Rocky Mountain High
March 1, 2008
Rocky Mountain High
By Dan Malovany
Rocky Mountain Pies has mapped out a strategy to conquer the competitive pie category. The goal is not to climb to the top, but to partner with customers and be the best at what it does.
Pie sales are flat, as a whole. Ingredient costs are soaring, and innovation is lacking. Getting increases in pricing is challenging, and competition in the category is as fierce as ever.
What a great time to get into the industry again, says Mark (Par) Grandinetti, president of Rocky Mountain Pies in Salt Lake City.
“I think it’s a perfect time to be in the pie business,” he asserts. “Things are very difficult in our industry because of raw material costs, and the ever-changing dynamics of our competitors and our grocery chain customers. But it’s perfect for folks who have a passion for this business, who stay in tune with it and who can identify their own weaknesses and their customers’ weakness, while helping them succeed in this environment. There are so many opportunities if you look at it that way.”
Founded in late 2006 by a core group of industry veterans, Rocky Mountain Pies actually didn’t get its legs into the business until the middle of 2007, but the company finished the year running in full stride, with a strong holiday season. In fact, its sales hit the $10 million mark last year, and expectations are to double revenues in 2008. In five years, Grandinetti says, its plan calls for the business to have $50 million in sales and be running a profitable three-shift operation.
Talk about a Rocky Mountain high.
Initially, its sales and marketing strategy relied on creating signature pies and targeted merchandising programs tailored toward a diversified mix of mid-size in-store bakery chains or divisions of major retailers that have anywhere from 50 to 100 stores, which many larger pie producers consider too small to service.
“It’s better to build a solid foundation, and, as cheesy as it sounds, the customers I have today I would like to have five years from now and still feel they are as important five years from now as they are today,” notes Julia Jones, national sales manager.
After developing a base of customers and expanding production from its current one shift to three shifts, Rocky Mountain Pies then will look at larger accounts, as well as expand into the foodservice and private label arenas. The emphasis will be to take the lessons the management team learned from Western Country Pies, where most of them started in the pie business. (See “Restarting their Engines.”)
“The first step was getting out on the street, getting our product out there, getting our story out and getting our legs underneath us, and the next step this year is to focus more on the marketing piece and the value-added piece that is going to complete the whole picture,” Jones explains.
“We could easily go out and do a whole generic pile of material when, in fact, it’s not what our customers need,” she adds. “As with our product line, we said, ‘Let’s create materials based on what they need for their stores. What’s going to make the most sense to them to generate sales?’”
Custom Pie Company
When it first started out, Rocky Mountain Pies had a streamlined product portfolio consisting of 35 varieties, including fruit pies, shelf-stable cream offerings, meringue pies and seasonal products such as pumpkin, pecan and sweet potato products. Its signature items include hand-laid lattice pies. Most products come in 8- and 9-in. sizes, although items such as those in its seasonal line also come in a 10-in. size, while its Deep Dish Apple Pie is a hefty 12 in. in diameter.
However, since its sales force hit the streets in earnest last year, the number of varieties began to multiply as it custom-designed products for new customers.
“Rather than trying to push a program that fits our production and manufacturing capabilities, we prefer to work with customers to build a program that works within the parameters of their market area,” Grandinetti says. “This might be a special flavor of pies. Or it could be a different packaging option. The basic products are required. However, there are always going to be different needs for different markets, and we understand this. Therefore, we offer an extensive line of items to establish the ‘foundation’ of the category, and from there, we ‘build’ the category with an offering tailored toward the customer’s needs.”
Because of this custom approach, Rocky Mountain Pies describe itself to potential customers as “your private pie company.”
As Grandinetti explains, “We also understand that it’s not enough just to provide great pie. Our customers need assistance with category management, increasing sales, point-of-purchase materials and more. We are currently in the process of building a catalog of POP materials, which can be customized easily. Our marketing department is also compiling research on consumer trends to assist our customers with category management.”
Such trends, Jones notes, reflect broader movements in the food industry. For example, zero trans fat was last year’s trend, while reduced fat was the hot button in 2006, and low-carb was the issue a few years back.
“The biggest trend that we see all across the country is natural and organic,” she explains. “Those are the current buzzwords.”
Grandinetti adds that portion control, no-sugar-added and other “healthy indulgent” trends are driving niche sales. In fact, the bakery plans to roll out a yet-to-be-disclosed portion control pie later this year.
“People who order pie are looking for high-octane desserts, and that’s never going to go away,” Grandinetti says. “The volume in this category is in that segment. Yes, consumers want zero grams of trans fat and all-natural products. You have to service those niches. We going to have those products available, but they’re never going to drive serious volume for us.”
Change on a Dime
It doesn’t matter what trends pop up because this nimble intermediate wholesale baker can adapt to wherever the tide turns.
“We have the ability to steer quick,” Grandinetti says. “The analogy that we use is that the big guys are like great big aircraft carriers in the ocean. To turn that ship around literally takes hours, where we can turn our speedboat around many, many times before they do it once.”
Take new product development. The bakery’s sales staff can go into a meeting on Monday and deliver samples by the end of the week, Grandinetti claims. That’s because of the depth of experience the management team has in all aspects of the pie business.
Many larger companies, however, may consider such an aggressive approach to new product development to be less than prudent. That’s because R&D processes often requires extensive bureaucracy and multiple stages of approval before a new product gets approved. But Rocky Mountain Pies relies on its library of knowledge as the foundation to streamline those processes. Its due diligence is the track record the team has accrued from decades of working in the pie and restaurant industries.
“We have many proven formulas in our archives that we can tweak, knowing that the base formula is stable,” Graninetti says. “Or, if someone wants a blend of fruit, we can introduce that quickly. From a strategic side, we can be on the phone and be describing to our production manager exactly what we need to do for this customer as we walk right out of their office.”
If “the proof is in the pie,” as Grandinetti likes to say, the company’s sales during the recent holiday season did a convincing job of surpassing many customers’ expectations.
“With every single customer we acquired during our first year of business, we’re hearing reports, without fail, that their pie sales are up substantially,” Grandinetti adds. “A lot of chains have private label corporate programs that they need to adhere to, and these programs are basically flat, but they have the leeway to interject some of our products into their programs, and when they have done that, just our separate category have brought up their entire private label programs.”
Right now, private label is about 15% of revenues, but is expected to eventually account for half of sales as the company expands geographically, builds production volume and diversifies its customer base.
Currently, in-store bakery customers have the choice of using their store brand or the Rocky Mountain Pies brand, which plays well with consumers in the Southwest and West Coast region. Although customers have asked Rocky Mountain Pies to provide a full line of frozen desserts, the bakery is sticking to pies as its core competency. And co-packing is not part of its strategy.
“I look at co-packing as a sign of weakness to fill up plant time,” Grandinetti says. “If your own creativity and own product line can’t fill up your plant time, then you might want to consider doing something else. That’s how passionate we are about this business.”
This year, to avoid seasonal fluctuations in its business, Rocky Mountain Pies put together a promotional calendar that attacks the holidays at the front end of the year. It rolled out its cherry pie for President’s Day and may create an as-of-yet undetermined meringue for Easter. The plan is to garner enough business throughout the year to minimize the peaks and valleys that have plagued the pie industry for years.
Geographically, in its second year, the sales team will branch out into the Southeast and Northeast and intensify efforts in the West, Northwest, Rocky Mountain and upper Midwest where it had success last year. The foundation has been laid for expanding the business in the future.
“As we launched Rocky Mountain Pies, we had a clear version of who we wanted to be,” Grandinetti says. “We have a pretty good idea of where we want to go in five years and where we want to end up in 10 years.”
For innovative companies like Rocky Mountain Pies, one thing is for sure: Anytime is a perfect time to be in the pie business. SF&WB
Eat ‘Em with Your Eyes
Rocky Mountain Pies strives to make its products so attractive you can almost eat them with your eyes.
To make its VIPs (very impressive pies), the bakery hand-lays lattice tops to give fruit pies that “homemade” look. Employees peak meringues by hand to give them a “scratch” look. Fillings are made on-premise using individually quick frozen fruit.
Mark (Par) Grandinetti, president, says these extra touches sensually differentiate the bakery’s lines from the competition. Innovation also separates the company from others. In addition to traditional varieties, for instance, the bakery offers a Berry Buckle variety with its own blend of “dazzleberries” that produces a unique taste when topped with oatmeal buckle crumble and spiced with cinnamon. Likewise, its Pineapple Upside-Down pie blends pineapple and maraschino cherries with a slurry base that’s capped with a ring of pineapple and the company’s signature crumbles.
“We like to say we have a passion for pie,” Grandinetti says.
A Safe Bet
It’s no accident that Rocky Mountain Pies has gone more than 425 days without a loss-time incident. Every “near miss” is logged, tracked and then investigated by the bakery, as well as by an outside business that specializes in worker safety programs. Then, at its monthly safety meetings, Rocky Mountain Pies managers discuss with employees how to avoid such “near misses” in the future.
The bakery’s emphasis on safety has a proven track record. Previously, when the bakery was known as Western Country Pies, the record for the Salt Lake City facility was 1,370 days without a loss-time accident.
Restart Your Engines
With a little over a year in existence, Rocky Mountain Pies may be new to the industry, but its veteran management team knows the pie business both inside and out. In fact, the top officials have spent more than 150 years working in the restaurant and baking industries.
Most of the team worked with Western Country Pies, which was founded in 1990 and then sold to Edwards Baking in 1997 and to Schwan’s Bakery in 2003. At the end of 2004, the Salt Lake City plant was closed, and production moved to three East Coast facilities. In 2006, the Western Country team reunited under the Rocky Mountain Pies name.
President Mark (Par) Grandinetti, for instance, has 24 years of “hands-on experience” in the bakery and restaurant business. He has served as everything from store manager, district manager and regional vice president of Marie Callendar Pie Restaurant and Bakery shops for franchises in five Western states, to co-owner and founder of Western Country Pies. He even served as director of plant operations for Schwan’s.
Likewise, other top managers have extensive experience. Julia Jones, national sales manager, spent many years working for Mrs. Smith’s Bakeries when it was part of Schwan’s Bakery and, prior to that, Flowers Foods.
Doyle Converse spent a dozen years as director of manufacturing at Western Country Pies and holds the same position at Rocky Mountain Pies. David Park, director of procurement, was Western Country Pies’ first employee and has 15 years in the industry. Kris Burt, controller, served in the same capacity at Western Country Pies. J. Samuel Park, co-founder and owner of Western Country Pies, has more than 40 years of experience in the baking and restaurant industry.
“One of the wonderful things of launching this business is visiting with our previous customers from the past with Western Country,” Grandinetti says. “It’s almost like an old reunion of friends. We generally start off with a 45-minute conversation about our families the successes we shared from our past association since the plant got restarted and share some of the successes we had together, and then talk about business.”
In addition, the core team notes that it has a clear vision of its strategy to provide custom pie programs and signature products for mid-size in-store bakeries, foodservice and private label accounts. That’s something they didn’t have during the first years of Western Country Pies, which eventually became a $50 million business with more than 300 employees.
“The biggest thing between then and now is that we have many years of experience of the whole retail process,” Jones says. “There’s a much larger understanding now of what we are getting ourselves into. We know what we want to do with the company and how we want to target our sales and marketing.”