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Gluten Free Manufacturing Plant Keeps it All in the Family

Oct. 5, 2015
A daughter’s dietary needs led to the establishment of a niche bakery in New England. Now the family firm is riding one of the fastest-growing trends in the food industry.

Onetime Yankees pitcher Lefty Gomez famously said, “I’d rather be lucky than good.” Some Red Sox fans ask, “Can’t we be both?”

Nick Sideri (left) and Robert Otolo confer in the production area of Gillian’s Foods. Moving to a new facility will help isolate allergens and segregate processing activities.

The fans in question happen to be bakers specializing in gluten-free goods. They form the operations and management team at Gillian’s Foods, a business established in 1992 in the home of Bob Otolo to meet the needs of his daughter and other sufferers of celiac disease.

Few options existed 23 years ago for that population. Catering to their needs with a superior product gave Otolo a toehold in a product category that has grown rapidly in recent years and fueled several expansions by Gillian’s in Lynn, Mass., and an anticipated September move to a new bakery in nearby Salem.

A chef by trade, Otolo began experimenting with gluten-free baking even before Gillian, his then-six-year-old daughter, was diagnosed with celiac disease. “At that time, there was nothing good on the market,” he recalls. “She had nothing to eat. For two years, we worked on a bread that wouldn’t fall apart” before coming up with a formulation that proved good enough to support mail-order sales and then retail distribution.

Gillian’s uses batter-based dough in a broad line (32 SKUs and counting) that positions the firm as a one-stop shop for gluten-free. The dough’s distinguishing features are its delicacy and a stickiness that’s a consequence of the gums, eggs and modified starches needed to bind it. While that always poses a formulation issue, the challenge is magnified with machining. Gillian’s production area has limited automation, but when dough meets hot metal, difficulties ensue.

Ten rack ovens serve the baking needs at Gillian’s Foods. As in any food plant, volume dictates the level of automated product handling and production.

“We’re almost like a quick bread,” notes Otolo, the firm’s CEO, “so we have to find equipment that is volumetric, as opposed to dividers and sheeters.” Any automation is contingent on production volume, and until the gluten-free market took off, manual processes prevailed. Hand-scooped dough gave way to a multi-function filler from Unifiller last year, accelerating throughput, slashing product giveaway and improving consistency.

Even after baking, gluten-free structure is an issue. Workers originally used a bread slicer to make croutons, but the stock crumbled. A conventional bakery machine designed for the job didn’t fare much better. Ultimately, the bakery sourced equipment engineered to dice meat and poultry. The Carruthers unit had the balance of speed and gentle handling needed for the job.

Sourcing equipment from suppliers outside the bakery space isn’t unusual with gluten-free. A vacuum transfer system designed for pharmaceutical applications moves bread crumbs to packaging. That product is Gillian’s biggest seller and a source of pride: the firm commands about half of the nation’s gluten-free bread crumb market, according to Nick Sideri, operations and production manager.

Ingredient separation

Flour and other raw materials are sourced from wheat- and gluten-free suppliers with dedicated facilities, and the certificates of analysis accompanying shipments help document Gillian’s gluten-free claims. Besides gluten, tree nuts and peanuts are other not-used ingredients at Gillian’s. However, demand for allergen-free products is growing, and the recent addition of soy-free French bread pizza reflects Gillian’s response to the free-from trend.

Eggs and dairy ingredients are other ingredients that need to be segregated and tracked. A disciplined allergen-control program is essential. Multiple certification programs and documentation vouch for product integrity.

The bakery was an early adopter of the Celia Sprue Assn.’s gluten-free certification and uses CSA’s third-party testing protocols. It also is HACCP certified by AIB International. Development of a HACCP plan five years ago introduced a level of discipline that previously was lacking, Robert Otolo, vice president-operations and son of the founder, frankly admits.

In response to requests from customers and prospects, the firm underwent SQF Level 2 certification early this year. It was an expensive process, the younger Otolo says, but the procedures and operational discipline it requires has helped the bakery sharpen its game and beef up documentation.

Previously, cleaning schedules and pest-control procedures were among the few documented food-safety programs; today, worker training programs, food-defense procedures, a business continuity plan and a product-recall plan reside in a cloud-based data-management system from SQF.

“SQF helps us tremendously in following an allergen-free protocol,” says Sideri. He expects similar outcomes as the bakery responds to requests for vegan-friendly and egg- and soy-free options. Already, soy-containing ingredients must be segregated to meet non-GMO requests from some customers. Retail customers have growing lists of ingredients that should not be included in the products they sell, adding to the importance of tracking and validation programs.

Facility upgrade

Mail order sales were Gillian’s only distribution channel in the early years, followed by retail and, more recently, foodservice. “With the SQF program in place, we can go to the (retail) big boys with a bid for their private label RFPs,” the elder Otolo says. Without the documentation and flow charts and certifications that the program supports, that business would be off limits.

Nick Sideri stands next to a size-reduction machine more typically found in meat and poultry plants. The bakery purchased the machine to produce gluten-free croutons.

The staff is bracing for unannounced audits but feels confident about them, thanks in part to the pending facility upgrade. Significantly improved product flow and sanitation will result after relocating to a 20,000-sq.-ft. building in nearby Salem, Mass.

Expanded freezer space, an additional proofer and epoxy flooring are improvements over Lynn, where the bakery operated in a former Fluffernutter facility. Wood-plank floors and piecemeal growth left Gillian’s with a warren of rooms and a hard-to-secure work space. Securing the Salem facility will be much easier, thereby improving the food defense plan.

Prior to the move, management surveyed local restaurants and found 80 in the town of 41,000 with gluten-free dishes on their menus. That’s good news for Gillian’s growing foodservice business. It’s only 10 percent of current sales, but restaurants, hospitals, schools and commissaries that want to cater to people with dietary sensitivities are a ripe opportunity.

“It’s really happening in foodservice,” Bob Otolo believes, but those customers have particular needs. Cross-contamination is a liability concern for restaurateurs, and he addressed it with gluten-free pizza dough delivered on a pie tin. Cooks simply add sauce, cheese and toppings before baking. “I put myself in the chef’s place” by supplying dough that never touches a kitchen’s food-contact surfaces, he explains. “The tin was the key.”

Overcoming obstacles and reacting quickly to customer requests are hallmarks of nimble entrepreneurs. “Production schedules are all about who’s buying what, and we can turn on a dime,” boasts Sideri. Order fulfillment is one week, down from two a few years ago. That’s helped the bakery add and subtract new products based on customer demand.

Dessert items are surprisingly strong sellers, while dinner rolls turned out to be laggards and were dropped. In a single week, three requests were received for gluten-free dog biscuits, though the bakery decided to stick with human foods.

With an estimated one in five Americans following a gluten-free diet, interest in Gillian’s product line is cresting. Food trends and fads wax and wane, but gluten-free’s core audience must eat these products. Growth is built-in if the bakery can supply a range of products for “everyday living,” Bob Otolo says.

He and his wife originally capitalized their business with $10,000. “I just wanted to make a living,” he reflects. Now he has a thriving business to pass along to the next generation. “My goal is to beat the big boys with better quality and better pricing,” Otolo concludes.

Getting into gluten-free 23 years ago was lucky. Remaining competitive will hinge on being good.

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