Consumers’ growing interest in artisan breads has caused high-volume wholesale bakers of pan bread and rolls to take notice. Seeing sales potential, some have installed artisan production equipment, while others have purchased established artisan bakeries. But in an unusual turn of events, an upstart artisan wholesaler in Phoenix has incorporated pan bread and rolls into its strategy to penetrate deeper into its existing market.

In 2009, Simply Bread, an award-winning baker of handcrafted bread, rolls and sweegoods, needed larger quarters. So, the company acquired a small wholesaler of bread and rolls sold to foodservice accounts. After moving artisan operations into the plant, bakers feeding sour starters and hand-scoring baguettes began working under the same roof as crews running a high-speed roll line and automated bread make-up equipment.

Bringing on highly automated white and variety bread production required soul searching by Simply Bread’s top management. “Jeff (Yankellow, E.V.P. and co-founder) and I started our business with a shared philosophy as to what we wanted to create, and it did not include industrial baking,” says Harold Back, president and co-founder. “But, as difficult as this was intellectually, the move operationally made perfect sense. e combination enables us to have more bats to swing at the ball so we can provide customers what they want, not what we want to offer.”

HAD PLANNED TO EXPAND

Since opening Simply Bread in 2006, Back and Yankellow had steadily constructed a client base of upscale food markets and supermarkets, as well as high-end resorts, hotels and restaurants. Early in 2009, the company was operating at capacity and was about to expand the facility, composed of eight buildings that covered about a half block.

“This was to be an interim expansion, knowing that we would grow into larger quarters elsewhere,” Back recalls. The plan included expanding Simply Bread’s fledgling frozen par-baked business, which initially was distributed locally, into the Los Angeles and Las Vegas markets.

But by that time, the economy was turning sour. Back and Yankellow figured that other expansion opportunities existed that would require less capital investment. Scrapping their building plans, they chose to acquire larger facilities, ultimately buying a three-year-old wholesale bread plant.

Back says his analysis of the metropolitan Phoenix market confirmed that su cient demand existed for white and variety bread and rolls to justify buying the bakery. “So, though this wasn’t what we did, we saw no sense in turning our backs to the business,” he says.

The sale was completed in 10 days, and overnight Back and Yankellow’s lives were turned topsy-turvy. “Our business had changed from being solely a craft bakery to one that included fairly extensive infrastructure for industrial baking,” he continues.

Both executives faced a steep learning curve because industrial baking was new to them. And the process was stressful. “We had to integrate it philosophically and operationally into an organization that had been exclusively craft baking-oriented,” Back says.

Ultimately, they needed nearly a year to get their arms around the business. During that time, the company purchased new equipment, and in August 2009, moved artisan production into the acquired plant. In October, Yankellow adjusted schedules to allow simultaneous production of the Classic line (pan bread/rolls/buns) and Heritage line (artisan bread, rolls and sweets).

Concurrent production has improved production efficiency, including loading delivery vans, and also helps ensure quality control with increase supervision to monitor production, Yankellow says, “and the move is helping to pull the two crews together to build a more cohesive team.”

IMPROVING PRODUCT QUALITY

In a move important to Back and Yankellow, the latter has applied techniques from artisan baking to high-volume production to improve product quality.

“The former products were Americanized Italian bread and rolls–fluffy, cotton-texture crumb–and each run was made from a single mix,” Yankellow says. Among the initial steps were buying additional mixing bowls and then switching to non-bromated flour and removing shortening from the formula to better conform with Simply Bread’s philosophy of making bread, he adds.

Hamburger bun production exemplifles such changes. The dough includes ingredients such as unbleached, nonbromated flour with 13 percent protein; soybean oil instead of shortening; bromate-free conditioners; natural shelf-life extenders and enzyme-based crumb softeners.

Bakers mix 525-lb. no-time doughs in spiral mixers for five minutes at first speed and 12 minutes at second speed. They monitor the dough temperature to maintain 72˚F to 74˚F, rather than 78˚F to 82˚F. “This is essential in Arizona, especially during summer,” Yankellow says. “Even during the winter, we use ice for as much as 15 percent of the water content. We could make smaller batches at the higher temperatures more frequently, but we would lose efficiency.”

A bowl hoist lifts the dough and dumps it into a chunker, which cuts the dough into 25-lb. slabs. The slabs flow into five pockets of a six-pocket divider to be portioned into 3.75-oz. pieces at 150 cuts per minute.

The pieces travel through an intermediate proofer for 12 to 15 minutes. After passing under a stamper, they are panned manually five by three per pan, racked with 30 pans per rack and rolled into a proofer. Proofing continues for 60 to 75 minutes at 100˚F dry bulb and 90˚F wet bulb. Proofed pieces are baked in double-rack ovens for 15 minutes at 400˚F with an initial 25 seconds of steam. After cooling for two hours on the racks, the buns are bagged or sliced and bagged manually. Plans include automating slicing to gain efficiency in the packaging area. Yankellow believes the return on investment will be quick.

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The baked buns’ texture is a bit denser and the crust slightly firmer as compared with the former operator’s product, he says. Use of non-bromated ingredients, which reduce volume, has presented an educational hurdle. “The challenge is to address customers’ perceived value. Most Classic line customers would define good quality as a 2-oz. roll being one-quarter inch higher than the roll we now offer,” Yankellow says. “But we cannot produce the same size roll using only basic great ingredients at a costfriendly price point.”

Customers noticed the change immediately. “Some hadn’t cared about the ingredients and preferred the old product,” he says. “About one-quarter of the customers left, or we dropped them and picked up new accounts who had not wanted to buy from the former owner. So we have a huge educational challenge ahead.”

RAISING PRODUCT STANDARDS

Simply Bread also looks for opportunities to employ Classic line equipment to produce items for longtime Heritage accounts. For example, a customer requested cinnamon raisin bread with a formula that would allow a clean label indicating all-natural ingredients.

Yankellow chose to produce it as a Classic item because the bread has a short proofing time and derives its taste mostly from cinnamon and sugar, not fermentation. Using all-natural ingredients and clean labels reflects Yankellow’s goal to bring the Classic line closer to what he and Back envision bread should be, while providing what customers want. “Still, we can go only so far because price point is an issue,” Yankellow says.

For example, some customers requested egg hamburger buns. The Heritage line includes challah buns, which are the company’s brioche buns without butter. But according to Yankellow, they are too pricey and have excessively high domes for these customers, adding, “They wanted brioche with the price point of a Classic product.”

To meet those customers’ needs, bakers substitute honey with sugar, use slightly less egg content and egg-wash the buns with a custom food-grade sprayer to enhance the yellow color. “We provide customers the flavor, texture and appearance they want at a lower price point,” he explains, “and we’re satisfied that we’re producing a product acceptable to our standards.”

Looking ahead, Back says the firm’s growth will be regional, not limited to Arizona, marketing frozen par-baked Heritage products. “We’re a small company. This is forcing us to review everything and to deploy our resources effectively, such as adding more freezer capacity. We now have the time to do it,” he explains.

Yankellow is reformulating Heritage line items, among them baguettes, ciabatta and challah, for a frozen line. Such reformulation is an example of Simply Bread’s evolving research and development techniques.

Until recently, R&D had been more art than science for the company, Back says. “As we mature and extend our geographic reach, science will have greater impact. Our challenge will be to maintain the art while pursuing the science,” he notes.

Yankellow says he does not want to repeat the mistakes of artisan bakeries that expanded geographically, “dumbed down” their products and allowed quality to suffer. “We want our bread to represent our focus on high quality.”

85 PERCENT COMPOUNDED GROWTH

As they prepare to expand regionally, Back and Yankellow say the plant size will be sufficient “for the time being,” and that the property’s three acres will accommodate another 15,000 sq. ft. of production and storage space. “This space will take us through this economic uncertainty and will help build some muscle for the future,” Back observes.

Growth for the five-year-old company has been rapid. Revenues have increased at an 85 percent compounded clip and are expected to approach $12 million this year. “I’m optimistic about our company but pessimistic about the business environment and the economy,” Back says. “To grow, we need access to capital; that will be difficult in the near term.”

To date, the company has relied on members of its board of directors, established by Back, who have invested $12 million in the business. Members include an investment banker, the C.E.O. of a $3 billion manufacturing firm, the retired C.E.O. of an international packaged foods company, a principal with a major public accounting firm and Back. “Generating capital internally will be a much less measured response to the market,” he notes.

If plans pan out for Simply Bread, Back and Yankellow may find themselves facing the same questions about facilities that they encountered last year.

The present building, they say, will become obsolete within five years, and plans call for a 15,000-sq.-ft. expansion. “Concurrently, I’m looking at acquisition opportunities as alternatives to expansion,” Back says. “It’s possible that an acquisition in the next three to five years could be a game-changer, just like this current facility changed our business.”

If that should occur and involve another bakery, at least he and Yankellow will rest assured knowing they will have learned both sides of the business.

Simply Bread at a glance

Location: Headquarters–Phoenix; plant–Chandler, Ariz.
Founded: February 2006
Primary business: wholesale, 97 percent; retail, 3 percent
Number of plants/retail stores: 1/1
2011 sales estimate: approaching $12 million
Plant size: more than 20,000 sq. ft. on 3 acres of property
Number of employees: 86 full-time staff
Web site: www.simplybread.com

Management: Harold Back, president/co-founder; Jeffrey Yankellow, EVP/executive chef/co-founder; Gary Brown, CFO; Iris Sullivan, VP-operations; Kate Nelson, marketing director

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Product line: Classic line–fresh-baked white and variety pan bread/buns/rolls; Heritage line–some 220 different fresh and frozen par-baked artisan bread/rolls, and limited varieties of biscotti, cookies, mondel bread, honey cakes and lavash

Primary customer base: resorts, hotels and restaurants (pan bread and rolls, artisan products) and supermarkets and wholesale clubs (artisan products)

Market served: metropolitan Phoenix, Tucson, Los Angeles and Las Vegas

Distribution: 13 route vans drop-ship in metropolitan Phoenix and Tucson, foodservice distributors serve Maricopa County, Los Angeles and Las Vegas

Production methods: pan bread/buns/rolls–base and scratch; artisan and other products–scratch

Production throughput: 60,000 lbs. per week

Equipment: pan bread and rolls–bowl hoist, dough chunker, high-speed roll and bun make-up line with six-pocket divider, two single-piston bread and roll dividers, two conical rounders, two bread and roll make-up lines, fi ve double-rack ovens; artisan line–bowl hoist, two pneumatic bread dividers, four-pocket roll divider, manual bun divider, automatic divider/rounder, two baguette moulders, reversible sheeter, cookie depositor, roll-in retarder, six-deck oven with automated loader/unloader; shared–water treatment system, water conditioner/meter, three spiral mixers, roll-in proofer, semiautomatic bread and bun slicers, wire tie bag closure machine, pan washer, walk-in refrigerator and freezer

Plans: automate pan bread/roll slicing; grow regional parbaked product sales; add retarding, proofi ng, freezing capacity; increase production and storage space within fi ve years.