7 minute read
Baker & Baker: John Lindsay, CEO, talks standalone business
Full-time baking
Baker & Baker, a specialist European bakery products manufacturer headquartered in the UK, has recently emerged as a standalone business following the separation of CSM Bakery Solutions. John Lindsay, the company’s CEO, reveals what this ‘next exciting chapter’ means for the company.
+A European leader in the bakery convenience market, Baker & Baker has recorded a turnover well in excess of EUR400m operating across 12 sites in seven countries, with more than 2,500 employees.
The bakery ingredients part of the CSM business had been long established, with many local brands in its continental European markets existing for many decades – over 100 years in some cases. By contrast, the bakery products part of the business was fairly ‘youthful’, rapidly gaining scale since the early 2000s to become around half of the combined business. The separation of CSM Bakery Solutions into the ingredients and bakery products as standalone businesses was a complex and lengthy process. It was formally announced in October 2020, with the formation of Baker & Baker in April 2021. Most of the manufacturing facilities were already dedicated to either bakery products or ingredients, which somewhat simplified the separation. “Staff and works councils had significant involvement in the process which has run smoothly with no disruption to the business and was completed to schedule,” the company’s CEO details. The process involved the creation of independent IT and business process systems, new legal entities as well as new branding for the Baker & Baker and CSM Ingredients businesses.
Plans for a fresh start
Baker & Baker now dedicates 100% of its time to bakery products and already enjoys the benefit of this focus, as it can review how it operates. “The creation of Baker & Baker provides an opportunity to review how the newly separate organization operates, with a drive to make processes simpler, reduce complexity and grow further,” he explains how the new company has set off operations. The largest part of the Baker & Baker business is within the retail channel, with an additional, strong market share within the traditional/artisan channel. Expansion is in the works, in addition to supporting the recovery of the foodservice segments, to also consolidate its growth in the countries where it is already present and enter new European markets. In the UK, the company aims to build its employer brand as it is focusing on recruiting the right people who seek a career in the business.
Baker & Baker will continue to build on its strong market share in the American sweet bakery segment: donuts, cookies and specialty muffins. It has also been working with Mondelez to manufacture and distribute a variety of products under the Cadbury, Oreo, Milka and Daim brands, while also supporting Mondelez with activations and marketing initiatives. “We are extremely proud of our exclusive licensing partnership with Mondelez. They are fantastic commercial partners, and we have only just scratched the surface in terms of the opportunities throughout continental Europe. Over the next 12 months, we expect to deliver new product innovation under our Mondelez portfolio,” Lindsay anticipates, and to grow the business to re-establish its pre-COVID growth momentum as a leading supplier of fresh convenient bakery products across Europe, in the next three years.
The COVID-19 factor
As with many manufacturers in the sector, the business felt the impact of the COVID-19 pandemic. However, recovery can be very fast, in Baker & Baker’s experience. This was the case in China, for instance, which was the first to be affected and where now demand has not only returned, but it is substantially higher than in pre-COVID times, Lindsay illustrates. As many European countries and regions prepare to loosen COVID-19 restrictions in the coming months, foodservice/out of home is increasingly important, and Baker & Baker is well placed to see growth return in the hospitality sector. “Clearly, hospitality and foodservice have borne the brunt of the challenges associated with COVID-19, and we’ve been working closely with our customers and partners to ensure they can rebound once the economies of continental Europe fully open up,” he shares.
John Lindsay, Baker & Baker CEO
Its partners throughout the supply chain worked hard through the COVID crisis, Lindsey highlights, including erratic demand month-to-month. However, throughout lockdowns and various restrictions, service remained uninterrupted. “The fact that we are now a dedicated and focused business on bakery products with the resurgence in eating out of home puts the business in a very strong position to benefit from this rapidly increasing demand post-pandemic,” he stresses. The company also sees very positive signs announcing a quick recovery of the tourism industry in Iberia, so it expects the second half of the year to see a rapid ‘bounce back’ in terms of consumer demand right across Europe.
Opportunities ahead
Baker & Baker bets on “significant, untapped growth in American-style bakery products” including muffins, cookies, brownies and doughnuts, driven by the relatively young demographic across Europe. However, the company does not pursue a one-size-fits-all approach to its markets, as it understands the need to represent specific local markets. “We will be exploring European markets where we have a more limited sales footprint, particularly in Eastern Europe, and we will drive growth in international markets which previously have been largely focused on ingredients,” he anticipates. Baker & Baker has the benefit of strong local business-to-business trade brands. It also actively promotes local specialties such as Bolo Rei in Portugal and Palmiers in Spain, various specialty breads and laminated products.
Germany is the company’s second-largest market. To support it, there are 450 employees based at its German facilities in Bremen, Delmenhorst and Wurzbach. Baker & Baker’s sites in Delmenhorst and Wurzbach are a considerable part of its manufacturing footprint, providing the opportunity to deliver at scale in the case of Delmenhorst, and with high flexibility in the case of the smaller site in Wurzbach. He evaluates that the state-of-the-art production facility in Delmenhorst, the workplace of half of its German workforce, provides an excellent platform for future growth. The sites produce a range of bakery products that are sold across continental Europe, including cakes, cookies and doughnuts. It can also produce variations and bespoke products, depending on the demand from its partners. “For example, in Delmenhorst, we produce both Simpsons and Oreo branded donuts, and our Wurzbach site makes private-label cookies for large retailers,” Lindsay illustrates.
Alongside its German operation, the company already enjoys an established footprint in Benelux, France, Italy, Iberia, and
all pics © Baker&Baker
the UK. It will prioritize the expansion of its customer base and explore new opportunities, in step with the easing of COVID restrictions across continental Europe and selected rapidly emerging international markets.
Trends
Sustainability is an increasing focus for Baker & Baker as well. In light of this priority, it is now rolling out new, innovative packaging such as flow-pack wrapping, in line with customer requirements. As a response to the COVID-19 precautions, the company has also introduced ranges of pre-packed products to answer increased concerns for hygiene.
Like other businesses, keeping pace with, and anticipating changes in consumer behavior and demand is one of the challenges the business is facing going forward. The company has dedicated innovation centers in several markets to ensure it stays ahead of the curve with R&D for new products dedicated to and inspired by specific, local consumer profiles. “This also means that we understand the need to appeal to rapidly changing consumer preferences,” details the company’s CEO.
As a result of market research, Baker & Baker has developed a range of gluten-free, vegan and mini-sized products, and has undertaken projects to reduce sugar and portion size. “However, we also understand that consumers still have the wish to enjoy a moment of indulgence, and one doesn’t necessarily preclude the other! Our mission is to create moments of pleasure and we must ensure that if a customer decides to indulge, then our products must really deliver for them,” Lindsay highlights. Baker & Baker is also “Working in step with customers and legislators in ensuring we help and assist with any requirement to reformulate or change packaging in the spirit of collaboration and partnership.”
The company seeks development opportunities within international markets where the demand for Western-style bakery products is growing rapidly. Its American bakery range is still on a strong growth curve, aside from the enormous benefit of its Mondelez-licensed range of products, with Milka and Oreo featuring most prominently, we learn. “It is Baker & Baker’s ambition to be the ‘number 1’ partner of choice; our key customers have a deep understanding of the market and have absolute clarity in the direction they wish to take their businesses. Our approach is to work alongside them, providing data and insights – and ultimately developing great-tasting products that will help them succeed in the marketplace, concludes Baker & Baker’s Lindsay. +++
