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Running down a dream: Harlan Bakeries specializes in producing almost any grain-based food that its in-store, foodservice and private label clients can dream up. As a result, its sales top $250 million, a tenfold increase over the last decade. Now, the nimble company is chasing a dream of its own, and that's to become an even bigger and better baking company.

Article Excerpt
It seems like decades ago for brothers Hugh and Doug Harlan, but in reality, it was only a few years back when frozen unbaked and fully baked bagels made up between 70% and 80% of the company's sales. In those days, calling on a potential client was a fairly simple, if not direct, process.

Through strategic acquisitions and internal growth since 2000, Harlan Bakeries has transformed itself from a specialty bagel producer into a major, diversified wholesale baking operation with a full line of products ranging from frozen breads, pies, cakes and other desserts to frozen muffins, cookie dough and, yes, bagels for its contract manufacturer customers, hundreds of in-store bakeries and thousands of national foodservice operations.

"We have a clear definition of the three channels of distribution that we compete in, and we have aligned our team members to better serve those channels of distribution," notes Joseph Latouf, executive vice president of sales and marketing.

Perhaps its boldest move was the 2005 purchase of the assets of Meyer's Bakeries business in Hope, Ark., and Wichita, Kan. Purchased by its subsidiary, Southern Bakeries, LLC, Harlan's acquisition of the $60 million operation last year added thousands of much-needed stock-keeping units (SKUs) to Harlan's product portfolio--everything from brown 'n' serve dinner rolls to breadsticks, hearth rolls, English muffins, energy bars and conventional hamburger and hot dog buns. In addition to private label, the business also sells baked goods under the Nature's Grain brand.

"It's making us more of a one-stop shop," says Dennis Daniels, Harlan's chief operating officer. "It also allows us to anchor some of the existing customers that we had shared with Meyer's. It makes us a stronger supplier to them."

In addition, Southern Bakeries now operates Meyer's extensive fresh distribution, which is much more complex than Harlan's line of frozen, longer shelf life baked goods that are shipped via foodservice distributors and other carriers. Overall, flesh sales account for 15-20% of the company's business.

"We have it set as a stand-alone separate business," explains Doug Harlan, executive vice president. "We want to understand the business better before we do a full integration. There are a lot of complexities that were new to us on the fresh side and getting a good understanding of that operating facility."

Initially, Harlan poured in millions of dollars in capital expenditures to retool the aging Hope plant and to provide the new pans and griddles that have enhanced the bakery's product quality and consistency. As a result of its efforts, the Hope plant received a superior rating from the American Institute of Baking after an audit of the operation earlier this year....