A delicate tension exists between core competency and innovation. A baker does well to take risks now and then, but how far from the original mission statement dare a baker stray in the name of expansion? Venture too far in either direction and the balance is lost, and things collapse. Bakeries could be in danger of diluting their brand by growing too quickly and spreading it too thinly among different channels.
A case in point is Simply Bread, an established artisan specialty wholesaler in Phoenix that a year ago expanded explosively and added a volume bread and roll baking operation. The volume arm of the bakery was taking new accounts and storming into new territories. An article about this unconventional company appeared as the cover story of Baking Management last month.
This baker had a big following in Phoenix and beyond. But it broke hearts by ingloriously folding on Valentine’s Day, leaving customers and suppliers surprised and in the lurch. Some 87 employees were out of jobs, and, presumably, someone else was holding the bag.
Simply Bread continued to bang along right up until collapse. The bakery filled its orders, made its deliveries on time and added new accounts. In researching the story, Baking Management checked with customers and others and found nothing unusual. Both retailers and restaurants raved about Simply Bread. No outward evidence of problems existed. The bakery appeared to be maintaining its famously high quality–especially when it came to artisan bread.
However, for a privately held company, financial information is hard to discern, even by journalists trained at background research. The trade media are often limited to what principals are willing to disclose.
After the shutdown, neither Harold Back, president, nor Jeff Yankellow, executive vice president and executive chef, responded to our inquiries. But in an e-mail sent to customers and friends, Back blamed the shuttering on their bank.
It’s difficult to make sense of the timing of the thing. After rave customer reviews and a positive outlook with plans for expansion of automation and growth in par-baked sales–all affirmed to our writer and editors in January by the bakery’s two principals–the business is kaput a month later.
Vendors caught off guard by the closing said that in hindsight there may have been signs that initially didn’t lead to alarms. Tings may have started to unravel a year ago after Simply Bread acquired a pan bread and rolls bakery and relocated artisan operations to much larger quarters. Ideas for trendy, niche products began to overshadow the company’s artisan soul. One person close to the situation said attention may have been diverted when the company started to look at new channels of distribution and new markets. The after-the-fact conclusion from these observers is that Simply Bread took its eye off the ball and the company probably overextended itself.
There are lessons for the industry here, about the perils of growing too fast and the need for trading partners to pay attention to early warnings. Baking Management also will take the opportunity to review and fine-tune our own vetting and research to ensure our coverage continues to be the most accurate and insightful in the industry.
