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Proofing the Profits: The Economics of In-House Bread Programs

by Francoise Villeneuve
Antoinette Bruno and Will Blunt
May 2011

Bread Recipes

Parker House Rolls
Pastry Chef Shuna Lydon of Peels – New York, NY

Pretzel Rolls
Baker Jen Rybarczyk, formerly of Grüner for Chef Chris Israel of Grüner – Portland, OR

Ramp-Bacon Rolls
Chef Tiffany MacIsaac of Birch & Barley – Washington, DC

Biographies

Chef Claire Smith
Canopy and Shade – Houston, TX

Pastry Chef Shuna Lydon
Peels – New York, NY

Pastry Chef Tiffany MacIsaac
Birch & Barley – Washington, DC

Chef Chris Israel
Grüner – Portland, OR

Photo Galleries

Chef Claire Smith
Canopy – Houston, TX

Chef Ginger Pierce Madson and Preston Madson
Peels – New York, NY

Pastry Chef Tiffany MacIsaac and Beer Sommelier Greg Engert
Birch Barley – Washington, DC

Chef Chris Israel
Grüner – Portland, OR

Chef Douglas Keane
Cyrus - Healdsburg, CA

Bread still warm from the oven emits with its aroma a promise of soft, yeasty deliciousness encased in a crackly crust. The aroma wafts out the doors of your restaurant, a fragrant come hither to passers-by. Let’s face it, making your own bread sounds pretty damn enticing. But is it really feasible? When it comes to answering that loaded question, it’s less a question of hearthside romanticism than it is of bread economics.

 

Money is a touchy issue when it comes to bread. To charge or not to charge? Is it more expensive to make it or buy it? If you’re planning on serving free bread to the table, you can cover at least some of the labor cost needed to bake bread in-house by offering menu items containing bread—whether it’s a bun, a crouton, bread pudding, or bruschetta. Culinary Institute of America costing instructor John Canner says “there are a lot of different restaurants [buying bread from an outside purveyor]. It depends on the standard that you want to work with.”

 

House-made Pretzel Bread at Grüner - Portland, OR

House-made Pretzel Bread at Grüner - Portland, OR

The Stand-alone Restaurant

At many restaurants, bread is the first thing that arrives at the table, setting the stage for the rest of the meal. If it’s lackluster, it’s foreboding; if it’s spot-on, you might be able to count on the customers’ loyalty before they even get to the first course. On the house-made bread at Portland restaurant Grüner, Chef Chris Israel concedes that “it would probably be a bit more expensive in terms of what you pay in labor cost versus what you pay a bakery [for bread].” But in the end the bread acts as an edible PR machine (that doesn’t draw a salary). “I’ve always liked to put bread and water out right away, and I think it’s an opportunity to make a really good first impression.” Israel doesn’t charge for bread, but qualifies this with a “if somebody’s chowing down on pretzel [bread], we serve two baskets, then ask them to buy after that.” Even though Israel doesn’t charge for bread baskets, he factors their cost into dishes that utilize bread. For example, the Grüner Salad incorporates leftover pretzel bread reborn as croutons. He also splits the loaf bread into grilled cheese sandwiches. For his stand-alone restaurant, Israel estimates he pays a full-time staff member $150 a day to execute both the pastries and the bread together. “It’s a combination job in terms of what we’re getting from the labor,” he clarifies. One of the luxuries of a stand-alone restaurant is that while your budget might be pint-sized, your volume might be small enough to justify having one salaried employee cover both your pastry program and bread programs.

 

House-made bread at Houston restaurant Canopy

House-made bread at Houston restaurant Canopy

The In-Restaurant Bakery

Pastry Chef and Baker Shuna Lydon at Peels not only crafts the dessert menu for the restaurant, but also heads up a small in-house bakery on the ground floor. The house-made bread not only gets a good retail bang for its buck, but it also appears in the bread basket for customers at the restaurant. Lydon is a purist, though, when it comes to getting warm bread to customers. When she joined the opening team, she insisted they bake the biscuits consistently throughout the day. Now they reheat and finish the Parker House rolls that Lydon terms “my babies” to order, and charges for them. This is one of the ways she undercuts the cost of running the program and offering bread. Other than her beloved rolls, she does not charge for bread if it’s requested. Of course, this approach could alienate customers who—not knowing this—order bread. But in the end, the owners of the restaurant agreed the Parker House rolls needed to be showcased, so they remain available by the order. Having house-made bread “definitely makes us stand apart from other New York restaurants that only offer store bought bread,” says Lydon. And because the bakery has been a huge part of the appeal of the restaurant, it boosts business so much that it balances out the cost put in.

The Bakery-Café

Chef and cookbook author Joanne Chang planned on buying bread for the sandwiches at Flour Bakery + Café and making bread for a few select sandwiches at first, but she fell in love with the house-made sandwich bread and decided to use it for all their sandwiches. “It really makes a difference in our final product.” Chang also prepares the artisan breads that she sells retail. This wasn’t her first foray into house-made bread though—far from it. She spent time at Amy’s Bread in New York and also prepared bread while working as Pastry Chef at Rialto. Her advice to chefs looking to start an in-house bread program? “Find a few good, reliable recipes and start small.” Chang readily admits that bread is a high labor cost item, despite the ingredients costing mere pennies. But at a café where the main offering is sandwiches, “it’s totally worth it because it’s a key ingredient.” You will soon be able to read more about the sandwiches at Flour Bakery + Café—Chang is working on a second book featuring the soups, sandwiches, and other menu items there.

 

House-made Bread Board at Birch & Barley - Washington, DC

House-made Bread Board at Birch & Barley - Washington, DC

The Restaurant Group

When Pastry Chef Tiffany MacIsaac of DC restaurant Birch & Barley started her first bread program at Allen & Delancey in New York, she had never worked at a restaurant with a bread program, so it was all trial and error. In the end, that approach had its merits. “If you make a mistake with the product you’re counting on using, you never make that mistake again!” Birch & Barley is part of the Neighborhood Restaurant Group—quite the sprawling enterprise, with seven restaurants and two bakeries. The bakeries don’t have a bread program yet but MacIsaac hopes to start selling a dozen loaves or so each day from each bakery to hungry Washingtonians on their way home from work. At the moment, she’s making bread for beer concept restaurant Birch & Barley and upstairs bar ChurchKey; which for most pastry chefs would be enough of a challenge. But the group is in the midst of construction of a commissary where all the bread for the group’s restaurants will be prepared.

If you’re a large restaurant group, one location for large-scale baking could end up being more economical in the long-run, as you don’t run into the space and consistency issues that you would if you were preparing one recipe in multiple restaurants. For MacIsaac the upside is choice. “We want everything made to the exact specifications of the restaurant. Right now you call the local bakery and they say ‘we have three categories of burger buns to choose from,’ and if you don’t want what they have you’re shit out of luck, basically.” Chef-owner Claire Smith of Houston restaurants Canopy and Shade found herself asking, “Why would I go and buy bread from the wholesale bakers? I could design menu items around the bread.” Now a large portion of the Shade menu revolves around bread, whether it’s as an accent—like a crostini on a salad—or part of the architecture of a dish—like sourdough used to make pressed sandwiches. She can also custom-design bread recipes around new dish ideas—like Eggs Benedict on a Sweet Potato English Muffin—then develop the recipe to fit. Smith shrugs off the equipment needed to make bread with “everything in the restaurant business requires a lot of equipment.” She sprang for a deck oven and a mixer, but also balances the cost of providing bread for two restaurants with wholesale accounts. MacIsaac’s a veteran of the New York matchbox-sized restaurant kitchen, so when it came to choosing an oven for Birch & Barley she made a convection oven work. She advises getting a convection oven with a steam function though, if you’re short on space. This comes in handy when she fires off complimentary bread boards as each table arrives (MacIsaac is enemy number one of the bread warmer).

 

House-made Bread Basket at Cyrus - Healdsburg, CA

House-made Bread Basket at Cyrus - Healdsburg, CA

The Economics of Status

Economics do not exist in a vacuum, and restaurants that gain culinary cred because of their in-house bread can be willing to forgo a little profit. For Chef Douglas Keane, the moment he saw the power of in-house bread came while celebrating the 2 Michelin stars won in the first year that Healdsburg, California restaurant Cyrus was open. It was on a trip to Joel Robuchon in Vegas, he remembers, “in the back of our heads, although we were happy and proud of our two stars, we were thinking ‘what does it take to get three?’ Then the bread cart rolled up and we said ‘oh I get it!’” It wasn’t to win that elusive third star that Keane revamping the building next door into a space to house their in-house bread program, though (costing about $450,000, Keane estimates, once the space was leased, the kitchen converted, and the equipment purchased). “It was more of an investment in the future of the restaurant,” he says. Of course he could have simply replicated the one type of bread that the restaurant had been purchasing for less money, but he took the opportunity to diversify the bread program, by including a basket of individually portioned breads, like brioche, laminated olive and feta rolls, multigrain rolls, and garlic rolls, increasing the cost of the program overall. “We were paying between $50 and $60,000 a year for bread, now I pay close to $40,000 in labor, then add food cost, it probably costs me more now because I’m doing eight different breads. But it wasn’t a business move, it was a vision move.”



The cost of making bread in-house depends on the volume, facilities, and labor at your disposal. Large scale bread production is often less expensive than small scale production, so you end up paying off all that great equipment. Lydon breaks it down for us. “If I make three loaves of bread, it costs me a dollar a loaf. If I make 300 loaves of bread it costs me 10 cents a loaf.” Before you put a commissary on your wish list though, think about starting small until you can handle the volume. Your bread-enamored customers won’t thank you if your new signature house-made rosemary focaccia runs out.