Navigating challenges

Observe your industry’s ecosystem

Over 10 years of growth — at times ridiculous growth — we were on a roll at Main Street Gourmet, but in the distance, we could see the hills were getting steeper.

Though we started out as a retail muffin shop, we pivoted to a frozen muffin batter manufacturer selling to restaurants, hospitals and hotels. We doubled sales for many consecutive years, which eventually got us recognized by Inc. as one of the 500 fastest-growing companies in America. We had an incredible sales team that was highly motivated by a combination of autonomy and very good commissions. Our production team effectively used a team piece-rate system to drive throughput, and was structured to allow us to flex during up and down demand periods. Our customers loved us for our products and our relentless pursuit to make it easy for them to make a profit from our muffin batter.

Tough terrain

But — and there is always a but — the landscape was changing. Our main customers and distributors were mom-and-pop operations that were increasingly subsumed by consolidation in both retail restaurant and behind-the-scenes supply chains. This meant much more intense competition for us from the “big boys.” Not only that, but the big boys were already entrenched in the distribution networks that were winning the consolidation game.

We had to differentiate ourselves from our competitors. To do that, we created a strategy to help our current and potential customers differentiate from their competitors. The vision was to transform into a frozen bakery manufacturer that could create and produce customized products. If we could pull it off, we would have a wonderful niche that would be difficult to compete against.

Path to success

We mapped out a path to get us to our new destination. Growing into a customized provider of bakery products meant that our sales staff would need to shrink as it took on more project management functions. Our product development team needed to be more entrenched with our production team so we could create and scale up production quickly. Our production teams needed to be more responsive and adaptable. And through all of the changes, we wanted to continue to sell products that were loved and keep customer relationships strong.

We were patient and moved slowly to give our employees, our customers and our internal systems time to adapt to our new niche. When our sales staff predictably shrunk, our forethought gave our team time to find new jobs, somewhat painlessly. Currently, 90 percent of our business is custom and our customer list contains many of the top restaurant and in-store bakeries in the country.

Looking toward the future can be tough for executives who are often consumed with resolving countless day-to-day issues. But had we not taken the time to see the changing landscape in the distance, we may not have been prepared to crest the steepening hills that threatened to stall the momentum of our small but growing business. Reserve a day on your calendar to observe your industry’s ecosystem. Your future success may depend on it.

Harvey Nelson is co-Founder and Co-CEO of Main Street Gourmet, a custom manufacturer of frozen bakery products with distribution throughout the U.S.