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Bake Or Break, Part 1: A Cookie Company Expands As The Economy Crumbles

Thanksgiving is tomorrow and while you might be at home relaxing with your family, Massachusetts retailers are getting more nervous. They're watching the economy spin downward along with consumer confidence — at the very outset of their most important season for sales: the holidays.

Throughout the coming weeks and months, we'll occasionally check in with one local company, to report how it's handling the growing economic challenges. It's Dancing Deer Baking Company — Boston-based, privately held.

WBUR's Curt Nickisch reports in this first installment.

TRISH KARTER: They got it wrong. I can't believe this!

CURT NICKISCH: Trish Karter is making a beeline across the concrete floor of a Boston industrial building. She has the brisk walk and thin frame of someone with lots of energy. Karter halts to look at five support pillars. They're newly painted in the same earth tone colors used in the company's packaging and mailings, the same materials that call Karter, the company president, "Chief Deer." But she says the colors are out of order.

KARTER: It was supposed to be Green Yellow Green Orange Green. Ah, you know. It's not the worst thing. It's just, they're not what they're supposed to be, but we can live with it.

NICKISCH: Right now, Karter is learning to live with lots of things that are not what they're supposed to be. Dancing Deer just moved into this building after ten years based in a cramped brick conversion in Dorchester. The new digs on the Dedham line are big for the operation, but they're also symbolic of the company's growth. For the past few years Dancing Deer has been investing millions, including venture capital, Karter says, to grab a bigger market share nationally.

KARTER: In our longer term strategic plan, this was the year in which we started generating cash, and all of these investments that we've made in the last three years in people and in IT and facilities, would pay off. Of course the timing is unfortunate because it's the worst retail environment in modern history, going back to the Depression.

NICKISCH: To understand the tension in her voice, you need to know this: Dancing Deer makes more than a third of its annual sales in a span just of a couple of weeks — right after Thanksgiving.

SOUND OF MIXERS

NICKISCH: Dancing Deer bakes higher-end brownies and cookies and cakes. They start out here as ingredients stirred in industrial mixers, then are cooked in huge ovens.

SOUND OF INDUSTRIAL OVENS WHIRRING, BEEPING

NICKISCH: The baked goods are then packed for shipping by rows of workers, many of them Somali or Cape Verdean immigrants.

SOUND OF WORKERS PACKAGING CAKES

NICKISCH: Tim Ryan is in charge of manufacturing, and he likes operating out of the new facility. Ryan used to have to coordinate between different buildings and warehouses.

TIM RYAN: For example, if these guys run out of cookies last year, I'd have to get them shipped over and that could take hours. Whereas now, it's a walk across the hall and saying we need more cookies, and then they're there, you know?

NICKISCH: But now that Ryan has this great new facility to run, the slowing economy may keep him from making the most of it.

RYAN: We have a base group of employees, let's say about 60 people, and we employ at one point or another triple that during our busiest season. You would hope a bunch of temps come in, and then maybe 20 of those people you bring on full time as you grow. Right now I don't know if we're going to be able to absorb those, or you know if they're going to remain temps.

TONY ROSA: Four five, six, seven. Hey, bring all these maple cakes over to the line!

NICKISCH: Tony Rosa started out as a temp. Now after six years, the big guy with a toothy smile just got promoted to quality control manager. As he boxes up maple pumpkin cranberry cakes, he gives instructions to the rest of the line in a mix of languages.

SOUND OF ROSA HOLLERING INSTRUCTIONS

NICKISCH: As Rosa sticks on shipping labels, he says he's not really all that worried about the economy.

ROSA: Let's just say, I have confidence in myself, so I'm pretty sure they'll be able to make the right calls and get sales for us — I'm confident about that. So I mean, we'll be fine. We'll be fine.

NICKISCH: Dancing Deer managers hope he's right, but the signs are worrisome. Scott Miller is the head of the company's online sales, and he's been closely tracking them all year long.

SCOTT MILLER: People are coming. People are shopping. But they're not spending as much. So that's where it first started to manifest itself.

NICKISCH: In response to sliding consumer confidence, the company came up with this strategy — basically: to identify everything that worked well in marketing and sales last year, and do it even better. Targeted. The early response has been good. But Miller says since Christmas lands on a Thursday this year, it won't be until just a few days before that the company will really know how it will fare.

MILLER: You know every holiday is a white knuckler at Dancing Deer, just because you spend so much of the year preparing for it. This is a big unknown. This is very very nerve-wracking. But we have taken every piece of the business last and optimized it. We've looked at offers, timing of offers, conversion rates, demand curves. We have tried to set ourselves up where the only question left is consumer response this year. But because of the volume and how important it is to Dancing Deer, it's very nerve-wracking.

NICKISCH: It's no less nerve-wracking for the head of the company, Trish Karter, whose involvement in Dancing Deer started when she invested in it. She's grown the company from a small bakery to one that sells its goods nationally online and through grocery stores such as Whole Foods and Trader Joe's. Karter's hoping the company's recent investments will still reward her with a profit this year. But she's made a contingency plan in case Dancing Deer doesn't come out ahead.

KARTER: If we miss, we'd still be able to make payroll. But if we miss by lot, by a really big amount, if the landscape around us gets really redefined, then we'll probably really redefine our growth strategy. And just focus on servicing the business we've got, holding our position, cutting out even more expenses, and waiting it out.

NICKISCH: Whether it will come to that, Karter doesn't know. That's simply what's at stake — a make-or-break holiday season, in the middle of an economic breakdown.

For WBUR, I'm Curt Nickisch.

This program aired on November 26, 2008. The audio for this program is not available.

Curt Nickisch Twitter Business & Technology Reporter
Curt Nickisch was formerly WBUR's business and technology reporter.

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