Schwebel Baking Company

views updated

Schwebel Baking Company

P.O. Box 6018
965 East Midlothian Boulevard
Youngstown, Ohio 44502
U.S.A.
Telephone: (330) 783-2860
Toll Free: (800) 860-2867
Fax: (330) 782-1774
Web site: http://www.schwebels.com

Private Company
Incorporated: 1906
Employees: 1,400
Sales: $130 million (2004 est.)
NAIC: 311812 Commercial Bakeries

Schwebel Baking Company is a large regional bakery based in Youngstown, Ohio. The firm produces 700,000 loaves of bread and packages of buns a day, along with bagels, English muffins, pita bread, and tortillas. Its products are distributed throughout Ohio and in parts of New York, Pennsylvania, and West Virginia. Schwebel's brands include Country Hearth, Roman Meal, Cinnabon, 'taliano, Millbrook, Vogel's, Fit for Life, Aladdin's, and Sun-Maid Raisin. Frozen bread products also are produced for sale to wholesale and foodservice accounts around the United States. The 100-year-old company is owned and run by members of the Schwebel family.

Early Years

The beginnings of Schwebel Baking Company date to 1906, when Dora and Joseph Schwebel began baking bread and selling it in and around the small town of Campbell, Ohio. Their first offering was Jewish Rye, which was delivered on foot in wicker laundry baskets. After several years the Schwebels started using a horse and wagon and expanded their delivery area to nearby Youngstown.

In 1914 the Schwebels began selling their bread through several local grocery stores. To keep up with the increased demand, they hired additional bakers and a delivery driver/salesman. In 1923 they invested $25,000 in building a new bakery, which also featured a retail sales counter. The small company now had six delivery trucks and 15 employees and was delivering 1,000 loaves of bread per day.

In 1928 tragedy struck when Joseph Schwebel died suddenly at the age of 46. Although friends advised Dora to sell the bakery and stay at home with her six children, she decided to keep running the business. The stock market crashed the following year, but she was able to negotiate several critical agreements that enabled the firm to keep operating.

In 1932, in the depths of the Great Depression, Dora Schwebel created "Happy the Clown," a character whose face was placed on the company's bread wrappers as a symbol of hope for the future. The company was growing despite the hard times, and in 1936 a new $100,000 bakery was built that doubled production capacity and improved efficiency. It was expanded in 1938 and again in 1941.

Opening of "Million Dollar Bakery" in 1951

Following World War II Schwebel Baking continued to grow, and in 1951 the company built a new $1 million bakery in Youngstown that featured state-of-the-art equipment, enabling it to create new product lines like Toasti-Taste Bread. By 1960, the company's annual revenues had grown to approximately $2 million.

Over the years a number of Schwebel family members had taken jobs with the company, which continued to be family owned. They were not given a quick and easy path to the top, however. After Dora's grandson Joseph graduated from the University of Pennsylvania's prestigious Wharton School of Business in 1960, he asked her where his office would be. As he told Inside Business years later, "She told me the next day I would ride route No. 1, which left at 4:30 in the morning. She told me that I was going to ride every route and then we were going to talk about what I was going to do after that." At that time, the company had 39 delivery routes. He soon came to realize the wisdom of her approach, however. "All the action, in stores, with customers, in restaurants, that's where you learn. So that was my real education."

In 1964 Dora Schwebel died at age 76, and her son Irving was named president of the firm. In 1967 the company began licensing its popular Golden Rich Bread nationwide, and in 1972 the company opened a distribution center in Canton, Ohio, its first facility outside of Youngstown.

In 1974 Schwebel's entered the Cleveland market, and two years later the firm purchased the Vienna Baking Company in McKeesport, Pennsylvania, and began selling bread in Pittsburgh. The year 1977 saw the Youngstown plant expanded and fully automated, allowing it to produce more than 100 loaves of bread per minute. This and other expansion efforts would allow the firm to double its output.

Growth continued in the early 1980s with the acquisition of the Lawson Bakery of Cuyahoga Falls, Ohio in 1981 and the opening of a new distribution center in Columbus, Ohio in 1983. That same year the firm signed a contract to supply bread to the Epcot Center at Florida's Walt Disney World, and also began broadcasting radio commercials using the catchy "We Want Schwebel's" jingle.

Naming Joseph Schwebel President in 1984

In 1984 Irving Schwebel's eldest son Joseph was named president of the company. He had worked for a number of years as restaurant and institutional sales manager for the firm and as vice-president of sales since 1981.

In 1987 Schwebel's acquired Millbrook Bread of Cleveland from Interstate Brands Corp. and also expanded to western New York by opening a distribution center in Buffalo. The growth of the company's wholesale baking business was recognized in 1989 by the Quality Bakers of America President's Cup, which was given to the country's premier wholesale baker.

Members of the Schwebel family had often given generously to others, and in 1988 they formed the Schwebel Family Foundation to oversee their philanthropic efforts. They had been particularly supportive of local educational organizations, including Kent State University and Youngstown State University. At Kent State the Schwebels established a scholarship fund for employees, endowed a Hospitality Management lecture series, supported the school's Jewish Studies and athletic departments, and helped create a restaurant in the Kent State Student Center, the Schwebel Garden Room.

The 1990s saw expansion continue with the 1990 purchase of the Kroger Company's Northcoast Bakery in Solon, Ohio, and the 1995 acquisition of a similar facility in Hebron, Ohio from Kaufman's Bakery. By now, annual revenues had grown to nearly $100 million.

In the mid-1990s a licensing deal was signed that enabled Schwebel's to bake bread using ingredients from cereal maker Kellogg's and use that firm's logo on its packaging. Several different varieties were produced, including All-Bran, Low-Fat Granola, and Nutri-Grain. By this time the firm also had signed agreements to produce baked goods for Stouffer's and Pillsbury.

Formation of a Trucking Subsidiary in 1996

The year 1996 saw the formation of a separate trucking subsidiary, SBC Transportation, Inc. Delivering the firm's fresh baked goods in a timely fashion required more than 600 vehicles. The year 1996 also saw Schwebel's switch advertising agencies to Pittsburgh-based MARC. The company was spending an estimated $2 million per year on advertising at this time.

In 1997 Schwebel's acquired several sales routes from Flowers Industries, Inc. of West Virginia. The company would supply bread, buns, and rolls to Flowers customers in central Ohio and Pittsburgh, and gained exclusive distribution rights to Flowers' BlueBird snack cakes and pastries in central Ohio. In September, 100 teamsters briefly struck the firm, stopping its deliveries to Pittsburgh, before they agreed to a new three-year contract.

The year 1997 also saw Schwebel Baking Company inducted into the Family Business Hall of Fame, located at Case Western Reserve University's Weatherhead School of Management in Cleveland. Numerous Schwebel family members continued to be involved in the firm, ranging from board chairman Frances Solomon, the 84-year-old daughter of Dora and Joseph Schwebel, to a recently hired fourth-generation family member. The firm was still entirely family owned.

In 1999 annual sales reached a new height of $125 million. The firm was now using the Internet to communicate with supermarket chains and take payments, and it expanded this capability over the next several years.

Company Perspectives:

Our Pledge To You: Many things change over time, but for nearly a century, the quality, freshness and great taste of Schwebel's breads and buns has been something that consumers have come to expect. Guaranteed Quality. At Schwebel's, our master bakers make use of some of the most innovative, state-of-the-art baking equipment available today to keep quality its highest. Guaranteed Freshness. Four strategically located bakeries and a comprehensive direct store delivery system guarantee product freshness. Guaranteed Product Variety. Schwebel's caters to the many tastes and lifestyles of today's consumers, with a large selection of mainstream and specialty breads, buns and rolls to please any palate. Guaranteed Nutrition. Rich in complex carbohydrates, a vital energy source, Schwebel's bakery products are vitamin enriched, low in fat, and cholesterol free. Guaranteed Food Safety. Schwebel's is continually awarded for excellence in quality, cleanliness and food safety by the American Institute of Baking (AIB) and Quality Bakers of America (QBA).

In early 2000 Schwebel's began running advertisements on radio stations in Cleveland, Columbus, and Pittsburgh that revived the catchy "We Want Schwebel's" jingle that first had been used almost two decades earlier. At this time the company was selling 52 percent white bread, 18 percent whole wheat, and 18 percent Italian and potato bread. The firm was the top maker of premium white bread in central Ohio, Pittsburgh, and Erie, Pennsylvania. In addition to its own brands, the company had contracts to produce Roman Meal, Country Hearth, and Sun-Maid Raisin bread.

In 2002 Schwebel's partnered with children's cable television network Nickelodeon for a three-month promotional campaign. Purchasers of loaves of Giant White Bread would receive a free trial issue of Nickelodeon Magazine.

During this period the bread industry was seeing a steady decline in the sales of many of its products. A national consumer trend away from white bread and toward more whole grain products caused white bread sales to fall by approximately 10 percent beginning in the late 1990s. Bagel sales had dropped 15 percent, while sales of hamburger and hot dog buns to fast-food restaurants had declined even more, by 20 percent, over a five-year span. Only more expensive premium bread and artisan bakery bread had increased in popularity.

When the craze for low-carbohydrate diets like Atkins and South Beach reached a fever pitch in 2003, millions of Americans began cutting back even further on carbohydrate-rich bread products. As sales at many baking firms plunged, the industry entered full crisis mode. Schwebel's fought back by creating a low-carbohydrate bread that used wheat gluten or proteins derived from beans instead of flour, while also taking a pro-carbohydrate stance and promoting the nutritional value of its products, which until only recently had been taken for granted.

Company president Joseph Schwebel, a former chairman of the American Institute of Baking, also helped form a new lobbying group, the Foundation for the Advancement of Grain-Based Foods, which would perform research into the health benefits of bread and other grain foods. By November of 2004 the number of American adults on low-carbohydrate diets was fading, dropping to 3.6 percent from 9.1 percent in February, according to research firm NPD Group.

After nearly 100 years, Schwebel Baking Company had grown into the leading baking firm in Ohio and parts of New York, Pennsylvania, and West Virginia. Still family owned and managed, the firm anticipated producing tasty, healthful baked goods for many more years to come.

Principal Subsidiaries

SBC Transportation, Inc.

Principal Competitors

Interstate Bakeries Corporation; Sara Lee Bakery Group; Pepperidge Farm, Inc.; Alfred Nickles Bakery, Inc.

Key Dates:

1906:: Dora and Joseph Schwebel begin selling home-baked bread in Campbell, Ohio.
1914:: Sales through retail outlets begin.
1923:: The company builds a new bakery/store.
1928:: Joseph Schwebel dies; Dora Schwebel takes control of the firm.
1936:: A new, larger bakery is built, doubling output.
1951:: A modern $1 million bakery is opened in Youngstown, Ohio.
1964:: Dora Schwebel dies; Irving Schwebel takes over the presidency of the firm.
1967:: National licensing of Schwebel's Golden Rich Bread begins.
1976:: Vienna Baking Co. is acquired.
1981:: Lawson Bakery is purchased.
1984:: Joseph Schwebel is named president of the firm.
1987:: Millbrook Bread of Cleveland is acquired.
1990:: The company purchases Kroger Company's Northcoast Bakery in Solon, Ohio.
1995:: Additional baking facilities in Hebron, Ohio are acquired from Kaufman's Bakery.
1996:: SBC Transportation is formed.
1997:: Schwebel Baking Company is inducted into the Family Business Hall of Fame, located at Case Western Reserve University's Weatherhead School of Management in Cleveland.