sweetmandie Posted 8 Jul 2012 , 5:31pm
post #1 of

We have a failing business. Actually we have had a failing business since the first day we opened a year ago. Times are so tough. Noone has money to spend on high end custom cakes here. Walmart is our competition even though in the two years I spent researching our business plan I never once thought a grocery store would compete with us. The truth is that with an insane 12-15k in overhead each month our 7-8k revenue stream just can not keep up. We will be offically closed the end of the month.

Well I went into HyVee (local chain grocery store) to pick up a few things for the house. There sitting up on a display case is a 3ft carved Lightning McQueen cake. I'm furious. I already have them as competition because they are sooooo much cheaper than me. Now they are getting another hand up because they are so obviously breaking copyright rules.

As I was checking out, the clerk asked me how business was going. I usually try very hard to sugar coat life but today I just didn't care. I told her business was terrible and now that I had seen their carved Cars cake I knew why. The clerk immediatly decided to call the bakery supervisor so I could bring my issue to his attention! Within a few minutes this disgusting unbathed man came to the front and introduced himself as the head of the bakery department. I asked how he was leagally able to take 40lbs of cake and carve it into a 3D Cars cake. He told me that he has the right because he purchases deco packs and in doing so he is buying the image and is able to use that image however he wants! Wanting to clarify I asked him if I too bought a deco pack toy kit I could then carve a 3ft by 4ft Cars cake and sell it for profit. His response well yeah but you will have to be their customer and good luck becoming one because they only sell to companies who are master decorators. I have never wanted to spit in someone's face as badly as I did his.

So my response was to look up Deco and see. I became a customer of theirs within about five minutes. The way I proved how masterful I was, was by entering my FEIN number. That was a toughy. As a new customer of theirs I then called the company to see what I needed to do in order to make these awesome carved character cakes too. They told me that buying their product does not give me the right to reproduce the characters. Well, duh. So I then called Disney and filed an offical complaint which I am sure will never be heard. I also contacted the copyright department in DC and was told that it was an issue I had to take up with Disney.

I guess in the end I am just heartbroken that I have done everything right and it hasnt been good enough. I just keep thinking about the thousands of dollars I turned away because I refused to make copyright characters. I'm just so very angry!!

Any ideas how I can make the store stop making these cakes? It's one thing when a small bakery is doing it to try to make ends meet, but it is totally different when it is a huge grocery store doing it because they can make an extra buck. I guess the good news is that the cake was excuted pretty terribly. Smeared buttercream and the works. Hopefully no one is actually fooled into believing they will get a high quality cake from there.

29 replies
auntginn Posted 8 Jul 2012 , 6:00pm
post #2 of

I'm so sorry business has not turned out for you what you were hoping for. I will not address the business end of your comment because it sounds like you've done your homework and wish not to make you feel worse than you already do.

It is a terrible thing that big businesses chose to break the rules and yet it seems like us little people always get the short end of the stick.

But it also comes down to our values and morals. Its a choice to do the right thing and stand up for what we belive is right.

I'm surprised that Disney did not appear to be more interested in this fraud. Hopefully they did that for appearance sake and will pursue the matter.

Good Luck to you.

jason_kraft Posted 8 Jul 2012 , 6:05pm
post #3 of

Good job standing up for yourself and your business. Regarding the copyright issue you've already contacted the copyright owner so it's now up to Disney to decide whether or not they want to pursue legal action. You can also contact the Hy-Vee corporate office at 515-267-2800 and try to escalate the issue from there (in a polite but firm manner), making sure they know that one of their stores is creating infringing cake designs.

$12-15K/month is a huge amount of overhead for a custom cake shop, what are you spending it on?

myslady Posted 8 Jul 2012 , 6:07pm
post #4 of

Sorry to hear that your business is failing.

Grocery stores are your indirect competition because they sell the same product as you. Now that you are a deco pac customer you can now offer the copyrighted designs based on those designs.

You have contacted Disney about it. Give them a chance to follow up on it.

icer101 Posted 8 Jul 2012 , 6:11pm
post #5 of

I just wanted to say, that i am sorry, things are rough on your business. I hope a big turn around will come for you. good luck

tiggy2 Posted 8 Jul 2012 , 6:44pm
post #6 of

Definately contact Hy-Vee Corporate Office in DesMones, IA. I'm sure they'd like to know which one of their Bakery Managers is doing this and which one is less then clean. You might also contact the Director of the store in question.

debidehm Posted 8 Jul 2012 , 9:19pm
post #7 of

"It's one thing when a small bakery is doing it to try to make ends meet, but it is totally different when it is a huge grocery store doing it because they can make an extra buck."
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Wouldn't it still be a copyright issue? If it's not ok for a big chain store to do it, why should it be ok for a small bakery to do it "to make ends meet"?

scp1127 Posted 8 Jul 2012 , 10:08pm
post #8 of

Sorry to hear about your business. This recession is real and unfortunately, your business is a casualty. My construction business that was doing phenomenal, did not survive 9/11, so I know how you feel. It took me 8 months of losing money to let it die.

Can you relocate and diversify? My retail business plan is based on smaller items for every day. This is my preference, and maybe not yours, but maybe a change of products will allow you to keep the part you love too. But it seems like relocation is a must. It sounds like you must have quite a place.

And I also commend you for taking the steps to protect your business. I agree that a call to the home office will help.

Again, so sorry for this situation, but you can recover. With your track record of monthly sales, another landlord will be happy to have you, even with the failed location. If you can run that kind of revenue, you will find a way.

PM me and I will share my retail business plan concerning location and overhead.

kimebarnes Posted 8 Jul 2012 , 10:49pm
post #9 of

so sorry about your business it is hard when you are doing what you love and it is not working out. I know what you mean about grocery stores becoming more and more competitive with speciality cakes. I walked into the hyvee by me as well and saw the cars cake a luggage stacketc . If you are in KCMO it is the same hyvee and other cakes that typically would not be in a chain store at prices that make it almost impossible to compete. And I also noticed that depending on who you talk to at the bakery you get diffrent answers i was trying to get an edible image for my husbands cake one person told me 10 if i got there cake and 15 if i did not because I have to pay for them using the machine. It was really something i needed for his cake so i went to the hyvee closer to me to get one and it was 5 dollars I asked if the bakeries had different pricing and was told yeah some of them are crazy they don't even want to sell kits to home bakers. hoping that you are able to figure out a plan to continue to do what you love and make a living from it

tiggy2 Posted 9 Jul 2012 , 12:11am

The Director at each HyVee set their own policies and prcedures. They may or may not know what the bakery manager is doing or if it is illegal but I'm sure they would like to be informed. The Director at my HyVee is very in tune with Customer input.

howsweet Posted 10 Jul 2012 , 3:35am

I'm so very, very sorry to hear of your troubles. I know how hard it is as I have been there myself. I'm just posting to let you in on something in case you're not aware of it. Obviously I don't know about the specific grocery store you compete against, but I do know about the major chain grocery store bakery that I worked in for about 8 months...

If any person was in a position where they had to compete with that grocery store's cake department, they were going to lose. Period. The reason is that the cake decorating part of the bakery worked as a loss leader.

It clearly was an intentional policy set from higher up. I assume it's ok to decorate cakes at a loss because their goal is to put mom and pop bakeries out of business and keep people in their store to pick up other bakery goods like cookies, pies, breads and rolls (baked from frozen dough), everyday cakes and brownies that come in frozen. If you notice, grocery stores have also put local florist shops out of business.

I can't begin to tell you how many cakes were thrown out every week. It was bizarre to see all that food go in the trash.

I realize everyone knows that grocery store cakes are cheap, but wasn't sure people were aware that the store may be intentionally loosing money on them.

Amberwaves Posted 10 Jul 2012 , 6:52am

I feel for you. I wrote a post last week about this very thing. For the first time in the 4 years I have had my business open I am starting to get people not ordering my cakes because of the cost. I attribute some of this to my state's Cottage Food Law going into effect last month, but along with that there are definitely more people worried about prices now than I've ever had before.

Add to that the local grocery store churning out cakes for 1/4 the price of mine and it gets very tough to make ends meet. This grocery store also has decided to start doing some carved cakes to attract even more of the cake customers in this small town. Yes they look like crap and I am sure they don't taste much better, but it's getting very difficult to convince a customer that my carved ladybug cake for $75.00 is so much better than the grocery store's carved ladybug cake for $22.00.

I have no idea how I am going to compete with the local home bakers now that are making all the copyrighted character cakes that I routinely turn down.

SoFloGuy Posted 10 Jul 2012 , 7:03am

If it's a chain grocery store you should complain to their corporate office. If you don't get a response send a letter directly to the CEO and see if they reply.

In the end it's better not to make yourself crazy over what others are doing.

docofthedead Posted 10 Jul 2012 , 7:16am
Quote:
Originally Posted by debidehm

"It's one thing when a small bakery is doing it to try to make ends meet, but it is totally different when it is a huge grocery store doing it because they can make an extra buck."
*************************************************************************************
Wouldn't it still be a copyright issue? If it's not ok for a big chain store to do it, why should it be ok for a small bakery to do it "to make ends meet"?




Exactly my thoughts Debi...if it's wrong for one, why would it not be wrong for the other. That sounds li ke a double standard.

costumeczar Posted 10 Jul 2012 , 11:17am
Quote:
Originally Posted by howsweet

I'm so very, very sorry to hear of your troubles. I know how hard it is as I have been there myself. I'm just posting to let you in on something in case you're not aware of it. Obviously I don't know about the specific grocery store you compete against, but I do know about the major chain grocery store bakery that I worked in for about 8 months...

If any person was in a position where they had to compete with that grocery store's cake department, they were going to lose. Period. The reason is that the cake decorating part of the bakery worked as a loss leader.

It clearly was an intentional policy set from higher up. I assume it's ok to decorate cakes at a loss because their goal is to put mom and pop bakeries out of business and keep people in their store to pick up other bakery goods like cookies, pies, breads and rolls (baked from frozen dough), everyday cakes and brownies that come in frozen. If you notice, grocery stores have also put local florist shops out of business.

I can't begin to tell you how many cakes were thrown out every week. It was bizarre to see all that food go in the trash.

I realize everyone knows that grocery store cakes are cheap, but wasn't sure people were aware that the store may be intentionally loosing money on them.




It's my understanding that the a lot of items in grocery stores bakeries are loss leaders in general, which people don't usually know. There's no way to compete with those prices. You have to compete with quality, but when people are so price-conscious these days, and they're used to having a crappy grocery store cake as the standard, it's going to be harder to convince them that it's worth paying more for a "better" cake if all they're thinking about is how much it costs.

mommachris Posted 10 Jul 2012 , 1:56pm

Not trying to be a stinker here..but isn't Seseme Street copyrighted. You have a very nicely done Elmo and Big Bird cake in your gallery.


I have a couple of character cakes in my own gallery. I live in a glass house. icon_rolleyes.gif


mommachris

jason_kraft Posted 10 Jul 2012 , 4:21pm
Quote:
Originally Posted by costumeczar

It's my understanding that the a lot of items in grocery stores bakeries are loss leaders in general, which people don't usually know. There's no way to compete with those prices. You have to compete with quality, but when people are so price-conscious these days, and they're used to having a crappy grocery store cake as the standard, it's going to be harder to convince them that it's worth paying more for a "better" cake if all they're thinking about is how much it costs.



In many areas there is a decently sized mid-market segment of people who want something better than a grocery store cake but don't want to pay the high prices of a premium cake "studio". It's easier to market directly to this segment than it is trying to convert people for whom a grocery store cake is good enough.

Of course there are some areas where this midmarket segment (and even the upmarket segment) is too small to support a viable business, this would be apparent in your business plan.

costumeczar Posted 10 Jul 2012 , 5:06pm
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by costumeczar

It's my understanding that the a lot of items in grocery stores bakeries are loss leaders in general, which people don't usually know. There's no way to compete with those prices. You have to compete with quality, but when people are so price-conscious these days, and they're used to having a crappy grocery store cake as the standard, it's going to be harder to convince them that it's worth paying more for a "better" cake if all they're thinking about is how much it costs.


In many areas there is a decently sized mid-market segment of people who want something better than a grocery store cake but don't want to pay the high prices of a premium cake "studio". It's easier to market directly to this segment than it is trying to convert people for whom a grocery store cake is good enough.

Of course there are some areas where this midmarket segment (and even the upmarket segment) is too small to support a viable business, this would be apparent in your business plan.




If you're charging what you need to to cover the cost of a decent custom cake, the mid market segment won't necessarily pay enough to make more than minimum wage if you market to that. There are definitely places where the basic grocery store cake is th standard, and there's just nothing you can do to change that. Is hard if you live in a small town (I've lived in tiny towns and huge cities, and there's a difference in how people buy things.)

tiggy2 Posted 10 Jul 2012 , 5:27pm
Quote:
Originally Posted by SoFloGuy

If it's a chain grocery store you should complain to their corporate office. If you don't get a response send a letter directly to the CEO and see if they reply.

In the end it's better not to make yourself crazy over what others are doing.



Contact Pat Hensly at Corporate in Des Moines, IA

jason_kraft Posted 10 Jul 2012 , 5:27pm
Quote:
Originally Posted by costumeczar

If you're charging what you need to to cover the cost of a decent custom cake, the mid market segment won't necessarily pay enough to make more than minimum wage if you market to that.



Sure it will, if your processes are efficient enough and you limit the complexity of orders. You can be quite profitable at ~$3/serving for relatively simple designs, even with the overhead of a commercial kitchen.

carmijok Posted 10 Jul 2012 , 5:46pm

Seriously? 12-15K in monthly overhead? That seems like a lot. Perhaps you need to look at a much smaller operation...and perhaps focus on doing wedding cakes where there's more profit and people are less likely to buy at grocery stores. Establish your niche as the premier custom wedding cake baker in your area--then you won't have to worry so much about the copyright issue. Don't throw in the towel...just change direction.

ellavanilla Posted 10 Jul 2012 , 5:47pm
Quote:
Originally Posted by howsweet


If any person was in a position where they had to compete with that grocery store's cake department, they were going to lose. Period. The reason is that the cake decorating part of the bakery worked as a loss leader.

I realize everyone knows that grocery store cakes are cheap, but wasn't sure people were aware that the store may be intentionally loosing money on them.




I agree. There is no way you can compare your costs to their costs. We have to find other added value in our products. For me it's 100% natural ingredients, and, hands down, the best tasting cakes you can find in the area.

If someone points out the price of a Costco cake vs the price of my cake I turn around and point out that the only natural ingredient in those cakes is the flour, and I agree that their chocolate-banana cake is delish! But it also contains no chocolate OR banana.

It's possible that your local economy can't support you at this time, and for that, I am truly sorry. I have also suffered the pain of sidelining my dream. It really, really sucks.

Jen

costumeczar Posted 10 Jul 2012 , 6:24pm
Quote:
Originally Posted by jason_kraft

Quote:
Originally Posted by costumeczar

If you're charging what you need to to cover the cost of a decent custom cake, the mid market segment won't necessarily pay enough to make more than minimum wage if you market to that.


Sure it will, if your processes are efficient enough and you limit the complexity of orders. You can be quite profitable at ~$3/serving for relatively simple designs, even with the overhead of a commercial kitchen.




I hate to break it to you, Jason, but in some towns $3 a serving isn't mid level, it's premium.

jason_kraft Posted 10 Jul 2012 , 6:30pm
Quote:
Originally Posted by costumeczar

I hate to break it to you, Jason, but in some towns $3 a serving isn't mid level, it's premium.



True, it definitely depends on local demographics. If the premium market in an area is only $3/serving then there is no room for a midmarket business.

ibeeflower Posted 10 Jul 2012 , 9:02pm
Quote:
Originally Posted by SoFloGuy

If it's a chain grocery store you should complain to their corporate office. If you don't get a response send a letter directly to the CEO and see if they reply.

In the end it's better not to make yourself crazy over what others are doing.




I agree with what SoFloGuy said especially at the end. Do not drive yourself crazy over this. Move on or it can consume you. I really hope things get better for you soon. I know they will get better for you.

karateka Posted 10 Jul 2012 , 10:13pm
Quote:
Originally Posted by docofthedead

Quote:
Originally Posted by debidehm

"It's one thing when a small bakery is doing it to try to make ends meet, but it is totally different when it is a huge grocery store doing it because they can make an extra buck."
*************************************************************************************
Wouldn't it still be a copyright issue? If it's not ok for a big chain store to do it, why should it be ok for a small bakery to do it "to make ends meet"?



Exactly my thoughts Debi...if it's wrong for one, why would it not be wrong for the other. That sounds like a double standard.




Clearly it's still wrong. I think you might just feel a bit differently about it. A small mom and pop struggling to make ends meet, doing whatever it can to keep the doors open vs a mega mart selling this stuff as a loss leader, doing it for peanuts and getting away with it, not caring a whit.... It isn't any better or worse in fact.....just maybe a bit in flavor.

Spooky_789 Posted 10 Jul 2012 , 10:57pm

If I may, I'd like to ask a question about kits a bakery can purchase, in bulk, from cake supply distributors.

Last year, when I first got in to this hobby, I bought a few bakery supply items from a bakery that recently closed its doors. The gal gave me a couple of her catalogs that included various kits that she could buy to use for birthday cakes. They ranged from Spider Man to Transformers to Superman, etc. You'd have to buy the kits in bulk (so like 30 kits per case, for example). The bakery would then bake and decorate the birthday cakes and include the decorations from these kits in their final product, and of course, charge for them to recoup their costs.

If you are a licensed bakery, with the ability to purchase your supplies from a distributor such as this, and buy these kits, are you well within the law then to sell your cakes with these kits?

Last year, when I made my nephew some sugar cookies for his birthday party that I wanted to put the LA Lakers "L" logo on, I went to my local King Soopers (Kroger) grocery store to have them print the edible images for me. While I was waiting for them to finish, I was looking through their "catalog" of cakes they can offer, with all sorts of different copyrighted kits on them. I asked them about it and they said those were the kits they were licensed to sell. So if you do buy the kits through a distributor, who is licensed to sell them, are you extended the same right?

I guess I'm a bit confused by it all. Thanks for your input!

carmijok Posted 10 Jul 2012 , 11:11pm

Again, this really isn't about copyrighting being the problem...it's about finding a way to make doing what you love profitable.

What makes you the most money? A birthday cake or a 4-tier wedding cake?

The best way I think (as I mentioned before...and BTW I just saw your awesome 'lovebirds' wedding cake in your gallery) is to become THE bakery brides want to go to first for their wedding cakes and groom's cakes! People know they're going to pay more for a
custom wedding cake...and those that use a grocery store for one are not going to be your customers ever anyway.

Find a way to cut WAY back on your overhead, concentrate your efforts on this one area and maybe later you can branch out into doing other event cakes again...the fun groom's cakes will show your versatility.. Market yourself to the wedding industry in your area! Don't give up your dream, or blame things on grocery stores and copyright infringement. Look at this as an opportunity to continue doing what you love in a more profitable arena. I think you will be very successful if you do. IMO! thumbs_up.gif

auntginn Posted 10 Jul 2012 , 11:39pm
Quote:
Originally Posted by carmijok

it's about finding a way to make doing what you love profitable.

thumbs_up.gif




I totally agree, Its what I did. Focused on my lollipops and while I was busy with them I gave classes and the cake order started to follow. Marketing and Branding are 2 areas we sometimes miss but can make all the difference in the world between Open & Closed.

I now only work as a commercial bakery, NOT retail. If I don't have an order, the oven doesn't get turned on. We always have orders.

jason_kraft Posted 11 Jul 2012 , 12:24am
Quote:
Originally Posted by Spooky_789

If you are a licensed bakery, with the ability to purchase your supplies from a distributor such as this, and buy these kits, are you well within the law then to sell your cakes with these kits?



Whether you are a licensed bakery or not, copyright law allows you to resell licensed figurines of copyrighted characters (as you would find in a decopac) on their own or as part of a cake without permission, since the copyright owner is already getting a cut. You only need permission if you will be recreating a copyrighted character yourself out of BC or fondant.

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