Case Studies

Greyston Bakery

 

Greyston Bakery in Yonkers, New York creates jobs by producing four million pounds of brownies and cookies annually

 

 KEY DATA
  Year Founded: 1982
  Revenue: $13.4 million
  Number of Employees: 144
  Headquarters: Yonkers, NY
  Mission: Greyston creates jobs and provides integrated programs for individuals and their families to move forward on their path to self-sufficiency.
  Enterprise Services: Greyston Bakery produces four million pounds of brownies and cookies annually, primarily for large customers including Ben & Jerry’s and Whole Foods.

In Brief

Greyston Bakery was created in 1982 to address poverty in Yonkers, New York through employment and, as the years progressed, housing, child care, and job training. Greyston initially produced baked goods for high-end bakeries in New York City but moved primarily to brownies after securing Ben & Jerry’s as an Anchor customer. Since then, Greyston has grown considerably and has now surpassed $11 million in annual revenues. This growth was the result of a number of important factors, including:

Identity

A strong philosophy that guides business decisions. As Greyston CEO Mike Brady says, “We don’t hire people to bake brownies, we bake brownies to hire people.” Greyston is committed to its open hiring process whereby anyone who wants a job is eligible, with no application, background check, or interview required. In addition, sustainability and social justice factor into all aspects of its supply chain, from how the cocoa is sourced to the LED lighting and solar panels in the bakery.

Anchors

A close, long-term relationship with Ben & Jerry’s. Greyston’s early relationship with Ben & Jerry’s allowed the enterprise to grow. As a values-led business, Ben & Jerry’s took interest in Greyston and lent its own staff expertise to help the bakery increase its capacity and efficiency to produce high-quality baked goods at a competitive price for large customers. Greyston has used that foundation to diversify in recent years and is now working with Whole Foods and expanding its direct-to-consumer online business.

Audacity

Increased visibility as an international leader in social enterprise. In early 2012, Greyston was the first business in New York State to achieve Benefit Corporation status—a legal status that requires a business to create social value in addition to its financial profit. This status, along with Greyston’s larger social mission, has attracted attention from Unilever, the multi-national corporation that bought out Ben & Jerry’s, as it attempts to implement its own Sustainable Living Plan.

Greyston Key Milestones

Approach

Target Population

Greyston’s open hiring policy means that applicants are not required to submit an application, undergo a background check, or participate in an interview. As a result, a large proportion of employees are people who would otherwise have difficulty finding employment due to involvement with the criminal justice system or a history of chronic unemployment. Almost all of Greyston’s workers reside in low-income areas of Yonkers.

Business Model

The Greyston Bakery is a for-profit business wholly owned by the Greyson Foundation that produces roughly four million pounds of baked goods per year. Its primary product is brownies, but it has recently expanded to produce cookies as well. Greyston provides products to large customers including Ben & Jerry’s Ice Cream and Whole Foods. In recent years, the bakery has expanded its direct-to-consumer sales and hopes to grow this line of business through greater brand recognition.

Program Model

Greyston Bakery is part of a network of programs—under the umbrella of the Greyston Foundation—that provide services to the Yonkers community. These services include affordable and supportive housing, subsidized child care, and workforce development services. Greyston has over 200 units of housing and 100 subsidized child care slots and provides training and job placement services to around 100 people per year. These services address the needs of the larger community but are available to all employees who meet eligibility criteria. In addition, Greyston provides PathMaking, a set of services that helps employees achieve personal and professional goals, to all of its employees.

Achieving Scale

In 1982, Roshi Bernie Glassman, a Buddhist monk and former NASA aerospace engineer, opened the Greyston Bakery as a way to address homelessness and poverty in the Yonkers community. The bakery is now one of a holistic set of services and supports— called the Greyston Mandala—designed to help people get back on their feet and move toward self-sufficiency. The bakery, along with affordable housing, child care, and workforce programs, is part of the Greyston Foundation. Two tenets are central to Greyston Bakery’s mission and philosophy:

Open Hiring

Anyone is eligible to work at Greyston Bakery with no application, interview, or background check required. By law, Greyston must verify citizenship status and eligibility to work in the U.S., but otherwise anyone who wants a job can find one at Greyston. The company keeps a list of people who are interested in employment and hires them on a first-come, first-served basis. Open hiring is designed to give people with a range of employment barriers—a criminal or drug history, a lack of work experience or education—a foothold in the workforce.

PathMaking

PathMaking is based on the Buddhist philosophy that everyone is on his or her own unique path in life. The director of PathMaking works with Greyston employees to help them accomplish their personal and professional goals, which can involve accessing supportive services, resolving workplace conflicts, reducing stress, assisting with job searches, investigating education and training opportunities, and dealing with dependent or elder care issues. The director works with employees individually and in groups and assesses the extent to which Greyston is meeting the needs of the broader community and fulfilling its mission.

For over 30 years, Greyston has stayed true to these core values and practices while delivering high-quality products at a competitive price. The company’s social mission has provided leverage to build relationships with other values-led corporations—including Ben & Jerry’s, Unilever, and Whole Foods—and allowed them to grow to over $11 million in revenue.

Finding an Anchor Customer

Having established itself as a purveyor of high-quality, handmade cakes and pies to New York City restaurants, Greyston had created a solid foundation for growth but needed bigger customers to be able to get to scale. In 1988, Glassman was introduced to Ben Cohen of Ben & Jerry’s Ice Cream, which led to a brownie order. When the first shipment arrived, the brownies were stuck together and unusable for their intended purpose in ice cream sandwiches. This mistake inadvertently influenced product development; the ice cream company broke the brownies into pieces and, in the process, created a new ice cream flavor, Chocolate Fudge Brownie, which became one of its best sellers. Greyston continued to provide Ben & Jerry’s with brownies, and the partnership enabled the enterprise to grow and mature, buying the machinery needed to scale up operations.

As another values-led business, Ben & Jerry’s was an ideal partner for Greyston, and the bakery grew in lock step with the ice cream company. Because of its social mission, Ben & Jerry’s took a special interest in Greyston and provided the resources and expertise needed to meet the volume of supply that the ice cream company demanded. Over the course of its relationship with Greyston, Ben & Jerry’s sent its own staff to the bakery to solve specific problems in getting to scale, including process engineers, research and development experts, and marketing staff. Ben & Jerry’s would not have made this kind of investment in just any organization; it saw the impact that Greyston was having on its employees and in Yonkers more broadly and wanted to be part of it. As Sean Greenwood, “Grand Poobah” of Public Relations for Ben & Jerry’s, says of the relationship, “I feel as lucky to be associated with Greyston and try to be more appreciative of Greyston than they are with us.”

While the relationship with Ben & Jerry’s has been critical to its growth, Greyston did not take the ice cream company’s business for granted. It used the foundation Ben & Jerry’s provided to create a state-of-the-art bakery that has allowed it to produce a high-quality product at a competitive price. As Greenwood explains, “If you don’t have a quality product, you won’t survive anything. This is tremendously important.” The bakery, completed in 2004, gave Greyston the ability to achieve this goal and created excess production capacity that set the stage for additional growth.

Leveraging the Social Mission

Greyston’s focus on having a competitive product proved critical when Ben & Jerry’s was purchased by Unilever in 2000. While the buyout did not affect Greyston’s work with Ben & Jerry’s at first, over time the relationship with Unilever turned out to be a huge asset. In 2009, Unilever unveiled its Sustainable Living Plan designed to reduce the environmental impact and improve the labor practices of companies in its global portfolio. The plan includes three major components: 1) improving the health and well-being of people using Unilever products; 2) reducing environmental impact (including lowering greenhouse gas emissions, limiting water use, and reducing waste); and 3) enhancing the livelihoods of workers producing Unilever products. This plan encouraged Ben & Jerry’s—and, by extension, Greyston Bakery—to examine its own supply chain and make improvements that impact social justice and environmental outcomes.

In the process of making some of these initial changes, Greyston decided to become a Benefit Corporation, a legal status that requires a business to create social value in addition to financial profit. In early 2012, it became the first business in New York State to achieve this status. Greyston also achieved B Corp certification; the certification process, conducted by a third-party organization (B Lab), required Greyston to implement a recycling process, increase energy efficiency, install solar panels, and continue to improve the environmental and social justice impacts of its supply chain. Though resource-intensive, this process has increased Greyston’s visibility as a leader in social enterprise, providing opportunities to grow its customer base and make a broader impact. Unilever, for example, began highlighting Greyston as a model for how the company would like other businesses in its portfolio to operate. Unilever invited Mike Brady, Greyston’s CEO, to participate in a series of TED Talks coordinated by the corporation. These types of events have given Greyston a level of visibility and brand recognition it otherwise would not have. In Brady’s words, “On the face of it, we are only a 20,000 foot facility outside of Yonkers, but we are positioned in a different way—as the most innovative social enterprise out there.”

Creating a Foundation for Growth

To capitalize on the many new opportunities that are likely to result from its increased visibility, Greyston has worked to create a solid foundation for growth over the long run. In the past few years, the executive team has focused on a number of goals:

Improving financial health.

While the new bakery considerably expanded Greyston’s production efficiency and capacity, it also saddled the business with considerable debt. A few years ago, Greyston was able to retire a large portion of its debt. This freed the business to establish a line of credit, providing more flexibility in the use short-term debt (for example, buying cocoa in bulk and saving money on inputs.

Diversifying the customer base.

Greyston has been very successful at bringing on new customers in recent years. Most notably, Greyston has partnered with Whole Foods to create the Whole Planet Brownie. Two percent of the proceeds go toward the Whole Planet Foundation, which uses the money to support entrepreneurship in poor communities across the globe. In addition, Greyston’s research and development unit worked with the Whole Foods grocery division to create a thin cookie crisp in three different flavors: chocolate mint, fudge brownie, and brown sugar blondie. Like Ben & Jerry’s and Unilever, Whole Foods is motivated to work with Greyston because of its social mission and commitment to sustainability.

Improving the manufacturing process and food safety.

One of Greyston’s B Corp goals was to achieve Safe Quality Food Institute (SQF) certification—a top-tier, globally recognized food safety and quality certification. They accomplished this goal in early 2015. In addition to SQF certification, the Greyston team is documenting each detailed component of the manufacturing process in order to achieve greater efficiency and product quality. The resulting guidelines will be used to communicate expectations to employees and make it easier for workers to move between roles.

Improving employee training and opportunities.

Employees at Greyston earn $10.50 per hour plus health benefits, life insurance, disability, and a small profit share— likely more compensation than they would receive in a similar position at another commercial bakery. However, Greyston executives realize this is not family-supporting compensation and have been looking to provide more avenues for advancement, both within the bakery and in the larger labor market. To that end, the business recently created Greyston University, a new training arm for the bakery. Its first goal is to analyze gaps in the existing training process to make sure all employees are brought up to production standards and cross-trained in different job functions.

Eventually, Greyston University will offer other types of training, including marketing and bookkeeping that will open up advancement opportunities for employees within and outside of the bakery. As the bakery grows, there will be additional senior-level positions to fill in quality control and management. As part of its PathMaking services, Greyston would like to establish relationships with local employers interested in hiring its employees for jobs that have a better long-term career track. As part of its central mission, this work is a priority for Greyston. As Greyston CFO Jennifer Solomon says, “When you help the employees, you help the business.”

Performance and Impacts

Greyston closely monitors the financial well-being of the business but also tracks its impact on social outcomes. In Solomon’s words, “Obviously we are here because of a mission, but that doesn’t mean you have to be less focused on results—but also have results that are socially focused.” In 2014, Greyston (along with the Greyston Foundation) achieved the following social impact:

  • 144 people employed at the bakery
  • 3,358 hours of training
  • 122,714 hours worked
  • 532 individuals placed in affordable housing
  • 139 children served in the child care program
  • 89 individual PathMaking meetings
  • $326,000 in new income created for participants in workforce development programs

The bakery continues to grow—2014 sales increased 17 percent to $13.4 million, and 4.6 million pounds of brownies were produced.

Future Directions

Greyston Bakery has achieved considerable growth since it first opened in 1982. Given its increased visibility and expanded customer base, the business is poised to reach even greater scale in the future—both within Yonkers and, potentially, through expansion into other communities—by influencing the social enterprise community more broadly. Priorities include:

Continuing to focus on the social mission and sustainability.

From its early relationship with Ben & Jerry’s to its current partnership with Whole Foods, Greyston’s mission has provided the business with opportunities it would not have had otherwise. Brady sees these opportunities expanding over time as consumers use their buying power to create environmental and social change. Greyston is “well-positioned for a future where people care about this. It is hard to understand the pace of change, but it is going to happen. Companies will have to compete based on sustainability and social justice. Purpose-driven products are important.”

Diversifying the customer base and improving brand recognition.

The bakery is currently operating at about half capacity, so it has plenty of room to grow. The executive team would like to find more institutional customers like Whole Foods who can collaborate on new products. Brady would also like to expand Greyston’s direct-to-consumer online business, which requires that Greyston become more of a household brand. While the Greyston brand has received more visibility through its partnerships with Unilever and Whole Foods, it still has work to do. Brady would like to explore new ways for Greyston to tell its story on its website and packaging.

Exploring different ways to scale up.

Greyston is committed to addressing poverty in its local community by creating more jobs, but also wants to make a broader impact. Increased visibility through its work with Unilever positions the business as a global model for social enterprise and sustainable business practices. The executive team is exploring the possibility of opening bakeries in new communities and providing consulting services to help them create models similar to Greyston’s— including expanding the concept of open hiring and PathMaking. Greyston has just finished codifying its model as a first step toward exploring these options.

Greyston has the operational capacity and strong identity to continue growing quickly, although the executive team is eager to expand at a responsible pace that ensures the enterprise remains true to its social mission. Brady’s vision is for Greyston to reach a tipping point and become a “model social enterprise” by continuing to focus on its core social mission in Yonkers, on sustainable business practices generally and, finally, on geographic expansion.

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