Skinner Baking in the heart of Paris … Texas
Dan Malovany, Baking & Snack
In its heyday during the 1980s, a 375,000-sq-ft bakery in Paris, TX, operated 11 lines, employed more than 1,275 people and stood as one of the pillars of the local business community. Back then, the state-of-the-art operation served as Campbell-Taggart’s flagship facility and later as a bulwark for its subsequent owners, Anheuser-Busch, then Earthgrains and finally Sara Lee Fresh Bakery business.
But by 2010, times had changed and taken their toll. Then-owner Sara Lee began closing lines and laying off employees, and all indications suggested that the end was near. It was not a matter of if, but when. For Rodger Coan, who worked at the bakery since his high school graduation in 1982 and then rose up the ranks as a part of its management team, the last few years were painful to live through. On Dec. 11, Sara Lee pulled the plug, seemingly for good, and eventually sold off the shuttered bakery.
“To see the lines drop off and be shut down one-by-one was disheartening, even though we knew it was inevitable,” he recalled. “The last day on the production line of the plant was difficult here.”
In September 2012, Audie Keaton, president and CEO of James Skinner Baking, toured the Paris plant, now owned by investors intent on divesting the facility piece by piece, if necessary. At Skinner Baking, however, sales of its recently launched J. Skinner brand had taken off in the in-store bakery arena. In fact, the company’s revenue has jumped more than 20% annually during each of the past four years, and the subsequent surge in volume for its Danish, muffins and other sweet goods taxed production at its 160,000-sq-ft Omaha bakery.
“We knew we needed to do something at that time,” Mr. Keaton said. “We had all of our products under one roof, and it caused quite a problem for us. We had capacity issues and were looking to expand our product portfolio. We were running seven days a week, and our ability to grow was greatly reduced unless we did something soon.”
A bakery with ‘great bones’
The company explored several options, including building a second facility in Omaha, but Mr. Keaton said none of them felt right or the costs were simply prohibitive for the family-owned company. When he heard about the availability of the Paris bakery, he said, “Whoa. I need to get down there and take a look at this,” he recalled. “This could be exactly what we’re looking for.”
Clearly, he added, the neglected plant was in “tough shape.” Throughout the building, ceilings leaked, paint peeled, and the abandoned equipment sat tagged for an auction scheduled for the following week. As Mr. Keaton entered the engineering office, he saw blueprints still resting on a table amidst the remains of what looked like two leftover cups of coffee and a crumpled candy wrapper. But it was the writing on the wall that said it all for the former employees who worked for years at the bakery: “Four generations. It’s over.”
However, inside the building, a couple of things surprised Mr. Keaton, who was accompanied by a few members of his operations team. First, the croissant line was in pretty decent shape, and croissants happened to be one of three product categories that Skinner Baking had targeted for future growth. “The line is an engineering feat,” Mr. Keaton said. “To be honest with you, there are a couple of things that needed updating, but for the most part, the line was ready to go.”
Second, the facility had what Mr. Keaton described as “great bones.” “The infrastructure, design and layout are fantastic,” he observed. “The people who built this bakery in 1974 knew exactly what they were doing. Certainly, modernization would have to occur with the new food safety requirements.”
Then, something special happened as he toured the bakery with the realtor, the building’s facility manager and local officials, including members of the Paris Economic Development Corp. “We were two hours into the visit, and I had a gut feeling that the stars had aligned and this was the right place to be,” Mr. Keaton recalled. “We started kicking the tires, and I got a call that there were some people at the guard shack who wanted to speak to us.”
Word had gotten around that the bakery had a possible new owner, and former employees began to show up to volunteer to put the facility back online. “We sat in that engineering office and talked for a good two hours — they told me amazing stories of things they had done in this plant over the years,” Mr. Keaton said. “It became apparent to me that there was a solid workforce here with a great work ethic. Many of them had been unemployed since the bakery closed, and the former management team was interested in coming back to Paris.”
He called Jim Skinner, chairman of Skinner Baking, and recommended that they buy the Paris operation. In typical fashion, the laconic Mr. Skinner calmly replied, “Well, OK. Let’s do it.”
Knowing that time was of the essence, Mr. Keaton then gave the realtor an offer and about 20 minutes to say yes to the deal. When the proposal was accepted, everyone in the room let out a big cheer. “There were a lot of high fives, and it was an emotional night,” he recalled. “And, it hasn’t let up since that day.”
Then, Mr. Keaton noted, someone in the engineering office changed the writing on the wall. Under the words “it’s over,” that person had now written, “Game on!”
Skinner’s new game plan
It took months to work out the details, but by December 2012, Skinner Baking completed the purchase, and it proved to be a game-changing experience. According to Mr. Keaton, the undisclosed price was well within the company’s budget, and the sale included not only the building and 89 acres of land but also all of the equipment.
Certainly, getting the operation up and running was a priority, but Skinner Baking carefully mapped out how the game should play out. “We had a sense of urgency tempered by a feeling that we wanted to do it the right way,” he said. “It wasn’t like we made a huge investment with a new greenfield facility. We don’t have any huge investment to recover. There is no pressure and little overhead. As a result, it left us nimble, and we could be selective as opportunities came to us.
“We are breathing life back into a good used facility,” he continued. “We can expand on our own timeframe, and we have so many capabilities here. We also have a great workforce. We want to be able to just turn on the proverbial faucet when we want to and do it correctly. And best of all, we probably have 10 years of capacity ahead of us.”
How did the sweet goods manufacturer bring the facility back to life? Mr. Keaton, an avid University of Nebraska Cornhuskers booster, is a proponent of sports analogies when talking about the proper strategies in running a business. “When you run a marathon, I’m a big fan of running one mile at a time,” he said. “Obviously, you have to see where you are going, but you need to meet a lot of short-term objectives before you hit that long-term goal.”
That long-term objective can be found in Skinner Baking’s five-year plan to install at least six production lines in the Paris operation. Already, there are two: a sweet roll line that started up last June to alleviate capacity pressure at Omaha and the croissant line that is currently ramping up capacity for this summer.
Counting capacity, along with increased sales of Danish and muffins, annual revenue is expected to rise about 25% over 2013 — about the same rate as it’s been increasing during the past four years since the company introduced its J. Skinner brand and began targeting in-store bakery as well as the foodservice and convenience store channels (see “Making it Parisian-Style” on Page 42).
“We’re on target to achieve that double-digit goal right now,” he said during Baking & Snack’s visit in February. “With this facility, we’re now comfortable we have the capacity to reach that goal. With just the Omaha operation, it would be difficult to accommodate that growth.”
Expect the company to eventually move Omaha’s muffin line to Paris. “When the entire transition is finished, Omaha will produce Danish, and Paris will produce everything else,” Mr. Keaton said.
That leaves room for three more production lines in the bakery, which he describes as a whopper of a challenge to fill over the next five years.
“This is like a 2-lb hamburger, and we’re going to eat it one bite at a time. The first bite was to get the facility where we felt comfortable from a food safety perspective,” he explained. “The second bite was getting the first line, the sweet goods line, up and running. The third bite is getting the croissants moving, and the next bite will be to get the following lines operating. As we do so, the bites will get a lot easier. You have a lot more moving parts, but you also have a lot more people involved.”
Veterans lead the charge
Before bringing the bakery up to today’s food safety standards and ramping up production, the company needed to rebuild Paris’ management team. It started by hiring Mr. Coan, who had worked at the bakery until the bitter end.
During the year in limbo, he assisted Baker’s Pride in its startup in Burlington, IA. Mr. Keaton, Ron Zaleski, vice-president of operations, and members of the Skinner family easily sold him on the position as plant manager, which has allowed his children to return to the town where they grew up. “This is where I want to be, and this is what I want to do for the rest of my career,” Mr. Coan said.
Along with Kasey Floyd, a long-time maintenance manager who served as facility manager during the sale of the bakery, Mr. Coan brought on board a crew of 17 former mechanics, technicians and maintenance personnel. During the six months before commissioning the sweet goods line, Skinner Baking rehired dozens of former employees, many with decades of experience. Of the nearly 140 people who currently work at the bakery, 82% are former plant employees. Within five years, the company projects to hire nearly 400 and possibly up to 500 workers (see “Partnership puts people to work” on Page 39).
“We wanted to make sure we brought people in who not only knew what they were doing but also were compatible with the other people we were hiring,” Mr. Coan said. “There was a lot of excitement evident then, and there is still a lot of excitement now.”
Starting up was not an easy process because of the facility’s neglect and its pure size (see “Starting up a mothballed bakery” on Page 34). The building has 263,000 sq ft of processing space, 28,000 sq ft allocated to packaging, 72,000 sq ft for warehousing and 12,000 sq ft in office space. The operation has 12 180,000-lb flour silos — it currently uses just one — as well as a 120,000-lb tank for high-fructose corn syrup. Currently, it uses just half of that tank. “The potential for expansion is right at our fingertips,” Mr. Keaton observed.
In many ways, he added, the facility is designed as three bakeries in one. Each section has two lines and a dedicated parking lot as well as remodeled lunchrooms, lockers and conference rooms. Near the offices, the front part of the bakery houses an active sweet goods line and an inactive snack cake line that just needs new packaging equipment to get up and running. At the opposite end of the building rests the 30,000-sq-ft croissant operation and an inactive frozen dough line. Two to-be-determined lines will be placed in the middle part of the facility, which is currently being remodeled.
In all, Skinner Baking pledged to invest $25 million ramping up the bakery. Already, it spent $14 million in the startup, about half of it on upgrading the infrastructure and the rest on ramping up the sweet goods and croissant lines.
Sweets on a roll
Outside of remodeling the facility, the next biggest challenge involved taking an existing Tromp 51-in.-wide makeup line and expanding it to 64 in. to meet the company’s sweet roll specifications. In addition to rebuilding belts, sheeters and rollers, technicians spent about a hundred hours a week to reprogram each drive on the line until production began in June 2013.
Sweet roll production runs on two 10-hour shifts, four days a week. Currently, the line turns out 72 8-count packs of cinnamon, strawberry, raspberry and cheese sweet rolls per minute, although it can easily expand to 80 family packs a minute. Mixing and makeup is done in a temperature-controlled room set at 75 to 80°F. Sponges are mixed in a 1,600-lb horizontal mixer. After a 2-hour ferment, the doughs are made in a Peerless 3,000-lb mixer. Mr. Keaton noted mixing times are relatively short — about 8 minutes — because the dough further develops as it’s transferred through two dough pumps to the Tromp sheeting line.
After the dough is extruded onto the 64-in. belt, the sheet travels through a series of reduction rollers while trim from the edges is automatically recycled back to the mixers. After four squiggles of cinnamon, cheese or fruit fillings are deposited, the sheet is cut into four strips. Each then passes along a separate cone roller to create four filled ropes of dough. A guillotine cuts the rope into individual pieces, which then fall onto parchment paper, eight pieces per pan.
Proofing and baking are done on existing systems that once made IronKids Crustless bread years ago. The four-strap pans travel to a Stewart Systems continuous proofer set at 105°F and 75% humidity for about an hour and bake in a Baker Perkins 160-ft tunnel oven, which was rebuilt by The Henry Group. “We had the oven entirely rebuilt from loaders to unloaders,” Mr. Keaton said. “The proofer is only about 10 years old and was barely used to make crustless bread.”
A Fremont depanner uses eight needles — or pegs — to depan the freshly baked sweet rolls, which then travel on a G&F ambient spiral cooler before entering a Moline waterfall icing machine, rebuilt by Topos Mondial.
Next, the rolls move along a rebuilt overhead cooler with sections of new Intralox belting and BMI guides to a separate packaging “clean” room and to an enclosed IJ White cooler set at 78°F. This cooler is actually part of an IJ White triple-spiral cooler and freezing system that had been used to preserve crustless bread and is now being used by Skinner Baking to freeze sweet rolls before packaging.
According to IJ White, the triple tower system was engineered for environmentally controlled atmospheric cooling and freezing and to provide a temperature-controlled process without promoting staling or surface drying. When hot or warm products typically enter a traditional cooler or freezer system, they are often exposed to coldest air blowing off the refrigeration coils. This can cause thermal shock, or fracturing or surface cracking of the products. In this energy-efficient system, gradually decreasing the air temperature controls the cooling process and reduces moisture loss.
After cooling and freezing, the sweet rolls are manually guided into clamshells. The bakery is installing a Precision Packaging denester to automate the process. After automatic closing, the clamshells are welded via the company’s proprietary system to make them tamperproof.
Sealed clamshells pass through a Safeline metal detector and enter the automatic sleever. It slides the
J. Skinner branded paperboard sleeve around the clamshells to add high-impact graphics to the overall packages, which are casepacked, palletized and sent to a storage freezer.
Traditionally done in Paris
In the croissant department, production currently runs on two 10-hour shifts, one day a week, although the company plans to add shifts as sales ramp up this summer. In the makeup room, which is temperature-controlled at 55 to 60°F, two ETM horizontal mixers, one rated at 2,500 lb and the other 3,000 lb, alternately feed a single dough pump located between them. The dough is transported through supplemental pumps that feed up to four Moline laminating lines.
To make high-quality croissants, Skinner Baking applies a layer of butter or trans-fat-free margarine atop the dough sheet, then sandwiches it with another sheet that’s together folded to create between 18 and 22 layers. The system can make up to 30 layers for a flakier crust. After traveling through a series of reduction systems, the sheet is cut into slabs and placed on racks. In traditional Skinner Baking fashion for creating modern artisan products, the dough then retards at 40°F for 24 hours in a 165-rack room.
The next day, the slabs are sheeted again and formed through a Rondo cutter, roller and curling system. Following indexing, the dough pieces are automatically panned and travel through a Stewart conveyorized proofer and oven system. The highly automated line also has a Stewart pan stacker and unstacker.
Mr. Keaton noted the dough pieces receive an egg wash, which gives the baked croissants an authentic “bronzed look,” a more delicate, crispy crust and a premium position in the market. The company recently installed four egg wash systems, which are rotated every two hours for extensive cleaning and sanitizing.
Prior to packaging, the croissants go through a G&F enclosed spiral cooler set at 40 to 45°F. For foodservice accounts, croissants enter one of two Stewart pillow packers that operate up to 1,200 pieces a minute. Each pillow pack case contains 20 to 30 croissants and can come with a center seal to ensure freshness.
For retail customers, the croissants enter a separate line that turns out 4-, 6- or 10-count clamshell packages that are tamper-evident sealed and overwrapped with the J. Skinner branded sleeves. The clamshells are casepacked, palletized and frozen.
The sky’s the limit
During the tour of the facility, Mr. Keaton pointed out production systems that came with Skinner Baking’s purchase and can be used in future production. In addition to the idle snack cake line, the bakery houses a frozen dough department with three Peerless 3,000-lb horizontal mixers and a Rademaker makeup line. Originally, the system cranked out frozen dough for pizza crusts, but it could also be adapted to create other products.
The building also houses a Blommer chocolate system for enrobing or filling and a kettle system for making fruit fillings on the sweet roll line. Overall, the plant has six spirals for freezing and two for pre-cooling. A 100,000-sq-ft room is simply filled with stacks of pans for making a variety of croissants and other products. Another department contains $3 million in spare parts — motors, gear boxes, chains, belts and more — nearly all never used or in near-mint condition.
Moreover, the bakery’s just starting to refurbish a product development and test kitchen. “When this kitchen is ready, I want 10 new product concepts a week,” Mr. Keaton emphasized.
Just as important, the building contains hundreds of thousands of square feet in unused space. With it, he said, the company can become vertically integrated to lower costs for both the Paris and Omaha plants.
For starters, Skinner Baking is in discussions with its fruit supplier about building an operation to make fillings on-site. The company may even partner with its plastic clamshell provider to make packaging on-premise to reduce shipping costs.
As for the dormant rail spur and the unused acres of land around the bakery, Mr. Keaton is exploring yet another partnership with other local companies in Paris to put it to good use. He’s just not ready to disclose plans at this time.
Even from a location standpoint, Paris offers potential cost-saving benefits. Freight costs from Texas are substantially lower than from Omaha. Skinner Baking is developing plans to lower its distribution costs from its Midwestern production facilities to its customers from coast to coast.
Certainly, the rebirth of Paris is a work in progress. Asked which projects are the company’s top priorities and when they might occur, Mr. Keaton shrugged his shoulders and observed, “We don’t have to do anything now. We just want to do it right.”
How about any regrets? “It was the best decision I’ve ever made,” he insisted.