Baking pains easing at Tastykake's South Philly plant: report

Tastykake's new Navy Yard bakery has been "operating in an organized fashion" lately, "versus the firedrill atmosphere in June," says repeat visitor Mitchell B. Pinheiro,  Janney Capital Markets's food-factory analyst. "Compared to our last visit in June 2010," the bakery is now "clean, more organized and generating less product waste...

"We still witnessed some production line issues," for example "icing and packaging" problems after the cakes leave the ovens. But "process improvements along with some equipment tweaks" have reduced waste (products that have to be discounted due to errors) "by about 50% since June," and "out-of-stock" problems that kept some Tastykake lines off store shelves in June and July have ended.

Tastykake will likely lose money again in the third quarter, due partly to the consultants it had to hire to get its fancy new state-aided facility running right. But by the fourth quarter, Tastykake should be making a profit and enjoying "annualized target savings of $13 million to $15 million" since leaving its old bakery in North Philly, Pinheiro concludes.

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