“An item that's doing particularly well is what we call a Tulip, a cross between a muffin and a cake wrapped in paper that looks like a flower,” he says. The chain charges a premium, even though it's smaller. People want indulgence, but they want to stay healthy. Perceptions of health and quality are more important factors in a value proposition than is sheer volume.

Forecasting 2010

“Historically, the restaurant industry neither leads the economy into or out of periods of economic downturns,” says Bonnie Riggs, restaurant industry analyst with the consumer research firm NPD Group, Port Washington, N.Y. “This recession is generally believed to be more severe than those in recent history, and this time the industry not only realized traffic losses, but customer spending was declining. This is the first time since NPD began tracking that the industry realized a fall off in dollars spent at restaurants.”

High unemployment, low consumer confidence, tightened credit and grocery store price wars are taking their toll on the restaurant industry, but there are some signs of a light at the end of the tunnel.

A recent NPD foodservice survey concluded that consumers believe the economy is beginning to improve, or at least isn't getting any worse. Based on these results, the company predicts that the industry will remain weak in the first half of 2010, with the rate of visits slowing early in the year only to turn slightly positive by the end of the year. Still the status quo isn't a growth friendly environment, as evidenced by the low number of planned additions among the Top 50.

Knowing that unit growth might not be in the cards until later in the year, foodservice bakery operators are focusing on higher end items in order to drive up ticket sales.

“I see the necessity for larger gross margin items, as 75 cent cookies aren't going to get you where you need to be,” says House of Bread's McCann. “You have to get that ticket price up, bundling items is one way to do it.”

Despite the tepid predictions, the fast-casual niche that most foodservice bakeries and bakery cafés occupy is still a “sweet spot.” Consumers want quality, healthful food while they are on the go, and the model is in a unique position to offer it. But the promise of an improved economy will reveal a shift in consumer demands.

“The first things you'll see coming back will be natural foods and sustainability. Altruistic consumer behaviors are first to go in a tough economy, but they'll be back as the consumers get more confident,” Frechette says.

That will not happen overnight, though. “It's going to take awhile before [consumers] feel comfortable spending again,” Riggs says. Until they do, diligent foodservice bakeries will be need to defend their turf on the restaurant spectrum by fostering and focusing what made them successful to begin with.