Welcome to Season 7 of the Troubleshooting Innovation podcast. Joanie Spencer, editor-in-chief for Commercial Baking, speaks with Richard Charpentier, CMB, and CEO of consulting company Baking Innovation. Their conversation explores the technical aspects of creating high-quality, premium baked goods on a commercial scale. Sponsored by Puratos’ Sunset Glaze.

In the first episode, Spencer and Charpentier give bakers a roadmap to understand the product development of premium baked goods, the risks behind it, and the difference between artisan vs. premium.

Learn more about this season here, and listen to Troubleshooting Innovation on Apple, Spotify, Google and Stitcher.

Joanie Spencer: Hi, Richard. Thank you so much for joining me this season.

Richard Charpentier: Hey! How are you, Joanie? Thank you for having me on the podcast. I’m happy to be here.

Spencer: I’m excited to tap into your years and years of expertise in bakery across a broad spectrum. For this season, we are going to talk about premium product development. And the first thing, I think, before we can even go anywhere, is we have to sort of define the parameters. So, premium can be a subjective term. In your opinion, when someone says a product is premium, what exactly does that mean?

Charpentier: Excellent question. For me, as a master baker and bakery scientist, premium comes with a variety of factors. It’s going to be higher quality ingredients, premium flour, whether or not you are making a pizza and bringing your flour from Italy or bringing water from Jersey to have better water to make a pizza. The artisanal production methods how to the format, are they taking the time for, say, long fermentation? Are they paying attention to details? What type of unique flavors do the products offer? Are they really fermenting to create optimal flavors? And of course, what type of packaging will convey a sense of luxury?

Premium to me is every category that we deal with, as a level of premium, whether you buy watches, cars, socks, shoes … there’s always a price for everybody, and there’s always a premium of what is considered better luxury. And one perfect example …  a lot of people I know love the French macaron retailer Laduree that was started in 1862 in Paris. Those macarons are considered premium luxury, top-notch quality. Generally, a premium product is something that offers a superior experience compared to its regular standard counterpart. It is important to think of the experience that it brings, because it’s often associated with a higher price point, and targets consumers that are willing to pay more for quality and exclusivity.

Spencer: Absolutely. And I like that you use Laduree as an example, because I’ve always seen that brand as a little bit mystical in the macaron space. You also talked about fermentation, and the level of time that goes into product development. And when we think about products like bread — a fermented product — that often refers to an artisan product. And some people tend to use the words artisan and premium interchangeably, but those are really two different things. So, what are the differences between artisan and premium? Where do they intersect, and why do they get confused so often?

Charpentier: Excellent question. Based on my experience, I did start as a bakery apprentice, back in France, and when I started I worked for an artisan baker. Everything we made was basically done and crafted with methods of attention to detail. Each product was made from scratch in a smaller batch to keep the unique flavor and texture. Because we had bakeries all over every street corner, we had to set ourselves apart from others and any mass-produced goods, because we wanted to drive the premium price.

In contrast, I think premium products are defined by superior quality and the ability to offer a higher level of experience for the customers purchasing it. This can involve just higher quality ingredients, unique flavors or even keto bread. And often the confusion between those two terms, artisan and premium, may come from the fact that many artisan products are also considered premium. This comes from going into a bakery and seeing premium products with high quality ingredients and attention to detail.

People will line up at beautiful retail bakeries because they know it’s an artisan product as well as a premium product. However, not to be confused, not all premium products are artisanal in nature, because they’re made somewhere else. As some may use a modern production method and rely on branding and marketing to convey the sense of exclusivity, they’re different from the artisan. And in the word artisan, there is the word art. So that means a lot of handmade work, in my opinion. Some people can argue with that, but that’s the way I look at it.

Spencer: I think it is important to articulate that a product doesn’t have to be artisan to be premium. You can create a premium product on a commercial scale. It doesn’t have to be handmade or artisan to be a high-quality premium product. So, Richard, there’s a lot of talk in our industry about premiumization. You and I were both at the American Bakers Association convention back in March. A lot of the research that was presented there talked about premium items and talked about the fact that consumers will spend money on premium baked goods despite inflationary pressure.

So, I kind of want to unpack that from a product development perspective because there’s a space for premium baked goods on store shelves. In terms of product development, I’m going to just sort of throw three different scenarios out there. There’s a bakery that could upscale its current product or add a premium item or a premium version of the existing product lineup or create an entirely new premium product to take into a different category. In your experience, what are the considerations that a bakery operation should make in each of these scenarios?

Charpentier: That is a very good question. When bakers are trying to upscale a current product to a premium version, they should really think of how to add either unique flavors or assets that will, again, go back and give the premium experience to their end customers. Are they changing the fermentation process? Are they going to improve the current packaging? From experience, I’ve seen a lot of commercial bakeries trying to say we’re going to upscale it, and all they have changed is the packaging, and that doesn’t work. Before upscaling a current product to a premium, I think bakers should really assess the overall competition and see what similar products are available in the market because being premium is being unique also. And if you’re trying to be like everybody else, you lose that premium-ness. So, that’s the first thing when upscaling.

The second part of your question was how can they add sort of a premium item to an existing product line where you have your current product line and now you say, “We’re going to a premium item on the same line? To me, the first thing I’m thinking is, let’s make sure that the new premium product you’re trying to bring aligns with the overall brand image and values of the company. Because if you have a cookie at Costco, a bulk, and people see it as a good quality product, but a value product, and now you’re trying to say, “We’re going to be premium,” does it meet the overall brand image and values? Also, when adding an premium item to an existing product line, I think the baker should consider their production process, their pricing strategy and their packaging and make sure that their new premium product stands out in the premium offering and think about it from a supply chain standpoint.

The last part of the question was, if you create an entirely new premium product to take into a new category, what is the most challenging thing to do? To bakers at that point, I’d say, “Hey, go conduct good market research to truly identify the potential gaps or opportunities in the market.” Also, same thing with considering the production process because you need to be able to make the product well and consistently every day. Also, as you go into premium, which is difficult for bakers, is the culture shock of the cost of the ingredients in premium products. Not necessarily always, but either the cost of the ingredients or the cost of the new process because the product, in order to be unique and give the experience, has to have  flavors that will set you apart from other premium offerings in the market and bakers, additionally, should really evaluate the potential customer base for the new product and develop a pricing and marketing strategy that will align with their needs and preferences.

Spencer: I know the third scenario is probably the least likely of the three. And it is not that likely that a high-speed bun producer is going to suddenly want to become a premium croissant producer, because that is a complete shift that requires a totally different operation. But I do think that it’s possible for a bakery operation to break into a new category and do so by creating a premium product. Perhaps it’s a baker who was already making premium products and wants to expand into a different category.

As I’m hearing these considerations, I’m thinking about a conversation that you and I had previously and that was around workforce and training. How do you train a staff that is most likely lean? Because in bakery manufacturing today, we’re all sort of operating lean and mean when it comes to our workforce. How do you train and, especially from your perspective as a master baker, how do you teach today’s workforce to sort of flex their creative muscle and expand their thinking to get into a premium production mindset?

Charpentier: To take what you’ve been doing for years … people are very talented with the day-to-day operation … And then you’re thinking of getting more into the premium and training, you need to invest in good education and good training for your people. Baking is not a simple thing of just putting all the ingredients together, and voila. You need to have people watching the process, and training is essential.

Coming from Europe, baking is a trade, and you must go to school for two years before you can call yourself a baker. In France, if you want to be a waiter, you must go to school for two years. In the US, we have trades for hairdressers, carpenters, electricians and things like that are considered trades. But for baker’s, we tend to ignore that and think we don’t need that. So, if they’re trying to expand, I recommend training. I would love to see a master baker in all bakeries like it used to be back in the days, to have at least one person, like in the brewing industry, to have a brew master that says when it is ready and not ready. To do that, reaching out to the supplier’s consultant and finding people who can truly teach is critical. We have lots of great talents, and I’ve lots of friends who are either retired or semi-retired, and I’m sure they could be convinced to come for a week and talk knowledge. Because the knowledge in baking for training is the people.

You can have all the textbooks, but it’s the people who can show and the touch and feel that I think we’re missing. Once you bring someone, for an example, who was an expert of working croissants, I will collaborate with that person and say, “Teach us, based on your recommendation, how can we get the best croissant with the current equipment?” And then collaborate to achieve that. But as we said, it’ll take time and investment from both parties to be willing to do that.

Spencer: And you make a good point that you have to sort of look outside of the bakery to find those experts, whether it’s consultants or the supplier network, suppliers of equipment and suppliers of ingredients. Both bring a lot to the table in terms of training, and there are master bakers, who are consultants, like yourself. And then also suppliers have master bakers who are available to not only train but help ideate for product development, for creating these new products. If we go back to those scenarios, and we think about a baker wanting to develop a premium product and any of those scenarios, let’s take it back one step further. What’s the first question that the team needs to ask themselves before they even take the first step?

Charpentier: I would say as a group, the bakers should say, “Do we have the internal knowledge to do that?” I have lots of great friends who are amazing bakers, but they’ve been making bread for the last 40 years. Are they comfortable making croissants? I’m sure they could, but I think at that point it’s we are trained and do we have the equipment and the production setup there? Are they willing to invest in equipment and then education, to first determine the visibility of what it would take for creating a premium product? And what steps would they need to ensure its success? Because that’s a key. Because if you go for premium, it’s not just a limited time offer. Premium ensures the quality and the consistency of your product to stay competitive. That’s why it’s essential for bakers to consider what are the current trends within the premium field and how would they sell it? At what price? I’ve worked on lots of projects where we tried to do premium, and suddenly because of the price point, we won’t’ be able to  sell it because it’s way beyond what we do.

Spencer: As you said, a premium product is unique by its nature. You can’t copycat a premium product; you must make it all your own. I also like what you said, that you can’t just make the premium item an LTO. You can’t say, “We’re going to be an everyday item except for Easter, then we’re going to have something that’s super upscale, and then it’s going to go away. I think it does have to be sort of part of the brand and part of a bakery’s identity. But there’s some risk involved in that, don’t you think?

Charpentier: I see risk everywhere. There’s risk of making every day low-cost cookies and low-cost breads. There’s the risk because it’s about consistency and the throughput. Premium doesn’t change. It’s just the steps involved around making premium. It’s going to be more attention to details. It’s not just about how many pounds per hour and what’s the throughput. How many good sellable quality units do we have every day? And it goes back to the premium restaurants. When they plate the desserts, they’re making sure that every dessert is the same and the experience is going to be the same. Going back to the theme, is premium going to give an experience to the customer where they’re saying, “I’m buying it because I’m connected with the product?”

Spencer: And just like you said earlier, when we talked about the difference between artisan and premium, and I think this is really what this entire season boils down to, is that there is great opportunity to produce premium products at scale. You can manufacture a great high-quality baked good if you’re asking yourself the right questions, you have the right team in place, you are partnering with the right supplier network, and you’re imparting the correct knowledge and doing it for the right reasons. Would you agree with that?

Charpentier: One hundred percent. I like what you said earlier. You know, it’s a commitment. And it goes beyond the commitment to say, “We must fulfill an order.” Now, our commitment is to ensure that every product we make is an experience. And it’s doable, but it’s really changing the thought process behind it. That’s going to be the challenge, the obstacles, to overcome.

Spencer: For sure. So, I think that’s a great note to end this episode on. Richard, thank you so much for joining me for this five-week journey as we talk about what it takes to create high quality premium baked goods.

And just to give sort of an idea of what we’re going to dive into next week, we’ll look at sort of the market conditions and what the demand looks like for premium baked goods. Then we’ll journey through choosing the right ingredients and looking at product development for the right taste and texture. We’re going to close out the season by looking at what it takes to create a great finished product that is highly marketable. That’s just sort of a preview for what we have coming up over the next four weeks. And I’m just so excited to dive into this with you, Richard.

Charpentier: Thank you, Joanie, for having me. I had a great time answering the questions and can’t wait for next time!