The hits just keep on coming, don’t they? On top of everything — supply chain, workforce, Ukraine, wheat forecasts, the pandemic — now we have avian flu driving up the price of eggs.
Yet, the industry continues baking bread, cookies, cakes, rolls, buns, pies and snacks. America must eat after all. And the industry’s resiliency is impressive. IRI data for Q1 shows that despite inflation driving up bakery prices, volume sales have remained virtually unchanged. It may not be the explosive demand of 2020, but consumers still want their baked goods.
While volume may be evening out to more sustainable levels, baking companies aren’t slowing down. Instead, I see them following the guidance Baking & Snack Pro Tips columnist Rowdy Brixey once gave me: When things slow down, that’s not time to catch your breath; it’s time to lean in and get ahead.
Leaning in can mean a lot of different things. It can be as simple as getting ahead on your maintenance, as Mr. Brixey was referencing. Or it could be as big as reworking an entire company’s organizational structure as Thomasville, Ga.-based Flowers Foods did as a part of its Project Centennial in 2016. Or it could be somewhere in between, such as investing in new automation or systems to help take operations to the next level as J&J Snack Foods Corp., Parsippany, NJ, did when it invested in a new enterprise resource planning (ERP) system in February.
Regardless of how far a company leans forward, there are bound to be growing pains. During a May 3 conference call with analysts, it was disclosed that J&J Snack Foods’ ERP system installation brought unforeseen challenges in operations, manufacturing and its supply chain. These challenges were enough to impact the company’s second quarter foodservice and retail business performance.
But just because there are growing pains doesn’t mean these weren’t the right choices for these companies, and just because the path is difficult doesn’t mean it isn’t the right way forward. In that conference call with analysts, David Fachner, president and chief executive officer of J&J Snack Foods, described the ERP system implementation as the “largest and most necessary change to strengthen our supply chain.”
Separately, in an interview with Josh Sosland, editor of Milling & Baking News and president of Sosland Publishing Co., A. Ryals McMullian, president and CEO of Flowers Foods, admitted that the company could have benefited from the assistance of change management resources during the many revisions it undertook as a part of its Project Centennial.
Many baking companies find themselves in a similar place: needing to make big investment decisions to stay competitive or having to rethink their production, labor or organizational structure. And that is a hard place to be that will come with resistance, whether it’s in business performance or even the people at the company. But that resistance can provide lessons to be learned and spark a fire to make a company — and an industry — stronger.