Tastykake looking fresh at 100 [The Philadelphia Inquirer :: ]
(Philadelphia Inquirer (PA) Via Acquire Media NewsEdge) Feb. 25--As an independent company, Tasty Baking Co. didn't quite make it to Tuesday's 100th anniversary, selling out to Flowers Foods Inc. in 2011 for $141 million to avoid bankruptcy.
But nearly three years after the rescue, the Tastykake brand -- which drips nostalgia in the Philadelphia region, but had failed to break through nationally -- has renewed strength.
The Flowers bailout has given workers at Tasty's bakery in South Philadelphia and delivery-route owners throughout the Mid-Atlantic the chance to celebrate the brand's centennial.
"Couldn't be better," is how Dom Rosa, who has owned a Tastykake delivery route in South Jersey since 2000, described life under Flowers Foods.
"As you know, a couple of years ago, we were really in a bad way, and Flowers came in and rejuvenated us," Rosa said. "Things are going really well."
Publicly traded Flowers, which is based in Thomasville, Ga., and had $3.75 billion in revenue last year, does not break out financial results for its Tasty Baking subsidiary, but Flowers' chief executive, Allen L. Shiver, told analysts this month that "Tastykake is proving to be a strong player across our markets."
Based on retail prices, not counting discounts, Tastykake sales have climbed to $425 million from $225 million since the takeover, Flowers said. That is not the amount of revenue collected by Flowers. The increase last year was 46 percent, said a spokesman for Flowers.
Flowers said it employs 561 at Tasty in Philadelphia, plus 217 at a second former Tasty plant in Oxford, Chester County, for a total of 778. At the time of the sale, the total was 740.
Before the sale to Flowers, Tastykakes were sold primarily through 474 delivery routes, most owned by independent distributors, who drove blue-and-white box vans. Flowers now sells Tastykakes in 5,000 of its 6,000 territories served by similar independent distributors from Maine to Florida and west as far as Nevada.
"When they bought Tastykake, they didn't buy Tastykake for Philadelphia. They bought it for the brand, to take the brand all over the place," said George J. Latella, a visiting professor of food marketing at St. Joseph's University and a former Tasty Baking sales executive.
Paul Ridder, Tasty Baking's president, declined to be interviewed on how the company has performed since the takeover, which followed the opening in early 2010 of a $78 million bakery in the Philadelphia Navy Yard.
Early production problems at the bakery -- built with the help of $32 million in publicly subsidized financing (since paid back by Flowers) -- meant that anticipated savings failed to materialize, forcing the heavily leveraged Tasty Baking to miss a debt payment in January 2011.
While the new bakery precipitated the end of Tasty as an independent company, it was a victory of sorts. Generations of Tasty executives had tried to build a new bakery to replace the inefficient, cluttered, six-story bakery in Philadelphia's Nicetown neighborhood that Tasty had occupied since 1922.
All failed until the arrival of Charlie Pizzi, who was hired as Tasty's CEO in 2002 after a career in government and 13 years as CEO of the Philadelphia Chamber of Commerce.
"Charlie Pizzi had the connections to get the financing, and built the new plant down in the Navy Yard," said Philip J. Baur Jr., son of a Tasty Baking cofounder, and a former chairman of the company.
Baur's father and a partner, with $50,000 in capital, incorporated the business on Feb. 25, 1914, and began producing small cakes that year and delivering them in horse-drawn wagons in the Germantown section of Philadelphia.
Asked for his thoughts on the 100th anniversary of Tasty Baking, Baur, 83, said: "I think it's rather unusual for a company to last 100 years. I'm surprised. I really am."
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