Speciality Baker Business Plan
Morningstar Bakery is a new organic bakery specializing in gluten, wheat and dairy free products. Within the last three years there has been significant increases in demand for these bakery products. This can be explained to a large degree by the fact that up until recently Americans have had food allergies that have been undiagnosed. It has been only in the last few years that medical doctors have begun to diagnosis food allergies correctly. What was once an unknown problem that affected so many people with no recourse has become a manageable ailment that is easily dealt with through modification of diets. This is very positive for both those people that are affected as well as bakeries such as Morningstar that specialize in these products.
Morningstar offers a wide range of exciting products. The first group is spelt breads, muffins, and pastries. Spelt is used as there are far fewer people that are allergic to this grain. Yeast allergies are also common and Morningstar offers a menu of yeast free breads. Dairy free muffins and pastries are offered for vegans. Lastly, egg free breads, muffins, and pastries are offered.
Morningstar will focus on three distinct customer segments. The first group is the Allergy group. This segment is growing at 15% a year with 32,000 potential customers. The second niche is the Doctor group. This segment is also growing at 15% with 14,200 potential people. The last group is the Dieters group. This segment is typically making modifications to their diet based on their desire to lose weight. This niche also is growing at 15% with 48,000 possible customers.
Recognizing the importance of human capital, Morningstar has assembled a strong management team. The team is led by Donna Sharp. Donna comes to Morningstar with 10 years of baking experience. In addition to her industry specific experience, Donna has had 2 years of management experience. Donovan Bailey brings financial skills to Morningstar after a 15 year CPA career. Tara Juniper-Reid will lead the marketing efforts having participated in her own PR firm. Lastly, Lucy Hamilton will be on the team as an assistant baker with over five years of experience.
Morningstar is an exciting opportunity that combines, fresh baked goods with spelt, yeast free, dairy free, and egg free products, addressing the recent need for these new products. Demand for these products is expected to grow exponentially as medical doctors become more and more aware of food allergies Americans are afflicted with. Profitability is forecasted to occur by month three. Through a combination of a strong management team, a solid business model, and exciting, market demanded products will allow Morningstar to quickly gain market penetration and cash richness.
- To establish a working storefront for Morningstar bakery.
- To develop the strong presence in the community needed to support sales goals.
- To develop a full menu by the end of the second quarter.
Morningstar Bakery aims to be a cornerstone in the community creating a neighborhood atmosphere where customers feel comfortable and become instant regulars. We are sensitive to the often over-looked population of allergy sufferers and cater to their needs for healthy, delicious baked goods. We seek fair and responsible profit, enough to keep the company financially healthy for the long term and to fairly compensate owners and investors for their money and risk.
Morningstar Bakery will be located in downtown [Name omitted] in a historical building. This downtown district is a very popular destination because of the historical architecture for weekenders and tourists. It is also a prime location for all the employees of the surrounding downtown businesses. The bakery sells non-wheat and other health specific breads, sweets and pastries to the surrounding community every Tuesday through Sunday.
2.1 Company Ownership
Currently Morningstar Bakery is a sole proprietorship owned by Donna Sharp. Eventually, as the company becomes established, Morningstar Bakery will apply to be incorporated.
2.2 Start-up Summary
The primary expense to establish the Morningstar Bakery is the mortgage loan estimated at $175,000 to purchase the vacant space on [Name omitted] street. The building was previously used as a bakery and we plan to buy the used equipment along with the space. This cost is also calculated into the loan estimate. Donna Sharp intends to invest $7,500 of her savings to cover the other cost of start-up.
These costs include:
- Advertising brochures.
- Bakery ingredients.
- Bakery accessories, i.e. paper bags, cartons, etc.
Morningstar Bakery provides non-gluten baked goods and pastries to diet-conscious and wheat-allergic consumers. Special considerations are made for all common food allergies such as dairy, yeast, wheat, and eggs.
Example of goods:
Spelt breads, muffins and pastries
Spelt flour is the most common wheat-alternative flour as it has the same characteristics as wheat which provides similar taste, consistency and behaviors creating goods that are just as good as any wheat baked good.
Many people have an allergy to yeast, or have been warned by their doctors not to eat it. We provide a line of yeast-free breads.
Dairy-free muffins and pastries
Most breads do not require any dairy products, so they are not a consideration. Muffins and pastries most often require butter. To avoid this, we use a soy substitute.
Egg-free breads, muffins and pastries
Eggs are most common in muffins and pastries. Applesauce can be used as a substitute as it provides the same amount of moisture that is required.
Market Analysis Summary
Our target market includes people who are health conscious and/or have common food allergies. This is a niche market since most bakeries do not cater to these needs with the exception of high-fiber diets.
4.1 Market Segmentation
Our target market consists of three groups:
The Allergy Group
According to Health Magazine, one out of five people suffer from a common food allergy, however many bakeries do not cater to their needs.
The Doctor Diet Group
For health reasons, many people are warned off certain foods by their doctors because of high cholesterol and blood pressure. Currently the main killer in the U.S. is heart disease according the American Heart Association. Many Americans aged 50+ are going on special diets to prevent heart disease.
The Diet Craze Group
According to Self Magazine, the year 2000 saw 20 new diet fads that discouraged certain foods such as wheat and dairy. The best selling book on the New York Time list for health was the “Blood Type Diet” which encourages readers to eat only non-gluten flours such as spelt, and to avoid dairy. While this target market is quite large, it is ever fluctuating since most people who diet yo-yo between different diets (Self Magazine September 2000).
4.2 Target Market Segment Strategy
In our target market, we will mainly focus on the “allergy group” since they are the most prevalent and steady of customers. We expect that the “doctor diet group” and the ‘”diet craze” group will make up a smaller portion of our customers. We have not listed “regular customers” as a target group since the customers who do not fit into any of our groups are too varied to segment. We are specifically filling the needs of the “allergy group” so we expect the most business from this group.
4.3 Industry Analysis
Morningstar bakery competes in the Food Services Industry. In addition to competing with other organic and non-wheat bakeries, it competes with all restaurants, delis, bakeries and supermarkets for a share of its customers’s food dollar. Morningstar is most concerned with competitors who differentiate their products and services with a healthy, organic focus. Because this group is so large, Morningstar has chosen to limit its analysis to other gluten-free bakeries.
4.3.1 Competition and Buying Patterns
Currently there are two bakeries in town that provide non-wheat goods.
Great Harvest Bread Company
Strengths: Makes spelt bread, muffins and cookies every Monday, Wednesday and Friday. Well-established bakery in town. Sells breads in local grocery stores.
Weaknesses: Does not provide a wide selection of non-wheat goods. Furthermore the texture and flavor of their spelt goods is very dense and flavorless. They use whole spelt bread which makes a denser, crumby consistency bread. We use white spelt in our spelt breads and other goods which has a texture and flavor similar to wheat.
The Sweet Life Patisserie
Strengths: Makes spelt bread, muffins and brownies every day. Will make custom-ordered non-gluten cakes.
Weaknesses: Does not produce a wide selection or large quantity of non-wheat goods. Their main focus is wheat goods.