Big fat Greek
March 1, 2004
Big fat Greek
By Martin Schultz
For Gold Standard Baking, dedicating the fortunes of an immigrant family to the quality of a single line of baked products had one result. It became the story of…
Constantin Caparos left his homeland Greece in 1957 for the central African state of Zaire, where he lived for 17 years before emigrating to the United States. This migration across three continents ironically follows a crescent-shaped route, perhaps symbolically anticipating Caparos' baking career that spanned the next 30 years of his life — learning to make perfect croissants.
By the '90s on Chicago's South Side, Caparos' son, Yianny, made his own way in the bakery business working for East Balt Commissary, a long-time South Side Chicago bakery operation and one of the bun suppliers to McDonald's. Yianny eventually became vice president of sales before starting out on his own.
"We got the chance for our own bakery in July 2002 when we purchased the laminated dough division of the East Balt Commissary," says Yianny, president and owner of Gold Standard.
"The owner was interested in focusing on McDonald's. He wanted to spin off the division and that's when he asked me if I was interested in buying it," he recalls.
Yianny could now pursue the dream of all immigrant families — to freely develop an opportunity as far as it could go. With the deal finalized, he immediately brought in his father as general manager, his brother George as director of sales and Michael Ware as controller. With Constantin serving as plant manager, training supervisor and mentor, the company concentrated on turning out and distributing high-standard croissants, hence the company name. Within 18 months, Gold Standard had increased production to more than 1 million croissants per week, distributing everything it could make.
Changing the Model
An important aspect of Gold Standard's dream was to improve the existing business model. "As soon as we took over, we decided to change the way we handled customers," Yianny explains. "Firstly, we wanted to expand the customer base and expand our business into new channels. Second, we decided that no longer would a customer have to deal with a salesperson. From now on, they would talk directly to the owners."
Customer service, in Gold Standard's view, is the beginning, middle and end of its corporate mission.
"Our customers are our friends," says George Caparos. "They know us as the specialty croissant guys and that's all we want to be."
Along with wanting to be respected for what it does well, Gold Standard has also built a reputation for its willingness to accommodate.
"We'll handle any size order, even a small batch of 200 cases," George adds. "And we'll fill it with croissants. We won't make up the order with other stuff, like muffins or cakes."
So, who are Gold Standard's customers and how demanding are they?
Gold Standard services three channels of distribution. Its primary customer base comprises foodservice customers. Representing 70% of Gold Standard's business, it includes independent operators, restaurants and hotels.
Gold Standard's second tier of customer by volume, and accounting for 20% of the company's capacity, are bakery/in-store/deli operations of grocery chains.
The third channel of distribution, representing Gold Standard's remaining 10% of production, concentrates on convenience stores.
Foodservice has been critical in helping Gold Standard intensify its focus on the business and production issues that count towards the bottom line. It has also enabled the company to realize one of its primary ambitions — to move from being primarily a regional player to becoming a producer with national capabilities.
"Because of our foodservice operation," Yianny explains, "we gained the opportunity to develop a national distribution program which, in turn, gave us the confidence to increase production. We now operate seven lines."
But this is an operation conducted under minutely controlled circumstances.
"Production is always fully programmed," Yianny notes. "This is vital because, as a small producer, we have to watch every penny of cost. And all the planning we can do in advance helps to make us as efficient as possible.
"For example, in planning our ingredient ordering, we know our production schedule two weeks ahead on the foodservice side," he adds. "For in-store, they'll give us the order a month in advance."
With such notice, Gold Standard can optimize its ordering not only of ingredients, but also of all of the trays and plastic clam shells it'll need on the packaging end.
"All of this planning not only naturally helps maintain our efficiency, it also enables us to keep our pricing tight," Yianny says. "Sometimes, we'll pass on the reduction to our customers and they'll make a comment about how everything's always going up, not down. They love it when we give a little back."
Staying on Focus
The risk, which Gold Standard fully understands, is of becoming complacent. As the company is the first to acknowledge, Gold Standard has tough competitors. "These are high quality, good people," Yianny notes.
Thus, to maintain its market share, Gold Standard must be ready to compete not just on equal terms, but to confront the competition even on the next level above.
"We've got a long way to go," Yianny says. "We have to be more flexible, have even faster response and turnaround. With our existing customers, for example, we need to be able to cut down time-to-delivery from 10 business days to six or even five. We know their cycle. We can do this."
Focusing on superior customer service and maintaining a competitive edge are necessary ingredients of successfully growing market share. Yet neither can be sustained without also keeping a close eye on product quality and developing new products that consumers will accept not only today but in the future too.
Gold Standard's commitment to quality extends to external audits. Six times in a row, Gold Standard has received a Superior Rating from the American Institute of Baking.
"We'll do three AIB audits a year, and send the reports to our customers at the same time we get them. We have nothing to hide," Yianny explains. "We're also very focused on hygiene, safety, HACCP [Hazardous Analysis Critical Control Points] issues and security, and we're confident we'll pass any unannounced inspections by our customers."
In fact, Gold Standard's "standards" have won it a coveted place as one of Sysco Corp's top 100 suppliers.
But as Gold Standard would be the first to admit, a bakery is only as good as the next product it sells. So, what are Gold Standard's plans for new products?
With the new laminator fully up and running smoothly later in the spring, the company intends to start producing several new products, including a full line of filled croissants.
"These will be different," George Caparos explains, "because the filling will be on the inside. It'll be deposited and the dough will be curled. In essence, we'll be giving our customers a croissant-shaped product, but filled."
Sized from a 0.75-oz. mini up to a 3.5 oz. large variety, the filled croissants will include such flavors as chocolate, cream cheese, coconut, guava and mango.
In the summer, Gold Standard plans to introduce an even more exciting departure from its regular croissants. Slated for a June roll-out, the company is introducing its first sandwich croissant. Rectangular-shaped and with no cuts or filling, the sandwich will be sliced for the bake-and-thaw market.
"Instead of going for a hoagie, consumers will have the opportunity to try something different in the sandwich line," George says.
Looking farther ahead, the company is actively researching introducing a trans-fat free margarine-based croissant Gold Standard could market as being less expensive, but with the same high quality. Aimed at the in-store bakery/deli, the croissant packaging would carry a trans-fat free label to emphasize its nutritional benefit.
And in a complete divergence from its core production, Gold Standard is experimenting with a gourmet dinner roll. Already producing 100,000 lbs. of the rolls per month, the entire production run is going into the foodservice channel and planning is at an advance stage to give it a dedicated line.
Risks and Rewards
Every opportunity is also a challenge, though few salespeople would ever admit there are challenges that still need to be overcome. George Caparos is different. A rarity among salespeople, he is very realistic but also a natural optimist.
"The challenge for us is to prove the small guy can be right up there with bigger guys," he says. "What the customer wants to know is: 'Can you fill the order? And what about your quality?'"
George wants potential customers to give Gold Standard a chance to prove that its croissants are good enough to rely on and that no customer will have to consolidate products to fill an order.
"We'll do whatever it takes to meet the challenge," he says.
The issue is that Gold Standard's strength, its extreme specialization, is also its potential weakness.
"We're so focused on croissants that we don't have a broad line product range," George notes. "We make one thing best, and we don't want to be an average baker turning out indifferent products 16 hours a day. But that opens us up sometimes to customers who will buy our product but then consolidate it to economize on distribution."
With the new laminated products coming on stream, this problem may recede in time, especially if what's coming has at least an equivalent quality as the current product.
Another issue is that Gold Standard is spread pretty thinly around the country. The company needs more salespeople to cover the national territory.
"We don't have the body coverage we need yet," George says. The director of sales has a plan, he says, but it has to get in line for investment. There are other calls on available funds, such as for product research and development, new equipment including automating the spiral proof box and installing a new freezer room, and new QA and R&D labs.
An Artistic Endeavor
The art of producing croissants starts with the dough mixing. A batch of 650 lbs. of flour is drawn from one of three silos, each of which holds some 50,000 lbs. The flour is combined with about 50% water, as well as micro quantities of salt, yeast, dry milk and sugar. The batch is mixed for 7 minutes — 6 at high, 1 at low speed — at 55ÞF.
Constantin Caparos notes that the bakery makes five batches per hour. As each batch completes its mixing cycle, it's dumped into a trough and put in a retarder for 18 hours at 40ÞF.
Afterwards, butter is gently folded into the dough to begin the layering process that distinguishes croissants from other baked products. At this point, the dough's returned to the retarder for a second rest period.
The dough is now ready for sheeting. A five-headed sheet reduces dough thickness to between 3 and 5 mm., depending on whether production is running 1-, 2- or 3-oz. croissants. Then, the sheet is conveyed to the cutter.
Operating at a 90Þ angle to the dough sheet, the cutter punches out triangles in a continuous stream. The next process is the curling of the triangle corners, followed by a short rest for a minute or two.
While the shaped croissants travel on an upper rolling conveyor, pans move along a lower conveyor. Employees standing either side of the conveyors remove the croissants and place them in pans, depending on production scheduling.
The filled pans travel on a conveyor for transfer to racks. As soon as they are filled with trays, production employees push the racks into a stainless steel proofer. Here, the croissants spend anywhere from 90 to 120 minutes at a temperature of 88ÞF and with a humidity ranging between 80% and 85%.
After proofing, the pans are transferred to a conveyor, where a depositor egg brushes the croissants. Then they enter a 100-ft. long, 14-ft. wide tunnel oven, which bakes the croissants for between 15 and 18 minutes at 400ÞF.
Exiting the oven, the croissants transfer to a cross-conveyor. At this stage a suction cup process depans the croissants, which move on to a pulling conveyor and travel up to a 2,000-ft.-long overhead spiral cooler. Passing through the five-layered cooler, the croissants' temperature drops from 200ÞF to about 70 or 80ÞF.
The croissants now descend to an over-and-under conveyor. They move along the top conveyor while cardboard trays travel on a bottom one. Employees hand fill the trays, which then move forward to be automatically shrinkwrapped and date/time coded. The packages then pass through a series of metal detectors before being labeled, sealed, casepacked and palletized.
In a move aimed at improving efficiency, Gold Standard recently purchased a new automatic laminator. Consistency is one of the many advantages Gold Standard will derive from this system.
"It'll produce croissants with a spec so exact it'll be within 4 or 5 gms. And it will go on producing perfect croissants," Constantin Caparos notes.
When fully operational later this year, Gold Standard will be able to completely eliminate its tray and rack staging practice. Instead, the laminator will form part of a closed system in which the croissants will exit the laminator, go to a spiral proofer and then direct to the oven.
The new system, in Constantin's view, will lead to an "increase in productivity and a reduction in labor. And as a bonus, the new laminator will get rid of the pan stacking and holding process."
By freeing up so much otherwise committed investment, Gold Standard could be in an excellent position to turn an even grander vision into reality — the construction and installation of a new freezer and cooling box.
As Yianny Caparos says: "We are good at what we do because this is all we do. We're a small niche player who specializes in croissants."
From northern Greece to the American Midwest, the family tradition has survived by making the most out of the opportunities that turn up.
It's Gold Standard's Big Fat Way of Succeeding…and this is just the beginning.
At a Glance
Company: Gold Standard Baking
Annual Sales: More than $10 million
Plant Size: 75,000 sq. ft.
Products: Laminated products— Croissants
Production: More than 1 million units per week
No. of Lines: Two
No. of Employees: 100
Pres, & Owner: Yianny Caparos
Dir. of Sales & Owner: George Caparos
Gen. Mgr.: Constantin Caparos
Controller and Owner: Michael Ware