How to invest to be the best
March 1, 2012
by Dan Malovany
In today’s economy, consumers will pay for artisan breads but only so much — usually $3.99 to $4.99 a loaf, depending on the market. To achieve these price points yet provide extra value, Tribeca Oven invests in premium ingredients while relying on lean manufacturing to control costs. “We’re happy to put labor into a product as long as we have the margin to sell it,” explained Marc Essenfeld, CEO of the Carlstadt, NJ-based bakery.
For example, Tribeca roasts its own garlic, hand-strips rosemary and preps all onions and potatoes internally. “We can buy dry rosemary or prepped garlic, and it would actually be less expensive. But we do it in a way that we think is right, and we believe customers will pay for these products because they perceive them to have a point of difference,” Mr. Essenfeld said. “It’s not about being a 100% lowest-cost operation. It’s about providing value to our customers in a way we can get a premium price.”
At the same time, the company is Level 2 certified by the Safe Quality Food Institute and enacted a lean manufacturing training program to remove non-value-added costs. Sometimes cutting costs is surprisingly simple, according to Mr. Essenfeld. “We used to print all of our batch sheets on a printer located upstairs,” he noted. “People had to leave the production area when there was a change in the schedule. We found we were spending $15,000 a year on people running up and down the stairs. We solved that by putting a $300 printer on the plant floor.”