Business North Carolina

Annie's Bakery Inc. is expanding faster than a loaf of semolina sesame bread--one of its specialties--left to rise in a warm spot. Giuseppe "Joe" Ritota incorporated the company in 2001, when he and his wife, Annie McKenzie, opened a 3,500-square-foot cafe and bakery in Sylva. "I was baking for friends and whatnot/' the fourth-generation baker says. Today, the company is a growing wholesaler providing organic bread to about 150 clients in the Carolinas, Tennessee and Georgia. It supplies restaurants, including the Ruth's Chris Steak House in Asheville, and grocery stores, such as Black Mountain-based Ingles Markets Inc. and Matthews-based Harris Teeter Inc., a new account as of this month.
The rapid growth began in 2005, when Ritota got the Ingles in Sylva to carry Annie's Naturally, his company's wholesale brand. Adding that store increased sales only 2%, but it gave Annie's a presence at a large retailer. Soon, it was supplying 17 Ingles. But its small bakery in Sylva, which produces 600 loaves a day, stymied growth. That changed in April with the opening of a 21,000-square-foot bakery in Asheville in the former Square D Co. manufacturing plant. Annie's, which is leasing the building, spent more than $500,000 on renovations. A West Virginia investment fund contributed $250,000, Mountain BizVVorks Inc., an Asheville community-development lender, provided $280,000, and private investors and family also chipped in. Annie's now makes about 4,000 loaves a day and supplies 10 more Ingles.
In the next few months, the bakery will add $250,000 of equipment, allowing it to begin "par baking," making partially baked bread, which is frozen, baked when needed and served or sold fresh. That could improve sales 20% to 30% a year, Ritota says, because it can be sold over a wider area since it won't go stale. The new bakery will also improve distribution, as Annie's four 16-foot delivery trucks will be about an hour closer to the company's biggest clients, including the three Harris Teeter stores in Asheville it entered this month.
Revenue has increased about 30% annually over the last five years, reaching about $2 million in 2011. He anticipates hiring more employees this year, going from 32 to about 50 by fall. But expansion has meant sacrifice: It shuttered its Sylva cafe in November, which means locals can no longer buy Annie's sandwiches or wedding cakes. "It's part of letting go," Ritota says. "What we're really growing toward is the wholesale business."