RISK, JUGGLE, BE BRAVE
By Geert De Lombaerde
The message was clear — even if Cordia Harrington wasn’t quite ready to hear it.
“You have got to get out of the way and let the business grow.”
It was a decade ago — the Great Recession was still very visible in the rearview mirror — and Kevin Dunn, a former McDonald’s regional president consulting with what is today The Bakery Cos., was shooting straight with Harrington about her long-term plans. With her carrying as much of the daily load as she was, her endeavor’s growth potential would always be capped.
“But I felt like my employees would think I didn’t care any more,” Harrington says of her hesitance to delegate leadership tasks. “And I didn’t think someone could care as much, be invested in our people as much.”
Dunn convinced Harrington to cook up a plan that would hand off day-to-day operations and free her up to look to the horizon rather than the next payday. She aimed to double the company’s EBITDA in three years and called Sara Lee executive Joe Waters, a longtime customer she hoped might connect her to other Sara Lee executives who would be open to a switch as that company was being bought by Mexico’s Grupo Bimbo. As they talked during the summer of 2011, Waters — who was in charge of dozens of plants — suggested he’d be up for the job. Around Labor Day, long talks between Harrington, Waters and their spouses bore fruit.
“In a million years, I did not dream Joe would have interest,” Harrington says. “Or that I could afford to hire him!”
Waters came aboard at the beginning of 2012 as president and settled into a role that involved both taking things off Harrington’s plate — she no longer needed to be at the table to discuss production line layouts or equipment specifications — and bringing to a growing business the processes and sophistication he had learned at Sara Lee. The two executives built a level trust and understanding as they figured out where Waters could move forward on his own and where Harrington still needed more than a cursory say.
“There was never one thing where the light switch came on and it was like, ‘Joe is now running the company.’ She had started and run this company for 15 years,” he says. “I focused largely on building communications and relationships within the growing management team to better use the skills of people who were there. I brought a more collaborative approach to decisions. She didn’t always have the patience to do that.”
Waters blew away the profit growth goals Harrington set and, allaying Harrington’s fears, cared as much as she did about building up their people. Along the way, he helped grow the company to more than 500 employees and freed up Harrington to look at the truly big picture. He remained at the helm — including as chief development officer — until the end of last year and remains a member of The Bakery Cos. board. “He trained me to be a CEO,” Harrington says.
Crying at night
What is today The Bakery Cos. had its inauspicious start in 1996, when Harrington — a McDonald’s franchisee in Illinois who bought a Greyhound franchise to feed her first restaurant a steady stream of customers — and her team broke ground on their first bakery in Dickson. (This was after she needed more than 30 meetings to convince company execs to make her a supplier.) Harrington’s group was ambitious and deliberately designed the plant to be bigger than it needed to be early on. The big, 1,000-bun-a-minute investment soon turned out to be a big headache: The regional market for their planned products hit a rough patch and demand fell by more than 30 percent from the time construction started until the lines started running.
“A $15 million plant can’t cash flow on that. We were losing $40,000 a month,” Harrington says. “Here I was, a single mom who had moved to a strange place, and I was crying myself to sleep every night.”
Harrington, her husband and CFO Tom and their team stuck at it. Landing a nice contract with Pepperidge Farms helped them over the early hump and let them build a solid book of business with other clients.
But in manufacturing, each big step forward — a packaging facility in 1999, for instance, or a cold storage warehouse six years later — calls for a risky investment and a calculated gamble that the revenues and cash flows will soon be there. Six years ago, Harrington says, the purchase of artisan product specialists Masada Bakery outside Atlanta was “a reach,” and the work they did a year later to roll out Dave’s Killer Bread regionally was thrown off course when the nation’s No. 2 baker, Flowers Foods, bought Dave’s for about $275 million.
“The whole 20 years have been been like this. There’s never been a time where I felt like we were rocking,” Harrington says. “I’ve had to juggle priorities, balance needs and be brave. And when things went wrong, we asked, ‘Well, that didn’t work out. Now what?’”
Most often, the answer involved leaning on one of Harrington’s greatest strengths: “She has never met a stranger,” Waters says. By knocking on doors, attending industry events and knocking on more doors, Harrington and her team diversified the customer base of The Bakery Cos. — the brand adopted as the successor to The Bun Companies in 2015 — and smoothed out the inevitable bumps of doing business. Today, the enterprise runs five facilities that service 1,400 customers, including big names such as Pepperidge Farm, Flowers and industry leader Bimbo. McDonald’s now accounts for only about a fifth of sales and the company’s seven lines can churn out eight million pieces daily.
“Cordia has always been one to look at what’s next and best,” says Jan Babiak, a former Ernst & Young managing partner and corporate governance specialist who has been on The Bakery Cos.’ advisory board since the middle of the last decade. “She’s never resting on her laurels and gaining comfort from her success. That’s not part of her DNA.”
Babiak says Harrington’s drive is fueled by her curiosity and openness to the views of others. Waters echoes that thought, saying she has in recent years extended that curiosity into trust of investment bankers, lawyers and other advisers as she explored strategic options.
There’s much more to come on that front: Last fall, Harrington announced that private equity firm Arbor Investments had taken a stake in The Bakery Cos. and plans to invest much more in an expansion push that aims to add lines at existing plants and build new facilities. The goal is nothing less than growing into a national player.
“This is another iteration of bringing on others to help the business,” she says. “If we’re going to be a big player, it wasn’t going to be with me at the helm.”
Joining Harrington to grow to new heights are veteran bakery executives Yianny and George Caparos, who are now the company’s president and chief development officer, respectively. The brothers are on their third baking venture backed by Arbor, which owns a portfolio of companies that generates $3 billion in annual sales and employs more than 5,500 people. The execs aren’t publicly sharing many numbers or growth goals but Harrington says that, if they’re successful on the journey they’ve started together, the first 20-plus years of The Bakery Cos.’ life will feel like a gentle warm-up. Already in the works are a cold storage capacity addition, two lines for English muffins and scout work for a new greenfield plant.
“It’s like everybody is on steroids,” Harrington says. “We’re just going for it.”
With the Caparos brothers alongside, Harrington’s role is, not surprisingly, evolving again. More than ever, she says, she’s around to focus on big-picture growth issues and to be the face of the business — inside and outside her plants.
“My job now is to motivate, connect and invest,” she says. “It’s like a personal ministry.”
These days, Harrington also advises and mentors numerous other executives just as Dunn coached her more than a decade ago. Oftentimes, she says, she finds herself helping people get past their own version of the pivot point she faced then.
“We’re all trying to do the right thing,” she says of entrepreneurs. “Sometimes, all it takes is a person to be truly honest with us.”