Baking & Snack - February 2015 - 20

CAPITAL SPENDING

Employees to the rescue
If there's something weird, and it don't look good,
who ya gonna call? Not Ghostbusters. Instead, turn
to the people who are making it.
"Employees are the best brains you have in any
plant because they work with the equipment, said
"
Kambiz Zarrabi, managing director, Blue Coast
Bakers. "I call them the DNA of the operation.
"
Mr. Zarrabi turned to line operators who discovered a way to reduce scrap on the bakery's lamination line to 1.5% from 7%.
At J&J Snack Foods, employees have made
several novel changes to reduce waste in its
facilities. "Engineering might not come up with
the approach. It comes from people working with
the dough every day that reveals a new solution,
"
noted Gerard Law, senior vice-president and assistant to the president.
Hearthside Food Solutions relies on hourly
employees for everything from improving yield
and throughput to something as simple as finding a way to better release a product off the belt,
according to Rich Scalise, chairman and CEO.
The company has a suggestion box and continuous improvement teams. It rewards staff for ideas
that ultimately improve the company. "The more
interaction we have with our maintenance and
floor associates, the better for our company, he
"
said. "That's why we have built-in processes and
structure for improving how we do things.
"
Improvement starts with a culture of employee
engagement, noted Joe Turano, president, Turano
Baking. The company provides various forums
for employees to share ideas for making the
bakery better.
When Alvarado Street Bakery moved into its
larger bakery eight years ago, the cooperative
naturally turned to employees to lay out the design of the bakery to gain efficiencies throughout
the operation.
"The distribution work group figured out fleet
parking and how to load trucks in the morning in the
dark, said Mr. Girkout, president and CEO. "The ad"
ministration group reconfigured the bakery's work
stations to put them in the most efficient formats to
best reflect what we need now and moving forward.
Each work group's expertise was sought. Everyone
has an opportunity to provide input.
"
The work groups also are involved in capital
spending decisions. For energy efficiency, Mr.
Girkout added, the cooperative's owner-employees
decided to put solar panels on the facility.

20 Baking & Snack February 2015 / www.bakingandsnack.com

customer before companies would commit to allocating
resources on a major project or a big-ticket item.
Now, Ms. Troxel Hellmer said, the tempo is substantially more upbeat, with several experts expressing that
they plan to expand their facilities - or build new ones
- if they're unable to meet their customers' demands
within their current confines. "The main thing we heard
is an upswing in spending," she said. "We're going to see
modest increases year-after-year in capital investments
for the next three years."
She stressed, however, that all executives interviewed
by Cypress Research resisted making any projections
about capital spending beyond the next 36 months, noting that anything outside that time frame was merely a
crapshoot. For the long run, the outlook for investment
is still "call me, maybe."
As David Hays, owner of Bodacious Foods, a Jasper,
GA-based snack producer, chimed in, "I'm not prepared
to project spending past three years because I don't have
a crystal ball."
That overtone reflects the unpredictability of the future, a quiet uncertainty about the economy, rumblings
of potential hikes in interest rates and even the 2016
presidential election - believe it or not, the race for the
White House is starting already. Definitely, the inability
to predict - let alone project into the distant future -
silences any thoughts of irrational exuberance. "We want
to see certainty and understanding as to where the economy is going, but we live at a time where things rapidly
change," said Marc Schulman, president and CEO, Eli's
Cheesecake, Chicago.
So what does the future hold for the industry? Scott
Kolinski, president of Lantmännen-Unibake USA, Lisle,
IL, observed that several market research firms forecast
a realistic 2 to 3% growth over the next two to four years
in frozen, par-baked bread and pastry categories for the
foodservice and in-store bakery channels.
That may not seem like much, but for specialty producers of premium baked goods, any sustained growth
in these multi-billion-dollar segments provides ample
room for optimism. "There continues to be so much
opportunity for providing high-quality products," Mr.
Kolinski said. Specifically, he cited fast-growing regional
retailers as prime targets for Lantmännen-Unibake USA.
Among larger players in the industry, Rich Scalise,
chairman and CEO, Hearthside Food Solutions,
Downers Grove, IL, predicted steady single-digit growth
in capital investments - not double-digit, he stressed.
That's primarily due to the popularity of between-meal
snacking and the heightened interest in higher quality products by foodies influenced by popular specialty
food shows and, specifically, the Food Channel.
"Consumer trends are changing relatively quickly,"

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Baking & Snack - February 2015

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