Baking & Snack - June 2017 - 18

How wholesale bakeries are combating 'factory fear'
In a world where product recalls open the news and certain ingredients are considered villainous, wholesale bakers often find themselves
on the defensive against the very consumers they're trying to serve.
"There's a real concern about the high level of processing," said
Chris Brockman, global bakery analyst, Mintel, who recently spoke
to a group of bakery producers and suppliers at the Rademaker headquarters near Amsterdam. "There's a high demand for better bread."
This is not a domestic issue. Consumers worldwide are becoming more wary of the foods they eat. In Brazil, for example, one
out of five infrequent bread users said packaged bread is "too processed," according to an August 2016 report. And in the UK, 48%
of consumers agreed that supermarkets should stock more locally
made artisan bread.
So, how do large-scale manufacturers get past the barrier of
"factory fear"?
First, the concepts of big food and local producers are, in fact,
in the eyes of the beholder. And thanks to modern technology,

the idea of "global" isn't the vast expanse it used to be, especially
for bakery, which is a highly-fragmented industry. For example,
Grupo Bimbo, Mexico City, considered the world's largest bakery producer, does not span the globe; 95% of its revenue comes from the
Americas, and Grupo Bimbo accounts for just 3% of all bakery new
product development in the past three years, Mr. Brockman said.
Next, it's about breaking the stereotype and coming out from
behind the curtain. Consumers are looking for authenticity, and
that often starts with a story. In fact, storytelling and baking are
crafts that have long gone hand-in-hand.
"Demand for authenticity is driving demand for higher quality
products," Mr. Brockman said.
Kossar's New York City Bagels, New York, has used the same
process for 80 years, and it makes sure to remind consumers of that
in its marketing materials.
Additionally, consumers are evermore cognizant of what happens before the bakery, and companies are tapping into that.

Ellison Bakery snags significant investment
Private equity firm Blackford Capital, Grand Rapids, MI, announced
that it invested an undisclosed amount in Ellison Bakery, Inc., Fort
Wayne, IN. Ellison is a manufacturer of cookies, snack bars and
crunch inclusions, as well as other products for the industrial market, foodservice channel, and retail and private label space.
"We're excited the Ellis family decided to entrust the future of
Ellison Bakery with Blackford Capital," said Martin Stein, founder
and managing director of Blackford Capital. "Ellison has established
itself as a premier industrial bakery and is known for its high quality and extreme flexibility in supporting a wide range of customers."
The transaction also marks the retirement of Rob Ellis, who
stepped down as CEO six years ago and remained with Ellison as
the CFO. Mr. Ellis' sons, Jon and Jeremy Ellis, have grown the business over the past four years and will continue to be active in the
business post-transaction, according to the company.
"The Ellis brothers had been looking for a financial partner that
would help continue the legacy they built with their father," Mr.
Stein said. "We're honored to play a part in Ellison's next chapter,
and we look forward to investing in the business, the employees

Vito Palmisano Photography

and the community as we continue the story of growth at Ellison."
Todd Wallin, president of Ellison Bakery, added, "We're excited
to benefit from the strategic experience and capital that Blackford
brings and look forward to working with the entire team to execute our aggressive plans for growth. We've experienced steady
growth the past several years under the ownership of the Ellis family. Together with Blackford, Ellison has strategically positioned itself for continued growth by preparing to invest in new production
and packaging capabilities, as well as additional R&D resources."

Tortilla industry set up to succeed
At the Tortilla Industry Association (TIA) Annual Convention
and Expo, held in Las Vegas, IRI representatives Brian Burke,
director, and Robert Porod, executive vice-president, presented
market data that showed how a shifting retail climate is affecting
tortilla sales and how the industry can adapt to meet consumers
where and how they shop.
According to IRI research, big-box store traffic has plummeted
28% since 2015, while small-format stores have jumped 95%. In
addition, discount stores such as Aldi and Lidl have had a significant impact on where people are shopping. Tortilla producers, Mr.

18 Baking & Snack June 2017 / www.bakingandsnack.com

Burke said, can capitalize on this shift by making sure their products are in the locations that shoppers prefer to visit.
Online conglomerates like Amazon have an advantage with return on investment sitting at 40%, while brick-and-mortar retailers average 13%. Because 76% of all shopping trips begin online,
Mr. Burke said, getting tortilla products into online retailers makes
sense now and will continue to grow in profitability.
Retail tortilla sales totaled $2.2 billion, which is up 2.1% over the
previous year, according to IRI, keeping with the general trend of
growth in ethnic food sales.

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Baking & Snack - June 2017

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