Co-Op Bakery

A Bakery operation is one of the easiest projects to establish in the Co-op kitchen.  The skills are fundamental for anyone looking to learn and for a group of a couple hundred people, they are likely already in place with varying degrees of skill.  Baked goods are used by most families: breads, cakes, snacks, muffins, bagels, rolls, pies, pastry.  They are also used by most of the general public, offering great potential for marketing.

Ingredients are primarily commodities: flour, yeast, sugar, oil, salt are the core.  Specialty grains and gluten free flours are also in growing demand.  Being commodities, the ingredients are available just about everywhere, and larger volume usually presents a lower price per unit.  They store without refrigeration, and need nothing more than an airtight container.  With a few simple ingredients and some equipment, product variety is practically limitless.

The equipment list is short.  A properly set up kitchen would already have an oven, worktables, a sink to wash the dishes.  A cooling rack gets the finished product out of the way.  A mixer comes in handy for volume production.  A proofing cabinet speeds up production.  Each product will use specific smaller equipment such as baking sheets, loaf pans, cake and pie pans.  Much beyond this list we are talking about smallwares and hand tools.  Scavenging can bring in many of those small tools.  

Bread is the staff of life.  Making bread is pretty simple: combine the ingredients, work the dough, bake.  We can buy it at the supermarket or bake our own.  Bread is well suited to the co-op: cheap to make, can be produced in good volume with the right equipment and some easily trained labor, and is purchased regularly by most members of the co-op and the general public.  A standard 9 inch loaf has a production cost of around 50¢, and with volume, the ingredients get cheaper.  A retail price of a couple bucks puts a steady cash flow into the company till.  200 families, 2 loaves per week, 400 loaves per week.  If we net a buck per loaf, $400/week, $20,000 per year.  We are already buying it.  Rather than keep on giving our grocery budget to the supermarket, we redirect it to our own company.  Just the bread would recover the investment made into the entire kitchen in a year, and this figure does not take into account sales to the general public.

Bagels cost about 6¢ to produce.  A half dozen at the supermarket will run $3.95.  Production is similar to bread, but with a parboiling step involved.  In the supermarket, the price you pay covers advertising, shipping, packaging, refrigeration, and production.  In our own bakery, ingredients and a bag are the expenses involved, leaving a substantial profit potential.  The sales figures won't be the same as bread, but if there are buyers this product can offer a handsome contribution.

We've got a bakery, let's put it to use with pies.  This would not be a major item every day.  Around the holidays, pies will move out the door as fast as we can make them.  Apple, blueberry, pumpkin, custard, pecan, banana cream, cherry, strawberry-rhubarb, lemon meringue, boston creme, banana creme, peach, squash, tomato...Good Lord, The Pies!

Pies present an interesting opportunity for developing a wholesale product line.  We would already be looking at restaurants as a market for our farm fresh produce.  Offering pies for sale to those same restaurants will bring more sales.  We're already going there to drop off vegetables.  Adding pies to our product line does not entail addition fuel costs or travel time.  We'd be well placed to take on a larger market share of the products used by those restaurants.  The same applies to our breads and rolls.  A restaurant would make good use of a pie, and offering a different pie each week to their customers keeps their customers coming back.  It would be possible to set up our own dining room with a slice of pie on the menu.  

A standard commercial oven will fit 6 pies on a rack.  With 3 racks, we can bake 18 pies in a batch.  It takes an hour to bake a batch.  During the holidays, we may need to beg people to work all night.  If we can move 18 pies an hour to local restaurants and in store sales there would be a whole lot of labor involved, and its US performing that labor.  We sell pies, we create opportunity for ourselves.

Cookies are another product which can be easily produced with simple ingredients and sold in volume locally.  The Girl Scouts only come around once a year.  The rest of the time its up to us to make the cookies people so desperately deserve.  There's a guy in town who put together a chain of convenience stores.  He's got 100 of them in 4 counties.  He's local.  I've met him a few times.  He'd be keen to the idea of supporting a local business.  Put some math behind this idea:

100 stores
10 boxes of cookies sold per store per week
=1000 boxes of cookies
We make a profit of a buck on each box
over the course of a year, $50,000

A wholesale cookie project would take some planning.  We'd have to develop the packaging and production routines, ensure our suppliers are lined up, and work out scheduling of staffing and equipment capacity.  We'd want to start the project with trials at our own store with sales to our group and our customer base.  When we find the right recipe and have the details worked out, we make the approach to the buyer for the store, give him our best shot.  If he buys, we have a major achievement under our belts.  If he does not, there are other store chains.  Eventually, we'll make a sale.  It may not be the next Twinkie, but it will be enough to make a difference in the lives of the people in the co-op.


Cooperative Enterprise, Plan Outline