Synergies between its fresh route business and its high volume
frozen accounts keep this company on the fast track to success.
During a time of economic challenges, Northbrook, Ill.-based Highland Baking Co. forges ahead with its plans for growth and has literally doubled its production capabilities in the 250,000-sq.-ft. facility it has occupied a mere 19 months. In a little more than a year, the company increased its capacity from one tunnel oven to two, 10 rack ovens to 16; and two deck ovens to three. Highland Baking purchased the building in Northbrook, a former Heinz plant, for $8 million and invested another $12 million to $13 million on equipment, modernization of the building, labor and the installation of a 14,000-sq.-ft., 2,200-pallet freezer. It currently is adding another line, including a mixer, divider and tunnel oven, for an additional $4 million.
Five years ago, the company's sales were at $15 million, but today, they are about $50 million to $55 million — representing more than 200 percent growth. Growth was 25 percent during the past year alone — not only a time when commodity prices were at record highs, but fuel, gas and electricity were costly as well.
While Baking Management presents Highland Baking Co. with the Capital Investment of the Year award, it is Jim Rosen, owner and C.E.O., who is the “real story,” says Stu Rosen, vice president and general manager, and Jim's son. Although he is admittedly biased, Stu feels “the heart and soul of the company beats with his father. He has never looked back or thought about ‘what if.’ He has guided and built this company through all of its changes. He has been integral in so many ways, whether there were five people involved or the 360 people we employ today.”
About 65 percent of Highland Baking's business consists of frozen, fully-baked pan breads, specialty buns and other breads, with the remaining 35 percent dedicated to fresh routes of specialty breads and rolls. Its product line includes pan breads, dinner rolls, focaccia, breadsticks and marble ryes, among others. Various toppings, from white sesame seeds to the white and black variety, to poppy seeds, herbs and spices, cheeses, onion and a host of others, enhance the bakery's product offerings and enable the bakery to create customized items. With an extensive product line of 800 to 900 different items, Highland Baking relies on its ability to be flexible and reactive to change.
Jim Rosen comes from a long line of bakers. His grandfather started S. Rosen's, which will be 100 years old next year. Alpha Baking Co., Chicago, acquired S. Rosen's in 1981. Jim left Alpha Baking 18 months after the merger, so he and his wife, Gail, could start a bakery in Florida. When the venture didn't work out, Jim and Gail returned to the Chicago area, and eventually purchased and reincorporated Highland Baking Co. in February 1985.
After Jim acquired the bakery, it began producing bagels, challah and a few other products for Alpha Baking. “Eventually, we decided to get into other products — not the typical hamburger bun — but the upscale bun,” Jim says. “We developed a bun for a national restaurant chain in 1997. We got into the frozen business shortly afterwards with buns and pan breads for Cheesecake Factory, and the business evolved from there. Our frozen business grew out of our fresh business through word of mouth. It's a side of the industry that you have to know. In the frozen business, and even in the fresh, it's about building relationships with buyers and corporate chefs, so as they move around from one account to another, they want to bring you with them because they have trust in you. Up until two years ago, we never really had anybody selling nationally, but we hired a national salesman a couple of years ago, and we'll be adding two more soon.”
Jim's ingenuity, perseverance and ability to overcome adversity have been valuable assets to his company, which has seen much change in the 23 years since its incorporation. Highland Baking began operating in a 1,500-sq.-ft. building in Highland Park, Ill., and went through two additional moves in Lincolnwood, Ill., until its most recent move to its current, fourth and final location, according to Jim. Any further growth will come not by moving, but from an additional 100,000 sq. ft. to 120,000 sq. ft. the company can build without requesting a variance from the city of Northbrook, or by building a second plant in another location to offset fuel charges and shipping costs.
One of the most unique aspects of Highland Baking is its capacity to manage two bakeries under one roof. The north side of the plant services its fresh routes, while the south side houses more automated equipment to meet the high-volume demands of its frozen business. Differences between the types of equipment operating in the two sides of the plant account for flexibility in batch size, speed and volume of production.
Five or six years ago, an automated lifter was the extent of the bakery's level of automation, notes Gail Rosen. Now, a 300,000-lb. capacity silo meters flour to mixers throughout the plant. All other ingredients are scaled by hand.
The north side is equipped with six production lines designed for quick changeovers to support the company's fresh route business and small test runs for potentially larger volumes. Included among its six lines is a bread divider line that produces 1-lb. to 3-lb. loaves with different toppings; a two-pocket divider for French breads; a six-pocket divider for hamburger buns, 0.6-oz. mini dinner rolls and appetizer rolls; a six-pocket divider for Kaiser rolls, knot rolls and buns; and an artisan line that produces European-style crusty breads. A product, such as a pretzel roll, can run on any one of the six lines, depending on the style and size, notes Mike Galenson, director of operations.
Once products are divided, they rest on the floor for 30 minutes before entering one of the proof boxes, where they will proof at 90°F, 85% RH for 40 minutes to 90 minutes, depending on the dough. Product then bakes in one of 16 rack ovens or three deck ovens, depending on the type of bread or roll. Finished baked products are cooled under ambient conditions, sliced or hinged if needed and sent through packaging lines, each of which is equipped with a metal detector. Fresh products are then staged for shipping.
On the south side of the plant, three 1000-lb. dough mixers prepare product for two highly automated lines. One line is equipped with a bread divider and a six-pocket divider and the other, a six-pocket divider and one 10-pocket divider for buns. Divided dough passes onto a panning table where dough pieces are automatically dropped onto pans, manually loaded onto racks and hauled to proof boxes. Highland Baking doesn't use overhead proofers, but instead prefers to visually inspect dough going into pans and the proofer, which has more of a scratch-made appeal, Galenson notes.
Pans travel through a seeding and scoring station, if required, and then through one of two tunnel ovens. When product exits the oven it is depanned and conveyed through one of two spiral cooling tunnels that cools at ambient temperatures. Once product is packed, cased and palletized, it is hauled to the bakery's new 14,000-sq.-ft. freezer for storage.
One of the biggest challenges Highland Baking faces is maintaining its flexibility throughout multiple product changeovers, Galenson notes. Customers want different samples, which must be turned around quickly. Even so, the company's greatest challenge also is one of its major assets. “We do have the ability to test product on the north side first, develop the flavor, the size and hopefully what the customer wants, and then move it to the south side for production on an industrial scale,” Galenson adds. “On the north side, we can do a 50-lb. to a 400-lb. batch, versus a 1,000-lb. batch on the south side. We can do a baking test in the rack oven and afterwards produce it on a larger scale in the tunnel oven.”
At one point, a segment of the staff felt the bakery should get out of the local route business, given the amount of attention and work force dedicated to it, but Stu and Jim “came to the realization that, if we lose the fresh business, we lose the foundation of who we are,” Stu says.
“The fresh business is an amazing business generator for our frozen side,” Stu adds. “It's a great product development tool. You can almost track every frozen customer of ours back to our fresh business in some way or another. It allows us to stay in direct contact with the restaurants in the industry in a very basic way. For us to stay in business with those independent restaurants, partnering with them, customizing for them, gives us a head start for the work we might be doing with the chains a couple of years from now. We look at it in two ways: We can handle the volume for a 2,000-unit chain that wants to do a 10-store test for a year. But, when the customer is ready to roll out with the product, we've got the equipment designed to do that. Also, for a chain that might be a start up, but really believes it might grow to 1,000 units one day, we can start with them and take them through every stage of its progression.”
Although the bakery's rapid growth has presented its share of challenges, growth is much preferred to the reverse situation, where difficult decisions have to be made and people laid off, Stu notes. Managing controlled growth means acquiring the right type of talent for the bakery, training and promoting people from within and knowing when a particular skill set is lacking and needs to be brought in from the outside.
Jim Rosen, no stranger to adversity as a childhood survivor of bone cancer, infuses the bakery with his strength. Much of Highland Baking's success can and should be attributed to Jim, according to Stu. “My dad would say nobody's bigger than the bakery, but if anyone was, it would be him.”
Steve Barnhart, head of R&D at Highland Baking, Northbrook, Ill., recently earned his certification as a foodservice management professional® (FMP) from the National Restaurant Association's Educational Foundation. The FMP credential distinguishes restaurant and foodservice managers who have achieved a high level of knowledge, experience, leadership and professionalism within their industry.
Still, FMP is merely one among several credentials that Barnhart has earned in recent years. He became a certified journeyman baker while still in culinary school at Kendall College, Chicago, where he earned a bachelor's degree in culinary management. In 2007, Barnhart was credited as the country's youngest certified master baker (CMB), and more recently was awarded the designation of master certified foodservice executive (MCFE). He is currently pursuing designation as certified baker in breads and rolls through AIB International, Manhattan, Kan., which he hopes to complete by early 2009. Once completed, Barnhart has his sight set on a certified research chef credential.
When asked about all of the certifications and the values they hold, Barnhart replies: “They are a continual assessment of my skills and knowledge, which help me stay on top of my game. The industry is always changing with trends, formulas, ingredients, sanitation, management skills, etc. To be the most up-to-date with all of these categories makes me better at my job, and ultimately my passion.”
Jim Rosen, owner and C.E.O., is grateful for the skills Chef Barnhart brings to the bakery. “Chef Barnhart has knowledge of formulations,” Rosen says. “As he becomes more familiar with our business, he's able to take that knowledge and develop products. What we really never had before was a real technical baker who has his abilities.”
Headquarters: Northbrook, Ill.
Ownership: Family-owned by the Rosen family
Web site: www.highlandbaking.com
Management: Jim Rosen, owner and C.E.O.; Gail Rosen, corporate secretary; Stu Rosen, vice president and general manager; Cheryl Wedyck, HR director; Mike Galenson, director of operations; Boris Golenson, chief engineer; Frank Nevarez, plant manager; Ron Katarzynski, manager, fresh sales; Greg Murrell, manager, national sales; Steve Barnhart, research and development; Vince Miller, sanitation manager; Martin Abundes and Victor Duran, production managers; and Martin Castillo, shipping manager
Product lines: More than 800 varieties of breads, specialty buns and rolls
Marketing territory: Fresh-route business, regional Chicago; Frozen business, national
Plant size: 250,000 sq. ft.
Production lines: (North side of plant) Six lines designed for quick changeovers — bread divider for 1-lb. to 3-lb. loaves; two-pocket divider for French breads; six-pocket divider for 3-in. to 4 ½-in. buns, 1-in. mini dinner rolls and appetizer rolls; six-pocket divider for bread, Kaiser rolls, knot rolls and buns; and an artisan line for European crusty breads; 16 rack ovens and three deck ovens for small run production (South side of plant) Three 1,000-lb. horizontal mixers; one high-volume bread line with bread divider and three high-volume bun line with six-pocket dividers and one 10-pocket divider; two tunnel ovens and two spiral coolers; with one additional mixer, divider and tunnel oven in installation phase
Sales: $50 million to $55 million
Customer base: Fresh products sold to Chicago-metro area foodservice and retail establishments and frozen products sold to national chain accounts
Number of employees: About 360