A Chance to Sprout: A Can't Miss Opportunity for a Small Bread Bakery?

By Gill, Sarah; Grandzol, Christian et al. | Business Case Journal, Summer 2015 | Go to article overview

A Chance to Sprout: A Can't Miss Opportunity for a Small Bread Bakery?


Gill, Sarah, Grandzol, Christian, Wynn, Pamela, Business Case Journal


Introduction

Doug ended the call with the Trader Joe's merchandiser and pondered the many issues racing through his mind. Sitting on a bin of spelt, one of the few items in the prep kitchen that could be used as a chair, Doug looked around the cramped multi-purpose room and small hallway that served as his executive office, supply room, packaging line, and inventory warehouse and thought, "I love this old building, but there are certainly more ideal places for a growing bakery. If I get the contract with Trader Joe's, we will almost triple our sales, but there is no way I can fill that contract with what I have here. Plus, a Trader Joe's contract will fundamentally alter the feel of the bakery." His thoughts were interrupted by Michael's footsteps coming up the stairs. Doug decided to wait to tell his chief baker about the exciting phone call--Trader Joe's would need an answer in a few days, but for now he would secretly savor the moment.

A Budding Bread Company

Opening a specialty bread business was never a specific goal or dream for Doug; instead, he took a roundabout journey to arrive at Columbia County Bread and Granola (CCBG). Doug had hopped around the country for 25 or so years as a cartoonist, a literary agent's assistant, and a newspaper reporter. At one point in his travels, Doug got a bread machine and wanted to know more about the processes involved, but his life often got in the way. For example, a stint in Louisiana made it impractical to pursue bread making to a serious extent because the house he lived in lacked an oven vent and the state's weather conditions were not ideal for making bread. Doug remembered, "Any number of things took me away from it, but I always came back."

In the early 2000s, Doug was displaced from his job in Manhattan and resorted to freelancing, a move that cost him his health insurance. Shortly after, he had to be treated with an intense course of antibiotics for Lyme disease. Doug said, "These experiences got me interested in nutrition and the work of Weston Price, a 1930s dentist who studied the link between diet and dental health. One of Price's contributions was his advocacy for sprouted grains. I thought that sounded interesting." Doug's research revealed that commercially-produced sprouted bread was available in stores, but there was little available information for those wanting to make sprouted bread themselves. The recipes that existed incorporated mostly flour with only a small amount of sprouted wheat, so Doug spent the next several years developing a work-in-progress bread recipe.

A move to Pennsylvania in a house with a convection oven opened the possibility of producing larger-scale quantities because the oven cut the bread's baking time from one hour to twenty minutes. At the time, Doug was working as a cartoonist, a job he could do from home. Making bread and trying to sell it at the local farmers' market gave him the chance to interact with people in the town: "I built a cart, and the first day I sold 20 loaves. I never looked back; I was off to try my hand as a specialty baker."

Bread Industry and Whole Grains

The bread production industry included commercial and retail bakeries that manufactured bread and a host of other products including cakes, muffins, bagels, pastries, and pies (Nanfelt, 2012a). After years of relative industry stability, the 2000s brought a state of flux. For example, the distressed economy of 2008-2012 gave people additional reasons to eat at home and consumers' choices about health and the quality of ingredients led to substantive changes in the sourcing, production, and marketing of bread products (Gelski, 2010).

There were a large number of establishments in the bread industry, the majority being small and limited to servicing distinct geographical areas (Nanfelt, 2012a). As demonstrated in Figure 1, the total number of businesses declined from 2003 to 2006, stabilized for a year, and then fell each year during the recession and the weak economic years that followed. …

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