Hartford Business Journal

29 HARTFORDBUSINESS.COM | March 14, 2022 Business Strategy With major new customer and pivot toward outdoor markets, Granny's Pie Factory sees revenue growth despite pandemic's challenges By Linda Keslar Hartford Business Journal Contributor A pple and chocolate cream pies, along with a flavor of the week — often a more decadent option like peanut butter chocolate or coconut cream — regularly line a sole refrigerated display case at the counter of Granny's Pie Factory in East Hartford. A menu on the door lists more extensive offerings of its 10-inch fruit and cream pies made from recipes that have stood the test of time. "Many of the recipes have been accumulated from little Greek YaYas," said Joan Harovas, explaining what's behind the "Granny's" company name. Joan co-founded the business with her husband Tony Harovas in 2006. Though still working as a part-time nurse, which has been her primary career, Joan Harovas, 75, can often be found at the counter taking orders. "I love engaging with the customers and talking about pies," she said. But the no-frills mom-and-pop store atmosphere is somewhat misleading. Granny's whips up over 150,000 pies a year, all from its 5,000-square-foot bakery on School Street. About 80% of those pies are sold in other outlets around the region, including farmer's markets, farm stands and some local supermarkets like ShopRite. "We're a very production-focused company and wholesale is the main [focus]," said Niko Harovas, vice president of Granny's Pie, who oversees day-to-day operations of the business he's inherited from his parents. Pandemic impacts pie makers Pies are a time-honored American tradition. For many years, Granny's, along with the pie industry as a whole, experienced slow and steady growth, industry data suggests. The pandemic only increased America's cravings for feel-good sweet treats (household spending on confections, baked goods and baking supplies shot up 9% from Feb. 24, 2020, through Sept. 30, 2020, according to market research firm NCSolutions CPG Insights), but has also created challenges for baked- good producers. For example, Something Sweet Inc., a much larger New Haven- based bakery, filed for bankruptcy last year, citing significant increases in the costs of labor, goods and shipping as a result of the pandemic. Middlefield's Lyman Orchards, known for its fruit pies, donuts and other baked treats, purchased Something Sweet's assets and two of its former buildings, and recently announced its moving its baking operations to New Haven. Lyman's Middlefield farm currently produces about 1 million pies a year and with the expansion, the number is expected to rise to 3 million. Granny's has cranked up production of cream and pumpkin pies, even more since last fall, when the business took on a new customer, Bozzuto's Inc, a large Cheshire-based wholesaler that supplies baked goods and other products to supermarkets in New England and other states. Previously, Something Sweet supplied those flavors to Bozutto's. "They came to us since we're one of the few cream pie makers in the area," said Niko Harovas. Though sales were up 30% in 2021, it was "a rough year," Harovas said, due to ongoing pandemic challenges that led to higher costs and other production headaches. The bottom line took a hit, but Granny's smaller scale and less overhead have allowed it to successfully pivot its business model for growth with a greater focus on its wholesale business. Evolving business Since 1988, pies have been baked from Granny's School Street location for various businesses run by Tony Harovas, who previously managed restaurants with his brother Philip and other partners, including chains like Grandma's Country Pies and Ann Fields Country. Pie production at that location is done both manually and with machines, but in the early 2000s, Tony Harovas expanded to a nearby facility to meet bulk orders from large supermarket chains like Stop & Shop. Budget pressures led him to close that operation and launch the current business with Joan as co-owner. Though retired at 78, Tony Harovas continues to log 40 hours a week at Granny's Pie Factory. Niko Harovas came on in 2008, uncertain of a career path after graduating from Trinity College as a history major. "I thought I'd go to work there for a year and see how it goes," he said. "I got hooked and never wanted to leave." Through the next decade, the bakery's growth benefited from a convergence of trends, including its ability to use social media as a cost-effective form of marketing, boosting its sales at farm stands and farmer's markets. Today, its pies span 50 varieties and are sold throughout the region. "Farm stands are the core of our business," Niko Harovas said. Much of Granny's business is seasonal, starting in the fall. That's when Harovas sets out to triple his regular workforce to 30 employees or more to meet surging demand. The Thanksgiving holiday remains the busiest time of the year and the bakery shifts all of its production capacity exclusively to meet walk-in customers. The storefront sold more than 4,000 pies — mostly homestyle apple, pumpkin, chocolate cream and pecan pies — last year during that shortened holiday week alone. Up until the pandemic, about 20% of total sales were also generated through fundraising catalogs, an income stream that dried up due to school shutdowns and other restrictions. That business is now recovering, Niko Harovas said. But strong sales from farm stands, which have thrived during the pandemic with shoppers crowding outdoor venues, has more than made up the difference. Niko Harovas said he has grappled with labor shortages, supply chain issues around sourcing some ingredients and the impact of sharply higher costs as ongoing challenges during the pandemic. Even still, Niko Harovas said he's committed to continually expanding the business, but not willing to trade off that goal with losing family control, or cutting prices and quality to compete against larger pie manufacturers. "We can't compete on price with a lot of these big companies nor do I want to," he said. "We're really a niche business." Granny's Pie Factory Vice President Niko Harovas (far right) with his parents and company founders Tony (left) and Joan Harovas. Granny's produces 150,000 pies a year from its School Street location in East Hartford. PHOTO | CONTRIBUTED AT A GLANCE Company: Granny's Pie Factory Industry: Baked goods Top Executive: Niko Harovas, Vice President HQ: 103 School St., East Hartford Company Website: https:// grannyspiefactory.com/ Phone Number: 860-291-1164

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