Bake In-House or Buy It In? The Café Pastry Decision

Every café owner has the same conversation with themselves at some point, usually standing in front of a half-empty pastry case at four in the afternoon. The croissants come in from a supplier, they are fine, and the margin on them is thinner than it looks once you count the ones you throw away. Surely it would be cheaper to bake. Sometimes it is. Often it is not, and the reason has almost nothing to do with the cost of flour.

What is the question actually about?

It looks like a cost question and it is really a capacity question. Baking in-house does not mean adding an oven. It means adding a second production process, on a different schedule from the bar, run by someone with a different skill set, using space you currently use for something else. The pastry has to be ready before the first customer, which means a start time nobody on your current rota is working.

So the honest version of the question is not "can I make a croissant for less than I pay for it". It is "can I produce the same quality every morning, for months, without the whole thing depending on one person turning up". If the answer is no, a cheaper unit cost on paper will not survive contact with a Tuesday when the baker is sick.

What does baking in-house actually cost?

Four things, and only one of them is on an invoice.

• Space. A deck or convection oven, a proving cabinet, a bench you can actually work on, and dry storage for flour and sugar in sacks. In a small unit, that space comes out of seating or out of your back-of-house, and neither is free.
• Equipment and the approvals behind it. Beyond the oven itself there is ventilation, extraction and power. Before you buy anything, confirm with your economic department that the activity on your licence covers producing baked goods on site, and with your municipality what the kitchen needs to be approved for it. That conversation is cheap now and very expensive after the equipment lands. Our guide to buying café equipment covers how to approach the purchase itself.
• Labour, at an awkward hour. Someone starts several hours before opening. That is either a new hire on a pre-dawn shift, or it is you, every day, indefinitely.
• Waste, which moves the wrong way. In-house production usually means baking to a forecast rather than ordering to one. Get the forecast wrong and you have not lost a supplier's margin, you have lost your own ingredients, labour and oven time.

What does buying it in actually cost?

A supplier sells you certainty and charges for it. The unit cost is higher than your ingredients would be, the minimum order may be larger than a small café wants on a quiet week, and the delivery window is theirs, not yours. If they deliver three times a week, your Friday pastry is made on Thursday and your customers can tell.

There is a strategic cost too. What arrives at your door also arrives at the door of every other café on the street buying from the same place. If your pastry case is the reason someone walks past two other cafés to reach you, being identical to them is a real loss. If your pastry case is simply something to sell with coffee, it is not a loss at all — and paying a supplier to solve it is a perfectly good answer.

How do the two compare, side by side?

Is there a middle option?

Most cafés that get this right land somewhere in between rather than at either end. Three versions of the middle are worth considering. You can finish rather than produce — bringing in par-baked or frozen product and baking it off through the day, so the smell is real and the shelf life problem largely disappears. You can bake one thing and buy the rest, choosing the single item that people would actually come for and outsourcing the supporting cast. Or you can bake only what does not travel well, which in this climate is a shorter list than you would like.

The one-hero-item version tends to work best for small units, because it concentrates the labour and the risk on the product that earns it. Work out which item that should be from your own sales data rather than your own taste: menu engineering is the method for finding the item that is both popular and worth the trouble.

How do you work it out on your own numbers?

1. Cost the recipe properly. Not just ingredients — the batch yield, the trim and failure rate, and an honest labour figure for the time it takes. Our guide to recipe costing walks through the method with worked examples.
2. Add the hours nobody counts. Ordering flour, receiving it, cleaning down the bench, servicing the oven. A production process is not just production time.
3. Measure your current waste first. Four weeks of a simple waste log on bought-in pastry gives you the number you are trying to beat. Without it, you are comparing your in-house plan against a supplier cost you have quietly assumed away.
4. Compare against the delivered cost, not the list price. Delivery charges, minimum order surcharges and the units you bin at close are all part of what buying in really costs you.
5. Then look at the gap. If in-house wins by a small margin, buying in is still probably the right answer, because the gap will not survive one bad month. If it wins by a wide one, the question becomes whether you can staff it reliably.

Where MidaOne fits

Both sides of this decision are argued from data most cafés do not have to hand. MidaOne records recipes against the items you sell, so stock comes down as you sell and a batch's ingredients are tied to what left the counter. Sales by item tell you what actually moves and at what hour, which is what a production plan should be built on. And because waste is recorded against the item, you can see what you are throwing away by product rather than as one lump at the end of the month. Whether you decide to bake or to buy, those are the three numbers the decision turns on.

Frequently asked questions

The cafés that regret this decision are almost always the ones that made it on unit cost alone. The ones that are happy with it — in either direction — made it on capacity: what they could reliably produce, with the people and the space they actually had, on the worst morning of the month rather than the best one.