KuyaRomeo Posted 13 Dec 2011 , 7:52pm
post #1 of

We are a very new business struggling to survive. Mostly because (a) we are on a shoe string budget and (b) we bake from scratch using high quality fresh ingredients which drives up our prices.

I really feel in my heart that people DO value good fresh products, yet every time I turn around, we get a kick in the stomach . .

We are competing against bakeries that sell box mix, canned frosting, items that can run circles around us in pricing. I am beginning to believe I was wrong. America can NOT taste the difference. They like the cheap stuff!!

Walked into a little cupcake-ery in NYC. They have several locations and are selling these little quarter size cupcakes for $1.00 each. We bought a few while visiting NYC as we make it a habit to always taste other bakeries items and compare.

It was very obvious this was a box mix. They were dry and chemical tasting. She is probably getting at least a hundred mini cupcakes (they are very small and flat) out of one box of cake mix that cost $0.89. So she is making a huge profit. Noting that rent in NYC is outlandish . . however, her business appears to be doing well. Yelp has her with great reviews. People love it.

I just don't get it. It makes me sad that america really loves this chemically induced box mix they could easily make at home in 10 minutes. We, are near closing our doors . . .because we just can't compete with this . . . . and I am heart broken.

56 replies
jason_kraft Posted 13 Dec 2011 , 8:08pm
post #2 of

For many customers the value-add is convenience and decorating skill as opposed to taste, and many mainstream customers will actually prefer the taste of a recipe based on box mix since that's what they grew up with.

As part of your business plan you should be identifying customers who are willing to pay a premium for what you offer. If you are a small scale baker and try to compete on price you probably won't make it, you need to highlight your competitive advantages to the right audience. In some cases you may find that there is not enough of a target market to support your business, ideally this would come up in the plan before you launch the business.

And re your comment about making a huge profit off box mix cakes -- the vast majority of the cost will be in labor and overhead (especially in NYC) as opposed to ingredients, so it's difficult to judge the net profit of a competitor by looking solely at what their ingredients cost.

leah_s Posted 13 Dec 2011 , 8:36pm
post #3 of

I have to agree that most Americans have never even tasted scratch cake or care a wit about premium ingredients.
When I first started I said things like "cake like your mom used to make." And I got blank stares. Thenn one bride said, "Hell my mom worked in an office all day. She never baked from scratch."

And the light came on.

sillywabbitz Posted 13 Dec 2011 , 8:48pm
post #4 of

It's all about your customers. You are providing what your customers want. I bake both scratch and doctored mix based on flavors because those are the ones everyone likes as is. Using high end ingredients I think is honorable but if the customers can't taste the difference it's a huge expense. I look at scratch and high end bakeries as more patisseries. European Buttercreams (I want to get into these), ganache etc. I use some of these items as frostings but I don't stress so much about if I'm using the most expensive butter. That's just me though. I love that other bakers do artisan baking, it's just not for my clients.

scp1127 Posted 14 Dec 2011 , 6:58am
post #5 of

I concur with sillywabbitz and Jason. You must direct your marketing to your target market. I have no problem selling items at triple the price of other bakeries because I reach the correct income level for my product and appeal to the people who want the best ingredients. If I didn't know how to reach that market, I would fail. You cannot supply an upscale product and wait for the masses to come through your door. The masses, or mainstream are not your customer. You not only must know how to reach them, your entire branding plan must cater to the upper income market for a total package. That is what they want.

As Jason stated, this is why business plans with demographic data and the corresponding marketing plan must be in place.

My bakery is already successful and I am planning a satellite retail store. This plan has been in the process for about four months and I will not have all of my research done for about six more months. It doesn't have to take this long, I'm just in no hurry. The details should be so specific that you should know your utilities based on the construction of the space. There should be few surprises if the plan is complete.

At this point, a cost analysis based plan with a comprehensive marketing plan should be completed asap. If the numbers don't work or you can't reach your market, then the business may not be viable.

ChilliPepper Posted 14 Dec 2011 , 7:21am
post #6 of

Come across The Pond to England. If I made my cakes from box mixes my customers would hang, draw and quarter me! Every cake I make is from scratch, regardless of the flavour or recipe required.

CP xxxx

Claire138 Posted 14 Dec 2011 , 7:50am
post #7 of

I bake from scratch & people love it, but I will say that there are plenty of people who care more about how the cake looks then how it tastes.
I had someone call me for a cake for a week that I would be away, she insisted that she just wants it for the look and ordered it anyway even though I told her I could not promise anything bc she would pick it up wednesday morning for a party on sunday afternoon. She later told me that it was as fresh as can be and that they ate the whole cake (it was covered in ganache and fondant), of course I was thrilled but the point is that she didn't care about eating the cake when I told her I wouldn't be here; she just wanted a beautiful cake to put in the middle of the table.
Personally, I don't understand that bc I know that if I were to go to a restaurant and order a meal I would for sure want it to taste good and not let "oh it's so pretty" make me disregard how it tastes, if you know what I mean.

mclaren Posted 14 Dec 2011 , 7:54am
post #8 of
Quote:
Originally Posted by leah_s

I have to agree that most Americans have never even tasted scratch cake or care a wit about premium ingredients.
When I first started I said things like "cake like your mom used to make." And I got blank stares. Thenn one bride said, "Hell my mom worked in an office all day. She never baked from scratch."

And the light came on.




It's funny that the reversed is true here ha ha.. Where I live, if I say "cake like your mom used to make" (provided their mothers had baked cakes before) everyone would automatically associate that with scratch cakes.

solascakes Posted 14 Dec 2011 , 10:53am
post #9 of
Quote:
Originally Posted by ChilliPepper

Come across The Pond to England. If I made my cakes from box mixes my customers would hang, draw and quarter me! Every cake I make is from scratch, regardless of the flavour or recipe required.

CP xxxx




So true lol, box mixes at my end......even little kids will spit it out.

ljslight Posted 14 Dec 2011 , 12:59pm

I told someone my Chocolate cake was from scratch and she asked me "what does that mean?" I said I add eggs, flour, sugar, salt, soda, etc. They were so amazed that I could do that. They said I thought cakes came from a box!

QTCakes1 Posted 14 Dec 2011 , 2:14pm

There are 4 cupcake shops in our area. The one that bakes from scratch ALWAYS is sold out and they are not even in a good location. And they are around the corner from one in an excellent location. Yes, people can tell the difference. You may just have to get a little more word out there.

jason_kraft Posted 14 Dec 2011 , 4:09pm
Quote:
Originally Posted by QTCakes1

There are 4 cupcake shops in our area. The one that bakes from scratch ALWAYS is sold out and they are not even in a good location



Constantly being sold out of product may not necessarily indicate that a business is successful.

Claire138 Posted 14 Dec 2011 , 4:16pm
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by QTCakes1

There are 4 cupcake shops in our area. The one that bakes from scratch ALWAYS is sold out and they are not even in a good location


Constantly being sold out of product may not necessarily indicate that a business is successful.




If that doesn't indicate a successful business then what does? or rather, what are they doing? not baking enough to constantly make it seem as though they are busy?

QTCakes1 Posted 14 Dec 2011 , 4:18pm
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by QTCakes1

There are 4 cupcake shops in our area. The one that bakes from scratch ALWAYS is sold out and they are not even in a good location


Constantly being sold out of product may not necessarily indicate that a business is successful.




They happen to be very successful. I know the owner. I wouldn't have said it otherwise. One place has a ton of product that they have to discount to move it at the end of the day and still end up tossing it in the trah. So I guess I should see that as a success...

jason_kraft Posted 14 Dec 2011 , 4:28pm
Quote:
Originally Posted by Claire138

If that doesn't indicate a successful business then what does? or rather, what are they doing? not baking enough to constantly make it seem as though they are busy?



Off the top of my head, one possibility could be that the products are priced too low. The best indicator of a business's success is profit, not revenue.

Of course sometimes selling out of product does indicate a successful business, my point was that you can't use that single piece of data to reach a conclusion as to whether or not a business will be viable.

Claire138 Posted 14 Dec 2011 , 5:20pm

Ahh ok, thanks.

scp1127 Posted 14 Dec 2011 , 6:16pm

Jason is right. There was a shop in a neighboring town that sold out every day. But they could not make enough cupcakes to meet overhead. The problem was a manpower and equipment shortage coupled with overhead too high for the margins and lack of product.

QTCakes1 Posted 15 Dec 2011 , 12:47am
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by Claire138

If that doesn't indicate a successful business then what does? or rather, what are they doing? not baking enough to constantly make it seem as though they are busy?


Off the top of my head, one possibility could be that the products are priced too low. The best indicator of a business's success is profit, not revenue.

Of course sometimes selling out of product does indicate a successful business, my point was that you can't use that single piece of data to reach a conclusion as to whether or not a business will be viable.




This is true, but my point was that people do appreciate quality ingredients. They OP's concern was people not appreciating a quality product, which is not true. This cupcake shop has been successful by consistent word of mouth, hence why they are sold out all the time. In the beganning, they knew how many cupcakes they needed to sustain their business. They were selling those out, so they increased their production. They keep increasing their production, but they are still always sold out about an hour before they even close. She hates to lose the income, but can't seem to figure out the actual demand needed. But yup, very succesful.

BizCoCos Posted 15 Dec 2011 , 2:23am

So sorry KuyaRomeo, maybe this was not the right time, hope all goes well for you in the end.

KayMc Posted 19 Dec 2011 , 4:39am

I agree - I don't think most Americans appreciate any type of quality in food. Have you looked at people's grocery carts in the store? A frozen bag of an already cooked 'meal' is what many (most?) people think is cooking. My husband's family has always had store-bought pumpkin pie for Thanksgiving, which I think is blasphemy. But it's what they know. Sure, there are people who appreciate quality. But I don't think that is the majority of people in this country.

LindaF144a Posted 20 Dec 2011 , 3:14am

I have not been on much - due to opening my own cake shop. I have had great success and it continues to go well. I bake from scratch. I don't sell out every day. I usually have about 1-2 dozen left over, which is good. That way I don't lose income from people coming in and nothing being available. We did have days where we did sell out. But after 6 months being open I am finally figuring out when to increase production and when not to.

The original OP said nothing about location. Without knowing where she has built her shop there is no way one can help her find an answer. The only advice I can give to the post is that opening on a shoe string budget is not good. You need a cushion for those first few years until you turn a profit. Doing it without the cushion only adds to the stress of a new business. Yeah, it sucks when you have to dip into the reserve. But it is expected right now also.

And BTW, being able to take a vacation after opening a store is truly amazing also. I have been working 12-14 hours a days since we opened. And I'm going since December 1st without a day off. There is no way I could take a vacation. Even a couple of hours is a stretch right now.

So it is not the same everywhere is all I can say.

MimiFix Posted 20 Dec 2011 , 4:15am

[quote="KuyaRomeo"]We are a very new business struggling to survive. Mostly because (a) we are on a shoe string budget and (b) we bake from scratch using high quality fresh ingredients which drives up our prices./quote]

Kuya, I live in the mid-Hudson Valley also, and am fully aware of the customer base throughout our region. There are many people here who value quality products, but they will not be at your door immediately. It takes time to build a following, especially if your business is buried inside another storefront. Look at your business plan, readjust your balance of retail/wholesale products, and spend time deciding how you will reach out to potential customers. Best of luck, Mimi

happigolucki35 Posted 31 Dec 2011 , 11:57pm

I have a cupcake bakery and we use box mixes and I am proud of it and my cupcakes are not crap, its my preference, I like the way they taste and so do my customers. You need to do your research, many cupcake only bakeries are closing especially in smaller towns and rural areas, I also do custom cakes its the only way my shop could stay in business. I think its very disrespectful to talk bad about someone else's business because yours is not doing good, the problem also with a lot of these cupcake shops is they start out to big, they buy all this expensive stuff that is not necessary, there's nothing wrong with a shoe string budget, why over spend on unnecessary stuff, put your money where it really matters. I get so tired of these scratch bakers thinking they are gods gift the the planet, get over yourself and stop putting other people down. I will put my Dr mix up against any scratch baker. Good Luck

LindaF144a Posted 1 Jan 2012 , 6:04pm
Quote:
Originally Posted by happigolucki35

I have a cupcake bakery and we use box mixes and I am proud of it and my cupcakes are not crap, its my preference, I like the way they taste and so do my customers. You need to do your research, many cupcake only bakeries are closing especially in smaller towns and rural areas, I also do custom cakes its the only way my shop could stay in business. I think its very disrespectful to talk bad about someone else's business because yours is not doing good, the problem also with a lot of these cupcake shops is they start out to big, they buy all this expensive stuff that is not necessary, there's nothing wrong with a shoe string budget, why over spend on unnecessary stuff, put your money where it really matters. I get so tired of these scratch bakers thinking they are gods gift the the planet, get over yourself and stop putting other people down. I will put my Dr mix up against any scratch baker. Good Luck


There are at least 4 cupcakes stores in my area where cupcakes are all they make. There are several other shops that throw them in with everything else because it is the new trend. We have cupcakes everyday in about 15 different flavors plus cookies and specialty cakes. I am the only one in the area that bakes from scratch. There is not a day that goes by where I get several customers who come in and are converts to our cupcakes. We are new and we are learning that word of mouth is the most powerful advertising tool, period. And word of mouth about taste has been the single biggest driving force i gaining new customers. I know this because people can't wait to tell us. They tell me they used to go to - insert one of my competitors here- and then they got a cupcake from ours through someone else and it was the most delicious cupcake they have ever had. And Can I tell them why it is so good. Most people don't know the difference between scratch and mix if they don't have the two different places offered to them. Most people have not tasted scratch Cake there whole life until they come to my store. We live in that era. I know I never did til I started baking scratch myself. It took a good year before I became an expert at it.

Once your customer gets a choice, that is when you will find out just how many customers like your cake. I don't know if you have that kind of competition where you live, and I am not arrogant enough to believe that all your customers would not shop a mix based store. There are people who can't tell the difference, who like different flavors, who like the location, who like the presentation better, and there is customer loyalty that keeps people from trying others bakeries. Then there are the customers who only want to pay WalMart prices no matter if you bake from scratch or mix. Bottom line is it is more than scratch vs mix. If it was totally based on that one factor running a business would be a whole lot easier.

So please do not let this degenerate down to I am just as good or better than even though I use a mix. The only difference is your operating costs are way lower then mone. I congratulate you on that. I get tired of defending my way of baking. I've done both mix and scratch. I like scratch, so shoot me.

But you know what, every day I get lots of new fellow cake lovers who feel the same way. The best part of owning my business is the new people we get to meet everyday and the ones that keep coming back too. We share our lives, swap stories, get to spend a few minutes with our new friends and feel like a real part of our community. I love the people and friends I make every day, those that used to be die hard mix eaters until they got a taste of a scratch cake.

And lastly the greatest feedback we get is our customer service. We treat each customer with great respect and truly work to fit their needs. That, more than anything else, is what I believe keeps our customers coming back again and again. I would not have it anyother way. I live in the same neighborhood where my store is located. I run into my customers everywhere. I want to be able to look at them in the eye and not be uncomfortable with the interaction. We are all neighbors and I intend to treat them with respect and get the same in return. And that will not happen if I don't give that respect first.

For the OP, to establish yourself takes time. Keep on putting one foot in front of the other and do NOT expect success overnight. And whatever your expectation of success is right now, throw it out. You will just set yourself up for disappointment otherwise. We all have different ideas of what success should be, and sometimes it is not always in line with reality. Just make sure to be open minded enough to learn from what is happening and be able to adjust to meet the new reality. Good luck.

FromScratchSF Posted 1 Jan 2012 , 8:17pm
Quote:
Originally Posted by happigolucki35

I have a cupcake bakery and we use box mixes and I am proud of it and my cupcakes are not crap, its my preference, I like the way they taste and so do my customers. You need to do your research, many cupcake only bakeries are closing especially in smaller towns and rural areas, I also do custom cakes its the only way my shop could stay in business. I think its very disrespectful to talk bad about someone else's business because yours is not doing good, the problem also with a lot of these cupcake shops is they start out to big, they buy all this expensive stuff that is not necessary, there's nothing wrong with a shoe string budget, why over spend on unnecessary stuff, put your money where it really matters. I get so tired of these scratch bakers thinking they are gods gift the the planet, get over yourself and stop putting other people down. I will put my Dr mix up against any scratch baker. Good Luck




Wow, that's an incredibly negative thing to post in a thread started by a business looking for some advice and encouragement from others in the caking community.

How totally insensitive to pop on this thread like you are all kinds of special because your little "bakery" sells crappy cake that your customers "prefer". Do you want a gold star? What you did was EASY. That's right. EASY. Anyone can do it. ANYONE. The person that started this thread is struggling. You have no idea who they are or what they stand to loose if their business fails. That's somebody's LIFE you just put down, and your completely condescending, ignorant rant just got my blood boiling.

What WE scratch bakers do is HARD. You couldn't do it. If you could, you'd at least show some respect for the craft and skill that some of us spend years to study and perfect. We put our entire lives on the line attempting to share our skill with the public, sacrificing our savings, time with our families, blood sweat and tears... all for the hope of getting a scrap of success in one of the worst economies this country has seen in 60 years. If you COULD bake scratch like we do, you could still choose to serve up your styrofoam masked as "cake" if that's your preference or what sells in your area, but you'd at least have a heart and understand the dedication and passion some of us have to the art of baking and what we stand to loose if we fail. We choose to run a marathon in a race with a bunch of lazy, untalented people in cars. We know that, and sometimes we need a space here on CC to ask other RUNNERS for advice and encouragement. What makes you a horrible person is for you to roll down the window of your car and piss on us as you drive by.

jason_kraft Posted 1 Jan 2012 , 8:51pm

In the future I recommend just ignoring negative comments instead of posting an even more negative comment as a response.

Starting a bakery business is not easy, regardless of whether or not mixes are used.

FromScratchSF Posted 1 Jan 2012 , 10:09pm

You are right, I did post something negative. Probably the most negative thing I've ever posted here.

I have seen all kinds of threads go to pot because people get into petty mudslinging over trivial matters. People get on the bandwagon and call others mean and unsupportive for posting well intentioned things that others misinterpret. Well, there is NO misinterpreting that post. It was the very definition of mean, unsupportive and astonishingly, truly, rude in a thread called "What a Heartbreak" about a business that is struggling.

Well, I'm calling it out. It was completely contrary to everything this forum is supposed to represent and goes way beyond "scratch vs. mix" or whatever petty argument people tend to engage in here.

belle76 Posted 1 Jan 2012 , 10:29pm

wow. as i clicked on this thread it went automatically to the last comment. so i went up and read the comments before that. how rude! i haven't even read the rest of this, but to say that those of us who don't always use scratch are lazy and our cakes are bad??? wow....just wow. to insult all of those people who use box/dr. mixes. wow. well aren't you just the worlds all time perfect baker! i think i might leave this forum for a bit if people like me are lazy and untalented, we probably aren't wanted on this forum anymore anyway.
fromscratchsf....can you please show me where your post was at all helpful, and not "It was the very definition of mean, unsupportive and astonishingly, truly, rude"??

gidgetdoescakes Posted 1 Jan 2012 , 10:45pm

Its called competition, and people buy what they like....business...any business can be very very hard thats the truth....hope you do better in 2012

LoveMeSomeCake615 Posted 13 Jan 2012 , 2:45am

Wow. Let's add some lighter fluid to the fire, shall we? icon_confused.gif

Quote:
Originally Posted by jason_kraft



Starting a bakery business is not easy, regardless of whether or not mixes are used.




Exactly. We are currently in the throws of the build out for our shop, and while we intend to sell both doctored mix AND scratch cakes and cupcakes as we have for the past two years now, that has absolutely no bearing on the challenges we are currently dealing with. It's hard work.

Calling anyone's cake "crappy" is kind of the opposite of help, isn't it?

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