What is ESL really?
Sept. 1, 2015
For people in the world of education, ESL stands for “English as a second language.” For those of us in the baking industry, ESL stands for “extended shelf life.” Yet there were many times during the development of ESL for bread, buns and snack cakes that I thought it stood for “extra severe lashing” — tongue lashing, that is.
As with many controversial topics, be they politics or changing the status quo, there are typically two different camps, the lovers of the idea and the haters of the idea. Oh, yes, there were people who thought ESL was a good idea in the baking industry, but they were vastly outnumbered by the naysayers.
One man at a luncheon proceeded to tell our table that I was personally responsible for the downfall of Interstate Bakeries. Changing Wonder bread to the ESL formula was the death knell for the brand and the company. I proceeded to explain that hundreds of thousands of dollars had been spent to ensure the consumer did not know there had been any change made to the formula. Given all of the upfront work done before the decision was made, I told him he was “misinformed.” He replied, “I did not know all of that work had been done.”
Well, no kidding! It is not like we broadcast our corporate product development strategies and secrets on the evening news. He was just one example of the many people who took it upon themselves to tell me ESL had ruined the company. Wow, if only I was that powerful!
The rationale behind ESL was, in my mind, a simple economics problem.
First, we spent 50%, or more, of every dollar to get products to the store via the direct store delivery (DSD) system. Then, we would return to the store to pick up out-of-code items. On a good day, that was 3 to 5% of delivered goods, and on a bad day, it was 8 to10%. Who goes into business to make 100 products knowing they will always throw away at least three? We were making 100 loaves of bread knowing we would discard three to 10 of them because they went stale.
It was my controversial (of course!) opinion that the DSD baking industry business model was flawed. And we haven’t even discussed the carbon footprint issue, sustainability or profit margins yet. But the response to this suggestion that conventional technology be replaced was typically always the same: “We have always done it that way.”
Nonetheless, my colleagues and I knew we had something extraordinary with the idea of ESL. We continued to explore it.
The thing was, our own company really did not know what to do with this new technology. Things began to change, however, when our senior vice-president of national accounts — let’s call him Terry — was getting ready to call on that Large Customer in Bentonville, AR. Terry asked my boss — we’ll call him Mark — what’s new that he could show Large Customer.
Mark had a loaf of bread on his desk and asked Terry to taste it. He did and said, “Yes, that is a loaf of Wonder bread.”
Mark then asked, “Is it fresh?” Terry replied, “Yes, it is a fresh loaf of Wonder bread.”
That’s when Mark explained that the loaf he just tasted was 30 days old.
Terry couldn’t believe it but thought his largest client might be interested.
As a mass merchandiser, Large Customer did not like when its store shelves were not full. As bakers with the short shelf life of three days at that point in time, we “managed” inventory to minimize stales. Some days, that meant the shelf wasn’t as full as Large Customer wanted.
Full shelves means not running out of product, and not running out of product means more sales. So, to make a long story short, Large Customer loved the idea of extended shelf life bread. ESL technology was a pull-through from Large Customer.
Many bakers are afraid of new technology. Change is a word that makes them break out in hives and run in the other direction. We asked a number of questions. One was, should a sub-brand be created? Like Lexus is to Toyota, should we create a brand other than Wonder to test ESL technology? Would the plant have to warehouse bread? There were many questions and few answers.
Today, I can tell you ESL technology is finally being used to its full potential. It took Dean Metropoulos and Apollo Global, the new owners of Hostess Brands, to achieve it. They harbored no preconceived ideas of how the Hostess business should be run. I would bet the words “we have always done it that way” are never uttered in that board room or product development lab. More likely, the questions are: How can we do it quicker, better, faster and make more money?
When Forbes described the Hostess Brands turnaround in its April 15 edition, the magazine reported the company used ingenuity, capital and creative chemistry. Creative chemistry may have a different ring to it than extended shelf life, but the outcome is the same.
Hostess Brands changed the way snack cakes and, most recently, bread and rolls are delivered. Such creative chemistry allows distribution of baked goods without tens of thousands of delivery trucks on the road. The consumer still gets the Hostess items they love. Now, they also have new Hostess bread products to add to their purchase options. So, time will tell of the success of Hostess bread products.
The technology behind extended shelf life is the “out of the box thinking” that took years to invent and optimize. Hostess Brands made the decision to push ESL to its full potential. It ships bread in cartons so that the customer’s store employees now stage Hostess products.
Investing the money in creative chemistry, Hostess Brands is positioned to save distribution resources, improve sustainability, reduce carbon footprint and increase the profit margin. Carpe Diem!