AIB Featured Business – Bakers Delight
In 1980, Lesley and Roger Gillespie started a small family bakery. So far, so unremarkable, except that the Gillespies business, nestled in suburban Hawthorn, did very well. So well in fact that the Bakers Delight franchise now spans over 700 outlets in three countries, with an annual turnover at around $600M. Intending to keep the business in the family, the Gillespies currently manage around 30 bakeries themselves, with no plans to sell.
Ironically, the two met in a bakery. It was the mid 1970s, and Lesley took a part time job in a local bakery while finishing her science degree. There, she met the bakery’s owner, Roger, a 25 year old, fourth generation baker with big dreams. The pair hit it off and by 1980 they were married with a young baby. Roger sold the Old Style Bread Centre, which became Brumby’s, and the two of them opened their own business, Bakers Delight. The name, the Gillespies have explained, was chosen to invoke the delight taken by bakers in their craft, and the delight of customers sampling their wares.
The original store, which they founded with a mutual friend, Gary Stephenson, opened in Hawthorn on a shoestring budget. It was successful enough that the Gillespies were able to buy Stephenson out in 1982 and secure bank funding to expand to the second store. “Our biggest growth was going from one bakery to two”, Lesley told The Australian. They made a commitment to always baking in-store, which cut down on delivery costs and ensured a fresh product.
By 1988, the couple owned fifteen bakeries, but business was slowing down. Profits per business were shrinking, and it was becoming more difficult to hold bakery managers accountable when they were spread over so many stores. The Gillespies regrouped and looked at alternative models. This being the eighties, there were a number of fast food franchises moving into Australia, from McDonalds to Pizza Hut, and so the decision was made to try the franchising model. The experiment was a success, with most new franchises being opened by people who had worked in a Bakers Delight store previously and had seen the possibility for profit. By 1993, the company was a national name, and in 1995 it opened in New Zealand.
In 2003, the family relocated to Canada and launched a bakery business there, under the name of COBS Bread and following the same franchise model. Lesley targeted areas where independent greengrocers still operate, reasoning that “the people who would shop in a fruit-and-vegetable shop are the kind of people who will shop with us”. Her reasoning proved sound and the company now owns 78 bakeries across four Canadian provinces.
Attempts to expand into America, however, have proven less successful. In 2007, the company opened three stores in Seattle, all of which were closed within the year before franchising. The United States is a tough market for independent food stores, as consumers overwhelmingly favour supermarkets and megastores for their shopping. Nonetheless, in 2015 the company tried again, this time as a franchise model right off the bat, and now claims the United States amongst its franchise opportunities.
Franchising has allowed the company to expand quickly without losing the overall brand. It has also helped them innovate: popular products like their cheesymite scrolls and white chocolate and berry scones were franchisee inventions.
Back in the office, Lesley oversees the business operations, including information technology, finance, human resources, training, product development and operations. Roger deals with the nitty gritty of his craft – overseeing the training of new bakers and working closely with suppliers to ensure quality. Together, they’ve also spent significant hours giving back to the community. Bakers Delight donates over $143 million in bread to charities every year and supports a range of health and community based organisations. Their regular fundraisers for the Breast Cancer Network Australia have raised over $6.5 million since 1999.
Both Lesley and Roger have received a number of prestigious awards, including an Order of Australia each for their service to the community through support for charitable and sporting organisations, business and commerce. In 2014 they took out the joint award of Champions of Entrepreneurship at EY’s Entrepreneur of the Year awards in Australia. In November 2013, Lesley was awarded a fellowship from Monash University in recognition of her contribution to business and the community.
Despite a number of offers to sell, the Gillespies are firm in their plan to keep the company in the family. As a fourth generation baker, it was important to Roger to create a legacy, and in this the couple have succeeded. Today, both of their adult children work for Bakers Delight, and there are no plans to sell the business. Their strong partnership and belief in the importance of a quality product have seen their company go from strength to strength with no signs of a slow down. “We’ll keep doing what we’re doing”, the Gillespies told Smart Company, and with Lesley’s business acumen and a pinch of Roger’s magic, it seems safe to assume that the company, just like its bread, will continue to rise.
This article was written by Tanya Ashworth-Keppel on behalf of the Australian Institute of Business. All opinions are that of the writer and do not necessarily reflect the opinion of AIB. The following sources were used to compile this article: The Australian Business Review, Smart Company, Australian Financial Review, Monash University, Business First Magazine, EY News Release and the Daily Telegraph.