Pan Pepin set up to serve its market well
The island of Puerto Rico presents unique challenges to operating a wholesale bakery.

After 40 years, Pan Pepín of Bayamón, PR, knows about baking bread and buns in the unusual environment of a 110-mile-long, 39-mile-wide island, the easternmost of the Greater Antilles chain. This is no easy place to run a bakery. The mountain range lying east to west along Puerto Rico’s center complicates over-the-road distribution. Land is expensive, and energy costs high. There’s only one flour mill, ConAgra Milling’s facility at San Juan, PR, and it supplies both Pan Pepín and its competitor, Holsum de Puerto Rico, Toa Baja, PR.

A commonwealth of the US, Puerto Rico enjoys a culture that mixes Spanish, Caribbean and American influences. Bread is a staple of the Puerto Rican diet, with the market evenly split between pan bread and local criollo styles, and 55% of volume passes through chain supermarkets.

Established in 1970, Pan Pepín was acquired by B. Fernández Holding Co., Inc., San Juan, PR, in 1998. This privately held, locally owned company specializes in food distribution and is managed by the founding family’s fourth generation.

Pan Pepín’s geographical reach covers all of Puerto Rico plus the Virgin Islands and the Dominican Republic. “Many of these islands don’t have local bakeries,” explained Mario Somoza, president and CEO. “Everything we do is fresh, and supplying the islands presents a challenge.” While the company operates its own routes on Puerto Rico, independent distributors handle the other islands. Two or three times a week, the bakery delivers container loads of packaged baked foods to the San Juan docks, where the distributors load them onto ocean-going ships.

“The product leaves here and arrives there the same day,” Mr. Somoza said. “It’s not trucking; it really is shipping.”