Natural Ovens Bakery, Inc.

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Natural Ovens Bakery, Inc.

P.O. Box 730
Manitowoc, Wisconsin 54221-0730
U.S.A.
Telephone: (920) 758-2500
Toll Free: (800) 558-3535
Fax: (920) 758-2671
Web site: http://www.naturalovens.com

Private Company
Incorporated: 1977 as Natural Ovens of Manitowoc, Inc.
Employees: 307
Sales: $30 million (2003 est.)
NAIC: 311810 Bread and Bakery Product Manufacturing; 311812 Commercial Bakeries; 722310 Food Service Contractors

Natural Ovens Bakery, Inc. produces nutrient-rich baked goods. Its products are full of whole grains and free of preservatives and are fortified with ingredients like flaxseed oil. The company maintains a Farm and Food Museum at its Manitowoc, Wisconsin headquarters.

Origins

Paul A. Stitt began his career with New Jersey's Tenneco Chemicals after earning a master's degree in biochemistry from the University of Wisconsin in 1969. Thus commenced a period of frustration and disillusionment with the food industry.

Stitt opposed the use of "appetite enhancers"—additives such as fat, salt, caffeine, and sugar, all intended to increase consumption rather than impart nutrients. "If you make it nutritional, then people eat less," he later lamented to the Christian Science Monitor. "And to a food company, that's harmful." After a subsequent stint at a Quaker Oats lab in Manitowoc, Wisconsin, Stitt set out on his own.

Author Michelle Stacey features Natural Ovens in a chapter on "designer foods" in her 1994 book, Consumed: Why Americans Love, Hate, and Fear Food. Paul Stitt told her he bought a 5,000-square-foot bakery in 1976 to complement a cheese store he had acquired the previous year. He later told the Milwaukee Journal Sentinel he started the business with just $5,000 and no recipes; the store began with five employees. Natural Ovens of Manitowoc, Inc. was registered on March 21, 1977.

The health-conscious Stitt soon cut the sugar-laden cinnamon rolls from the menu at the bakery. This proved unpopular with the citizenry and with Stitt's original bankers, who canceled his loan, he told Stacey.

The bakery stayed well ahead of nutritional trends, eschewing partially hydrogenated fats or trans-fatty acids from the beginning. Stitt also began fortifying the breads with more than a dozen vitamins and minerals. He was chiefly concerned with obesity and heart problems.

Stitt's wife Barbara (née Reed) later came on board as vice-president. A former probation officer, she developed a specialty researching the effect of different foods on behavior. (The Wall Street Journal ran a story on her work in June 1977.) The two met at a natural foods conference in 1980 and were married two years later.

Flaxseed Oil Added in the Mid-1980s

Stitt became an early proponent of flaxseed oil, which was rich in omega-3 fatty acids and other health-promoting components. Before it could be made suitable for baking, it had to be treated with zinc to keep it from decomposing too rapidly. In 1989 Stitt patented a method of stabilizing flaxseed oil. (This led to the formation of another business, Natural Enterprises, Inc., later called Essential Nutrient Research Corporation, or ENRECO, and Natural Ovens Holdings, Inc.). Large food companies soon began buying Stitt's flaxseed oil for research purposes.

A new 28,000-square-foot plant was constructed outside of town in 1988. Its front entrance featured a 15-foot-high stained glass window depicting agricultural scenes. A small farm next door dated back to 1910 and housed Stitt's collection of vintage farm machinery as well as livestock.

Natural Ovens ended the decade with sales of about $6.5 million a year, according to Forbes, which reported that its profit margins were unimpressive at the time—just 1 percent—in spite of the premium retail prices (then up to $3) the loaves commanded.

Functional Foods in the 1990s

In the early 1990s, reported Stacey, Natural Ovens had 130 employees and annual sales of $7 million. By 1993, it was baking 20,000 loaves a day, with sales of $9 million a year. Paul Stitt drew a modest salary and helped others break into the bread business.

The National Cancer Institute was undergoing a five-year, $21 million study of phytochemicals, or cancer-fighting compounds, including flaxseed oil. Stitt was developing "functional foods" geared toward preventing specific illnesses, such as cancer. The Food and Drug Administration (FDA), however, prevented him from making such claims on product packaging.

The company had a line of 15 different breads. New products included Seven Grain Herb Bread, which included, according to product literature, almost 200 cancer-fighting compounds. Other items also were packed with goodness. Garden Bread included carrots and sunflower meal. Blueberries made up more than one-quarter of the Blueberry-Oat muffins. Stitt also had formulated drink mixes and energy bars.

School lunch programs were the Stitts' next target for reform. Fat- and sugar-laced junk food had displaced fruits and vegetables. Natural Ovens started with Wisconsin's Appleton Central Alternative High School, donating bagels and underwriting the healthy eating program at a cost of $30,000 a year for the first five years. This program was later featured in the film, Super Size Me.

Natural Ovens practiced nutrition in its own cafeteria, which was stocked with fresh fruits and baked items. The healthy food helped employees work together productively, Paul Stitt told the Washington Post. "We have a very low sickness rate, very low absenteeism, very low turnover."

Counting Carbs After 2000

By the end of the 1990s, Natural Ovens was supplying 1,300 supermarkets in the Midwest. It had more than 200 employees. In 2001, the company was renamed Natural Ovens Bakery, Inc. Every day it was baking about 25,000 loaves of bread, 15 varieties in all, plus 50,000 bagels and thousands of rolls, muffins, and cookies, noted Snack Food & Wholesale Bakery. Its annual shopping list included 500,000 pounds of flaxseed. Sales were $22 million a year.

In September 2002, the company opened its second plant, a $9.4 million, 60,000-square-foot bakery in Valparaiso, Indiana. This facilitated expansion to the east and south. It was entering the East Coast retail market with frozen bread. At the same time, the fresh bread market in the Midwest was becoming more competitive as it attracted the attention of big players such as Sara Lee Corp.

By putting a domed roof on the Valparaiso facility, Natural Ovens created a plant unique to U.S. baking and manufacturing. The two-story building did not have internal columns or walls, to promote open communication among employees.

Natural Ovens began rolling out low-carb breads in 2003 to meet the challenge of the popular Atkins diet. These were soon accounting for 30 percent of sales. The higher margins on the low-carb bread allowed them to be shipped further across the country, Stitt told the Chicago Tribune.

Unfortunately, the low-carb trend managed to derail two dozen years of double-digit growth. The new plant at Valparaiso closed after little more than a year, a victim of slow sales.

The company's focus on innovation and wellness was reflected in a new health insurance program that rewarded employees with annual stipends for meeting preset health goals. In late 2003 Natural Ovens became the launch customer for Healthy X Change, a new medical insurance program that emphasized fitness, nutrition, and alternative medicine.

In spite of the low-carb setback, the company was planning to expand distribution of frozen bread to the East Coast and West Coast. At the time, Natural Ovens was supplying 1,200 grocery stores in 18 states, and shipped a small amount of product via UPS.

Principal Subsidiaries

Essential Nutrient Research Corporation (ENRECO).

Principal Competitors

Breadsmith Franchising, Inc.; George Weston Bakeries Inc.; Great Harvest Bread Company; Rudi's Organic Bakery, Inc.; Sara Lee Corporation.

Company Perspectives:

Our mission is to make the best tasting and most nutritious whole grain breads. We use only the highest quality ingredients including natural wheat and fortified flax, which is high in Omega-3. All our products are certified Kosher, Pareve by the Chicago Rabbinical Council-Pas Yisroel. Our goal is to help you live a long, healthy life by eating our healthy breads. From our ovens in Manitowoc, here's to a healthier you.

Key Dates:

1976:: Paul Stitt buys a Manitowoc, Wisconsin bakery.
1986:: Stitt begins baking with flaxseed oil.
1988:: A new plant opens outside Manitowoc.
1989:: Stitt patents a method of stabilizing flaxseed oil.
1997:: The company begins outreach in public school cafeterias.
2003:: The low-carb trend forces closure of the new Valparaiso, Indiana plant.