Closing the price gap

by Dan Malovany
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Just Desserts
Just Desserts believes in baking from scratch using familiar ingredients. And it’s figured out how to compete in the organic market.

When it comes to indulgence, Just Desserts believes in “no regrets” — as in “having your cake and eating it, too.” The company believes in baking from scratch using familiar ingredients, such as butter, whole eggs and chocolate — up to 20% chocolate — in some of its top-selling indulgent treats. And it’s figured out how to compete in the organic market.

By driving volume and streamlining production at its new bakery in Fairfield, Calif., Just Desserts also plans to close the price gap — perhaps one of the biggest barriers between organic and conventional baked goods.

In an exclusive interview published in Baking & Snack magazine’s February issue, Michael Mendes, the company’s chief executive officer and managing partner, noted that organic treats on average sell for an 18% premium over conventional goods, but it’s striving to narrow the gap to the low double-digits or even a high single digit. That’s a more modest premium that many consumers are more willing to pay to trade up to organic.

Most of the premium comes from the higher costs, limited availability and shorter shelf life of organic ingredients. Managing sourcing and the use of organic ingredients become vital. By breaking down the barriers, Just Desserts also has begun to penetrate mainstream supermarkets that currently offer a limited amount of organic baked goods. In addition to expanding its customers’ clean label and organic offerings in the in-store bakery, the company strives to provide a convenient one-stop shop for consumers who are intrigued by organic but only visit conventional grocers.

“When people are making choices where they are buying their baked goods, they don’t usually associate a clean-label offering with a traditional supermarket,” Mr. Mendes said.

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