• Growth Rocket

Chanters Bakery. Wholesale Growth.

Last month, we had a 6 a.m. meeting with Chanters Bakery owner, Richard Chanter, for a tour of his traditional bakery business in North Devon. After parking in the dark, we followed the smell of freshly baked bread and pastries into the hot and busy bakery. Richard guided us through the busy wrapping department and bakehouse. It seemed like everyone was in a rush, trays of baked goods were constantly being removed from the oven before immediately being taken away for packing or delivery.

After meeting the staff and a quick tour of the building, we escaped the hustle and bustle of the bakery to the office for coffee and croissants that were still warm from the oven.

Can you tell us a bit about the history of Chanters Bakery?

During the 1920s my great-grandfather and his brother were running a bakery in a little village. In 1928, the opportunity arose to acquire an existing bakery in a neighbouring town, my great-grandfather took his leave of their existing business and went out on his own. He purchased 2 Barnstaple Street and renamed the business Chanters Bakery. My grandfather joined the business as soon as he was old enough, before eventually handing over the business to my father and uncle.

My wife and I took over in 2013.

How did you come to be involved in the business?

I have been involved with Chanters Bakery ever since I was old enough to have a Saturday job. There have always been stacks of jobs for youngsters in the business, from sugaring donuts to washing floors, and like my brothers, I spent many of my weekends and school holidays there.

There were times when I had other jobs, and my involvement with the bakery was less, but it was always a big part of our upbringing. As with most small family businesses, meetings were often carried out over the dinner table.

By the time I had started helping at the bakery, the decline of retail had already begun. Supermarkets had taken the majority of the trade that had existed for so many decades. Investment in machinery allowed the business to shed staff and cut costs. Although it remained profitable, there didn’t seem to be much of a future in Chanters Bakery, and my brothers and I drifted away once we got into our late teens.

After spending over a decade away from my home town, sometimes working on my own businesses and sometimes employed by others, my father and uncle decided to put the family business up for sale.

Although I was very interested in taking on the bakery, I was living over four hundred miles away with commitments of my own. Over the next year, I watched with interest as the business came close to being sold several times, but always falling through at the last moment. It began to feel like fate.

I was twenty nine and had become obsessed with the idea of running the bakery. I was sure that with an injection of youth and enthusiasm, we could turn the business around. We spent hours talking it over, trying to hammer out a deal that would be fair for everyone. I didn’t have much of a deposit, and the profitability of the business meant I would never get a large enough mortgage to buy the freehold. But we got there in the end, my father and uncle were ready to finish, and we finally came to an arrangement. Contrary to what people might believe, in the end we paid what anyone else would have. We didn't get given the business, and we hadn't expected to get it for nothing. What we did get was a private mortgage for 100% of the value of the business and freehold property, with a fixed interest rate. We left Northumberland and returned to Devon.

The business has been established a very long time. Has that been a big help?

Yes, definitely. An eighty-year heritage is always going to have a positive effect, nearly everyone in the local area is aware of you and what you do. We have customers that have been visiting us for decades, before I was even born. That’s the sort of customer loyalty that many businesses would love to have.

On the other hand, a long history does bring its own set of problems. When we took over at the bakery, we knew that we were going to have to change. The traditional business model of piling loaves of bread in the window and selling hundreds of them by closing time wasn’t going to work anymore. Footfall in the town was close to drying up, and our passing trade had become almost non existent. To make a success of Chanters Bakery and take it forward another generation, changes had to be made.

What sort of changes?

We had to drop several of the lines that had been produced for a long time. We didn’t make the decision lightly, but they were either too similar to other products we were manufacturing, or they simply didn’t have enough sales to support their production. We had to start closing the shop earlier because it just wasn't profitable to keep it open until 5pm everyday.

We modernised our offering by including more traybakes and savouries. We installed a coffee machine and started taking card payments. Our shop front and signage had got to look very tired, so we invested a lot into improving our kerb appeal.

One of our first tasks was to update our image. We used a design agency to create our new branding.

You mentioned earlier that high street spending in bakeries has decreased, so how has the business grown?

We decided that if customers wouldn’t come to us, we would take our products to them. Once I realised that we were a bakery with a shop on the front, rather than the other way around, our whole strategy changed.

There were already a couple of local businesses that were buying from Chanters Bakery, but we started making sales calls to hotels, shops, restaurants, caterers and everyone else that we could think of that might want locally made baked goods. The support we received in those early days spurred us on to contact more customers, and our wholesale operation was born.

We also attend markets and food festivals, anywhere that might have a large crowd of hungry people. Experience has taught us that people are a lot more relaxed about how much they spend on food when they are attending events than they are on a normal week day.

Did this change of strategy bring any new challenges?

Definitely. We had to implement new procedures for traceability. We had to learn about, and invest in technology for wrapping and labelling. Barcodes, ingredients, allergens and shelf lives were all new concepts. Before we took over, the bookkeeping was carried out with a pen and paper, so we had to invest in an IT system with ordering and invoicing software. We also had to start our production much earlier because of the extra time needed to wrap and label everything.

That sounds like a big investment in time and money.

It certainly was. You don’t realise how far you’ve come until you look back at where you started. The wholesale side of our business has grown 400% in the last five years. We’ve shipped products to as far away as Dubai, supplied rolls to almost an entire music festival, attended food shows across the entire South West, and even pitched to both Harrods and Selfridges.

Can you tell me more about the plan for the future of Chanters Bakery?

We are investing heavily in modernising our production techniques. We have replaced our old gas oven with a larger capacity electric model that is far more efficient, and most of our freezer equipment has also been replaced. We’ve also just ordered a new dough moulder, which is a big outlay, but it should pay for itself within two years on the saving we’ll make on wages. As wages and utility bills increase, it is becoming even more important to be as efficient as possible.

Installing our new oven increased our capacity by 40%. Our previous oven was installed in 1928! We had to have it serviced by an engineer who also worked on steam engines. At nearly £15,000 it was a big investment but it's a lot more efficient and much more versatile.

What’s been the hardest part about your experience running the business so far?

In the early days, it was definitely cash flow. Our income has now transitioned from mostly cash sales through our retail outlet to 30- or 60-day terms on trade accounts. This means that we’ve sometimes struggled with cash flow. If I had my time again, I would have got this sorted out prior to it happening. There is nothing more depressing than worrying about money.

Another one is staff management. You either seem to have lots of people asking you for a job, or there is loads to do and it seems like everyone is off sick or on holiday.

The biggest challenge is the hours. I start just after 1am Monday to Friday, and midnight on a Saturday. We also put in some really long days, especially at the weekends. Trying to balance work and home life is really difficult. Making fresh produce makes that situation even more tricky.

And the most enjoyable part?

A couple of years ago, we started running children’s workshops during the school holidays. We would get the kids in to make bread and decorate cakes. It also evolved into doing kids birthday parties. It was the most fun we've ever had at work. Unfortunately, due to our increasing workload, we had to stop doing them, but we loved every minute of it.

Finally, can you share some of what you think has helped your business to grow over the last five years?

There are many parts to this answer, but I’ll try to keep it as succinct as possible.

Hard work is key. Without eighteen-hour days and seven-day weeks, we never would have made it this far. They won’t, and shouldn’t, happen all the time, but when they do happen, you have to be prepared to knuckle down and get on with it. I have friends in their sixties that have their own businesses, and they still work the occasional 18-hour day, sometimes even longer. Do whatever it takes to make sure your customers orders are completed on time and to the standard they expect, even if that means rolling up your sleeves and putting in some more hours.

Network. Use your contacts and do what it takes to get in front of the right people. Be shameless; beg, bribe and schmooze your way into the office of anybody who might put business your way. Recommend your friends businesses too, help them and they’ll help you.

Another advantage of networking is the opportunities that it will throw up. We’ve acquired two businesses in the last few years that have added to our turnover and haven’t really cost us anything. They never reached the open market and simply came out of chance conversations. The more you talk to different people, the more these opportunities will come up. And if there isn’t any downside, then grab them with both hands because you never know how successful they might turn out to be.

Diversify. Once you start struggling to grow a part of your business, start another. If you’re already selling bread to everyone in your local area, then start selling them pasties as well.

Hire a good team. Find people who are motivated and share your enthusiasm for your business. The right employee will make your life much easier and should help your business to grow. Just remember to keep the happy and they’ll stick around. On the other hand, watch out for lazy and negative people. They will make your life a misery, and your business will suffer. There are good people out there, so don’t accept anything less.

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