SAN ANTONIO — Hill Country Bakery is no stranger to high-quality baked goods and desserts. For years, the San Antonio-based company has provided private label gourmet bars, loaf cakes, crumble cakes and muffins to large food service chains, cruise liners, in-store bakeries and — most notably — leading coffee houses across the country.
Many companies might, without blame, be content to simply maintain that level of success behind the scenes. Hill Country, after all, boasts four plants and an off-site frozen warehouse totaling 284,000 square feet and more than 400 employees. But Hill Country — specifically founders Steve O’Donnell and David Nolan — saw an opportunity to make a name for itself outside the world of private label.
|Steve O’Donnell, co-founder of Hill Country Bakery|
“We have a pretty strong background in food service and working with coffee chains and we saw that there was a need at the c-store level for improved cake products,” Mr. O’Donnell said. “C-stores were improving their coffee offerings and because the quality of coffee was going up, we saw a natural extension of that to offer premium snack cakes.”
Customers at c-stores, grocery stores and quick-serve coffee bars were looking for better java, but the level of snacks and cakes to pair with the coffee was not elevating at the same time. With Hill Country’s background, the fit couldn’t have been any more natural. In turn, the company launched its Coffee House Cafe brand in late 2013. The line consists of premium pound cakes, loaf cakes, coffee cakes, crumb cakes, muffins, bars, Danish and cinnamon rolls, all individually sliced and wrapped.
Coffee House Cafe is currently in c-stores and grocery stores across the country and may soon be in retail drug stores and airports as well.
“We have about 18 s.k.u.s (stock-keeping units) in the whole lineup,” Mr. O’Donnell said. “Things are going very well”
Mr. O’Donnell said a big part of the line’s early success is its distribution program, which solves a past problem with Hill Country’s shipping. Customers could choose only between direct-store delivery and frozen delivery.
“We have Coffee House Cafe, we leave that up to the retailer,” Mr. O’Donnell said. If direct-store delivery is their best option, that may be done through Hill Country’s partnership with Collegedale, Tenn.-based McKee Foods Corp., the producer of Little Debbie Snacks. Customers also may choose to go through a regional distributor like McLane Foods or they can go the frozen route with Dot Foods. And for large accounts, customers can buy direct from Hill Country’s San Antonio bakery in truckload quantities.
“A lot of time the distribution is a difficulty and some of our competitors only do direct-store delivery,” he said. “Some only go frozen. We have the ability to go either. Whatever suits the retailer best is the way they should purchase it.”
Solving shelf life
One of the biggest obstacles Hill Country faced in launching its Coffee House Cafe line was achieving the shelf life demanded by c-store customers. Most retailers look for a 30-day shelf life in order to maximize sales and minimize loss.
“We’re trying to make a really upscale, premium product using authentic ingredients and then, on top of that, we were trying to get that shelf life,” Mr. O’Donnell said. “You have to find out how to put in all those wonderful, great ingredients and still solve the shelf-life-issues.”
The solution ended up being a combination of the right recipe creation and the right packaging. That allows Hill Country to still maintain the ingredient list of premium items while meeting the shelf life necessary for direct-store or frozen distribution.
Those premium ingredients that Mr. O’Donnell mentioned are key component to Hill Country’s claims that Coffee House Cafe is a line of high-quality snacks. The banana loaf, for example, uses whole, ripened bananas and walnuts from California. The pumpkin products are made with whole Dickinson pumpkins from Minnesota. Only korintje cinnamon is used in the cinnamon rolls and other cakes.
“Ingredients are very important to us,” Mr. O’Donnell said. “We know what we want in terms of the finished product, so to get to that, it starts with really great ingredients. We don’t jump around from supplier to supplier to buy at the cheapest price. We have long-term relationships with our supplier base. They know the quality we’re looking for and they deliver.”
That helps Hill Country fight the reputation that pre-packaged snack cakes are of poor quality and carry loads of calories. Instead of making a quick sweet dough and passing it off as a Danish, for example, Coffee House Cafe’s Danish stays true to the definition, with 108 layers of dough and fat.
“We’re really the only snack cake out there that is a true Danish product, even though you can find a lot of others that call themselves a Danish,” Mr. O’Donnell said. “And most of them have about 14% to 16% fruit. We make sure our fruit content on the Danish is at about 30%. When people buy a Danish, they really want that filling. We want to give the customer what they’re paying for.”
Hill Country’s relationship with its suppliers also has paid dividends in times of relative crisis. When the avian flu outbreak of 2015 led to an egg shortage, Hill Country was assured by its supplier that the company would be taken care of.
“Our supplier here in Texas has been with us for about 10 years and he guaranteed us supply,” Mr. O’Donnell said. “He told us that we’re a loyal customer and he’d do whatever he needed to keep us supplied. That’s what a strong, long-term relationship can do. While other people may not have been able to get fresh, whole eggs, we had the supply we needed.”
Mr. O’Donnell said the company is happy with what it has accomplished with Coffee House Cafe over the last few years. The products may be found from the Pacific Northwest to Florida to the Northeast and, as of recently, Southern California.
“We can’t say we’re in every city, but between what we’re doing with direct-store delivery and frozen, we’re pretty much nationwide,” he said.
Now the biggest challenge is continuing to spread the word about the line. That includes promotion programs that offer retailers display racks that can go along with a coffee bar or can stand along anywhere throughout a store.“We’ve had tremendous receptivity and it’s been a great venture for our company,” Mr. O’Donnell said. “Now we’re doing everything we can to keep getting our message and product out there.”