At Happle Gourmet, The Pie’s the Limit

By Sarah Fister Gale

Jim Happel and his daughter Tamra Garman spent six years researching the best ingredients and formulas to produce a line of gourmet organic fruit pies. But even with their years of upfront work, they were scrambling down to the last hour to get certified in time for the Organic Trade Association’s (OTA) sponsored All Things Organic show in Chicago last May.

The mad dash at the eleventh hour wasn’t the result of poor planning or incomplete paperwork. On the contrary, the family-owned Happle Gourmet Foods, based in Cedar Rapids, IA, was better prepared for the certification process than most organic processors. It was their unwillingness to produce a pie that didn’t meet the family’s high standards for quality, taste and presentation that slowed them down.

In fact, Happle spent the days before the show tracking down the manufacturer of the Italian-made paper that his organic cakes are baked in, to get proof that the paper met organic standards. He got it, and Happle Gourmet officially received its certification in time to make the show, becoming the first company in the OTA to produce large amounts of certified organic fruit pies and cakes. Since then, Happle Gourmet Organic pies have made their way into natural food stores and mainstream grocery shops across the country. Its organic fruit pies include apple, cherry, blueberry and peach, as well as a cherry cheese pie, carrot cake with cream cheese frosting, and chocolate cinnamon cake. The company also produces an extensive line of non-organic desserts, including cakes, cookies, pies and pastries.

The family is thrilled to be pioneering a new sector of the organic processed foods market, but Garman and Happle say it’s been a long journey. Since the company began investigating the possibility of an organic pie line in 1998, they came up against constant obstacles, from sourcing the best fruit in reasonable quantities, to identifying hard-to-find organic ingredients critical to the recipe, and finding an appropriate facility where they could produce the pies.

Even today, although the logistics of producing Happle pies are in place, Happel struggles in his marketing efforts to educate consumers and distributors about the difference between “organic” and “natural” products, and about the value of a purely organic gourmet dessert. “There have been a lot of challenges,” says Garman, “but it’s getting easier.”

Sourcing Problems Continue
Going organic was an obvious choice for Happle Gourmet. The company began in 1992 making fresh pies daily in the family’s Iowa bakery. Two years later, the pies, which were made with only natural ingredients and no preservatives, were so successful, Happle started producing them on a grander scale and freezing them for distribution around the country. Its customer base loved the simple natural elegance of the pies, and many of them began enquiring about the possibility of an organic line.

“It was a natural fit for us,” Garman says. The family was committed to using simple recipes with few ingredients that let the essence of the fresh fruit and flakey crust carry the rich flavor of the pie, and research showed that interest in organic processed foods was slowly increasing. They soon discovered however, that the challenge was in the details.

“Initially it was hard to get product,” notes Happel. “Often, we were the only customer in our area for a specific ingredient, such as fresh fruit, so we had to buy in huge quantities.”

In other cases, ingredients were scarce, or not yet invented. They were only recently able to source organic shortening, organic starch and organic chocolate, for the organic chocolate cinnamon cake. Without these key ingredients they couldn’t make the pies meet the required percentage of organic ingredients to achieve the “certified organic” label and they didn’t want to go to market with a “made with organic” label. So they waited.

Eventually, as organic companies and product lines grew in popularity, access to ingredients in reasonable quantities became easier to come by, and those had to find ingredients became available.

But sourcing challenges continue to be an issue, Garman says. For example, there is always a shortage of tart Michigan cherries, because they are a popular choice for organic juice manufacturers. This year it’s even worse because crops were cut in half due to excess rainfall.

Happel has called the agricultural departments of other states in an attempt to find additional organic fruit suppliers. The fruit is there but there are no processors in those states certified to core peel and individually quick freeze (IQF) organic fruit for shipping. “I would love to use Colorado peaches for our peach pies, but there are no processors to prepare it,” says a frustrated Happel.

For the time being, he buys fruit in advance from nearby growers to secure the amount he needs and hopes that more options for IQF organic fruit will become available in the future.

Say “Cheesecake”
Once they secured access to all the necessary ingredients to make the pies, they got to work on the formulas. “It took quite some time to get the recipes right,” Garman admits. But ultimately, it just came down to getting the right combination of ingredients to make pies that look and taste great. “It was just a lot of trial and error,” she says.

Along with using all organic ingredients, the company switched from traditional wheat flour to organic spelt to reduce the risk of allergens for people sensitive to wheat.

Garman wasn’t sure how the spelt would look or taste in a pie, but she felt it was an important choice since many people who are sensitive to wheat can digest spelt. After experimenting with different combinations of organic spelt mixes, she was pleasantly surprised by the results. “The spelt converted rather well,” she says. “The crust was light and flaky.”

Because Happle uses no dairy or animal products in its fruit pie recipes, they are also considered vegan, which appeals to another large segment of organic buyers.

With the formulas in place, Happel needed a facility to produce them. The plant where the company bakes its non-organic key-lime pies was not suited to a segregated production process, and Happel wasn’t interested in purchasing a second plant. He wanted to co-locate with another baking facility, but it had to meet his high expectations for quality and cleanliness, he says.

Happel also wanted a location somewhere between his base in Cedar Rapids, and the Michigan growers who provide the cherries. So, he contacted a bakery supplier in Wisconsin asking them to recommend a baking facility that always paid its bills, produced high quality products, and was extremely clean. “They made one recommendation,” Happel says. “Suzy’s Cream Cheesecakes in Milwaukee.”

Suzy’s produces gourmet cheesecakes that are distributed in six states around the country. In 2003, its first year distributing nationally, it did $3 million dollars in sales and continues to grow in popularity.

Happel went to Suzy’s where he met Mark Strothmann, husband of Suzy, and co-owner of the company, and the two men hit it off instantly. Suzy’s had a 10,000- sq.- ft. baking facility that was not being used to capacity. “It was just beautiful,” Happel says. “Everything was stainless steel. It was neat and clean, and I knew that it would pass the certification process with flying colors.”

The Strothmanns were equally excited about the prospect of working with Happle Gourmet. Like Happle, Suzy’s Cheesecakes are made with only the finest natural ingredients, and the focus is on quality and excellence, not mass production, says Mark Strothmann. The Strothmanns had been discussing the possibility of developing an organic line of cheesecakes, and hope to do it in the future but were not yet ready to make that transition. “For us to go organic would be immense,” he says. “It would take me away from what’s important –making the product.”

Strothmann says he prefers to spend all of his time in the plant agonizing over every production detail, from making sure the cakes are perfectly shaped and decorated, to ensuring labels are straight and wrapping in secure. “I don’t want to spend my time figuring out marketing strategies, I want to run a bakery and focus on quality control.”

By partnering with Happle the Strothmanns could take the first steps. They’d convert part of the facility to organic production and learn the ropes of producing and marketing an organic dessert line before launching one of their own.

Through the partnership, Happle provides all the ingredients, formulas and packaging, and Suzy’s provides dedicated employees for production. “We bake the pies, and they do the marketing,” Strothmann says. “It’s perfect for us.”

Happel agrees. “It was a fortuitous meeting. Our two families have melded together.”

Custom Software Tracks Ingredients
To ready its facility for the organic pie production, Suzy’s dedicated 4,000 square feet of the plant to strictly organic production and converted the sanitation process for the entire plant to all organic cleaners and cleaning processes, such as using hot steam on sheet pans to kill bacteria.

Every ingredient and piece of equipment used for the organic pies in tagged with green stickers, as are all ingredients when they come through the door to ensure segregation from non-organic materials. Happle has its own dedicated organic freezer, and the two lines share the four double rack ovens.

To track all the organic ingredients, Strothmann designed a custom software program that catalogs ingredients as they arrive, linking vendor certification information with their lot numbers and condition of the ingredients upon arrival.

In another database, Strothmann logs what ingredients were used in which batches, assigning new lot numbers to the pies so they can trace the ingredients in every end-product back to their original sources. “The database gives us a complete link back to each ingredient producer,” he says.

Finally, the software produces daily reports comparing the total amount of organic ingredients that came in to the facility to the total amount used in final products, noting any discrepancies. The reports ensure that formulas are followed correctly, they indicate how much waste needs to be accounted for, and they prove for certification purposes that the facility is only using certified organic ingredients in the production process. “It’s important that we be able to prove to the USDA that if we made 1,000 pounds of pie, we used 1,000 pounds of ingredients,” Strothmann says. It also helps the team adjust its ingredient purchases to reduce standing overstock and avoid falling short.

“The software has made tracking and record keeping so much easier,” says Garman, who has real-time access to the databases from Cedar Rapids, so she can track production and ingredient use. “It would have been quite cumbersome to do this on paper.”

A Certifier’s Dream
Happle and Suzy’s attention to detail and commitment to creating a smooth-running organic facility wowed agents in Iowa and Wisconsin when they applied for certification. Happel and Garman had been researching the certification process for years, so they were familiar with the expectations and paperwork requirements heading into the process. Their early efforts won the appreciation of certifiers, notes Maury Wills, organic program administrator for the Iowa Department of Agriculture, in Des Moines. Happel started having conversations with Wills and others at the Department of Agriculture three years prior to applying for certification in an effort to prepare himself. “They did their homework before they applied,” Wills says. “They are model applicants.”

Wills notes that this isn’t always the case. “Often individuals apply who are unfamiliar with the regulations. They haven’t read it, or they want the certifier to handhold them through the process, but we can’t do that.”

Happel began the official paperwork in February 2004, and says the state of Iowa was very supportive in helping him complete the process in time for the All Things Organic show, which began April 30. “There were a lot of people rooting for us,” he says.

Wills agrees. “We try to be sensitive to the needs of people when they apply,” he says. “We knew they wanted to go to that show and we wanted to accommodate that deadline.”

Blazing a Trail for Gourmet Desserts
The show was a success, and Happle products are slowly being picked up by larger chains across the country, but Happel still struggles to educate distributors, retailers and consumers about what an organic pie is. “There is a big misunderstanding about the difference between natural and organic,” he says.

He even worked with a national broker of organic products who claimed he already had an organic pie that was doing well in the market. It turned out that the pie was “made with natural ingredients” and not organic at all. “I’m shocked people aren’t trained about what it means to be organic,” he says. Happel regularly has to explain the differences, and the value of an organic dessert that may cost a little more. “That’s been my biggest hurdle.”

Because it is a new organic category, there is little research or data to support or guide him as he figures out where the market is, what exactly consumers want and how to educate them about the product. But as interest in the pies takes hold, Happle is beginning to carve out a niche for itself on store shelves, and it’s paving the way for future organic dessert makers, including Suzy’s Cream Cheesecakes.

“Once we see what people want and what the trends are, we will know whether there’s a market for organic cheesecakes,” Strothmann says. And he’s not worried. The organic market has grown 23% a year, and purchase of luxury items, such as gourmet desserts, has grown 15% a year. “Some things are fads and some things are trends,” he says. “Organic’s slow and steady growth proves it’s here to stay.”

And in the end, he says, it’s about quality and taste. “If you start a recipe with great ingredients, like a perfect piece of organic fruit, it will taste twice as good as anything else,” he says. “That’s not a fad, it’s a fact.”

Sarah Fister Gale is Editor of Organic Processing Magazine. She can be reached at sarah@organicprocessing.com.