La Petite Boulangerie pushes new products, image
Though company officials declined to discuss future rollout plans, employees at several of the bakeries in California and Arizona said they expect to begin serving the stuffed croissants after the first of the year. Just which of the numberous fillings in test will be offered is unclear at this point, they indicated.(Though PepsiCo, as a policy, will not disclose sales or earnings for the chain, insiders have said the concept was designed to generate annual per-store sales of about $390,000. Others in the know have said that as of late 1985 the per-store average was running about $350,000.)However, talk of such expansion began to diminish in 1985 in the face of lower-than-anticipated sales.Also in the works, he indicated, is a new name that will be "easier to remember.' The new name, he said, will also be easier for the average American to relate to than the French moniker now in place. "La Petite Boulangerie'--roughly translated --means "little neighborhood bake shop.'Gunther said he decided to put television advertising on hold because, given the size of the chain and its level of market penetration, it could not be used "[cost] efficiently' anywhere.The stuffed croissants are appealing from an operational standpoint because they could be prepared ahead of time in batches by the back-of-the-house crew and held warm or heated to order. Boxed lunches hold a similar attraction because they could be assembled by counter workers before opening or during lulls in business.Named Abraham Shore, a Long John Silver's marketing executive, the new vice president of marketing.WITHIN THE next six months, Gunther said, La Petite Boulangerie will open 10 new bakeries, including new-design prototypes. It will also close some poor performers, he added.A new look--"a little more country . . . not so slick . . . perhaps wicker [display] baskets instead of wire'--is definitely a part of Gunther's ambitious long-range repositioning strategy.Pepsico chairman Calloway has said he asked Gunther to head up La Petite Boulangerie because it has "great potential' and because he could "turn it into a winner.'"At any given time I might have 35 things in test,' Gunther said. However, he added, products will be rolled out only if a careful review of sales data indicates they improve the product mix.Launched a product development campaign that has so far seen 50% more filling added to fruit and cheese croissants, the rollout of warm "sticky' buns and jumbo cinnamon rolls and tests of numerous items, including hot filled breakfast and lunch croissants.He also said he is reevaluating the role played by the chain's made-to-order sandwiches, which he described as "labor intensive' and one cause of customer bottlenecks.Gunther said that his goal is to bring about a 10%-to-20% increase in sales during the next year and that he will look for gains from all dayparts.Emanual Goldman, a Pepsico watcher at Montgomery Securities in San Francisco, recently told the San Francisco Examiner that the bakery chain "is either going to become something big, or Pepsico will divest itself of it.'"We have to look at a better way to serve them [sandwiches] and a faster way to serve them,' he explained. "In the long term, I'm not sure it [custom-made sandwiches] is the right way to go.'Photo: Art GuntherThat unit is also selling egg, meat and cheese-filled "omelet' croissants for $1.91 as well as boxed lunches containing cold turkey or ham croissant sandwiches, a chocolate chip cookie, potato salad and a soft drink for $4.21, including tax.Most of the bakeries are located in suburban strip centers.If the "cash flow and earnings problems' attributed to the bakeries by PepsiCo's chairman D. Wayne Calloway last spring can be resolved, Gunther said PepsiCo will aggressively expand the chain by hundreds of units a year. PepsiCo is also parent of Pizza Hut, Taco Bell and Kentucky Fried Chicken, each the No. 1 chain in its segment.PRACTICING what he preaches, Gunther said La Petite Boulangerie will trim its menu from about 40 items to 30. Because the items contributing the smallest amounts to the sales mix will be the ones eliminated, a product might be dumped in one region but retained in another where it is popular, he indicated.Scrapped television advertising in favor of newspaper ads and direct mail.The result of those moves, Gunther said, has been "positive.' Some of the bakeries that in May reported weekly sales down as much as 12% from the year-before figure, recently showed weekly gains of 19% compared with those of 1985.Among the new bakeries, Gunther indicated, will be additional in-store units, such as the one that opened last December in AJ's, an upscale market in Phoenix. Unit-level employees said the AJ's bakery quickly jumped to the front of the pack in terms of unit sales in the Arizona-Colorado region, but company officials declined to comment on those reports.Art Gunther is leaving few stones unturned in his search for the lucrative La Petite Boulangerie envisioned by PepsiCo when it bought a mom-and-pop bakery operation in 1982.Ordered the scheduling of a third counter person during peak business hours and the installation of additional coffee machines and cash registers in the bakeries in an effort to speed up service.That kind of growth could result in the 2,000-unit giant foreseen by former La Petite Boulangerie president Terrance Collins in 1984. At the time, Collins and others at PepsiCo were convinced the small bakeries, which average 1,200 sq. ft. and use frozen dough from a central manufacturing plant in Southern California, were the greatest thing since sliced bread."Indiscriminate product infiltration' is a major problem in food service today, he said of the tendency of some chains to add new products without a complete analysis of the effect they might have on operations or the public's perception of the business.Most of the other stores are clustered in Los Angeles, Denver and Phoenix, though there are a small number of the bakeries in New Jersey and Pennsylvania as well as 15 franchised units in Seattle.But Gunther said that he is not working under an eitheror edict and that he is receiving nothing but "positive support' from Pepsico. He also said he is not even considering a scenario in which the chain might be sold and recently made arrangements to "buy a house' near the company's Mill Valley headquarters.Problems with the concept also led to the tabling of franchising plans and the buy-back of four of five development agreements and about 20 franchised bakeries.Many in the financial community credit Gunther with the turnaround of 5,000-unit Pizza Hut and see him as La Petite Boulangerie's last chance.THE ANSWER to boosting sandwich sales while reducing service times might be found at one of the chain's San Francisco bakeries, which is selling croissants baked with fillings of ham and Swiss cheese, turkey and Monterey Jack cheese and spinach and cheese, all $2.49.La Petite BoulangerieIn the six months since the former Pizza Hut president took command of La Petite Boulangerie, a 136-bakery chain, he has:
La Petite Boulangerie
Author: Alan Liddle
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