Organic works

Organic Works Bakery is both carving and expanding a niche. Although it
started out as a wholesale supplier, it’s fast becoming a destination
shopping experience in downtown London, Ont.

Organic Works’ chocolate chip muffins. Photo by B John Sayer-White

Organic Works Bakery is both carving and expanding a niche. Although it started out as a wholesale supplier, it’s fast becoming a destination shopping experience in downtown London, Ont.

Customers in the area could easily walk to an oh-so-trendy downtown farmers’ market, where they could buy a variety of breads, meats, cheeses, over-priced coffee and other gourmet fare. But instead, they come to this little bakery – almost invisible on a side street, squeezed between railroad tracks and the famous Labatt brewery. Some customers call ahead to find out when the cinnamon buns will be coming out of the oven, while others place standing weekly orders for six or nine loaves of gluten-free bread at $6 apiece.

It amounts to a nice little retail trade, and it’s growing rapidly, says owner Peter Cuddy. But it also means he has to balance the rapid growth of the retail/walk-in side, which can mean hundreds of dollars a day in sales, against the needs of his growing list of larger-scale wholesale customers.

Cuddy is no stranger to the wholesale aspect of food sales. It’s something he learned while working for his family’s poultry and egg business in the 1990s. (At one time, Cuddy International, his late father’s company, produced every McDonald’s Chicken McNugget consumed in North America.)

Striking out on his own in 2005, he purchased a bankrupt bakery operation, nursed it back to health and flipped it to investors. In March 2007, he opened Organic Works, starting with used equipment in a 4,000-square-foot plant, and targeting customers seeking organic and gluten-free baked goods. He shipped his first product to an organic/health-food store in Toronto three months later.

From left: Organic Works Bakery head baker Leona Williamson, owner Peter Cuddy and second baker Julia Stewart. Photo by Brian Hartz

Today, Cuddy’s baked goods are found in 13 Sobey’s Urban Fresh stores, a five-store mom-and-pop grocery chain in Toronto, more than two dozen one-off stores that usually feature the word “organic” in their names, as well as a six-store chain of coffee shops
in London.

Catering to customers in search of organic, vegan, vegetarian and gluten-free products comes with unique challenges – and rewards – that few mainstream bakeries experience.
“Organic customers are knowledgeable. They know, or they want to know, about all the products they are buying. They want to know where the ingredients came from and how the products were made,” Cuddy says.

As an example of his customers’ particular requirements, Cuddy points to palm oil, an essential part of most organic and vegan products. It’s not enough that his oil is “genuine organic.” He has had customers ask whether the palms were harvested (cut down), or tapped for their oil – the difference between stripping the landscape and practising sustainable management. Other customers just want to see “a clean ingredient deck,” meaning as few ingredients as possible, he adds.

One of the more challenging aspects of selling organic baked goods, he says, is the need to churn out reams of paperwork necessary to have his ingredients certified by Pro-Cert Canada Inc., a watchdog group that charges a hefty fee for allowing him to claim that his products are, indeed, organic.

Even sourcing some raw ingredients presents its own unique challenges, Cuddy says. “Our problem isn’t based on pricing; it’s based on availability. We have had primary suppliers call us up and say, ‘We can’t get it for you this week, but we’ll have it next week.’ Sorry, that doesn’t work for us – I have customers waiting for our bread or cookies right now, so I have to find other sources for that ingredient.”

Head baker Leona Williamson says she can tell the difference among the flours that she purchases from each individual supplier. This can create a problem for her, because she has to adapt each batch to that particular kind of flour.

Organic Works has grown to include five full-time and six part-time employees. Each afternoon, Cuddy and staff make up the production sheet for the following day (it’s still done the old-fashioned way, with paper and a clip board) and an employee begins batching at 5 a.m. the next day. The bake staff arrive by 7 a.m.

Gluten-free products, which make up “around 60 per cent, if not more” of the total output, are made first, followed by the organic and finally non-organic goods, which are made for the coffee shop chain. This is to avoid cross-contamination among the three different product lines, Cuddy explains.

Launching the retail side of the operation is proving harder than the wholesale side, however. Currently, sales are handled out of the front of the store, which is still a work-in-progress. While some days are extremely busy, others are “totally flat.” And being solo manager, as well as head buyer-estimator-salesperson, means Cuddy is spreading himself thin when it comes to looking after the front and back ends of the business. Eventually, he hopes the retail front end will sell not only his own products, but organic goods produced by other small companies in the area.

Along with the increasing word-of mouth referrals, mainly among organic food devotees, Cuddy says the most important vehicle for promoting his business and developing new wholesale customers has been larger food trade shows, especially those with an organic focus. He started his first print advertising placements in January, and he expects to increase his advertising budget later in the year.

While the initial success of Organic Works Bakery looks encouraging, two questions that come to mind are how long the marketplace can sustain the growth of organic or gluten-free baked goods, and whether there might be too many players now entering what is quite clearly a niche market.

Cuddy answers that customers with celiac disease, a condition that makes them unable to digest the gluten in wheat products, need gluten-free products. Gluten-free baked goods are becoming popular because more people are learning that celiac disease can be managed successfully if wheat products are removed from the diet.

“I don’t think we are carving up an already small niche. We are actually growing the niche – it’s not growing exponentially, but it is expanding,” he says.

Besides the breads, Cuddy’s gluten-free line includes cookies, a delicious raisin-cinnamon loaf, scones, cookies and brown rice buns. All of Organic Works’ specialty products are vegan,
as well as lactose-, nut- and peanut oil-free.

And what future growth might be in store for this humble bakery in London? The fact that Cuddy’s wholesale base has grown from one store to more than four dozen in just two years suggests that the niche for his gluten-free and organic baked goods still has a lot of growth potential.

“The key is to understand your niche. If it starts to look like the pie is getting cut up into too many smaller slices, you have to be able to provide a product which is different enough that it stands out in the crowd,” Cuddy says. / BJ

Cameron Johnston is a freelance writer with an extensive background writing about the food industry. He lives in London, Ont. E-mail him at camjohnston@hotmail.com.