The company has achieved 27 consecutive years of sales growth
by focusing on its core product line, which pulls from native Hawaiian
traditions. Learn how the bakery’s future vision revolves around
It shouldn't surprise anyone that a company, created more than 50 years ago in Hilo, Hawaii, continues to embrace its island heritage and the core mission of its founder, Robert Taira. King's Hawaiian, still a family-owned business, is managed with the same vision, dedication and forward thinking Robert Taira valued.
“In founding this company in Hawaii, my father's vision was to bring the spirit of aloha into every facet of our business-from the bread we produce to the legacy we leave behind,” says Mark Taira, C.E.O. and president, King's Hawaiian Holding Co., Torrance, Calif.
Today, King's Hawaiian Holding Co. includes a 151,000-sq.-ft. wholesale bakery and an older, 30,000-sq.-ft. facility-both part of King's Hawaiian Bakery West Inc.; and two retail restaurant/bakery units. The smaller building was the company's original mainland bakery. A 12,000-sq.-ft. commissary, located within the larger building, supplies the company's restaurants with a wide variety of baked products, while serving as a pilot plant and product development site.
Robert Taira started the business in 1950 in Hawaii in a rented space in a small building. He had one display case of product. Five years later, Robert built the first building in Hawaii designed as a stand-alone bakery. The building, which was about 5,000 sq. ft., was the first to have a refrigerated display case, Mark Taira notes.
Robert Taira was a visionary, notes Shelby Weeda, president of King's Hawaiian's Bakery West Inc., who has been employed with the company for 28 years. Robert's use of refrigeration in his display case demonstrates that, he adds.
In 1960, Robert sold the business because he knew that in the state of Hawaii, industry was changing from agriculture, mainly pineapple, to tourism. He wanted to go to Honolulu, where most of the hotels were, and get involved in the tourist industry.
“My father's venture in tourism didn't work out, so in '63, he opened another bakery on King St., which is how the name of King's Hawaiian sweet bread originated,” Taira says. “Because he had all the family working there, my grandmother had to work everyday and cook for the family-breakfast, lunch and dinner-which was a lot of work. So, he built a counter with 13 stools and hired a cook to cook primarily for the family. But, since the cook was there, he figured he might as well serve some customers. That blend of a coffee shop and bakery, back then it was called a coffee shop, was a great combination. We expanded from 13 stools to about 130 seats. That concept of retail bakery and coffee shop was extremely successful. Nobody was doing it back then.”
Robert developed his bakery's distinctive Hawaiian sweet bread based on Portuguese sweet bread, which was introduced by Portuguese sailors who came to Hawaii to trade. The bread became hard and crusty after only one day, and had a shelf life as long as a month. Robert's goal was to give his bread a light, soft, airy, cake-like texture with a shelf life of at least two weeks. “Obviously, the sweet bread, which was what we called it back then, is really what built the company,” Taira says.
Fundraising was popular in the islands. Robert was the first to devise the use of tickets for fundraising. An organization would sell tickets, but would only pay for those redeemed in the bakery. “For King's, it forced people to come into the bakery to pick up the sweet bread, and of course they'd buy cakes and other products as well,” Taira says. “My father became the biggest fundraiser in the islands.”
Eventually, people on the mainland began taking an interest in the company's unique product. When local people from the islands travel, it is customary to take gifts to whomever they visit. King's Hawaiian sweet bread became a popular gift item, which would include a mail-order form. “Mail order became a huge business for us,” Taira says. “We were the biggest customer for the post office in Hawaii.”
It was the volume of mail orders that convinced Robert product would sell on the mainland. Plus, the company started getting requests from people on the mainland who wanted to purchase King's Hawaiian's product in their stores. “My father always said Hawaii was too small to build a business because of the limited population,” Taira says. “And, he always had dreams of coming to the mainland.”
In 1977, Robert moved to California and built a 30,000-sq.-ft. facility in Torrance. At that time, the company had a single product line-its Hawaiian sweet bread, and not a single wholesale customer on the mainland.
Efficiency and automation were concepts grasped early on by Robert Taira. “Back in the late ‘60s, early ‘70s, labor unions in Hawaii were becoming very strong,” Taira says. “My father knew labor was going to become more of an issue with businesses as the years went on. In his mind, he wanted to automate production and minimize the use of labor as much as possible. One of the most important things is to maintain consistency of the product. He had plans to come to the mainland and build a plant, so he bought some equipment to test out automation before we got here. When he came to Los Angeles, he wanted to build a facility that was fully automated-that didn't use a lot of labor. Today, I think we follow that same philosophy.”
In 2001, the company broke ground on a 151,000-sq.-ft., state-of-the-art facility. The plant, originally a Boeing aircraft facility, was leveled and designed from the ground up. “Mark and his team essentially worked 18 to 20 hours a day, almost seven days a week, trying to develop the right plans and the right flow patterns for the plant,” Weeda says.
The original 30,000-sq.-ft. bakery has been modernized and well maintained. “We put in new silos, new cooling towers and new conveyors, so we've done a lot of upgrades and PMs,” Weeda says. “We've been able to really keep that plant going, because at certain times of the year, we really need it. About 20 percent to 35 percent of our business occurs during the fourth quarter. We run about 105 percent capacity during the holidays,” Weeda says.
The new, larger facility opened in 2004. Although the breadth of products manufactured is small, volume is high. Products include the original Hawaiian sweet bread and rolls, honey wheat bread and rolls and savory butter rolls in various pack sizes (see sidebar).
Flour, sugar, butter and minor ingredients are scaled and conveyed to a dough mixing room. The dough is mixed and sent to the dough holding hoppers above dividers/rounders for rolls or a divider/rounder for bread where it's divided into specific weights. More than 6,000 lb. of dough is produced per hour, explains Stan Shaffer, vice president of operations. Each divider/rounder funnels into one of two lines-one line is a dedicated roll line and the other produces bread or rolls.
“King's Hawaiian's bread and rolls have a richness and sweetness that requires special attention to the process.” Shaffer says.
Rolls and bread are then conveyed into one of two proofers and ovens, and exit with a rich golden brown color that is continuously measured to meet our customer's requirements,” Shaffer says. One spiral cooling tunnel services the roll line and another the bread line. An extensive conveyor system supports three, product focused packaging lines-one line plus a spare for peak volume dedicated to 12-pack rolls; three lines plus a spare for peak volume dedicated to four-pack rolls and two lines for round bread and sliced bread.
King's Hawaiian recently launched its Green Vision sustainability initiative, a program it feels is in keeping with its native Hawaiian heritage. The company's environmentally-friendly endeavors range from a heavy focus on recycling to production line procedures to consumer awareness of sustainable practices. Its Green Vision logo and text directs consumers to the company's website, which features tips on recycling.
Employees proudly display a Green Vision patch on their uniform sleeves, and information about the program is provided in both English and Spanish. Every unused item in the plant is recycled, from plastic bags to the foil bread pans that don't make it through packaging. Unusable dough is given to hog farmers for feed.
Part of the company's initiative was to replace cartons it was using made from cut trees with a more sustainable alternative. “Those trees were logged, transferred to the mill, cut down into boards, processed into pulp and shipped to large plants that produced paperboard,” Weeda says. “People used a lot of electricity, water and energy to process that. Plus, a lot of oxygen-producing trees were being removed from the forest. We figured there had to be a better way.”
Weeda found a company that produces 100-percent recycled board made from old cardboard that is actually repulped, repressed and remade into board. No trees are destroyed in the process.
King's Hawaiian partners with the SmartWay program of the Federal Department of Transportation that supports providers of transportation using modern, state-of-the-art, fuel efficient diesel engines. Part of the policy requires that diesel engines emit less, but also idle less.
Last year, the company performed a complete warehousing and line haul analysis that helped identify more favorable routes and cold storage to help make both inbound and outbound shipping more efficient, Weeda notes. The logistics company King's Hawaiian hired for the job also helped develop a routing tool for more efficient distribution.
The company has already seen a measurable impact from its efforts. Through extensive testing, the bakery has reduced the film gauge and, consequently, the volume of plastic resin used for its bread and roll bags by 122,035 lb. annually.
The “aloha spirit” is an actual part of Hawaii state law that encourages citizens and government officials to think and emote good feelings toward others. This “spirit” is manifested throughout the King's Hawaiian organization and the way it conducts business with its customers.
“Consumers want value today more than anything,” Weeda says. “What we want to do is go to market with our premium product and add value to the purchase experience.”
King's Hawaiian adds value in a number of ways. Its website is one of the top-viewed consumer packaging websites in the United States with recipes, product locator tools, product information and other value-added information, Weeda notes. An online sweepstakes reportedly garnered 1.2 million hits and its coupon redemption of 15 percent surpasses the typical coupon redemption of 0.5 percent associated with newspapers.
The company also helps its customers drive sales by providing menu ideas for in-store delis. “Obviously, we can't compete with meats and cheeses in the deli department, but we are probably the destination for sales as a branded product in that department,” Weeda says. “We drove at least 50 percent of the front of the counter displays for in-store delis.”
In addition, King's Hawaiian's sweet rolls are used for the chicken meal program in supermarkets throughout the country. Customers can purchase an eight-piece chicken, a side and a four-pack of rolls for about $7. The program is available with Kroger's, Publix, Dixie's and every major chain in just about every major market, Weeda notes.
The company reached its 27th consecutive year of sales growth, with an 18 percent increase over previous year's sales, an impressive number in a staggering economy. With a core product that was never designed to be a national product, King's Hawaiian seems to have spread the aloha spirit and taken the mainland by storm.
“What we have done basically is carve out a niche, not only in the deli department, which was the road I took more than 20 years ago because it was the path of least resistance, but throughout the country,” Weeda says. “It has always been about owning the sweet, indulgent, flavor profile of the core product that traces its roots back to its island heritage.”
Headquarters: Torrance, Calif.
Ownership: Privately owned by the Taira family
Web site: www.kingshawaiian.com
Plant size: 151,000 sq. ft.
Management: Mark Taira, C.E.O.; Shelby Weeda, president; Stan Shaffer, vice president, operations and Angela Davanzo, C.F.O.
Product lines: King's Hawaiian original sweet bread and honey wheat bread (16-oz. round loaf); Hawaiian sweet rolls, honey wheat and savory butter (4-pack and 12-pack); Hawaiian sweet snacker rolls,Hawaiian sweet sandwich rolls and Hawaiian sweet sliced bread
Marketing territory: In supermarkets nationwide, club stores, mass merchandisers, military worldwide, convenience stores and commercial foodservice
Production lines: Dividers for rolls and a divider for bread converges into one of two lines; packaging lines include one, 12-pack roll line plus a spare for peak volume; three, four-pack roll lines plus a spare for peak volume and two bread lines
Throughput: More than 6,000 lb. dough per hour
Sales: About $100 million
Number of Employees: About 148