Academic journal article Business Case Journal

Amy's Bread: Changing the Recipe for Success

Academic journal article Business Case Journal

Amy's Bread: Changing the Recipe for Success

Article excerpt

Introduction

Being a local neighborhood bakery had been a cornerstone of the success of Amy's Bread, a Manhattan bakery serving retail and wholesale customers in New York City for over 20 years. However, in late 2012, Amy faced a major decision that affected her reputation and branding as a "local neighborhood" bakery as well as her production facility and her premier retail location. Making the decision to move her production facility from her beloved Manhattan to Queens was challenging on many levels: financial, strategic, personal, and logistical. Unfortunately, the challenges didn't end there. Amy's Bread also faced much stiffer competition and a lease problem at one of their retail locations.

Background

Amy Scherber came to New York City (NYC) in 1984 with the desire to make it big in the "Big Apple." (See Table 1 for a timeline of Amy's Bread). By 2012, Amy had three Manhattan retail bakery locations and a 7,500 sq. ft. production facility located in Chelsea Market, a prime retail location. Amy garnered great press and many kudos along the way including feature articles in many major magazines as well as a cameo appearance on Oprah. In 2014, Amy's Bread was named the No. 6 best bakery by The Daily Meal in their article on the 75 best bakeries in the United States (Daily Meal, 75 Best, 2014).

Amy was a self-starter and hard-worker--born and raised in Minnesota. Her father was a successful Pillsbury sales executive and her mother a talented cook and baker. Following college, she moved to New York City for a marketing position but quickly realized her passion was in food and pursued a degree at the New York Restaurant School in 1987. Amy then went on to focus on bread, studying in France at famous bakeries (boulangeries). With a focus on French inspired sourdough starters, Amy took the risk of opening a bakery in 1992 to sell bread and rolls wholesale to New York's finest restaurants and hotels. Within months, at the request of locals, she also opened a neighborhood walk up window for retail sales. Over time, her business grew and expanded. She was one of the first tenants of Chelsea Market, which became a prime NYC business, shopping and dining area. In fact, it has been home to Food Network, Google, and YouTube. Since its development, the first floor of Chelsea Market has been devoted to restaurants and specialty food shops.

Current Operations

By 2012, Amy's Bread had over 200 employees with operations running 24 hours a day, seven days a week, 365 days per year. The workforce at Amy's Bread was very diverse representing a wide variety of international backgrounds. Many employees had worked for the company for more than ten years.

Amy's management team included her CFO, Ann; her Wholesale Director and Sales Manager (and husband), Troy; her Bread Production Manager, David; Executive Pastry Chef, Miran; Facility Manager, Jessica; and her Retail Division Manager, Kerrie as well as a part-time assistant. (See Figure 1 for the Organization Chart).

The management team's responsibilities had also grown steadily along with the business. Ann had been with Amy for over 15 years working alongside her to manage the finances and accounting areas. Troy had joined the company part-time in 2002 and eventually took over management of wholesale operations including sales, pricing, and customer service. David had been with Amy's Bread for almost fifteen years. He managed the day and night bread production. Miran managed their vast array of pastry products; everything from cupcakes to bars, to cookies, to croissants, to layer cakes. Jessica supervised the facility making sure the ovens and refrigerators were all in working order while Kendall (the Customer Service Manager) ensured that product was loaded and delivered on time. Lastly, Kerrie oversaw all three retail locations and also directly supervised the Hell's Kitchen retail location.

Amy's Bread had 2013 sales of $13M split 55% retail and 45% wholesale. …

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