Commercial Baking April | Q2 2023

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ISSUE Q2 | PARTAKE FOODS’ DENISE WOODARD | REGENERATIVE AG | SIMPLYFUEL APR 2023 DIGITAL EDITION
BARS AND BITES MADE WITH LOVE Bobo’s
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AVANT FOOD MEDIA

Paul Lattan President - Principal Steve Berne Vice President - Principal

Joanie Spencer Director of Content - Partner

COMMERCIAL BAKING

Paul Lattan Publisher 816.585.5030 | paul@avantfoodmedia.com

Steve Berne Director of Media 816.605.5037 | steve@avantfoodmedia.com

Joanie Spencer Editor-in-Chief 913.777.8874 | joanie@avantfoodmedia.com

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Jordan Winter Creative Director jordan@avantfoodmedia.com

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Annie Hollon Managing Editor annie@avantfoodmedia.com

Evan Bail Associate Editor evan@avantfoodmedia.com

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Features

PLUS: Look for QR codes that contain exclusive digital content throughout the issue.

22

Bobo’s: For Love and Satiety

After 20 years of growth from a home kitchen to an automated facility, Bobo’s stands strong on its core values and good vibes.

36 Denise Woodard: Setting Standards and Breaking Barriers

42 Emerging Brand: simplyFUEL

49

Kern’s Kitchen: Maker of the Iconic Derby-Pie

COMMERCIAL BAKING 9
IN THIS ISSUE
Cover: Bobo’s has taken a major step with its new wind-powered manufacturing facility. Read more on page 22. Photo by Olivia Siddall | Avant Food Media
COMMERCIAL BAKING 11 91 106 TRENDS Critical Issues: 53 NFTs Product Development: 62 Regenerative Agriculture Category Outlook: 71 Sweet Goods Category Outlook: 77 Gluten-Free INNOVATIONS Category Insight: 83 Sweet Goods Category Insight: 91 Gluten-Free Commercial Baking Channel 102 Supplier Solutions 106 Ad Index 112 QUICK READS Editor’s Note 12 Seen and Heard 15 Business Intel 99 The Last Word 114 83 Departments IN THIS ISSUE

Running Up Hills

What do you do when the plan goes wrong, and then the backup fails?

The past few years have taught us, if nothing else, to expect the unexpected. But we’re also human and want to assume the best. Well, we all know what they say about the best laid plans … they do, indeed, go awry.

I can say from experience that when plans fail, the reaction — not the failure — will determine the outcome.

In this issue, you’ll see some recurring themes, not the least of which is the undeniable grit that comes with entrepreneurship. When launching a brand, plans can fall apart before they even materialize. But (and I’ve learned this from experience, too) there’s a point where you want to give up … and beyond it is where success lives. That’s the make-or-break moment.

To get beyond the breaking point, you’ve got to have grit, but first, you’ve got to have courage.

There’s nothing like hard times to fire up the engine — to dig deep, get creative and discover new resources. In fact, I’d say a crisis is a key ingredient for innovation.

It’s always smart to hope for the best and expect the worst. But if the worst sneaks up on you, just remember: We get stronger by running up hills.

APRIL 2023 Q2 12
A NOTE FROM THE EDITOR

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Seen Heard AND

COMMERCIAL BAKING 15
“We don’t even use those words because they’re confusing. ‘Belonging’ just looks at what it means to have humanity at work — being respected at work and feeling valued at work. That’s belonging.”
Ted Castle | CEO | Rhino Foods Speaking on the belonging aspect of DEI
“There’s a lot of relevancy for today’s consumer across all baked goods, and it isn’t price that motivates their purchases.”
Jonna Parker | team lead, fresh foods | Circana
Photo courtesy of the American Bakers Association
“Bakery is such a basket builder. When people have bakery items, they also have spreads or a protein in the basket. They might not have toothpaste on the grocery list, but they almost always have bread.”
Omar Haque | VP/GM of omnichannel | Bimbo Bakeries USA
During “The Boundaryless Consumer” panel discussion at ABA’s Annual Convention
Photo
courtesy
of the American Bakers Association

WHEN PROOFING FLOOR SPACE IS TIGHT...

SEEN AND HEARD
“If you want to make a food safety culture scale in your organization or your industry, you have to make it real. You have to make it personal. You have to instill a sense of pride and purpose in each person involved in food safety.”
Killian Lapeyre | business unit manager | Intralox On hygienic design and best practices around safe food production

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“Everybody is aware of the fact that we have a climate crisis, and it’s affected everybody in some way, shape or form. The regenerative agriculture story has to be told because it’s a story of hope. And it’s a story of a meaningful solution for problems that affect us all.”
Evan Harrison | CEO | Kiss the Ground
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APRIL 2023 Q2 18
“I can assure you, no leader in an organization wants to put someone in a position that isn’t going to be effective or that leads to a disruption of what’s going on in the plant. It’s about having strategic alignment and being able to say, ‘This is important enough to address so it doesn’t lead to other problems.’”
Brendon Russ | lead, Americas, reliability and asset management engineering services | JLL Work Dynamics
On workforce development at Intralox NEXT
“If we can embrace diversity, equity and inclusion, and get all of our people to understand that what they do out there on that floor matters, that what they do is helping you and you challenge them to keep doing that, everybody just comes together.”
Nathan Norris | director of diversity, equity and inclusion | Highland Baking Co. About the impact of implementing DEI in a bakery
Photo courtesy of the American Bakers Association
“You have to take the opportunities that are given to you, but you also have to create your own. You have to figure out how to get in the room. It doesn’t mean you can make miracles happen. But if there’s a will, there is a way.”
Laura Meyer | owner | Pizzeria da Laura
SEEN AND HEARD
During the Women-Owned Pizzerias panel at the International Pizza Expo & Conference
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APRIL 2023 Q2 20
“If you think about it in-store, we have three to five seconds to make an impression before people decide. They spend two and half hours every day finding recipes, ideas, how to decorate, baking for kids. Those are big opportunities.”
Anne-Marie Roerink | president | 210 Analytics
Photo courtesy of the American Bakers Association
“Being recognized in the Circle of Honor truly has been a really big surprise to me. It’s just a fantastic honor that the industry and the American people would recognize our contribution to the industry.”
Alf Taylor | co-founder and CEO | tna Solutions Receiving the Circle of Honor award from SNAC International
“This is our planet. We need to be resilient, and we need to start taking decisive action because we are all connected.”
SEEN AND HEARD
Irene Espinola Campos | head of net zero carbon and renewable energy | Grupo Bimbo Speaking to ASB BakingTECH attendees on the industry’s need to reach net zero carbon emissions by 2050

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APRIL 2023 Q2 22
All photos by David Grossman, Colorado Photography

FEATURED BAKERY: BOBO’S

FOR LOVE AND SATIETY

After 20 years of growth from a home kitchen to an automated facility, Bobo’s stands strong on its core values and good vibes.

In today’s world of emerging brands, co-manufacturers are in high demand. In fact, it’s hard to find young brands making their own products at scale. Then again, there’s Bobo’s, a Loveland, CO-based oat bar brand.

During its 20 years in business, Bobo’s has mostly relied on making the bars in-house. First, it was in shared k itchens before upgrading to its own small baking facilities in the B oulder area. But today, the company is ready for its next stage of growth, manufacturing its products in a newly completed wind-powered commercial bakery.

How Bobo’s got to where it is today is a tale as old as CPG startups themselves. It all began in founder Beryl Stafford’s kitchen when her daughter Alex — known as “Bobo” to her family — decided to bake some goodies from a recipe she found.

“She started making these treats out of a cookbook,” Stafford recalled.

“They were originally flat little cookies that were dripping with gooey yumminess, and she just kept making them for her friends at school.”

One of Stafford’s close friends, who worked in the natural food industry, took notice and convinced her to adjust the recipe, add oats and make them into bars … and perhaps start a business.

“I didn’t know anything about business,” Stafford said. “I didn’t know anything about food, and I didn’t know anything about sales. But I was newly divorced with two kids, and I knew I had to reinvent myself. So, I thought, ‘Why not? Let’s see if it works.’”

Stafford modified her daughter’s corn syrup and white sugar-based treats, adding oats and replacing the corn syrup with brown rice syrup and nixing white sugar for natural cane sugar, as well as swapping the butter with coconut oil.

She covered them in plastic wrap and took her Bobo’s Oat Bars to a local coffee shop, and soon the bars were a hit in coffee shops and co-ops. Before long, they caught the attention of a Whole Foods bakery buyer … and the rest is CPG startup history.

Two decades and six manufacturing spaces later, Bobo’s Oat Bars

COMMERCIAL BAKING 23
“As an entrepreneur, you never sit back and pat yourself on the back because there’s always more to do.”
Beryl Stafford | founder | Bobo’s Oat Bars

bear the Whole Grains Council stamp and are certified gluten-free, kosher certified, dairy-free and Non-GMO Project verified, and they haven’t strayed far from Stafford’s original modified recipe that included just five ingredients. Only now, the bars, bites and toaster pastries comprise a variety of flavors and are manufactured on four production lines in a 123,000-sq.-ft. bakery.

The company was built, one sale at a time, through good old-fashioned trial and error and, of course, bootstrapping resources. And, for the most part, it’s all been done in-house. After all, Bobo’s was born in the pre- Shark Tank era, before crowdfunding and social media, at a time when co-manufacturers weren’t exactly the most sought-after partnerships in CPG.

In fact, in the early days of the business, Bobo’s Oat Bars were made by hand in shared kitchen space with other notable Boulder-based brands like Justin’s and EVOL. It took about 10 years before Bobo’s was baking bars in its own small facility as it began to enjoy slow, but steady, growth.

Despite the innovative food brands that have emerged from the Boulder area, the lack of industrial space eventually pushed many of them toward co- manufacturing outside the city walls. However, Stafford chose the self-manufacture route, and Bobo’s has maintained control over the process and growth.

“The business was launched in Beryl’s kitchen, and she chose to ‘DIY’ it the entire time,” said T.J. McIntyre, Bobo’s CEO. “That’s become a great legacy that, 20 years later, is woven pretty thoroughly into who we are and how we do things.”

For McIntyre, who joined the company in 2016, Bobo’s manufacturing strategy has been a key factor in its growth.

With executive experience with some of the leading Colorado-based natural brands including Smart Balance, Earth Balance and Boulder Brands, McIntyre is focused on increasing production output through automation and growing the business organically through category and channel expansion.

With 50% market penetration in retail, including rotations in every region of Costco and 15,000 points of distribution for Walmart, opportunities abound for expansion as well as doubling the equivalized items inside the stores where Bobo’s already has a presence.

On supermarket, drug, convenience, military and, of course, big-box store shelves, Bobo’s currently competes in the cereal bar and nutrition bar categories. The most recent product launches — a protein bar, a dipped bar and a PB&J variety — will expand the brand’s presence in both categories.

—Below With its new 123,000-sq.-ft. bakery, Bobo’s is prepared for continued growth.

APRIL 2023 Q2 24
BOBO’S
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In c-stores, Bobo’s is on pace with other natural brands as it increases presence in high-end banners such as Wawa, Plaid Pantry, Jacksons, Racetrac and more.

But that’s just the beginning. With new technology now at its fingertips, the runway for growth is still quite long because shoring up production opens up R&D and product development.

In 2022, Bobo’s grew 40%, despite several out-of-stock periods before the company moved into its new facility. Shortly into 2023, February proved to be the bakery’s second biggest month on record.

“It nearly cleaned us out,” said Jason Jimenez, Bobo’s director of operations.

With investments in automation to streamline production and overcome labor challenges, the bakery is on pace to at least match last year’s growth.

The entrepreneurial spirit that started Bobo’s is what keeps the engine revving today.

“As an entrepreneur, you never sit back and pat yourself on the back because there’s always more to do,” Stafford said. “There’s always another place where we can sell Bobo’s. When you start with nothing, and then you get people excited about buying Bobo’s Oat Bars … it’s addictive.”

With many items being baked to order, Bobo’s works with a two-week lead time and a 270-day total shelf life, so the product is constantly on the go … just like Stafford herself.

“Product is never longer than 30 days on our racks,” Jimenez said.

That’s one reason why Bobo’s has, for the most part, focused on making its products in-house, rather than relying on a co-manufacturer.

“We leaned on external manufacturing last year when we were capacity constrained, but it’s just not the same as working with your own team,” McIntyre said. “Even the best co-manufacturers, while they can be an extension of our team, they’re not going to function like our team would internally or have the type of flexibility we have.”

Self-manufacturing, he explained, also helps Bobo’s better control its margins, which has been critical to its growth in a post-pandemic environment.

With the new facility and equipment investments, Bobo’s is better equipped to serve its current customers, avoid the out-of-stock nightmares and focus on its continued growth.

One area where automation is significantly helping Bobo’s keep up with growth is the packaging department. Horizontal flowwrappers run up to

700 pieces per minute for bites, while flowwrappers for bars handle about 250 pieces a minute.

The Westrock packaging automation runs by volume and weight, and it doubles the throughput of the previous location, where all packaging was a manual process.

“It’s been a life saver,” Jimenez said.

Facing typical manufacturing workforce challenges, the packaging automation has helped alleviate some of those labor woes. The operation is set up so that those working on the 24 Revent, Sveba-Dahlen and Gemini/KB Systems rack ovens can shift over to packaging where needed once the bars finish their bake cycle.

The bakery was designed with four central “baking kitchens,” which receive ingredients and house the mixing stations that feed the four production lines. The kitchens are large enough that one can feed two lines when needed for larger runs, such as Costco orders.

APRIL 2023 Q2 26
BOBO’S
“We don’t develop products for a Nutritional Facts outcome. We just bake food. Bobo’s core products are intuitive, good food.”
T.J. McIntyre | CEO | Bobo’s Oat Bars
It’s ingrained in us © 2023 Ardent Mills, LLC. All rights reserved. At Ardent Mills, we are your supplier partner to solve today’s challenges At Ardent we are your partner to solve and stay ahead of tomorrow’s trends. With our nationwide footprint and stay ahead of tomorrow’s trends. With our nationwide and localized support, we help you respond to market dynamics and localized support, we you to market dynamics. And with our best-in-the-business research and resources, like And with our best-in-the-business research and resources, like our Innovation Center, we’re continually developing concepts and our Innovation we’re concepts and products that that can help you seed can you seed growth. Let’s innovate what’s next. next. Visit ardentmills.com/together today. *Ingredients depicted in raw form and not ready for use.
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Solutions for today. Growth for tomorrow. Together,

BOBO’S

“If we’re running the Apple Pie variety on two lines, we can run them both from just one kitchen,” Jimenez said. “Costco’s main products are Apple Pie and Strawberry, so this allows us to make them both at the same time. In the past, we had to make one flavor, then the other. This layout gives us much more flexibility.”

That flexibility is key for this nimble bakery, but strategic approaches to automation keep it all running smoothly. While one line might still rely on manual work, another line with Reiser automation deposits dough into trays. Additionally, investing in a Vemag extruder has allowed for one of the new products released earlier this year.

The automation has not only increased throughput but also provided greater product consistency.

More than all that, the new bakery enables Bobo’s to keep living out Stafford’s entrepreneurial values and core principles as a mission-driven company.

The wind-powered facility, developed by Colorado-based design-build firm McWhinney Brothers, supports Bobo’s mission of remaining a good steward of the environment.

Although Bobo’s does not own the building, the team worked with the landlord throughout the greenfield process to incorporate sustainable design elements that will benefit not only Bobo’s environmentally friendly production but also whoever occupies the space in the future.

“Of course, the owner wanted to have a building that was environmentally conscious,” said Henry Hughes, Bobo’s EVP of marketing. “But as

we built it out together with the tenant improvement budget we had in the lease, we also could do things that pushed it in that direction.”

Bobo’s rapid growth in recent years — coupled with incremental increases to capacity — casts a light on how operational inefficiencies can impact a company’s carbon footprint. Collapsing three small production spaces into one site allowed Bobo’s to reset and reexamine its environmental impact as a midsize food manufacturer.

“Moving into this facility has enabled us to not only get efficient but also embrace sustainability from an environmental perspective,” McIntyre said, noting that in the first few months after starting up the lines, the operation has established systems to capture the waste stream and calculate natural gas consumption to track and control emissions — which is zero for electricity.

Bringing on Jim Stewart as director of environmental health and safety was the natural first step in that reset.

“Jim has done a lot of work to help us understand our baselines with CO2 emissions and how we can minimize it, as well as help us look at how we handle waste in the facility,” Hughes said. “Now we have a lot of opportunities to get smarter and more thoughtful about our emissions and how we can offset those.”

With a goal of becoming carbon neutral by the end of the year, Bobo’s is taking a holistic approach to sustainability through LED lighting, water reduction and efficiency in transportation.

The baking technique required for these bars relies on gas-fired ovens, so while the gas usage currently prevents Bobo’s from eliminating its carbon footprint, the bakery is exploring partnerships for purchasing carbon credits.

APRIL 2023 Q2 28
Automation is helping Bobo’s expand its product varieties and channel reach.

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Meanwhile in the packaging department, Bobo’s is managing cardboard use by recycling or selling unused materials.

Additionally, the Bobo’s engineering team, led by Charles Nichols, director of engineering, worked hard to develop packaging that was environmentally friendly yet sturdy enough to withstand robotic case-packing machinery.

“We worked really closely with the packaging engineers to maximize the efficiency of the cartoners,” Hughes said. “They understood our goals of not only keeping our cardboard usage down but also having something that we could run through the equipment efficiently.”

Sometimes, all it takes is a small change to make a big impact.

“People don’t always think about it, but if you could make a box just a millimeter thinner, it saves money and still gets the customer their product but in a more sustainable way,” Jimenez added.

Bobo’s has also invested in postconsumer recycle board, and the package design includes messaging about how to properly recycle the wrapper. The bakery has also enrolled in the “How 2 Recycle” program, which will be added to product packaging later this year.

“A lot of people will bring their waste to a compost/trash/recycle stand and not know what to do,” Hughes said. “So, I spent a lot of time learning about it so we can help make it easier for consumers.”

And speaking of consumers, Bobo’s also stands on a foundation of the people the bakery feeds. The company has come a long way from Stafford’s kitchen, but the sentiment is still the same.

“We talk a lot about bringing people home and feeding them,” McIntyre said. “That’s a way that Bobo’s has stood out from the very beginning.”

Bobo’s partners with There With Care, a Boulder-based nonprofit that provides

a range of fundamental services to children and families in critical health crisis.

“This group shows up and helps them,” McIntyre said. “They really descend on families who have a child facing terminal illness and attend to their needs. That feels really good to us.”

Service like this is foundational to Bobo’s culture, and it shows in how the bakery develops its products.

“We don’t develop products for a Nutritional Facts outcome,” McIntyre said. “We just bake food. Bobo’s core products are intuitive, good food. It’s satiating, but at the same time, it reminds you of coming home from school and smelling

WATCH NOW: T.J. McIntyre expands on the core benefit of Bobo’s Oat Bars beyond nutrition.

APRIL 2023 Q2 30 BOBO’S
As a commercial bakery, Bobo’s stands on a foundation of values that were established two decades ago when founder Beryl Stafford was just getting started.
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cinnamon and raisins baking in your mom’s kitchen. That’s the benefit we bring: Love and satiation.”

That love is what brought Stafford and her daughter joy from the very first iteration of a Bobo’s bar, when Bobo herself was just 14 years old.

As Bobo’s continues its category and channel expansion, the bakery is spreading that love through products like its Pride Bar line, which has run as a limited-time offer (LTO) for three consecutive years. In celebration of Pride Month in June, Bobo’s donates 100% of the profits to organizations such as PFLAG National and The Center on Colfax. While the LTO launches in conjunction with Pride Month, it remains available direct to consumers on the Bobo’s website.

“These are the things that are interwoven into the fiber of who we are as a company,” McIntyre said.

Twenty years ago, her friend sketched a caricature of Bobo into a logo, and Stafford set off on an adventure selling the plastic-wrapped bars she made in her kitchen. Stafford’s had successes and made mistakes along the way, and she’s learned how to improve with every step.

Today, Bobo’s is a mission-based business that’s bringing the same good vibes to consumers that the original gooey treats brought Bobo’s classmates all those years ago. Not bad for a single mom who didn’t know a thing about food or business. It just goes to show, people really can do anything if they want it bad enough. CB

INNOVATIONS FROM THE BAKERY FLOOR

In Loveland, CO, Bobo’s Oat Bars have settled into its environmentally friendly 123,000-sq.-ft. plant. Collapsing three small bakery spaces into one facility with four production lines increased Bobo’s capacity while reducing its carbon footprint and the need for additional labor. Below is a list of supplier innovations that can be found in the bakery:

AMFEC mixers

Fanuc robotic tamping unit

Lantech pallet wrappers

IMA/Delta flowwrappers

PMI Kyoto horizontal | vertical cartoners

Revent rack ovens

Sveba-Dahlen rack ovens from Gemini

Vemag depositors

WestRock case packers

APRIL 2023 Q2 32 BOBO’S
While Bobo’s relies on gas-fired rack ovens, the bakery is exploring options for purchasing carbon credits.

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The North Star

Partake Foods founder and CEO Denise Woodard is setting standards and breaking barriers — and doing it for all the right reasons.

In the US, women are starting businesses at a much faster rate than men. However, they’re only raising a fraction of the venture capital funding. According to TechCrunch+ citing the latest PitchBook data, women-founded startups raised less than 2% of all venture capital funds in 2022. And for women of color, the slice of the pie is even smaller.

Enter Denise Woodard, the first Black woman to break $1 million in startup funding for a packaged food or beverage company. New York City-based Partake Foods is a brand of allergy-friendly cookies and baking mixes that is breaking ground for not only consumers with food allergies but also marginalized entrepreneurs. Some might call Woodard a North Star for women and people of color, but the truth is, she followed a star of her own.

A former sales and marketing executive for well-known CPG brands, Woodard developed an affinity for entrepreneurialism when she was named director of national sales for venturing and emerging brands at The Coca-Cola Co.

“I got to work with high-growth, missionoriented beverage brands, and that gave me a glimpse into entrepreneurship,” she recalled. “I saw how a seemingly regular person with a big dream could make a change.”

36
All photos courtesy of Partake Foods
APRIL 2023 Q2

Woodard didn’t realize it, but that was a foreshadowing of her own career path.

On the surface, her story isn’t new: She’s a mom who started making allergy-friendly treats after her daughter, Vivienne, was diagnosed with several food allergies. It’s often the origin story for many emerging brands in the betterfor-you food space. But the way Woodard built the brand made her a hero in more ways than she could have expected … and not just for Vivienne, though she was the driving force.

When you start a food company for your child’s nutritional needs, failure is not an option. Vivienne was her North Star.

“It would be one thing if I started any other business and it failed,” Woodard said. “But there was no way I could have looked at my daughter and said, ‘Mommy started a company to make things better for you. And then it got really hard, and a lot of people said no, so I quit.’ That was not going to be the example I set for her.”

In some ways, developing the product was the easy part. And while having sales and marketing experience with one of the country’s biggest beverage brands looks great on a resume, marketing is only a small piece of what it takes to launch a CPG startup.

“I started the business in a very small way and had to learn on my feet,” Woodard recalled. “I was bootstrapping and delivering cookies out of my car. But that gave me the opportunity to learn every facet of building the company.”

Because it’s almost impossible for largescale brands to be nimble, the boom in emerging CPG stemmed from the fact that big companies are innovating via

acquisition. Woodard used that insight to shape how she innovates in her own product development.

Learning the hard way about innovation and scale, she’s self-taught in developing a formal Stage Gate innovation process and food safety in manufacturing.

“A lot of times, entrepreneurs think a brand revolves around packaging or a logo,” Woodard said. “But through my experience at Coca-Cola, I know it’s every single touchpoint a consumer has with your business.”

WATCH NOW:

Denise Woodard shares her journey from bootstrapping Partake to production at scale.

To that point, much of what Woodard has learned about the criticalities of creating an allergy-friendly product didn’t come from her time at Coca-Cola, in securing co-manufacturing deals or in building the business at all. It came from being a mom.

“It’s really scary for food allergy parents when companies aren’t particularly clear about things like the type of facility where their products are manufactured,” Woodard said, noting that it’s unnerving when labeling isn’t clear about what potential allergens are in a facility.

“Through that experience, I’ve learned how important it is to be as transparent as possible with our consumers,” she added. “That includes transparency about our supply chain and where we’re sourcing our ingredients from, what testing we’re doing on our finished products so that our consumers can make an informed decision about

37 COMMERCIAL BAKING
“I have a responsibility — a privilege — to support other women and people of color as they build their companies. Because the inequity shouldn’t be like this. It just shouldn’t be the case.”
EXECUTIVE PROFILE: DENISE WOODARD
Denise Woodard | founder and CEO | Partake Foods

whether our product is right for them. I care more about the safety of our consumers than I do making the sale, and I learned that from being a part of this community.”

The implications of making an allergy-friendly product — Partake cookies and mixes are free from the Top 9 allergens — finding a co- manufacturer when it was time to scale proved to be one of the hardest challenges for Woodard’s burgeoning brand.

The only thing harder than finding the right co-manufacturer was securing the funding, especially when manufacturing is so costly. But overcoming those challenges eventually put Woodard on a path to break the ceiling for Black businesswomen in manufacturing and beyond.

“There are not many allergy-friendly manufacturers that exist in the US,” Woodard said. “Getting [co- manufacturers] to work with a company that was just a woman with an idea — and making a cold phone call — was a huge challenge.”

After running a Kickstarter campaign that finished in the top 1% of food Kickstarters at that time, Woodard deployed what she called an “I told you so” strategy to get a co-manufacturer on board with Partake. The company still uses the same partner today.

The Kickstarter campaign was just the beginning. Partake was in Wegmans and Whole Foods in the brand’s first year, and managing that high growth rate is expensive. Once Woodard was all-in from a personal finance perspective, it was time to seek funding. After

exhausting the “friends and family” capital, she added some fuel to her fire.

It was 2019 when Woodard became the first Black woman to raise $1 million in public funding for a packaged food or beverage startup. That funding was led by Marcy Venture Partners, a venture fund co-founded by Jay-Z. Partake has since raised more than $19 million in capital, achieving one of the largest food and beverage startup funds led by a Black woman.

“Every time I hear that, it makes me feel even more committed to change,” Woodard said.

Looking at the statistics of inequity in access to capital, Woodard has recognized a calling. She may look to her daughter as her North Star for creating

APRIL 2023 Q2 38
EXECUTIVE PROFILE
With a self-taught venture capital accumen, Denise Woodard is the first Black woman to raise $1 million in public funding for a packaged food or beverage startup.
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a successful business, but in doing so, she has become a North Star for other entrepreneurial women of color.

“I have a responsibility — a privilege — to support other women and people of color as they build their companies,” she said. “Because the inequity shouldn’t be like this. It just shouldn’t be the case.”

Woodard is leading the charge with a self-taught venture capital acumen that’s stemmed directly from building Partake one “no” at a time — 86 no’s, to be exact.

“My experience with Marcy was eye opening to me because up to that point, I was just a number,” she said. “I learned that relationships with investors are longterm. They shouldn’t be transactional; they should be a partnership. You want investors who are aligned with you and your mission and vision for your company.”

Beyond the hard data of revenue and gross margin is where the innovation lives. Finding the right partner who will invest in more than the bottom line is the key to relationships that can truly drive a business forward. It is a sea change that, through Partake, Woodard wants to drive.

“Don’t get me wrong, business metrics are important,” she said. “But there’s also something qualitative that goes with it, and people hadn’t been as concerned about that previously. It’s a reason why I’m so passionate about mentorship today.”

Woodard believes that the venture capital system is designed in such a way that entrepreneurs with groundbreaking ideas could be overlooked simply because they don’t speak the language, and that’s having a big impact on women and minorities in particular.

Through mentorship and teaching others the lessons she learned the hard way, Woodard is helping those who are coming up behind her to increase that success rate in gaining access to capital. She volunteers her time to several mentoring programs, including one through Target, with whom she’s had a partnership for three years. The retailer’s Forward Founders accelerator program organizes cohorts of 30 women and minority entrepreneurs for networking and career guidance.

“If I can share the mistakes or landmines that we’ve come across and help someone else go further and faster,” Woodard said, “that’s what I want Partake to be.”

Now, she’s creating those opportunities earlier through Partake’s Black Futures in Food & Beverage fellowship, built in 2020 and designed to help HBCU students find jobs and internships in the food and beverage industry.

“Throughout my career, I’ve seen a lack of women and minorities in leadership, and I thought, ‘If I start my own company, I’m going to change that,’” she said. “When I went out to hire for Partake, the applicant pool was so homogeneous, so we started the fellowship to create more diversity in the industry.”

Woodard started Partake for the sake of her daughter, and she kept it going as a show of unconditional love. The result was a product that people with allergies — or without — can safely enjoy. But she created more than a company; she started a movement.

When marginalized entrepreneurs hear “no,” they can look up and see Woodard. The success of Partake shows proof of the reward that lies beyond perseverance.

Is that a greater gift to Vivienne than the products themselves? It’s hard to say. But today, when Vivienne sees a problem, she simply suggests, “We should start a company and fix that.” So, perhaps, one gift couldn’t exist without the other.

“When Marcy said yes to me after 86 other people had said no, that changed the trajectory of my business,” Woodard said.

The dedication that led to Partake’s funding is what has kept the company alive, and that is what Woodard intends to pay forward.

“I hope we can do similar things for other entrepreneurs,” she said. “I hope we open doors for them.” CB

APRIL 2023 Q2 40
EXECUTIVE PROFILE
“If I can share the mistakes or landmines that we’ve come across and help someone else go further and faster, that’s what I want Partake to be.”
Denise Woodard | founder and CEO | Partake Foods
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The Curveball of Protein Snacks

When it comes to building simplyFUEL, it’s all about the hustle.

Most emerging brands — nicknamed “challenger brands” for their reputation of upsetting the status quo — attempt to disrupt an established market with an innovation created to solve a problem that mainstream brands aren’t addressing. Sometimes, though, a brand develops organically, which is exactly what happened for Leawood, KS-based simplyFUEL.

The motivation behind creating simplyFUEL was to feed a passion for healthy living through better-for-you protein balls to a wider consumer audience.

When founder and chief fueling officer Mitzi Dulan, RD, CSSD, was a newly minted registered dietitian fresh from a highly competitive dietetic internship at the University of California San Francisco Medical Center, she dove straight into the entrepreneurial world, launching her own nutritional consulting company. She built an impressive client base that has included the likes of the National Honey Board, the Kansas City Chiefs and the Kansas City Royals. The partnership with the National Honey Board served as a catalyst for the popularity of her signature protein balls after the recipe appeared on Dulan’s America’s Nutrition

Expert Pinterest page. With about 3.5 million followers, the recipe went viral.

Over the next two years, Dulan continued developing protein ball recipes out of her home and sharing them on social media. The balls are formulated with the same base ingredients — oats, honey, peanut butter and protein powder — with inclusions such as chocolate chips and almonds for variety.

The 2015 World Series was the game changer that would give simplyFUEL its first base hit.

“By 2015, I had been the team sports dietitian for the Kansas City Royals for 10 years,” Dulan recalled. “I was out at the ballpark, and I told the guys I was going to bring them my protein balls the following week. It was the first time I ever made the team food from my kitchen as I always worked with the chef. They absolutely loved the balls. I kept having to make more, eventually quadrupling the recipe. The players kept eating them, loving them — and winning games.”

Baseball is a superstitious sport, and the players connected their winning streak with the protein balls.

APRIL 2023 Q2 42
In the early days, simplyFUEL relied on a network of friends to help fulfill orders.

“I got lucky … six weeks later, we won the World Series,” Dulan said.

A chance meeting with a sports reporter after a celebratory party in the Royals clubhouse during the playoffs led to a series of appearances on all the local TV networks, which were already familiar with Dulan’s work from her appearance as an expert for nutrition segments.

“My protein balls became a little bit famous in KC, and people started asking, ‘How can I buy these?’” Dulan said. “That’s how the company got started.”

The brand began as an online store in 2016 while Dulan made products in her kitchen to fulfill digital and word-of-mouth orders. In those early days, the simplyFUEL production team was a bit unconventional as Dulan called on a network of friends to help fulfill orders from customers like the US Men’s National Soccer team and the Los Angeles Lakers.

The 2017 Natural Products Expo West show was the next big play for the company when simplyFUEL drew big-name attention.

“We ran out of samples the first day and had to make more protein ball dough that night,” Dulan recalled. ”We had so many people coming to the booth that we were rolling protein balls in the booth as fast as we could.”

At the show, the brand caught the attention of Los Angeles-based Pressed, a manufacturer of cold-pressed juice and plant-based foods that sells its products in its own retail stores. Pressed became simplyFUEL’s first large-scale client, adding the protein balls to the 68 locations it had at the time. The retailer has since grown to 114 locations in California, Texas, Arizona and New York City.

43 EMERGING BRAND: SIMPLYFUEL
All photos courtesy of simplyFUEL
COMMERCIAL BAKING

A Los Angeles-based buyer from Costco also noticed simplyFUEL at the show. But with no co-packer, that opportunity quickly turned into a challenge.

That didn’t stop the fledgling brand. Before long, simplyFUEL secured a co-packer and — after more than a year of searching — invested significant capital into a protein ball extruder that could help the brand scale up production while maintaining the integrity of the product.

“I wanted to keep the sphere shape of the protein balls intact,” Dulan explained. “I wanted to keep the integrity of the product so that all the ingredients are blended into small pieces together. I wanted it to look and feel like it was still handmade.”

Yet, by the time the necessary pieces were in place, the Costco buyer from Los Angeles was out on medical leave. Then the COVID-19 pandemic hit. Like so many early-stage brands, the forward momentum all but evaporated in a matter of weeks.

“I was supposed to meet with a buyer from Costco’s Midwest region in March 2020, and it was cancelled because of COVID,” Dulan said, reflecting on one of the brand’s biggest challenges.

“It was a really tough year because I had made the decision that we were going to go through some major growth, and I was ready for it. I was going to use a distributor in LA to hit Southern California hard. It was going as planned for January, February and early March. We were adding 50 locations a month, but I had to back out of the California situation from a financial perspective and just try to hold on and make it through COVID.”

At the time, simplyFUEL’s customer list included NFL teams like the Dallas Cowboys and New York Jets. But when the pandemic prevented teams from getting together, the orders stopped.

“It’s hard to make it in the industry in general,” Dulan acknowledged. “But I’ve always been an entrepreneur and owned my business. I’ve bootstrapped my company, and I operate lean.”

In 2020, the brand used a convertible note to securing funding, and it has plans to fundraise in the third or fourth quarter

44 EMERGING BRAND
APRIL 2023 Q2
—Below simplyFUEL launched in 13 Costco stores in the Texas region earlier this year, with additional distribution planned.
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this year, which will help grow the brand and expand the product line.

The return of in-person tradeshows is helping get the name out there again.

Dulan returned to the Natural Products Expo West show in 2022 with the goal of reigniting some of the momentum that started before the pandemic. This time, when Costco came calling, simplyFUEL was ready.

The VP for Costco’s Texas region stopped by the booth at the Expo and offered to introduce simplyFUEL to the buyer in the snacks category. It was just a few weeks later that the brand had secured its first Costco protein ball purchase order.

As a result, simplyFUEL protein balls launched in 13 Costco stores in the Dallas/Ft. Worth area earlier this year and in Costco stores in Oklahoma and Wichita, KS, also part of Costco’s Texas region. The protein balls have performed so well, in fact, that Costco is expanding distribution to the entire Texas region, which includes Houston and Austin. The emerging brand is set to launch in the San Francisco Bay Area this month.

Currently, simplyFUEL protein balls are available in three flavors: Chocolate Coconut Peanut Butter, Brownie Batter and Peanut Butter Honey Almond.

The brand also offers keto granola and a one-ingredient chickpea protein

EMERGING BRAND
Altering the integrity of the product was non-negotiable when simplyFUEL looked to scale production.

powder and plans to expand the line with a second protein powder.

One thing that’s definitely in simplyFUEL’s favor — the market. Dulan was in the protein-packed, better-for-you products game when the only people interested were athletes. Now that everyday consumers are seeking these products, simplyFUEL is well-poised to shift from the emerging brand roster to mainstream player faster than expected — and by the bootstraps. CB

Securing a co-packer and investing in equipment helped simplyFUEL scale up production quickly.

QUALITY OVER QUANTITY

With

When most people think of the Kentucky Derby, they probably think of horse racing, mint juleps and ornate hats. Two weeks prior to the famous two- minute race held each May, however, is the Kentucky Derby Festival, a grand celebration designed to increase anticipation for the race. Over the years, the festival’s partnership with Louisville, KY-based Kern’s Kitchen, makers of the iconic Derby-Pie chocolate nut pie, has become a tradition.

The partnership began in 1990 when the Kentucky Derby Festival was searching for a new pie partner. Kern’s Kitchen was eager to gain that title.

“We had been ready to get involved with the Kentucky Derby Festival ever since we heard about them,” said Alan Rupp, president of Kern’s Kitchen.

The roots of the company’s Derby-Pie chocolate nut pie run deep through Kentucky, dating back to 1954 when Walter and Leaudra Kern — or Grandma Kern — began managing the Melrose Inn restaurant with their son George. It was there that the first-ever Derby-Pie chocolate nut pie was created, named and sold. Little did the Kerns know, by creating the Derby-Pie chocolate nut pie, they paved a path for a business that would last for generations to come.

As business picked up and Derby-Pie chocolate nut pie production rapidly hit major milestones, such as 1,000 pies sold in 1960, Walter and Leaudra knew that at the pace their business was increasing, they couldn’t continue to work out of the restaurant kitchen.

The couple moved all baking to their home kitchen, where they had a 5-quart KitchenAid mixer to handle the mixing. Back in those days, they could only bake two pies at a time.

As product demand grew, the Kerns upgraded their resources to a Hobart

140-quart mixer but kept their commitment to quality.

“Our main focus has been that pie coming out the same way it did when Grandma was baking two at a time,” Rupp said.

Growing demand often leads to a need for more production space. Kern’s Kitchen has moved locations multiple times, with production currently run out of an 11,000-sq.-ft. space the company moved into in 2014.

The team prides itself on being very hands-on in the process of creating

49 FEATURED BAKERY: KERN’S KITCHEN
a storied history, Kern’s Kitchen has stuck with its iconic chocolate nut Derby-Pie.
The Derby-Pie chocolate nut pie is made with premium chocolate and choice walnuts that are folded into a decadent filling and baked into Grandma Kern’s crust. All photos courtesy of Kern’s Kitchen
COMMERCIAL BAKING

its own pie dough. However, if they get backed up, one of the perks of being a “somewhat small business,” as Rupp described it, is the versatility to make changes on the fly.

When the team needs to increase production quickly, it uses a Colborne Double Arm mixer combined with a Colborne portioner.

Kern’s Kitchen is built on the foundation of family business, purpose and passion. In fact, a sign on the way into the bakery’s production floor reads, “Purpose and Passion.” It’s important that everything related to creating pies is done with intent. Because Kern’s relies on many old school techniques for crafting the pies, several quality control procedures are required to ensure the highest standard.

“Our walnuts come in already handpicked and machine cleaned,” Rupp shared. “We still dump those on a table and hand sort before we present them to our production manager for mixing.”

The Derby-Pie chocolate nut pie recipe is extremely proprietary, making it one of the most sought-out desserts in the region. New hires who will be working with the recipe have to sign a noncompete and confidentiality agreement. The bakery’s new production manager is only the third person outside of the Kern family to know the complete recipe.

Beyond the Derby-Pie chocolate nut pie, the Kern’s Kitchen product portfolio only extends to one other product, the Golden Pecan Pie. Added to the lineup in 2010, the recipe was also taken out of Grandma Kern’s recipe box.

As a business dating back to the ’50s with only two products in its portfolio, “quality over quantity” is something

Kern’s Kitchen takes very seriously. Plans of expanding the lineup had been tossed around internally. However, just like many other companies, COVID-19 hit the bakery hard, so any plans to grow the product line are at bay for now.

“These last three years have been quite a challenge with COVID,” Rupp said. “Restaurants shut down and distributors really locked down. We have been in survival mode for a couple of years, and we are just coming out of that.”

As Kern’s Kitchen gears up for the 149th Kentucky Derby, held May 6 at Churchill Downs Racetrack in Louisville, preparation to produce enough of the two pie types has been a long, extensive process. Projections for spring began in January, and days are counted in ovens at Derby-Pie. Currently, the bakery uses three rotary tray ovens that can bake 80 pies at a time. The projections for the spring and

Kentucky Derby Festival totaled nearly 64,000 pies.

With any business, there is often a push to expand and increase profit. Kern’s Kitchen continues to grow, but expanding just for the sake of profit is not what this family business is about.

“It’s not that we want to make a bazillion pies a year,” Rupp said. “I want to make sure we are doing things right and we are making a good quality product. Everything that comes out of Kern’s Kitchen is top-notch quality. That’s where we want to grow our space.”

It is easy to zoom through tasks and prioritize quantity over quality. However, at Kern’s Kitchen, the Derby-Pie chocolate nut pie production process serves as a reminder that slowing down, going back to the basics and remembering your core values can lead to a better end result. CB

50 KERN’S KITCHEN
APRIL 2023 Q2
Quality control is something that is prioritized at Kern’s Kitchen to ensure every pie meets the bakery’s standards.
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Marketing in the Metaverse

Are

NFTs a fad … or the future?

When you hear “NFT,” what comes to mind? Is it digital art sold for millions at a Christie’s auction? Maybe it’s something about brands like Nike, Adidas and Budweiser releasing digital collectibles for major dollars. Or perhaps it conjures up other techy buzzwords like cryptocurrency, blockchains and the metaverse — all of which are hard to get a handle on.

Consumer interest in non-fungible tokens (NFTs) remains relatively low. According to a survey by Maru Group, nearly one-third of US adults have not heard of them, and the aftermath of the 2021 NFT boom may have left those who are familiar with them feeling less enthusiastic. But now, as this technology enters a new stabilizing phase, brands are shifting their focus to explore how NFTs could offer greater utility for consumers and serve as a game-changing marketing tool for building community, brand awareness and loyalty. And that starts with the emergence of Web3.

53 CRITICAL ISSUES: NFT
© Two Pixel on Adobe Stock
COMMERCIAL BAKING

In the early days of the World Wide Web, content was delivered in one direction. Information was uploaded and then accessed by users — not unlike an online encyclopedia. Then came Web2, which allowed users to create their own websites and connect to others via social media apps like Twitter, Facebook, Instagram and TikTok. The latest iteration, coined Web3, ushers in a new era of worldwide connectivity based on a decentralized online ecosystem that utilizes blockchain technology.

“Web3 describes the future of how we will connect, communicate and collaborate online,” said Ben McDougal, a tech founder, author and entrepreneur. Put simply, “If Web1 is read-only, and Web2 is read and write, Web3 is all three — read, write and own.”

Because Web3 is still very much in its infancy, it’s easy to be put off by some of the jargon — and much of the language is still being shaped by innovators and early adopters. However, there are a few must-know terms and concepts that make exploring the world of Web3 far less overwhelming.

First is the idea of decentralization, a key component to the next generation of the web.

“[Decentralization is] sufficiently transitioning from single authorities to proportionately deliver verifiable ownership, access, control, transparency, communication and governance to many stakeholders,” McDougal said.

This means that in the future, the internet will be controlled less by big tech, and more by individual users.

Web3 runs on the blockchain, a digital decentralized ledger that records

information in a way that makes altering or cheating the system nearly impossible. Since the data cannot be changed and is completely transparent, it enables cryptocurrency, a digital decentralized currency that works around the traditional financial system using the blockchain’s cryptography. Bitcoin and Ethereum are two of the most well-known cryptocurrencies. Either can be purchased from a cryptocurrency exchange such as Coinbase, then transferred into a digital wallet — the tool for accessing Web3.

That brings us to NFTs. It’s important to first distinguish between what’s fungible and what’s non-fungible. Fungible items can be replicated and are not unique (e.g., a $1 bill has the exact same value as any other $1 bill). Non-fungible items, on the other hand, are unique and irreplicable (e.g., a signed rookie baseball card).

Therefore, NFTs are original digital assets that can be verified on the blockchain, and because they are uniquely coded, they serve as a digital record of ownership. NFTs can represent almost anything and can be used for collectability, event or community access, and crowdfunding, among other things. Users can receive, buy and sell NFTs on marketplaces such as OpenSea (the largest NFT marketplace), with new utilities and applications constantly emerging.

McDougal said now is a good time to help shift perception about what NFTs are and what they can do.

“I think because of the way they hit the mainstream through digital art, it created a false assumption that that’s all they are,” he said. “Focusing solely on what an NFT looks like is a quick way to get misguided.”

54
Web3 provides a unique opportunity for CPG brands to connect with consumers.
NFT credit APRIL 2023 Q2
© ArtemisDiana on Adobe Stock

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Instead, he said, NFTs should be considered digital properties that have the potential to add immense value and utility.

How are food and beverage brands thinking about NFTs? As expected, some of the largest global players were among the first to jump on the bandwagon. At the start of 2021, big names like McDonald’s, Coca-Cola and Taco Bell made flashy headlines with an onslaught of high-profile releases.

To mark the relaunch of its McRib sandwich, McDonald’s gave away 10 McRib NFTs as part of a sweepstakes promoted on Twitter. The chance to obtain one of the exclusive digital art pieces was aimed at superfans hoping to own a piece of the McRib’s 40-year history.

Coca-Cola’s inaugural NFT collection dropped just in time for International Friendship Day with proceeds from the auction benefiting Special Olympics International. The four unique multisensory NFTs reimagined some of the brand’s most notable features for the metaverse including a custom-designed jacket wearable and sound visualizer that brings to life a Coke’s iconic audio cues.

Taco Bell hopped on the NFT train by selling taco-themed GIFs and images, which were also accompanied by a $500 digital Taco Bell gift card reserved only for the NFT’s original owner.

Despite the buzz generated by these campaigns (and apparent demand: Taco Bell’s 25 tokens reportedly sold out in just 30 minutes), brands don’t appear to be in a hurry to repeat these efforts with similar initiatives.

“There was this feeling that brands were saying, ‘Hey, we’ve got an NFT collection,

and it’s really cool,’ but beyond that, it was difficult for consumers to understand why they’d really want it,” McDougal said, noting that giant brands could only entice their audience with Willy Wonka’s golden ticket so many times before they caught onto the gimmick.

But it’s not just the world’s most massive brands that have dipped a toe in the NFT pool. Baking and snack brands big and small are also experimenting.

The Kellogg Co. and General Mills were two of the bigger players to test the NFT waters in early 2021. Kellogg’s joined the NFT frenzy with a limited-edition release of CryptoCrisp Pringles, a virtual flavor of the popular chip rendered in the form of digital art by Ukranian artist Vasya Kolotusha (proceeds from the auction of the 50 artworks went directly back to Kolotusha). Despite the fact that consumers couldn’t actually “taste” the exclusive new flavor, early bids for the collectibles went for upwards of $800 on Rarible, an Ethereum-based NFT marketplace, after starting at just $2.

General Mills, on the other hand, took a page from McDonald’s’ playbook and leveraged interest in the tech to support nonprofit Feeding America. To mark the return of chocolate Dunkaroos, the company auctioned off 10 original digital artwork NFTs dubbed “new frosting tokens” inspired by Dunkaroos artwork from the 1990s, when the snack was in its heyday. All proceeds from the Rarible auction went to Feeding America’s network of food banks, and the highest bidders also scored an exclusive first taste of the nostalgic snack before it hit store shelves.

While many of these early NFT campaigns leaned heavily into scarcity and collectability — and the hope that

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NFT
“For us, it’s about creating something that builds a longterm relationship with our guests; food is perishable and can be fleeting, and once you’ve eaten it, it’s gone. With an NFT, it lives on, and we can keep building and growing that community.”
APRIL 2023 Q2
Dominique Ansel | French pastry chef, owner | Dominique Ansel Bakery

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the collectible NFTs would increase in value over time — they lacked utility, which McDougal said is crucial for mainstream adoption.

According to Maru Group, only one in four US adults said they were aware that some NFTs could provide real-world benefits, so increasing awareness about the more practical uses could encourage greater consumer interest.

“If you have a huge audience with a ton of reach and brand loyalty, collectability is a realm you might want to experiment with,” McDougal shared. “But if you are a small baker and your bandwidth is already maxed out, you don’t need to make a big gimmicky splash with NFTs or try to make a bunch of money off Web3. Instead, just start to consider how NFTs can provide value to your customers — whether that’s a loyalty program that delivers exclusives to NFT holders or access to unique events. They need to be more than just a digital token to collect.”

Some of the smaller bakery brands that were quick to explore the NFT space did include this additional layer of utility to build consumer interest

San Francisco-based Love + Chew, a plant-based superfood and protein cookie company, launched a crypto cookie NFT collection in March 2022 to honor International Women’s Day. Designed by female artist Fatemeh Monfared, the NFTs were not just collectible digital art pieces. They also unlocked access to upcoming launches, cookie subscriptions and recipes exclusive to NFT holders.

Las Vegas-based Freed’s Bakery, which was recently acquired by Cafe Valley, was among the first small bakeries to dabble in NFTs when it created the world’s first NFT wedding cake — a collectible GIF of one of its handmade cakes — in September 2021. Since then, Freed’s has expanded its NFT collection to 50 colorful cake collectibles

available in its Sprinkle Iced Cake Depot on OpenSea. Each cake NFT unlocks gated content and presents exclusive offers and benefits.

No stranger to scarcity and exclusivity, in May 2022, French pastry chef Dominique Ansel celebrated nine years of the Cronut with an inaugural NFT collection consisting of 60 Cronut tokens in five former flavors voted upon by fans.

“We’ve always been excited to try new things that we thought are worthwhile, whether it’s regularly changing our menu or, in this case, developing our very first collection of NFTs,” Ansel said. “For us, it’s about creating something that builds a long-term relationship with our guests; food is perishable and can be fleeting, and once you’ve eaten it, it’s gone. With an NFT, it lives on, and we can keep building and growing that community. This will be a new way to keep in touch and give our guests that extra bit of hospitality.”

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© popaukropa on Adobe Stock
NFT
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Each Cronut NFT also came with special perks, including early access to new pastry launches and a free pass to “skip the line” when visiting a Dominique Ansel Bakery.

McDougal said he sees lots of opportunities for companies to test similar NFT strategies that include exclusive access to help consumers feel a deeper bond and loyalty to a brand through unique experiences.

“Along the way, you’ll find things that might not fit what you’re trying to do long term,” he said. “But there may be ways that you can weave in something fresh and activate not only your existing audience but also maybe introduce channels for new awareness.”

One way marketers might want to consider NFTs is as a tool for deeper storytelling, whether that’s unlocking content that connects with customers who care about where their food comes from, establishing traceability through the supply chain or improving transparency around safety protocols. It’s all possible with NFTs via smart contracts, which act as the bridge between digital assets and the blockchain.

A key element of Web3 is its community lead, meaning it diversifies the pool from which stories are told. As power in advertising continues to shift toward influencers and real-life consumers, marketers can use the decentralized NFT space to think outside-the-box for new ways to connect with customers.

“Maybe you throw on a [virtual reality] headset, and suddenly you’ve stepped into a concert presented by Panera in the metaverse,” McDougal shared as a hypothetical example. “Perhaps you’re able to walk the grounds where they’re growing

ingredients, and you can chat with the individual farmers and makers. Or maybe you get to interact with other Panera customers in a sort of live testimonial.”

That idea might seem far-fetched, but with the speed at which experimentation and adoption of NFTs start to take hold, marketers would be wise to start thinking about what’s next.

In one of the most recent NFT launches by a large global brand, Starbucks unveiled Starbucks Odyssey, a new blockchain-based loyalty program and NFT community. The platform, which is an extension of its successful loyalty program, allows customers to complete interactive activities called “Journeys” to earn collectible “Journey Stamps” (a less technical term for NFTs) that unlock exclusive experiences and rewards.

McDougal noted that he sees value in presenting Web3 concepts like Starbucks Odyssey in a way that doesn’t

scare off the Web2 consumer. If marketers can create NFT programs that reduce some of the tech fear factor and bridge the gap between Web2 and Web3, they stand a much better chance for mainstream adoption.

The good news is that once you get past the jargon and gimmicky hoopla, the barriers for entry for NFT experimentation are quite low. If the central theme of Web3 is decentralization of the internet, that means there is as much of an opportunity for the small folks — just as much as the big players—to make an impact.

“We’re in this phase of curious exploration, and it’s a great time to lean into learning,” McDougal said. “Remember when cell phones were scary. Remember when personal computers were scary. As with anything new, it brings a fear of change. But those who embrace it and explore some of these innovations can really stand out and stay ahead of the curve.” CB

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© ArtemisDiana on Adobe Stock

A Whole New World

Regenerative agriculture is changing the face of farming and creating interesting opportunities for the baking industry.

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© Yu Lan on Adobe Stock

If necessity is the mother of invention, then today’s dominant agriculture model was definitely born out of necessity, namely the need to feed a growing global population. Yet, decades of planting mono crops like corn and wheat, combined with soil disruption from constant tilling and the use of chemicals, have degraded soil health, polluted the water and air, and created a sizeable carbon footprint that creates about 25% of the world’s greenhouse gas emissions.

Regenerative agriculture is one promising solution for restoring the earth’s biodiversity. It’s not a new concept, having been around for hundreds of years. But as climate change concerns grow and consumer demand to know where food comes from and how it’s made increases, the regenerative agriculture movement is gaining ground.

According to Datassential, while only 20% of consumers say they’ve heard the term “regenerative agriculture,” 70% agree the food they eat should be grown on farms that use sustainable practices.

Regenerative agriculture takes sustainability a step further. Whereas sustainability measures are designed to stop the depletion of natural resources, regenerative agriculture takes a holistic approach to farming that simultaneously incorporates techniques that restore crop and soil biodiversity, remove carbon from the atmosphere and sequester it in the soil, improve water quality and usage efficiency, and make agriculture as a whole more sustainable.

“We believe regen ag is the way agriculture will respond to the climate crisis,” said Ben Mantooth, VP of marketing for New Cambria, KS-based Farmer Direct Foods, a flour supplier that sources its

PRODUCT DEVELOPMENT: REGENERATIVE AGRICULTURE

grain from its own network of regenerative farms. “It’s been at the forefront of our story for a long time, but it’s also an emerging trend. It’s exciting to see that it’s gaining global adoption.”

Evan Harrison, CEO of Kiss the Ground, a non-profit organization that seeks to increase awareness about regenerative agriculture, noted that the practice is reaching more large organizations

“You’re hearing a lot of healthy conversation and serious action plans from big companies that can make seismic changes in how they’re sourcing their products to help with all of these issues,” Harrison said.

As one case in point, Minneapolis-based General Mills has committed to converting 1 million acres globally, an area that represents approximately 25%-35% of its worldwide sourcing footprint, to regenerative agricultural practices by 2030.

Mexico City-based Grupo Bimbo set a goal to become a net zero-carbon emissions company by 2050.

“We need to start working with our famers, with regenerative agriculture practices, so we can have healthier soil and better ingredients,” said Irene Espinola Campos, net zero carbon global director for Grupo Bimbo. “It is a model where we transition from an intensive industrial model, which doesn’t mean to eliminate technology or machinery, to a regenerative model where we take that technology and make it smarter.”

While such large-scale commitments can certainly advance the regenerative agriculture movement by leaps and bounds, getting finished baked goods made with regenerative ingredients to

COMMERCIAL BAKING 63
While only 20% of consumers say they’ve heard the term “regenerative agriculture,”
70% agree the food they eat should be grown on farms that use sustainable practices.
Source: Datassential Research

REGENERATIVE AGRICULTURE

the masses on a global scale is a challenge, especially considering that in the US alone only about 1.5% of the 900 million acres suitable for farming is done so regeneratively.

That puts smaller bakers at the forefront of downstream contributions in terms of product innovation and consumer education, due in part to their nimbler operations and pricing flexibility with retail customers.

Kansas City, KS-based Farm to Market Bread Co. is one of those operations. The bakery, which serves wholesale and retail customers, recently partnered with Farmer Direct to use its hard red winter wheat, hard white wheat and stone-ground rye flours.

“Quality was a high priority when we made the decision to transition, and we see the results in our products,” said John Friend, CEO of Farm to Market. “Being able to be more conscious about where our wheat is coming from as far as having a positive impact on the environment is an added plus.”

Manhattan, KS-based Radina’s Bakehouse, which also sources flour from Farmer Direct Foods, also sees the opportunities that come with using locally sourced, regenerative ingredients.

“There’s a new wave of regenerative agriculture coming, and we want to join that conversation,” said Santiago Bonilla, bakery production manager of Radina’s. “Our goal is to educate our customers so regenerative agriculture can be scaled.”

When St. Louis-based Bright Future Foods, makers of Airly snacks, set out to develop the first-ever climate friendly snacks, designed to remove greenhouse gases from the air, it intentionally sought

out farmers already practicing regenerative agriculture and worked with them to add practices and measurement to validate the act of growing grains as a carbon sink.

“We asked them to add one or two more [regenerative agriculture] farming practices and allow us to do a farm-level life cycle analysis,” said Kris Corbin, chief supply chain officer and co-founder of Bright Future Foods. “The growers who participate in the Airly Agriculture program receive premium payments for the extra data collection as well as when they achieve carbon negative results.”

While there’s no doubt that using flour sourced from regenerative farms is good for the environment and helps meet consumer demand for better-foryou, better-for-the-planet baked goods, it must also make good business sense, especially in an industry with thin profit margins

“At the end of the day, for-profit and non-profit businesses have to be able to support their mission, and profit is incredibly important,” Harrison noted. “When regenerative practices lead to greater profit for the farmer, when the cost of producing products comes down

APRIL 2023 Q2 64
For smaller bakeries, regenerative ingredients can open doors to product innovation and consumer education. Photo by Liz Goodwin | Avant Food Media

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because there’s less input, then there’s more profit to drive the mission.”

While that’s the long-term goal, in the short term, cost vs. ROI must be a consideration, whether a bakery sources ingredients made from regenerative farming or local grain, like New Haven, CT-based Chabaso Bakery. Along with Atticus Bakery, its bakery-cafe sister business, Chabaso has been involved with New England’s local grain movement for quite some time.

“Before the pandemic, we shifted all of the flour and grains used at Atticus to only New England grown from smallscale growers and millers,” said Reed Immer, director of sales and marketing for Chabaso. “But at Chabaso, we’ve realized that we can’t make a product with 100 percent locally sourced, regenerative practice grains because it goes way past the price point we need to be competitive in a mainstream grocer. Part of the value we provide to our customers is knowing the economic constraints they are working with.”

Instead, the Chabaso team shares its learnings from baking with local grains at Atticus with its customers.

“It’s almost been like a bread lab for Chabaso in terms of being able to test items in a more intimate, smaller environment,” Immer said of the work at Atticus. “We tell our customers, ‘This is what’s working in the micro bakery, super-premium world, and we think there’s some trends that can flow over into your more mainstream grocers or foodservice operators.’”

Friend echoed Immer’s comments about the necessity of weighing the costs and benefits of baking with regenerative or local ingredients.

“We kind of compete in two worlds,” Friend said. “There’s the [foodservice] side of our business that’s very price conscious. But on our retail side, there’s a little more price elasticity. I think those customers are going to be really happy to start learning about where their flour is coming from and that it’s going to have a more positive impact on the environment.”

For now, ROI for larger bakeries may need to come in the form of product innovation. Research indicates that consumers, especially younger ones whose buying power is becoming increasingly relevant, are intentionally seeking products made from sustainable sources, which can command a premium price. They’re doling out their dollars based on the environmental impact of the brands on the shelves. Consumers are also willing to try baked goods made from new-to-them grains.

Another potential downstream benefit of producing regeneratively sourced baked goods is market differentiation.

“If you’re able to align with some of these trends and differentiate yourself as a preferred supplier with some of the major wholesalers who are setting these corporate missions, like, ‘We’re going to cut out all non-recyclable packaging by 2025,’ you’re able to stand out at the higher executive level in terms of being a part of interesting initiatives,” Immer said.

When bakery manufacturers think circularly vs. linearly about the agriculture supply chain, they can tap into things like upcycled foods and ingredients. Regenerative agriculture starts the circle and upcycling closes the loop.

“Regenerative agriculture and upcycled foods are two sides of the same coin,”

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REGENERATIVE AGRICULTURE
“We need to start working with our famers, with regenerative agriculture practices, so we can have healthier soil and better ingredients.”
Irene Espinola Campos | net zero carbon global director | Grupo Bimbo
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said Dan Kurzrock, founder and CEO of Upcycled Foods Inc., the leading innovation platform for upcycled food. The company got its start by converting spent grain from the beer brewing process into grain for baked goods, a product called ReGrained SuperGrain+.

“It’s like an ecosystem approach,” Kurzrock explained. “You’re trying to figure out where outputs — for example, waste products — can become inputs. There’s a super clear financial bottom-line benefit to food manufacturers looking at their own waste streams and seeing what could be transformed into a usable ingredient with upcycled technology instead of sending it to animal feed, compost or a landfill.”

Another bottom-line benefit of using upcycled ingredients can be found in sourcing. Conventional ingredients are sourced externally, while upcycled ingredients are sourced internally. According to Kurzrock, it’s the same business.

“The difference with upcycled ingredients is you’re going to get products that are differentiated,” he said. “There are products that can feature new ingredients, that have health benefits and environmental claims that can help companies reach their ESG goals, potentially, lower their carbon footprint, and tell a story that consumers are looking for.”

According to “Taste Tomorrow,” proprietary research from Puratos, consumers are interested in that upcycled story.

“We found that one in three US consumers are interested in products made from upcycled ingredients,” said Michael Gleason, senior product manager – SBU Bakery for Puratos. “Globally, 43 percent of consumers are interested in these upcycled ingredients.”

Puratos’ R&D team has been working with the ReGrained product for two years. It partners with bakers, foodservice chains and in-store bakeries to show them how they can use upcycled ingredients alongside Puratos ingredients.

When it comes to regenerative agriculture — and sourcing local grains and upcycled ingredients as extensions — continued steps forward in the right direction is what’s needed.

“We don’t need all-in on regeneration from day one, but we do need transparency, monitoring and constant forward momentum from go,” Harrison said. “We just need to get the word out that regeneration is a solution to the climate, wellness and water issues. The way that will happen is with like-minded companies that say, ‘We want to give our consumers an opportunity to make a decision to support regeneratively sourced products.’” CB

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REGENERATIVE AGRICULTURE
—Below Upcycling waste into a usable ingredient is a downstream extension of regenerative agriculture. Photo courtesy of Upcycled Foods Inc.
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Sweet innovation

Total Center Store

Cakes Sales

The sweet goods category — which includes pastries, Danish, coffee cakes, strudels, turnovers, crumb cakes, sweet rolls and croissants — represents an abundance of choice for consumers and retailers alike. But the range also poses an important question of why some retailers do well within the category while others do not. Jonna Parker, team lead for fresh foods at Circana, summed it up by saying, “It’s all about the mix.”

From a numbers perspective, sweet goods should sit at a position of strength as the category brings in more buyers while consumers choose at-home dining over foodservice. Additionally, the indulgent treats are notoriously work-intensive, making them easier to buy than make. But a dip in retail sales suggests many still don’t have the right mix of pastries in-store .

“Despite knowing that younger consumers are engaging with pastries that have different flavors, many retailers continue to offer varieties that would be recognizable to the parents or grandparents of those younger generations,” Parker said.

In contrast, sweet goods created by foodservice and coffee shops are showing strength, a sign that consumers might prefer these venues for sweet goods because of the variety of flavors and sizes.

Considering the category’s versatility, sweet goods can meet the needs of a

CATEGORY OUTLOOK: SWEET GOODS
71 Source: Circana OmniMarket Total Store View Latest 52 Weeks Ending Feb. 26, 2023 *Dollar sales have been rounded to the nearest hundredth COMMERCIAL BAKING
Pastry/Danish/Coffee
SWEET ROLLS DANISH COFFEE/CRUMB CAKES PASTRIES HISPANIC PASTRIES TURNOVERS ALL OTHER ASSORTED/MULTI-PACK STRUDEL TOTAL DOLLAR SALES ($ IN MILLIONS)* % CHANGE VS. A YEAR AGO $700.92 $284.23 $130.50 $96.79 $78.26 $12.78 $10.01 $9.31 $0.51 $1,322.84 20.2% 13.4% -3.1% -7.3% 21.7% 1,392.7% -25% -57.8% -78.3% 12.7%

range of consumers. This is particularly true as eating occasions evolve.

The Hartman Group found that these changes are influenced by inflation concerns, supply chain issues, shifting health and wellness priorities and a heightened sense of sustainability. These scenarios are culminating in a rising number of “eating alone” instances, which represent 44% of all eating occasions, according to the consumer research firm.

Diverse consumer groups are also contemplating different reasons for purchasing sweet goods. Those looking to save money might purchase sweet goods in-store instead of buying at a local coffee shop. The purchase could be part of a strategy to combat the soaring price of eggs by eating sweet goods for breakfast instead of eggbased dishes, or it could simply be a purchase with permissible indulgence in mind. Value is also considered through the lens of the experiential and environmental, according to Mintel’s US Executive Summary In-Store Bakery 2022 report.

While the trending of sweet goods as “older” is nothing new, Parker suggested now is an excellent time for modernization to attract new consumers. Case in point: Foodservice and coffee shops attract a younger consumer base by offering innovative flavors, smaller sizes and sustainable packaging.

That modernization doesn’t mean eliminating the nostalgia that has long been an attribute of the category; however, younger generations expect something new. For example, Gen Z is looking for sweet goods that offer a combination of indulgence, nostalgia and unique flavors.

The IFT 2023 Flavor Trend of nostalgia can easily morph into “newstalgia” as younger generations seek out flavors that possess familiarity with a twist. This includes an ongoing desire for diverse, unusual flavors and ingredients such as those from Asian and Latin American cuisines.

The trend of pairing familiar flavors with unusual, innovative ones was also highlighted in Mintel’s Trending Flavors and Ingredients in Desserts and Confections 2022 report.

In center store, Hispanic pastries represent $78.26 million in current dollar sales, a 21.7% change vs. a year ago. In contrast, Hispanic pastries in the perimeter has shown a dip in sales at $68 million in current dollar sales and a -26.5% change vs. a year ago.

Traditional sweet goods find favor with a range of consumers. In fact, within the perimeter, pastry/Danish/

coffee cakes showed strong current dollar sales of $1.75 billion, an 8.2% increase from a year ago. The rise was even higher in center store with a 12.7% increase vs. a year ago and $1.32 billion in current dollar sales.

Center store sweet rolls registered $700.92 million in current dollar sales, a 20.2% change vs. a year ago, and sweet rolls in the perimeter saw slightly lower growth with $444.84 million in current dollar sales and a 9.8% change vs. a year ago.

The humble toaster pastry is another example where center store is outpacing perimeter in terms of innovation. This includes an ongoing premiumization of the pastry in foodservice and some innovative in-store bakeries.

For example, Parker highlighted the dichotomy of a more traditional brown sugar and cinnamon toaster pastry with that of a toaster pastry featuring the

Source: Circana

CATEGORY OUTLOOK: SWEET GOODS
72
APRIL 2023 Q2
In center store, Hispanic pastries represent $78.26 million in current dollar sales, a 21.7% change vs. a year ago.
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on-trend heat of a sriracha topping. Both varieties fall within the Sweet Plus flavor trend reported by IFT, which pairs chili varietals with sweet ingredients. Mintel reported a 138% increase in spicy flavors on bakery menus in 2022.

Innovation in this category must be cultivated. Consumers are used to seeing it in center store, but the perimeter bakery remains disconnected. Consumers don’t look for innovation in the perimeter the same way they look for it in center store. It’s not that perimeter isn’t ripe for innovation; it just needs a different approach.

Parker recommended introducing innovative products in the perimeter through digital media. When combined with social media promotion, sweet goods can get people talking. This can be particularly effective as consumers expand where they shop. This is the time to surprise existing customers and build interest among new ones.

One trend worth “borrowing” is the use of popular flavors or formats from other countries/cultures, according to Marcia Mogelensky, director of insight at Mintel Food & Drink.

“We’ve already seen churros and stroopwafel influences become popular in mainstream bakery goods,” Mogelensky said. “We are also seeing more formats, flavors and styles from other countries and cultures becoming more common, including paczki (filled donuts) and pain au chocolat.”

The consumer who shops the bakery might not be the one a retailer expects. There’s typically an overlap. For instance, a consumer looking for clean labels might also be in search of permissible indulgence in the right moment.

“If you’re putting out a product, you need to know who it is for,” Parker said.

When courting new consumers, especially younger generations, Parker emphasized looking for elements designed to speak to them. For instance, clamshells have long been used to display and protect products, but younger consumers with a focus on sustainability may bypass a new product housed in a clamshell because it doesn’t fit their idea of sustainability. Instead, bakeries can look for ways to use packaging to convey transparency and recyclability to a younger audience.

The demographics of the American household are also changing, making 2or 3-pack sizes a better option. Smaller

Center Store Pastries By Dollar Share

pack sizes can speak to a range of concerns, from food waste and ongoing inflationary pressures to a way to lower prices. Plus, consumers increasingly want to purchase only what they can eat over the next day or two.

Just as dough requires the right conditions to rise, so do the elements of success in the sweet goods category. An organizational pivot could be the boost needed to help consumers find additional relevance within the category.

“This can be accomplished by recognizing sweet goods dough to be an important carrier for a wide variety of flavors and sizes,” Parker concluded. “You won’t lose the consumer who has always been there; but by pivoting, you can welcome new consumers.” CB

CATEGORY OUTLOOK: SWEET GOODS
74 APRIL 2023 Q2
Source: Circana OmniMarket Total Store View Latest 52 Weeks Ending Feb. 26, 2023 BON APPETIT DANISH INC.: 34.7% GRUPO BIMBO: 28.4% SVENHARDS SWEDISH BAKERY: 15.7% HOSTESS BRANDS: 7.5% BAKERLY: 4.1% STARBUCKS COFFEE CO: 2.8% FLOWERS FOODS: 1.9% PRIVATE LABEL: 1.7% MURRAY’S SUPERIOR PRODUCTS: 0.5% DAIYA FOODS INC: 0.4% OTHER: 2.3%

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Finding the crossover

Over the years, gluten-free has been a category that’s caused the baking industry a fair amount of stress and head scratching. When first introduced more than a decade ago, many bakers rightfully wondered about the point of trying to make quality baked goods without a key ingredient for a niche audience. It’s a valid point, one that continues to be explored via ongoing R&D and formulation more than a decade later — to outstanding results.

At first, the gluten-free category was largely driven by need, and many bakery manufacturers struggled to commit resources to such a small demographic. Since then, the category has grown strong, thanks in part to the commitment of several players who were intent on offering gluten-free options. This was often instigated by the desire to provide gluten-free baked goods for a loved one or friend.

Growth in the gluten-free category is evidenced by a sizable market for these products. Grand View Research notes that North American markets make up an approximate 37% share of the global gluten-free market. According to Statista, global sales are valued at $6.6 billion in 2022 with projections for it to reach $13 billion by 2023. This trajectory can also be seen in gluten-free sales from Thomasville, GA-based Flowers Foods, which has seen steady growth in the category since 2017.

“Whether the adoption of a gluten-free diet is a medical necessity, as it is for the 1% of the population with celiac disease

or the approximately 13% of the population with a gluten-related disorder, or a preference because of perceived/realized wellness, the gluten-free diet is a choice rooted in the ability for consumers to control their own health outcomes,” said Jeanne Reid, marketing manager of the Gluten Intolerance Group (GIG).

GIG found 23% of consumers are shopping for gluten-free products, with 7% rigidly restricting gluten in their homes. Eighty-two percent of these purchases are influenced by certification. The GIG’s Gluten Free Certification Organization program, for example, offers independent, third-party certification for gluten-free products.

This growth may also be attributed to the crossover consumer. Just one person in a household following a gluten-free diet can strongly influence other members within the household. Additionally, the American College of Gastroenterology recommends screening for first-degree family members of someone with celiac disease and people with signs, symptoms or lab results indicative of the disease.

The gluten-free category also witnessed a peak several years ago among those who looked to improve their health by eliminating gluten. As with many trends, this too is experiencing modulation, though the category continues to serve people with celiac disease and consumers who choose a gluten-free lifestyle.

Some manufacturers who are not willing to accept an all-or-nothing rule

Gluten-free shoppers by age:

28% Gen Xers

24% Baby boomers

20% Millennials

are taking the charge. More bakers are choosing to lead with taste before talking about gluten-free attributes — something appreciated by those who choose to avoid gluten. These manufacturers are approaching the category with new eyes, looking for a crossover audience that includes those who need gluten-free foods and those eating alongside them.

“This is a sizable market, and it’s an addressable market,” said Jonna Parker, fresh foods team lead at Circana. “It’s important to understand who the shopper is. It’s not just the celiac or the gluten-intolerant shopper.”

Parker stressed the importance of leading with taste and experience first.

CATEGORY OUTLOOK: GLUTEN-FREE
77 COMMERCIAL BAKING
Source: Gluten Intolerance Group

This shifts the focus from a product that may not taste good to one that is delicious and safe for the glutenintolerant consumer. Such an approach can make the product more accessible for more people.

Then it’s important to ask if a gluten-free product is regularly purchased as a need-based item. If so, are there other gluten- or grain-free products that could easily be subbed in? One example is the sandwich bread, buns and rolls category. If a tasty gluten-free bread/ bun/roll option isn’t available, a consumer can achieve a similar effect with a gluten-free tortilla, slice of cheese or even a piece of lettuce. It may not be the same, but if the product doesn’t lead with taste, it’s an easy choice for the consumer to make.

Parker cautioned that bakery manufacturers must also consider price points when consumers are making product comparisons. If another product has a lower price point, it might be even more appealing. Items that are priced too high won’t make it into the shopping basket at all, no matter how good they might taste.

“This is a market based on taste and permissibility, but if the price point becomes too high, people will go without,” Parker said.

The ability for gluten-free products to extend shelf life and minimize food waste also earns another positive tick for accessibility. Items that can be frozen offer an advantage over conventional products with quick sale dates. Consumers conscious of rising food prices will

Gluten-Free Category Sales

continue to look for ways to make the most of their food purchases. This can create an opportunity for manufacturers to highlight how long something will be good in a freezer or for retailers to highlight extended shelf life with a shelf tag.

Remaining top of mind for not only gluten-free consumers but also retailers will require ongoing awareness of the trends, a clear idea of core and crossover audiences, and an understanding of how ad dollars are spent and where products are merchandised.

“You can’t shoehorn a product and hope that the consumer will find it,” Parker concluded. “Ingredients matter, and how foods fit into a consumer’s lifestyle matters. This is how we need to be talking to consumers. This is a lifestyle.” CB

CATEGORY OUTLOOK: GLUTEN-FREE
78 APRIL 2023 Q2
FY 2018 FY 2017 FY 2019 FY 2020 FY 2021 Source: Flowers Foods Custom Database — IRI Total US Mulo + C Store
($ IN MILLIONS) GF MINUS FLOWERS FLOWERS GF 221.0 17.4 229.7 32.8 221.7 61.8 229.1 93.5 224.9 108.0 237.4 128.7 FY 2022 FLOWERS SHARE OF GF 7.9% 14.3% 27.9% 40.8% 48.0% 54.2%

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TASTIER BREAD THE NATURAL WAY

Bread production is an art, and its secret is naturalness. Good bread contains no industrial additives. All it consists of is cereals, water, salt, yeast, and above all, pre-doughs that give it a characteristic flavor. Therefore, the challenge of modern baked goods production is the naturality of the products.

Thanks to pre-dough systems, consumers can consciously enjoy tasty, natural bakery products. This applies worldwide for all sorts of creative combinations to produce unrivaled bakery products. Pre-dough can be used to optimize a wide variety of dough types. From pizza dough to brioche and croissants to gluten-free bread, there are almost no limits to the potential culinary applications.

In addition to variety and taste, pre-dough technologies also enable various forms of further processing as well as packaging. They can also secure a longer shelf life.

HOW TO OPTIMIZE DOUGH QUALITY PRIOR TO THE KNEADING PROCESS DEFINITION OF PRE-DOUGH

Generally, pre-dough production belongs to the group of food processes named “fermentation.”

• Pre-dough is made from milled cereal products.

• Cereal products come from grinding mills and machines, which can be combined with other raw products, such as seeds.

• Pre-dough is made before the main dough.

• It is produced under thermic and/or microbiological conditions for a specific length of time to keep functional.

APRIL 2023 Q2 80

CLEAN LABEL COST REDUCTION IMPROVED SHELF LIFE

Besides the avoidance of certain ingredients, some of which were declared with E-numbers or sounded like “chemicals,” the term “clean label” is often used when the list of ingredients is reduced. Many clean label requirements can be met by pre-dough technologies, for example, in terms of eliminating the need for pre-mixes as well as reducing the use of preservatives.

In addition to saving space and time, production with pre-dough can significantly reduce the following cost factors: yeast, premixes and improvers. Ready-to-use sourdoughs can be completely replaced as well. Furthermore, pre-dough also allows the re-use of waste dough and of unsaleable bread.

An optimally matched integration of pre-dough into the production process enables the extension of shelf life, freshness and mold retardation of the baked goods. Additionally, the structure and taste after frozen processes are significantly improved. A beneficial side effect is sustainability: reduction of logistics costs and fewer waste products result by using pre-dough.

Another smart solution within pre-dough technology for longer freshness and great taste is completely natural grain cooking. The sophisticated grain cooking process delivers the ideal synergy between mechanical equipment and biotechnology for the best results in food production. It ensures optimal product quality of the baked goods for customers.

Grain cooking involves heating flour and various grains with a large amount of water until you get a gelatinized hot soaker (e.g. “Kochstück”). By adding it to the baking ingredients, the natural freshness of the products extends, and the dough yield gets higher.

By using grain-cooking processes, bakeries get significantly extended natural freshness and frozen storage stability of the baked goods; a reduction or waiver of premixes, bread improvers and preservatives; and, of course, a cost reduction (yeast, flour, logistics).

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DIOSNA is the pioneer of pre-doughs and sourdoughs from small to large scale, creating optimum conditions for producing quality goods on the downstream plant. Its pre-dough solutions offer everything from well-engineered artisan systems to individually configurable industrial systems with fully automatic process controls. Besides sophisticated equipment, DIOSNA offers the necessary technical know-how, and with DIOStart starter cultures, it also provides the necessary basis for excellent pre-dough processes.

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Tradition in transition

When it comes to breaking down the baking industry into distinct categories, none are quite so broad in scope and variety as the sweet goods segment. The products themselves, identifiable by their distinct flaky layers of buttery pastry, are staples in perimeter aisles in grocery stores and on foodservice menus. And though the classics are undeniable as they are, the state of baking is driving the sweet goods category in a modern direction based on consumer desire and operational need.

However, the ability to mass produce and distribute these products has become a challenge that manufacturers have had to innovate around to

keep moving forward. With increased difficulty in acquiring and retaining the skilled labor needed for these products, bakeries are finding alternatives that can retain quality and business.

For example, Swedesboro, NJ-based Banneton Bakery, is leading the way in the sweet goods segment by sticking to the classics, though it’s not shying away from innovation. With decades of experience in the industry and a concentrated line of products, the bakery is bringing more croissants to consumers with freezer-to-oven technology and a strong foodservice and grocery presence sparked by the COVID-19 pandemic.

LISTEN NOW: Alex Litinetsky details the innovations happening in the sweet goods category.

“During COVID, we switched our attention from the foodservice accounts we enjoyed before the pandemic to supermarkets, which were extremely busy during COVID while the foodservice accounts almost died,” said Victor Litinetsky, owner of Banneton Bakery.

Even though Banneton has faced its fair share of tough times from the

83 CATEGORY INSIGHT: SWEET GOODS COMMERCIAL BAKING
Photo courtesy of General Mills With labor troubles impacting the baking industry, ready-to-bake sweet goods can save operators time and also reduce costs.

pandemic, the family-owned bakery — Victor’s son, Alex, serves as EVP — fared well all things considered, according to Victor. The bakery’s unexpected pandemic-induced transition into the supermarket sector opened the doors to new consumers and customers. As a result, Banneton actually expanded its production facility at a time when other bakeries were putting similar plans on the back burner.

“We built another 50,000-square-foot addition with three more automated lines during COVID,” Victor said. “Even though we had a few hiccups along the way, we are not feeling any of the stress of supply chain challenges any longer.”

Banneton now has 100,000 sq. ft. of production space, with five lines strictly specializing in croissants in all variations and Danish items. When the bakery’s foodservice business returned after the initial lockdown period, Banneton was able to also keep up with its newer supermarket accounts.

While Banneton currently has a major slice of the freezer-to-oven sweet goods segment, Minneapolis-based General Mills Foodservice has also thrown its hat in the ring. Its latest innovation, the Pillsbury freezer-to-oven chocolate croissant, features a rustic, European-style product with 48 layers of pastry with chocolate swirled inside.

Freezer-to-oven versions of sweet goods such as this can help foodservice operators save time and reduce labor costs. In fact, labor challenges are one of the driving factors behind General Mills’ sweet good innovations.

“This freezer-to-oven croissant was developed with the challenge of labor in mind,” said Christine O’Connor, associate principal scientist at General Mills Foodservice. “An operator can take one from the freezer and place it on a pan that goes straight to the oven to bake. It’s very simple and easy to manage for the operator.”

O’Connor noted that the lack of pastry chefs on top of labor shortages across the industry has proven to be challenging for many operations. The place-and-bake croissants are designed for simplicity while retaining the product’s key characteristics.

“Croissants can be difficult to make from scratch, so many operators are taking them off the menu,” O’Connor said. “Yet, our research tells us that croissants remain a consumer-favorite menu item with chocolate being a top flavor choice in the sweet goods category. We want to help foodservice operators offer premium breakfast baked goods, whether it is during the morning hours or if they are serving customers eating outside of the breakfast rush.”

84 CATEGORY INSIGHT: SWEET GOODS
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—Below Banneton Bakery shifted its focus from foodservice to supermarkets during the COVID-19 pandemic. Photo courtesy of Banneton Bakery

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The freezer-to-oven croissant concept is something that the team at General Mills has been working on for years now, with the classic butter variant first being released in 2021.

Even for a staple product like croissants, R&D is no walk in the park, with ample time taken to ensure the right product formulation.

“There was a significant amount of testing from the pilot plant to plant scale that went into this invention,” O’Connor said. “It took several years and many experiments to find the right freezerto-oven technology parameters and balance the amount of chocolate-tobutter ratios.”

The flat shape of the product in its frozen form was also an important factor in the development of the product as it saves valuable freezer space for operators.

“This process entails chocolate folded into the croissants to achieve the visual appearance,” O’Connor said. “After this step, the croissants are curled and pressed over a series of steps to make the croissants flat. Several experiments were conducted to dial in the exact processing parameters of how much to flatten and still maintain the final desired quality. The result is croissants that can be stored flat but still rise beautifully.”

Sweet goods aren’t only produced for the foodservice and supermarket sectors, nor are they strictly European in origin. Omaha, NE-based Panaderia Internacional connects with consumers seeking new and authentic flavor and product experiences.

Gabriel Gonzales, owner of Panaderia Internacional, noted that automation helps with certain aspects of vari -

ous sweet goods such as brioche-like conchas and laminated goods including cuernos and bigotes . With high consumer demand for these types of products, having an automated line that can create conchas from start to finish would make a major difference in the ability to scale up.

“What we’ve come to understand is that just because there’s a machine that makes a specific product that you sell, you have to break even within five years to make it make sense,” Gonzales said.

This proves especially true when it comes to producing specific products such as Hispanic sweet goods and pastries. Gonzales has worked with A.A. Bakery to find solutions that can be adjusted for his bakery’s needs with customized accessories and other specifications.

When Gonzales purchased the bakery from his brother in 2016, Panaderia Internacional was a “very hands-on” operation with nearly everything being produced by hand. The choice to install industrial equipment helped keep the bakery running after labor came up short following the start of the pandemic.

Panaderia Internacional uses an A.A. Bakery pastry line to cut the dough needed to create the cuerno. Additionally, Gonzales uses a Rondo line to automatically fold bigotes , which reduces the amount of labor-intensive hand folding required to create the correct shape. Because the equipment had to be adjusted to manufacture Hispanic sweet goods vs. European products, the end result is visually different, which at times can present a challenge when marketing the products to consumers.

“From the tests we’ve been able to pull, we noticed that the cuerno is a little bit smaller and the legs are shorter,”

86
CATEGORY INSIGHT: SWEET GOODS APRIL 2023 Q2
“We’ve designed [the facility] in that respect not to go fully automated. There’s a hand touch to our products that’s really obvious. It’s not a cookie cutter look all the time; it’s got tiny imperfections that give it a homemade look.”
Alex Litinetsky | EVP | Banneton Bakery

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Gonzales said. “The cuerno we sell to the Hispanic people in south Omaha has significantly longer legs, like triple the size that this machine is pulling. So one of our challenges is figuring out how to get people to accept this product under a new shape.”

Understanding consumer expectations while staying true to the authenticity of the product — and the bakery’s heritage — is key.

In New Jersey, Banneton plays to its strengths with a concentrated product lineup including croissants in almond, chocolate and cheese varieties as well as cinnamon rolls. All of these items, according to Alex, are built from a 100% fresh butter croissant base.

To keep production running and grow the bakery, a strong relationship with equipment manufacturers is a must for Banneton. Victor shared that the company’s 30-year relationship with Rademaker has proven crucial. The bakery uses Rademaker’s laminating

and makeup equipment to process the dough that makes its sweet goods and signature croissants.

While a good portion of the baking industry leans into automation for its manufacturing practices, some sweet goods producers are striking a balance between mechanics and manual labor. At family-owned Banneton, having a healthy mix of automation and manual work preserves the quality of the product while bringing an artisan touch to its commercially manufactured sweet goods.

“There’s a hand touch to our products that’s really obvious,” Alex said. “It’s not a ‘cookie cutter’ look all the time; it’s got tiny imperfections that give it a homemade look.”

Innovating classic products like croissants and cuernos can be challenging when it comes to balancing indulgent characteristics that consumers love with label claims they’re also keeping top of mind.

Banneton boasts a lineup built by clean, non-GMO ingredients, but the bakery is also making steps toward products with health-focused claims such as a multigrain croissant with 16g of whole grains per serving.

There’s also room for traditional sweet goods with rich, rooted history to innovate inside American consumer preferences. Panaderia Internacional is doing just that with a clean ingredient product to address the better-for-you trend that has been noted across the sweet goods sector and beyond.

The sweet goods category remains a staple in the baking industry, though there is no doubt that it is moving — slowly, but surely — toward elevating the product consumers know and love with the health claims they’re increasingly seeking. Innovating iconic, instantly recognizable sweet goods has proven to be an uphill battle, yet bakers of all sizes are making headway and transitioning the classic category into a new age. CB

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CATEGORY INSIGHT: SWEET GOODS
APRIL 2023 Q2
Hispanic sweet goods manufacturers are meeting consumer demand for new and authentic flavors and products. © Kirsten on Adobe Stock

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Breaking from the status quo

It’s no secret that today’s consumer is keen on finding foods that tailor to their lifestyle choices, with health claims quickly becoming key factors in p urchasing decisions. The growing movement for healthier, better-for-you options has caused increased interest in products such as gluten-free baked goods that stray from the standard. But in an industry where gluten is the status quo, how are manufacturers responding?

What was once taboo is now quickly on the rise.

“Gluten-free is no longer relegated to the freezer section; it’s gone mainstream and is merchandised in the commercial bread aisle adjacent to conventional and organic specialty breads,” said Dan Letchinger, SVP, growth brands of Thomasville, GA-based Flowers Foods. “The category, led by Canyon Bakehouse, has really elevated in terms of eating experience. Delivering that heightened experience, ensuring product availability and producing products that are free from other top allergens — not just gluten — are extremely important for bringing new consumers into the gluten-free category.”

Canyon Bakehouse, a Flowers Foods brand, also boasts key health claims such as being soy-, nut- and dairy-free as well as using 100% whole grain.

91 CATEGORY INSIGHT: GLUTEN-FREE COMMERCIAL BAKING
Photo courtesy of Flowers Foods Flowers Foods’ Canyon Bakehouse brand tops the gluten-free baked good segment.

These callouts appeal to consumers, and the added attention to detail and awareness means baking companies must rethink how they relay the benefits of their products to the public.

“We are seeing consumers become increasingly more knowledgeable and demanding transparency from their favorite brands,” said Erin Cancade, director of innovation at Toronto-based Riverside Natural Foods, the parent company of better-for-you snacks and treats brand MadeGood.

As a result, companies like Riverside Natural Foods use external certifications to provided added information for consumers on first glance.

“With an overwhelming amount of choice, combined with a multitude of on-pack callouts and claims, consum ers are rightfully skeptical,” Cancade continued. “MadeGood uses third party certifications such as USDA Organic, Non-GMO Project Verified and GFCO Gluten-Free to give our consumers confidence and show that we hold ourselves to the highest quality standards.”

For some bakers, the need for glutenfree products comes from personal history. In fact — as is the case for most emerging brands — many gluten-free producers are born out of necessity, such as Shelby Township, MI-based Ethel’s Baking Co. CEO Jill Bommarito’s grandmother was the inspiration for the company’s name.

“Celiac disease has been in my family for over 40 years, so baking gluten-free is not new for us,” Bommarito said. “My goal has always been to provide delicious treats that are amazing for everyone to enjoy, not just good for gluten-free.”

Over the years, Bommarito noted a shift in the perception of gluten-free products as it emerges in bakery as an essential category parallel to traditional baked goods, not a consolation prize.

“When we started in 2011, we had to be cautious about how we called out glutenfree on our packaging,” she said. “At that time, gluten-free was often relegated to its own specialty diet area and was considered a ‘less-than’ product. We’ve always made it a point to create products that appeal to everyone, which is how we’ve been able to compete with traditional bakery products. Our mission is to have the gluten-free consumer be able to feel normal, and have everyone else desire what they are eating.”

Normalizing gluten-free makes all the difference. Consumers with gluten

sensitivities often seek the opportunity to share the same flavor and product experience as their gluten-tolerant counterparts but face an uphill tussle in terms of texture and composition.

“Our customers are seeking products made with inclusive ingredients so everyone can feel good about enjoying an indulgent moment,” Cancade noted.

MadeGood is free from top allergens such as wheat, dairy and eggs. The exclusion of staple bakery ingredients provides a unique challenge for creating products with alternative ingredients that function in the same way.

“Maintaining great texture during shelf life is one of our biggest challenges, and we continually work to refine and improve our formulations,” Cancade continued.

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Photo courtesy of Riverside Natural Foods When creating gluten-free products, brands like MadeGood add inclusive ingredients when possible

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“Consumers are increasingly looking for products with cleaner ingredients and lower sugar, but of course, great taste is paramount.”

Producing gluten-free goods can quickly become an uncanny valley of texture when trying to mimic traditional products. This is where R&D becomes most critical. Finding the perfect combination to create a product that stands up structurally without sacrificing the product’s integrity is the name of the game.

“Gluten provides elasticity in doughs, so when it is removed, doughs are often more fragile and sticky,” Cancade said. “We experimented at length to find the right blend of flours for our MadeGood Star-Puffed Crackers to manufacture efficiently and, most importantly, deliver a great tasting product.”

The art of creating gluten-free products requires Ethel’s to look at things differently. From the temperature of the fat when it’s added to the batter to the amount of air folded into the product, it all makes a difference in comparison to traditional baking, Bommarito shared. It also helps that many of the people crafting Ethel’s products are in the gluten-free population.

“Our team is made up of those that eat gluten-free, for a variety of reasons, and those that can eat traditional products,” she noted about the company’s R&D team. “We find this is the best combination for success.”

For the team at Canyon Bakehouse, the R&D process circles back to providing products that meet the dietary requirements of its key consumers with products that stand as equals to their traditional counterparts.

“As we look to product R&D, we always strive to meet consumer needs, considering how the product looks or tastes, how long it stays fresh, or how nicely it toasts for your sandwich,” Letchinger said. “Our goal is to have our gluten-free products taste and perform as close as possible to their glutencontaining equivalents.”

The team at Ethel’s is committed to taking its time to perfect what they bring to market. After moving into a larger facility in 2020, the team held off on rolling out new products until 2022, spending months in the R&D process to meet Ethel’s commitment to taste quality.

The brand recently launched a new cookie line in the three flavors consumers seek most: chocolate chip, oatmeal raisin and snickerdoodle. With cookies being one of the most sought-out items in bakery, Bommarito noted that it was important that the brand have a gluten-free offering for all.

Although the baking industry has a rich history in developing wheat-based products, this category doesn’t have the luxury or history to do so easily. Companies like Riverside Natural Foods are

finding the answers for innovation in unexpected areas and ingredients.

“As ingredient technology improves, we are seeing gluten-free baked products deliver exceptionally well against traditional wheat products,” Cancade said. “Ingredient suppliers and packaged goods manufacturers are getting creative with non-gluten flours made from nuts, seeds, tubers and pulses.”

In addition to alternative flours, Cancade said there is a notable rise in upcycled ingredients making their way into the segment.

“These ingredients are typically higher in protein and fiber and rescue food headed for waste streams, so this can be a win-win to improve nutritional quality and for environmental sustainability,” Cancade continued. “Another innovation area is ‘hidden vegetables’ in products. MadeGood products have always contained extracts from vegetables, which provide a nutritional boost. We are seeing the industry start to follow suit.”

In catering to a demographic with certain dietary needs or preferences, maintaining sanitation standards and taking steps to reduce or eliminate cross contamination becomes a critical part of a bakery’s operations.

Letchinger noted that Flowers bakes Canyon Bakehouse products, which range from classic breads to buns and

94
CATEGORY INSIGHT: GLUTEN-FREE APRIL 2023 Q2
LISTEN NOW: Jill Bommarito shares how R&D in gluten-free products balances science and art.
“We are seeing innovation in alternative sweeteners and fibers, which will bring great benefits in improving the overall nutritional profile.”
Erin Cancade | director of innovation | Riverside Natural Foods

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CATEGORY INSIGHT: GLUTEN-FREE

rolls, in a dedicated gluten-free facility that is also soy-, dairy-, sesame-, peanutand tree nut-free.

Ethel’s, which is Safe Quality Food and Gluten-Free Certification Organization (GFCO) certified, hopes to lead by example with its operations and partnership with premium ingredient suppliers with proven track records. Bommarito shared that the team completes regular testing on raw materials and finished goods alike.

The supplier relationship is critical for gluten-free operations. Cancade said that for Riverside, the company strives to connect deeply with its vendor partners beyond the transactions.

“Last year was especially challenging with disruptions across many areas of the business,” she said. “For key

ingredients in short supply, we needed to be creative in replacing with similar alternatives. Constant communication, looking for mutually beneficial solutions and working with our internal R&D team to validate new ingredients and suppliers were key to keeping our production lines running. We are proud to say that we kept our products on shelf throughout the pandemic while ensuring all quality aspects were met both at raw material and finished goods level.”

Just as it holds a high caliber for its products, Ethel’s has specific standards for the packaging of its baked goods. The company uses a BW Flexible Packaging flowwrapper for all of its individually wrapped products. When the company moved from its initial bakery to its 20,000-sq.-ft. facility in 2020, that machine was top of mind for Bommarito and was pivotal for efficiency gains.

“When I was in our little 1,300square-foot bakery space, that machine was on our vision board because BW Flexible Packaging is a leader in the industry,” she said. “I believe that when you work with amazing partners, you get amazing support.”

Additional automation that helps the Ethel’s Baking Co. operation includes Vemag depositors for cookies — the first baking automation for the company — five Baxter double rack ovens and D&W Packaging’s custom-built line to help move the company’s bar tubs to be labeled. The bakery also has a Reiser multi-outlet water wheel with dripless valves, a Savage Brothers bowl lift, checkweighers and metal detectors.

If the rise in popularity isn’t already indicative of what’s to come, the future is gluten-free friendly. Cancade shared that she anticipates higher nutritional value in the segment moving forward as well as some intersectional health benefits for consumers.

“For baking applications, we are seeing innovation in alternative sweeteners and fibers, which will bring great benefits in improving the overall nutritional profile,” Cancade said. “I hope to see more products across the category cater to multiple allergies such as wheat, egg and dairy to allow greater inclusivity in social settings when food is shared.”

Bommarito is enthusiastic, not just about the products, but also what companies like hers can provide moving forward in in-store bakery and even beyond.

“The idea that more people need what we do is so gratifying, and we’re excited for the new innovation that we’re going to be bringing to market,” Bommarito said. CB

96
Ethel’s Baking Co. continues to innovate to provide indulgent treats for all.
APRIL 2023 Q2
Photo courtesy of Ethel’s
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Learn more about how an ABA membership can benefit your company at AmericanBakers.org/Membership

Strategy for Succession

Planning for a smooth leadership or ownership transition can keep a business moving forward during a time of change.

Determining a leadership exit plan for an organization, whether it’s through retirement, sale, merger or acquisition, can be one of the most difficult decisions a company will make. There are many aspects to consider, including business continuity; transition plans; the wellbeing of the employees, customers and vendors; and the overall financial impact.

The departure of a top executive will have a significant impact on the enterprise, and the exit strategy is an important process. It requires patience because it can eat away at time, finances and, to an extent, sanity. The first step is familiarizing the leadership team with how the process will look.

Whether planning for a sale or retirement, the next business or individual doesn’t necessarily need to be identified immediately, but the leadership team should think about what traits the successor or next owner should have and weigh them against the goals and aspirations of the organization.

Similar to selling a home, the buyer or successor should be able to see themselves leading the company or visualize the company as part of a larger organization. Updating processes and writing down specific business protocols will help the successor

easily pick up where the predecessor left off. In the case of an acquisition, it will help the buyer more easily fold the business and operations into its own.

When selling the business, a valuation is a critical component to help determine the appropriate price and reveal — and tackle — any obstacles that might jeopardize the sale. The business valuation can be done in early stages of an exit strategy to allow the opportunity to address any potential issues that would come up for a potential buyer.

The three most common business valuation methods are income, cost and market.

With the income approach, future financial metrics are converted into present values to determine what future cash flow is worth today. The cost, or asset, approach determines how much it would cost to recreate the business from the ground up. Lastly, the market approach bases the value of the business off similar sales transactions. Looking to the market is a reliable way to estimate what sales price will be acceptable to interested buyers.

There are also several tax implications that will vary depending on the specific exit strategy a business chooses to pursue.

COMMERCIAL BAKING 99 BUSINESS INTEL

A business sale or liquidation can be structured in one of two ways: a stock sale or an asset sale. For a C or S corporation, the exit plan should be structured as a stock sale. A capital gain or loss will be seen on the sale of ownership shares. If the assets of the business are sold, the sale price will be allocated to each asset, and gains and losses will be calculated separately. The holding period and character of the gains will be determined by how the assets are used in the business.

For a company with an employee stock ownership plan (ESOP), the exit strategy will look a little bit different. C corporation owners have the option of deferring their gains by reinvesting their proceeds in securities of other domestic companies. This can allow owners to defer taxes for years or even decades, and if those replacement shares are held until death, the gains will be permanently excluded.

Owners of ESOP companies — both C and S corporations — will have the option to sell their shares back to the company over several years, enabling them to gradually exit the business. This will not eliminate capital gains taxes, but it will spread out the gain recognition.

Owners of family businesses often want to transfer ownership to the next generation. The first option is to transfer ownership shares while the owner is still alive. In this case, it will be necessary to file a gift tax return. Some

business owners draft their will so business interests are transferred to their heirs when they die. If the business and other assets in the estate exceed the gift/estate tax exemption, the estate will owe taxes on that transfer.

Another option is to transfer ownership over time. To reduce reliance on the gift and estate tax exemption, business interests can be transferred into a trust. There are many trusts that can hold business interests, so it’s important to talk with a business advisor to select the one that’s right for the business and its long-term goals.

There are countless ways to exit a business, and each method produces different outcomes, both strategically and financially, all with their own tax considerations. By identifying the right exit strategy early and relying on resources such as a valuation consultant, lawyer, broker and business advisor, the process can run more smoothly for all parties involved CB

Katie Lejong is a partner at Landmark CPAs. She has more than 20 years of experience assisting family-owned and privately held businesses navigate the tax and regulatory environments. She advises clients in tax-savings strategies, profitability, bookkeeping and payroll, exit strategies and succession planning. Contact her at klejong@landmarkcpas.com . Visit www.landmarkcpas.com/services for a downloadable succession planning e-book.

APRIL 2023 Q2 100 BUSINESS INTEL
There are countless ways to exit a business, and each method produces different outcomes, both strategically and financially.
a·vant adjective culturally or stylistically advanced Thought for Food avantfoodmedia.com

Commercial Baking Channel

Our multimedia collection is full of videos, podcast episodes and more, where you can get a deep look — and listen — into the exciting shifts happening in the baking industry.

TechTalk with Grant Olmes, Kubota Brabender Technologie

Grant Olmes, regional sales manager of Kubota Brabender Technologie, dives into the various metering technologies for ingredient handling. www.brabenderti.com

TechTalk with Bobby Martin, AMF Bakery Systems

Bobby Martin, global product systems leader of AMF Bakery Systems, talks about the ins and outs of pizza processing. www.amfbakery.com

TechTalk with Kevin Pecha, AZO

Kevin Pecha, sales manager of AZO Food, touches on the benefits of ingredient automation for a labor-strapped industry. www.azo.com

102 APRIL 2023 Q2

TechTalk with Nico Roesler, Reading Bakery Systems

Nico Roesler, pretzel and snack equipment sales manager for Reading Bakery Systems, discusses the benefits of the company’s sustainable oven technologies. www.readingbakery.com

Catching Up with Commercial Baking: Cordia Harrington at the 2023 ABA convention

Cordia Harrington, founder and CEO of Crown Bakeries and board chair of the American Bakers Association (ABA), shares the exciting changes to the association’s 2023 convention and how ABA plans to keep momentum in the industry going.

Catching Up with Commercial Baking: Jonna Parker at the 2023 ABA convention

Jonna Parker, team lead, fresh foods at Circana, discusses how consumers — now with unlimited channels for buying baked goods — are creating limitless opportunities for bakers.

Catching Up with Commercial Baking: Jeremy Shall at Intralox NEXT 2023

Jeremy Shall, North American bakery and snack team leader of Intralox, shares the key features and highlights from the Intralox NEXT 2023 event.

COMMERCIAL BAKING 103 COMMERCIAL BAKING CHANNEL

Catching Up with Commercial Baking: Kristen Spriggs and Eric Lewis at BakingTECH 2023

Kristen L. Spriggs, executive director of the American Society of Baking, and Eric Lewis, VP of supply chain quality at Flowers Foods, discuss their new roles in the association and their closing thoughts on BakingTECH 2023.

Catching Up with Commercial Baking: Brittny Stephenson Ohr at BakingTECH 2023

Brittny Stephenson Ohr, director of product development of Sugar Foods Corporation and the American Society of Baking’s chairman of the board, reflects on the highlights of BakingTECH 2023.

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2023

Anthony Tsocanos, director of quality at Hero Bread, talks about what he’s most excited for at the American Society of Baking’s BakingTECH 2023.

A Day at Crown Bakeries

Commercial Baking explores the Crown Bakeries plant in Smyrna, GA, and experiences the latest upgrades to the state-of-the-art facility.

www.unifiller.com 1 888 733 8444 We design and manufacture processing and portioning equipment to bakeries and food plants worldwide. More SAVINGS. Less DOWNTIME. Catching Up with
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Solutions

Sliced roll hinge improver

Repco’s Ultimate Hinge was developed to improve hinge integrity on all sliced rolls. The proprietary formula is incorporated into the baker’s recipe to achieve the best sliced roll on the market. Ultimate Hinge enhances softness and freshness as well as improves texture while keeping the structural integrity of the protein inside the bun. www.repcoworld.com/ultimate-hinge

APRIL 2023 Q2 106

Freshness solution for resilient soft breads

AB Mauri has released the Softase Platinum 2300, a premium freshness solution designed to help keep soft breads resilient to damage during transport and handling. Providing softness, texture and even sugar reduction, it helps ease the challenges of today’s bakers and provides cost-in-use savings. www.abmauri.com

Advanced bread makeup system

AMF Bakery Systems is elevating the industry standard with the ADD-S Bread Makeup System. The system delivers advanced, automated flexibility to handle a wide range of doughs including bread, pizza and specialty doughs. The user-friendly, recipe-driven servo technology offers adjustable, precision dividing for high-speed bread production. www.amfbakery.com

All-purpose feeder for bulk materials

Kubota Brabender’s FlexWallPlus is an all-purpose metering feeder with high-accuracy weighing. The loss-in-weight feeder is suitable for nearly every type of bulk material and works in every bulk material-processing industry globally. The hopper’s patented trapezoidal shape positions the bulk material at the optimum flow angle to feed the screw. www.brabenderti.com

Touchscreen-enabled thermal profiler

ECD introduced the market’s first traveling thermal profiler with operation via a capacitive touchscreen. M.O.L.E. EV6 offers a user-friendly, intuitive design engineered to save baking professionals time, simplify data viewing and analysis, and improve productivity. Thermal profiling as a routine practice helps bakers with consistent quality and high product yields. www.ecd.com

COMMERCIAL BAKING 107 SUPPLIER SOLUTIONS

Labor-saving sanitation solutions

Goodway recognizes that commercial baking facilities need to be on top of best practices for cleaning and sanitation. The company released dry steam conveyor belt cleaning and specialty industrial vacuum solutions designed to deliver the best cleaning and sanitation results while reducing labor costs. www.goodway.com

Metal detectable gaskets

Great Western’s metal detectable gaskets for QA series sifters are integrated with stainless steel particles. With industry members continuing to look for innovative solutions to enhance and add protection to the product stream, metal detection of foreign materials can help prevent product contamination. www.gwmfg.com

and place Dough Handling Depanning automation
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Rotary blade for dough cutting

Handtmann’s rotary divider for pizza and bread doughs features a unique undercut function that reliably increases precision and adjusts cutting speeds for different dough densities. Technologies for bakery are consistent, from single-lane pizza dough ball lines and eight-lane depositing for pan breads to 24-lane filling on a high-speed lamination line. www.handtmann.us

Instant moisture measurement tool

MoistTech’s Food Grade Sanitary Valve Connection allows for the instant measurement of moisture through a pipeline by seamlessly installing within the existing pipe. This enhanced method of measurement provides users with a non-destructive technique for instant moisture control directly on the production line without lengthy lab tests. www.moisttech.com

W APPI N G

D L A O -360 X S flex ble s re dy f r m rr ’s llenges

Raw material costs and their availability, national and international regulations - everything changes so fast, making the future increasingly unpredictable.

DELTA OF-360 X is the first future-proof packaging machine, thanks to its variable geometry that can be set with just a touch on the HMI. Limitless flexibility to quickly switch from one material to another, even those which are still to be developed, is the best way to protect your investment. With DELTA OF-360 X, the future is in your hands.

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Multi-lane dough divider

Reiser’s Vemag Multi-Lane Dough Divider adds versatility to production lines and works for all types of buns, rolls and English muffins. The Vemag is easily adjusted to consistently produce exact-weight portions of any dough absorption or crumb structure. It can run up to eight lanes of product at up to 300 cuts per minute. www.reiser.com

Intelligent portioning for cookies and crackers

Syntegon has developed a solution for the handling and portioning of cookies and crackers. This innovation features gentle product placement through linear motor technology, managed by user-friendly, format-altering software. It has the ability to perform seamless changeover between a variety of product shapes and pack styles. www.syntegon.com

SUPPLIER
SOLUTIONS

Preventative maintenance scheduling program

Unifiller’s Preventative Maintenance Program provides priority access to the company’s service technicians and allows appointment scheduling to ensure equipment runs smoothly. The company provides training, guidance and safety advice on how to use its equipment. Experts guide customers through the process in preventing downtime, selecting replacement parts, and cleaning and storing equipment efficiently. www.unifiller.com

Improved conveyor belt mesh

Wire Belt launched CG15, an addition to the Compact-Grid conveyor belt family. The 15-mm mesh has an increased wire diameter of .082 and boasts an even larger open surface area at 73%. This offers better flow-through properties for heating, cooling and coating operations. Thicker and larger, the mesh can also hold more weight per square foot. www.wirebelt.com

Automate Moisture & Oil Measurement in Food Production

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Allows for a constant, non-contact solution to moisture and oil measurement directly on the production line in real time

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Operational personnel are able to make crucial, immediate adjustments on the line to avoid waste and downtime

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Measuring moisture directly on the production line produces instant, accurate data that can be easily communicated to a PLC - creating a closed loop process

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A MoistTech system provides improved product quality, lower waste and energy costs, process optimization, increased plant efficiency, oven control & reduced downtime

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Sifting through the noise

The following advertisers appear in this issue. We encourage readers to reach out to these companies through the listed website or email for further information. This index is provided as a service to readers and advertisers, but Commercial Baking does not assume any liability for errors or omissions. Please send any updates or corrections to info@commercialbaking.com

112 SUBSCRIBE Fresh insights on trends and innovations www.commercialbaking.com/subscription Ad Index AA Bakery Services 8 7 www.aabakeryservices.com patrick@aabakeryservices.com AB Mauri 7 www.abmna.com customerservice.abmauri@abmauri.com ABI Ltd. 10 8 www.abiltd.com inquiry@abiltd.com American Bakers Association 98 www.americanbakers.org info@americanbakers.org AMF Bakery Systems 10 www.amfbakery.com sales@amfbakery.com Apex Motion Control 104 www.apexmotion.com info@apexmotion.com Ardent Mills 27, 29, 31 www.ardentmills.com info@ardentmills.com Avant Food Media 10 1 www.avantfoodmedia.com info@avantfoodmedia.com AZO 73 www.azo-inc.com info-azo-usa@azo.com Bettendorf Stanford 90 www.bettendorfstanford.com jatkins@bettendorfstanford.com BluePrint Automation 8 9 www.blueprintautomation.com sales@blueprintautomation.com Brolite 76 www.bakewithbrolite.com s.delghingaro@broliteproducts.com Bundy Baking Solutions 13 www.bundybakingsolutions.com info@bundybakingsolutions.com Cain Food Industries 115 www.cainfood.com sales@cainfood.com Capway Automation 16-17 www.capwayautomation.com sales@capwayusa.com Cavanna Group 5 9 www.cavanna.com sales@cavannagroup.com Colborne 48 www.colbornefoodbotics.com info@colbornefoodbotics.com Corbion 5 7, 116 www.corbion.com foodus@corbion.com Diosna 80-81 www.diosna.com info@diosna.com Farmer Direct Foods 65 www.farmerdirectfoods.com sales@farmerdirectfoods.com Formost Fuji 39 www.formostfuji.com sales@formostfuji.com Fred D. Pfening Co. 19 www.pfening.com sales@pfening.com Gemini Bakery Equipment 25 www.geminibakeryequipment.com sales@geminibe.com Great Western Manufacturing 6 9 www.gwmfg.com eharrison@gwmfg.com
Print magazines Digital editions Website Newsletters Multimedia APRIL 2023 Q2
Curated for decision makers... Subscribe now.

Peerless Food Equipment www.peerlessfood .com sales@peerlessfood .com

Rademaker www. rademake r.com sales@rademaker.com

Reading Bakery Systems www. read i ngbake r y.com info@readingbaker y.com

Reiser www. reiser.com sales@reiser.com

Repco www. repcoworld .com/bake r y info@repcoworld .com

Rexfab www. rex fab .com rexfab@rex fab.com

Schubert www. schuber t.group sale s@schuber t- na .com

Shaffer www. shaf fermixers .com info@shaf fermixers .com

Shick Esteve www. shickesteve .com info@shickesteve .com

Syntegon www. syntegon .com info@syntegon .com

Unifiller www.un ifille r.com info@unifiller.com

Wilevco www.wi levco .com sa l es@wilevco.com

Zeppelin Systems USA 79 zeppelin-systems.com/us/industries/food-industry info@zeppelin-usa.com

113 ADVERTISE Download the media kit www.commercialbaking.com/adv ertise AD INDEX COMMERCIAL BAKING Handtmann 14 www.handtmann.de/en patrick.mcgady@handtmann.us Harpak-Ulma 55 www.harpak-ulma.com info@harpak-ulma.com Henry & Sons 46-4 7, 61 www.dhenryandsons.com info@dhenryandsons.com Ilapak 109 www.ima.it/flexible-packaging-hub info.flxhub@ima.it Imperial 110 www.imperialind.com morgan@imperialind.com Intralox 5 www.intralox.com customerservice.bakery@intralox.com IPCO 82 www.ipco.com sales.us@ipco.com J&K Ingredients 2 www.jkingredients.com sales@jkingredients.net Kaak 95 www.kaak.com jlaros@kaak.com Kubota Brabender Technologie 97 www.brabenderti.com golmes@brabenderti.com Middleby Bakery Group 70 www.middlebybakery.com nicole.plantenis@middlebybakery.com MoistTech 111 moisttech.com/applications/human-food-moisture info@moisttech.com Multivac/Fritsch 4 us.multivac.com matt.zielsdorf@multivac.com National Honey Board 45 www.honey.com honey@nhb.org Oakes 51 www.oakes.com 21 85 33 41 67 93 75 52 34-35 3 105 8 info@oakes .com
Paul
Steve
steve@avantfoodmedia.com
Lattan paul@avantfoodmedia.com 816.585.5030
Berne
816.605.5037
It’s time to perform rather than just spend.

This month, the world celebrates Earth Day, a day of education about environmental issues and a demonstration of support for the protection of the air we breathe, the water we drink and all other natural resources.

Across our industry, companies are exploring ways to reduce use of resources like water, packaging and energy. And while there is work yet to do, we are improving in many areas, and I couldn’t be prouder of our collective efforts.

At Flowers, we recognize that carbon dioxide and other greenhouse gases (GHG) may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters. We seek to reduce emissions through a combination of energy awareness and efficiency upgrades. And we know that small steps can yield big results.

Our energy strategy includes three key components — track, integrate and share.

We use an online energy management program to track energy use and emissions at all our facilities: bakeries, distribution centers and warehouses. Any unusual change in energy consumption that may warrant an investigation triggers an alert, notifying the facility’s management.

We improve energy efficiency by looking for ways to incorporate energy-saving measures when upgrading equipment, installing new production lines or designing new projects.

A Global Effort

We want our team to be energy smart. We regularly communicate best practices from around the company and celebrate energy successes with the entire Flowers team.

As a result, we’ve lowered our GHG emissions by 22% since 2015. Additionally, 13 Flowers bakeries earned Energy Star certification from the US Environmental Protection Agency in 2022, which recognizes buildings that save energy and help protect the environment through reduced greenhouse gas emissions.

Collaboration is a key tenet of our efforts; that includes collaboration among our internal teams, as well as with suppliers, vendors and other external organizations. I encourage you to consider how you can integrate more sustainable processes in your own operations — no action is too small. Working together, our industry can continue to make great progress.

Thank you all for your contributions, and, of course, Happy Earth Day! CB

Margaret Ann Marsh is the VP of environmental and sustainability for Flowers Foods. In her role, she oversees Flowers’ environmental and regulatory compliance and sustainability efforts across its network of 46 bakeries. Marsh is responsible for the origination and continued development of the company’s environmental sustainability program.

APRIL 2023 Q2 114
THE LAST WORD FROM MARGARET ANN MARSH
SOFT A NEW LEVEL OF IS ON THE RISE sales@cainfood.com cainfood.com 214.630.4511 SUPERIOR SOFTENING SOLUTIONS FROM ALPHASOFT COMPLIMENT THE FOLLOWING APPLICATIONS: •Bread & Roll •Tortilla & Flatbread •Cake •Sweet Goods THE ART OF BAKING MADE SIMPLE. Available in Organic

Webinar: Improving Sustainable Practices in Your Bakery

May 24, 2023 12PM CST

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Re:

Redefine Your Expectations for Preservation

We believe food preservation is about more than simply cutting costs. It’s about keeping food out of landfills, reducing waste and ensuring sustainable practices. It’s about keeping consumers safe and healthy and doing what’s right for the planet. If you think improving the way we make food improves the course of nature, you think like we do.

Together we can redefine preservation.

foodus@corbion.com

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3min
pages 109-114

Solutions

1min
pages 106-109

Commercial Baking Channel

2min
pages 102-105

Strategy for Succession

3min
pages 99-101

CATEGORY INSIGHT: GLUTEN-FREE

2min
pages 96-98

Kaak Does Pizza!

0
page 95

VACUUM DEPANNER LINE INTEGRATED

2min
pages 93-94

Breaking from the status quo

2min
pages 91-92

Systems Integration

5min
pages 86-90

Tradition in transition

2min
pages 83-84

Bake more, bake better with IPCO steel belt technology

0
page 82

TASTIER BREAD THE NATURAL WAY

2min
pages 80-81

Gluten-Free Category Sales

0
page 78

Finding the crossover

3min
pages 77-78

Sweet innovation

5min
pages 71-76

NATURALLY GOOD. RIGHT FROM THE START.

4min
pages 65-70

REGENERATIVE AGRICULTURE

1min
page 64

PRODUCT DEVELOPMENT: REGENERATIVE AGRICULTURE

0
page 63

A Whole New World

1min
pages 62-63

Re:

4min
pages 57-61

New Top Load Case Packers using Gravity

3min
pages 55-57

Marketing in the Metaverse

2min
pages 53-54

QUALITY OVER QUANTITY

3min
pages 49-52

The Curveball of Protein Snacks

5min
pages 42-48

The North Star

7min
pages 36-41

the

0
page 33

FOR LOVE AND SATIETY

11min
pages 23-32

The world’s best foods are made on the world’s best equipment.

0
pages 21-23

LOOK UP.

0
pages 17-20

Maximize the Life of Your Pans

0
pages 13-14

Running Up Hills

0
page 12
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