Brewing something special

by Dan Malovany
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Some businesses operate under the radar. Others do not even want to be on the map. For years, Hill Country Bakery was not even a blip on the screen, preferring to silently supply some of the nation’s largest foodservice chains and coffee shops — as well as cruise liners, in-store bakeries and even the military — with restaurant-quality loaf cakes, crumble cakes, gourmet bars and a variety of other decadent sweet goods.

Among its customers and others in the know, the San Antonio private label bakery and contract manufacturer became renowned for its custom-designed sweet goods using premium, often natural, ingredients such as whole eggs, ripened bananas, cream cheese, butter, chocolate chips and even whole Dickenson pumpkins. Founded in 1997 by managing partners David Nolan and Steve O’Donnell, Hill Country Bakery developed a quiet reputation for working behind the scenes to create signature items, seasonal products or other limited-time offers (LTO). In fact, the bakery didn’t even have a website before 2009.

Then three years ago, the company decided to branch out in yet another direction. “The concept of developing a product that was our own brand was very attractive to us,” recalled Mr. Nolan, whose expertise as a chef and restaurant operator complements Mr. O’Donnell’s 38-plus years in the operations side of the baking industry.

“We have developed a lot of products for a number of companies, and they had a great deal of success on their end,” Mr. Nolan added. “We decided to take some of our expertise and create a brand. The payoff is that you decide what the brand means, and you control how the brand is positioned in different channels of distribution.”

The project took months to define and a year to develop. Last November, the company began a soft rollout of Coffee House Cafe individually wrapped slices of loaf cakes, crumb cakes and dessert bars for the burgeoning number of retailers, universities, hospitals and other outlets wanting a broader array of gourmet items to accompany their flavored coffee services. Already, the bakery sells the brand throughout select convenience stores in Texas and Florida as well as to a redistributor who ships the products to smaller c-store chains throughout the nation.

Starting this fall, however, Hill Country Bakery plans to go high-profile, bang the drum and make a lot of noise as it introduces the Coffee House Cafe concept to the retail trade at the National Association of Convenience Stores (NACS) show in Las Vegas. Eventually, the new line will include muffins, Danish, bear claws and other baked goods that provide a fine accompaniment to cappuccino, espresso, hot cocoa and more through all parts of the day. (See “Coffee Talk” on Page 46.)

“Because c-stores are upping the quality of their premium coffee, they’re also looking at upgrading the fresh-baked goods they sell,” Mr. Nolan said. “That’s where we come in to meet their needs.”

At the same time, Hill Country will be showing off its Nutridurance line of sports nutrition bars. Initially developed for the military, these gluten- and dairy-free bars are high in protein and fiber and packed with dried fruits, nuts and other wholesome ingredients.

“We came up with the idea of ‘nutrition for endurance’ so we created the name Nutridurance,” Mr. Nolan said. “It’s not only for athletes but also to provide endurance for the person working 9-to-5 who at 4 p.m. is getting tired and wants one of our protein bars to have the energy to get to the end of the day.”

Together, the branded initiatives signify the dawn of a new day for Hill Country Bakery.

Matter of convenience

Hill Country’s venture into the branded arena is a natural outgrowth of a business that started with no sales, two rack ovens and a handful of employees working in a semi-automated 12,500-sq-ft facility. Over the years as the business blossomed, the company invested $65 million in renovating existing buildings, expanding its footprint and automating production. Today, the 284,000-sq-ft operation — a 10-minute drive from San Antonio’s famous River Walk — has 400 employees as well as four processing lines, including two state-of-the-art sweet goods lines.

“All of the automation we have is pretty amazing,” Mr. O’Donnell noted. “With our two newest production lines, if we were a multi-billion-dollar company, which we’re not, we couldn’t have built those lines any better. We didn’t spare any expense in investing in these two lines. We did them right from a food safety perspective, an efficiency perspective and a quality perspective regarding equipment and design.”

Investing in automation, he added, goes hand-in-hand with how the business evolved. Today, the bakery has two versatile Matiss inline ultrasonic slicers and nine packaging lines — five for individually wrapping products. The company plans to install additional, higher-speed flowwrappers as it ramps up its Coffee House Cafe initiative.

“The biggest challenge was going from foodservice and bulk pack to doing individually wrapped products,” Mr. O’Donnell said. “Some of our cakes run 30 or 40 per minute, which is pretty quick when you are making 3- to 4-lb loaves. When you subdivide that loaf into individual slices, you are running 480 to 600 pieces a minute. Ramping up to that speed is a challenge, as is training employees to adapt to the new speeds.”

Hill Country’s strategy for convenience stores involves providing six potential touch points for buying its high-end products. Shoppers can buy individually wrapped sweet goods in the snack cake aisle, via impulse displays at the register or in the refrigerated case next to deli sandwiches under the Coffee House Cafe or buy a private label brand, if the retailer prefers.

Additionally, the bakery offers frozen, sliced bulk packs of its signature items that can be slacked out and served along with donuts and other snacks in a plastic dome next to the coffee and beverage station. In 2015, the company plans to introduce monkey bread, a soft, glazed cinnamon treat that can be heated on hot dog grillers. Hill Country will also debut gooey, warm cinnamon rolls that can be microwaved or heated in other appliances for on-the-go consumers.

Providing a bucket of multiple impulse purchase opportunities is integral to Hill Country’s c-store strategy, according to Mr. Nolan. “Typically, people take only three seconds to decide whether they are buying an item in a c-store,” he explained. “By giving them six touch points, we’re giving people up to 18 seconds to view our products. We’re offering multiple concepts from one source.”

Hill Country’s foodservice strategy, along with its Coffee House Cafe retail brand, strives to differentiate the line from what’s currently in the market. The products don’t look or taste like the conventional belly stuffers. In his product development work, Mr. Nolan tries to add a touch of elegance that reflects the wholesome ingredients in the product. “They’re similar in price to other snack cakes, but they’re a notch up in quality, and they look like something you would find in a high-end coffee shop or restaurant,” he observed. “That allows c-stores to sell them at a higher margin.”

Additionally, Hill Country will develop signature products — or even LTOs — for c-store chains. “In foodservice, we develop an entire concept for a chef we serve: everything from product development to table tents and other merchandising materials. Now, we approach it as if we were the chef for the c-store,” Mr. Nolan said.

“C-stores are used to people saying, ‘Here’s our product. Do you want to buy it?’ ” he added. “We’re going to approach the channel from the standpoint of, ‘Here’s our product. How can we help you sell this product? How can we develop point-of-sales materials for it? What products do you want and what can we develop for you?’ We’re getting great receptivity in the market. We’re hitting a nerve and giving people what they want to have.”

Offering both individually packaged and foodservice formats broadens the number of convenience stores the company can reach. “Remember, not every c-store is going to have a fresh bakery concept, but every c-store has aisles of packaged products and snack cakes,” Mr. Nolan said.

Adapting for endurance

The Nutridurance line is actually an evolution of another branded initiative that Hill Country Bakery developed several years ago, when the green and all-natural, easy-to-recognize ingredient trend was hitting its stride. Initially, the big push was for EONI, which stands for Earth’s Own Natural Ingredients. EONI includes a variety of muffins, crumb cakes and granola bars made with wholesome ingredients. While the natural trend was taking hold in foodservice, however, the upscale product line didn’t take off in other channels where price remains a primary competitive factor.

Fast forward to the present. Mr. Nolan recognizes that the natural trend remains relevant, but Hill Country has layered gluten-free and dairy-free attributes onto an easily digestible, fruit-, nut- and protein-filled bar that targets everyday athletes. It’s planning to roll the bars out in a big way in 2015. Nutridurance shows how new product development is often not a straight line, he explained, but one that zigs and zags until the trends align and the concept finds its comfort zone among consumers.

“We went from bakery products to high-protein, high-fiber bars with less sugar, but we kept the ‘all natural’ in it, adding gluten-free and dairy-free,” Mr. Nolan said. “It had to taste good. It had to be individually wrapped, and we needed to go into the market with a year-long shelf life and packaging system without having all of the preservatives in it.”

The Nutridurance line consists of PRO, or high-protein bars, and LEAN, or low-calorie, fruit-inspired options. The PRO line includes Peanut Butter, Chocolate Peanut Butter, Dark Chocolate Brownie and Cafe Americano bars. The LEAN line comes in Apple Raspberry, Orange Cranberry and Mixed Berry flavors.

In the bar business, taste, nutrition and energy are paramount to mountain climbers, hikers and even the “extreme athletes” featured on Nutridurance packaging, but there are other attributes that are just as vital, especially if a runner needs a boost of energy halfway through a marathon. “It’s not as heavy on your stomach,” Mr. Nolan observed. “It’s not as hard to eat where you have to drink something with it. It moistens your mouth. It’s not dry and chalky and doesn’t absorb your saliva. This bar actually creates and builds your saliva. So, if you are an athlete running a race and take a bite of it, you don’t have to drink something else to get it down.”

Adapting for the future

From a production standpoint, Hill Country already has developed detailed plans to accommodate its evolving business model. Starting next year, Mr. O’Donnell noted, Hill Country plans to transform its original bakery, opened in 1998, into a gluten-free, dairy-free operation with proprietary mixing systems, extrusion technology and flow wrappers to produce Nutridurance bars as demand builds for the line.

The bakery currently houses 15 Baxter double-rack ovens, two static rack freezers, two 1,000-lb slurry mixers and an Arpac packing labeling system. It also serves as a pilot plant for major new product development as well as a production facility for short runs and seasonal products.

The company also plans to turn its 28,000-sq-ft part of bakery, which opened in 2005 and features a semi-automated loaf cake and sweet goods line, into a  yeast-raised dough operation for its Coffee House Cafe initiative. Starting next fall, Hill Country will install a laminated dough line and proofers. Mr. O’Donnell said an additional 14,000-sq-ft expansion of that facility will provide ample room for new individual flow wrappers and other packaging equipment. Currently, that facility has a Peerless 2,000-lb slurry mixer, AMF paddle mixers, proprietary automatic depositors, a BABBCO 120-ft multi-zone impingement tunnel oven and Arpac packaging and labeling systems. The two semi-automated bakeries employ Unifiller cake decorating equipment to provide additional appeal to customers’ signature desserts.

In all, Hill Country’s operations sit on 15 acres and include 284,000 sq ft of processing, packaging, warehouse and office space that literally takes up a whole city block in San Antonio. The bulk of production takes place in a 115,000-sq-ft facility, built in 2009 and now housing the company’s two most automated lines.

Overall, production runs two 12-hour shifts up to six days a week, depending on the time of the year. Demand for Hill Country often spikes as the Thanksgiving and Christmas holidays approach. Louis Flores, director of engineering, works with Mr. O’Donnell and the operations team to install equipment or build systems internally in its 10-person machine shop.

The main bakery has a Shick bulk oil system, but most ingredients arrive in 2,000-lb totes or as bagged flour because Hill Country custom-makes so many different products, each with its distinct formula. “It seems like every recipe calls for a different flour,” Mr. O’Donnell said. “That’s not the case, but it seems like it at times.” A Donaldson flour recovery system next to the bag dumping station keeps the air clean in the prescale ingredient handling area.

Because it’s a cake operation, both production lines feature Douglas inline pan washers at the front of the line. The pans — silicone-coated for easy product release — then pass through Mallet oil systems.

During Baking & Snack’s visit this summer, Line 3 was cranking out pumpkin loaf cakes. Two Peerless, 2,000-lb slurry mixers continuously feed batter to a Fedco multiple depositing system. Mr. O’Donnell noted that the Hill Country engineering staff modified or custom-built many of the depositing systems so that they could produce a wider variety of sweet goods and mimic hand methods for making cakes.

The pans pass over checkweighers before and after depositing to ensure accuracy. As a part of its statistical process control process, overseen by Erica Butler, director of quality assurance, an Infinity QS wireless system allows the bakery to chart data and monitor production in real time before defects occur.

That system also weighs finished products in the slicing and packaging area and sends data to the bakery’s mainframe computer to provide a continuous, closed loop of quality assurance as a part of the company’s Hazard Analysis Critical Control Points (HACCP) and Safe Quality Food (SQF) Certified, Level 2, programs.

The pans then enter a BABBCO 175-ft, four-zone tunnel oven — the longest in the operation because the 4- to 5-lb loaf cakes require additional bake time — that can produce up to 9,600 lb an hour. “All of our products were developed for rack ovens,” Mr. O’Donnell noted. “We found out that an impingement oven best replicates what we were trying to do in rack ovens because of how the forced air circulates.” He added that tunnel ovens bake the large loaf cakes in about 35% less time than the rack ovens do.

After baking, the pans travel around a G&F spiral ambient cooler for 20 to 40 minutes, depending on the product. The loaf cakes are manually depanned and enter a dual-spiral blast freezer set at -30°F for a 150-minute dwell. In comparison, products placed in the older rack or static systems take up to 12 hours to freeze.

Installed in 2011, Line 4 for mini loaf cakes also uses a slurry system as well as a Peerless double-sigma mixer to create streusel. After pan washing and oiling, the 24-piece pans pass through a Tromp twin depositing and topping line. Specifically, batter is deposited, topped with streusel and the process is repeated to create the multi-textured product. Line operators manually smooth out the streusel to ensure full coverage on the top of each piece.

After baking in a BABBCO120-ft air-impingement oven, the loaf cakes receive ambient cooling before manual depanning, entering a JBT Frigoscandia single-spiral blast freezer and traveling down a spiral lowerator to the floor level. Mr. O’Donnell noted that the newer freezer cost about 35% more than the older one, but the footprint is half the size as the older one and easier to clean. It’s also 50% more energy efficient than industry standards.

That’s a wrap

Because of San Antonio’s hot and humid climate, the entire operation is air-conditioned. The bakery keeps the makeup and oven room around 80°F, the warehouse approximately 70°F and the cooler, freezer and packaging departments at about 60°F. In addition to providing employees with a comfortable working environment, the filtered-air, temperature-controlled operation maintains quality control and optimizes the freezing systems.

The newest capital additions can be found in the slicing and packaging department, which consist of two separate rooms — one for each high-speed production line. Loaf cakes from Line 3 enter a Matiss ultrasonic slicer that can be automatically reconfigured to cut products in 12 different ways. Before purchasing the ultrasonic slicers — a second one serves Line 4 — the bakery relied on 26 FoodTools mechanical slicers.

“This machine is processing three times the amount of product with just one person and almost no waste,” Mr. O’Donnell said. “You can cut a half or full sheet cake into 10, 20 or 40 pieces without any mechanical setup. Just push a button and go.”

The sliced pumpkin loaf cakes then enter one of three Campbell horizontal wrappers, operating at speeds up to 250 pieces a minute. Mini loaf cakes from Line 4 enter two horizontal wrappers. The packaging department also has Mettler Toledo checkweighers, Safeline metal detectors, Safeline X-ray machines and Arpac packing and labeling systems that code every product.

For Hill Country, the challenge in ramping up the packaging department wasn’t only getting used to the new technology. “It requires a lot of training  to get employees to adapt to new speeds,” Mr. O’Donnell said.

Currently, products are manually casepacked, palletized and shrinkwrapped. Hill Country then uses its fleet of 15 tractor trailers to shuttle products six miles away to its 60,000-sq-ft distribution center, which holds 3,600 pallets or 180 trailers of products. The trucks return to the bakery carrying ingredients and packaging materials from the center on a daily basis.

Hill Country Bakery presently has the capacity to serve 100,000 c-stores and ample room to ramp up production on existing lines after it installs the next generation of packaging lines, according to Mr. O’Donnell. Moreover, the company plans to put in yet another high-speed production line and move employee parking across the street. It’s already bought the additional property.

Mr. Nolan added that the brands are designed to drive traffic not only to c-stores and gas stations but also to supermarkets and other mainstream retailers. The company has even designed shippers for mass merchandisers and warehouse clubs.

“Our goal is to create a brand that is known nationally and brings great quality products to the masses,” he said.

Mr. O’Donnell believes the company is creating something special. “My expectations? These brands are a game-changer,” he said.

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