Small Bites April 29, 2021
Bakery burned by "investment"
Over $102 Million in VT 2020 local sales tabulated so far...
Let's get you counted! Are you selling DSD or are you a store purchasing DSD in Bakery & Meat categories?
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Iconic Bakeries Close

There is one big story out this week.
 
It is the sudden closing of the iconic Vermont brand Koffee Kup Bakery (KKB) which purchased the Vermont Bread Company in 2013. It became well known in retail & restaurant circles with the expanded products & wider distribution potential. Since 1940 the bakery has been known as THE Vermont baker of sandwich breads, rolls, crullers, & donuts. With no notice to employees or to the state Labor Board, operations ceased on Monday.
 
Less than a month ago the bakeries were purchased by investment firm American Industrial Acquisition Corporation. In an announcement to the industry financial adviser G2 stated:
"Koffee Kup Bakery successfully completed a transaction with American Industrial Acquisition Corporation (“AIAC”) on April 1, 2021. AIAC has significant experience partnering with manufacturing and distribution businesses and is well positioned to continue the expansion of KKB, capitalizing on operational improvements and driving growth momentum forward."  
 
Well, it looks like they were off base. With the closure of both bakeries, more than 150 are unemployed in the Burlington location and over 90 in Brattleboro. The closing takes on a new meaning when read within AIAC's criteria for acquiring companies.
 
To offset the impact, several area manufacturing, bakeries, distribution businesses are working together to hire former bakery employees. The lost jobs cover many aspects of the supply chain which allowed stores across the state to access the products. As reported in Seven Days, an out of state bakery company actively expressed interest in buying the baker. The sales however went to AIAC, the operation shut in less than 30 days. There is a yet-to-be-told story how this happened.
 
The story has been widely covered by state & local media with more likely to come as the impact unfolds or journalists explore the story behind the recent purchase AND shuttering of KKB less than 30 days ago. 
$102 million counted!
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Let's include all VT direct to store delivery sales dollars from producers across all categories & all regions of the state.
Independent Rural Stores Take Note of Two VT Grants

Local Food In Your Community Grants addresses market access including grocery stores, independent retail, & food co-ops
In case you missed it:
Dan & Whit's, the hub of Norwich, has a long history of engagement. They know the value engaging with humor through one minute videos providing awareness of businesses in the community struggling due to the pandemic. The Monday Minutes are "non-essential but interesting local things".
Dosa is South India's version of the crepe. To eat is to fall in love with its seductively sour, tangy flavor & airy, crisp texture. Gluten-free, dairy-free & fermented fits into many top consumer preference categories. Dosa
Kitchen is expanding into the retail arena as well as their Brattleboro restaurant & food truck for events around the state. Find more new VSFA members here.
Impacts on Closure

The impact & fallout of Koffee Kup & Vermont Bread Company abruptly closing this week throws a monster wrench in the supply-side of distribution impacting stores, restaurants, delis, & food service operations across the northeast, not just in Vermont.
 
Sales to retail stores of all sizes from Keeler Bay Variety in South Hero to regional Walmarts, are suddenly left with no inventory for restocking & still yet-to-be-determined substitute products. What it also means is the Vermont multiplier effect is in full force with over 250 employees left without a paycheck to spend with many support businesses impacted too.  
 
When a manufacturer fills a distinct place in the market, it is not easy finding immediate substitutes. Right now, across Vermont & the northeast, stores, restaurants, & distributors are working hard to find replacement freshly baked products at prices & with efficient logistics in place to mitigate inevitable cost increases.
 
Local bakeries have distinct market share. Due to the changes this week, some are now exploring if they can fill the gaps with their own products. It is not always easy to shift existing operations & account management to satisfy a sudden opening like we now face. There are many internal logistics for bakeries considering their place in this new landscape: capitalization (note the deleterious impact of AIAC on KKB); staffing (other local businesses are reaching out to hire the recently unemployed); customer account maintenance & sales & efficient delivery routes. These all come into play in helping fulfill the sudden needs to fill store shelves & in the case of grab & go sandwich delis "fill the bulky roll".
 
In Small Bites, we talk a lot about the full supply chain & economic impact. As is noted this week, a business closing - one that covers a large market segment- has innumerable fall out. If a new buyer for the bakery is not in the wings, our hope is that other local businesses can hire, train & provide support to the laid off employees. It is going to take a strategic approach to fill the enormous void.  It will be interesting to find out the story behind this story, a cautionary tale of outside acquisitions & investment, supply chain disruption, with broad impacts that include an affordable product line accessed by a large segment of shoppers across the northeast.  
 
Tim Wessel, a member of the Brattleboro Select Board, wrote on social media on Tuesday that “Brattleboro has been blindsided by this abrupt closure at VBC and this callous move does seem to be driven by outside investors.” -Brattleboro Reformer
Farmers Take Note

The Vermont Agency of Agriculture, Food & Markets does not anticipate adding additional specialized guidance for farmers markets beyond the universal guidance that went into place April 9th for all Sector. Things are looking up!

VAAFM Grants to for farmers know: Support with wholesale market access, including grocery stores, independent retail, & food co-ops

Calling All Farmer Market Vendors: Scale Testing
- No in-person scale clinics this year
- Vendors who have had their scales tested in a prior year will not be required to submit their scales to the Agency for inspection
- Vendors who may be using new scales for the first time are asked to contact the Agency to make an appointment to have their scales tested for compliance to accuracy and specification requirements. More info
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