March 26, 2010 Bread Winners

Volume 6 | Issue 1

Bucking conventional business wisdom, Mid South Bakery focuses all of its activities on a single client. In any other situation, that makes

The McDonald’s Corporation and its restaurants, which boast a 72-year history (roots date back to 1937), has always been fond of proclaiming its success. As the company grew, and its sales steadily increased, it trumpeted between the fabled Golden Arches the numbers of burgers vended in its fast-food outlets. Eventually, totals reached brain-confounding levels. It’s hard to wrap your mind around “hundreds of billions sold.”

While consumers lost count, Mid South Bakery kept its mind fixed on figures, specifically as far as what it provides for this American eating institution. If it chose to boast its own accomplishments upon a billboard set up outside of its Bryan, Texas headquarters, Mid South could proclaim, “1.75 billion dozen buns shipped!” That’s the total that this hamburger king’s exclusive supplier reached about two years ago.

Moreover, that figure underscores why and how McDonald’s values its business relationship with Mid South. One of McDonald’s most valued suppliers, the Southwestern-based company supplies the buns, rolls and English Muffins that comprise McDonald’s most popular offerings. Mid South is a regional supplier, and from its three facilities (one in Texas and two in Mississippi), it provides McDonald’s with an enormous amount of bread products. Think about that when you raise a juicy McDonald’s product to your mouth. The bread that you’re pressing your fingers upon might have been produced and delivered by this flourishing enterprise.

NON-RISKY BUSINESS

The company not only tallies the product it provides, but it factors into the equation the number of business hazards and advantages involved. “Operating as a dedicated supplier for any one company involves a tremendous amount of responsibility as well as risk. One-customer companies are often second-guessed about placing all of their eggs in one basket,” says Steve Warden, Mid South’s vice president, bakery operations. “But companies that can place its eggs in the basket of a company like McDonald’s have situated themselves in a good place.”

Indeed, the McDonald’s Corporation is the world’s largest and most recognizable food chain. It doesn’t take a “brainiac” to comprehend that this company has staying power. Nor will it be impacted by current economic trends that might compel downsizing activities, on both the employee and customer sides. With more than 31,000 restaurants located in 119 countries, McDonald’s is a firmly entrenched domain with greater stability than the Grecian, Roman, British and United States empires combined. If and when the human race destroys itself, whatever life forms remain will no doubt be feeding at a McDonald’s outlet. That’s how resilient the organization is, and that is whom Mid South has associated itself with. Every supply-side business should be so lucky. “We know we’ve placed ourselves in a good position, and already, in our past 20 years, the arrangement has fostered company growth,” says Warden. “Overall, it has been a very positive experience for us.”

SOUTHERN SANDWICH SPREAD

It all began in 1979, when Mid South Baking Company started servicing 50 McDonald’s restaurants in the Oklahoma City area, providing product from a modest-sized bakery located in Wichita Falls, Texas.

By the mid-1980s, Mid South was servicing about 1,200 regional McDonald’s restaurants. That’s about when the indomitable foodservice industry force approached the modest baking enterprise with an offer that no company in its right mind could refuse: McDonald’s offered to build Mid South a new facility in its present location. “This was a period when McDonald’s was experiencing significant growth and, at the same time, Mid South had established a reputation as a viable supply partner,” recalls Warden.

This provident circumstance provided Mid South with even greater growth. “We continued operating the Texas facility as our single operation until the mid-1990s,” Warden relates. “Then we expanded by building two new facilities.”

These included the Mississippi Baking Company, which was established in 1995, and the Central Mississippi Baking Company, which came into existence only five years ago. Both new facilities are located in Pelahatchie, Miss.

Today, the Mid South enterprise services more than 2,500 McDonald’s restaurants throughout a specific region. “The defined geographic area ranges from the southeastern part of New Mexico and extends across the country to just east of Atlanta,” explains Warden. The northern border is easily distinguished by a major interstate (I-40). “We also cover the Florida panhandle and extend almost to Jacksonville,” adds Warden.

BREAD LINE

Mid South’s Texas bakery is comprised of 90,000 square feet, while the Mississippi Baking Company and the Central Mississippi Baking Company encompass 45,000 and 35,000 square feet, respectively. All facilities, which are staffed by more than 400 employees, include high-speed production lines that capably churn out as many as 1.75 million dozen buns and muffins each week.

The product line includes the bread that encases familiar McDonald’s products such as the traditional hamburger, the Quarter-Pounder, the Big Mac, the premium chicken and McRib sandwiches and the breakfast sandwiches.

ROLLING OUT THE ROLLS

But Mid South’s success involves much more than providing high-quality bread products. “As we have expanded geographically, we’ve also expanded our capabilities as a distributor. That is, transportation and delivery now comprise a significant portion of our business,” reports Warden. “In fact, it’s almost 50 percent of what we do.”

To foster an ongoing relationship with McDonald’s, Mid South established an efficient and effective transportation/delivery system that accomplishes three-times-a-week deliveries across its broad market territory. According to the company, Mid South drivers cover nearly 150,000 miles a week, an enterprise-wide route system that includes close to 8,000 stops. “Our growth as a distributor certainly involves challenges, but we’re meeting this challenge, and the service agreement we’ve established with McDonald’s validates our success,” says Warden.

Along with expanding its production and transportation/delivery capabilities, Mid South continually assures itself (not to mention its single and highly valued client) that all of its production facilities can accommodate any specific need related to new product development. After all, McDonald’s didn’t get to where it is today by virtue of a 15-cent hamburger, a small bag of fries and a strawberry milkshake.

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