A 2007 plant fire sparks teamwork, new growth forPineridge Foods’ bakery group.

by Bob Garrison

Unfortunately, trial by fire is sometimes a real thing. Just ask executives at Canada’s Pineridge Foods.

Pineridge was a 2004 start-up involving successful industry consultant and executive Roger Dickhout (McKinsey & Co., Canada Bread Co.), Swander Pace Capital and Scotiabank’s Roynat Capital division. The company debuted after it bought Canada’s leading organic and natural yogurt producer, Liberté Brand Products; and Liberté Natural Foods, a leading refrigerated natural and organic foods distributor. The following year, the group bought another specialty dairy in Quebec and refrigerated deli foods distributor in Ontario.

Coming into 2007, Pineridge was on a roll – ready to establish a bakery platform. In January, it acquired Gourmet Baker, a Burnaby, B.C.-based company with three Canadian plants producing frozen desserts and breakfast pastries. Then in April, Pineridge purchased Oakrun Farm Bakery, an Ancaster, Ont., firm supplying fresh and frozen English muffins, crumpets, pre-deposited muffins, Danish, cakes, pies and other products.

Combined, Gourmet Baker and Oakrun let Pineridge dominate important niche categories in foodservice, private label and in-store bakery channels.

Just five months later, however, a September 2007 fire destroyed part of Oakrun’s plant and the two lines producing its signature English muffins and crumpets.

“We had just been forming into a new [bakery] team, setting an agenda and direction to take our companies when Oakrun had its fire,” recalls Dickhout. “Shortly after we recovered, we then faced a commodity crisis.

“I’m proud of the way that our organization responded to the fire,” he continues. “The Oakrun team reacted immediately to manage the crisis and rebuild the future. Gourmet Baker performed well and even helped Oakrun in certain ways.

“The commodities issue also led our team to come together, re-examine our margins and better understand them. It subsequently has led to some major operational improvement programs. Today, we’re a much stronger and united company for going through that period. It brought out the best in us and we now have even better control of the business.”

For the record, Pineridge Foods’ four bakeries now supply Canadian and U.S. customers in all channels of distribution (including co-pack) with more than 600 SKUs. The group already accounts for an estimated $200 million in annual sales and – at just about three years old – management says the Pineridge bakery group is just getting started.

“I’m extremely proud of how Pineridge responded [to the earlier fire],” says Tony Tristani, Oakrun’s senior vice president and general manager. “Our people pulled together – across every function – to take charge and solve the immediate issues. Since then, we’ve continued to drive cost out and improve margins.”

Adds Dave MacPhail, Gourmet Baker’s vice president and general manager, “I’m excited about steps we’ve taken to strengthen our sales organization. We’re training the salespeople of both bakeries to sell each other’s products. We’re anxious to go out and conquer because there are new customers that we haven’t each touched yet. It will be exciting to present one face to the customer.”

Besides its own new products – such as a “Caramel Rage” crème caramel dessert bar – Gourmet Baker is known to customize desserts for some of Canada’s largest private label, foodservice and co-pack customers. Likewise, Oakrun officials talk about new offerings (including a multi-fruit, round Danish ring) and how they invite foodservice and retail customers to Ancaster for custom new product work – right on the plant floor.

Speaking of the plant floor, Pineridge has developed several shared bakery and dairy group resources – including experts in corporate development, manufacturing efficiency, strategic sourcing and consumer marketing. Bakery group officials say they also are excited about ongoing plans for a shared I.T. network and coordinated sales training and support.

“We think of Dave and Tony and rest of the leadership team as partners in our enterprise”, says Dickhout, “and [Pineridge Foods’] goal is to build and serve the bakery business. We want to maintain the advantages of being decentralized and fast moving. However when we as partners find shared opportunities of mutual benefit we organize to act on them.

“Our business is concentrated in certain products and some customers aren’t even aware of what we make,” he continues. “We do want to be more aggressive in cross-selling because we think we have great products and can easily grow with our existing customers.”

Pineridge also will look for more growth opportunities.

“We believe we can maintain organic growth at a level greater than the industry’s average – simply by augmenting our existing positions,” Dickhout says. “Meanwhile, we will pursue Canadian and U.S. acquisitions in the [frozen bakery] category to strengthen our competitive positions and give us access to bigger markets."

Last but not least, Dickhout notes that there’s another side to Pineridge Foods’ business philosophy.

“We’ve talked about the technical, hard side to our approach and you need that to be successful. Then again, I think you truly ‘win’ and reach greater goals through the softer side of business. I’m talking about the mission and philosophies engendered in the spirit of an organization.

“We want everyone in our company to be motivated to drive for success while they feel good about the company they work for," he continues. "This means we aspire to live by our values on a day-to-day basis. More broadly, our goal is to become more environmentally sustainable and add value back to society and the communities we work and live in. We believe in doing the right things build the right kind of company.”

Pineridge Foods Inc.

Location: Brampton, Ont., Canada

Top executive(s): Roger Dickhout, President & CEO

Founded: 2004

Product line(s):Bakery– Frozen baked and unbaked desserts and breakfast pastries; fresh and frozen Danish, cakes, pies, tarts, bagels, English muffins, crumpets, muffins and muffin batter and pancakes.Dairy – Yogurt and other cultured dairy products, organic milk and goat products.

Brands: Gourmet Baker, Oakrun Farm Bakery, Liberté, Western Creamery

Distribution: North American distribution to foodservice, retail, co-pack, private label and in-store bakery channels.

Web site: www.pineridgefoods.com