Bold breadmaker
by Liz Wolf Bread-making has been around for centuries, yet Lynn Gordon keeps coming up with innovations for her French Meadow Bakery in south Minneapolis.
Gordon, regarded as a pioneer in the organic food industry, was baking organic and yeast-free breads long before most people even knew anything about natural foods. Now after 21 years in business, French Meadow is the longest-standing certified organic bakery in the country.
Sometimes, being a pioneer brings pain. A legal case, for example, once nearly banned one of her most popular breads — hemp bread. Most recently, she had a labeling dispute with the Federal Drug Administration, which she estimates will end up costing the business $1 million to $2 million in lost sales and expenses.
“Will I recover? Yes. But I will never forget the pain. The integrity of French Meadow was questioned,” Gordon says.
But over the long haul, Gordon’s innovations are the reason for her company’s existence.Gordon, 57, began living a healthy lifestyle, doing yoga and eating organically when she was in her early 20s. She admits that many people deemed her a health nut. However, she stuck to her convictions.
“I was considered the kook, and everyone now says, ‘Lynn, remember when you were doing this? We thought you were a health nut. Now we’re doing this,’ ” Gordon says.
“She’s a woman who believed in herself and believed in organic foods when we were all eating Wonder Bread,” says Tené Wells, president of WomenVenture, a nonprofit business development agency in St. Paul that worked with Gordon. “And she was right.”
Gordon’s next advancement was pioneering the frozen bread category, which opened up a new way of wholesaling and shipping her breads to mainstream supermarkets and health food stores nationally.
But what really put French Meadow on the map was Gordon’s focus on the nutraceutical industry, or using foods for health and medical benefits. She developed four “functional” breads that provide balanced, low-carb nutrition. She says her sprouted Women’s Bread with soy isoflavones can help prevent osteoporosis and breast cancer, and Men’s Bread, containing pumpkin seeds and flaxseed, helps sustain heart and prostate health.
Gordon developed her functional breads well ahead of the low-carb craze, and they’re driving French Meadow’s wholesale business, which is experiencing 15 percent to 25 percent annual growth.
Gordon and business partner Steve Shapiro, along with managing partner Nick McCreary, also own Eagan-based Organic Concepts, a spin-off of French Meadow that specializes in flourless sprouted bread and produces the bakery’s sweet goods. Organic Concepts also makes lines of products for companies like Kowalski’s and Starbucks Coffee under private labels.
Plus, French Meadow Bakery and Café, another separate entity from the wholesale business, is seeing sales increase 15 percent a year.
Total sales among the three units topped $10 million in 2005, Shapiro says, adding that they employ 120. They’re expecting even stronger sales in 2006 and beyond following several new contracts.
At 15, Gordon lost her mother to ovarian cancer. She decided then to make it a priority to live a life of prevention. She became interested in macrobiotic cooking — the whole foods approach to health and well-being — and studied the ancient process of making bread with natural leavening and no yeast. She became a certified macrobiotics instructor and taught cooking and lifestyle classes at St. Paul’s Traditional Center for Macrobiotics.
Only two yeast-free bakeries existed in the country at that time, one on each coast. Gordon decided to launch an organic bakery in her kitchen in 1985 and offer these healthy breads. In the beginning, Gordon, a single mother of three, was the entire business. She baked and delivered bread and did in-store demonstrations and operated the business end — all while teaching to make ends meet.
Six months after launching French Meadow, two of Gordon’s macrobiotic cooking students started their own bakery, and Gordon says they mimicked her every move.
“Here there were only three bakeries like it in the whole country and now I have competition,” Gordon says, adding that the students’ bakery was better-connected, better-located and had deeper pockets. “I was clearly the underdog. No money, one person, three children, divorced, and I’m baking, delivering and teaching.”
Gordon persevered. In 1986, she moved operations from her kitchen and began baking during the night shift at a Burnsville cheesecake factory. She had six varieties of bread being sold at a handful of local co-ops. Her staff grew to four, including her daughter Debbie and father, Bob Smith, who helped with day-to-day operations.
Smith wasn’t surprised by his daughter’s determination. “From the time she was a couple of years old, you could spot it,” he says. “When she got something in her head, she would persist.”
The cheesecake factory expanded production and Gordon needed to relocate. That’s when she met business partner Steve Shapiro. She was looking for a commercial kitchen and space for a cafe. Shapiro, then a commercial real estate broker and now vice president of French Meadow, located space and Gordon signed a sublease.
It was office/warehouse space, however, so a retail café was not an option, Gordon says. That’s when she decided to concentrate exclusively on growing the wholesale business. She also realized that she needed to find a way to distribute her products outside of the Twin Cities.
“We were probably the first bakery to sell bread in the freezer,” she says. “It feels good being a pioneer, but with that’s the reality of how hard it was. No one really knows unless you’re living it — all the rejection.”
Her challenges were convincing customers to buy bread that wasn’t freshly baked, convincing stores that people would buy bread out of the freezer and convincing distributors that enough stores would buy frozen bread that it was worth their while to stock it. It took Gordon five years of traveling around the country marketing her bread.
“Even the natural food stores didn’t know about yeast-free back then,” she says. “I got the door slammed in my face many times."
At one point, she had flown to Florida primarily because of one particular store. “A lot hinged on it. If I could sell this store, I could get brokers to look at me. It was hard to get brokers to even look at you without distribution. In order to get distribution, you had to have orders in hand. All I could think of was that I could hardly afford the air ticket. It was so expensive to be there and it had to be a successful trip. There was no not being successful.
“ I did everything so cheaply. I traveled cheaply. I stayed cheaply. That store was the most important call for me. I remember the manager looked at me and I said, ‘We have a meeting.’ He said he didn’t have time and wasn’t interested in yeast-free, organic bread. This was the clincher. I couldn’t talk because I was fighting back tears. I turned and headed toward the door.”
The manager chased her down, partly out of pity, she says. He looked at her bread samples and was impressed and became a regular customer.
Gordon’s big breakthrough came when she was able to convince several stores like this one and a couple of East and West Coast distributors that bread could successfully be shipped and sold frozen. French Meadow can ship 7,500 cases, or 45,000 loaves, weekly.
The bread is distributed to all 50 states and Puerto Rico through a network of warehouses. Breads are baked, cased and frozen in Minneapolis and shipped frozen to these warehouses around the country. These distributors resell the product to natural foods stores and supermarkets in their regions. Whole Foods Market, Wild Oats Market and SuperTarget are Gordon’s largest customers.
Gordon says the other local organic bakery remained a mom-and-pop operation and closed about six years ago.
In the late 1980s, Gordon and Shapiro discovered what would become French Meadow’s permanent home, a 24,000-square-foot facility at 2610 Lyndale Ave. S.
Ignoring the sold sign on it, Gordon inquired about the building. The agent said the deal was about to fall through. Gordon said she wanted it and plunked down an earnest money check.Five years after launching the wholesale business, Gordon and Shapiro opened the Bakery & Café in the front of the building.
“From a strategic standpoint, French Meadow’s real advantage is product development in terms of manufacturing and distributing new breads and other products,” says retail expert Dave Brennan, a professor at the University of St. Thomas School of Business.
Yet, he says, French Meadow was able to successfully cross over into retailing. “Most manufacturers do a poor job at the retail level,” he says, simply because manufacturing and retailing are two different animals, but he says French Meadow is an exception.They didn’t know what to expect that first day. They hadn’t marketed it and days before opening turned away a cash register salesman.
“I wouldn’t buy a cash register. I was too frugal, because I thought we won’t get that much business,” Gordon says. “We had old tables and library chairs that I bought for $2 a chair from an organic farmer friend.”
Sales were so strong that they called the cash register salesman and paid for the register with their first-day proceeds. “It was a hit right when we opened,” Shapiro says.
The café offers breads, muffins, cookies, bagels and pastries as well as entrees like fresh egg pasta with organic vegetables and green curry noodles.
French Meadow often buys used equipment and modifies it. The only loan they’ve ever taken was a $104,000 SBA loan to buy their building and that’s paid off. Shapiro says French Meadow is debt-free.
“We’ve had a conservative growth strategy,” Shapiro says. “But the downside is we probably could have grown more quickly if we’d taken out more loans and been willing to take on debt.”
By the early 1990s, business was good. In 1993, French Meadow was awarded a contract to supply Northwest Airlines with fresh rolls for the Minneapolis hub. They worked with Northwest for nearly five years, and the contract grew to be 25 percent of their business. However, Gordon says one day they were so severely underbid that they lost the account.“That’s when I got really tough,” Gordon says. “I decided to build the business back and think more outside the box. I listened to consumers’ needs. I sat down and thought about my products, services and commitment and asked, 'what are we not doing?' ”
That’s when Gordon ramped up production of her low-carb, high-protein, high-fiber Women’s Bread, getting it to the market in 1999, sooner than planned. After Women’s Bread, she introduced Men’s Bread and then Healthy Hemp, which was an immediate hit.
In 2002, however, the Drug Enforcement Agency issued an order banning the use of hemp in foods and cosmetics because they might contain trace amounts of THC. “There’s no THC in our bread,” Gordon says, adding that she and several other companies launched a legal challenge and won the case.
Gordon’s introduced Healthseed Spelt in 2003 and it became her most popular bread. But in January she was faced with an unexpected turn of events. The FDA came in and "seized" 30,000 loaves of French Meadow frozen bread containing spelt or Kamut, saying they were mislabeled and violated a new law that went into effect Jan. 1. The FDA recently declared that spelt and Kamut are forms of wheat and cannot be labeled a “wheat alternative.”
Gordon clarifies that the FDA did not actually seize the bread, but asked her not to move it from her warehouse. They did not physically remove the product or request that stores remove the spelt breads from their shelves. “The press release sounded like they handcuffed poor Steve and had machine guns,” she says, referring to her business partner.
Gordon says for many years organic bakers have used the ancient grain spelt as a wheat alternative. She disagrees that spelt is wheat and says she would never put her customers in jeopardy. (Some people with certain food allergies cannot tolerate wheat.) She acknowledges that spelt contains gluten and labels that as so.
However, she wanted to comply with the FDA and planned to change the labels, but she thought she could first use up her existing stock.
“We didn’t file for an extension, because we didn’t know that was an option,” she says. “If we were more savvy, we would have. We’re not savvy.”
She says she has based her entire business on integrity and helping people lead healthier lives. “It’s like a bad dream. It’s amazing that one can work hard with integrity night and day, and then in one week years of work are destroyed.”
As part of the settlement, French Meadow will pay all costs associated with the FDA’s review and approval of the new labels. Gordon estimates the ordeal will cost French Meadow $1 million to $2 million in lost sales, lost shelf space, new labeling, attorney fees, consulting fees and other expenses. She also laid off two bakers.
Gordon designed new temporary labels, and at press time, was in the process of designing permanent labels. Everything needed to be approved by the FDA before breads could be shipped out.
One expert says Gordon handled the situation correctly. “I tell my clients that if something goes wrong in your company, the first thing is own up to it,” says Gwen Chynoweth, vice president of the Maccabee Group, a Minneapolis-based PR firm. “It shows you care about the safety of your clients or employees and you care about the reputation of your company and the goodwill that you’ve spent so many years developing.”
Gordon continues to stay ahead of trends by listening to customers. She’s often in her café talking with customers and seeking feedback. “I want products that serve needs,” she says. “They’re either products that I personally need or those that come to my attention that my customers want and just aren’t available. That’s what motivates me. I don’t want to do a ‘me too’ product. There’s no reason for that.”
French Meadow continually invests in new product development and recently rolled out lines of Texas toast, garlic bread and organic tortillas.
Explorer Will Steger, who led expeditions to the North and South Poles, is a believer in Gordon’s products.
“For the last 20 years, we’ve had her bread with us on our expeditions,” Steger says. “Her bread is unbeatable. It’s a bread of substance.” During an expedition, he toasts the bread on a stove and eats it with butter and jam.
Steger met Gordon in 1987. “One day I picked up a loaf of French Meadow bread,” Steger says. “It was the best bread I had ever had, so I contacted Lynn. We discovered we were kindred spirits right away. A lot of people have ideas, but Lynn is able to act on her ideas.”
In order to keep growing, Gordon realized they needed to continue to experiment with new products. In 2004, they opened Organic Concepts, a spin-off of French Meadow that acts as a lab. The plant specializes in flourless sprouted bread and produces French Meadow’s sweet goods. In addition, Organic Concepts signed private-label contracts with Kowalski’s, Starbucks and Super Bakery Inc.
Although French Meadow-branded breads currently are their biggest moneymaker, Shapiro predicts by the end of 2006, Organic Concepts will be their top producer.
Franco Harris is a satisfied customer. He’s owner/CEO of Pittsburgh-based Super Bakery and a former Pittsburgh Steeler Hall-of-Fame running back.
“We worked with Lynn on formulations and ingredients to make a line of organic products that offers what we want in our Super line, including Super Bread and Tortillas,” Harris says. “She loves her breads and loves the industry and loves what it means to be organic and help people with her products. With that type of spirit, we just connected."
Super Bakery specializes in nutritional bakery products and developed a lot of its recipes at Penn State University's research kitchen.
Gordon was approached by airport concessions provider Host International about opening a cafe at the Minneapolis-St. Paul International Airport. The 1,800-square-foot French Meadow opened in 2005 on Concourse F.
Gordon will open a larger café in the main terminal this summer that will include an organic wine/martini bar. Both airport locations are licensed to Host, which hires employees and manages the facilities. Gordon says she’s talking with Host about opening cafes in airports nationwide.
French Meadow also is partnering with Sunflower Market, a new, affordably priced organic grocery chain and wholly owned subsidiary of Eden Prairie-based SuperValu Inc. The first Sunflower Market opened in Broad Ripple, Indiana, in January. The company is scheduled to open three more this summer in Chicago and Columbus, Ohio, says John Sturm, director of Sunflower Market.
Sunflower Market is confident the partnership will provide a competitive edge. “We asked, ‘How can we get ahead of the Whole Foods of the world?’ The way to stay ahead is to partner with Lynn, who sets the trends,” Sturm says.
Wells at WomenVenture sums up Gordon: “Lynn is amazing and brilliant, but she also works really hard. She gives French Meadow and all her concepts all she has. She’s a model for all people who believe in themselves and have that sort of intuitive sense that what they’re doing is right.”
[contact] Dave Brennan, University of St. Thomas School of Business: 651.962.4077; dpbrennan@stthomas.edu. Gwen Chynoweth, Maccabee Group: 612.337.0087; gwen@maccabee.com. Lynn Gordon, French Meadow Bakery: 763.473.0873; lgordon@frenchmeadow.com; www.frenchmeadow.com. Franco Harris, Super Bakery Inc.: Superbakeryinc.@aol.com. Steve Shapiro, French Meadow Bakery: 612.870.4740; shapiro@frenchmeadow.com. Will Steger: info@willsteger.com; www.willsteger.com. John Sturm, Sunflower Market: 952.914.5791; john.a.sturm@sunflowermarkets.com; www.sunflowermarkets.com. Tené Wells, WomenVenture: 651.646.3808; tenewells@womenventure.org; www.womenventure.org.
