The state of the economy pushed many businesses into a holding pattern on capital investments. And in an environment rife with mergers and acquisitions, the food retail industry is contracting, even homogenizing. There's a pervasive feeling of just hanging on, digging in heels and riding the storm out, if you'll forgive the string of clichés. And for many companies, this is the best course of action. Firmly entrenched businesses may be wise to look back to core competencies, refocus business goals and raise standards. And holding on for dear life is an understandable gut reaction.
According to a 2009 study by the Ewing Marion Kauffman Foundation, a foundation devoted to entrepreneurship, more than half the companies on the Fortune 500 list, and just under half of the 2008 Inc. list, got their start during a recession. Of the prestigious Dow 30, 16 companies began during a recession. And given that the country has been mired in recession only a third of its economic life since 1850, recession-based startups are represented strongly in the current economic landscape.
The recession is like a wildfire in a forest. The strongest, best-rooted trees survive, the poorest-suited do not and a new generation of businesses springs from the ashes, competing for sunlight. But what can get lost in this commonly cited analogy is that the opportunity for growth isn't limited to the next generation of businesses.
This month, Baking Management had an opportunity to visit Rolf's Patisserie in the Chicago area. Rolf's president Lloyd Cullbertson is busy doing the legwork to get a brand-new facility off the ground. It's quite a leap, too, adding a new 60,000-sq.-ft. facility in nearby Pleasant Prairie, Wis. (a location I strongly approve of, given that it's my home town), to a current bursting-at-the-seams 20,000-sq.-ft. plant. Plans to ramp up production of a growing frozen product line were hatched in the heart of the current recession — opportunity knocked, and Cullbertson answered.
And it seems volume bakers are answering the call across the board. In BM's recent wholesale baking industry study, 53 percent of respondents referenced automation and adding new lines as a change implemented to boost productivity. As a result of these capital investments, 74 percent foresee a sales volume increase compared to the previous year. And several bakers specifically cited the collapse of competitors as an opportunity to grab market share. For those bold enough to release their white-knuckle grip on the status quo, opportunity is out there.