TAYLOR, MI — Michigan Bread is constantly in motion, whether it’s the product mix for distribution or the plant floor configuration, which has changed a dozen times since the bakery began. The company’s evolution has been rapid, and it isn’t over yet.
On the heels of its copious automation upgrades, Michigan Bread bought Minneapolis-based Franklin Street Bakery. It’s triggered an immediate upward shot in the company’s trajectory.
“Franklin Street has a number of innovative products,” said Spiros Assimacopoulos, president and CEO of Michigan Bread. “There will be a tremendous amount of value created between the two leadership teams, R&D and the combined larger geographic reach. Leveraging customer relationships will be key to realizing synergies in sales and plant operations, and I’m excited to see what the two teams can accomplish together.”
The 18,000-sq-ft. facility that exclusively manufactures fully baked frozen products for foodservice opens the door for a host of collaboration in areas such as sales, marketing, finance and accounting to foster that growth. The acquisition also paves the way for product development and refining the overall portfolio for the whole company, specifically through the expertise of David Beal, an R&D specialist at the Minneapolis bakery.
“I’m really impressed with some of the products David has developed,” Assimacopoulos said. “There are challenges and opportunities that come with integrating two plants, and he will play a critical role in navigating those waters.”
With an arsenal of SKUs, Michigan Bread can fill in gaps in the Minneapolis product line almost immediately while rationalizing its own SKU proliferation.
“With the growth, evolution and change comes some hard decisions,” Assimacopoulos said. “Sometimes, you just create more headaches by trying to do what feels good. Despite our best efforts, there are certain products that are just too costly or difficult to automate.”
“Finding the right customer with the right volume for your products can be more challenging than developing a good product in the first place,” Assimacopoulos said.
In recent months, those hard decisions have included nixing some of the products the bakery created in those early days as it tried to get on the broadliners’ radar.
“We’ve cut SKUs that probably should have been cut a long time ago,” Assimacopoulos said. “Some of it is the residue of trying to elbow our way into the industry. We often have to be willing to bake products that other companies are not interested in. From manufacturing and business perspectives, some of those products only work if our intention was to maintain the business as a hands-on shop.”
Strategy is not simply about cutting SKUs, though. It also means having an appropriate portfolio for the customer base.
“Finding the right customer with the right volume for your products can be more challenging than developing a good product in the first place,” Assimacopoulos said.
That was one lesson that revealed itself during the state’s 2020 COVID-19 lockdown, which dealt the bakery a near fatal blow. On March 16, 2020, Michigan Gov. Gretchen Whitmer ordered bars, restaurants, theatres and casinos to close, shutting down virtually all Michigan Bread’s customers.
At the height of the lockdown, the bakery’s sales had plummeted nearly 80%, and Michigan Bread made the heart-wrenching decision to lay off a good portion of its workforce.
But as one facet of the business came to a screeching halt, another area rapidly expanded.
At the same time foodservice operators closed, retail demand for bread surged, and supermarkets couldn’t keep it on the shelves. One day after that layoff, the bakery got a call from Kroger looking for an operation with the capacity to help replenish its bread supply. The following week, Michigan Bread had half a dozen branded products in Kroger stores and began pulling those workers back into the plant.
“It was a very timely and mutual need that both organizations had,” Assimacopoulos recalled. “The Kroger team was incredible to work with, and the relationship is flourishing.” Today, retail accounts for about 20% of the bakery’s business, and that’s triggered even more change.
Between the retail opportunity and the acquisition’s expanded reach, Michigan Bread had to rethink how it presents itself in a much larger marketplace. The company recently launched its new brand, The Good Bread Co., representing the Minneapolis bakery as well as all branded products. Next year, the transformation will be complete when Michigan Bread completely rebrands itself into the Good Bread Co.
“Although Michigan is our home and dear to our heart, Michigan Bread doesn’t fully represent the essence of the growing organization, which in part is bringing our version of Good Bread to dinner tables across the country,” Assimacopoulos said. Starting with the retail line and the Minneapolis bakery, the move will very quickly put the Good Bread Co. on the map. And although it can be intimidating, change — for the right reasons — is a good thing.
“Growing a business relates back to those ‘meaning of life’ questions and what your definition of success is,” Assimacopoulos pondered. “Of course, we strive to make great bread and become a world-class company, but there are so many other aspects of the business that need to be right for us to consider our efforts a success. Maintaining our family culture and continuing to produce better-for-you baked products are vital to our definition of long-term success.”
In seeing all that Michigan Bread has accomplished, Assimacopoulos holds the ones he calls “true bakers” in reverence.
“I walk back here and see all our bread stacked so nicely in baskets, and I think about everything it took to get here. It’s a minor miracle, and I’m thinking, ‘Wow, this is really great.’ It takes a lot of blood and guts every day from everyone on the team to get the job done.”
Even in the most painful points of this rapid growth, it’s been worth the ride. “At the end of the day, we’re enjoying the process and the journey,” said Mike Sanfilippo, Michigan Bread’s VP of sales. “We still love coming to work every day.”
Read more about Michigan Bread in the October | Q4 issue of Commercial Baking. Photos by Liz Goodwin.