Culinary Apple On How Small Consumables Bring Big Margins

The independent gourmet housewares segment is constantly evolving and consumable goods have become an increasingly important part of the experience. However, it’s not just shelf-stable foods that give customers a reason to keep coming back. Small batch goods, like fudge and roasted nuts, that don’t require a heavy investment can end up bumping a retailer’s bottom line.

Dave and Mary Weldy, of Chelan, WA-based Culinary Apple, have been serving up fudge and nuts for years. The goods, noted Dave Weldy, have added healthy margins to their business and is something that retailers should look into investing in.

“The margin is really phenomenal on these products. On fudge, we make a 78% margin. Even if you can start small and build up to selling one or two thousand pounds of fudge in a year, that’s serious money,” he said.

Mary Weldy added, “It doesn’t take a large footprint to do something like the fudge and the nuts, and it’s an added part of the customer’s experience.”

However, there are a several things that an independent gourmet housewares retailer should pay attention to when planning to get into made-on-premises consumables, even on a small scale. The first, she said, is to ensure your kitchen is certified.

“You don’t need to have a large kitchen, but it needs to be certified commercial. But once you have it, you have it,” Weldy said.

She added that retailers will also have to apply for a food handler’s permit so that the food can be handed out to visiting customers while they shop the store.

“We had to submit plans for the kitchen and the products and then once a year, they come and inspect the fridge and see how we are serving the samples. They look for things like if you’re wearing gloves and other things like that,” said Dave Weldy.

Mary Weldy, too, said that retailers looking to start making consumables like fudge and nuts should also look into state laws regarding food supplies. She said that when she picks up supplies to make the fudge, it’s all considered inventory and some part of those ingredients may be taxable, depending on the state laws. However, once the initial plans are in place, the real selling fun begins, said Mary Weldy.

She explained that putting together a sampling schedule is very important when it comes to selling consumable goods.

“You can’t just let the products sit on the shelf. You have to put together a schedule of what is being sampled out and you also have to be able to talk about it. It’s part of the experience that sets you apart and it’s also a way to engage with the customer. Once you start engaging with them, you can figure out if they’re here for something specific or if there wasn’t really a reason, but maybe now you can show them a new product or two,” she said.

Added Dave Weldy, “Right now, we make between 12 and 14 different types of fudge. It makes a statement to our customers to let them taste it.”

Weldy explained that while it may seem daunting to add a new aspect to a business model that is already full, as gourmet housewares retailers wear many hats, bringing in small consumable product is worth it.

“Adding something small like the fudge or the Nutty Bavarian nut roasting just adds to your margins. It actually becomes a business within a business,” he said.

Not only that, said Mary Weldy, but it’s a product that people have to return to your store for and it also makes a good addition to gift baskets, which the store does a lot of.

“People who buy these from us while they’re here have to come back to buy them again. They can’t get them in the local store or online. It’s creating an in-store element that brings customers back,” she said.

Dave Weldy said that the fudge and nuts also brings in customers that may or may not have planned to visit the store, as the smell of the goods seems to attract people that just happen to be walking through the area.

“We make the nuts and the fudge two to three times a week, and people walk into the store immediately asking what smells so good and want to know what we are making. Experience is what makes independents stand out,” he said.

Mary Weldy also explained that if a retailer is looking to move into consumable goods — even on a small scale — it is worth it to seek out a veteran retailer for a conversation.

“The companies that we get the supplies from are very proprietary and if someone wants to get involved, they go through the channels to see if they will allow it. Retailers thinking about getting into consumables like this should talk to retailers that are already in it so they can learn all the ins and outs,” she said.

Added Dave Weldy, “We are more than willing to share the information about the consumables and pass along the information to other retailers that are looking to start making things like nuts and fudge. That’s how those companies expand, and they are very good about trying not to compete with each other. These really enhanced our business and enhanced what we wanted to do with our business.”