Editor's note: This article originally appeared in the July/August 2015 issue of Food Manufacturing.
Its legions of fans — affectionately referred to as the BreadHead Nation — call it the best bread in the universe. Dave’s Killer Bread started at the Portland Farmer’s Market just ten years ago, and is now sharing its bestselling products with consumers nationwide, as the company has recently expanded its distribution to all 50 states.
Dave’s Killer Bread is an all-organic, Non-GMO Project Verified bakery located in Milwaukie, Ore. — a small suburb located just minutes away from downtown Portland. With 16 nutrition-packed varieties of bread, DKB prides itself on its hand-crafted/seed encrusted line of breads. While the products may taste distinctly different from one another, they each come power packed with protein, Omega 3s, seeds and a handful of all-organic ingredients, including amaranth, barley, blue cornmeal, spelt and quinoa.n
“When we started out it was really ‘Let’s make some breads with the most seeds. The most seeds, the most grains.’ You know some breads are just like ‘The 9 Grain’ or ‘The 12 Grain,’ well it’s like you know what? We’re going to do better. Straight up, we’re going to have the most,” Dan Letchinger, Product Manager, Dave’s Killer Bread, said. “Our founders really hit to a lot of grain and seed and superfood trends before they were even trends. Quinoa, spelt, stuff like that. It was already sort of in our wheelhouse, and we were just like, ‘Let’s find them organically and let’s make bread with them.’”
And that’s exactly what DKB did.
With more than 300 employees and a 24/7 operation, the 49,000 square-foot “Breadquarters” produces around 550,000 loaves of bread in a week. And that number, Letchinger said, is constantly growing. “I remember when I first started here eight years ago and we would bake 2,000 loaves in a day and we were dumfounded. It was like, ‘Oh my God! That’s so much bread. Can you believe it?’ And now it’s like half a million a week.”
The regular bread line is made up of 12 varieties, including: 21 Whole Grains and Seeds, Good Seed, Blues Bread, White Bread Done Right, Seeded Honey Wheat, 100% Whole Wheat, Powerseed, Sprouted Whole Grains, Spelt, Rockin’ Rye, Million Dollar Bun and a sinfully delicious baguette-shaped cinnamon roll, the Sin Dawg. Dave’s Killer Bread also recently introduced a Thin-Sliced line for consumers that are looking to be a little more calorie conscious. The Thin-Sliced line, which includes 21 Whole Grains and Seeds, Good Seed, Powerseed and 100% Whole Wheat, is a smaller loaf with smaller slices, each with only 60 calories.
The latest innovation at DKB, though, came in the form of white bread. “But people are like, ‘What? White bread? That’s terrible!’” Letchinger said. “This was a big thing for us because we were unequivocally and unabashedly a brown bread company. But that’s kind of why we started. We saw a lot of opportunity with a white bread to redefine what white bread means for consumers.”
The White Bread Done Right launched in March 2015 and so far has been a tremendous success. “We recognize that a lot of consumers find a sort of nostalgia in white bread. There’s something kind of soft and comforting about it, and so we wanted to appeal to that, but do it in a DKB kind of way — which is organic, Non-GMO Project Verified and that has a nutrition story,” Letchinger added. Most white breads don’t have a lot of nutrition power to them, especially not whole grains, but Dave’s Killer Bread made it possible. The white bread has no bleached flour, no preservatives and no artificial sweeteners. But what the bread lacks in artificial ingredients it makes up for in nutrition, as each slice has 10 grams of whole grains seeded through.
In terms of product development and innovation, Dave’s Killer Bread is notorious for spending time listening to its consumers. The Healthy Bread Store, a bakery outlet store located right at the BreadQuarters, has become one of the many ways the brand communicates with its customers. The store, which is open six days a week, sells fresh, imperfect and day-old loaves of bread, along with DKB merchandise like t-shirts, hats and reusable shopping bags. Gabrielle Enfield, Brand Manager of Dave’s Killer Bread, said customers often come into the shop and offer up advice on what they’d like to see, or whether or not they like a new product, like the new White Bread Done Right, for example.
“We definitely had a lot of conversations about the white bread,” Letchinger said. “Can we do this? Should we do this? Is this killer? The bread is cranking at local stores right now and it was partially the customers who suggested it. The BreadHeads let us know what they want.”
But the most active way the brand communicates with its loyal fan base is through social media. With more than 200,000 BreadHeads providing feedback online, the company isn’t afraid to take risks if it means seeing their customers happy. Stepping out of their comfort zone is never easy, but DKB prides itself on pushing boundaries and really listening to its consumers. “We’re really active in social media. I mean we’ve got this really loyal fan base that aren’t afraid to tell us what they want,” Letchinger said. “When it comes to certain things, it was a no brainer. We didn’t have a hamburger bun, so we were like, ‘Oh let’s make hamburger buns.’ But consumer trends has also really helped guide a lot of the innovation. It’s weird though, because before DKB there wasn’t really organic bread like this. We’ve disrupted the category, we’ve set the trend. We created this.”
Sprouting to the Top
While Dave’s Killer Bread really didn’t flourish until 2005, the history of the family bakery dates back to 1955, when Jim Dahl purchased a small bakery in Southeast Portland. The business, called Midway Bakery, quickly gained followers for its sprouted, whole grain breads. It wasn’t long before Dahl and his wife Wanene’s first child, Glenn, began working in the bakery, along with their younger children Linda, Al and Dave.
While the rest of the family found passion and excitement in the bakery, Dave Dahl admitted to having no devotion for his family’s business. Struggling with severe depression, Dave found his release in methamphetamines, leading him to a life of incarceration. With Dave serving time in jail, Glenn took the lead and began running the family business. In 1984, he changed the name to NatureBake and then officially purchased the business from his father in 1988. Glenn’s son, Shobi, also began to work for the bakery, just like Glenn and his siblings (including Dave) had years earlier.
It was about three years into his last jail sentence that Dave found his turning point. In 2001, he turned to prescription medication to help cope with his depression. He found help in vocational training for computer-aided drafting/machining and passed the next couple of years by helping design furniture, modular housing and machine parts for the Construction Tech program at the Snake River Correctional Institution. Due to his continued improvement, Dave was accepted into a drug treatment program in 2003 and released early from his term on Dec. 27, 2004.
‘Bad Seed’ Turns Good
After spending 15 years in prison, Dave was welcomed back into the family business by his big brother Glenn. “Fifteen years in prison is a pretty tough way to find one’s self, but I have no regrets,” Dave said. “When I was given this opportunity at the age of 43, I was ready for it.” And with his newfound desire to turn his life around, Dave’s story of redemption is nothing short of amazing. He was given no special privileges and was told to work his way up the totem pole, but with his dedication he quickly established himself as a creative force for NatureBake.
After reformulating the company’s cookie line to eliminate the use of Trans fats and animal products, Dave set his sights even higher. He was tasked with the job to create a nutrition-dense bread that uses only the best type of organic ingredients available. “They knew that the breads they had been making since 1955 weren’t necessarily competitive with the younger set, and so Dave was given license to go create a new recipe,” Genevieve Martin, Community Development Manager, said.
Then the magic happened.
The four varieties that Dave created were Blues Bread, Nuts & Grains, Good Seed and Rockin’ Rye. Dave, along with his nephew Shobi, who had recently graduated from Willamette University with a degree in Economics, wasted no time in sharing these products with the public. So in August 2005, Dave’s Killer Bread launched at the Portland Farmer’s Market. It happened to be a “Summer Loaf” artisan bread festival so there were many competitors, but DKB certainly stood out among the crowd.
Letchinger said Dave and Shobi had only planned to sell at the farmer’s market that one time, but the rave reviews from customers led the Portland Farmer’s Market to ask the new brand to permanently join mid-season. The response went above and beyond DKB’s expectation. “We were like, ‘Oh let’s go there once and do this.’ Then [the farmer’s market] was like, ‘Well we want you every week.’ And then it was like we had natural retailers saying they want us. And then Fred Meyer and Kroger were like, ‘We want you, too,’” Letchinger said. “It was sort of like this ground swell and from there we were really opportunistic in riding that momentum.”
It was this opportunity to introduce the new breads that was vital to the rise of Dave’s Killer Bread. Business boomed and the Dahl’s were getting phone calls left and right from people wanting their bread. By that same fall, Dave’s Killer Bread products appeared on shelves of Portland retailers, including New Seasons, Whole Foods and Fred Meyer.
Baking Up Success
During its rise to fame, the company only had about 35 employees and was producing about 2,000 loaves per day. Dave’s Killer Bread has come a long way on its journey to the top, as today the bakery employs about 300 workers and produces half a million loaves during an average week. Letchinger said between 2010 and 2014 the company’s compounded annual growth rate sits comfortably around 34 percent. "When you're growing as much as we are, you have to be able to kind of roll with it, and it can be stressful," Letchinger said.
The "World Breadquarters," located at 5209 SE International Way, is where all the magic happens. The production facility takes up the majority of the space with 25,000 square-feet, while an in-house ingredient warehouse helps to hold 10,000 square-feet of flour and organic materials. "This supply is always coming in and out," Enfield said. "There are 2500-pound bags of flour stocked all over the warehouse. It's a pretty powerful visual." The main site also contains an employee café, The Healthy Bread Store and a newly built Research and Development test kitchen. The state-of-the-art R&D area opened in July 2014 and is used to evaluate and experiment with new ingredients and processes.
"We want to be a brand that's constantly innovating and that can be difficult when it's like, 'Let's make this bread, let's make it and expand,'" Letchinger said. "There's sort of a tension in there though because when you're innovating, it can get inherently risky. So we were very fortunate to have a leadership team that saw the value in (building a new test kitchen). It would be very easy for us to say we are just going to make 21 Whole Grains and Good Seed, expand everywhere in the country and rest our laurels there, but that's not the kind of brand that we want to be. We have innovative spirit."
While Letchinger wasn't able to reveal whether or not Dave's Killer Bread has another creation in the works, he did declare that the company is "not a sleepy brand." With a top-notch R&D staff, food scientists and some of the best bakers in the world, Letchinger says that the team is always throwing around ideas. In March 2014, the Seeded Honey Wheat was the first new product launch in two or three years. At that time, honey wheat breads were all the rave, so the brand decided to play off that trend. "We knew it was a really popular flavor, but we wanted to do it differently," Letchinger said. "So we were like, ‘Uh, why don't we make it taste like there is actually honey it?' Because most of those breads are just sort of generically sweet, so we put 3.5 tablespoons of organic honey into each loaf. Each loaf! That's a good amount of honey." And since then, DKB has introduced about six new varieties a year, including its first white bread.
From ideation to building a marketing and sales business case to deciding where to source the ingredients from, rolling out a new product is no easy task. "Of course there are hiccups along the way, as there are in any organization. We're pretty scrappy around here — you have to be when you grow this much. You just have to be like, 'Let's get after it,’” Letchinger said.
While the plant is highly automated, all the dough is hand-woven for perfection. Each ball is then manually rolled, dipped and sewed in with the various seeds and grains. Many of the organic ingredients make it tough to run through the automated equipment, so Dave's Killer Bread has found a happy marriage of people and machinery. "We couldn't do it without the people," Letchinger said. "Symbolically, but also like literally from a formulation standpoint, we need that."
Every three hours or so, the production cycle changes to include a different product — meaning a new variety of wheat. With each wheat change, the protein levels fluctuate, keeping the mixers hard at work. Without the luxury of added chemicals to help the dough run through the machines, the DKB team is constantly performing mix tests. "There's a very tactile way of making this bread. There's a lot of feel involved. Our mixers always have to be on top of their game because the margin for errors is very small with these seeded breads," Letchinger said.
Dave’s Killer Bread is currently the number one organic bread brand in the U.S. and the number 20 bread brand overall. The breads can be found in thousands of retailers nationwide, as the company officially announced its expansion into all 50 states in May. DKB products can now be found in stores like Kroger, Safeway, Costco, Sam’s Club, Whole Foods, Fred Meyer and a handful of independent and natural retailers.
Riding the Grain Train
It is said that a whole is only as good as its sum of parts. That statement rings true for Dave’s Killer Bread, who strategically sources its ingredients from all around the world. Finding a wheat that is able to withstand the rigors of a production environment, but also able to coexist with various grains and seeds as inclusions can be a challenge. “That’s why you don’t see a lot of seeded breads on the market, because it’s hard to do,” Letchinger said. “You can’t just open up the yellow pages and be like, ‘I need 300,000 pounds of organic wheat.’”
DKB found its answer, though, in high-protein wheat. The company sources its wheat supply primarily from organic farmers in Montana and Canada. The decision to work hand in hand with farmers and millers from those locations was due to the wheat’s high-protein levels. Dave’s Killer Bread recognizes that there is a finite supply of organic wheat, so it teams with the farming community to help increase output. Letchinger said DKB works with the farmers to develop ways to provide them security based on DKB's success. "It's totally mutually beneficial," Lechinger said.
At heart, Dave’s Killer Bread makes seeded organic breads. While the high-protein wheat helps set the foundation of the company’s success, it’s the seasoned grains from countries worldwide that keep the consumers coming back for more. Just a few of the grains utilized by DKB include: flax, oats, quinoa, amaranth, spelt, buckwheat and barley, among many others.
DKB is notorious for keeping tabs on consumer trends when developing new products, and Letchinger said grains and seeds are a great way to bring their nutrition story to the forefront. “There’s still quite a bit of momentum for a clean label and we feel comfortable on delivering on that promise with these breads. That kind of guides whatever we do when it comes to innovation. All the consumer and retail trends are pointing in that direction, so it’s very important for us to not lose sight of that. We’re a transparent brand, we make clean-label products. That’s not going to change any time soon.
“You know, organic breads were almost non-existent before us,” Letchinger said. “There were a few brands but we’ve brought a lot of exposure and popularity to the category.”
Dave’s Killer Bread has certainly found value in its use of supergrains, as its bestselling bread, which also happens to be the top organic bread in the country, is 21 Whole Grains. This bestseller is made up of flax seeds, sunflower seeds, un-hulled brown sesame seeds, rolled oats, triticale, pumpkin seeds, un-hulled black sesame seeds, spelt, millet, barley, rye, blue cornmeal, brown rice flour, quinoa, amaranth, buckwheat and oat fiber, among other organic ingredients. “This bread has been number one for a long time,” Letchinger said. “It was number one even when we were only in 13 states, which just goes to show the leadership position this brand has when it comes to the organic bread category.”
With Good Seed as the second most popular DKB product, the two best-selling varieties are of the four original breads that were developed 10 years ago. With an average slice of its bread containing 5 grams of protein, Letchinger said consumers are starting to see bread differently. With the introduction of the Atkins Diet and the gluten-free craze, bread was certainly not very high on the grocery list for a while. In recent years, research has proven bread to be not only a convenient, healthy option, but also a nutrient-dense food. “People are getting hip to the fact that these are tremendous sources of nutrition," Letchinger said. "Most breads are just carriers for peanut butter and jelly or lunch meat, but ours are what really makes the sandwich."
While continuing to make its mark in the competitive bread industry, Dave’s Killer Bread is always looking for ways to increase its capacity. While there are no immediate plans to expand the bakery, Letchinger said it’s a definite possibility. “It’s tough when you’re growing as much as we are because you’ve got to keep up with the growth but also kind of forecast ahead,” Letchinger said. “We’re making it work here. There is no magic bullet to make bread 10 times faster. It’s a labor intensive process; a labor of love. We’re never going to be able to make bread as fast as a Wonder Bread bakery, but that added time makes sure that it’s a killer and makes sure it delivers.”