Baking & Snack - April 2020 - 16

Bakeries navigate change during the coronavirus pandemic
The novel coronavirus (COVID-19) severely affected global markets
in March, and bakery operations around the world have stepped up
to various challenges.
"This is uncharted territory. We are learning as we go," said John
Paterakis Jr., co-principal and senior vice president of sales and
marketing at H&S Bakery, Inc., Baltimore.
He said the outbreak has triggered a major surge in supermarket
business, a slump in foodservice business and difficult distribution
disruptions. With a growing number of schools and other institutional customers shutting down and with more foodservice sites
limiting business to carry-out only, a major outlet for baked foods
has collapsed as a result of the pandemic. Foodservice, including
McDonald's, is the largest part of the business of Northeast Foods, a
company affiliated with H&S.
At the same time, the company, including its retail arm Schmidt
Baking, has experienced a massive expansion in supermarket demand. Beginning March 10, H&S altered its production schedules to
focus on a limited number of items sold at supermarkets.
"We are only making the largest sales-volume products,"
Mr. Paterakis said. "It's the 80/20 rule - 80% of our volume comes
from 20% of our items. That's what we are doing."
Narrowing the number of products H&S bakes has been key to
keeping up with demand.
"The key is to keep the lines running on the same items," he noted.
"Low-volume items, changing over, you lose time. That time is very
important when you can make more production volume when you're
running straight dough continuously on the same items."
How much of a difference do the longer runs make for H&S?
Mr. Paterakis said the company's nine plants in the Northeast give it
proximity to customers and the flexibility to adjust production lines
to meet the highly unusual market needs.
"The good news is employees in all our bakeries are working,"
he said. "We haven't had any employee walk off. That doesn't mean
in the near future it's not going to happen. Our backup plan is, we
have called third-party temp workers. Every one of our bakeries
is backed up."

The company has identified certain lines that will be shut down in
the event workers are unable to make it to work.
Grupo Bimbo, Mexico City, said its global bakeries have been
adapting to the circumstances since coronavirus was first reported
in China.
"The countries where we have experienced this crisis already
like China, Italy, Spain and France taught us that social distancing is the best way to reduce the impact of this pandemic, so
any job or position that can be done from home were asked to
do home office (mainly administrative ones)," said Jorge Zarate,
senior vice president of global operations and engineering,
Grupo Bimbo.
"Operationally we have to shorten the response times to fulfill
sales orders by better scheduling each one of the needed items to
the market, avoiding downtimes or any production interruption,
ensuring our people's safety as well food safety with a superior
quality," Mr. Zarate said. "To increase our production volumes,
we are increasing the production times while strategically also
scheduling cleaning and maintenance time. There's no time to
waste to serve our customers and consumers."
- Josh Sosland, Food Business News,
Joanie Spencer, Baking & Snack

PepsiCo to increase workforce by 6,000
PepsiCo, Inc., Purchase, NY, will provide additional compensation to line workers and enhanced benefits to all US-based employees during the coronavirus outbreak.
The additional compensation covers more than 90,000 frontline
employees at both PepsiCo Beverages North America and PepsiCo
Foods North America and consists of a minimum of an incremental $100 per week for full-time workers over the next month. The
company also will hire an additional 6,000 new full-time, fullbenefit frontline employees over the next several months.
- Sam Danley, Food Business News
16 Baking & Snack April 2020 / www.bakingandsnack.com

B&S April book.indb 16

4/6/2020 11:17:03 AM


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Baking & Snack - April 2020

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