Cheryl's expands to meet demand

by Charlotte Atchley
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It’s one thing to make a cookie that takes people back to grandmother’s kitchen, but turn that treat into a beautiful gift and a bakery becomes a part of its consumers’ celebrations. That’s been the vision of Cheryl’s for more than 30 years. The Westerville, OH-based company, founded in 1981 by Cheryl Krueger, prides itself on transforming its cookies and desserts into packaged gifts for any and all occasions.

“Cheryl, because she had such vision as a merchant, saw that it wasn’t really enough to sell delicious cookies in a bag over the counter,” said Elisabeth Allwein, product development director. “From the very first, she wanted to make them into beautiful gifts.”

Today, Cheryl’s gifting business has its own dedicated space, a warehouse of 175,000 sq ft populated with people hand-packing cookies and other desserts. “We started out very small,” said Sheila Howell, vice-­president, marketing, Cheryl’s. “The catalog is where we really started to grow nationally.” 

This focus on gifts caught the attention of Carle Place, NY-based 1-800-Flowers.com, which acquired Cheryl’s in 2005. With the support of a company of this size and resources, Cheryl’s gained even more exposure and had the capital to take this regional operation to the next level with major expansions and new equipment to keep up with its growth. 

Foray into automation

Cheryl’s move toward automation did not start with 1-800-Flowers.com influence, though the acquisition has given the cookie company the ability to make substantial leaps.

In the beginning, Cheryl’s was predominantly a manual operation. Employees scooped dough and cut out round sugar cookies from sheets by hand. Stories are told of Ms. Krueger’s brother chopping chunks off a large chocolate block by hand to get pieces big enough to suit Ms. Krueger’s vision.

As demand for the cookies and gifts rose — fueled by the company’s stint on airlines and its now-iconic catalog — the need arose for some automation, but Cheryl’s did not rush into it. They started gradually. “We would start with whatever used piece of equipment we could afford, buy it, and use it and use it and use it,” Ms. Allwein said. “We wanted to grow the business and invest in the new equipment in a really sound way.”

Even though Ms. Krueger has retired and Cheryl’s has the financial support of 1-800-Flowers.com to justify more updated equipment purchases, it’s still important for those stewards of the business to maintain the company’s vision. They don’t want to automate for the sake of automation.

“Equipment that maintains or improves the quality and also is more efficient — those are the things we’re looking for,” Ms. Allwein explained. “If the quality isn’t maintained or improved, then that piece of equipment isn’t coming in here.”

For example, the company had a brief experiment with a robotic frosting system. “We had some robotic arms, but it was hilarious because the cookies would come off the robotic arm, and then there would be two people standing there, re-frosting the cookies to give them ‘the look,’ ” she said. “We had to admit that we weren’t really using those robotic arms.”

Other investments have been more successful, such as the Food Tools Ultrasonic cutter for brownies or the Formost Fuji horizontal wrappers. “Cutting a brownie by hand versus cutting it by an ultrasonic cutter: There is no real value to taking a giant knife and cutting brownies, whereas the ultrasonic cutter improved the process,” Ms. Allwein noted. The brownies cut cleanly and evenly with the ultrasonic cutter, with improved efficiency.

Capacity also dictates many of Cheryl’s equipment decisions. The leadership team has a road map of the company’s projected growth until 2021, and based on those projections, research is done on equipment that may be needed in the future to handle those projections. “We have this rolling map, so every year, we reformulate based off of sales growth and what our product mix is,” said David Adell, director of food production. “Last year it could have been a lot of crunchy cookies, so we did research on vertical packaging equipment. This year it might be brownies are going to grow more so then we’ll research depositing equipment.”

With the support of 1-800-Flowers.com, Cheryl’s has been able to dig into its continued growth and make investments in the business. “Our expansion is a big part of that, and they are very supportive of the brand’s growth, so we’re able to take on those big projects because it’s not a small business any longer,” Ms. Howell said.

Blowing out the walls

Cheryl’s last major leap was when the business built and moved into its current facility in 1994. Until last year, the building’s footprint has not been changed. Processes had been rearranged, and gift assembly and warehousing had been moved to a warehouse in Obetz, OH, but the Westerville building square footage had remained untouched. 

“As efficient as we were and as many lines as we managed to fit in there and shifts that we used, we were at a point where in order to grow in sales, we needed to have more space in which to manufacture,” Ms. Allwein said. Construction began in February 2014, and in October, the bakery expansion was completed. New office space for creative merchandising and marketing departments was finished this spring, and a retail shop attached to the bakery opened in August. The expansion added 23,000 sq ft to the previously 17,000 sq ft food production area.

With the added space, the bakery breathes. While more lines have yet to be added, the existing lines have improved flow. “It is so much more efficient because we had things kind of stacked on top of each other,” Ms. Howell said. 

For example, the current mixing room once housed two depositors for brownie, cake and muffin production as well as three wirecutters for cookie production. Today, these processes are separated. Three lines of cookie production inhabit the mixing room while the depositors have moved to what was previously warehouse space.

For the most part, the three cookie lines are dedicated to three distinct types of products: frozen dough, classic cookies and frosted cookies. Ingredients were stored at the warehouse and distribution center and trucked over twice a day, but with the new expansion, some ingredients can be housed onsite at the bakery.

While the majority of ingredients are still stored in Obetz, perishables and ingredients needed on a daily basis are stored in Westerville. Ingredients are hand-scaled and added to mixers feeding all three lines. Conveyors carry dough to hoppers feeding Baker Perkins wirecutters, which then portion the dough into discs.

The frozen dough line will then send those discs through a Praxair nitrogen freezer. An employee packs the sheets of frozen cookie dough to be shipped to wholesale customers such as restaurants and foodservice accounts.

The classic cookie line can turn out 350 lb per batch, but the company is looking to invest and upgrade to a 750-lb mixer, according to Ms. Allwein. This line produces those cookies that won’t be frosted. Once cut by the Baker Perkins wirecutter, these cookies are placed on pans and racked by an operator and moved to the oven room.

The third line produces cookies that will be frosted, whether on top or for frosted sandwich cookies, which were being produced during Baking & Snack’s visit. The die in the wirecutter can be changed for different sized cookies and even various shapes to suit the season. These cookies are also panned and racked by hand before baking.

In the depositing area, batters for cakes, brownies and muffins are mixed in two mixers and then deposited into pans by two depositors. They are also placed on racks before being moved to the new oven room.

Cheryl’s relies on 17 Gemini Baking Equipment double rack ovens for its baking needs. “We went with rack ovens because that’s what we liked when the company was smaller and just starting to grow,” Ms. Allwein said. “They weren’t as expensive, and they suited our capacity and flexibility needs. Now they allow us to stay flexible and run five or six products at a time.”

In the original oven room, 10 rack ovens bake classic cookies and cookies that will go on to be frosted. The room is divided with ovens 7, 8, 9, 10 dedicated to baking cookies to be frosted and the rest dedicated to classic cookies. This keeps production organized and in line with the company’s lean manufacturing practices.

With the expansion, the company was able to convert its packaging room into a second oven department that houses seven new ovens to ­handle slower-bake items such as brownies, cakes, muffins and the company’s latest crunchy cookies.

After being baked, products are staged on racks in two cooling rooms, each one set at a lower temperature than the next, until the product has been brought to room temperature or cooler. Once product has been adequately cooled, it is taken to the newest section of the facility where frosting, slicing and packaging is housed.

Cookies are frosted by hand, and decorations are also hand applied. This can be as simple as placing the top cookie on a frosted cookie sandwich or as intricate as adding candied dots to ladybug cookies or spreading frosting across cookies with more detailed shape. Cookies are then racked, and the buttercream frosting is given a chance to set up before they are individually packaged on one of six horizontal wrappers.

Two of these horizontal wrappers are new, added a year ago to keep up with the bakery’s growing throughput. With this purchase, Cheryl’s decided instead of buying from its longtime supplier, it would shop around. “Packaging had become a pinch point for us,” Ms. Allwein said. “We were at capacity. We couldn’t package fast enough to keep up with production, and packaging is very important because the seal affects every product.”

The equipment purchasing committee discovered Formost Fuji. This committee, made up of representatives from product development, operations, maintenance and sanitation, makes all of Cheryl’s equipment recommendations. Having representatives from the bakery’s departments enables it to consider the equipment as a whole. When shopping for a new horizontal wrapper, each representative was impressed with Formost Fuji’s machine, according to Mr. Adell. Product development loved the heat seal for product freshness. Maintenance and sanitation appreciated its accessible and sanitary design. And operations liked how easy and fast the equipment could handle changeovers.

Once cookies are individually packaged, they are packed in boxes by operators, then trucked to the distribution center where they will be frozen in anticipation of becoming a part of a gift box.

Packaging doesn’t stop there, however. A vertical packaging machine looms over the horizontal wrappers to bag crunchy cookies. This required a new packaging strategy, and the company invested in a vertical packaging machine about 10 years ago. This new product has taken off and the vertical packager expanded from the initial two-bucket scale to 14 four years ago. Cookies are removed from pans and fed into the packager’s hopper by hand. The machine scales the cookies and bags them. Operators then fill boxes with the bagged cookies.

For brownie production, the frosting and packaging room also houses the Food Tools Ultrasonic slicer, installed seven years ago. Here, two team members remove a sheet of brownies from the pan and place it on the conveyor. A robotic ultrasonic blade, vibrating too fast for the naked eye to see, slices the brownies sheet according to pre-programmed measurements. The slicer then removes the crunchy edges of the sheet because as Ms. Allwein explained, Cheryl’s is about the soft middle of the brownie, not the crunchy edges. These sliced brownies are then boxed by a team member and trucked to the distribution center to be added to gift boxes.

Smooth operations

The new facility turns out hundreds of thousands of frosted cookies, unfrosted cookies, individually cut brownies and crunchy cookies per day — all running simultaneously to meet the demand of Cheryl’s customers. To accomplish this in a semi-automated bakery requires a great deal of planning and a well-trained team.

Cheryl’s employs up to 300 people in the food production area team. During the bakery’s busy season, from July through the end of the holidays, Cheryl’s core team is split into two shifts, and seasonal employees are hired to work with the core team on each shift to meet demand. Cheryl’s trains these seasonal employees through a peer-to-peer strategy.

“We buddy up a core person with a new person, and it’s just hands-on training,” Mr. Adell said. More detailed processes such as GMP, HACCP, Kosher and allergen policies are all taught extensively to new hires before they even reach the plant floor. “If I show people how to feed cookies into a packaging machine, they grasp it quickly,” he said. “But if I just tell them we have an allergen policy and these are the points, sometimes they will forget, so we invest in a lot of upfront classes beforehand.” The training is based in SQF Level 3 principles to reflect Cheryl’s SQF Level 3 certification.

To keep things running smoothly and fill orders,

Mr. Adell adjusts schedules to maximize the facility’s capabilities. Production scheduling is based on projections and scheduled three weeks out, but he checks every day to ensure he’s optimizing production. “He’s very good at flexing the schedule,” said Kevin Rooney, senior director of operations, of Mr. Adell’s scheduling. “Sometimes there will be an item that suddenly takes off, and if they’re making 100,000 chocolate chip cookies, they’ll need to make only 50,000 chocolate chip to make room for 50,000 of the other product to meet demand. You have to be able to have that kind of flexibility in the schedule to meet the demands of the customer.”

Mr. Adell compares it to solving a Rubik’s cube: “You have this side that’s red, but you also need to this side to be yellow. But as soon as I start turning it, I might mess up my red side to get the yellow side. It’s this balance where you have to make sure that all the pieces are moving in the right order.”

Scheduling in testing for the new products that Ms. Allwein comes up with every season requires careful communication between the two departments. “I work very closely with Elisabeth,” he said. “She knows what our equipment is capable of, and she’ll tell me what the dough looks like and its consistency. She’ll recommend which equipment it should go through.” And by this stage in new product development and commercial testing, the product should only need a few tweaks after Ms. Allwein’s rigorous test kitchen processes.

Fresh for each season

Cheryl’s relies heavily on seasonal themes to boost its gift sales, and that requires new products every season to infuse some excitement into the catalog. “We need to have new, exciting flavors for each season, so that’s really an important piece of our business,” Ms. Allwein said. She and her team start new product development a year out from the targeted season.

The team considers the season’s latest flavor trends stacked up against flavors Cheryl’s consumers have enjoyed in the past. “We take all that in, and say, ‘We really know our customer and what she likes,’ ” Ms. Allwein said. She also works closely with the merchandising and marketing teams to draw inspiration from their themes for the season. 

The product development team chooses a target number of new items it wants to introduce and begins work developing ideas, tasting and making small batches. The field of ideas narrows until the team lands on the target number of new products for launch, with each test making larger and larger batches.

These products will then go through in-house testing and then ship testing. Because all of Cheryl’s products are shipped, each one has to be sent to various testers throughout the country to ensure the quality holds up through the time and handling it takes to deliver. When that testing checks out, Ms. Allwein takes the new products to the production floor for commercial testing, and the process starts again. At this point, however, enough progress should have been made that the formulation only needs to be tweaked to be successful.

However, just because a cookie is tasty doesn’t mean it is a done deal. Cheryl’s delivers not only delicious cookies but also beautiful gifts. The products must be a feast for the eyes as well. If a product doesn’t look as good as it tastes, it cannot pass the test. “People eat with their eyes first,” Ms. Allwein admitted. “We know that. There are certain constraints that we have to follow.”

Some seasonal products do so well that once they’re removed from the product rotation, consumer outcry is so loud the dessert gains a permanent spot in Cheryl’s catalog. The pumpkin cinnamon cookie is one such cookie. “We used to take it out of the line, but people clamored for it, so it’s in the line all the time now. Even though it’s a pumpkin cookie with cinnamon buttercream, people did not want to see it go away,” Ms. Allwein said.

Continuously evolving

With the Internet shaking up catalog shopping, the company is poised to adapt to the changing marketplace. While Ms. Howell anticipates the printed catalog will always be a part of the business, the marketing department embraces the way the Internet has changed how its consumers shop for gifts. With the shift to mobile, Cheryl’s is shifting its marketing dollars online.

“Within the digital realm, things are changing so quickly that one of the fun things is you can very quickly juice up a channel that’s working and pull from another,” she said.

 As Cheryl’s continues to grow with the support of 1-800-Flowers.com, the company has an eye out for ways to adapt its operations to the growth.

“We are constantly looking for ways to improve our processes,” said Denny Hicks, CFO. “Quality will always be our first consideration, and we feel confident we can combine quality and efficient automation through future investments in this area of the business.”   

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