Advantages

Value Assessment Through Cost Comparisons in Today's Business Environment

In retaining its position as a market leader, French Gourmet continually strives to keep abreast of fluctuations in market conditions.

One of the methods used to steer the company?s direction is market surveys. French Gourmet compiled a survey from intensive field work in hotels and pastry shops of various sizes in the United States, Hong Kong, Singapore, and Korea, which represent a cross-section of its domestic and international markets.

Further, it strictly focused on breakfast pastries and breads (doughs and batters), the most labor-intensive segment in any pastry department around the world today, yet the least profitable. It is not always recognized as such, simply because high-profit items, like cakes and pastries, mask the real cost incurred in dough making, since costing is based on the entire department.

Additionally, market indicators suggest that bakeries are becoming expensive to operate due to the continued shortage of skilled labor in this field. More than ever before companies are looking for alternatives.

With today's new challenges present in every bakery and kitchen, current strategies in retaining quality and achieving bottom-line figures may need to be reconfirmed or revised.

The pie charts on the next pages illustrate a spectrum of five categories in how dough products can be acquired today ? from the least convenient, highly labor-intensive dough made in-house, to the most convenient and of the highest quality Artisan Frozen Dough where only 3% labor is required.

The cost percentage allocation shown interprets the pulse of today?s market. The bar chart demonstrates the benefits to be reaped when selecting from the least to the most convenient categories.

Market indicators suggest
that bakeries are becoming expensive
to operate due to the continued
shortage of skilled labor in this field.

These data were published to enlighten and initiate a meeting of the minds among department heads ? pastry and kitchen, purchasing, food and beverage, cost control, and the head office.

How does your organization?s present costs compare? Surely, there will be some differences, as the numbers shown are averaged out. Nevertheless, they will illustrate today?s business environment.

Are you as profitable as you thought? Are you meeting your company?s standards? Are you maintaining customer satisfaction? Are your cost increases eroding your profit?