It was only a matter of time before Detroit-based Avalon International Breads LLC outgrew its modest 2,000-square-foot home at 422 W. Willis St. in Midtown.
Avalon is spending about $2.2 million to open Avalon City Ovens, a 50,000- square-foot baking and distribution center three miles away, at 6555 E. Forest Ave., to help the company meet demand for its growing list of wholesale clients.
Ann Perrault and Jackie Victor, co-owners of Avalon Breads, have seen steady growth over the past few years buoyed by demand for its line of sweets at retail locations and by wholesale customers.
For example, Perrault said that when Avalon introduced a line of sea salt chocolate chip cookies two years ago, it was making about eight dozen batches a day. Now, she said, the company is making 1,200 batches at least five times a week.
Perrault said sweets sales increased from $400,000 a year and a half ago to $975,000 in 2012, due primarily to adding grocery shelf space in stores including Plum Markets and Holiday Market in Royal Oak andWhole Foods Markets in Michigan (except for Grand Rapids). In July, Avalon opened a retail location, Eat Well. Do Good. Café, in Henry Ford Hospital in Detroit.
Perrault said sales at the hospital café have reached $725,000, much higher than she expected.
The company plans to open the bake house by Jan. 1; it will be staffed by current employees and new hires. Total Avalon employee count will grow to about 100.
Scaling up requires a thoughtful approach, said Dave Zilko, president of Ferndale-based Garden Fresh Gourmet Inc. It’s important for an expanding company to maintain quality as it increases capacity, he said.
“When we tried to scale up, we brought in process engineers and tried to make our salsa in 400- and 600-gallon tanks, but the consistency was wrong and the onions were sinking,” Zilko said.
Garden Fresh went back to small batches, five gallons at a time. It just makes more of them.
In 2009, Avalon was generating about $1.8 million in revenue. By 2011, revenue increased to $2.2 million. Perrault said the goal for 2013 is to reach $3.2 million.
“I want to try to build the business by $1 million over the next year,” Perrault said. “We have a lot of contracts that are pending until the bake house is fully open.”
Perrault said the bake house will have new machinery capable of making items like cheesecakes and torts that Avalon is unable to do in its current location.
Avalon City Ovens is just one phase of Avalon’s growth plan.
Avalon Breads is moving its current location at 441 Canfield St. in Willy’s Overland Lofts into a bigger space less than a quarter-mile away.
The 3,000-square-foot location will have 45 seats and drive-though capability, although Perrault said it will take at least one year to open the drive-through.
Perrault said she and Victor are entertaining the idea of opening several local retail outlets modeled after the current Avalon’s store.
“The plan for us is to help build neighborhoods and support small-business growth in neighborhoods,” she said.
Nathan Skid, Crain’s Detroit