ABC's of Baking
September 1, 2007
ABC’s of Baking
Dan Malovany, editor
When Mike Marcucci learned that Alpha Baking was selected as our 2007 Wholesale Baker of the Year, he made his usual sarcastic comment. “Starting at the beginning of the alphabet again?” he asked.
Actually, there are a number of reasons for choosing Alpha Baking. First, the Chicago-based company’s growth over the last few years has been nothing less than impressive. In 2004, its annual sales were around $140 million. Today, sales are “north of $200 million,” notes Mike, chairman and CEO.
In a highly competitive, changing marketplace, Alpha Baking consistently has bolstered its sales base by strategically and adeptly seizing opportunities in a variety of distribution channels, including foodservice, retail, wholesale clubs and contract manufacturing.
Ten years ago, Alpha Baking acquired National Baking, eliminating its biggest direct competitor in Chicago and opening up instant opportunity into the national frozen baked goods channel.
The most recent opportunity it seized was the purchase of Natural Ovens Bakery of Manitowoc, Wis., in March. In many ways, the acquisition is a perfect fit. Natural Ovens, for instance, expands Alpha Baking’s direct-store distribution base north throughout Wisconsin and as far out as Minneapolis, where it now ships both Natural Ovens and S. Rosen’s products.
At the same time, Alpha Baking has been able to consolidate Natural Ovens’ distribution system in the Chicago area and in other markets that it calls home. With the extra volume, route drivers carry fuller trucks, make fewer stops and have time to provide better customer service.
Yet another synergy is channel-driven. Alpha Baking is predominantly foodservice, while Natural Ovens is almost exclusively retail. There was very little, if any cannibalization, as a result of the acquisition.
There also are seasonal synergies. Alpha Baking’s busy season is summer, when its bun business soars, while Natural Ovens’ busy time is winter, when consumers’ attention turns toward health and nutrition as a part of their New Year’s resolutions.
From a production standpoint, Natural Ovens provides much-needed capacity and allows the company to produce some of its S. Rosen’s varieties closer to market in its northern territories. Similarly, Alpha Baking’s high-speed production lines can make Natural Ovens buns and rolls at six times the speed the Manitowoc plant can.
Finally, Natural Ovens’ wholesome products nicely complement Alpha Baking’s specialty product portfolio. Natural Ovens’ all-natural line opens up a new customer base, namely natural food stores, and it provides a brand that allowed Alpha Baking to venture into the organic bread market in July. If anything, the company has a more diversified customer base than before, and the acquisition has huge potential to pay off dividends in the long run.
Throughout the last 30 years, Alpha Baking’s management team has demonstrated leadership in the baking industry. Mike, for instance, served as chairman of the American Bakers Association. His cousin Larry Marcucci, president of Alpha Baking, served as chairman of the American Society of Baking and has been recognized for his commitment to the industry. Heck, George Poulos, vice president of manufacturing, is the ASB’s current chairman.
Being able to adapt is how companies such as Alpha Baking survive in the snack and baking industries.
“To say where we will be five years from now, whatever we tell you, we won’t be there,” Mike explains. “Something unforeseen will happen and force us to change midcourse.”
That’s how you stay in front, in more ways than one.