5. The Facility
It was a crazy time to say the least! With all the Operations and Logistical craziness going on …I was also getting all kinds of great PR opportunities. Everybody thought I was making a whole pile of money …but it was quite the opposite!
I had Shark Tank reach out during this time which was super cool, but they said it would take 9 months to “maybe” get on the show. I knew I would be long gone if I had to wait that long …so out of the blue a local friend reached out and after a few conversations he agreed to invest in my business to build a bakery in Selma, AL.
I found an old abandoned Dollar General, and the owner was nice enough to give me a few months free while I fixed it up. I had to rip up all of the flooring, building out separate rooms for warehousing, processing area, office space, refrigeration, bring in natural gas, run air lines, etc. I also had to rework the electrical as the equipment I was using required a good bit of power.
I knew my initial purchase was a forklift as everything I ordered after that would need to be unloaded by a forklift. The tricky part was how do I get a forklift delivered to me …and if I ship it how do I get it off the truck without a dock or another forklift.
So, in my traditional fashion I bought one anyway… just assuming I could figure it out. I found one on an auction and was super excited to get it for a great deal BUT then I realized it was in California and I’d have to spend another more than what I bought it for to get it here.
The day it was set to arrive I just was hoping the truck had something we could use to get it off the trailer, of course they didn’t and the driver couldn’t speak English either which made for an interesting situation.
So here is what I did; there is a Winn Dixie across the street that had a dock. I went in and asked the manager (who didn’t know me) if I could use their dock to get my forklift off the truck. He looked at me like I was crazy …but somehow said he would allow me too.
Another snag was that I wasn’t the only thing on the flatbed and my forklift was in the front. So we had to unload everything else (rusty equipment)on the truck into the receiving room in the back of the Winn Dixie so I could get to the forklift.
I sit on the forklift and am praying it will actually start. Low and behold it does …and somehow I know how to drive it as I’ve never driven one before. I back it up off the flat bed into the Winn Dixie and then out a side door down a ramp through the parking lot, across the street and on to my building! BOOOM!!! Thank you Winn Dixie!
As I was working on the building, I was using the building to warehouse the cookies. Luckily for me it wasn’t in the heat of the summer …just yet so I didn’t have to worry about the hot temps melting or making the cookies go bad.
Oh yeah almost forgot …during all this the Walmart Cookie Buyer found our cookies in Cracker Barrel and loved them so much she reached out for a meeting. I flew out there and the next thing I knew we were getting into a few hundred Walmarts.
Back to the story ….
I made good progress in getting the building ready by removing tile flooring with 60 year old adhesive, building out new rooms, staining concrete, running electrical, putting in floor drains, installing a dock, building pallet racks, and installing large equipment, …made for an interesting few months. All while continuing to ship orders to major retailers out of the building and working thru launching into Walmart in just a few short months.
To say it was a little crazy is quite the understatement!
During this time I was still baking the product in PA, and was just having to “eat” the cost of them packaging the product while we got our plant setup. Not ideal, but in order to keep the brand alive I had no choice.
As we were gearing up for a Walmart launch, we were thinking this would be “the retailer” that would give us the volume to create a sustainable business because at this point we were not profitable.
We made quick progress on the new building and were installing the equipment all at the same time.
I also hired my first full-time employee to help on the operations side. This proved to be a key decision in being able to make this all happen. He was a “beast” and we worked really well together.
I purchased most of the equipment used so I spent my evenings and nights searching for the best deals on eBay and auction sites. I also didn’t know exactly what I needed as I’ve never built a bakery with automated packaging equipment before. One thing that made the selection of packaging equipment unique is that the cookie was pretty fragile and so the way that the equipment operated needed to gently handle the product. LOTs of youtube videos and lots of phone calls!
It seemed like things were coming together …key word is “seemed”.
Once we got everything installed we were going to start baking for about 90% of our customers, minus Cracker Barrel because they required us to have a GMP Food Safety Audit completed and score above a 90%. We first had to schedule it and then prepare for it.
We had about 25 different notebooks for record keeping, etc. that needed to have some history in it for an audit to be valid. So in other words we needed to operate a little while before we could bring in an auditor. So we still had to bake & pack a portion of the cookies in PA — and continue to ship orders to Cracker Barrel at a big loss. If we could ever move the production in-house we’d start making a good margin again.
We started to test bake even as we were finishing up the building and the first day we did things didn’t go as planned …which is expected. The thing that kept me up at night though is that the oven didn’t seem to bake a cookie that even closely resembled the one we were selling. The cookies we were selling were crispy almost like a chip, and had a specific color to it.
The cookies we had baked in our new oven were soft and much darker. It almost had a reddish brown tint to the cookie.
It was a Hobart Double Rack Oven (same as the ovens in a Grocery Store bakery). The baking process was a lot different than what was being done in PA. In PA we were baking on a 160 tunnel oven with a lot more capacity and a lot more controls to adjust.
After a few more bakes I called the Hobart guy who installed it, he came out and realized he installed the exhaust fan backwards. So instead of the air getting sucked out, it was getting blown in. I was pretty frustrated to say the least as were were paying this guy $150 / hour to do this jack leg work.
Honestly, at the time I was just glad we had found the problem at least I thought and was excited to keep trying with the oven now fixed.
So, now that it was “fixed” we kept trying and we kept getting the same results. The cookie just wouldn’t turn out even close to what we were selling. I even had a baking consultant working with us to find a solution as to why this wasn’t working.
Not only did the baking not cooperate, the baking through-put wasn’t what we had estimated as well.
**At this point of reading this you are thinking 1 of 3 things: This guy is an idiot, this guy out of his mind, or this guy needs to just quit.
Let me explain what I mean by throughput:
Here was my math when purchasing the equipment:
- Oven and Racks hold 40 Pans
- Each Pan holds 1.5 pounds
- Each batch in the oven is 60 lbs (40 x 1.5)
- Bakes for 9.5 minutes
- We estimated we could get 6 batches in an hour
- 6 x 60 = 360 lbs
In an 8 / hr shift we estimated we would average 6 hours of run time because our line wasn’t completely continuous and there would be some bottlenecks in the process to begin with.
6 x 360 = 2160 lbs per day.
In actuality the throughput was somewhere around 100 lbs / hour or 600 to 700 lbs per day.
That wasn’t going to work with the business I was building. The low volume and the required labor would have created too much costs in the product to go the thru traditional retail. The only way to make it in traditional retail is volume — and efficiency is key.
Just to give some context to my mental state at this point.
- I had raised money to build the bakery and buy the equipment, and it wasn’t going as planned
- I had a few magazines and newspapers writing or planning to write articles on the “New Bakery”.
- I was featured on the local TV network multiple times
- Walmart Buyer was excited about supporting a local business and what sold her was the fact that we were building our own bakery.
- The relationship with our bakery in PA was not great at the time — potentially going “south”.
- I personally was in a good bit of debt from the business — and no steady income.
- I wasn’t taking a regular salary, but just paying myself as little as possible to survive.
- The business was loosing money every month
- I didn’t know how to do anything I was doing: logistics, baking science, electrical, plumbing, carpentry, managing brokers, calling on retailers, purchasing equipment, accounting, creating a food safety plan that would be approved by the largest retailers in the world….I could go on.
And the plan didn’t look like it was going to work! The building was done, the equipment was put in place, the employees were hired, the PR was set in motion, the “key” retailer was there, BUT I screwed it up by not knowing the oven I built the bakery around wouldn’t work.
Some might ask, well why don’t you just buy the one you need. The one I bought cost $15K, the one I was baking on in PA cost 1.5 million and required a lot more space.
After weeks of trying to get the oven to work and trying to figure out a plan what to tell everybody — as I was extremely embarrassed. I had to put my big boy panties on and decided that we would turn the facility into a packaging facility only — and keep baking in PA. Bake in PA and ship cookies to Selma in bulk …and we would do the packaging / shipping out of Selma.
It seemed like a good idea as it would simplify a lot of things for us. The Food Safety Plan got a lot simpler, we could sell some of the equipment and use the capital to continue on, and the fact that we could still bake in PA would give us the ability to have more capacity. The downside, as we would find out is that it became a logistical circus every time we’d execute a production run.
So that’s what I did, I sold the walk-in cooler, the mixer, the depositor, the oven, the massive pan washer and designed a setup that would work. We turned our focus to being more of a contract packaging facility / fulfillment center from being a bakery and hit the ground running. We even set our focus on doing some contract packaging during our down times.
This seemed like it was going to work and the numbers were actually pretty good. The cost for us to bake on the smaller oven was actually a little more than baking in PA + shipping the product to Selma …surprisingly. The efficiencies we could get from the oven in PA would more than make up for the freight. We got really good at shipping!
This was towards the end of 2015, just 2 years after we had launched the revised brand G Mommas. It all felt like a blur and I was just holding on for dear life.
Next: The Progress
If you want to read them all now here are the links:
