The Muffin Mam Inc., the Simpsonville-based private-label baker of crème cakes, pound cakes, muffins, brownies, and angel food cakes, is about to enter an aggressive new phase of growth.
With new funding from Azalea Capital, a Greenville-based equity finance firm, Muffin Mam’s new chief executive officer, Dewey Armstrong, has set the bar high: Generate four to five times existing growth in the next three to five years and become a $150 million company employing 200 people.
Armstrong, the former Wise Snacks CEO who engineered a major turnaround at the near-bankrupt company in the early 2000s, joined Muffin Mam in July as part of the equity deal inked with Azalea, which brought him in to rebuild the 26-year-old company after trustees representing the former owners sought out fresh capital.
“They’d been maxed out in capacity … and they had continued as-is for two years” while serving at least one national food club and a variety of retail grocers, Armstrong explained. “Their current profits were going to be eroded.”
To revive the company’s fortunes, Armstrong and the firm’s newly named executive vice president, Greg Marshall, will increase the current production capacity of approximately 40,000 square feet by adding 80,000 to 100,000 square feet at a second site in the Upstate. “And it would be my vision to double that space in the new facility in a year and a half to 150,000 square feet,” the new CEO added.
The additional facility will be selected from among a dozen available sites that are now under review. It will open in 2019, Armstrong said.
More immediately, Muffin Mam is stepping up automation at its Simpsonville plant, located at 3129 North Industrial Drive off I-385.
“Azalea is investing a million dollars in automation as part of the growth vision, and we started that on day one,” Armstrong said, noting that manual insertion of paper wrap in muffin trays is one of the first labor-intensive tasks to be automated.
“Speed is kind of important when you’ve got customers waiting for your product,” Armstrong said.
Muffin Mam has 63 full-time employees on its payroll and also leans heavily on temporary staffing.
To help accelerate production, Muffin Mam is starting to recruit at least 60 new employees, many of them maintenance technicians and production leaders, in order to develop four teams working 12-hour shifts, four days on and four days off, Armstrong said.
Following the opening of the company’s second plant, perhaps 30 more employees will be recruited, he added.
With a larger workforce and heavier use of automation, the stage will be set for serving more clients.
Working off its existing customer base of food clubs and retail grocers, Marshall, who had served as general manager, said a push is underway to interest more convenience stores in the company’s products.
“In addition to C-stores, we also want to look at food service … your restaurants, your hotels; we’re qualified with some of the products we make to also work with school lunch programs, breakfast programs,” Marshall said.
Both new and existing clients will be able to make purchases from a product line that will expand, Armstrong said, including cupcakes and decorated cakes for special occasions.
Ben Wallace, a partner and director of business development at Azalea Capital, said the equity firm usually makes investments of $5 million to $15 million per company and holds its position for an average of five to seven years.
“We like the general trends in the industry,” Wallace said of the baked-goods sector, explaining that consumers will buy such products in both good times and bad.
“I’m just excited to see what the future holds,” said T’yada Vega, who joined Muffin Mam as a temporary worker 22 years ago and who was one of three employees that the company sponsored for specialized training last year to help them advance their careers.
Vega now serves as human resources manager and will play a key role in recruiting and training both new and existing associates as the business expands.
“I’d like to pay it forward … just kind of developing the same kind of opportunities that were developed for me,” she said.
Going forward, Muffin Mam will continue to nurture “leaders who grow leaders,” Vega said.