Menu Selection and Pricing: How should cottage food operators create and price a menu for success?

(This article appeared in the Spring 2022 issue of Pastry Arts Magazine)

By Deanna Martinez-Bey

In any given town or city, you will find various doctors, including dentists, orthodontists, chiropractors, podiatrists, but chances are you will never find one professional that offers all of these services to their patients. The same goes for cottage bakers. First, as bakers, we need to figure out our niche. Then we have to choose specific items in which to specialize. These items will allow us to stand out from other cottage bakers in our area. Let’s take a look at some ideas to help you nail down your niche:

Create What You Love

Ask yourself these questions: What do you enjoy baking? Do you enjoy decorating cakes? Is your heart in creating intricate cookies? The trick is to find out what you enjoy creating and then take the time you need to perfect those items.

Practice, Practice, Practice

After you decide what baked goods bring you joy, start practicing. Try new recipes and new decorating techniques. YouTube is a fantastic place to watch videos to learn new ideas and methods. Instagram is also an excellent platform to watch cookie decorating at its finest.

Clientele

Give some thought to who your ideal client would be. For example, have you worked with baking customers in the past? What types of baked goods were they interested in purchasing? It would be wise to tailor the marketing for your bakery to potential customers in your area.

Visit Bakeries in Your Area

Visiting other bakeries will give you a firm foundation for what types of baked goods are popular in your area. Then you can create your recipes and decorations to make your items stand out from the others. In addition to the baked goods they have for sale, take notice of their business cards, decorations, color scheme and all the things that pertain to what makes that business run successfully. After doing this, jot down what you liked about each business and use those ideas to springboard your cottage bakery.

Cottage Bakery Marketing Tips

Income, family status, age, and gender play a role in your target market. For example, the younger generation may order cookies, cupcakes or cake slices. Families may order items along the lines of bread and rolls. Your higher-income customers may order custom cakes and cookies. Stay current on what is trendy in the baking industry. Also, pay attention to what ingredients are popular in your area. For example, if you live in an area with a high vegan or gluten-free population, you may want to offer items geared towards them.

Pricing Your Baked Goods

Pricing can be a cottage baker’s worst nightmare. On the one hand, you want to make sure your baked goods are reasonably priced, and on the other hand, you want to be sure you are making a profit on each item.

1. Ingredient Cost

Create a spreadsheet with a list of ingredients used in each recipe and the current cost of each ingredient.

2. Time to Make the Recipe

How long does it take you to create each item? (prepare, bake, decorate and package)

3. What amount will you charge for your time?

For example, if you value your time being worth $20 an hour, and it takes you two hours to create an item, then you will want to add $40 to the total charge of that item.

4. Preparation and Packaging

Create a list of items you need to produce and package each item (parchment paper, cupcake liners, boxes, etc.)

Total Cost:

Ingredients: $5
Time: 2 hours
Your Pay: $20 (assuming $10 per hour)
Packaging: $5

You would have to charge $30 for this baked item to break even. To make a profit, increase by 20%. Your total charge is $36.

Your labor cost will go up with specialty cakes or cookies because of the extra time it will take you to decorate these items. These numbers are estimated to give you an idea of where to begin pricing your baked goods.

Photos by Kliver, Depositphotos

Deanna Martinez-Bey is a cottage baker, baking class instructor, content creator, and multi-genre author. With twelve published books under her belt and a certified cottage bakery, everything she does revolves around food and writing in one way, shape or form.