Awrey Bakeries, Inc. History

Company Perspectives:

While our products are efficiently mass produced, we always start from scratch. Each recipe maintains that homemade taste which earned Awrey's the title of America's Hometown Bakery. Our tradition of old-fashioned value and delicious quality are still reflected in our modern, progressive company--progressive in our products, our service, our technology, and even our environmental awareness in making packaging decisions. Across the country, Awrey's really is 'America's Hometown Bakery'.

Key Dates:

1910:

The Awrey family begins selling baked goods in their Detroit neighborhood.

1914:

Family opens first retail outlet and begins volume baking operations.

1920s:Firm, known as Awrey & Sons, expands to 32 stores.

1930s:Growth continues during Depression; 91 outlets open by end of decade.

1950:

Supermarket "service counters" help drive number of locations to 120.

1960:

With 160 outlets, Awrey celebrates 50th anniversary.

1967:

Awrey moves to new baking plant and headquarters in Livonia, Michigan.

1970s:Sales of frozen food service baked goods begin to grow; retail outlets dwindle.

1990:

Revenues top $50 million; 70 percent of sales are now derived from food service products.

1991:

Awrey abandons retail sales, then reinstates them amid management shake-up.

1995:

To service new Baskin-Robbins account, firm kosherizes its baking plant.

1998:

$20 million, 5-year modernization program begins.

Company History:

Awrey Bakeries, Inc. is one of the leading producers of frozen baked goods for the U.S. food service trade. The company makes a number of different items including cakes, cookies, Danish pastries, doughnuts, and croissants, which are used by restaurants, hotels, schools, hospitals, and other institutional customers. About one-tenth of the firm's business comes from retail sales of its own branded goods, which are available only in the state of Michigan. Awrey Bakeries is owned by members of the Awrey family and executives of the firm.

Early 1900s Beginnings

Awrey Bakeries got its start in 1910 in the home of Fletcher and Elizabeth Awrey, who were living in Detroit, Michigan, after moving there from Canada. To help make ends meet, Elizabeth Awrey began to bake breads and pastries in her wood-fired oven and selling the goods to their neighbors. When sons Wilbur, Elton, and Thomas began to help sell the baked goods door-to-door, the business started to grow. In 1914 the Awreys opened a retail outlet on Tireman Avenue in Detroit, where the firm's first "volume baking" was begun. Two bakers were hired along with three women who finished cakes, assembled products, and minded the store.

Over the next four years two more storefronts were added, and the Awreys purchased a Model T Ford truck to make deliveries from the Tireman bakery to the stores. The three Awrey sons were now involved in every aspect of the business and excelled at finding new markets, such as high school cafeterias and lunching workers at Detroit auto plants.

As sales increased the Awreys began to expand their baking plant and staff. By 1923 there were 25 employees working in production, and in 1929 the company began installing mechanized baking equipment. Awrey & Sons, as the firm was now known, was operating 32 stores by the end of the decade. The firm was also again selling baked goods door-to-door, which it had returned to in 1923 with a group of independent salesmen who owned their own trucks.

The Great Depression did not slow the company's expansion, and it had 55 units in operation by 1933. By 1940 this number had increased to 91. During World War II growth was put on hold in part because of a shortage of sugar due to rationing.

Supermarket "Service Counters" Fuel Postwar Expansion

After the war Awrey's growth resumed, aided by the increasing popularity of supermarkets. The large grocery stores of this era typically contained several departments operated by outside concessionaires, and Awrey "service counters" were set up in many such stores around the Detroit area. By 1950 the company had 120 locations, including both individual stores and supermarket concessions, and was also operating a home delivery service. This period saw the introduction of the "Kissing Kids" line of products. Aimed at families on a budget, the economical line of baked goods came to include doughnuts, sheet cakes, and bread. A logo was created for the line which featured two kissing Dutch children.

During the 1950s the company closed a number of its older outlets and opened many new ones, bringing the total number of locations to 160 by 1960, the year the firm celebrated its 50th anniversary. There were now 12 independent stores, 112 service counters, and 36 new "self-service" locations in supermarkets, the latter minimally-staffed outlets that had been introduced in 1957. Some 20 percent of the firm's sales also came from home deliveries through a fleet of 115 independently owned and operated trucks. At this time Thomas Awrey was the company's president, with Wilbur Awrey serving as vice-president, and Elton Awrey secretary and treasurer.

In 1967 the company opened a new baking plant in the Detroit suburb of Livonia, moving its offices there as well. The original facility on Tireman Avenue was closed two years later. During the 1960s and 1970s Awrey's delivery and concession businesses were declining, due to increased competition as well as supermarket consolidation and the demands of concession workers for better wages. The firm sought new areas in which to expand, and the decision was made to introduce a line of frozen baked goods, which were modeled on the successful products of Sara Lee. The results were less than spectacular, but a parallel line of frozen baked goods aimed at the food service market began to take off, and this category grew to represent a sizable portion of Awrey's business by the end of the 1970s.

In 1981 control of the firm passed to the third generation of family members when Robert Awrey was named chairman and CEO. By this time ownership of the company had broadened to include several family members as well as some of the firm's management team, many of whom had been with the company for decades. This generation of employees was now reaching retirement age, and during the late 1980s the firm lost ten of its top 11 managers. To maintain an orderly transition from these experienced executives to younger ones, Awrey developed a plan whereby successors were named six months to a year in advance and then trained by the outgoing executive until they were ready to take over. Two such new additions were president Richard Pedi, who joined the company in 1986 after running an institutional produce firm in Chicago, and vice-president of finance Dean Calvert, a former independent financial planner. At this time Awrey's annual revenues were an estimated $45 million.

As its leadership began passing to a new generation, Awrey also started to implement a business philosophy of "continuous improvement," which emphasized quality and customer satisfaction as primary objectives over simple quantitative measures. The philosophy (derived from the ideas of W. Edward Deming, who had worked with the Ford Motor Company) eschewed radical change in favor of small improvements in day-to-day operations.

Food Service Baking Dominates the 1990s

By 1990 Awrey's food service business had grown to account for 70 percent of total revenues, with retail sales contributing one-quarter and contract baking making up the remainder. The company had 700 food service distributors and a national network of brokers that distributed its products to institutional accounts such as hospitals, schools, and restaurants. The retail line, which included pies, cakes, bread, doughnuts, rolls, croissants, muffins, and Danish pastries, was distributed in southeastern Michigan to stores that ranged from major supermarket chains to small independent grocers. By now 76 percent of the firm was owned by members of its management team, with Robert Awrey holding a 17 percent stake.

The year 1990 saw Awrey add a new line of low-fat, low-cholesterol baked goods to its retail offerings in an attempt to compete with rival Entenmann's, which was having great success with similar products. The company spent eight months and $75,000 to get four coffee cakes, two muffins, and two pound cakes formulated and ready to market. Awrey was the second major baking concern in the country to introduce such a line of baked goods.

The new products did not bring the success the company had hoped for, and in May 1991 President Rick Pedi announced that the firm would stop baking goods for retail sale entirely, though the Awrey brand name would continue to appear on bread and buns baked under license by Veri-Best Baking Co. of Ferndale, Michigan. The company's line of frozen food service baked goods had become its primary area of business, and it was decided to concentrate on this exclusively. Awrey had already begun to move in this direction, discontinuing a number of retail products and laying off 95 truck drivers, production workers, and retail-related workers earlier in the year.

Less than six months after Pedi's announcement, however, he and Chief Financial Officer Dean Calvert left the firm, and CEO Robert Awrey and his son Thomas took control of day-to-day operations. The company immediately announced it would return its retail baked goods to store shelves, though the distribution would be handled by Veri-Best Baking Co., meaning that many of the laid-off workers would not be rehired. The Awrey line was returned to most of the former retail outlets, which included Detroit-area Kroger, Foodland, Hollywood Markets, and Farmer Jack supermarket chains, as well as several independent grocers.

In 1994 a new food-labeling law took effect, forcing Awrey to spend ten months and $100,000 on new labeling equipment and the modification of existing equipment. By now the firm was employing 500 and posting $52 million in annual sales.

In 1995 Awrey beat Sara Lee Corporation to win a multi-million dollar baking account with Baskin-Robbins USA Co. to make the chocolate-brownie crusts for its new Polar Pizza flavor, which was launched in the ice cream chain's 2,500 stores in August. Baskin-Robbins would join several other national baking accounts the firm held that included Burger King (for which Awrey supplied Danish pastries, doughnuts, and birthday cakes) and Wal-Mart (which bought the firm's Danish pastries). Awrey also spent nearly $200,000 to "kosherize" its plant in Livonia after winning the Baskin-Robbins contract. In addition to certifying that the firm's suppliers adhered to Jewish dietary laws, Awrey's 260,000-square-foot production facility was shut down for four days while it was steam-cleaned and sanitized from floor to ceiling. Awrey food service goods were already distributed throughout the United States, but the kosher certification was expected to increase its business on the East Coast.

In April 1996 Demetri Preonas took over the jobs of president and chief operating officer from Tom Awrey, who moved to the position of vice-chairman. Preonas had been with the company since the preceding June, serving as general manager of operations. Prior to joining the firm, he had run a family-owned bakery in Dayton, Ohio.

By 1997 Awrey's annual revenues had grown to an estimated $60 million, with 90 percent of sales coming from the food service market. Awrey products were found in restaurants, hotels, schools, hospitals, airlines, and other institutional settings such as business cafeterias. The company's factory operated five production lines which made Danish, cakes, doughnuts, croissants, and biscuits, with the latter two lines used alternately as the basis for dinner rolls and cookies. The plant operated 24 hours a day, five or six days per week. In addition to its own products, a few items from other bakeries were offered to food service accounts through the company, including English muffins and bagels, though these were manufactured to Awrey's specifications.

To keep up with constantly-changing customer preferences, Awrey added many new products each year--as many as 100 or more. The company maintained a five-member research and development team to come up with the new offerings, the majority of which were intended for the food service market. Many were test-marketed to customers at the firm's sole remaining retail outlet, near its packaging facility in Livonia.

In 1998 Awrey installed robotic devices to remove sweet rolls from pans in the firm's baking plant, which produced significantly better results than a 20-year old system that required frequent maintenance and damaged an estimated 6 percent of product. This move was one of the first steps in a $20 million modernization effort, which over the next five years would expand the firm's plant to 348,000 square feet.

2000s and Beyond

In 2002 Awrey was one of the first companies in the United States to win a prestigious American Institute of Baking Bakers Quality Seal Award, which was given for both quality and safety of baking operations. The company went through several rigorous inspections and surprise visits before receiving the award. Nine Awrey family members were now involved with the company, and they could often be found in the plant, checking quality and assuring that the production line was running smoothly.

In the spring of 2003 Awrey began widely marketing a six-inch chocolate cake that had originally been offered at the recently-defunct Bill Knapp's restaurant chain. The cake, which had been baked for Knapp's by Awrey, had been hugely popular with the chain's customers, and after the restaurant's demise Awrey bought the recipe for $15,000. The cakes were sold through Meijer stores, in many of the areas where the restaurants had been located.

Approaching the century mark, Awrey Bakeries had evolved into one of the top food service baking companies in the United States. With a strong distribution system and contracts with many major customers, as well as the continued involvement of its founding family, Awrey Bakeries maintained the quality and sense of pride that had helped it grow and prosper over the years.

Principal Competitors: Sara Lee Corporation; General Mills, Inc.; Weston Foods; Koepplinger's Bakery Inc.; Quality Bakery Products, Inc.

Further Reading:

• "Awrey Bakeries Golden Anniversary," Detroit: Awrey Bakeries, Inc., 1960.
• Esparza, Santiago, "Robots Help Bakery, Human Touch Keeps it Flourishing," Associated Press Newswires, May 5, 2003.
• Knape, Chris, "Happy Re-Birthday: Knapp's Specialty Gets New Life," Grand Rapids Press, April 12, 2003, p. A1.
• Krumrei, Doug, "Judge Not By Label Alone," Bakery Production and Marketing, March 15, 1997, p. 20.
• Lahvic, Ray, "No Longer Just a Numbers Game," Bakery Production and Marketing, May 24, 1990, p. 36.
• "Robots Deliver Tasty Benefits," Food Engineering, October 1, 1999, p. 20.
• Roush, Matt, "Food Labels Hard to Swallow," Crain's Detroit Business, May 2, 1994, p. 3.
• Smith, Carolyn, "Awrey's Packaging Changes Boost Retail Sales," Crain's Detroit Business, July 20, 1987, p. 13.
• Stopa, Marsha, "Everything's Just Kosher: Awrey Gets to Crust of Baskin-Robbins Deal," Crain's Detroit Business, September 18, 1995, p. 1.
• Wernle, Bradford, "Awrey Adds Low-Fat Artillery," Crain's Detroit Business, May 28, 1990, p. 3.
• ------, "Awrey Ends Retail Sales in Favor of Contract Baking," Crain's Detroit Business, May 6, 1991, p. 1.
• ------, "Awrey Revives Retail Operation," Crain's Detroit Business, October 28, 1991, p. 1.

Source: International Directory of Company Histories, Vol. 56. St. James Press, 2004.

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