"As a smaller company, we have to make changes on a timely, planned basis," said Alan Rosenblum, president and owner. "It's a matter of doing the work before we need the capacity. And it's far better to do this on your own schedule than under the pressure of demand."
With the luxury of time and the freedom of independent ownership, Granny's Kitchens has been able to make its changes in stages. To raise capacity - and gain important processing flexibility - Granny's drew up a multiphase plan that takes it to the year 2000 and beyond. The company invested in additional plant and warehouse space, its own electrical power substation, more cooling and freezing equipment and a fourth production line. During the same period, it switched to ammonia freezing and glycol cooling. Equally important, Granny's invested in its staff, now numbering 110, through extensive training in communications, team building and job cross-tasking.
"You have to plan in order to achieve manufacturing flexibility," Mr. Rosenblum said. "To get ready to put in the fourth line, we had to have the other equipment, the building modifications and the personnel training in place. We now make more cake and yeast donuts than any other company in the world."
ONLY DONUTS. Frozen donuts are a hot market. And donuts are all that Granny's Kitchens makes. "Amazing" was how Mr. Rosenblum described current demand for cake donuts. He attributed this to the trend among supermarket in-store bakery operators to move away from mixes and into pre-fried items. It's a big market. Yeast-raised and cake donuts account for 14% of in-store baking's $10 billion annual sales, he said. "The future is thaw-and-sell," he continued and predicted that this style will dominate the frozen market into the next century. "Already we sell three times as much in that category and in thaw-and finish as we do frozen dough."
This trend leverages the cost and quality advantages of wholesale production. It also challenges the wholesaler. "Our customers buy not only our donuts but also our knowledge of the donut business," the donut baker continued. That means constant new product development and market research as well as flexible production.
From the start, Granny's Kitchens set itself up for high-volume donut production. The company is run by the third generation of Rosenblums to direct a baking business. Both Alan's grandfather, Benjamin Rosenblum, and his father, Jerry Rosenblum, operated retail bakeries and shops. In 198 1, Alan launched Granny's in a rented production facility in Yorkville, N.Y., about eight miles from the current Frankfort plant and its 15-acre site where it moved in 1989 (see May 1990 Baking & Snack, page 6).
That set the stage for growth during the early 1990s, with the supermarket in-store business the company's primary market. It also has strong sales to convenience stores and food service operations. Recently, it started a separate venture to produce and market frozen donut specialties through the retail freezer case.
In 1991, the company added more warehouse capacity and, in 1993, doubled the size of the bakery's production shop. Granny's corporate plan, the Year 2000 Project, includes a fifth fryer line in 1996. It will be supported by a freezer installed in 1994 and a cooler put in during 1995. By the year 2000, the bakery plans to start up another two processing lines.
THREE PHASES. Granny’s followed a detailed, three-phase plan to enlarge its processing capacity between 1993 and 1995. Phase I added 35,000 sq ft of new plant and warehouse space. Included in the expansion was 3,500 sq ft of extra freezer support slab for future use. Granny's put a glycol system under this flooring and that of the other new freezer space to prevent floor heaves. During construction, the bakery's blast freezing and bowl chilling systems were switched from carbon dioxide (C02) and Freon to ammonia and glycol. A grant from the New York State Energy Department assisted the bakery to make the switch because the state has a mandate to reduce C02 emissions. On a per-pound basis for finished goods, blast freezing proved to be far more economical than cryogenic C02.
"It was a big change for us to go from Freon and carbon dioxide to ammonia," Mr. Rosenblum said. The investment in the new engine room ran to nearly $750,000. That brought Granny's to Phase 2: a new 46,000-kilovolt power station.
"The bigger refrigeration system moved us to a different level of energy costs," Mr. Rosenblum said. "We have to be competitive with our production costs, and power is a big part of the cost of making product. So now it made sense for us to go to the power company and put in our own utility substation."
Previously, Granny's Kitchens bought its electrical power from the local utility company in the form of secondary power. Unfortunately, power rates in western New York are higher than in many other parts of the country. By operating its own transformer substation, the bakery could buy primary power directly from the state hydroelectric authority at a lower cost than conditioned, secondary power.
"It cost $250,000, but our engineering study showed a return-on-investment of two years," Mr. Rosenblum said. Phase 2 was completed in 1994.
Phase 3 involved processing equipment. The bakery added its fourth processing line, a Moline combination cake and yeast line with automated sheeting and cutting, automatic proofer loading, a self-regulating proof box and a temperature-controlled 22-ft fryer. At the same time, the bakery lengthened one of its older 22-ft fryers into a 26-ft system.
State of the art, the new computerized line significantly changed the way this bakery runs all its donut lines.
"When we saw how beautifully the new Moline line operated," Mr. Rosenblum said, "we took all the controls out of our older Moline systems and duplicated the 1995 controls in them."
The company then upgraded its existing yeast-raised line to match the new system in yeast-raised output. Both proof boxes are now the same size, and each is operated by computer.
Another lesson from the new fryer prompted Granny's engineers to alter placement of temperature sensors. Heat probes, previously located under the heating tubes, are now put outside them. Other probes are stationed at the top of the oil, where the donuts actually fry. Digital control assures accurate temperature maintenance.
Also during Phase 3, the bakery installed two double-tier mechanical blast freezers. "This allows us to go into our next phase and installation of our fifth line," Mr. Rosenblum said. "And we'll add that new fryer without having to put in more freezing capacity."
