This California co-op transformed a cottage industry into a national player without compromising its flour-free foundation or its 100 percent employee ownership.

Sprouted grain is mixed with certified organic yeast, honey, barley malt and other ingredients prior to proofing.

Avarado Street bagel varieties include wheat, wheat sesame, wheat cinnamon raisin, wheat onion poppy and spelt.

Packaged loaves are twist-tied before being readied for shipping. Fresh products are distributed daily on Alvarado Street trucks, while others are frozen and shipped to an off-site storage facility.

Freshly baked loaves are cooled and ready for inspection, packaging and shipping.

Packaged loaves pass through a metal-detection system before shipping.

 

Success stories come in all shapes and sizes. At Alvarado Street Bakery, located in Northern California’s Sonoma County, success arrived in the form of wheat berries, which dominate the Rohnert Park-based bakery’s ingredient list. Alvarado Street does not mill its grain; instead, it sprouts the seeds and uses the living plants to formulate its extensive line of organic breads, rolls and bagels.

Alvarado Street was founded in 1979 as part of a small food cooperative in Santa Rosa, Calif. In the early days, the bakery was less than successful. A group of members, including current Chief Executive Officer Joseph Tuck and President Michael Girkout spun off the bakery as an independent entity while retaining the co-op management structure upon which it was founded.

“In those days, everybody was on the board of directors,” Girkout says. “We were just a small group of people sitting on the floor making decisions about the company.” As the business and nmber of employee-members grew and more workers joined the business, Girkout and Tuck knew the bakery had outgrown its “hippy-dippy” status and needed a more traditional operational structure that could co-exist with its co-op roots.

“It became unmanageable,” Girkout says. “Suddenly we had 30 people working here, then 50. We started to become dysfunctional. Everybody was just out there doing their own jobs and there was no accountability. Making decisions on a day-to-day basis was nearly impossible. About 18 years ago, we evolved to the new model, which is a more hierarchical system, with the membership still being the decision-making body,” he notes.

Under the new organizational model, still in place today, the full membership elects a group of area-specific coordinators to represent their interests. A general manager oversees the heads of the various departments, including marketing, administration, human resources and sanitation, as well as the bakery’s operation. The full membership now stands at 117. All co-op members work for the company and meet quarterly to approve the business plan, elect the board of directors and vote on big-ticket items.
Currently, the bakery occupies three buildings with an aggregate size of 30,000 sq. ft. The bread bakery and sprouting area occupy one facility, bagels and rolls are produced in a second building and distribution is handled out of a third structure. Later this year, the bakery will consolidate its operations into one 70,000-sq.-ft. facility in nearby Petaluma, Calif. New equipment purchases include an impingement tunnel oven from C.H. Babb and a Reed stainless steel proofer. All of the existing equipment, except the old oven and proofer, will be moved to the new location.

Alvarado Street was founded decades before organic products came into vogue, and it has longstanding relationships with its suppliers. Wheat is purchased directly from farmers who grow organic grain. All of the grain used at Alvarado Street is grown in the United States, mostly on farms in Utah, Wyoming and Montana. In addition, the bakery uses only certified organic raisins, dates and seeds, such as pumpkin, sunflower and flax.

Girkout’s main objective when choosing and dealing with grain suppliers is obtaining sproutable grains. “In the early years, we sometimes would find hard, unsprouted seeds in the bread. Now, we have to be assured that we are getting sproutable seeds,” he says. “Because we need to have certified organic raisins and dates, as well as seeds, we’re a bit limited with regard to where we can buy our ingredients.”
Today, Alvarado Street bakes 30,000 loaves of sprouted wheat breads daily. Its products are sold nationwide in supermarkets, health food stores and organic food outlets with $21 million in annual sales. “We started in natural food stores,” Girkout says. “Then, when organic products became more mainstream, we began selling in supermarkets, beginning with Raley’s, [a Northern California chain]. After that, they tended to fall like dominoes and we ended up in Safeway, Albertson’s, Costco. Now, most of our sales come from mainstream mass market supermarkets. We’ve been in Whole Foods since the day they opened,” he adds.

Production
The bakery’s truck fleet distributes its fresh products daily on 24 routes throughout California. For out of state customers, products are boxed, palletized, wrapped and frozen before they are shipped to an offsite facility for storage and pickup by distributors and retailers. While it does some private label business, Alvarado Street’s main focus is branded products, sold through brand merchandisers in in-store bakery departments.

Alvarado Street’s production process takes several days, most of that time is devoted to sprouting the various grains. Dormant seeds are delivered in 2,000-lb. totes and loaded into a 1-ton capacity silo, located in the distribution building. The grain is pumped through a system of underground pipes into the sprouting area where it soaks in filtered water until the individual seeds soften and sprout. When the plants are ready for harvesting, the sprouts become the main ingredient in the bakery’s breads, bagels and rolls.
To prepare the various doughs, sprouted grains are mixed with combinations of fresh yeast, organic raisins, dates, honey and barley malt. Once mixed, the dough is proofed, divided, rounded, proofed again, moulded and proofed yet again. Loaves are baked for 26 minutes at 400°F. After cooling, products are band-sliced, bagged, twist-tied and either loaded onto trays for next-day delivery or frozen and shipped to a U.S. Cold Storage facility for pickup.

Meeting consumer need
Alvarado Street’s top seller is its Sprouted California Style bread, which contains several sprouted grains, including wheat soy, lentil and corn. “Grain alone does not provide all the essential amino acids to form a complete protein. Our combination does,” Girkout notes. The California Style line is “hugely popular with vegetarians,” he says.

All of Alvarado Street’s products are certified kosher and are ideal for consumers looking for healthful bread, bagels and rolls. “Our products have a lot of health attributes,” he says. “But most people buy them because they taste great. We have a very loyal and dedicated customer base.”

Another popular Alvarado Street bread, the Diabetic Lifestyles variety, was formulated based on the glycemic index data, derived from a commissioned study conducted at the University of Florida. “Bread is one of the things diabetics avoid,” Girkout says. “We had the recipe tested on diabetics to determine the blood glucose response. Diabetics want a gradual absorption of glucose into the bloodstream.” The tests showed a remarkably low absorption rate.

“Because it is made from sprouted grains, which are plant matter, the nutrients and minerals are more readily absorbed by the body,” he adds. Introduced a year ago, the bread already has become a top seller.
The research and development that went into creating the Diabetic Lifestyles bread is typical of the bakery’s approach to expanding its product line. “We try to target a specific issue or concern about nutrition,” Girkout says. “In the case of the Diabetic Lifestyles line, because it was based on the glycemic index, it is not something you can figure out just by doing the math. We had to have the recipe tested on human diabetics.”

Current developments
Alvarado Street’s newest development is its Essential Flax Seed bread. Already popular for its cholesterol-lowering attributes, Girkout says sprouted flax delivers omega 3, 6 and 9 fatty acids more efficiently than dormant seeds or meal. Omega 3 and 6 are touted as positively affecting growth, vitality and mental health, and they are reportedly involved in enhancing the conversion of food to energy. Improvements in people with atherosclerosis (hardening of the arteries), coronary heart disease, inflammatory disease, even behavioral disorders, have been attributed to these fatty acids. Omega 9, also known as oleic acid, reportedly slows atherosclerosis, reduces insulin resistance and improves immune
system function.

Other Alvarado Street sprouted bread varieties include No-Salt Multi Grain, sourdough, barley, wheat, Ultimate Kids, Soy Crunch, wheat multi grain and wheat raisin. Sprouted bagel lines include wheat, wheat sesame, wheat cinnamon raisin, wheat onion poppy and spelt. The bakery also offers sprouted wheat burger buns, hot dog buns and dinner rolls.

Though it was founded prior to FDA regulation of organic products, Alvarado Street Bakery always has adhered to the strictest standards of organic quality. “When we were starting out, we used independent third-party certifiers who would assure that our grain was grown organically,” Girkout says. “We decided to provide what was not being provided at that time, which was whole grain breads made with organic ingredients.”

Nearly three decades later, Alvarado Street Bakery has found U.S. consumers understand the message.