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Homestate EconomyIcing on the (Tasty) Cake - Pizzi remakes venerable Philadelphia baking companyby Joseph W. Garner There are few more recognizable brand names in the Delaware Valley than Tastykake. Tastykakes are synonymous with Philadelphia , like cheesesteaks, soft pretzels, and the Liberty Bell. Since 1914, Tasty Baking Company has filled countless lunch boxes with products such as Krimpets, Kandy Kakes, Tasty Pies, Juniors, and Cream-Filled Cupcakes. The company derives over $110 million, or 70% of its annual revenues from the mid-Atlantic region, where it holds a leading market share in snack cakes. However, despite the company's strong market position Tasty Baking has been a company in decline, plagued by ill conceived efforts to expand the company's geographic presence, a stagnant product offering, greater competition, and a customer base that is increasingly dominated by Wal-Mart. Enter Charlie Pizzi. Pizzi joined Tasty Baking Company as President and CEO in 2002, following an accomplished 13-year run as President & CEO of the Greater Philadelphia Chamber of Commerce. As Pizzi puts it, he moved from one Philadelphia institution to another. Shortly after joining the company, he embarked on a bold strategy to resuscitate the beloved Philadelphia brand. Pizzi led the company through a thorough analysis of the company and concluded that it lacked leadership, it had stopped listening to its customers, had strained relationships with its independent sales distributors, and relied on a reactive versus proactive decision making process. Long on leadership skills, but short on packaged foods industry experience, Pizzi smartly built a new leadership team for the company consisting of industry veterans, such as Chief Marketing Officer Vincent Melchiorre, a former marketing executive with the Pepperidge Farm and Red and White Soup division of Campbell Soup Company; Chief Financial Officer David Marberger, the former Vice President of Finance with the Food and Beverage Division of Campbell Soup; Senior Vice President, Supply Chain Blake Thompson, a former Operations executive with the Frito Lay Division of PepsiCo; and Vice President, Sales Robert Brown, a former District Sales Manager with Lance. The new team set forth on a plan to transform the company from the top down and the bottom up. They began to do the little things like reducing the layers of management and fostering a more direct relationship with all levels of the workforce, converting the executive offices into an employee service center, initiating face-to-face meetings with customers, having management and board members involved in over 150 route rides with the company's independent sales distributors, exiting unprofitable non-core business lines, and implementing a Quality Council led by Philip J. Baur, Jr., the son of the company's co-founder. Take a plant tour with Pizzi and it becomes readily apparent that he is on a first name basis with his employees and he has engendered an unusually high level of morale that was long absent from the company. Pizzi and his team are executing a growth strategy based on five pillars that are beginning to show results. These pillars are as follows:
Charlie Pizzi and his team at Tasty Baking are out to prove that the corporate transformation strategy is more than just a feel good story. The company has made dramatic strides in less than 18 months in reinvigorating a strong, but long neglected regional brand. The company's skeptics point to an increasingly challenging industry environment and question Tasty Baking's ability to grow beyond its regional roots. However, given Pizzi's passion for success, the strength of his team, and the company's solid fundamental underpinnings, it appears that the new Tasty Baking Company may just have what it takes. (Note: Emerald Advisers is the manager of the Emerald Select Bank and Finance Fund, a mutual fund that invests in many small community banks in Pennsylvania and nationwide.)
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