As the number of specialty wholesale bakeries steadily grows, foodservice and retail food operators in many metropolitan markets find themselves sitting in catbird’s seats. After identifying which types of bakery foods they plan to offer, these operators often can cherry-pick several bakeries to fill their needs.
That is precisely what Mike McCloud, owner of Uptown Bakers, wants to avoid in his market, stretching from Baltimore to south of Washington, D.C. “We don’t want this market to become like the metropolitan New York market where customers buy from four different bakeries because each has a different flavor profile to its products. And, we don’t want a reputation for having all of our breads taste alike,” he says. “We want to provide it all.”
| from left: José Lopez, Michael McCloud, and Didier Rosada |
The wide selection enables Uptown Bakers to serve a broad spectrum of some 500 foodservice and retail food market accounts.
The artisan side of specialty wholesale baking is fairly new to McCloud. He had been a sales and marketing executive with several consumer products companies, and then he went into business consulting in late 2000. Uptown Bakers’ owners contacted McCloud in October 2001, seeking help to sell the company.
Expanding into wholesale
Founded in 1990, the bakery opened in Washington as a retail bread bakery. It later expanded into wholesale baking, added pastries and opened an Arlington, Va., retail store. The owners then consolidated the business to one Washington location and focused solely on wholesale accounts. But, business had not been strong before Sept. 11 and declined sharply after the attack on the Pentagon.
“I saw acquiring the company as an opportunity to buy into an equity operation,” McCloud recalls. “I knew that the business could be grown because the potential for high quality wholesale products in the Baltimore and Washington area is huge.”
McCloud spent the first 90 days assessing the bakery’s needs and problems. “Each department required attention,” he says. “Most of the equipment needed servicing or replacing.”
He also switched to leasing delivery trucks, rather than owning them. “The leasing service provides weekly, on-site service, which frees us of being concerned with maintaining our own vehicles,” McCloud explains. “We also put our capital to better use, such as to buy equipment. We wanted to be in the bakery business, not trucking.”
| Flexible bakery equipment allows quick change-over to handle Uptown’s 30 different doughs daily. |
Construction crews spent the next six months renovating the building and installing new equipment. They doubled proofing and oven capacity and quadrupled refrigerator/freezer space. In April 2005, crews moved the few remaining pieces of equipment over a weekend, while bakers kept production running without missing any deliveries.
Among the new equipment was a flour handling system with an 80,000-lb.-capacity silo, a second spiral mixer and bowl hoist, automated roll makeup line, eight roll-in retarder/proofers, three four-deck ovens with automatic loaders, and five double-rack ovens.
Missing piece–the baker
“One piece was still missing–a master baker who could pull everything together and improve our operations,” McCloud says. In June 2004, he hired Didier Rosada, a master artisan bread baker and instructor, to set up the new bakery and direct production.
To improve efficiency and product quality, Rosada largely addressed processes. Several changes involved production of the bakery’s many different doughs. For example, to enhance the quality of baguettes, he switched from using high protein bread flour to a variety with 11.5 percent protein, which yields baguettes with lighter interior texture and crisper, eggshell-thin crust.
Also, production times of the various doughs vary, largely based on fermentation times. Rosada established a staggered schedule that enables production to move smoothly through mixing, makeup and fermentation without creating backups at the ovens.
Part of this included scaling preferments immediately after mixing, rather than dividing fermented batches the next day. “This saved some time, but more importantly, we improved scaling accuracy,” Rosada explains. Each type of preferment is assigned a color-coded plastic bin for easy identification.
Having the capability to produce 27 to 30 different doughs reflects Uptown Bakers’ goal to be “more of a mass ‘customizer’ rather than a specialty bread and pastry wholesaler,” McCloud says. “We don’t go to market with what we make and say, ‘take it or leave it.’ Rather, we ask, ‘What do you need, and how much do you need?’ As a result, we make many different doughs.”
He acknowledges that this approach creates many SKUs with short production runs. “Our business challenge every day is to maintain our position as a mass customizer in an environment in which we don’t have an existing product that exactly fits the bill,” McCloud explains. “Nine of 10 times we have a product and can show a customer that it would be less expensive and offer better quality because it’s from a longer run.
“It would mean that the customer would have to adjust his or her expectations just a little bit. And, that has to be tempered with the fact that the customer might object and go to another source. It’s a fine line to walk. Of course, we’ll make what the customer wants. But, we have a bottom line, and there has to be a sufficient quantity to make the product worth our while.”
| Although it is a wholesale bakery, Uptown’s smaller production runs allow bakers to form products by hand. |
Production, which continues 24 hours a day, seven days a week, is separated into bread and pastry rooms. Both rooms are air-conditioned. Crews feed made-up products through a central retarding, proofing and baking area. Bakers use rack ovens for breakfast pastries, pan breads and dinner rolls, and deck ovens for artisan breads.
Production is scratch, except mixes for most muffins and a couple of bread items. Rosada notes that muffins are one of the bakery’s largest volume items and that high quality mixes make their production cost efficient while yielding good products.
The focus is on quality, as reflected by the use of fresh eggs, imported Greek olives, fresh herbs and fresh fruit. Each day, bakers go through 350 to 400 lbs. of European-style, unsalted butter, much of it for some 1,000 croissants, each of which is hand rolled.
“We explain to customers that each croissant is hand-shaped,” McCloud notes. “If they want uniform croissants for sandwiches, our croissants may not be the right product for them, and maybe they should buy them from another source.”
“We’re doing the same job as a small retail baker but on a much larger scale,” Rosada adds.
To achieve the freshest products possible, bakers prepare batters and pull yeast-raised items from proofing as close to their baking times as possible. Further, 14 large panel trucks deliver product seven days a week. They drop morning pastries by 6 a.m. and lunch bread before 11 a.m. Products for evening use are delivered before 5 p.m.
Some accounts receive two to three deliveries a day. For example, Uptown Bakers bakes baguettes and ficelles for Balducci’s (food market) at 3 a.m. and delivers them just before Balducci’s opens at 7 a.m. The delivery carries the store through lunch. Then, the bakers bake another batch at 10 a.m. for delivery in mid-afternoon for Balducci customers who shop from 4 p.m. on.
Rising vehicle fuel prices, along with those of natural gas, have driven nearly every operations’ costs higher, McCloud continues. To help minimize the impact of rising prices, he purchases forward contracts for natural gas and electricity, as well as flour. Flour purchases are contracted as far out as three months.
He adds that hedging the bakery’s costs is crucial in today’s volatile markets. “It can mean the difference of being profitable or not profitable during a given month,” McCloud says. “We’re talking tens of thousands of dollars’ difference in a monthly natural gas bill.”
The combined efforts to improve product quality and product efficiency are yielding results. Sales have been climbing about 30 percent a year, McCloud notes. In less than four years, sales doubled to reach more than $8 million in 2005. He estimates 2006 revenues will total $9 million to $10 million.
Having identified a market niche was a key to the growth, he adds. “Metaphorically speaking, we are an upscale car. We want to appeal to consumers of $50,000 and higher cars. For the most part, our customers are restaurants and food retailers that market to this niche and won’t accept average quality product.
“For example, the Palm steak house, which has $45 steaks on its menu, is not going to serve mediocre wine, poor French fries and inferior bread. This is the market we want to appeal to.”
Three full-time account managers go after the sales. When appropriate, McCloud and Rosada also make sales calls, especially Rosada when a chef wants to be approached by another professional. “Chefs frequently ask for advice regarding a product or want to know how we produce our bread,” Rosada says.
Uptown Bakers’ biggest sales challenge is educating prospects as to what constitutes really good bread and how it can benefit their operations, McCloud continues. “The issue boils down to food costs. Our industry continues to measure success based on food costs, instead of profitability.”
| Karine Geiselhart, bakery merchant for Balducci’s (pictured with Didier Rosada), accepts at least two deliveries a day from Uptown Bakers. |
“What is the first thing operators do when times are tough? They cut food costs and quality,” McCloud says. “Eventually, customers leave. Even sophisticated, smart operators fail to see what a top quality product can do.”
He cites one account that serves $9 hamburgers on soft white buns, instead of using artisan Kaiser rolls with good flavor and texture that will retain its structure. “Sure, the artisan roll costs twice as much as the bun, but the added cost is only peanuts relative to the hamburger’s $9 price,” McCloud says.
“How can we sell prospects on investing in quality bread? If we see wholesale club boxes of bread, foodservice boxes of frozen product or a large wholesale bakery’s bread trays, we know that cost is an issue. So, we speak to seven-day-a-week delivery and fresh-baked-to-order every day. And, if the location has a chef, I discuss Didier and his credentials, which make us unique.”
McCloud and his team currently are working on identifying “how can we help the consumer get a better quality eating experience with time-sensitive products?” For example, bakers currently must have most products baked, cooled and available for packing no later than 10 p.m. So, bakers finish the most-sensitive products, like croissants and Danish, last.
“But, a croissant that’s consumed 10 hours after it has been baked doesn’t taste as good as one freshly baked,” McCloud says. “How can we improve on this?
“We don’t want to do it with chemicals. But, maybe a way to alter the dough will help. For example, we’re adding cream cheese to Danish dough to help keep it moist.” Rosada, he adds, will be identifying other methods to enhance freshness with natural ingredients and not violate the company’s no-preservatives strategy.
Plans for expansion
McCloud says he would like to develop and add sweet desserts, such as cakes and tortes, pies and cookies for hotels. The distribution network is in place; however, production facilities would be needed.
Last year, he purchased a 5,000-sq.-ft. building across the street from the bakery with an adjacent 10,000-sq.-ft. lot. The company currently is using the structure to store and maintain equipment. “Eventually, it could be converted into a dessert production facility,” he says. Also, the bakery could use about 10,000 sq. ft. of its garage for production.
“When we bought this location, we knew the space was more than we would need for five years.” McCloud explains. “These 15,000 sq. ft. represent a third of our current production space, and we now are operating at 60 percent of capacity.”
During the next few years, he expects business to grow organically, that is, by increasing volume of current product categories. For the longer term, Uptown Bakers may decide in the next five years to introduce desserts.
If so, the bakery’s customers likely can expect McCloud, Rosada and company to approach desserts with the same methodical care that earned their business for bread and pastries. MB
Uptown Bakers . . . . . . at a glance
Location: Hyattsville, Md.
Web site: www.uptownbakers.com
Market served: Baltimore, Md., south to Richmond, Va.
Wholesale customer base: about 500 accounts, including full-service restaurants, foodservice contract feeders, retail food markets, hotels, bakery cafés, bookstores
Bakery management: Michael McCloud, president and owner; Didier Rosada, vice president-operations; Theresa Rhizzo, general manager, purchasing, sanitation, distribution; José Lopez, plant manager; Andrea Donolo, director-human resources, customer service, office administration
Bakery size: 40,000 sq. ft.
Number of employees: 120
Sales: more than $8 million, 2005; projected $9 million to $10 million, 2006
Product line: about 100 SKUs, including artisan and other specialty breads/rolls, variety breads/rolls, dinner rolls, muffins, cookies, brownies, Danish, croissants, tea cakes, coffeecakes, scones, bagels
Production methods: scratch, except mixes for most muffins and bases/mixes for a few bread products
Major equipment: flour handling system; vertical and spiral mixers; bowl hoist; sheeter/moulder; bread divider; semi-automatic divider/rounder; two reversible sheeters; baguette moulder; automated bread, roll and pastry production lines; eight retarder/ proofers; six rack ovens; three deck ovens with automatic loaders; bread and bun slicers; walk-in refrigerator and freezer; rack washer
Major plans: grow current business, consider introducing desserts in about five years
Bakery supply distributor: George Ruhl & Son, Inc.
Uptown Bakers...a sampling of wholesale prices
Baguette, 14 ozs. $1.22
Sourdough boule, 16 ozs. $2.86
Challah loaf, 16 ozs. $3.50
Whole wheat pan loaf, 48 ozs. $4.50
White pan bread, 32 ozs. $2.76
Kaiser rolls, 12 count $4.44
Plain bagel $0.42
Plain rustic scone $0.93
Blueberry muffin, 3.5 ozs. $0.93
Chocolate chunk cookie, 3 ozs. $0.99
Plain croissant, 4 ozs. $0.87
Uptown Bakers Vice President-Operations Didier Rosada has a well-deserved reputation for his top quality baguettes.
A native of France, he began baking when he was 15 years old, attended a regional professional school and apprenticed under a local baker. He also has baking experience at Club Med and received a master’s degree in baking from the Institut National de Boulangerie-Patisserie in Rouen, France.
In 1996, Rosada became the unofficial trainer for Baking Team USA, which took first place in the bread category at the Coupe du Monde de la Boulangerie in Paris, and he helped train Baking Team USA in 1999, which placed first overall, and 2002, which finished second. He also was a baking instructor at the former National Baking Center and at the San Francisco Baking Institute.