Awrey’s Bakery back from the brink


This is an AP Member Exchange shared by the Detroit Free Press.
LIVONIA, Mich. (AP) — It was a year ago that
Awrey’s Bakery — one of the few remaining iconic Detroit-area brands —
avoided permanent closure in a down-to-the-wire purchase deal.
new buyers, Michigan residents Ron Beebe and James McColgan, bought the
Livonia bakery from a pair of out-of-state private equity firms just
hours before its equipment was to be sold at liquidation auction. The
200-some Awrey’s employees were already out the door. In their place
were auctioneers.
"I physically had to go down and stop them from
taking things apart because they didn’t think the deal was going to go
through," McColgan, now the company’s CEO, told the Detroit Free Press ( ).
the 104-year-old Awrey’s brand is back in the pastries and cake
business as it jockeys for shelf space and a sustainable business model.
company employs 94 workers at its Farmington Road plant and
headquarters and is expanding into meat pies, deli trays and a
gluten-free product line. McColgan said the new Awrey’s is not yet
profitable, but getting closer.
The new owners reversed Awrey’s
controversial 1991 decision to remove its baked goods from most retail
stores and focus on sales through restaurants, airlines, hotels, prisons
and vending machines. For the first time in years, classic Awrey’s
products such as Long John coffee cakes, fudge brownies and date nut
bars can be found on local grocery shelves.
The new company is
legally known as Minnie Marie Bakers, but operates under the Awrey’s
Bakery name. Beebe and McColgan bought the business for an undisclosed
sum from Hilco Equity Management and Monomoy Capital Partners, the funds
that acquired Awrey’s out of bankruptcy for $25 million in 2005.
aggressive cost-cutting and labor concessions, Awrey’s lost $5.3
million in 2011 and $6.7 million in 2012 under the former owners,
according to documents in its Chapter 7 liquidation bankruptcy case. The
bakery announced in late 2012 that it would close for good unless a
buyer stepped forward.
Representatives for Torch Lake Capital
Partners, a successor fund to Hilco Equity which was the majority
Awrey’s owner, did not return a message for comment.
In an interview, McColgan said the equity fund owners"bled this company dry."
"They took every ounce of blood you have in your body, plus whatever they could get out of your
tissue," he said.
many customers, the Awrey’s name is tied to the Detroit area like other
well-known brands such as Faygo, Sanders, Stroh’s, Kowalski and
A few of the company’s 100-plus products are based on
the original recipes of Elizabeth and Fletcher Awrey, who went into
business selling in 1910 selling fresh bread and other goodies to their
Detroit neighbors on West Grand River.
"They’re still the Awrey’s recipe from grandma Awrey," McColgan said.
went on to pioneer the concept of in-store bakeries within
supermarkets. At the company’s peak headcount in the 1950s, it employed
4,000 workers between its bakery, supermarket counters and free-standing
In 1970, the company moved its headquarters from Detroit to Livonia.
Awrey family has not owned the business since the 2005 bankruptcy. A
few relatives still work there, including John Awrey, the director of
sales and marketing. "The new owners have certainly injected a lot of
life into us," Awrey said. .
Close to three-quarters of Awrey’s
workers were unionized before the 2013 shutdown. There is no longer a
union under the new corporate structure.
"We treat everybody great, at least I think we do. So we don’t think there’s a need for one,"
McColgan said.
company doesn’t disclose revenue figures, but says about 70% of its
business is now retail-level sales at 300 stores, including Kroger,
Wal-mart, Spartan Foods, Costco and local grocers like Hollywood
Markets. The other 30 percent is food service accounts with firms such
as Cisco and U.S. Foods.
Previously, about 98 percent of the Awrey’s business was in food service.
The CEO said he is trying to win back a few companies that didn’t return to Awrey’s products when the
plant reopened.
"It’s still going to take some time to convince major customers that we’re here to stay, but we are
here to stay," he said.
Dairy Fresh Foods is one long-standing Awrey’s customer that
distributes the products throughout Michigan and surrounding states.
really have some unique items," said Jay Must, a Dairy Fresh manager.
"This is a brand that’s well recognized in the region and we are finding
great reception for it in states nearby."
Van Conway, CEO of
restructuring firm Conway MacKenzie, said Awrey’s could be a successful
niche player in the overall market if it continues gaining customers and
shelf space.
Later on, if the business achieves sustained
profits, it could make an attractive acquisition for a major food
producer looking to expand its products, he said.
Information from: Detroit Free Press,
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