Longtime Baker-supplier relationship takes next step

Ask successful wholesale bakers about their suppliers, and the bakers likely will praise them as valuable partners. True enough. Yet, rare is the baker who has woven a baker-supplier relationship into merged operations that yielded benefits for baker and supplier.

But that’s exactly what happened to Boston-based wholesaler The Original Boston Coffee Cake Co. and ingredients manufacturer Bake’n Joy Foods Inc. For 17 years Boston Coffee Cake, which produced a line of upscale coffeecakes, purchased proprietary dry mix from Bake’n Joy, a supplier of premium mixes and bases, frozen batters and cookie dough.

With the merged operations, Boston Coffee Cake has tapped into Bake’n Joy’s research and development, marketing, sales force and distributor connections; Bake’n Joy in turn picked up a growing brand and introduced wholesale baking to its operations. The firm constructed a 12,000-sq.- ft. bakery dedicated to producing Boston Coffee Cake brand products exclusively and has set its sights on making the cakes and product line recognized across the country.

Dropped careers to bake

Boston Coffee Cake was the brainchild of Mark Forman, who with his brother, Bruce, abandoned established business careers in 1992 to become entrepreneurs. The brothers, then 32 and 27 years old, respectively, grew up enjoying their grandmother’s moist, rich cinnamon walnut coffee cake, and Mark became convinced a market existed for it.

A pastry chef friend told the brothers he had tired of his small wholesale bakery and invited them to use the facility for a few months to learn whether they would like to bake for a living.

Working for three months, the brothers developed their concept for coffeecake. They used Boston in the name because consumers often like to associate a locale with a food product, Mark explains.

With $18,000 in personal and family funds, Mark and Bruce leased the bakery, adding a vertical mixer and two convection ovens to an existing walk-in refrigerator. They started with the one flavor, cinnamon walnut, producing it from scratch with fresh eggs, high-quality sour cream and premium walnuts.

After baking cakes, Mark drove his car to prospective customers–restaurants, hotels, gourmet food stores and bagel shops–to sample the cakes. By the end of 1992, the brothers, with their first employees, a baker and a pot washer, were making about 400 cakes a day.

Their first big sales opportunity came in spring 1993

with a wholesale club operation that had opened nearby. “Because our business was new, we had no credit and had to purchase ingredients COD,” Mark says. They began buying supplies at the club store. “The store manager believed his store could sell our coffeecake, and within six months of opening our bakery, the store gave us a shot.” Until then, the largest account purchased 30 cakes a week; the club store began ordering 300 a week. The club store company then said that to retain its business the bakery would need to supply half a dozen stores in the area with daily store-door delivery. “That account propelled us into big-time wholesaling,” Mark recalls.

Booming volume and scratch production strained production capacity, Mark says. A family acquaintance put the brothers in touch with Bake’n Joy Foods, which, among other offerings, develops proprietary mixes. “It wasn’t easy. We went through 30 to 40 tests to create a mix that emulated Nana’s recipe,” Mark says.

Success in developing one mix formula that accommodated many cake flavors marked the beginning of the companies’ long-term relationship. The Formans regularly worked with Bake’n Joy’s research and development team to create new flavors. “The basic mix remains the same,” he says. “This has allowed us to produce consistent product.”

Customers, mostly supermarket in-store operators, often asked the Formans to alter the formula. “They wanted a cheaper coffeecake,” Mark says. “We refused, explaining that this is what we bake, the best coffeecake we believe we can make.” Others wanted it packaged with their brand. “Fortunately for us, the wholesale club and other initial customers wanted the Boston Coffee Cake brand.”

Two years into business, Boston Coffee Cake moved to a 3,500-sq.-ft. facility and added a single-rack oven to its five convection ovens. Business grew steadily; a second club store operator signed on, as did a large regional supermarket chain. In 1996 the company expanded the bakery to 6,500 sq. ft., replacing the convection ovens with three double-rack ovens and installing a utensil and pan washer.

Despite the brand’s broad exposure in club stores and supermarkets, many consumers remained unaware of Boston Coffee Cake, Mark says. To help build brand awareness for the 1996 winter holidays, the company focused on its packaging, which featured white boxes with red type. Mark chose to develop an upscale red-and-gold-striped box to distinguish the packaging from other bakery foods. Strong holiday sales convinced the Formans to continue using the revamped design year round.

The red-and-gold box became a major brand component and enabled the company to pursue mail order, foodservice, gift sales, fund-raising programs and seasonal promotions, he says, adding, “Consumers now recognize Boston Coffee Cake because of the box.”

Mail order cakes are wrapped in tissue paper and sealed with a gold insignia. The upscale presentation, Mark notes, encourages consumers to buy coffeecakes for gifts. “We sell more than a cake; we sell an experience. To add to the experience, we sourced the best-quality jams, jellies, honey, coffee and coffee mugs in New England and include them for specialty gift packages.”

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Interestingly, the “Boston” identification did not deter mail order sales when the Formans sought to expand geographically. “People said we couldn’t sell ‘Boston’ coffee cakes in New York,” he says. Yet, supermarkets successfully sold the product to New Yorkers. “It’s not the name; it’s the high-quality product that people want.”

Until 1999, the company had not promoted its products beyond changing the box design. That year, a New England supermarket chain asked the company to participate in a weeklong in-store promotion that called for mass displays in all stores and an initial order for 40,000 cakes.

The bakery knocked out the cakes in two weeks. Two days into the promotion, the stores had sold all of them. “We busted tail and supplied another 40,000 cakes, which were sold, too,” Mark says, noting that the cakes became the alltime top-selling featured bakery product for the chain.

Growing volume spurred a move in 2000, and the Formans built a 6,000-sq.-ft. bakery production area in their 40,000-sq.-ft. three-story building in nearby Haverhill. The Formans installed a custom-designed 40- by 13-ft. tunnel oven in the new space, which provided the necessary capacity to supply distributors serving foodservice and supermarket customers across the country.

Companies merged forces

In August 2007, the bakery sustained a fire confined to the oven. Bake’n Joy C.E.O. and President Robert Ogan put Mark in contact with a nearby bakery that agreed to let Boston Coffee Cake produce cakes with its equipment until Boston Coffee Cake’s oven and facilities were up and running. During that time, Bruce Forman left the business. After the bakery was fully functioning three months later, “I had to decide whether to take on an extended lease in an old building, build a new facility or look for a partner,” Mark says. He and Ogan met for lunch regularly, their conversations eventually turning to opportunities to join forces.

“Bake’n Joy saw that we had spent a lot of money and time over 18 years to build our brand. I wanted to build that brand further and take it to the next level–national recognition,” he says. “Bake’n Joy, which itself had great brand recognition in foodservice and in-store baking, had the resources to do this.”

Ogan adds, “We (Bake’n Joy) were more than a supplier; we were an extension of their business. We examined both businesses and discussed how we could benefit each other.”

In early 2009, Forman and Ogan agreed to merge. The biggest obstacle facing them was obtaining a baking facility; they did not want to extend the Haverhill bakery’s lease, due to expire in January 2010. In September 2009, they chose to add a production bakery to Bake’n Joy’s frozen batter and dough plant in North Andover, eight miles from the Haverhill plant.

Ogan selected a 12,000-sq.-ft. warehouse attached to the plant to be retrofitted into a bakery. Certain warehouse and distribution functions were transferred 12 miles east to a Bake’n Joy building in Georgetown, Mass.

Ogan says he had considered adding baking capacity about 15 years ago. “But, we did not want to become competitive with our customers. Boston Coffee Cake, however, is a niche product and differentiates itself from our current customer base.”

A team of Bake’n Joy and Boston Coffee Cake personnel fast-tracked the project, enabling the bakery to produce cakes last June. An outside engineering firm designed the bakery, which includes a production area with a mezzanine that overlooks production and rooms for packaging and an automatic pan and utensil washer.

Boston Coffee Cake’s needs required installation of only production space. The Bake’n Joy facility already had ancillary support and space, such as R&D, engineering, sanitation, ingredient storage and freezer storage. Much of the bakery equipment came from the Haverhill plant, but some new equipment, including conveyors and a spiral cooler, was purchased to streamline production. “We could do this because we had purchased high-quality equipment and maintained it religiously,” Forman says.

The entire space was gutted. This included digging down as deep as 7 ft. to replace the concrete floor with a new surface to accommodate a system of strategically pitched drains; they allow production crews to wash the floor easily before, during and after production runs. New electrical circuits and lighting were installed. Walls were covered with easily cleaned paneling.

Opportunities to conserve energy and natural resources were identified. “As with any new construction or improvements made to the Bake’n Joy plant, our first concern is sustainability, our impact on the environment,” Ogan explains. Furthermore, the company replaced some packaging components based on this concern for sustainability. Renovations, which included energy-efficient air-, gas-, water- and waste-handling equipment, cost about $3.5 million.

Ogan also notes that the entire facility is state-of-the-art in terms of sanitation and efficiency. Last month, the plant earned Global Food Safety Safe Quality Food Level 3 certification from NSF International for sanitation excellence.

Use the best ingredients available

Boston Coffee Cake stands out from other coffeecake because the proprietary formula allows the cake to remain very moist, Forman says. For example, sugar in the preservative- free cakes helps retain moisture and extend shelf life to 10 days after thawing. “The taste is excellent because we use the best ingredients available, like premium walnuts, sour cream, fresh eggs and individually quick-frozen fruit,” he adds. “Bake’n Joy has always been a quality-driven company, and we’re maintaining those same standards with Boston Coffee Cake product.”

Mixer operators incorporate fresh eggs, water, sour cream, and fruit when specified, into the proprietary mix in 140-qt. vertical mixers. Mixed batter is transferred to a production line of single-piston batter depositors and small ingredient toppers. The variety of cake produced determines the number of depositors used.

For example, for original cinnamon walnut cakes, still the most popular variety, a depositor places an initial few ounces of batter in each bundt pan, which has been greased automatically. Toppers add the cinnamon sugar and walnut streusel mixture. More batter is deposited, followed by more walnuts and then cinnamon sugar streusel on top. “This layering of ingredients also distinguishes our cakes,” Forman says.

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Personnel hand-sprinkle streusel and other final toppings, which imparts a homemade appearance to the cakes. Forman adds that the company is examining ways to automate this step while retaining the cakes’ handmade look.

The conveyor moves the pans into the 40-ft. oven, which was refurbished before reassembly. Temperatures are computer-controlled for each variety; every 15 minutes, an oven operator uses a probe to ensure internal cake temperatures are correct.

Baked cakes travel about 25 minutes on a cooling conveyor to the mezzanine where employees depan the cakes before topping them by hand with streusel or icing. Cakes traverse down a spiral freezer for 60 minutes and enter the packaging room where crews place the cakes into the boxes before the boxed cakes travel through a coding machine and a metal detector. Once cleared, they are packed in shipping cartons, stacked on pallets and sent to the storage freezer.

The bakery currently produces about 12,000 cakes per 10-hour shift, five days a week. Ogan notes that the management team is still getting its arms around the potential offered by the new bakery and estimates that production could be at least doubled with existing resources.

“We can expand the building, add a production line and increase storage without disrupting the bakery,” Ogan says. “We already have developed blueprints for another line.”

Cakes destined for mail orders are trucked to the Georgetown facility, dedicated to mail order warehousing, fulfillment and distribution for Bake’n Joy and Boston Coffee Cake. Mail order sales, mostly seasonal, had been a part of Boston Coffee Cake production at the former plant, says Forman, who is director of business development/ecommerce. “We’ve formalized mail order into a year-round business on the Internet.”

Ogan says numerous opportunities exist to increase brand awareness and grow sales. “Though the Boston Coffee Cake brand is 17 years old, I view it as still in its infancy,” he observes. “We have so many different markets and channels to enter. I want to grow the business at a rate that makes sense. What makes sense? A quick pace that allows us to take care of our customers during aggressive growth.”

The Original Boston Coffee Cake at a glance

Founded: 1992 by brothers Mark and Bruce Forman
Location: North Andover, Mass.
Websites: www.bostoncoffeecake.com; www.bakenjoy.com
Annual sales: not available
Ownership: merged with Bake’n Joy Foods Inc. July 2009; Boston Coffee Cake became a brand of Bake’n Joy Foods.
Employees: about 30 of company’s 150 personnel
Bakery size: 12,000 sq. ft.

Bake’n Joy management: Robert Ogan, president/ C.E.O.; Jack Waldron, C.O.O.; Alice Shepherd, C.F.O.; George Fregone, vice president–marketing and business development; Mark Ake, vice president–sales; Mark Forman, director–business development/e-commerce

Product line: 10-in., 8-in., mini bundt coffeecakes in Cinnamon Walnut, Applicious Walnut, Pecan Delight, Blueberry Blizzard, Marble Madness, Chocolate Explosion, Golden Pumpkin, Orange Pineapple, Mocha Java and Lemon Burst; some flavors in 4.5-oz. cakes. Mini dessert cakes include Kitchen Sink, Cookies & Cream and Mini Chip and Double Chocolate Infused Lava Cake.

Business channels: supermarkets, wholesale clubs, gourmet food stores, restaurants, hotels, catering, mail order, Internet, fund-raising, and foodservice and bakery supply distributors

Market territory: New England, Mid-Atlantic, Southeast, Midwest and major metropolitan areas across the country; nationwide mail order

Major equipment: two 140-qt. vertical mixers, two production lines with depositors and ingredient toppers, depositor for mini bundt cakes, 40- by 13-ft. tunnel oven, double-rack rotary oven, 120-ft. cooling conveyor, spiral blast freezer, cake box erector, metal detector, storage freezer

Daily throughput: about 12,000 cakes per 10-hour shift, five days a week

Distribution: foodservice, retail and bakery supply distributors

Plans: strengthen brand, increase national sales–especially mail order; add production equipment