Stroll down the cake aisle of the supermarket and you’re sure to spot a local success story. Cake sales are flat; indeed, year on year there has been a small decline by volume, but family-run cake brand The Fabulous Bakin Boys, based in Witney, Oxfordshire, is bucking the trend, with sales up nearly 15% year on year. Eleanor Harris discovers how the company has achieved rapid growth and how it plans to double the size of its business by 2015
The Fabulous Bakin’ Boys was launched 14 years ago by CEO and founder Gary Frank, but its story began much earlier, when Frank, who was working as a Wall Street trader, lost everything in the stock market crash of 1987. Moving back to the UK and finding himself “unemployed and unemployable” for a year, he had a dream in which he was told to “Go and make doughnuts”. In 1989 he founded Delicious Doughnuts on funds supplied by friends, family and the bank.
In the first year he made a £15,000 loss on a turnover of £45,000 – the Brits weren’t quite ready for American-style doughnuts, he says. But the company moved into muffins, flapjacks and cakes, dropped the doughnuts, and by 1996 was turning over £4 million. Following a rebranding, The Fabulous Bakin’ Boys was launched in October 1997.
Since then, the company has experienced rapid growth. The first major turning point came in early 1998 when Sainsbury’s decided to stock its products in stores nationwide. Other retailers quickly followed suit and, thanks to the supermarkets, over the next decade the company grew to a £12m business.
The second turning point came in 2007 when the company’s main supplier went bust. Though the business plan was never to have gone into manufacturing, the company decided to buy the supplier’s assets, which included a manufacturing plant, from the administrator, and it became a full-blown baker as well as a sales and marketing business. It was a great decision: as an integrated business Frank had much more control over the whole operation, and it gave him the opportunity to further grow and develop the business.
Like everyone in the food business, the company was hit by sharply rising commodity prices in 2010. Nevertheless, it continues to grow and today the company, which is still family-run by Frank and his brother Jon, has an expected turnover of £20m for the year ending 2011, employs over 150 people at its 75,000 sq ft bakery and supplies the big four supermarkets as well as independent stores and food service outlets across the UK.
Innovation and quality are the two pillars underpinning the business and they are key to the company’s growth and success. Consumers are bored with the same old cherry bakewells and apple tarts that have been around for years, says Frank, so it’s perhaps not surprising that sales in the cake fixture are flat and that some of the company’s competitors are in decline, despite the fact that promotional activity has gone up by nearly 20% year on year, he adds. “We’ve come along and offered something different and our sales have increased by nearly 15%. We like to think of ourselves as the challenger brand, the kind of Ben & Jerry’s of cake.”
In this vein, the company has recently announced ambitious plans for expansion. It is aiming to double the size of its business by 2015, taking sales to around £50m. Its plans are based on the principle of offering customers quality, innovation and value for money – a vision very much aligned with what the retailers are looking for, says Frank. The company is investing heavily in new product development – it has a five-year pipeline of product development in place. Last year it launched a new range of fruit and oat slices which were the first baked snack to contain one of the five-a-day portions of fruit. And in another first for cakes, the company is launching a range of mini versions of its bestselling cupcakes and muffins, which hit the stores in January.
In addition, the business has made a £3m investment in the installation of a new automated line in its bakery in the first quarter of 2012, which will double capacity, is more cost efficient and gives the company new capabilities. The equipment will enable the production of the new ‘Minis’ range, allowing an assortment of different flavours within the same pack, all operating at very high speeds – a considerable technological achievement. “When we’re running flat out we’ll be producing about 65,000 Minis, standard size muffins, flapjacks and cupcakes an hour. That’s quite a lot of cake!” adds Frank.
As part of the expansion plans, the company is planning to increase its workforce and aims to employ around 200 people by mid-2013. After more than 20 years in Witney, The Fabulous Bakin’ Boys remains firmly rooted in the area, but it is looking to cast the net a bit further afield: it is considering export for the first time and has just started supplying into southern Ireland. The company is now looking at opportunities for its products in Europe and beyond.
The journey is far from over, Frank points out: “We’re not even half way there, there’s still masses of opportunity. Who knows what lies beyond the next three years, because I think there’s almost infinite potential.”