Picture a product that combines donuts, honey buns and apple fritters. Mix it, rest it, fill it, cut it, extrude it, cut it again, fry it and glaze it. “It’s one ugly but delectable pastry,” said Matt DeBoer, president, Apple Baking Co., Salisbury, NC. “It’s not only ugly, in a beautiful sense of the word, but inconsistent in looks — no piece looks the same: It’s perfect.”

Started in 1984 as a storefront bakery selling snack and creme cakes, also known as ring cakes, the company soon began experimenting with other pastries trying to expand its offerings. Through a series of trials and errors, the combo pastry, affectionately branded the Apple Ugly (“Ugly” for short), was born. Sales grew quickly and captured the attention of local retailers and supermarkets.

Within a year, the company switched to mass production. From the storefront in Kannapolis, NC, the company relocated to a manufacturing facility at Salisbury.

Converting a 40,000-sq-ft shuttered meat packing plant into a bakery was made easier with the spacious layout and plant design already in place. Slow but steady growth prompted the company to introduce line extensions including four new varieties of Uglies. Other mainstay products include nine varieties of batter cakes in whole and half rings, 3-oz single-serve wedges and 4-oz mini-Bundt cakes. Its newest products are Cheerwine (see “Say Cheers!” on page 40) and mini Bundt cakes.

With Apple Baking celebrating its 25th year, current output is on track to produce more than 7 million Uglies and 3 million cake slices this year. And the company is on the verge of taking giant leaps forward. “We are in the midst of significant investments in technology and equipment to become more efficient and flexible and to expand our capability,” said Mr. DeBoer, who joined the company in January 2008. He predicted that within three to five years, operations will require either physical expansion of the current facility situated on 30 acres or a move to a larger, better designed building.

In the past 12 months, the company went from flat sales to double-digit increases. New branding and marketing strategies are paying off. Expansion into local and regional grocery chains such as Food Lion, with more than 1,200 stores in 11 Southeast and Mid-Atlantic states; a new Web site with online sales; and media exposure through contests, festivals and community events have helped get the company noticed.

Recently, Apple Baking began contract manufacturing for customers such as Tasty Baking Co., producing sliced, individually packaged 3.75-oz pound cake wedges. Tasty found the company through a Web search.

“The mini Bundt cakes may be one of our most promising products,” Mr. DeBoer noted. “It crosses category lines by being great for convenience stores, vending machines and upscale food service.”


Investments are only beginning at Apple Baking. On the Ugly side of operations, the company may soon install a new extruder to provide enhanced consistency in weight, length and width but not in appearance. “This was a hurdle that had to be overcome because machines are normally designed to produce a consistent appearance,” Mr. DeBoer explained. “Part of the overall investment is a feedback system from the checkweigher to the extruder to maintain consistent weight.”

Consistency in length, width and weight will save on product giveaway and also save on packaging film. “The current setup produces a wide range in product size — short and fat to long and skinny,” Mr. DeBoer said. “It creates havoc with wrapping and packaging.” He estimated the weight variance resolution could yield close to $1 million annually or nearly 30% in savings.

“With the new system, we hope to achieve a product appearance that is even more inconsistent,” Mr. DeBoer noted. “We also eliminated proof time by changing to an auger versus gravity feed system. While the surface of the continuous extruded dough is smooth, when it is guillotine portioned, it is the cut surface that becomes the top and bottom of the pastry and that makes the Ugly, well, ugly.”


Uglies are produced in Apple, Blueberry, Raspberry, Chocolate Chip and Raisin Honey varieties. The business is split almost evenly between Cstores and vending with a small but growing retail presence.

The 1.5-hour production process for Uglies starts with hand-scaled ingredients added to the Triumph 400-lb-capacity mixer. After mixing , dough is portioned into totes, each holding approximately 100 lb and allowed to rest.

After resting, portions of dough are dumped on a work table where a specific measure of apple or other filling is added and spread across the dough. The operator then takes a 5-blade rotary cutter and randomly runs the roller blades through the dough, folding the dough on itself several times during the process.

The dough mass is hoisted to the hopper and extruded as a continuous solid round ribbon. After receiving r i a dusting d of corn starch, the ribbon is portioned and transferred to another belt, falling on its side in the process. Proofing in a DCA automated proofer helps develop unique surface patterns because of the manual rotary cutting and the blend of fruit pieces and raised dough.

Upon leaving the proofer, Uglies are fried less than one minute per side, and subsequently cool on a 9-tier ambient spiral system. “We are looking to enclose the spiral and condition the air within to speed the process,” Mr. DeBoer added.

All Uglies get a full glaze after cooling. Operators mix the powdered sugar-based glaze in an 80-qt bowl mixer and pump it to a kettle cooker before application to ensure smoothness and set. Two Allpac wrappers complete the process.

“Each wrapper runs at 65 pieces per minute and requires two sets of operators,” Mr. DeBoer said. “It is very labor intensive. We’re looking at a laning system that will take and automatically move the product into a single feeding lane to load a wrapper running at up to 150 pieces per minute.

After labels are applied using a Label-Aire applicator, quality is checked using Lock checkweighers and metal detectors as well as by taking physical measurements before manually casing and palletizing.


For cake production, mixed batter is deposited using a new Hinds-Bock system for ring cakes as well as mini-Bundt cakes. The depositing system helps reduce overfills and adds efficiency. Ring cakes are deposited and baked in individual tins while mini-Bundts use moulded rubber tray forms. Cake varieties include Lemon Creme, Vanilla Creme, Chocolate Creme, Strawberry Creme, Walnut, Pineapple Crush, Orange Crush, Plain Pound and Cheerwine — a wide array of flavors.

For now, products are baked in revolving deck ovens for about 30 minutes at 300°F. The company has reserved 6,000 sq ft for a tunnel oven in the near future.

Finished cakes can be iced with a manual stringer applicator and/or sliced using knife forms to ensure consistent piece weights. Automating these two processes is also on the capital spending agenda.

A new Ameripak wrapper with capacity of up to 140 pieces per minute more than triples production capacity and reduces bottlenecks. “ROI is less than one year, and the wrapper opens up the possibility to use printed film on this line as well,” Mr. DeBoer said.

Another update in cake production was the installation of a washdown-capable false ceiling. Current ceilings are up to 35 ft high and not accessible for cleaning. The new ceiling will lower energy cost, improve hygiene, add light and enhance overall appearance.


The plant has tremendous capability, capacity and potential pot ntial. The The current setup also enables donut, muffin and cookie production. Marketing has always been word of mouth, but Mr. DeBoer secured the commitment of company shareholders to reinvest in the business and expand market reach. “But we will do so in a controlled fashion with consistent sales growth to maintain top service,” he said.

Mr. DeBoer is the company’s first full-time president. For years, Rob Watts, a principal shareholder but also a full-time landscape architect, tried to split his time and run the operation. “The company has always been profitable, but it needed someone to provide full attention and take the company forward,” Mr. Watts said. “Profits are now being invested into marketing, technology and machinery. That was part of the agreement when Matt took over. We have a great, unique and niche product with the Ugly and tremendous potential with our Cheerwine license and our contact manufacturing.”

Since it has been a small company for so long, Apple Baking’s corporate structure is deliberately shallow. A lot of empowerment and responsibility is placed on employees. “I sell and manage the business and deal with customers, but I am nothing without the employees working every day to make the quality products we offer,” Mr. DeBoer noted. “And I am certainly not any better than anyone else in the company. If I am needed to help on the line or sweep the floor, I’ll do it. That’s my philosophy and way of conducting business. But it was not always that way, and the employees appreciate the effort, which translates into positive morale and more care and concern over quality as well as efficiency.”

Central to its current business are vending and convenience stores. “These are our bread and butter,” Mr. DeBoer noted. “But we’re looking to expand retail sales and grow geographically into the Midwest over the next few years. We are already in Ohio with one private-label customer and the Northeast with the Tastykake business.” All products are baked to order, shipped fresh and have a 30-day shelf life but can also be frozen to maintain quality.

No one at Apple Baking Co. defines its products as healthy. “They are definitely indulgent,” Mr. Watts said.

“While you will never see a low-fat Ugly, we are working to remove trans fat and even formulate a gluten-free Ugly,”Mr. DeBoer added.“We are not opposed to producing low-fat items for customers, but not the Ugly.”

To the company, Ugly is not an offensive word. It’s actually pretty sweet.