Business

Golden Krust: Feeding Jamaicans in the USA

Monday, December 04, 2017

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The following is a reprint of the story we ran on Sunday, November 20, 2011 when Golden Krust Caribbean Bakery and Grill, the empire built by Jamaican Lowell Hawthorne, was nominated for the Jamaica Observer Business Leader Award 2010, along with other companies in the Jamaican Diaspora.

IF Lowell Hawthorne had succumbed to his earliest entrepreneurial temptation, the world would have been deprived of more than a legendary producer of patties and other culinary delights.

For us in Jamaica, Hawthorne's creation — Golden Krust Caribbean Bakery & Grill — has been the quintessential showpiece of the American dream in perpetual motion.

With 122 branches in nine states, 1,800 employees and more than US$100 million in gross annual sales, Golden Krust is not your average mom-and-pop store. Even by the standards of the world's largest economy, it is in fact big business.

“When I came to New York all I wanted to do was to hustle for one year and return to Jamaica with enough money to buy a Quarter Million Dollar (Coaster) bus,” Hawthorne confesses. “This was the dream of everybody in the minibus business: to own a Coaster.”

While history will never reveal the outcome of the alternative path not taken, there are ample examples that Jamaica's public transportation business would have made for a more bewildering life.

Just how powerful a role one's environment plays in shaping one's dreams and sense of mission was on display throughout Hawthorne's early life.

One of 11 siblings, Lowell had the good fortune of an early exposure to business by helping his parents — Euphrame and Mavis — with the bakery they operated from 1949 in their community, Lawrence Tavern, a hilly country town in northern St Andrew.

“This is where I got my first love for business,” he says.

By the time he was a teenager, Hawthorne had already developed a remarkable enterprising culture.

While still at Oberlin High School, this resourceful youngster earned his own income by rearing chickens, pigs, and goats. At age 17 he had so much livestock that he was able to raise enough cash from their sale to fund his next business venture.

“I used the money to buy a minibus,” he tells the Business Observer.

If Hawthorne's childhood provided an early glimpse into the probable future of an entrepreneurial genius in the making, his teenage years would have left no doubt about it.

Here is how he leveraged the minibus to the hilt: Mondays to Thursdays the van plied the route between Half-Way-Tree and Lawrence Tavern. By Friday morning all the seats would be out, creating space for bread delivery that day and the following, to the anxiously awaiting market vendors and shop owners along the way from Buff Bay to Annotto Bay.

The seats had to be back in place ahead of Sunday morning worship so that churchgoers in and around Hawthorne's community could have reliable transport to and from service.

None of this activity was for free.

“I had to be paid,” he points out. “I was a busy teenager.”

Hawthorne says that an elder sister living in New York, Larice Campbell, filed for him in 1981, and that his intention was to spend a year in the city of opportunity, save his money, and head back to Jamaica as the proud owner of the highly coveted Coaster bus.

“That was every minibus driver's dream — to own a Coaster and become president of the minibus association.”

Without a job, the plan began to unravel in slow motion, and the bragging rights that this single-minded youngster so passionately sought seemed to be slipping from his grasp.

“I was in New York for months without a job,” he sighs.

It is not clear at what point the would-be president of the minibus association conceded that the Jamaican plans would just not work out the way he hoped, but when he landed his first job as a stock handler at the New York City Police Department (NYPD), he quickly adjusted to the long-term reality of living in America.

He enrolled at Bronx Community College and later City University of New York as an accounting student, and began to climb the ladder at his workplace.

With his accounting background he started to “do a little accounting work on the side” to earn extra money.

After nearly a decade in America, Hawthorne's entrepreneurial bug began to bite.

“I wanted to do business, to carry on our parents' tradition,” he says. “I always had the entrepreneurial spirit. I was always a businessman.”

He became the main promoter and driving force behind what was, on paper, a simple plan: a bakery.

Seven of the Hawthorne siblings resided in America, and all hands would have to be on deck for the business to succeed.

One brother, Lloyd, had worked at a major New York bakery and had first-hand knowledge of the industry in America. He was also renowned for his baking talent. Another, Milton, had worked for Ford Motors and so had great mechanical skills. Lowell was the business visionary and the numbers man.

“I was the driving force behind the business. We came together in 1989 and I shared my vision with them. We talked about the potential and the source of funds. They bought into it and we came to the conclusion that we just had to do what we had to do to raise the funds,” he explains.

The fact that the financial institutions initially balked at the idea of bankrolling the project did not deter this family. They mortgaged their houses, tapped into personal savings, and called on friends to raise the $107,000 which they calculated was the minimum it would take to get the business off the ground.

With cash in hand, they leased a building in Bronx and bought used equipment. The business plan called for a wide range of baked products — bread, buns, patties, bulla — and takeout-only service.

“Everything was exciting,” recalls Hawthorne, who had taken special long leave from his job at the NYPD to take charge of the family business. “It was an experience for all of us to see the first customer walk in.”

Golden Krust was in business.

Hawthorne's informal market survey had indicated that having the right location would be the key to the success of the bakery, but it was not until the first few months in operation that he realised just how pivotal the location would be and how far-sighted they were in their first choice of real estate.

The building was across the road from the Number 5 subway station, on Gun Hill Road, a place frequented by the intended target group of the products on offer: members of the Caribbean and Jamaica diaspora.

The Hawthornes were spot on: within months the bakery had sold $100,000 worth of products.

“We clearly recognised that the location was good,” says Hawthorne. “We knew we had a good chance of success.”

This store was the template for the others that followed.

“We had a success story,” the entrepreneur reckons. “The model going forward was to put the stores beside subways and in large Caribbean communities and near hospitals where lots of West Indians worked.”

The success drove the pace of the expansion.

“When we saw the potential and revenue from one store and saw the number of family members we had to take care of, it drove us,” he says.

Within three years there were seven Golden Krust bakeries in operation, and by year five, 17.

The growth was fuelled in part by a series of supply contracts that were won from several New York City agencies — from the prison at Rikers Island to the New York City school system. Contracts from school districts in Mount Vernon and Rockland County also boosted sales.

But the most rapid expansion phase was after 1996, with the far-reaching decision not just to add franchise outlets, but to shift the commercial model from a 100 per cent-owned retail outlet to a franchise-based operation.

Concomitantly, the Hawthornes decided to shift the concept from bakery to full-fledged restaurant that also served baked products.

A 60,000-square-foot centralised manufacturing facility was created in the Bronx to keep pace with the expansion in demand and to ensure product standardisation across the network.

In 2003, Hawthorne deepened the management capacity at his organisation. A vice-president of franchising and director of franchise sales and development were two of the key posts that were created. That year, the firm also signed a deal with Pepsi USA for the drinks giant to install soda fountains in Golden Krust's restaurants and help the company with marketing.

Currently, the central manufacturing facility in the Bronx is 100,000 square feet in size. All the batters for all the eight different types of patties that are sold throughout the franchise network are made there. They are transported in refrigerated containers on train to centralised distribution points in the south. From there they are trucked to the various restaurants where they are baked and served to customers.

The plant churns out 24,000 patty batters per hour, working 16-hour shifts each day — in addition, of course, to all the other products.

Never short on innovation, the company has moved towards a concept called mini-bakeries, three of which are currently in operation — in Orlando, Atlanta, and Miami. At these locations, Golden Krust bread is mixed and baked from scratch.

“The main purpose is to ensure that the community can get fresh, authentic hard-dough bread daily,” explains Hawthorne.

With the expansion in the menu over the years, all the Golden Krust restaurants offer full Jamaican-style meals like oxtail, jerk chicken, curried goat, and soup. These meals are cooked at the individual franchise operations using what Hawthorne describes as “Golden Krust secret blend... they buy all the seasoning from us that we formulate in New York. It standardises the taste throughout the network”.

Some of the restaurants are takeout only.

“Of the 122 stores up and running, most are franchise,” he points out. “We used to be 100 per cent-owned, but we find that with the franchise store we can focus on the manufacture, supply, and distribution logistics. We also create opportunities for other entrepreneurs.”

The ambience and feel of the Golden Krust restaurants are standard and have what Hawthorne describes as “the Golden Krust theme”. The blue represents the Caribbean Sea, the floor is sand, and yellow walls the sunshine.

The Caribbean music that is played in the stores is intended to create a “Caribbean experience”, he adds.

Jamaica has been an important beneficiary of the Golden Krust success with farmers in St Elizabeth and other communities having this restaurant chain as an important outlet for their produce.

They supply ground provisions like yam and seasonings such as curry, pepper, escallion, and thyme.

“We buy from a company in St Elizabeth which gets all the farmers to pool their resources and the vendor then ships it to us in the US,” explains Hawthorne. “We get the cheese that we use in our bun and cheese through GraceKennedy.”

The goods are shipped either to the main facility in New York, or to the company's main distribution centres further south.

A critical aspect of this corporation is that seven Hawthorne brothers, sisters and their spouses are involved in the operation.

Lowell is the principal shareholder and executive chairman. His wife Lorna is director of human resources. His sister Laris Campbell runs the flagship store in Bronx, while another sister, Jacqueline Robinson, is in charge of the Atlanta-based stores.

Brother Lloyd straddles Miami and Florida, while his wife Velma is the company's executive chef.

Milton Hawthorne helps to keep the machines in good working order.

“I have a wonderful staff and team and group of family members who are the unsung heroes of the success of this company,” says Lowell. “My family members are the founding and brave soldiers who shared my vision, dreams and aspiration. They had the faith and trust that I would have delivered, and I think I have done that.”

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