Novice Baker Needs Help!

[Somtamnication]

My wife wants to bake cookies (as a first step into other baked goods).

I approved on it as long as she does one item first, learn how to make it, market it around the village, etc etc.

Bought her a medium size oven (about a 1/2 size larger than a microwave) and we have been concocting oatmeal cookies and choco chip cookies.

I know nothing about cost issues. Is it as easy as adding all the ingredient costs, plus how much for time, effort, electricity, packaging?

We have an idea of what the usual Thai cookies cost.

We are actually gonna use real butter and other more expensive ingredients like real vanilla extract..

Thanks for any suggestions.

[NanaFoods]

My wife wants to bake cookies (as a first step into other baked goods).

I approved on it as long as she does one item first, learn how to make it, market it around the village, etc etc.

Bought her a medium size oven (about a 1/2 size larger than a microwave) and we have been concocting oatmeal cookies and choco chip cookies.

I know nothing about cost issues. Is it as easy as adding all the ingredient costs, plus how much for time, effort, electricity, packaging?

We have an idea of what the usual Thai cookies cost.

We are actually gonna use real butter and other more expensive ingredients like real vanilla extract..

Thanks for any suggestions.

Yeah, pretty much.... with a few additions.

- First step is to add up the ingredients used (as you mentioned)

- Next, try to calculate the gas/electricity usage for baking (and blender or food processor, etc.).

- Of course, add the labor cost (as you mentioned) to produce the cookies

Also

- Estimate transportation costs for obtaining ingredients, as well as distributing final product.

- Shopping for ingredients is labor too

- Calculate Packaging costs (plastic bag or tub, label, etc - dont forget the labor for this too)

- Marketing costs (advertising, promotion, free taste give-aways (cost of product given away), cost for booth at the local talat, etc - and all labor for these activities)

- Amortization of Equipment and Facility (being a home operation, you may opt, or not, to include some amortization of the facility/home and equipment - I'd say at least consider the oven over its estimated life of 5-years - tools like spatulas, baking pans, blender, etc: two years). So if your oven cost 4000 baht, that's 800 baht per year (for a life of 5-years), or 66.7 baht per month - divided by how many cookies you plan to cook/sell in a month.

- anything else that might be relevant to your operation (tea money, etc...)

Divide total of all costs by total weight (or units) yielded.

Best bet is to use MS Excel and set up a spreadsheet for this, then you can expand into other products easily simply by modifying the spreadsheet.

Edited October 31, 2009 by ChefHeat

[jazzbo]

We have an idea of what the usual Thai cookies cost.

You may also want to work backwards: If the usual Thai cookies cost 10 baht per package, so that the most that you can charge is say 25 baht per package without being laughed at by the locals, will that be enough to cover your costs seeing that you are using real butter, real vanilla extract, and other expensive ingredients, etc.?

[DonaldBattles]

Have you ever seen any Thai cookies. If so what do they look and taste like?

You are all set up and you can make some great breads. Don't worry about the ingredient cost just enjoy the fun of baking and fresh bread?

[jazzbo]

There is a medium-sized wholesale/retail bakery shop right down the street... they sell to many of the Thai coffee shops and stands. Cookies, cakes, brownies, sweet type breads stuffed with pineapple or dried pork, etc. No western style breads. No retail package sells for more than 10 baht as they have a big '10 baht' sign outside the retail store.

[Gippy]

I sell some cakes and cookies in our hair salon, it keeps me off the streets and the beer fridge stocked but I haven't tried to grow it any bigger. I have what ChefHeat suggests, an excel spreadsheet with tables for how much 1kg of butter, flour etc. costs. On another sheet I insert the recipes and it calculates how much the raw ingredients cost and adds on packaging etc.

I bake my cookies with European or American recipes, if you do the same be prepared for a lot of comments about 'too sweet', 'why isn't this cookie crunchy' etc. But my customers are learning that cookies can be soft, crumbly or crunchy and those customers that have travelled and eaten the real thing before are happy to find it again in Bangkok.

Edited November 1, 2009 by Gippy

[NanaFoods]

jazzbo has a good point.... and you did mentioned you live in a "village" ...

Those dreadful local Thai cookies made with soy oil, fake chocolate, fake vanilla, etc. are common around small communities. It could be the local residents are actually used to this low quality fare, and may not even appreciate in the slightest a high-quality offering. They may even think it tastes "funny". Like I say to my wife, you can't serve caviar to cow (no offense meant).

You should probably test the market first to see your neighbors can even detect the difference in taste of real butter and real vanilla vs. a talat oil-cookie. They may not care, and only look at price. Using quality ingredients, you certainly wont be able to match the price of std Thai soy oil-cookies.

Aside from that bit of discouraging news, it should be heartening to know that there is a bakery in Ban Rai (a very small podunk town near my village) that sells real butter Thai-style cookies - a Thai owner - and the cookies so are much better than the talat oil-cookie garbage. Very similar to those Dutch butter cookies available everywhere at Xmas time. They have been there a few years and seem to be successful. I see some people buying a large qty for an entire office party (there are about two block of business in the downtown area).

It is made abundantly clear on their window-front and packaging that they use REAL butter. I believe a small (stapled !!) bag of about 10 small cookies sells for about 25-30 baht or so.

Therefore, in your marketing, you really need to emphasize the quality ingredients you are using to justify a higher price. Free samples may be even more important to build high-value perception in a small community, and get the WOM working for you (WOM = word-of-mouth). First target should be the neighborhood bigmouth, if possible (in my case its my wife's oldest sister). Do a hard-sell on her (most likely a "her") and teach her to taste the difference, if they can't already. Point out the "smoothness" in taste of the real butter and vanilla vs. a talat oil-cookie. Then she will get the word out for you!!

If you have some up-scale Thais living around you, you might want to target them as well, perhaps entice them with a few free samples - and a softer sell, of course. They may get the word out to their up-scale friends, who would more likely become regular customers, as they can afford it no problem.

Good luck and keep us posted !!

Edited November 1, 2009 by ChefHeat

[Somtamnication]

Hi all. Thanks to the excellent responses. Rather than quote everyone, let me try to answer some of the questions...

I have tasted the Thai cookies and as ChefHeat has said, they are pretty bad. Cheap ingredients etc.

By us living in a village, I meant in a housing development, not some field out by the river. LOL.

Wife´s sister works at a hi-so hotel and she will take samples to the staff as well as the hotel and see how it is accepted.

We have used the kids in our soi and other sois as guinea pigs. Some say they are too sweet, others say they are great. The falangs who I have given samples to said "wow".

The issue of pricing. The limit is true that 10 cookies may sell for about 25-30 baht. It appears to be the ceiling price-wise, so we are shooting for that.

Labeling the product as using real ingredients such as butter and vanilla will be a major selling point and we may start off by stapling one on the bag at first and see.

The spreadsheet idea is excellent. And if anyone cares to share it with me, we would be eternally grateful.

Will keep everyone posted. We will do only oatmeal cookies first (some with raisins, apples, nuts) and then go from there.

Start small, thing big. Keeps the wife busy!

[jazzbo]

Kuhn Somtam... You might also find some middle ground by going to your Makro bakery section and seeing what products they sell. They do have some 'better' quality ingredients than the rock-bottom... there is butter-flavored puff pastry shortening made from palm oil that may do well... plus some good quality real chocolate that is not top-shelf... just to get you started.

[Somtamnication]

Hi K. Jazzbo, will check Makro out and see what they have.

Thanks.

[Gippy]

Hi K. Jazzbo, will check Makro out and see what they have.

Thanks.

Makro is the best place I have found for buying supplies short of going to a proper bakery suppliers. Flour is 30 baht a kg and 5kg of butter is 510 baht.

[Gippy]

The issue of pricing. The limit is true that 10 cookies may sell for about 25-30 baht. It appears to be the ceiling price-wise, so we are shooting for that.

You may be able to push this higher, depending on the area you live in. Don't forget that, hopefully, your cookies are going to be considerably better than the standard Thai cookie and the price should reflect that.

I sell my cookies at 6 for 40 baht. They are decent sized cookies, for example my chocolate chip is around 20-25g. I do have the advantage of being in a relatively middle class area of Bangkok and sell them through our salon. Someone who has just spent 2,000+ baht on a Paul Mitchell colour isn't going to think twice about a 40 baht bag of cookies.