In Ottawa, there are surprisingly few independent bakeries that cater to walk-in traffic and specialize in bread. Or maybe it’s not such a surprise.
“There are only about seven, including us,” says Jessica Carpinone, owner of Bread By Us on Wellington Street West. “It seems like a small number, based on my travels to Vancouver and Montreal, where there are a lot of really good bread bakeries. Granted, their population size is double that of Ottawa’s, but it always strikes me, for example, how many craft breweries there are in Ottawa and the surrounding areas. I can think of at least 10 off the top of my head. Or barber shops — so many barber shops!”
Considering that more people eat bread than drink beer or frequent barber shops, the stats — though anecdotal — are worth discussion. We worked with Carpinone to explore how overhead costs, and the skill required to make really great bread, result in high risk for local bakeries. Carpinone says these risks keep most of the city’s bakers hidden away in industrial parks and restaurant basements, opting to deliver their breads to wholesale clients instead.
We asked Carpinone for a breakdown of the costs that go into making a loaf of their most popular bread, the Country Sourdough.
Ingredients: $0.80 The ingredients in BBU’s Country Sourdough loaf are about as simple as it gets — flour, water, yeast, and salt. They use a blend of three flours to get just the right texture and nutrient balance: organic white wheat flour from La Milanaise, organic stone ground wheat from Moulin Lacoste, and conventional wheat from P&H Milling. BBU’s blend of organic and conventional flours is meant to help keep prices affordable. High-end organic flours can run as high as $40/20kg bag, whereas a good quality, unbleached conventional bag costs around $16. The cost of water, yeast, and salt is negligible.
Labour: $3.25 To pull off an average bread and pastry production, BBU relies on staffing three bakers every day, plus one dishwasher, and two service staff to get bread into customer’s hands. On any given day, those three bakers make around 200 loaves of bread, 180 hand-rolled croissants, and 200 buns. Compared to industry standards, BBU spends a lot on labour — 53 per cent of revenues are spent on payroll (latest statistics average salaries, wages, and benefits as 32 per cent of revenue). This is a direct result of the skill set and the amount of time required to pull off high quality bread. It takes, on average, a year to fully train a bread baker who has some foundations in the craft. (Six years in, BBU has six bakers.) It takes between 24-48 hours, working within a meticulous production schedule, to turn flour, water, yeast, and salt into a delicious loaf of bread.
Overhead: $1.50 Rent, utilities, cleaning and packaging products, repairs and maintenance, professional services, and everything else you need to run a store are all included under this category. Carpinone says it was important for her to be on a street with good pedestrian traffic. But at $5000/month, rent isn’t cheap. Moving to a warehouse or to less expensive real estate isn’t on their radar though — getting that 1 tonne oven into the shop was a one-way trip!
Profit: $0.95 The cost to prepare a 900g loaf of sourdough bread that sells for $6.50 is $5.55. Compared to their overall profit margin of around 2.5 per cent, a 14 per cent profit margin on a loaf of sourdough bread is a money-maker for the bakery. Even though selling bread is the simplest way to turn a profit, getting people in the doors to buy it is complicated.
As people got to know Bread by Us over the years, Carpinone and her team diversified the menu. The coffee shop, the lunch menu (a loss-leader), the pastries (another loss-leader), and the friendly service are all important draws to getting people to come in and buy bread.
“Diversifying our menu has been key to gaining a steady following,” says Carpinone. “Our friendly service and coffee bar bring in people who might not otherwise care much about bread. Loss leaders, like our lunch menu and our pastries, bring people who live and work in the neighbourhood into the store and are an indispensable part of our business model. All of the components combined are what make our bakery work.”
When you’re considering whether to buy high-quality, handmade bread, consider that there is a lot of value packed inside a great loaf. Consider how much it nourishes; consider that you don’t bat an eye at paying $8 for a pint, and beer is made with the same ingredients. Consider that paying a small premium compared to what you might pay at the grocery store is worthwhile when you add in the intangible benefits to the street culture that a shop like Bread By Us provides.