Best in Their Class
May 1, 2005
Best in Their Class
by DAN MALOVANY
Nobody can be everything to everyone, but Karen’s Fabulous Foods, Inc., comes close for consumers who want to indulge without the bulge.
During the past 11 years, the product-development and marketing company from Elmsford, N.Y., has created an extensive line of biscotti, cookies, macaroons, muffins, scones and other baked goods that are on-target with almost every trend.
Initially, the company’s vision was to develop “the best-tasting, easy-to-eat, light crisp biscotti in the world,” says Gary Spirer, chairman, who founded Karen’s Fabulous Foods with his wife Karen, a renowned chef and award-winning fashion designer.
When the Atkins diet came on strong last year, however, the company took on a much broader challenge.
“During the height of the Atkins [craze], people were complaining that low-carb products in the marketplace and health products in general didn’t taste good,” Gary recalls. “We thought, let’s take up the challenge. Let’s create the best-tasting products in the health arena and wellness marketplace.”
During the past 18 months, Karen’s Fabulous Foods has transformed itself by creating a burgeoning line of healthy-but-indulgent baked goods.
The Kosher-certified products offer such attributes as being all natural, lower in calories and low on the glycemic index. They also contain whole grains, no added sugar, zero trans fats, high fiber, high protein and lower carbs. In some cases, the products are wheat-free or made with organic ingredients, and all have no preservatives.
“It just so happens that we never had trans fat in our products. We have never added preservatives. We always have used whole grains and unbleached, unbromated flour,” says Karen Spirer, president and the namesake for the company.
To be on-trend for multiple eating and snacking occasions, the portion-controlled products come in nearly every possible shape, including poppable mini macaroons, mini muffins, bite-sized cookies, health bars and large, enrobed and non-enrobed mini biscotti, to name a few.
“Since convenience and portability are very important to consumers, we have combined the best premium products with delivery systems that enable the consumer to enjoy our products and provide distributors and retailers the means to easily deliver our products to their customer base,” Gary says.
Additionally, Karen’s Fabulous’ objective is to provide full-flavored comfort foods that fit into a healthy lifestyle.
“We’re constantly researching where consumers are going with their lifestyles, and [we] develop products to meet the lifestyle needs,” he adds. “The consistent theme that we’re seeing is that consumers want premium, healthy products that they can trust.”
To target a wide array of channels, Karen’s Fabulous sells thaw-and-serve products in plastic clamshells, scoop-and-bake cookie dough and thaw-and-bake cookie pucks for the in-store bakery and foodservice channels.
Likewise, the baked goods are individually wrapped or packaged in multiple-sized retail boxes, snack trays or gable-topped gift boxes, depending on the retail channel. Although convenience and portability drive packaging design, the company has even custom-designed snack trays inscribed with the retailer’s name on the label for some private-label accounts. Retailers are co-branding with Karen’s Fabulous because it has established a premium gourmet, healthy-lifestyle positioning in consumers’ minds.
To compete in every channel from C-stores and mass merchandisers to gourmet coffee shops and top-scale department stores, retail prices range from 60 cents for a 1-oz. pack that contains four cookies to as high as $6.50 for a 6-oz. gift box of its highest-end enrobed products.
“The channels that we are targeting are tied to unit sales, and unit sales are based on what consumers perceive as the best value for their money. So what we have done is given consumers the highest and best value in the baked goods segment. We believe four light, all-natural, healthy cookies are better than one cookie with trans fat in it,” Gary says.
In addition to the Karen’s Fabulous brand, the company’s products are sold under the Alex & Dani’s label, named after the Spirers’ two daughters, Alexandra and Danielle, who also work at the company in marketing roles. Although the Karen’s Fabulous brand targets the higher-end, more sophisticated consumers, its pricing still is affordable to generate high volume, Gary says.
Alex & Dani’s products are positioned and priced for an even broader audience of children and adults yearning for more wholesome, nostalgic products, in which the taste is indistinguishable from homemade.
“Alex and Dani’s is the retro, middle-American, all-natural and organic brand,” Gary says. “The girls’ images were used to subliminally remind somebody of a more sophisticated version of the Girl Scouts. It combines the warmth of middle America with the healthy attributes of organic, all natural, zero trans fat and no preservatives.”
Just Great Partners
With a comprehensive marketing plan in place, the Spirers saw increased demand for their products and wanted to expand across North America. However, the company had one problem.
“We’re innovators and marketers, but needed someone who understood our vision and marketing strategies and would ally with us in production,” Karen recalls.
“Our challenge was to keep the homemade formulas the same in a commercial setting, and we were determined to do it,” she adds. “We wanted a product that tasted like it just came out of our kitchen. We would not want to put a product out in the market unless we would eat it ourselves, share it with our family and give people a great taste experience.”
With the help of a consultant who specialized in pairing product developers with co-packers, Karen’s Fabulous met up with Coby’s Cookies, Inc./Just Great Bakers Inc. in February 2004.
Karen’s Fabulous focuses mainly on healthy-indulgent items, while Coby’s/Just Great Bakers produces highly indulgent products. In addition to creating indulgent products, both companies formulate baked goods that minimize waste, eliminate returns and prevent retailers from having to police their shelves for outdated items.
“We produce two types of products here — our frozen products and those products that have a long shelf life,” says Joseph Bergman, president of Coby’s Cookies, Inc. & Just Great Bakers Inc. “Karen’s products, like their biscotti and their crisp cookies, fit in nicely with our operation because they have such a long shelf life.”
Specifically, Karen’s Fabulous biscotti have a shelf life of one year, soft brownie cookies can last four months and muffins have a three-month shelf life. The companies have extended shelf life using a combination of formulation and heavy-duty packaging.
“We have extended shelf life on our higher-moisture products because of the quality of the ingredients we use,” Karen says. “When I researched this market, I looked for products that would be humectants so they would retain their moisture and retain shelf life when needed.”
Located in Toronto, the 72,000-sq.-ft. plant has multiple depositors that can be wheeled around to crank out a wide variety of baked goods in a short time. The bakery houses rack, band and revolving ovens that provide for versatility as well as volume.
“I can’t be captive to one oven,” Bergman says. “I’m producing all kinds of products that need a quick turnaround. What if I’m producing cookies, and I get an order for muffins? Now, I can fill it quickly and easily.”
Art Meets Science of Baking
While Karen’s Fabulous focuses on market trends and new product concepts, Coby’s Cookies/Just Great Bakers specializes in executing them.
Initially, Karen formulates and develops batches of prototypes in her test kitchen. Then, test samples are given to a select group for feedback or any recommended revisions to be done by Karen.
Karen and the food chemists at Coby’s Cookies/Just Great Bakers translate the product to a commercial baking level. This is where the art meets the science in baking.
“Once the products are scaled up, I present the products to Karen for her to see if we met her benchmarked needs. It’s a real art to do that,” Bergman says.
In addition to combining their technical expertise, Bergman’s company provides marketing tips, which have helped Karen’s Fabulous move into new product categories and into broader distribution channels.
“We know what’s going to work in the market from a baker’s perspective,” Bergman says.
For instance, Karen’s Fabulous initially wanted to produce an indulgent, low-carb mini muffin early last year. Although the cranberry orange, pecan praline and raspberry fudge products had been scaled up within eight weeks, Bergman sensed last spring that the low-carb craze was quickly waning and suggested to the Spirers to shift courses.
“That was very easy for us. We weren’t changing any product. We were just changing the direction and the focus,” Bergman says. “I told them, if we focus on the other attributes, such as low trans fat per serving, high fiber and no sugar added, coupled with the fact that the products looked good as opposed to looking like and tasting like cardboard, I felt we had something nobody else had in the market.”
Bergman also worked with the Spirers to develop other healthy-indulgent baked goods, such as brownie cookies, macaroons, crisp cookies and scoop-and-bake cookie dough, that complemented what Coby’s/Just Great Bakers already produced on its own equipment.
Over time, the two companies have extended their partnership. At food shows and conventions, they share a booth with Coby’s & Just Great Bakers providing the conventional and gourmet baked goods at one end, while Karen’s Fabulous offers healthy-indulgent alternatives at the other end.
“People who would sample the regular macaroons and then try the healthy-indulgent ones had trouble distinguishing them,” Bergman says. “The two products looked the same, but when we told them one was a healthy version, they would insist on seeing the nutritional certificate to satisfy themselves that we were not joking. At that point, we knew we had something that worked.”
The slowdown in the low-carb craze also worked in their favor.
“As we were ready to bring their products to market, the supermarkets were delisting low-carb products, and that opened up space for us,” Bergman says.
Just Great Production
At the Toronto facility, two shifts work 18 hours a day, five days a week. Through automation, Bergman has reduced the workday from three shifts. However, because of the varieties of packaging formats and products, much of the plant’s process requires some manual labor.
At the facility, which has been certified for Hazard Analysis Critical Control Points (HACCP), production is broken down into four major areas. The first room houses the quality-control department, ingredient handling, mixing and a continuous refrigerated and frozen cookie dough line. Samples are routinely taken off the lines to check the quality to ensure it meets its standards. Fully baked products are stored while frozen dough is baked off in a small three-deck oven, located in the quality-control lab, says Joseph Lall, the bakery’s co-owner and operations manager.
Bulk flour and granulated sugar are held in separate silos. Eggs are stored in stainless-steel totes while other minor ingredients, such as molasses, come in smaller totes. Nuts and other allergens are stored in a separate area. Butter and other ingredients that need to be refrigerated are stored in a cooler.
To monitor ingredient usage, the production crew scales out the exact amount of minor and micro ingredients and brings them into the mixing area just prior to the start of a new shift, Bergman says. The bakery relies on order history, existing orders and freezer inventory to determine its daily production schedule.
The bakery uses four 600-lb. spiral paddle mixers to prepare a variety of batters and dough at the same time. Nearby, a 5,000-lb. continuous mixer cranks the batter, which is piped from the mixer, passes through a metal detector built into the mixer, and is deposited into pails ranging from three to 33 lbs. The buckets then pass through a second metal detector. Following checkweighing and lidding, the tubs/pails are stacked, palletized and sent to the plant’s holding freezer.
The second adjacent room houses the rack and revolving ovens. Again, the plant is designed for production versatility and fast changeovers.
Mixing bowls are rolled into the third room, which houses five depositors and extruders — all on wheels, to provide as much production flexibility as possible.
In addition, three packaging lines with metal detectors can do everything from individually wrap muffins and assemble 12-pack and bulk-pack products to place cookies in clamshells and assemble display caddies. An inkjet-coding system labels the packages on each line with the shift, time and date of production.
“Our lines are set up to supply every class of trade,” Bergman says.
In many ways, the fourth room is a highly automated bakery in and of itself. It houses two 800-lb. horizontal mixers as well as a tunnel oven with a 39-in.-wide steel band for mass-producing cookies, brownies and other baked goods. In all, Lall says, the oven can make 350,000 pieces of product over a 16-hour period.
After product is baked, there’s a 150-ft. cooler set at 36°F that can lower the temperature of the brownie cookies in 20 seconds.
“If I had to resort to an ambient cooler, I would need a plant [twice] this size,” Bergman says.
After being packed in a form/fill/seal bag, the products are cartoned and pass through metal detection before they’re case-packed and palletized. Common carriers distribute products. The bakery has three docks for shipping product and one for receiving ingredients.
Bergman notes that the two companies have a full slate of projects in the pipeline.
“We’re constantly trying to come up with something different. That’s what buyers are looking for,” he explains. “If you’re going to show them a scone, show them something different. Show them one that has a longer shelf life, a unique texture or other characteristics. They want to see something upscale that also meets the growing trends among consumers.”
In Canada, Karen’s Fabulous Tastes line of healthy crisp cookies hit the market this spring. The product names emphasize their “fabulous” nature and taste and come in varieties such as “Heavenly Chocolate Chip” or “Pecan Praline.” Its “Amazing Almond” biscotti are anything but average.
In the near future, a new mini scones/tea biscuits will be available. During the next few months, the company plans to introduce a health bar that has “the attributes that consumers are looking for,” Gary says.
In the end, he adds, it all about being the best.
“We want people to feel fabulous,” he explains. “We want consumers to have a fabulous experience with our products. We want them to feel fabulous about our company. From the very beginning, we gave to charities. We believe in a charitable giving spirit. That’s what it’s all about.”
At a Glance
Company: Karen’s Fabulous® Foods
Location: Elmsford, N.Y.
Brands: Karen’s Fabulous and Alex & Dani’s.
Products: Soft cookies, crisp cookies, biscotti, muffins, scones, brownies, frozen cookie dough and other baked goods.
Chairman: Gary Spirer
President: Karen Spirer
Vice President/Marketing: Alexandra Spirer
Marketing: Danielle Spirer
Operations: Anne Courtney
At a Glance
Co-packer: Coby’s Cookies Inc. & Just Great Bakers Inc.
Location: Toronto, Ontario, Canada
Plant: 72,000 sq. ft.
No. of Employees: 200
Products: Ready-to-eat cookies, macaroons, muffins, brownies, other baked goods, frozen cookie dough and muffin batters.
President: Joseph Bergman
Operations Mgr.: Joseph Lall
Plant Mgr.: Patrick Thomas
Q.C./R&D: Tanveer Ahmad
Order Desk: Angela Ho
Not only Fabulous,
Karen’s may call biscotti and other baked goods “fabulous,” but the products have won more than 25 awards from various magazines and groups.
Additionally, for the last eight years, Karen’s Fabulous Foods has received the Five Star Diamond Award from the American Academy of Hospitality Sciences, given to the leading hotels and restaurants around the world. The company is the only food product other than champagne to receive this award in its 50-plus years of existence.
Karen’s Fabulous Foods also is endorsed by Feed the Children, a $500 million charitable organization. The company donates food and gives a percentage of its sales to feed children around the world, says Gary Spirer, chairman of Karen’s Fabulous Foods.
A Little Fate Makes Fabulous Cookies
What do you get when you bring together a real estate developer, owner and investment banker, a fashion designer and their two daughters, and a former commercial litigation lawyer?
How about award-winning baked goods?
Karen’s Fabulous Foods was started 11 years ago when Gary Spirer, a real estate developer and investment baker, urged his wife Karen to take her Italian mother’s biscotti recipe and reformulate it into a full-flavored snack that was light and crispy, easy-to-eat and great-tasting.
Karen, an award-winning clothing, jewelry and product designer and artist, had grown up around food. Her grandparents ran an Italian restaurant, so fiddling around in the kitchen and developing new recipes came naturally for her. Her father’s family owned and operated the fish markets under the Williamsburg Bridge at the turn of the century in New York.
Through the years, she was worked with several of the top culinary professionals along the East Coast. She’s a member of the New York Women’s Culinary Alliance, an association of culinary professionals, and a past recipient of the Five Star Diamond Award as one of the world’s top chefs from the American Academy of Hospitality Sciences.
“Karen has a knack of taking something ordinary and making it extraordinary. That’s her genius,” says Gary, chairman of the company.
Gary oversees sales and marketing for Karen’s Fabulous Foods and works with Karen on identifying trends and new product concepts. The two Spirer daughters also work in the business. Alexandra works as vice president and brand manager, conducting consumer studies and marketing for their new products, while Danielle works on packaging design and marketing. They are the inspiration for the company’s Alex & Dani’s brand.
Last year, Karen’s Fabulous Foods teamed up with Toronto-based co-packer, Coby’s Cookies Inc./Just Great Bakers Inc., to mass-produce products throughout North America.
The co-packer is owned by Joseph Bergman, a lawyer and real estate developer who specialized in turning around financially distressed companies.
In 1991, Bergman took over the 10,000-sq.-ft. operation, which had 18 employees, and slowly built up the business. Originally, the bakery was named Coby’s Cookies, after one of the children of the founders.
Seven years ago, Bergman added the Just Great Bakers brand, which is also a sister company that produces brownies. Today, the company has 200 employees who work in a 72,000-sq.-ft. operation.