Furlani’s expanded into garlic toast, garlic loaves, and breadsticks in the early 1990s, buoyed by a subsidiary of a large American food service operator that pioneered garlic toast and needed a Canadian producer. This presented a great growth opportunity for Furlani’s in the US, as the garlic bread category is much larger in the US than in Canada.
“Until recently, roughly 75% of our volume was in the US,” said Paul Da Re, VP of sales and marketing. “About 10 years ago, there was a burgeoning market for private label garlic toast in the US, as casual dining establishments began embracing it. Because of the consumption difference in the US, we grew to service the US. That has changed a little recently as we’ve enhanced marketing activities in Canada.”
All told, Furlani’s manufactures and distributes both fresh and frozen products to bakeries, delis, grocery stores, and food service operators in both countries. It has its own branded products as well as a robust private label program. What has been the key to the company’s success in the market is its ability to produce both quality and value in its breads.
“We are a highly efficient baker, and we ideally like to sell our products as value-added breads, processing the product further to make unique offerings,” said Da Re. “The most common way we do that is by topping breads with garlic spread, but we aren’t limited to that. We top breads with cheese, pizza toppings, spices, seeds, or aggregates as well.”
Although producing garlic spreads, purees, and chopped garlic for the Canadian market is still a part of its operations, only 5% of Furlani’s production today serves its original business line. All the remaining volume revolves around production of value added breads, equally split between food service, frozen grocery branded, and frozen grocery private label.
“We aren’t obsessed with building our own brand, but we find there is a good opportunity to do so by offering private label value in branded form. For the retailers that see the opportunity for providing a value brand, we can transfer that value to the consumer,” Da Re said. “If a retailer wants a private label product, we’ll support it and won’t discourage it for the sake of a brand. Some retailers may be uncertain about a private label product, so we offer our brand, which sometimes transitions to a private label after a while.”
Promising the best
Quality is the lynchpin of the entire operation. Most of the company’s baking equipment is designed and manufactured inhouse because many of its processing technologies are proprietary in terms of how breads are garnished. The company has around 300 employees, little turnover, and shares a large percentage of annual profits with employees. These factors have helped maintain the quality of Furlani’s products for years.
In addition, about a third of Furlani’s R&D resources go toward evaluating and improving breads. The company accommodates requests from customers to help improve products, and this has helped Furlani’s create a reputation as an innovator in the food service arena.
“Leveraging the base of casual dining restaurants we work with helps us refine products that we can then take to retail,” said Da Re.
Within the last few years, the company also embraced the Safe Quality Food (SQF) initiative. Da Re said at SQF Level 3 certification, the program encompasses safety, continuous improvement, and evolution. Furlani’s went straight to that level to promote quality and efficiency throughout all areas of the company in order to get all of its interests internally aligned behind those principles.
“As a result, we’ve found places to improve. We have an enhanced inventory management system, and the SQF system allowed us to look critically at each stage of production to identify weak links,” Da Re said. “We’ve found new machine technologies to invest in and created training programs for almost everyone in the organization. Not just on food safety, but management, efficiency, and statistical training as well. The biggest improvement has been a result of HR training.”
With Furlani’s working to determine the steps to take in the next few years to continue building on the success of the last quarter-century, gaining customers through great value, quality, and innovation will be the centerpieces of that effort. Da Re said Furlani’s understands the need to have a whole portfolio of products in addition to core items, viewing garlic bread, breadsticks, and toast as equal and necessary to produce a whole program, even though the percentage may be skewed toward toast.
The last 10 years have seen significant category growth, but Da Re knows Furlani’s can’t count on that forever, as the category has matured. Furlani’s is confronted with a nominal rate of organic growth and needs to stimulate new consumer interest and growth in the category with higher quality, better pricing, and innovation. The company doesn’t want to grow only by taking marketshare and intends to look at efforts outside the category, with some products in development competing with factors in other industries.
“We’re concerned about the economy at large, as there will be some constraint on consumption. The prospects for economic growth fueling our growth are tenuous,” said Da Re. “However, we are positioned well to deal with that because we provide a good value for those consumers who may be cost conscious. We will cater to that, because we think value will persist as an important consumer consideration.”