Community Supported Bakeries
"It is a fascinating example of applying the concept of Community Supported Agriculture to a different enterprise. Dan and Johanna started small, doing their first baking in their oven at home. They began building a base of subscribers, who paid for two loaves of bread a week, which were collected from a local pub. They observed that most bakers get up at 3am to bake, something, with a small child, they were understandably keen not to do. They also observed that most people make toast with bread in the morning, which can be done with staler bread, and the time you actually want fresh bread is at lunchtime.
They wanted to expand the business, but no premises and no big oven. Then, ingeniously, they approached a local pizzeria, whose oven was only used during the evening, and came to an arrangement to use their oven in the mornings. For two days a week they baked bread for their subscribers, and every Saturday morning the pizzeria became an impromptu bakery where people could drop in.
Then a grocers shop in Slaithwaite was in danger of closure, and Transition Slaithwaite and others took the shop over as a Customer Co-op, and so after 6 months, the Handmade Bakery left the pizzeria and took over its own premises in the back of the shop. It is an ideal partnership, supporting both businesses. They are now baking 1200 loaves a week, most of which are sold within 7 miles of the bakery, and employ 9 part-time staff. 30% of what they sell is sold through the shop, the rest through other outlets and direct to subscribers. The benefit to subscribers is that they get a discount on their bread, they are able to collect it whenever is convenient for them, they know they won’t turn up to buy bread and find it has sold out, and they are emailed options for what they would like baked the following week.
Dan told me that for him, the CSA/subscription based approach is best at the earlier stage of the business. When they started, 100% of their business came from subscribers, now it is more like 10%. The advantages, he told me, are that you build instant customer loyalty and create many champions in the community, and it takes a lot of the risk out of starting a new business. Amazingly, many of the initial subscribers signed up without even tasting the bread!
When I spoke to Dan, he told me that the business has grown so well, that he is now planning on using the subscription model a second time, as a way of financing the business’s move to larger premises. The Handmade Bakery also runs courses in breadmaking and how to start your own bakery, which have become wildly popular. So, in order to have a new larger space for baking, training, and for community events, they need to raise £20,000. The idea is to invite investment as 3 year rolling loans offering 7% interest, but with the interest paid in bread. This, for the business, is a very attractive rate to borrow money at." (http://transitionculture.org/2010/12/22/ingredients-of-transition-community-supported-farms-bakeries-and-breweries/)