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Flour Power

Digital Library > Building and Inspiring an Organization > Buying a business “Flour Power”

Schwebel Baking Co. celebrates 100 years as a family business.

Unlike many family businesses, entitlement isn't a problem at the Schwebel Baking Co.Family members don't view joining the business as a right — but a privilege, says Alyson Winick, senior vice president of the Youngstown, Ohio-based company, which generates more than $130 million in annual revenue.

Founded in 1906 by Winick's grandparents, Joseph and Dora Schwebel, Schwebel's has grown from a small local bakery to a regional force with four bakeries and 26 distribution facilities. The company makes bread products under a variety of labels, including Schwebel's, Country Hearth, Sun Maid, Cinnabon, Roman Meal, Millbrook and 'taliano.

Although entitlement may not exist, there is considerable pride in the Schwebel name — pride that became a double-edged sword at one point.

In 1979 Schwebel's entered the Pittsburgh market when it purchased Drake Baking. Immediately the company changed Drake's packaging to the Schwebel's label. "That was one of our biggest mistakes," Winick explained at a TEI Presidents' Forum. "Our brand equity, our hearts and our employees are committed to Schwebel. Yet we were not as well known in Pittsburgh as we thought we were."

Consequently, a lot of Schwebel's bread sat on grocery shelves. "It was a scary time — we were bleeding red ink because of our ego," Winick adds.

The company recovered from the branding blunder with an aggressive advertising campaign that put the Schwebel's name in front of Pittsburgh consumers. And though an unpleasant incident, the company learned an important lesson for subsequent acquisitions.

In 1981 Schwebel's bought Lawson's Baking, a company that supplied a number of convenience stores with private-label products, so brand wasn't an issue here. In 1983 Schwebel's acquired the Tip-Top baking company. Schwebel's decided to keep the Tip-Top label for about a year and then transition to its flagship label through advertising and cross-promotions.

Schwebel Baking made its biggest acquisition in 1987, buying the Millbrook Bread Co. of Cleveland. In this case, however, Schwebel's decided to keep the Millbrook brand intact and operate the company as a separate division.

When making acquisitions, it's important to evaluate any name changes carefully. "You've got to consider the customers, what their buying habits are and what the brand name means to them," Winick says.

Other ingredients in Schwebel's recipe for success:

Rule by consensus. "At the end of the day, we rule by consensus," Winick says of the eight family members actively involved at Schwebel Baking. "We talk things over and over until we agree. Granted, some of us may be less enthusiastic about an issue, but we won't move forward on a project or expenditure until we reach consensus. This has always served us well."

Valuing employees. Schwebel's strives to create a family atmosphere for its employees. Staying visible helps. "Any person in the company can pick up the phone and call us," says Winick, referring to family members working in the business. In fact, visibility is one of the reasons she maintains two offices at Schwebel's Youngstown headquarters — one in the plant and one in the sales offices.

Average tenure for Schwebel's employees is 10 years — twice the national average — and Winick links the low turnover to the company's inclusive culture. Schwebel's hosts a variety of special events to recognize employees, including annual luncheons for its 300-plus retirees. To celebrate its 100th anniversary in April, the company will host two huge dinner parties where more than 2,400 employees and their spouses are expected to attend.

That's a lot of dinner rolls. "But it's important to value the people who put you where you are," stresses Winick.

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