Retail Bakeries 1962-2004

In the early 1960s, the Dayton brothers of Dayton Department Stores were developing a new retail concept, a discount store named Target. Applebaum's were invited to operate the grocery store side of the new stores. The Applebaum brothers liked the idea that they were brothers in a family business, as were the Dayton's. Hy Applebaum approached Burt McGlynn and asked if he would consider leasing space from Applebaum's and setting up on-premise bakeries in the stores. Most of the discount stores at that time had both grocery and department store areas. Burt agreed to the plan with Applebaum's and then resigned from Emrich Baking Company to begin a new bakery business. He later learned that George Emrich, commenting on Burt's resignation, told his staff, "Burt McGlynn will be broke in two weeks." 

The Dayton Brothers

Sid Applebaum

Starting a new business from scratch was going to be expensive and Burt needed some financing to get going. At the time, in 1961, Burt and his family lived near Southdale Shopping Center in suburban Minneapolis, across the street from Gerry Rauenhorst. He knew Gerry and his family because they attended the same Catholic church.  Gerry asked about Burt's background and he told him the history of the bakery. Gerry said, "Burt, if you ever want to get started again, let me know; maybe I could finance you." Gerry was developing and building commercial real estate, mostly in the suburbs of Minneapolis and St. Paul. Burt called him one day and said, "Gerry, I have this opportunity to go into business with Applebaum's in a new discount store called Target. Come visit it with me." Burt and Gerry drove to a Target store that had just opened, and it was extremely busy. After negotiations, Gerry leased Burt the equipment needed for the first two in-store bakeries that opened in 1962. In those days, Burt could build and open a new in-store bakery for about $25,000. Gerry financed the first eight stores, setting up a leasing company, Oaklawn, Inc. Oaklawn was the name of the street where the Rauenhorsts and McGlynn's lived.

Gerry Rauenhorst

The first three Target stores were in Roseville, St. Louis Park, and Crystal, all suburbs of Minneapolis/St. Paul. The Roseville store opened May 1, 1962, but without a bakery - one was added later. St. Louis Park (Knollwood) was the first Target store in which Burt had a bakery. The Crystal store was opened in September of 1962. “I baked in the grocery part of the Target stores: bread, pies, cakes, donuts. They did great business right off the bat,” Burt had said.

Because Burt had sold the name McGlynn Bakeries to Emrich in 1958, Burt named his new business Molly Ann Bakeries after his only daughter, Molly. (Emrich, ten years later agreed to release the McGlynn name to Molly Ann Bakeries at no cost, a decision Emrich would later regret!). But, to most customers, the bakery would have been referred to as Target Bakery. Even the signage in the store was generic.

Target Store bakery shelves circa 1962

JT helping Burt in one of the first Target Stores - circa 1962

In the early days, Molly Ann Bakeries was only located within the Applebaum's run grocery section of the Target stores were the bakery sales came from self-service wrapped bakery products. The bakery had been making money, but Burt wanted to grow sales. Doug Dayton, the President of Target Stores, said to Burt, "Burt, you should really have a bakery in the Target portion of the store, not just the grocery section."  At that time the business was paying Applebaum's 10% of sales as rent. Doug's idea was to put some bakery items in the front of the Target store where the kids rides and popcorn concession were located. Target negotiated rent of 8%; however Applebaum's received 4% of the McGlynn's "Target" sales. The additional retail space help grow sales immediately and increased profitability by having sales on both "sides" of the Target stores.

Bakery Display in Front of Target Store

One of the first products sold on the Target side of the store was cake donuts, fried right in front of the customers, across from the Target checkout stands. It was fun to watch the donuts being made, but sales were not overwhelming. When Burt talked to his wife about it, Pat suggested replacing the donut fryers with a more interesting operation - cake decorating! In 1966, space was made in the Bloomington Target store where bakers could decorate cakes in front of customers. All the parents and kids would stand around the decorator's booth to watch us decorate cakes. Then the bakeries really started making money.

Cake Decorator in Front End of Target Store - Circa 1965

Through the association with Applebaum's and Target in the early 1960s, the business expanded to Duluth, Denver, Dallas, Fort Worth, Houston, Tulsa, St. Louis, and Milwaukee, in addition to growth in the Twin Cities. In the late 1960s, Target expanded and McGlynn's continued providing bakery departments for Target and Applebaum's. When Target opened a new store, McGlynn's was just "in" -  sometimes the bakery wouldn't even sign a lease agreement until many months after opening the store. By 1972, there were more than 35 Target stores with instore McGlynn's Bakery departments. Burt's son, Mike, also joined the company fulltime in June 1972 after graduating from college.

Mike McGlynn ID Card (1993)

Mike immediately recognized that the bookkeeping and processing of information at the company needed to be improved with better controls and dedicated services. Knowing that a mainframe computing system would be a perfect solution, Mike enrolled in a computer programming class. Months later, an IBM computer system was purchased and Mike programmed it for payroll and bookkeeping. With new controls in place, a platform was created to manage the business with professional results.

At this time, all baking was done in the Target stores. However, in 1973, Target began planning smaller stores that could not accommodate space for baking. This created the need for a production facility that could bake products for expanding needs. In October 1973, McGlynn's opened a central bakery in Eden Prairie, a southwestern suburb of Minneapolis. And later opened smaller central bakeries in Houston and Milwaukee. And in 1976, Burt's son Dan joined the bakery full time, having just graduated from college.

During the growth with Target, the decorated cake business became about 35% of the entire bakery. More and more, consumers demanded popular Disney and TV (like Dukes of Hazard) characters. This demand forced the company to look at new ways to grow the cake business with "character cakes." That idea launched another business for the company.

In 1981, the company was baking in 17 locations including the Eden Prairie plant and sold products in 81 locations. Burt had moved into the chairman role and Mike had been promoted to president and Dan was vice president. In addition, in 1980, they set up a Board of Directors including directors outside the family. And they employed over 650 people.

The growth with Target eventually subsided. Applebaum's exited all stores outside of the Twin Cities and Target decided they no longer needed bakeries in the front of their stores. Through the 1980's and into the 90's, McGlynn's opened bakeries in other Minnesota retailers such as SuperValu, Festival Foods, Cub, Knowlan's, Simon Delivers, Jubilee Foods, Rainbow Foods, and Dayton's. And by the mid-1980's there were over 100 stores in the Twin Cities area with a McGlynn Bakeries location. Five or six people managed these stores and hundreds of employees.

In 1982, Applebaum's stores, no longer located in Target, were sold by Applebaum's to Gateway Foods, a Wisconsin grocer. They chose Sid Applebaum to develop and convert the stores to Rainbow Foods warehouse supermarkets.. McGlynn's continued a strong relationship with Sid and converted or opened bakeries in all of the Rainbow stores. Also, in 1982, the company opened two French bakery cafes located in the Midway and Robbinsdale Rainbow stores. It was a challenge to open an entirely new concept. Dan McGlynn hired a team of experienced restaurant managers to help open the cafes. While operating cafes was a financial struggle (always lost money), the soups, salads, sandwiches and desserts were a success in consumers' eyes. And the addition of croissants led to another business for the company. One more freestanding café was opened in downtown Minneapolis - in close proximity to early 1920's McGlynn Bakeries location. The cafes were closed after several years as sales declined.

In 1978, Tim McGlynn joined family business. He worked with Burt in managing the bakeries outside of Minnesota. Tim left the business in less than 2 years to pursue other interests.

Mike, Dan, Burt and Tim

Tom McGlynn joined the business after college and working for a bakery broker in California. He worked in retail marketing during a time of fast growth and new opportunities.

Tom, Mike, Dan and Burt - Southdale Target

In 1992, the McGlynn's baking facility in Eden Prairie was sold to Pillsbury (see A Taste of France) and all retail management and production was moved to a 147,000 square foot facility in Fridley, MN. Ironically, the plant was at one time a Totino's pizza plant owned by Pillsbury. This new facility provided more production opportunities and a focus on the retail business.

In 1994, Mike McGlynn discovered natural artisan breads in a small bakery in Wisconsin. He was so impressed with the flavor and texture and of the breads that he introduced them to the rest of the McGlynn's team. Through a lot of trial and error and by purchasing some of the natural sours from the bakery in Wisconsin, a new, unique line of bread was introduced in two stores. The process for making the breads took up a lot of space and needed a long fermentation time. It was decided that we had enough space in the new Fridley plant to increase production of artisan breads so we could expand the sales to more stores. The breads also needed special care because the shelf life was only one day, but sales were promising. It would later be exploded into a business of its own.

In 1997, Sid Applebaum retired from Rainbow Foods and sales under new management began to fall. In the meantime, McGlynn's began selling products in Holiday Stationstores, a successful chain of convenience stores in Minnesota and Wisconsin. Eventually, sales in Rainbow had deteriorated so far as to start losing money. The only chance for survival in the Rainbow stores would be a reduction in lease costs. The new management of Rainbow refused to budge and the difficult decision was made to exit the Rainbow Foods chain - all 34 stores

MIke, Burt, Dan & Tom Ready for Christmas

The loss of Rainbow Foods sales increased the pressure to grow sales at Holiday Stationstores, but in a surprise move, Holiday decided to discontinue McGlynn products for the nationwide craze of Krispy Kreme donuts. (The Krispy Kreme craze in Minnesota began in 2002 and lasted less than 5 years). The decrease in sales when the Holiday business was lost changed the economies of scale. It became impossible to make a profit with a large plant, expensive trucks and a large support system. Another tough decision was made to close the remaining McGlynn Bakeries locations in late 2003 and early 2004.

In January, 2001, the company split into two entities – DecoPac, Inc. and McGlynn Bakeries, LLC. Both companies remained family owned and operated. Burt McGlynn's sons Mike and Dan operated DecoPac and McGlynn Bakeries, respectively. Employing over 1,000, both companies were growing rapidly. McGlynn Bakeries was quickly growing the Concept 2 Bakers business, while retail sales were falling.

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