The name — Rise Baking Co. — might be new, as well as the trademarked technology FastPan, but the South Coast Baking Co. product has been around for decades, as has the management team that’s bringing it to the forefront of the in-store bakery sector.
In 2013, Arbor Investments, a private equity firm specializing in food and beverage, began work on a new entity, Rise Baking, which encompasses Minneapolis-based New French Bakery; River Falls, WI-based Best Maid Cookie Co.; Hudson, WI-based Hudson Baking; and, most recently, Irvine, CA-based South Coast Baking, which opened its second facility in Springdale, AR, in 2014.
With a primary focus on frozen cookie dough for in-store bakeries, South Coast opened its Springdale facility to increase capacity and reduce distribution costs by establishing a presence east of the Mississippi River. The bakery already had an office in Northwest Arkansas to support its growing business.
“We needed more capacity as well as the East Coast presence,” said Kent Hayden, South Coast president. “We had an R&D lab and a sales office, so we were well-established in the area.”
As the new Springdale plant streamlines distribution across the nation, the integration into Rise Baking stands to change the cookie game for not just South Coast but the rest of the portfolio as well. As these cookie manufacturers come together, Rise Baking is quickly emerging as a major player in the cookie space, specifically in the large — and perhaps fragmented — in-store bakery area that lives between the ultra-premium and the “gut stuffers.”
In fact, Rise Baking has taken these four producers, who might have been seen as a thorn in the sides of their competitors, and turned them into one $300 million-plus cookie powerhouse.
Welcome to the family
Across the baking industry, companies — even those that might be seemingly unrelated — have been joining forces to create new platforms, product offerings and services. But acquisitions and their subsequent integrations don’t happen with the snap of a finger. They require time, patience and a commitment to maintaining a cohesive unit that will ultimately benefit the customer.
“Any time you try to bring multiple companies together, one of the hardest things, of course, is the diligence on product categories and financials. But the key — and often the most challenging — is bringing the cultures together to find a common bond and language,” said Eric Ahlgren, COO, Rise Baking.
Since its founding in 1999, Arbor has made numerous investments in the North American baking industry, most recently winning Buyouts Magazine’s 2016 Deal of the Year for the 2015 sale of Gold Standard Baking, and saw an opportunity to pursue a roll-up strategy in the cookie, crispy bar and artisan bread segments. In 2013, Arbor acquired New French Bakery, which produces par-baked and frozen artisan bread for in-store bakeries nationwide, and partnered with industry veteran Mike Schultz, now Rise Baking CEO, to launch the platform.
As plans began for Rise Baking to emerge from Arbor’s investment portfolio, the company watched with a careful eye for cookie producers that would complement one another in terms of product quality, operational standards and corporate culture. “After acquiring New French Bakery, we immediately began pursuing Best Maid, South Coast and Hudson Baking, which were all great cultural fits, and added product capabilities that our team could leverage in the in-store bakery market,” said Brody Lynn, partner at Arbor Investments.
Roll-up strategies are not easy to execute, but Mr. Lynn gave credit to Mr. Schultz’s 25 years in the baking industry and his ability to bring together not only a cohesive sales force but also corporate cultures that naturally gelled.
Mr. Schultz recalled that in the three-year search for a company to incorporate into the Rise brand, he and Arbor passed on some businesses, simply because their cultures weren’t the right fit. “Integration is just too difficult if you don’t have a common vision of the customer and consumer in mind,” he said. “This could not have been possible without the vision, resources and support of the Arbor Investment team. It’s a beautiful thing seeing everything come together perfectly.”
When Rise Baking leadership developed its mission statement and core values, it discovered they were all quite similar to those of the legacy companies. “There were a few words that were different, but their spirits were spot on with one another,” Mr. Hayden said. “That was really nice for our people because when we came out with the new mission statement, it wasn’t really new to anyone.”
Rise Baking’s core values revolve around customer focus, work ethic, accountability, passion for results, teamwork, commitment to safety and caring. “We cultivate a caring environment where our dedicated and passionate team relentlessly services our customers,” is explained in the company’s core values statement.
Additionally, the phrase “one bite at a time” is found in the Rise Baking mission statement, communicating that quality starts with the commitment of its people and lives through each product the company makes in every facility.
“This is evident throughout the company and with our sales force, most of whom also have extensive knowledge in manufacturing,” Mr. Schultz said. “We’ve always had that ‘team’ mentality. We’ve known these customers for 25 years; we walk in, and they know us. They know we have a quality product, and we’ll help them grow their business. We don’t short our customers — we give them innovation.”
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