Svenhard’s Swedish Bakery brings jobs to Exeter

In this southern San Joaquin Valley town best known for quaint murals, a bakery is churning out 345,000 pastries per day, and the number is expected to keep growing.

Svenhard’s Swedish Bakery makes bear claws, raisin snails, cinnamon rolls, butterhorns, fruit horns and other pastries for distribution in all 50 states.

Formerly based in Oakland, the 66-year-old company began moving out of its commercial bakery in Oakland in late November and was full bore with all production and office staff in Exeter as of Jan. 4.

Svenhard’s is now Exeter’s largest private employer. The company has 190 positions and operates 24 hours a day, five days a week. Another 80 people work in the field in sales.

It is the company’s only plant.

The company delivers fresh pastries by truck to stores in 13 Western states, and frozen pastries thawed upon delivery to the rest of the nation, including Hawaii and Alaska.

Customers include Costco, Walmart, Save-Mart, Safeway, Walgreens, CVS Pharmacy, FoodMaxx, Raley’s, Vons and Albertsons. Svenhard’s has no retail stores, although there’s talk about opening one in Exeter to show the flag.

The family-controlled company is a good fit for Exeter, City Manager Randy Groom said.

“Svenhard’s is a pretty prominent pastry manufacturer,” Groom said. “They’ve got these things everywhere. Every pastry you see comes out of Exeter. That’s kind of cool for a town our size.”

How did a major commercial bakery like Svenhard’s, which dominates the pastry market in Northern California, end up in Exeter? The Loma Prieta earthquake of 1989 has something to do with it – but first, a little family history.

Svenhard’s traces its roots to Sweden.

In 1893, Tilda Svenhard began baking bread in her home and selling it at the town square.

She and her husband had 15 children, and eight took up the baking trade, making the Svenhard name well-known in Sweden.

In the late 1940s, their son David Svenhard, his wife and four children moved to the United States, started a retail bakery in Oakland in 1950 and opened several in the East Bay.

“He was an entrepreneur,” said his granddaughter, Michelle Svenhard-Barnett, company president. “He told Ronnie (his son who succeeded him and is now retired in Visalia), ‘One day, we’re going to make millions of these.’ ”

A division manager of Safeway was a regular customer, and he asked Svenhard to package some pastries and deliver them to a handful of stores.

“They immediately sold out,” said David Kunkel, chief operating officer and the only non-family equity owner in the business.

After making that first delivery in his 1955 Oldsmobile, Svenhard returned to his bakery and the phone started ringing – it was Safeway store managers wanting more pastries.

Soon, the division manager said he wanted Svenhard’s pastries in all the stores in Northern California, so Svenhard sold the retail bakeries and opened a commercial bakery to supply at first Safeway, and later more stores, as the company expanded.

“It was really a success story,” Kunkel said.

Svenhard’s is a survivor in an industry that has seen bakery after bakery go out of business or be folded into a larger company.

The key to success includes keeping the pastry recipe virtually the same as when the company started, Svenhard-Barnett said.

The exact mix of ingredients is a secret. There are no artificial preservatives in the dough, although fruit fillings do include preservatives.

Another factor is common sense, Kunkel said: “We’re not top-heavy. Our executives wear lots of hats.”

The company uses local suppliers where possible, buying packaging trays from an Exeter company, fruit filling from a Fresno company and corrugated containers from a Kingsburg plant.

An earthquake launched the move, but it took a while.

The 1989, the Loma Prieta quake destroyed the Cypress freeway in Oakland. Svenhard’s bakery was next to the freeway, and the state bought the property with plans to tear it down for a new freeway.

Kunkel was dividing his time between Los Angeles and Oakland and had moved his family to Exeter because of its midstate location, small-town atmosphere and good schools.

The former Dixie Yarns factory on Industrial Drive in Exeter went on the market. At Kunkel’s urging, Svenhard’s bought the building with plans to move out of Oakland.

But Oakland officials offered Svenhard’s financial incentives to remain, so the company stayed put – but held onto the Exeter property. Over the years, the company tried limited production in Exeter, but the effort proved economically unfeasible.

With labor costs rising in the Bay Area, the time finally came to make the switch. Last year, Svenhard’s sold its Oakland factory. Twenty sales staff, executives and production managers moved to the plant in Exeter.

“It’s something we’ve been wanting to do for a long time,” Kunkel said. “It feels like a 1,000-pound weight has been lifted off our shoulders.”

Most line employees chose to stay in the Bay Area – Oakland employees were with the company an average of 28 years – but employees who transferred say they like their new community.

“I like the Valley, it’s something new,” said 29-year employee Manuel Morataya, 53, foreman on the singles line. “It’s a good change.”

Local employees were hired for the production line, which are Teamsters Union jobs that pay $11.80 to $30 per hour, the company said.

“We treat our employees well,” Kunkel said. “We intend to do the same here.”

Joey Gutierrez of Tulare is one of the new hires.

“I’ve worked in dairy production before,” he said as he laid slabs of dough onto a moving belt.

Making pastry the Svenhard’s way begins with 1,800 pounds of flour, eggs, milk and other ingredients mixed together into dough, put on pans and aged for six hours.

“It gives us color and eating quality,” said director of manufacturing Tommy Hampton, a 44-year employee whose first job at Svenhard’s was washing pans.

Fat is added to the dough and it rests again.

It’s flattened, sprinkled with sugar or cinnamon as needed, machine rolled and cut into rounds, claws or horns, and put into proofing boxes. Cheese or fruit filling is added, the pastries are baked in a natural gas oven fitted with a catalytic converter to reduce pollution, and glazed icing drizzled on.

The finished product is packaged on a fast-moving line and shipped out.

The industry is heading toward more automation, so the company is investing in equipment that will replace some jobs. Layoffs are not expected because product lines are being expanded, Kunkel said.

Currently, Svenhard’s does not produce pastries under other brand names, but the company has been approached to produce a private label product for a large grocery chain, Kunkel said.

“We’re excited about that,” he said.

This story was originally published May 28, 2016 at 5:00 PM with the headline "Svenhard’s Swedish Bakery brings jobs to Exeter."