Welcome to Season 17 of the Troubleshooting Innovation podcast. Spiros Assimacopoulos, president and CEO of The Good Bread Co., shares his journey through automation, expansions and more … all to share the time-honored tradition of artisan bread. Sponsored by WP Bakery Group USA.
In our fourth episode, we are discovering operational pain points post-acquisition and the challenges that come with rebranding, expanding and adopting a new corporate identity.
Learn more about this season here, and tune into Troubleshooting Innovation on Apple or Spotify.
Joanie Spencer: Hi, Spiros, thanks for joining me again this week.
Spiros Assimacopoulos: So happy to be here. How are you today, Joanie?
Spencer: I am doing great. And you know, we had such a good conversation last week. Thanks for all your honesty and authenticity in talking about the growing pains that you went through in making this decision to grow and then expand.
Assimacopoulos: Hey, this is like free therapy for me! It’s actually saving me a lot of money.
Spencer: I’m like, Lucy in Peanuts: The doctor is in! So, I want to kind of pick up where we left off last week. You know, we were talking about the impact on culture that an acquisition has, and how important it is to, you know, get everybody on board and sort of ease those fears. You know, you walked in and you’re like, ‘Hi, I’m Spiro. I’m your new boss.’ I want to revisit that and really look at where you are today and how the teams work together.
So, how do these two bakeries now function as one company?
Assimacopoulos: First of all, I’m really happy that that we were able to close the acquisition, and not just from the standard, ‘Well, we have more capacity,’ or ‘We have different machines.’ But the different personalities, the different talents that you add to the team. It’s a blessing and an advantage for the company to be able to deepen our bench and bring in new skills instantly, as opposed to trying to develop those over course of time.
So, the bakeries, we’re in a good place. Culture in my business has always been for me being present, or my partners being present, and it’s tough to do that when you’re 800 miles away. You know, there’s only so much of you to go around. So, like we kind of talked about last week, the first step really is to is to gain trust. So, you need to gain the trust of the key people, the key leaders in that organization. You have to share the vision and really be willing to listen. Whenever there’s change, people are fearful. It’s human nature, a lot of times, to run in the other direction. Thankfully, we retained almost everybody from the initial acquisition, and they’re still with the organization today. But there’s also some really very particular things that we had to learn and work hard at collectively. For instance, I disallowed everyone from using the words ‘you’ and ‘us’ and ‘you guys’ and ‘your plant.’ It was really important to ensure that we all understood that we are we are one team, we are one organization, and we are all here to help each other. We still slip up now and then, and we chuckle about it, but that was a big thing, just really getting everybody to live in how we speak and communicate to each other, that we are on one team, and, you know, striving for the same goal.
Spencer: Okay, so how hard was it for you as the leader, to delegate that leadership to the other bakery. Because your company was pretty young when, when you made this acquisition, and I can just — being in a young company myself — I know that there’s a lot of like, fear of failure, and I have to get this right, and it has to stick with my original vision. And when you’re starting something that’s yours, sometimes it’s hard to let go of that and have that trust from 800 miles away. I can’t even imagine. Was that a challenge for you?
Assimacopoulos: Well, one of the reasons that I was really interested to make the acquisition was that there was such a strong team in place at the time. The previous owners were absentee, so, you know, it’s kind of like the kids that are left at home without their parents. They figure out how to feed themselves and clothe themselves, and so they were already there. They were already capable. It was just a matter of them getting to know me, getting to know my partners, and really understand how we approach business, how we approach baking, and how that probably was a little bit different from the previous ownership, and just working hard every day with every interaction to cultivate that trust and that openness. You know, trust is a word that’s used often, and it’s overused. But it’s not easy to get people to, especially when you’re not there every day, to open up and tell you what they think, or to tell you the bad news. It’s easy to share good news. It really takes confidence and trust in a relationship to share the bad news as well.
Spencer: Trust is hard to gain and it’s easy to lose. And then when you’re afraid to share bad news, it’s a really hard mindset to realize there’s a worse outcome if you don’t share the bad news. The best case scenario is sharing the bad news, and that’s a really hard thing for some people to get their head around.
Assimacopoulos: Yeah, yeah, definitely. So it’s, like I said, it’s a lot of those conversations. It’s reinforcing my beliefs as a person, as a business person, and then getting to spend as much time interacting with the team there as possible. And sometimes that’s in a conference room. Sometimes that’s getting on the floor and pushing racks and asking people how their day is, asking if there’s any problems. It goes a long way. It goes a long way. And once, once you’re kind of there, then it’s, you know, I go there now, and I get smiles when I walk in and fist bumps. And it’s, it’s a real pleasure.
Spencer: That’s awesome. And that’s one of my favorite things when I’m in a bakery, is walking through with the president or the CEO and seeing that person interact with the people on the floor, and seeing that they know them personally. That always just brings me joy. And when those workers are happy to see the leader and they’re talking about their personal life, or, ‘How was your vacation?’ Those things, just to see that real interaction, and that human interaction where there’s no separation between the operation and the business in terms of the human side, is really cool. It’s one of my favorite things about this industry.
Assimacopoulos: Yeah, I agree 100%
Spencer: Okay, so you got away from using terms like “us” and “them,” and so you have new names for the bakeries. Can you remind me what those are?
Assimacopoulos: Yeah, so it’s nothing fancy, but we refer to the Taylor facility as East, and the Minneapolis facility is West.
Spencer: I’m sure that simplifies it and keeps things in more of a group, ‘We are one group’ structure and mindset.
Assimacopoulos: Yeah, absolutely. We toyed around all kinds of different cutesy names, but at the end of the day, what was practical is what worked best.
Spencer: I like it. I like it. Simplistic is often best. So how do you organize what’s made in each bakery? Based on what you said last week, I think it’s kind of evolved a little bit. Was there some trial and error involved in getting production streamlined in both facilities?
Assimacopoulos: Yeah, we went through a few iterations. One of the impacts of covid was some of our product mix changed. So, some equipment we really were underutilizing and we took out of the plant. One of the, you know, million-dollar ideas I had was to consolidate production of certain items at each plant and then ship back and forth. And in theory, it was a great idea. And then freezing rates jumped up, freight rates jumped up, and the economics behind that plan became less than optimal, let’s put it that way. So, you know, kind of a tough lesson.
Bread takes up a lot of space in a truck, and it still costs as much as anything else to ship. So normally, we try to produce as close to the end user as possible and build in enough capability in each plant to satisfy those customer needs. There’s some things that — a few things — we can make in one plant but not the other, and we ship back and forth. But the wholesale idea of making bread in one plant and buns in the other, due to geography, didn’t quite work out for the two plants.
Spencer: So then what did that mean for equipment? Did you have to move things back to where they were originally?
Assimacopoulos: It meant that a lot of my equipment suppliers were happy because I had to buy double of everything! So yeah, now we have, four bread slicers, two in each plant, versus just having two in one. So, it’s more it’s more capital, it’s more training. You know, the idea was, if we can specialize a plant that’s less materials you have to inventory, fewer recipes, you know, more straightforward preventative maintenance, it just takes a lot of the noise out of the business. And, you know, obviously organizational complexity is terrible for any bakery to deal with, and we’re always fighting against it. We just got to the point where the geography and the cost for freight kind of trumped the idea to specialize. So, in the future, if we acquire additional lines or different plants, it’s still a great concept, if the relationship between the customer location and the point of manufacture lines up
Spencer: So, when you’re having sort of those discussions and coming to that realization that that organizational structure wasn’t going to work, what did it take, as far as sitting down with the team? Who had to be involved and how did you put pen to paper to figure out how to adjust?
Assimacopoulos: We realized that when we saw the freight cost per month at both plants, when we were about six weeks into it. And then it was a pretty immediate meeting that we needed to schedule, and it was with my COO Pat and our production planners, and then, you know, down through the rest of the team, just to communicate, ‘This is this is what we’re doing, and this is why. And we know we just changed some things, and unfortunately, we’re going to have to change it back.’
Spencer: How do you do that without disrupting the production schedule and still getting your product to your customers on time?
Assimacopoulos: It’s a lot of over communication, planning, and then, as always, you have to have fantastic people out there doing the work that are going to make that little extra effort to ensure that things go smoothly.
One thing that we’ve really been working with the team on recently is the whole idea of details in the process, in the plant. Pat, my COO, coined the phrase, ‘the details make the bread.’ So, every meeting we have, we review the day before certain runs, scrap rates, what went well, what didn’t. And when things don’t go well, we have to keep asking why, and really dig down and find out what the root cause of the issue was, which, you know, that’s just muscle memory, a culture to, number one, pay attention to the details, but understand that that’s where we find success, is really getting down to the nitty gritty and understanding what’s happening.
Spencer: So, what does training look like then, in that regard? Does it require a lot of cross-training?
Assimacopoulos: Absolutely. We do a number of different things. We’re starting to leverage AI to t build some training manuals, some preventative maintenance manuals for our operational support team. But that’s standard. You know, everyone is going to do that. We send employees out to seminars. We bring in baking consultants to do continuing education with the teams at least twice a year. But ultimately, the most powerful way to learn, in my experience, is from your peers. So, we try to identify different team members that have an aptitude and an interest in in kind of being a coach. So, we empower them to kind of lead and coach and train different people on the team.
Spencer: How is that going for those people you identify, and how is it being received?
Assimacopoulos: It’s fantastic because a lot of times, a lot of people who come to work in the bakery, they’re not coming from a big career. A lot of times this is may be their second or third job, and to entrust them with leading others in a certain capacity and sharing their knowledge, it feels good. I mean, it feels good when I do it, so I know they enjoy it and they do it with, with a smile and a happiness. It’s not something that that we’ve got to push down or force them to do.
Spencer: That’s exactly what I was hoping you were going to say. It seems like such a good culture builder and a way toward retention when you’re empowering your team to sort of take their knowledge that they’re building and share it with the rest of the team. Like that just seems like such a win-win-win.
Assimacopoulos: Yeah, for sure. And there’s a couple circumstances, you know, at least two or three times a year, where we’ve got a really high-performing operator at one plant in we ask them to visit the other plant and kind of train the team at the other plant on what they know. And it’s pretty cool for an hourly person to go on a business trip and have dinners paid for and stay at a nice hotel, and you’re kind of a local celebrity at the other bakery for two or three days. I think it’s really cool for them and it’s great for the organization.
Spencer: What a cool idea. Okay, so I want to revisit something else that we talked about last week regarding the rebrand. I know when you were reflecting there were some things that you maybe would have done differently if you knew then what you know now. But here we are as The Good Bread Company. What were some of the benefits? Does this brand help you expand into new areas in terms of geography or channels? What does it look like now?
Assimacopoulos: The Taylor facility is years ahead of where it would have been if we remained as a standalone bakery. A lot of as we know in life and in business is relationship-based. There are a lot of relationships that that bakery had with customers in the marketplace that were maybe, you know, underutilized, or the fact that they were also a standalone plant, those customers were more apprehensive to expand the programs. But, you know, as a multi-plant producer with redundancy in different markets, it gives us more credibility to some of the regional and national customers that we now service.
Spencer: That makes sense. Did it help you on the retail side at all? Like, can we see The Good Bread Company on store shelves?
Assimacopoulos: Unfortunately, no. Coming out of COVID, we were doing a lot of DSD work with Kroger during the initial bread shortage. I don’t know if I’ve told you this story before, but I think it was Wednesday, I laid off 50% of the staff, and then Thursday morning, Kroger called and asked if I had any capacity, because they didn’t have bread on the shelves. So yeah, within six days, we had bread on the shelves in I think it was 90 Krogers around the Detroit area, which was fantastic. So, part of our goal is to continue to grow with Kroger, and then expand outside of the local market and leverage the Michigan Bread brand, you know, as far as Kroger wants to take it.
We are doing some work with other retailers now, and as soon as someone signs on the dotted line, you’ll be the first one to call, and I’ll let you know if we have a successful launch. But we’re planning on launching the Good Bread brand in a regional retailer sometime in the next four months.
Spencer: Awesome. Okay, so in addition to the channels and the distribution, how did this rebrand and going from Franklin Street Bakery and Michigan Bread to the Good Bread Company — does the Good Bread Company brand name compete with the Franklin Street brand and Michigan Bread brand?
Assimacopoulos: Yeah, so Michigan bread is still the brand that we w produce in Taylor. You know, we’ve been around for 15 years now, so we’ve got good brand recognition in this market. The Good Bread Company, which we rebranded from Franklin Street Bakery, is just getting to the point where customers will approach us at food shows as The Good Bread Company and not say, ‘Oh yeah, you’re the ones that bought Franklin Street.’
So yeah, as I, as I said last week, that was probably a misstep on my part. Franklin Street bakery was a great brand, and had a lot of equity in that market. We probably should have kept it and then leveraged the Good Bread Company for specific multi-state or regional opportunities in retail. So, I probably would have managed that little bit differently.
Spencer: I kind of feel like if you had done that, you still would have had a whole new, different set of challenges in managing multiple brands depending on the channel and the location. Don’t you think?
Assimacopoulos: Yeah, potentially. And you know marketing is incredibly important when you’re trying to reach new customers and communicate your story. And when you start a new brand, you’re kind of, you’re starting at zero.
Spencer: Don’t I know it. And I mean, once you change that brand, there’s no going back. Unless you’re like the Coca Cola Company, there’s no going back. You’ve got to just go with it.
Assimacopoulos: You’ve got to go make sure you’ve got the right resources to support it. And, yeah, it’s something that we really were not prepared to do at that time.
Spencer: Okay, so here’s another question about that, from a business perspective. Were there specific pros and cons when it came to the rebrand? I think the acquisition happened really early, when you know, within 15 years of starting the company and then making a rebrand. Like, from a business perspective, what are the implications for that? Are there pros and cons doing it early in the life of the company, or when a young bakery buys an older bakery?
Assimacopoulos: Yeah, I think the biggest question is to understand why it’s being done in the first place. If you’ve got a strong reason, if you’ve got a strong why to make a move, then potentially you can justify it. I didn’t necessarily have a strong reason. I felt that Michigan Bread is a great brand, until you get to Columbus, Ohio. Nobody wants to see Michigan bread on the shelf in Columbus, which is valid to a certain extent. But like I said, I think I overestimated the need for rebranding of the Franklin Street Bakery which was established.
Spencer: Okay. So, what does all this mean for the future? I feel like there were sort of two waves of growing pains, one stepping into automation, and then the second wave, the acquisition and the expansion. Now that you kind of have this operational setup in place, are you poised for another wave or chapter of growth, and what do you think that would look like?
Assimacopoulos: Yeah, we absolutely are. We’ve invested heavily into people, into CapEx. But to your point of growing pains, there’s a lot of things that we’ve learned over the last four years, and when you’ve got multiple locations to manage, it kind of puts a finer point on it. Simple things like how to run a proper meeting, and not every leader in the company is going to be on every meeting. How do you design a playbook so that when leadership is not at a meeting, people are following certain norms, being respectful? There’s an agenda being followed, there’s notes being taken. That’s not something that’s really sexy and people want to talk about, but that’s a big part of the, you know, the lifeblood of the company, how we communicate and how visible our execution is on a daily basis.
So, we’ve done a lot of work with both teams to develop a language and a set of metrics that are shared across both plants. So, we’re not calling, you know, something purple in one plant and, you know, dark blue in the other. We have the same exact dashboards. We have weekly meetings where we review performance for every department in the organization with both teams on the call.
Spencer: Is it hard to get there?
Assimacopoulos: It took us about three and a half years. Just basic things like collecting data. Are operators on the floor, pencil whipping? Are they really putting in the actual data? Yeah, it’s a lot of work. It’s setting up processes, a lot of review, a lot of trial and error, and then, of course, the whole team needs to be on board. A lot of times, ideas may start from management and work their way down, but everyone needs to buy in. Otherwise, it’s really bumpy. And it took us a while to get there, but luckily, we are there. And one thing that, I’ve always stressed to the team is as we’re developing these systems, I want them to have a mindset that we have three, four, or even five different plants.
Spencer: Okay, that’s what I was going to ask you, is, do you have this thought that’s always sort of living beneath the surface of ‘Because when we acquire the next one, that one has to do it the way we do it with these two’?
Assimacopoulos: So, we have a dashboard now and we understand the playbook. And yes, it will always take time to build that data and train a new team to feed the data on a daily basis. But we’re not reinventing the wheel at this point, and now you’ve got a whole group of super users that are there to support that new team. So I also think thinking in larger terms kind of helps everyone that’s really close to the daily activity step back and look at it through a different lens.
Spencer: Is everybody in that mindset always? Or is this something that you’re just kind of, it’s what drives your decision making, as far as thinking about a growth mindset?
Assimacopoulos: I think that’s become part of our culture. And, you know, a lot of times people will chuckle, ‘Did Spiro order some new equipment?’ Or, you know, there used to be equipment would come through the door, and I didn’t even communicate to the team what was happening. So obviously, we’re well beyond that at this point where, you know, we have ops support, we’ve got sales, we’ve got operators. Everyone has a stake in changes that are made in the plan, and they have a role to play in our mutual success. So, it’s kind of, everyone is on board with that, and I think it keeps things exciting. And maybe they would use a different word sometimes than exciting. For me, it’s exciting, but potentially it’s a lot of work at times for the team.
Spencer: Now, when you said they come to the bakery and you’ve ordered another piece of equipment just shows up, it makes me think of when my husband comes home and there’s a stack of Amazon boxes on the porch, like, ‘Oh my god, she bought something again.’
Assimacopoulos: I wish I could do that with baker equipment! That would be a blast.
Spencer: Wouldn’t it be, though? We wouldn’t have lead times. Lead times be damned. We’ll just order it and it shows up. Okay, this is a good note to end on, because next week we’re going to take a look at the future. I think we’re at a good stopping point. We’ll pick up next week looking at what this entrepreneurial mindset of yours means for the future of The Good Bread Company. So, thank you again for a great conversation this week, Spiro.
Assimacopoulos: Thank you, Joanie. Have a good week.
