Rosenblum Donut empire founded on marketing savvy, family, and flour

CNY Business Journal (1994-95), Mar 06, 1995 by Hadley, Mark

FRANKFORT-Some people are born with printer's ink in their veins; others, with sea water; but for Alan Rosenblum, the stuff of life is yeast and flour.

Rosenblum represents the fourth generation of bakers in his family--a line of bakers stretching back to his great-grandfather in Poland. Each generation has put a different spin on the business, making it something that each could claim as his own creation.

But none of his forebears, with the possible exception of his father, could have imagined the idea that Rosenblum cooked up. Where his father built a chain of Dandee Doughnut Shops in Central New York, Rosenblum has taken the doughnut business several steps further. He is selling fresh doughnuts to restaurants, cafeterias, supermarkets, and even convenience stores all over the country--more than 1.3 million doughnuts a day. And he is making them all in one factory at an industrial park just outside this small Herkimer County village.

In just 15 years, Rosenblum has taken his company, Granny's Kitchens Ltd., from providing thaw-and-serve doughnuts to food-service companies, nursing homes, hospitals, and schools in the Northeast to selling anything from frozen dough for in-store bakeries to fresh-frozen, fully finished and decorated doughnuts. The finished doughnuts, depending on the portion size and the packaging, can serve either the food-service market or the retail-consumer market, even for sale in convenience stores.

Rosenblum's guiding vision is providing his customers, whether in food-service, supermarket, or any other market he serves, with top-quality products. "Top-quality" in Rosenblum's definition means doughnuts that look and taste as though they were made from scratch at the point of purchase.

Rosenblum explains, "We want to provide our customers with a product that they can pull from the freezer as they begin to set up for the day and serve 45 minutes later and not have their customers wondering how long the doughnut on their plate was sitting on a shelf."

He targeted food-service operations initially because he knew that providers needed food that would pass the taste-test with consumers, and pass the ease-of-use test for the food-service companies and institutions.

"Bakeries in a city can handle some deliveries, but if you have 15 or 20 food-service operations, you can't deliver fresh doughnuts to all of them right at 6 a.m. With our product, you don't have to," Rosenblum stresses. "You can't give the food-service people something that is going to take much preparation or any special equipment."

Granny's Kitchens hit its target market well enough in the early 1980s to build a solid business, but Rosenblum is not one to coast when he is succeeding. He is always watching consumer and commercial trends and tracking his competition. And one trend he saw as he was building Granny's food-service business in the early 1980s was a boom in supermarket construction.

From his conversations with large customers, he realized several supermarket chains were planning to remodel existing stores to include bakeries, and to build new stores with bakeries on the premises, too. When he saw that trend, he also saw an opportunity for hi company.

He went after the supermarket business with two products--frozen dough that could be fried by the customer, and thaw-and-finish doughnuts, where all the customer had to do was apply the icing or other decoration.

Then Rosenblum began to turn his attention to geographical expansion. During the late 1980s, he sold his products to food-service operations and supermarkets in the Northeast and then began moving down the East Coast, until Granny's served a market from Maine to Florida. And with the beginning of the 1990s, the company looked westward, moving across the Midwest and then the Great Plains.

"We now are supplying our customers from Maine to Florida and west to the Rockies. And I think that we will be nationwide within a few months," Rosenblum predicts.

It takes a lot of doughnuts to serve a market of that size. And that has led Rosenblum and Granny's to pioneer technology and recipes. Until mid-February, Granny's was operating three production lines. One produces 14,400 yeast-raised doughnuts an hour. Another turns out 19,200 cake doughnuts. Those two both supply the thaw-and-serve customers. The third line yields 31,200 frozen-dough pieces. Together, the lines could produce 64,400 doughnuts per hour, or more than half a million in an eight-hour shift.

What's more, the company recently launched its fourth line that will also serve the thaw-and-serve customers. And a fifth line is expected for the first quarter of 1996. "Those plans may change or at least have to be adjusted," Rosenblum reports, "but the plans are there, so we have an idea of where we want to get to."

He adds, "When we were starting up our fourth line, one of our equipment suppliers said that we were the biggest producer of doughnuts under one roof in the world. I knew that we were the biggest in the U.S., but now he says that we are the biggest anywhere."