Q. I’m the third generation owner of a bakery. We have been profitable for years and have assets tied up, but sales have been in slow decline for some time. I’m wondering if this is because, as a traditional family business, there are things we do here that we have done for years. I am interested in new types of products and techniques, but I am unsure where to start. How can I reinvigorate my business without throwing the baby out with the bath water?
Peter Shaw writes:
First, look at what consumers are doing differently today, compared to when your sales were still growing. Our bread consumption as a nation has changed beyond measure over the last 30 years. Back in the 1970s, the greatest innovation to date was slicing bread and putting it in a plastic bag. Today, not only has our traditional bread consumption gone down, but also our tastes in bread have broadened beyond measure. Speciality breads are the one category that has seen huge innovation over the last 10 years or so, and the great thing about these types of products is that they are higher in margin.
Great innovation is a mixture of the familiar with the distinctive. Don’t try and create something completely new, but do try and give a known product category a twist. Creating a completely new product is a long and lonely road. Take a look at Yakult, that strange little dairy drink in a bottle with an odd lemony flavour and millions of live bacteria to help your digestion. It has taken that brand over 10 years to even begin to become mainstream, and it is still seen as peculiar by many people. Compare this to the yogurt brands that introduced live bacteria into their products. In this way, beneficial bacteria as a value added proposition became mainstream much more quickly, because people understand yogurt as a live product.
The next thing is to understand why your business has been successful to date. Are your products distinctive, do you have a particular relationship with your customers, is it the location of your shop? What are the aspects of your business that you could leverage further? Is there something in your region you could develop – every part of the country has a different name for a bun. I worked with a butcher, and we identified his local sourcing as a way of adding value and attracting more customers. Could you develop beyond the bakery by selling something else to your loyal customers. How about a small café, or a delicatessen promising the same culinary skills as your baking? The answer lies in your business; the key is to look at it from a different perspective.
Peter Shaw runs the brand consultancy Brand Catalyst, helping businesses create and develop distinctive and profitable brands.
www.brandcatalyst.co.uk
