Cycle complete!
This past week I turned up in Karlsruhe, South West Germany to stay at a friends house for the night. However upon arriving at the door and ringing the doorbell I didn't receive any answer. We had the time agreed and all but unfortunately he wasn't around at this time. Anyhow I set off to find someone who had a phone with which to call him (my phone is setup for wifi when I'm abroad but not for calling or texting.
My friends house was in a suburb just outside the city and the hamlet there was almost devoid in the way of shops or people who I could approach to ask for help. I found a bakery however and asking 'sprecken tu engels?' I was fortunately met with a smile and an affirmative 'Yes'. And so I asked if I could use her phone to call my friend. She said that would be no problem at all and so handed me the phone. I called, but the number I was given seemed to be wrong when it would not ring. Anyhow with time on my hands and no one else in the shop I struck up conversation on the economics of running a bakery. With the finance background I always find it interesting to learn of how different businesses are run, so a bakery was a new one for me. I asked for how long they would leave the breads and the cakes on the shelves for? For her (and as I imagine is the case in most bakeries) it was one day for the bread and 2 days for the cakes. This meant that whatever stock was leftover would be thrown out or sold into a secondary market (to another shop) for very little. When I cast my eyes onto the shelves, this looked like an extraordinary amount given they were half full and it being 4pm in the afternoon. When you think of the pricing strategy bakers must use when pricing their loaves of bread or their sugary cakes, one large factor in this must be how much waste they expect me their to be. For if one creates 10 loaves of bread at a total cost of €1.50 each (10x€1.50=€15) and sells them for €2, but only sells 6, then he will make a loss will he not? (6x€2=€12). If this continues then the baker must raise his prices or he can cut production to a level that he believes will match demand for the day. But this is another sticky problem that leads me onto the next point. How does a baker create the right balance of not baking too much nor cooking too little on any given day? This is a dilemma that perhaps German bakers face more often than in other countries, as my baker friend explained to me. "Customers always ask is the bread still warm? But it only stays warm for 30 minutes once out of the oven. Some of my customer won't buy anything if it's not warm and so will leave for the other bakery down the road. Throughout the day I will make batches so that it's as fresh as possible." Sadly even this is not enough for some customers. The other problem associated with creating only just enough bread to meet demand is that often the shelves can look empty. And as we all know when we look for bread or cakes and see only one or 2 left, we are inclined to think that it must be 'old' or that it's 'the worst of the bunch and so was left there intentionally by others.' This my friend explained is another problem of running a bakery in that customers will hesitate to buy something of which the shelf is not plentiful off already. So if there's leftover bread at the end of the day why not give it to the poor? This was a question that without me asking, seemed to immediately raise its head based on our thread of conversation. It so happened that she had tried this already. That at the end of the day, a poor man came in looking for old bread. She acquiesced to him simply on a feeling of pity giving him some bread and thought no more of it till the next day. Next day there was a queue of impoverished people waiting for the shop to close. This she said was unsustainable for two reasons: 1. The image that you have of people of multiple social, drink, drug related problems sitting outside your shop does not lend itself to a healthy image to passing or potential customers, therefore reducing sales. 2. It also doesn't help sales if people know they can get it free by waiting till the end of the day. In this way, being generous was detrimental to the business. And so that concluded my brief but interesting introduction into the running of a German bakery. It's a tough world getting up at 4am and trying to balance pyroduction with demand for products that are low value and only profitable in volume. Perhaps we should be more appreciative to small bakeries who must balance so much to give us our daily loaves of bread.
0 Comments
Leave a Reply. |
The AuthorName: Daniel Ross Top Tips:
1. Constantly challenge yourself. 2. If you never try you'll never know what's possible. Archives
October 2016
Categories |