Thursday, March 19, 2009

In Nebraska, One Family Owned Baking Company Thrives In Spite Of Recession

Imagine this: a caramel cinnamon roll made of over 100 layers of dough and butter, decadent, dripping, and delicious, fresh out of the oven.

No, I didn’t just describe the latest creation by a Top Chef winner. It’s not the newest dessert entrée at Le Bernadin. It’s one of several pastries sold by James Skinner, president of the family owned James Skinner Baking Company.

In a time where most small companies and family run businesses are either failing or floundering, the company has been seeing record gains. A recent article in USA Today reported a profit increase of 18% from 2007 to 2008. And in December of this year- one of the poorest holiday seasons on record for the vast majority of retail- sales for the company rose 25%.

In a recessive economy, only the strong survive. Usually, it’s the bargain giants: well established corporations with thousands of stores and questionable ethics. In a recent press release, Wal-Mart reported a profit increase of 1.7% in 2009, up over $1.5 billion dollars from 2008. And in January, McDonald’s announced a staggering 7.1% increase in global profits.

It’s not surprising, but it is upsetting. As America shifts its priorities from quality to cost, many small businesses and family owned companies are failing. And though most Americans are now picking up their new summer wardrobe at Target instead of Macy’s, or grabbing a coffee at Burger King rather than Starbucks, the search continues for smaller companies that provide quality service at low prices- while remaining financially stable enough to weather a tough economic climate.

Enter James Skinner, 58-year-old president of the James Skinner Company. His company, family owned since 1983, sells a variety of homemade pastries, from streusel topped cinnamon rolls to Bavarian crème coffee cake. And at $3.49 to $5.99 for a pack of six pastries (a package that sells for $8.99 is being discontinued), the price is definitely right.

Since taking over the business in 2004, Skinner relies on quality products and a tight knit staff of over 300 to maintain a profitable enterprise. And whatever he’s doing, it’s working.

All this success stemming from a man who, at one point, wasn’t sure whether he wanted to take over the family business.

“I was interested in marine biology, however I knew my father wanted me in the business,” wrote James through an email interview. “Besides, there's not much marine activity in Nebraska.” 

The company, which bakes over 200 million pastries annually, relies on a method hundreds of years old for its baking process. An exclusive layering method ensures that each pastry is made with 100 layers of dough and butter, then kept overnight in a time delay process to provide maximum flavor.

“It is an old world European process, and is very time consuming,” admits Skinner. “Throughout the years most large bakeries have shortened the process, which we believe has lessened the quality of the finished product.” 

From there, the privately labeled products are shipped off and sold across the country to bakeries in several supermarket chains- Nash Finch, Supervalu, Associated Wholesale Grocers, Target, and Hannaford brothers, for example. While the pastries are not sold directly to the supermarkets- yet- Skinner is considering the idea.

“Presently we have a Vice President of sales and two sales associates who direct over 45 food brokers throughout the country,” wrote Skinner. “Within retail sale we have always utilized a broker network but are exploring direct sales.”

Since he’s confident in his products, he’s not really worried about the recession. “Our products are quality based and priced right for the consumer,” wrote Skinner. “The recession, as [with] past recessions, have not had that much of an adverse effect.”

He does admit, however, that sales usually slag in the late winter months.

"Sales have historically fallen off a bit every January and February and usually pick up toward the end of February and beyond,” wrote Skinner. “We are addressing this and will plan additional promotional activities during these months next year.”

Skinner believes that maintaining his company as private is one of the key components of its current success.

“We look at areas within the company- people, operations, etc-
where we are inefficient, and explore ways to make improvements,” wrote Skinner. “Because we are family owned and operated we can react quickly, compared to a publicly owned company that must answer to shareholders.” 

But while times are good for the mid sized, family owned company, Skinner is anything but complacent, preparing the company for the tough times ahead. In addition to making improvements to their purchasing and engineering departments, the company is also currently working on a healthier product line, “to complement our existing line of products.” A smart move, considering just one five-ounce cream cheese iced cinnamon roll packs 580 calories and 30 grams of fat. (But what did you expect from a pastry that boasts over 100 layers of dough and butter?)

But that doesn’t stop Skinner from admitting it’s his favorite.

“It's a tie between our cheese strip danish and our cream cheese iced cinnamon rolls,” he wrote. 

For more on the company, or to place an order (I highly recommend the Bavarian Creme Coffee Cake or the Cream Cheese Iced Cinnamon Rolls), check out their website. Support family businesses!

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