Rounding off the annual meeting of the Scottish Association of Master Bakers, this year’s ’James Scott’ Technical Sessions scored a notable first: never before had these popular sessions been addressed by the incumbent president of the Natio-nal Association of Master Bakers.
Mike Holling, retail operations manager with Birds of Derby, entitled his speech ’Surviving in the high street’ and treated delegates at the Peebles Hydro hotel to tips on boosting turnover, many of which were focused on marketing initiatives. He urged bakers to give more publicity to the freshness of their products and to the skill invested in their creation. Arguing that products should be supported by "good standard" point-of-sale material, he insisted: "Marketing should not be done with a felt tip pen on the back of a cake box."
bright and modern
Recommending "bright and modern" shop designs, Holling continued: "From time to time, you should assess your business from the customer’s eye... starting with the shop front. Do the contents in the window catch the customer’s eye? When was its appearance last changed? Are you fully utilising the space available?"
But appearances are not everything, he stressed. "Ensure all staff have good product knowledge. Remind them that every time they serve a customer, they hold your company’s reputation in their hands," he said. Shop staff should be involved in the process of making changes to window displays or interior design, he added.
Subscribing to the soundbite "retail is detail", Holling underlined the commercial advantage derived by his company from the introduction of an electronic point-of-sale (EPOS) system some five years ago. The "invaluable" information yielded by this system had allowed Birds to make the right decisions, he claimed. Birds operates a policy whereby products falling below a certain turnover threshold become subject to review and to possible expulsion from the company’s production roster.
Birds of Derby has no wholesale component to its business and relies solely on retail sales. Holling noted that the company had already reached agreement on the purchase of its latest shop, thus taking to 50 the number of Birds retail outlets spread across east central England. Annual turnover of around £18m is divided across the following broad product sales mix: filled rolls/bake-off 17.5%; cooked meat/sausage 16.1%; bread rolls 16%; savouries/pies 14.7%; confectionery 13.6%; cream cakes 12.9%; and bread 9.2%. Thus, bread represented the smallest product category in sales terms and was expected to remain "very static", according to the speaker. By contrast, he pointed to bread rolls as a potentially significant growth area for the business.
In what was a generally upbeat assessment of the craft baking industry, Holling also acknowledged a number of problems common to most operators in this field, including: pressures from legislation and red tape; rising utility costs; staff turnover - although Birds enjoys a relatively low rate of 7% per annum; loss of trade to supermarket chains; and councils’ parking charge policies. He also highlighted the problem of finding good retail locations with affordable rents.
Also on the theme of maximising business opportunities, British Bakels’ head of product development Gary Gibbs identified health, indulgence and convenience as the three forces that were continuing - and would continue - to drive consumer trends. Heightened awareness and ever-increasing choice now meant that "low is no longer enough" as customers were seeking products that were good for them rather than less bad, he told delegates. "Taste remains paramount - if you have got a good-tasting product, it sells."
Gibbs also pointed to certain types of product with huge sales potential that were effectively under-represented in the bakery field. For example, he said: "There are big opportunities for foods targeting the elderly or the ageing as well as pregnant women." He also envisaged strong sales in the future for products focused on weight control and on lifestyle.
Sounding a perhaps less welcome note, Gibbs also alluded to EU Health & Nutrition Claims Regulations that came into force in January this year. These require nutrition claims relating to products to be scientifically proven; the nutrient had to be included in a significant proportion and had to deliver the claimed benefit, he explained. At the same time, the claims for the product had to be clear to the average consumer, he added.
The SAMB Technical Sessions also returned to a familiar subject that is relevant to a high proportion of UK bakery businesses - namely succession planning. Martin Stepek, chief executive of the Scottish Family Business Association (SFBA), confirmed that 67% of the country’s family-run companies did not survive into the next generation, mainly because of "a failure to plan for succession". He urged family businesses to tackle, as early as possible, questions such as: Who will take over the company? Will they take over ownership, leadership or both? And when will this happen?
Basing his comments on personal experience of the hand-over from one generation to the next within his family’s electrical retailing and travel agency businesses, Stepek spoke of the need to encourage genuine, inter-generational teamwork well ahead of the point of succession. The older generation had to ensure that the business heads of the future were suitably trained and were treated with patience once embarked on their learning curve.
He also recommended that the younger generation spend perhaps four or five years gaining experience outside the family business. "It’s good to get them grounded in what real work is," he explained. "It gets you work experience and allows you to become yourself."
Formulation of a succession plan - including the exact date on which the senior family member would exit the business - was vital to a successful hand-over, according to Stepek. The older generation sometimes found difficulty in staying away from the business following their retirement, often involving themselves in day-to-day activities to the point where they undermine the confidence of their successor(s). "Decide a retirement date and stick to it," said Stepek. "Help is good when it’s asked for, but not so good when it’s imposed." And he added: "Plan your post-work life - you can’t play golf every day."
According to Stepek, the SFBA had become aware of a lack of understanding in many professional circles of the specific challenges confronting family businesses. In response, the association was planning to establish accredited certificates/diplomas in family business affairs, designed to enable, for example, lawyers and accountants to focus on "the real issues and best practice in family business".
The need for planning was central to the other presentations at this year’s SAMB Technical Sessions. Andrew Shepherd, a partner with chartered accountant and business adviser Johnston Carmichael, pointed out that inheritance tax accounted for 40% of an estate’s value above the sum of £300,000. However, the impact of the tax could be mitigated by, for example, the making of gifts during one’s life.
Shepherd also strongly recommended the making of a will, so as to guarantee that "the right people get your money". He added: "Dying intestate is a just a muddle. Make sure you learn from other people’s mistakes."
The Scottish baking industry’s desire to plan for the future lay behind the development of the Scottish Bakery Training Centre at Mathiesons’ headquarters in Larbert, Central Scotland (see also news). Scheduled for its official launch later this month, the facility incorporates a training room and training bakery, kitted out with a range of new equipment, including oven, prover/retarder, roll plant and mixer capacity.
SAMB training manager Arthur Rayer reiterated the call for bakers both north and south of the border to make use of this valuable new resource which was "as good as anything you can get anywhere in Scotland".
The facility provides an excellent opportunity to address the industry’s "at risk" skills base and to develop staff capable of shouldering the ever-heavier burdens associated with legislation, quality and accountability, he said. According to Rayer, it represented an important addition to the UK training resource as a time when other colleges were either disappearing or were facing an uncertain future.
The centre was expected to host courses on a wide range of topics, including: health & safety; food safety; HACCP; first aid; information technology; quality and customer service; and, of course, the full range of technical bakery subjects ranging from bread- and pastry-making to confectionery and microbiology. A link had been forged with the University of Abertay in Dundee for the provision of courses on, among other topics, market trends, green production, packaging and legislation, said Rayer.
His concluding message was unequivocal: "We now need the members’ commitment and support. It’s up to you to use the resource." n