The synergies and synchronicities between two bakery power players

BACK TO ALL NEWS

The synergies and synchronicities between two bakery power players

2 May 2022

Joanie Spencer

Since 2008, Joanie Spencer has covered the retail and wholesale sides of the baking industry.
Serving associations such as the American Society of Baking (ASB) and BEMA, Joanie is also in demand as an industry presenter on bakery operations and trends. She holds a bachelor’s degree in communication from Rockhurst University and a master’s degree in journalism from the University of Missouri.

When she’s not running or playing soccer, Joanie spends her time with her husband and 11-year-old son.

DENVER — Dessert Holdings’ main differentiator is its cross-functionality of scalability and entrepreneurialism, partnered with the customer centricity that lives across every brand in the family.

That’s been important for the company as it acquired Steven Charles – A Dessert Company.

The word “acquisition” could be met with trepidation if a customer erroneously assumes that scale comes at the cost of innovation.

But Dessert Holdings’ reputation for innovation and thoughtful timing of acquisitions created respect in the marketplace so that when the purchase of Steven Charles was announced, customers didn’t really bat an eye.

“I was fully versed in all the rationale behind why they shouldn’t fear the acquisition, but it never even came up,” said Rebecca O’Hara, president of Steven Charles. “That’s because Dessert Holdings already had a great reputation in the marketplace. The talent, the reputation, the scalability, the geographic locations, the financial backing for growth: It all resonated with every one of our customers.”

It all leads to speed of innovation, which thanks to a “Fortune 500 CPG discipline,” makes Dessert Holdings’ speed to market about three to four times faster — and with a higher success rate — than that of the overall food industry.

The company still uses a Stage Gate innovation process with solid business propositions on the front end, but the ability to remain nimble allows Dessert Holdings’ bakeries to move through the gates much faster.

“Our customers need us to move that quickly, so that’s where we tend to win,” said Paul Lapadat, CEO of Dessert Holdings, the St. Paul-MN based parent company of The Original Cakerie, Lawler’s Foods, Atlanta Cheesecake Company and Steven Charles.

“Steven Charles is a great example. When we looked at the R&D process, we saw it was a perfect match because the companies go to market in the same way — with discipline but with urgency, as well,” he said.

The team at Dessert Holdings is an assembly of A-players, including many career-long colleagues of Lapadat’s from his snack food days. Dessert Holdings’ Chris Rogers, chief financial officer; Mike Bley, chief supply chain officer; and O’Hara, have come in as the ringers, with O’Hara likely considered one of the strongest assets in the acquisition.

“Rebecca turned this business into a world-class operation, and one we wanted to buy,” Lapadat said.

“We’re focused on our customers; we’re focused on our employees and just building a great company. There’s no doubt we’ve built something special here.” — Paul Lapadat | CEO | Dessert Holdings

Steven Charles and Dessert Holdings’ numerous synergies created a seamless transition internally, where cultures of transparency, humility, inclusivity, urgency and efficiency completely aligned. This created a sense of “merger” over “acquisition.” It also kept the Steven Charles team intact under O’Hara’s leadership, which masterfully combines discipline with entrepreneurialism.

“My team has this hyper resilience for keeping up with me,” O’Hara said. “I’m very committed to the leadership that we’ve built, and I never lose sight of why I’m here. People don’t just come in; they come in and contribute.”

The Steven Charles team is known for what O’Hara calls the “rumble” — it means fighting for what works and a willingness to let go of what doesn’t. And it requires grit.

“The word ‘grit’ means there are no lanes … you care about all aspects,” said Jennifer Caro, chief commercial officer at Steven Charles. “You have to be in it. My peers and I rumble, and that’s not always easy. It’s about true, transparent, tough conversations that move the agenda forward.”

As leaders, Lapadat and O’Hara are not afraid to get into the weeds to ensure every aspect — from procurement to production planning to marketing — is proactively pursuing contingency plans, down to secondary or even tertiary suppliers. But with the level of growth and investment the company is making, there’s some leverage to be had, especially after Dessert Holdings was acquired in 2021 by Bain Capital, the global top-tier private equity investor.

With that financial backing and willingness to roll up their sleeves, these two are fully invested in overcoming any challenge in the name of prosperous growth for their customers.

“We have the benefit of the strong financial backing to invest for growth, but it’s combined with a culture that we have ownership around each of our areas,” O’Hara said. “So then the investment becomes very personal.”

O’Hara has the proven discipline to run a high-throughput operation without much more than strategy and hard work. Now, she has the resources to invest in technology upgrades to take the business even further.

“It’s invigorating,” she said. “It’s given a whole new life to some people who may have felt they were spinning wheels without the appetite for investing to get into a go-forward plan.”

Operationally, Steven Charles is a hybrid of traditional commercial bakery manufacturing and state-of-the-art robotic technology. It’s so proprietary that it nearly requires Willy Wonka’s Golden Ticket to enter (O’Hara herself even checks in before stepping through one particular door, and no guest gains access without her approval).

Before any cakes, brownies, cookies or other desserts — in nearly every configuration imaginable — hit any area of production, the R&D team tinkers with product innovation in the 3,178-sq.-ft. culinary innovation studio, where they work with partners such as BakeMark and Agrana to develop new and interesting flavors. Every month the studio hosts “Sugar Rush” to showcase new product ideas for the exec team to sample.

Once those go into production, the bakery is a bustling 367,000-sq.-ft. metropolis running 23 hours a day, cranking out thousands of SKUs for customers throughout the country and internationally. Production planning is critical to keeping this well-oiled machine running smoothly, and part of that is focusing on limitations first.

“When you overcome constraints early, efficiency naturally follows,” O’Hara said.

This enables Steven Charles to maintain a strong foothold in the premium dessert space.

“That’s a testament to the trust our customers have in us growing with them as partners,” O’Hara said. “They trust we’re on the right path and doing the right things. We don’t have to ‘hunt’ for business because our reputation precedes us. We still have to earn it every day, but we come with that mindset.”

The strength that Steven Charles brings to Dessert Holdings is making waves that neither Lapadat nor Fabos could have imagined when they first started in their respective careers. It’s blue-chip synchronicity.

“We’re focused on our customers; we’re focused on our employees and just building a great company,” Lapadat said. “There’s no doubt we’ve built something special here.”

This story has been adapted from the April 2022 Q2 issue of Commercial Baking. Read the full story in the digital edition here.

Advertisement

BACK TO ALL NEWS