Welcome to Season 19 of the Troubleshooting Innovation podcast. We’re talking with Kristen Boschetto, owner and GM of Boston Baking, to learn how generations of baking experience can lead a midsize bakery straight to the future. Sponsored by Tutor Intelligence.
This week, we hear how Boston Baking evolved from a bagel shop into a mid-size, innovation-driven bakery — leveraging infrastructure, contract manufacturing and cross-functional teamwork to stay ahead of a changing market.
Learn more about this season here, and tune into Troubleshooting Innovation on Apple or Spotify.
Joanie Spencer: Hi Kristen, welcome back for week three.
Kristen Boschetto: Hi Joanie. Thanks so much for having me back.
Spencer: I’m loving our conversations. I want to kick off this episode by revisiting the name change and going from Boston Bagel to Boston Baking. Obviously, it changed the product mix. But what are some of the other opportunities that made that change opened up for the company?
Boschetto: Sure. So the very first thing is it, it allowed us to expand our outreach within the market. So it did not pigeonhole us into just one product line. It gave us more of an identity. We always had that brand recognition with our family legacy because the Boschetto name was tied to Boston Bagel, but it allowed us to create more opportunities and to penetrate the market in a different strategy.
We implemented new marketing strategies, new sales strategies. We also decided that we wanted to leverage our infrastructure. And with our infrastructure, not only was our equipment in the physical space, but the knowledge that we had in the industry, the, you know, the third generation passing on to the fourth generation, and what is missing in the market? What we very quickly identified was this whole co-packing space. How can we really capitalize on that? Let the industry know that we’re a co-packer. But we didn’t like the term co-packer because it’s very, very cold. Along the vein of partnership. we termed ourselves as a production partner. That opened up a lot of doors and a lot of opportunities to expand our offerings within the service category. So we were not selling a product first, we were selling the company.
When we thought of the name Boston Baking, it was very thoughtful, because we wanted to still recognize, you know, the legacy and where our roots came from, which was Boston. But what do we do? We bake. And then we added Bake Shop quality because that’s who we are, and then we are a family tradition. So there was a lot of thought that went into the rebranding of our logo and our taglines and our identity. We really wanted it to represent the roots of who the Boschettos were, and what we are trying to do, as you know, innovation into this industry and let people know that we are evolving and growing so that we are their trusted partner if they want to go to market with a new product.
Spencer: I know you did so much upfront work. The name change happened really fast, obviously, but the thought that went into it was not a short process. Was there anything once the name change happened, like expected challenges and also unexpected challenges from a marketing perspective?
Boschetto: Branding was one of the biggest challenges. Is, how do we penetrate this market with this new identity? What channels do we tap into? How do we communicate? I mean, then social media wasn’t even a thing. Do we tap into trade journals? Do we tap into advertising? Is it word of mouth? You know, what do we do from a marketing perspective to let the industry know of this change? A lot of it was knocking on doors. A lot of it was cold-calling. A lot of it was through tradeshows, because then that was really the main vehicle to announce these changes. So that’s really what we did. We kind of went old school, and we enlisted in many local, regional tradeshows to introduce this new brand, the new name, display new products.
We would schedule lots of meetings with in-store, retail buyers and just introducing this new kind of company but still has the same kind of infrastructure. We can just take your bakery program to the next level, which is one vendor. So you know for them, we would position. You don’t have to source from multiple different vendors. You can just source from us, and we can help to customize your program. So that was really our differentiation from our competitors, is that we can offer more than just one product or solution for you.
Spencer: It feels like this change, really wasn’t I mean, technically, it was a rebrand, but really it was more about you didn’t change the company. You enhanced your capabilities based on the strengths that you recognized internally in your infrastructure. Is that a fair assumption?
Boschetto: Absolutely. And the other thing we needed to do was prove ourselves. So we had to really show the industry that we can scale. We can support your growth. One of the biggest ways that we did that is we partnered with a global company, and I just knocked on their door, introduced a product concept to them, and what did I have to lose? They could say no — thankfully, they did not — and they embraced this idea. They embraced working with a family business to help grow their infrastructure. So it ended up they sold to a global company, and it did take us to that next level. I mean, it was then where we had to implement food safety. We had no idea what food safety meant back then. I mean, my grandparents would bake and produce on a wooden bench. All of a sudden we had to remove all wood from the facility. We had to really adapt these new disciplines and these practices if we were going to compete in this space.
That was a big moment for us, and it changed the whole trajectory of the Boschettos, really in this industry, and adapting, these food safety principles, and hiring a team to really spearhead this new department for us. Because at the time, it was, you know, my dad and I as leadership, we did not have any other leaders to really take on these departmental roles to support this growth. That’s why partnership is so important to us. Because without that partnership, if they were just a customer, we would never be where we are today. They really gave us that education and information on how we get from a local baker to a commercial bakery that has food safety embedded in every aspect of the organization.
Spencer: And when you have sort of those standards, you’ve got to set your standards according to the standards of your most stringent customer, and then everyone else is covered.
Boschetto: Exactly, and then it validates you, in the industry as well.
Spencer: That’s amazing. I can imagine that if you have a customer that gets acquired by a global company, it’s scary, and to be able to have that endorsement from the customer to their new parent company, “This is who we want to work with. We have a good relationship. We have a partnership,” that had to feel really good and encouraging for the work that you had put in.
Boschetto: 100%. And it was risky as well, because, knowing their reach and their power, they could have gone to anyone else, really, to produce this item for them, but they decided that they are going to take a chance with us, with our family business, and knowing the history that we have and our attention to detail and quality and the values, it aligned with this brand. So, they took a risk on us. We took a risk on them, and it is now a 20-something year partnership. So yeah, and it’s just, it’s really great. It opened up a lot of doors, as I mentioned, and really helped us to position us to that next kind of commercial partnership.
Spencer: So, what does your product mix look like today as Boston Baking?
Boschetto: It varies. We do everything from components to finish product, and everything in between. We support all different channels of the market. We have a pie shell component line that supports prepared foods. We sell to USDA facilities that will take our component and they will make a finished product, such as a chicken pot pie or a quiche, etc., and that’s on a national scale. And we do have the flexibility that we will differentiate a product for a specific retailer. We’ll have different formulas, different component sizes, different component shapes, whether they want to square, an oval, a top and/or a bottom. So we really offer that kind of that differentiation, to set our retailers apart. So we give them that kind of thoughtful attention to those details, so that they can go out and market their product. And then we do some other raw products as well. So dough components that are sold, not only retail, but foodservice as well, in the cookie space, and then we do finished products: cakes, cookies, brownies, crumb cakes, Bundt cakes, components as well as finished products. So ready-to-serve. We really satisfy all of the different pillars within the foodservice space and within the food space.
Spencer: Do you still do bagels?
Boschetto: We don’t. We do one bagel, and it’s in the form of a log for one of our partners, and that’s it. We have made the conscious decision to discontinue bagels and really exit that space and just put our focus on some of those other sweet goods.
Spencer: That evolution was not overnight, like it took a while to get there, but to go from one core product to then diversifying away from that product almost completely, that is a huge change. So how did your infrastructure impact that change and sort of that evolution?
Boschetto: Well, it was also an emotional decision for my father, because he started Boston Bagel. So we still had the brand Boston Bagel under Boston Baking, but it was underperforming. And quite honestly, we needed the space in the facility to make room for more of our profitable items that had a lot of opportunities in the marketplace.
So that was another difficult conversation that I had to have with my father. But I, of course, you know, presented a case. I showed him data analytics, what’s going on in the market, marketing trends. And we did make the decision that we were going to exit the bagel space, but we were going to introduce new items and new services to the market. We did invest in additional lines in pie because we saw a lot of opportunity there. We also saw some opportunity in the cake space to really penetrate the in-store, retail bakery, where labor was an issue for them, and they’re still struggling with labor. How do we help them with that pain point?
I mentioned kind of consumer habits and behavior. How early on, they would go to a local bakery to buy their sweet goods. Well, now that pattern is changing, the behaviors are going to one store to buy everything now,
Spencer: Right.
Boschetto: So, how do we provide those authentic fresh pastries in an in-store bakery infrastructure? That’s what we did. We developed from start to finish a whole program that an in-store bakery could buy from components to cake, blanks to cupcake blanks to a finished product, depending on their labor skill, and what kind of their restrictions were. If they wanted to still decorate and finish product in-house to give their consumers that kind of experience, they could do that.
But then on some items, if they didn’t have the labor, then they could have a fresh-baked product from the freezer, but it still met quality standards, then we could offer them that product as well. It gave a lot of versatility. And yeah, so those were some very conscious decisions that we made of how we are going to strategically penetrate kind of in-store bakery in this new, new space of baked goods.
Spencer: I can’t remember if it was last week or the week before we talked about the start of in-store bakery, and how you all were sort of at the forefront of that in your region. And when you look at, maybe, I would say the past 10 years or so, the labor in in-store bakeries is going down, and the consumer expectations for the quality of what they could get at an artisan or specialty retail bake shop, those expectations are going up. So there’s a gap in there where there is a distinct need. It sounds like that’s a space you all are filling pretty well.
Boschetto: We are. And then there’s also, with our component is pricing, because the market has already dictated the price, so we have to figure out a way how we can meet that artisan-type platform to scale, yeah, as well and meet that price point.
That’s why I’m just going back to partnerships. So the vendor partnerships are so critical in the success of those programs with not only ingredients, but also your packaging. It’s so important to have all of those components before you launch a product in the marketplace. So that’s a great point that you bring up. Consumers expectations are high. They really are, as they should be. They’re paying money for something, and oftentimes, the products that they’re buying from us are something that they’re using as a celebration. Or, it could be a moment where they’re sad and they just want a little sweet pick me up, you know, so we satisfy all of those different emotional times for people’s lives. Just to know that we play a part in that is very special to us.
Spencer: What was the impact on the business when you stepped into contract manufacturing, but then also, how did it fit into the existing business?
Boschetto: That’s a channel that I think I am most excited about, that we offer to the food industry. We do partner with CPG brands, wo entrepreneurs who are launching a consumer brand. Either they’re already on the market and they’re just looking for more line capacity, or they have a new product line that they want to launch.
We work at every single phase of their business stage and where they’re at. We do identify these opportunities with them, and we help them from their inception all the way into their fruition of the business. To me, it’s rewarding and exciting to see a brand come to us looking for this partnership to help them launch a product on the shelves. And there’s no greater feeling than an entrepreneur seeing their brand on the shelf and knowing that you had a part in that.
There’s some limitations, obviously, based on the equipment and the capabilities that we do have. There are some products that we are unable to produce here, but we made a decision that we are going to invest in some lines of products that we see could be a good fit, not only for us, but for the market. We did make some initial investments in those pieces of equipment that can help aid manufacturing.
But one thing that differentiates us from some other commercial bakers is that we are semi-automated, so we are not a fully automated facility. We do not have tunnel ovens. We have multiple rack ovens in here, so that gives us a lot of versatility and product mix that we can produce so that they have different oven times and temps. We can make a lot of different products here, so our depositors have a lot of different capabilities. We’re very strategic in who we partner with, as well with our vendors, to make sure that we’re not locked into just one size, shape, etc., that it does have that versatility, because we’re satisfying all different product categories in the big space.
So that’s, that’s one of my most favorite channels, I have to say, is getting to understand what drives and motivates them, and understanding the nuance of their business and how we blend it in with ours. You know, a lot of the partners that we do work with are also family business. So it just so happens that there’s a lot of alignment there.
Spencer: So, there is this huge influx of new CPG brands and these emerging brands, whether it’s creating a new product to a fill a need for specific health requirements, or somebody who is just truly entrepreneurial and has a new idea for a new product. But there are a lot of new CPG brands out there, and when I hear conversations, it is a lot of, “We cannot find a contract manufacturer.” They’re either trying to crank out their product in a commercial kitchen, and they just do not have the capacity, because the requests are growing, the company’s growing, and a lot of them really struggle to find a good fit for a contract manufacturer. So do you guys get a lot of requests? Do you pick and choose which ones based on capabilities and values alignment and all of those factors, like, are people knocking on your door?
Boschetto: We get a ton of requests. Yes. So there’s always somebody who, Auntie Mary made the best brownie and or Crumb Cake, and they want to commercialize it, which is excellent, but as we go into any opportunity, we have to run it through our filters. We do have a process that we go through in the discovery of identifying if this opportunity aligns with us.
Sometimes there is some capital that needs to go into supporting this project, so we have that discussion up front as well, if they have something that is specific to their item. So there is a lot of initial sort of discovery that goes into understanding what their expectations are, who it is that we’re going to be working with, the opportunity, really, for the market share for this item, and how efficiently we can integrate it into our infrastructure.
It’s a lengthy process, oftentimes. The entrepreneurs want it to happen overnight, but we have to go through our, you know, checks and balances, and I mean, first and foremost, we have to make sure that it is SQF not only approved, but it aligns with our current infrastructure. We do have a regulatory compliance manager, as part of our team, and she makes sure that all of the ingredients, the procedure, the process, it does meet our standards as well as industry standards. There’s a lot of work that goes into it that an entrepreneur may not even be aware of before we can really commercialize and produce the product here.
Spencer: And I do hear that a lot, and when I hear, like, any expert panels on contract manufacturing. They’re giving those entrepreneurs like the advice of, it’s entering into a relationship that has to benefit both parties, and it has to be a good fit. I’ve heard that there might not be anything worse than a contract manufacturing relationship that isn’t a good fit. It can get really kind of dicey when the fit isn’t right for whatever of the reasons that you listed.
I have another question about like the existing CPG companies that you work with. You mentioned that sometimes it’s a line extension or new product that they’re launching that they come to you for. Do you ever help with, like the ideation, on product development with those customers?
Boschetto: We do. We have had some brands come to us with a product that may be out of the scope of what their current capacity is and capabilities are for production, and we have helped, not only with the R&D, but also the commercialization. So, if a company is trying to add a protein into their product, so their existing product, and they want to differentiate a little bit, we can help with that. We have suppliers that we work with that are able to include kind of those functional ingredients into their proprietary base, which is great, so that they can provide us with the ingredients that we need in order to produce their product. And we tap into the resources that we have here. So John Fisher, who’s our R&D chef, so he is instrumental in the early stages of helping with that product development, our innovation and regulatory compliance manager making sure that everything is compliant all the way through marketing to sales. We’ve really kind of developed this functional group, which is our accountability organization, to really help cross functionally, to be able to support our partners in the needs, to be able to meet their needs. And it’s so important, I think, as an organization, to have that infrastructure, not only in the operation, but also in the people that are able to identify what really it is that they need, because they do need that overall support. So, for us to be able to give that to them, to help them in their product development launch, I think is very important.
Spencer: You’re reading my mind, because I was going to ask you about, like, how the team taps into formulating specifically for functionality. Because obviously, everybody wants more protein in what they’re eating and drinking. It’s huge right now, then things like nutraceuticals as well. So is that team having a blast, sort of being able to tap into these new formulations and see how they can help your customers with new product development?
Boschetto: Yes, and that was an opportunity that we saw years ago. We started in the nutraceuticals and the functional ingredients, oh, gosh, years ago. So in order to support that, we recognized early on that we needed to bring in a team, and that’s what we did. We built out our infrastructure so we could offer the industry those types of functional products.
Big buzz words back then, lower salt, lower sugar, lower fat, reduction of certain types of hydrogenated oils, etc. But then how is your product going to perform? Because it has to go through all of the different channels, the distribution channels, shipping, processing channels. How is that going to translate now into a finished product? So when the end user that they have that experience, they have the best experience that they can have with your product.
Our team not only works with formulation from an ingredient standpoint, but also from a texture and an overall experience standpoint. So, yeah, they’re having a lot of fun taking traditional formulas and removing a lot of those ingredients that have a bad buzz in the industry right now, which I would agree with in replacing them with more fiber, more proteins, reduction of sugar, etc.
It’s going to be a big landscape, I think, for a lot of bakeries, and I think a lot of bakeries are starting to evolve to be able to create kind of those products that that meet consumer standards, because their standards are changing. People are turning around that packaging. They’re looking at those labels. They want to make sure what they’re feeding their families is safe. Because food is so important. It’s such a huge part of our family, and the experiences that we do have.
Spencer: I do think you’re totally right. Several years ago, consumers were looking for the “free from” call outs. They were focused on what was being removed from the products, but they have so much access to information now that they are tapping into, “We don’t want the finger coat “bad stuff,” but we don’t want it replaced with more bad stuff. What’s the good stuff that’s going in?” And they’re looking at both sides: what you’re taking out, but also what you’re putting in.
Boschetto: And that was the mindset years ago. We’re going to take something out, but we’re going to replace it with six other ingredients. It’s a totally different infrastructure now, removing all of those dyes, removing all of those bad for you ingredients, and people are just more educated, and they’re more aware, which I think is great, and I think it motivates us and it empowers us to do better and produce better food for the industry.
I love these new initiatives, I really do, and they align with our goals and objectives, which is to create more healthy products, so it’s aligned with our company goals and our company strategies as well. I’m proud of the industry. They’re stepping up trying to make this change.
Spencer: Consumers are, like, calling the industry to task and making us better. And I like what you said, that they turn the package over. They’re not just looking at the call out on the front of the package anymore, and they now know that it’s replaced with something, and they’re reading the entire list to see what it’s being replaced with. So kudos to your teams for like being ahead of that and focusing on the intention behind what you put in to replace those things.
And I’m curious how the teams all work together in terms of ideation, formulating, commercialization and sales to help your customers to either bring your own products to market or to help your customers bring new products to market. How do all those teams come together? Because sometimes, especially if you’re thinking sales and operations or product development and operations, everybody has their own different individual goals to meet in order to meet a company’s goals. So how do they all come together to make it happen?
Boschetto: Sure. So first of all, innovation to us is not just about creating a new product line. It’s about continuously improving how we serve both our partners as well as our company. We kind of break that down into three different parts, so it’s products, it’s the team, and then it’s operations, and how each of those functions kind of work together.
Each of those departments plays a role in every single aspect of our product development, of our team and people development for continuous improvement, as well as operational innovation. So it really starts with marketing. We’ll bring forth some data, some trends, and then R&D gets involved in the creation of those products. And then operation gets involved. Well, operationally, how can we produce this, so it’s lean, we’re reducing waste, we’re able to meet throughput, etc.? Then sales, they position it in the market. So then sales is the one that is going out, and they are trying to sell this product to their customers, to not only the production partners and/or there are current existing customers or new customers. So it’s really a collaborative sort of experience. And then SQF gets involved to make sure that everything that we are doing is food safe.
So we really align on all of our goals and objectives, especially when it comes to innovation. Does it check all of our boxes? Can marketing go out and just develop and design packaging that clearly illustrates what this product is and how it can benefit a consumer? It’s very much a collaborative effort in how we approach innovation from the top level all the way down to the bottom.
Spencer: And it’s not easy to find all of the common ground, just because the goals for each of those areas can be so different.
Boschetto: Yes, and then can the buyer go out and procure all of the ingredients in the packaging? It’s really a joint effort.
Spencer: Are these maybe some of the areas where we talked last week about loud voices in the conference room?
Boschetto: Possibly. But we never shoot down an idea. There’s never a bad idea. We do have a think tank where we come and we just brainstorm a bunch of ideas. From there, we do filter it down based on criteria. But at first, an idea is an idea, and who’s going to shut down so and so’s idea? You shouldn’t do that, right? You never know an idea could end up being one of our top performing products. And it just started with a thought.
Those sessions, to me, are the most fun, and I love to hear what some people might think, because I would never think that they would come up with that idea. And then to get operations involved and see how their brain works, and to see, well, how can I produce it? It’s just so rewarding and fulfilling to see that the team takes ownership, that the team is now buying in, because they’re the ones that are going to be doing the production on it. So just see how excited and energized they get from these sessions, that’s really a fun part of my job that I very much enjoy.
Spencer: I think, to harken back on last week’s conversation around culture and this idea of partnership that you have in your culture, I think this is a great example of that, and another business case for being able to bring products to fruition when you have a partnership mentality in creating new products that require thought leadership and ideation from so many different aspects of the business.
Boschetto: And our team loves a good challenge. I mean, they really, really do so they love to problem solve. They love to see if they can take a concept all the way to commercialization. It’s one of the most, to me, rewarding and fun parts of my job to watch the team really come together and utilize their resources and their skills to be able to problem solve and to come up with a solution for a product that’s going to go to market. It’s exciting.
Spencer: I love that. We’re getting ready to wrap this episode up, but I want to ask you something that’s a little conceptual. The podcast is Troubleshooting Innovation, so if you had to wrap it all up into one, like overall description, what does the word innovation mean to you?
Boschetto: Oh, goodness. Innovation, to me, means continuous improvement and continuous improvement not only in product, product selection flavors, but also in your infrastructure and with your people. So, it’s all encompassing to me, but really, it’s growth, it’s development, it’s new ideas, it’s evolution, it’s kind of all of those things. It’s change, which all of those things can be really hard, really scary, you know, risky, but if you don’t take risks, there’s no reward.
Innovation, in my opinion, should be part of everything that you do. It should just be woven into every discussion that you have, every strategy that you have. So it’s not only just dedicated to production or R&D, but it’s really part of every single department of the organization.
Spencer: I love that answer, and that’s such a good note to end on this week, Kristen.
Boschetto: Thank you.
Spencer: Okay, so I think this week, in talking about sort of how you got into some big time product development, great springboard for next week’s conversation around technology, infrastructure and product efficiency, and how those together have led to growth for Boston Baking. So we are wrapping it up for this week, and we will get into some more technical discussion next week.
Boschetto: Awesome. I look forward to that.
Spencer: All right. Thanks, Kristen.
Boschetto: Thank you. Have a good day.
