Heaven On a Plate
April 1, 2007
Heaven On a Plate
By Dan Malovany
Lawler Foods, Ltd.’s new $10 million expansion proves that consumers still love desserts that taste like they were made in your grandmother’s kitchen.
"Life’s short. Eat dessert first." That’s the catchphrase on T-shirts, coffee cups and bumper stickers at tourist traps across America.
But Mike Lawler wants to know: What’s the rush? At Lawler Foods, Ltd., where his family has been producing elegant tortes, creamy key lime pies and decadent layer cakes for more than 30 years, fine desserts are too good to snarf down fast. Rather, Lawler Foods prefers that consumers heed its slogan and save “The Best for Last,” when it comes to enjoying life to its fullest extent. Anything less than total indulgence is just anticlimactic.
“We’ve had all of the requests for low-fat and low-sugar products over the years, and we jumped on that bandwagon and developed those products, but what we found in the foodservice market, though, is that we’ll get a request, we’ll make the item, and it will be delivered to that restaurant chain and, at the end of the day, it doesn’t sell,” explains Lawler, who’s vice president of operations for his family’s Humble, Texas-based bakery.
“When people go out to restaurants,” he adds, “they’re still looking for a great meal that they will finish off with a real dessert, as opposed to cutting back on calories with their dessert.”
Today, Lawler Foods produces more than 400 varieties of desserts, ranging from turtle pie and trés leches cake to tiramisu and its line of signature New York-style cheesecakes, including a new Crème Brûlée variety topped with caramelized sugar that Lawler calls “heaven on a plate.”
Heavenly can describe any number of Lawler’s desserts. Take, for example, its Raspberry Eruption, which contains whole raspberries folded into a cream cheese mixture with rivers of raspberry sauce cascading from its peak. Or check out its Chocolate Fudge Collision, which the company describes as “the perfect marriage of chewy brownies and chocolate chip cookies topped with thick fudge and crunchy nuts. … this collision is no accident!”
To serve its diverse customer base, which includes restaurants, wholesale clubs, in-store bakeries and private label brands, Lawler’s line of desserts comes in all sizes, from a 7-lb. Colossal Cakes for foodservice customers to 1-in. square cheesecake miniatures that are packaged in 36,- 48- and 63-count boxes for grocers, wholesale clubs and other customers.
“We’ve seen the trends shift from the big oversized colossal desserts, and while those are popular in many restaurants, we’re getting a lot of requests for individual desserts and especially round desserts,” notes vice president Steve Kempa, who heads up sales and marketing. “They’re looking for something that’s not cut out of a wedge from a 9-in. cake or a 9-in. pie.”
Specifically, the trend is toward portion-control items because a greater number of foodservice chains are targeting the in-between meal or snacking occasion.
“We’re putting desserts in a disposable, bakeable cup with a lid so that it’s ready to go,” Kempa adds. “Such items have applications for both retail and QSR [quick-serve restaurants].”
$10 Million Expansion
Creating ingredients, inclusions or components for ice cream and other desserts is another burgeoning business, Lawler adds. One customer, for instance, takes bite-size squares of cheesecake and then batters and deep-fries them.
“[Components have] been a large avenue for growth for us over the last couple of years, but we’ve not been set up to do that,” he says. “We’re not just dipping our toes into component sales. It’s turning into a lot of volume very quickly, so we have to accommodate for something that we haven’t historically been set up to do.”
That’s soon going to change. Currently, Lawler Foods is adding a 64,000-sq.-ft., $10 million expansion that eventually will house three state-of-the-art lines. In June, the first line will begin operating. Unlike the company’s other two bakeries — which feature a battery of 140-qt. spiral mixers that feed a collection of depositors with products baked in revolving tray ovens — the new line will have high-speed makeup equipment with multiple depositors feeding a tunnel oven and a spiral freezer. Production will run in a straight line from north to south. (See “Artists at Work” on page 16 for more information on production.)
“Before, we had minis made by hand,” explains Aurelio Jaramillo, vice president of production. “Now, we’re purchasing the equipment in our new expansion that will have machines that cut the products in line and format the product in the product direction and with the proper mix. We’re going to eliminate a lot of the labor in making those products. It’s a huge investment upfront, but, in the long run, it will pay for itself and make profits for everybody.”
Most of the labor savings will come from employees being shifted and new employees being added as Lawler Foods ramps up production.
“We’ll be producing some new products and many similar ones, but at a much higher speed,” Jaramillo says.
The cheesecake miniatures, for instance, come in standard flavors such as an original New York-style cheesecake or a raspberry swirl, strawberry daiquiri and turtle varieties. The new lines will allow Lawler Foods to produce rectangle or square sheets of products more quickly than in its current Kosher-certified plants, which are designed for round desserts.
“As far as productivity is concerned, the new plant will be more automatic,” Jaramillo adds. “However, it’s capable of producing the same products if we need to add on to the capacity on those products we sell today.”
Expanding production is not new for the company. Over the years, the dessert producer has grown in spurts, first by selling to wholesale clubs and then by supplying restaurants and other foodservice accounts. In fact, it expanded its initial bakery to meet the demand for wholesale clubs. The new bakery will fill the need for components and Lawler’s venture into the in-store bakery channel two years ago.
Jaramillo adds that there always is a lag between a successful new product launch and ramping up production to produce it efficiently. That’s where the company is right now, but not for long.
“It can be very expensive to introduce a new product because you may not be set up to produce them so, initially, they can eat up a lost of cost,” he says. “If an item takes off, we know what it takes to automate the process. It’s just a matter of making the investment.”
Diversifying Its Business
Although the privately held business won’t disclose its annual sales, Lawler’s revenues have grown at a double-digit rate, which is something the company expects to continue for years to come.
“We had it for the last 10 years, with some years experiencing huge spikes and some growing pains, and we expect the growth to continue at a similar rate in the future,” Lawler says.
Typically, selling frozen pies, cakes and other desserts can be extremely seasonal, with the bulk of sales coming in the fourth quarter as consumers spurge on special occasion treats for Thanksgiving and Christmas holiday period. Because the company has expanded its product line with single-serve snacks and entered new channels of distribution, these seasonal fluctuations aren’t as great as were in the past.
“We used to have that huge swing toward the fourth quarter, and while we still have that swing, it’s not as dramatic as it used to be,” Kempa notes.
In addition to venturing into alternative channels, Lawler Foods has evened out production throughout the year by creating products for other holidays such as Valentine’s Day, Easter, Mother’s Day, Father’s Day, the graduation season, July 4 and Halloween.
Creating signature desserts also is Lawler’s forte and brings in business year-round. The company even has an in-house laboratory that works with its clientele to create new products.
“If it’s requested by a customer, we’ll make it for them,” Lawler says. “If you want to put our carrot cake side by side with anyone else’s, I’ll take that Pepsi Challenge any day. It’s much easier to sell as high of a quality product that you can possibly manufacturer than it is to spend so much time and effort on the sales end to sell an inferior product.”
To develop new desserts, Lawler Foods simply turns to its arsenal of existing ones.
“We will develop our stock items, and if our customers want something tweaked, we are always willing to do that if the volume is right,” Kempa says.
Lawler’s strength is in its product quality and its production capabilities, he adds, not in creating sales and marketing strategies.
“When we sell into foodservice, for instance, it’s pretty much a pull-through,” Kempa says. “We don’t do the marketing programs through foodservice or in retail. That’s always been our philosophy. We go straight to the customer who is using the product, and we cut a deal with them.”
Because the company is family owned, it can respond quickly to customers’ requests. Founders Bill and Carol Lawler still own the business and are active in major decision-making, but Mike Lawler, Kempa and Jaramillo handle the day-to-day operations. If the company needs to expand to grow, as it is doing now, it doesn’t hesitate to do so if the business is there to justify the expenditure.
“We’re the type of company that is never afraid to spend money on equipment if we see a trend or a product that is doing very well and investing in the capital will allow us to make that product more efficiently,” Kempa notes. “That’s just who we are.”
Sure, life’s short, so enjoy it to the fullest. In the end, heaven can wait … unless it’s in front of you, sitting on a plate.
To Russia With Love
Lawler’s signature desserts cannot only be purchased in neighborhood casual dining chains, fine dining restaurants, in-store bakeries, wholesale clubs and grocers’ shelves under the Lawler’s brand and other private labels, but they also can be found in restaurants and hotels as far away as Russia.
“A few years ago, we met [a re-distributor] at a food show and sent samples back and forth,” recalls vice president Steve Kempa, who oversees sales and marketing. “It started out slow, with us just sending a couple of pallets that were piggybacking on some of their shipping containers, but now we’re up to shipping full container loads.”
Once in Russia, the products are resold to foodservice establishments across the country.
“Their marketplace is just beginning to define itself,” notes Mike Lawler, vice president of operations. “They’re trying anything new, and our products are new to their market and well-received.”
Lawler’s products also can be found in restaurants in Canada, Mexico, the United Kingdom and other parts of Europe.
At a Glance
Company: Lawler Foods, Ltd.
Location: Humble, Texas
Products: Frozen desserts, including cheesecake, pies, cakes, bars and single-serve desserts for foodservice, in-store bakeries, private label and contract manufactured customers
No. of Plants: Three
No. of Employees: 400
Web site: www.lawlers.com
Founders: Bill and Carol Lawler
V.P. of Operations: Mike Lawler
V.P.: Steve Kempa
V.P. Production: Aurelio Jaramillo