Outrageous Prices

Back in the ‘90s I knew someone who owned a delicatessen on the east side of Manhattan. He was very successful, his store always crowded as food places can be in New York, Paris, and San Francisco.

My friend had what seemed to me then a novel way of pricing his foods. He always made a point of charging more than anyone else charged. The price of his chicken salad sandwich, for example, was $15 and that was a lot in the early ‘90s, even now.

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I asked him, of course, having just opened Marvelous Market and beginning to learn how much I didn’t know, how he could justify such prices. He said, “I don’t justify them. I think about what other people charge and I charge as least twice as much. That how my customers know that what we make is good.”

Perhaps some people feel that way about Bread Furst.

I had an exchange last week with a customer. He wrote to say:

                Your prices are outrageous. I had a soup and sandwich today. I must tell you that it was delicious! But it set me back $18. For the same price I could have gone to a sit-down restaurant and had a proper meal. You need to make your pricing accommodate the folks who will eat with you 3 days per week. This pricing does not do that. You have conditioned me to avoid your shop because of the prices, not to explore your offerings day to day.

           I wrote back of course:

                 I can say only this:  We buy organic flour and use it to make bread.  We buy heritage hams from the Hudson Valley, butternut squash from Amish farms, milk from a local dairy, high-fat butter.  We make soups with stocks made here from scratch.  Our chickpeas come from California from the best of all legume suppliers.  

We don’t have to do it this way but making the best food possible is what I want to do.  Ten dollars for a sandwich.  Five dollars for a soup.  These are not cheap prices but they are not outrageous prices.

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Food producers like us hope to keep ingredient costs on average below 30 percent of sales prices.   That’s easily achievable by those who are content to buy really cheap ingredients. Some popular restaurants in the city do this and keep their menu prices very low.

It is possible that buying expensive ingredients is not something you would ask us to do. Perhaps the differences are noticed only by the most discerning of you.   But we buy the best possible ingredients because that’s the kind of place I want to have.

I believe I was committed to quality when in 1997 I opened The BreadLine, a downtown restaurant. We used to make a tuna salad sandwich there. It had a harissa mayonnaise. We made the mayonnaise ourselves and the tuna came from Italy, the harissa from a jar.

But at Bread Furst when we use harissa as an ingredient, it is made here by Hadj Osmani. We make the mayonnaise as we always did but we add to it Robert Dalliah’s preserved lemons, made here, and tuna doesn’t come from a can. Instead we buy fresh tuna loin and confit it ourselves in extra-virgin olive oil and fresh herbs, then aging it a little in our refrigerator.

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This may be precious of us but why would we make breads and croissants from scratch and take shortcuts elsewhere?

Of course this doesn’t explain fully why our prices are high and I can blame our prices on the rent, on the huge costs of building and equipping Bread Furst, and on paying good salaries and wages to people who work here.

But I have two additional explanations: More and more I find that some of my ethical considerations drive up our prices. I am trying (unsuccessfully so far) to replace all the plastics we use with compostable products. You’d be surprised to learn how difficult – as well as how expensive it is.

I want to buy as much as possible from local producers. Local produce is far more expensive than commodity produce. I want to be seasonal and that ought to lower our prices – but because we buy from local farms it doesn’t. I want to be as organic as possible and organic grains cost three times as much as non-organic grains.

Perhaps these considerations aren’t important to you. Perhaps, since in effect, we are passing off those costs to you in the form of higher prices, you would prefer that I not impose my values on you.

But there we are.

There is one other consideration that leads us to prices higher than those charged by some others.

When I left do-gooding and started a business career in the early ‘80s, I brought to my business career the socialist impulses of my paternal grandfather and the social work instincts of my maternal grandfather.

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Business? I am in business, I would ask myself.   How can that be? I am not a businessman.

And I wasn’t. Prices at Marvelous Market were low. Quality was high.  We were overstaffed and perhaps I paid people too much.

I certainly repeated that pattern at The BreadLine.  At The BreadLine I didn’t even really try to make money.

I opened Bread Furst hoping to contribute something to the neighborhood and I believe we are doing that. But when we opened it I knew that I won’t be able to play for many years the role I am now playing.

The perpetuation of Bread Furst will depend upon its becoming something others want to own – the staff, the neighbors, or an entrepreneur or established operator. Bread Furst will be desirable to others only if it is profitable. Its ultimate survival therefore depends on its financial success.

That may seem axiomatic to you – but it isn’t to me.  I come from an anti-business heritage. (My sister Carla ran Politics and Prose like an extension of her family more than as a business.)

I want Bread Furst to be successful. I owe to all those who lent money to me to help start this bakery. I owe it to the neighborhood that has received us with such warmth and given such support. I owe it to my own vision of what a neighborhood bakery can contribute in Washington.

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17 thoughts on “Outrageous Prices

  1. Mark: thanks for this commentary. I think it’s pretty bold of you to confront this question directly. I’m glad you did it.

    My favorite line on this topic is that Bread Furst and Potomac Vegetable Farm etc. are not expensive so much as most food is too cheap. If we stopped subsidizing commodity farmers and other subsidized producers, and required them to incorporate into their prices the costs to the society of impoverished and exploited workers, pollution, soil loss and other abominations, we would have a more level playing field where conscientious growers and quality food shops could compete on a more equal basis.

    (Sounds like a rant, but it’s hard to say in a few words.)

    Michael

  2. I don’t think what you’re doing is “precious” in the slightest. I’d say you’re attempting to create an environment in the US where quality of food is important, as it is in many other countries. Here we’ve fallen victim to the post-WWII convenience-food fallacy. Twinkies and Velveeta, baby!

  3. Mark thank you for doing what you are doing and in the way you have chosen…having an ethical conscience and staying afloat are a difficult mix but know that it is very much appreciated…..

  4. i completely agree with your ethics and commitment to clean foods. if people don’t want to pay for that, they have choices nearby.

  5. I agree with everyone – unhealthy , inexpensive options are the norm around us – for a variety of reasons. We need to support those businesses that have such strong convictions to make the food we eat- the best possible. I am heading in from NoVa and will be making a special stop just for a few loaves of delicious bread! Thank you!

  6. Mark,

    Your response to this customer was far more than he deserved. He needs to know three things; your dedication to the finest product you can bring to the market, you are entitled to make a profit for your labor (and your staff is entitled to earn a living), where your competition who sells similar products for less is located, so he can buy there.

    Anything more than that is unnecessary. Like you, I have a business that carries better to upper end product, and like you I hear “can’t you make it cheaper?” constantly. My answer is always, “NO, good things cost money! You patronize my shop because you appreciate superior quality and the cost of quality is precious. There are many men’s shops around whose standard of excellence is different than ours, so if your goal is to buy cheaper merchandise, you should shop there, if your goal is to buy top quality product you MUST buy from us, and there are our prices; we have sales twice a year so you may choose to buy then, however the selection is dramatically diminished at that time (one needs to be clear about that too because there really is a whole sect of clients who prefer to buy then, too)

    Now this is not to say that there should be a variety of prices, after all even Mercedes has a vehicle that opens at $29,000 to offset the 600’s at $120,000…and guess which sells more. So perhaps the solution is to expand the menu options which, while maintaining the integrity of the product and price structure. Maybe more salads that along with the soup can go out for $10-$12. I have noticed that the restaurant up the street from my business does a brisk lunchtime business with a more limited menu (one can order off of their menu, too) but their salad driven offerings are what most people choose and their prices are not too different than yours, their quality is a few steps behind. And they are busy because the offer a good value for the money- people recognize this- and there are other more low end places nearby if the client’s standard of excellence is not as high as this place purports.

    This cuts both way, however. Recently I was at an age old Spanish restaurant not far from my business and ordered a house salad. Owing to the reputation of the place, I expected something really fine, but what I got (and sent back) was something I could have gotten in a bag at a Food Lion or Safeway (no not even remotely like a Wegmans or Whole Foods salad). So one must also be careful not to try to trade on name alone.

    Oh yes, and as far as competition who has the same products at lower prices…there isn’t any!

    I leave you with the line Aldo Gucci used, “People remember quality long after they have forgotten the price.” What we as business people need to hear is “It’s pricey but fair for what they sell.”

  7. “But at Bread Furst when we use harissa as an ingredient, it is made here by Hadj Osmani.”

    Just curious, is his harissa available to the public? Thanks.

    Paul

  8. Hi
    I see that the comments move around the idea of quality food and ethics. I completely agree. But when I read the original complaint of your customer I see a different aspect: he/she buys (or would like to buy) your food three times per week. Though there is a critic to your prices my point is learning to have a closer relation to food and cooking so we manage to prepare or own, daily meals. I’m a married health worker with two children and have been taking our own food to the job since 10 years ago: one learn about food, diet, planning, simplification…
    This social (or public health worth) meaning is something that I would appreciate in famous tv-chefs, for example.

    One more thing. I met Mark around 10 years ago in Madrid, Spain, when he was the teacher in a 2-3 days course on bread baking. I’ve never travelled to Washington, unfortunately. Everyone have inflection points in their lives in this was one to me. Since then I have baked, studied and enjoyed quite a lot…and use the same sourdough culture that I started those days. I thought that you had disappeared form the “scene” but today I’ve discovered that you are still in the edge. It makes me happier today.
    See you in the blog!

  9. Mark. Very good to put all that out. Two comments. 1. Have a friend who had a restaurant. So have seen and shopped Restaurant Depot. Eye opening. 2. Weavers way coop has been looking for years for compostable take out containers. If you find one let me know. Helen

  10. I have been by your joint and I did not see you roaming the street, putting a handgun to people’s head and forcing them to come in and overspend. You don’t like the price of Cadillacs? Go Buy a Hyundai. Simple enuff. Lots of whiney white folk…keep up the good work and don’t let the Haters shame you.

  11. I rarely read comments but I was so taken by Mark’s dealing with the pricing issue so forthrightly that I read all the comments. Those comments give me a lift.
    They also tell me what I learned in practicing issue politics: if you have a case to make it directly and compellingly. Mark has.

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