Otis Spunkmeyer

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Otis Spunkmeyer Inc.

Type	Subsidiary
Founded	San Leandro, California (1977)
Headquarters	San Leandro, California
Key people	John S. Schiavo, President & CEO Ahmad J. Hamade, Chief Financial Officer Gerald P. Reardon, Marketing Director
Industry	Food processing
Products	Muffins, Cookies
Revenue	▲336.3 million USD (2005)
Employees	1,183 (2005)
Website	www.spunkmeyer.com

Otis Spunkmeyer Inc. is a baked goods distribution company widely known for its odd name and flagship line of muffins and cookies. Although a relatively small company, Otis Spunkmeyer has enjoyed a large amount of success in the industry, with clients ranging from small family-owned businesses and restaurants to worldwide military organizations such as the United States Army. In addition to its famous muffins and cookies, Otis Spunkmeyer also produces frozen cookie doughs and other pastries.

Despite common belief, the name Otis Spunkmeyer is not actually referring to any person. The name was a creation of the then 12 year-old daughter of the company's founder.

[edit] Business

In the year to 31 December 2005, revenue was £336m, EBITDA $48m, and operating profit $29.1m. Tangible assets were about $50m. From 2001 to 2005 sales grew at over 9% pa.^[1]

[edit] History

2002 saw an MBO led by CEO John Schiavo in association with the private equity firm of Code Hennessy & Simmons. In November 2006, they sold Otis to Irish company IAWS plc for US$561m.^[1] IAWS already own Cuisine de France and La Brea Bakery.

Kenneth B. Rawlings and his wife, Linda, who opened their first fresh-baked cookie store in Oakland in 1977, founded Otis Spunkmeyer. For the name of their business, the Rawlings took the suggestion of their 12-year-old daughter, Kimberly, who came up with the Otis Spunkmeyer name, but their choice of what type of business to open was decidedly less whimsical. The Rawlings did their research, reading various marketing studies that consistently rated cookies as one of the most stable food items. Fresh-baked cookies, as a retail concept, also exuded another strength. They were highly popular, trendy food items, the appeal of which helped the Rawlings transform their Oakland store into a chain. By 1983, there were nearly two dozen Otis Spunkmeyer stores in operation, composing a thriving, fast-growing chain. Despite the signs of a regional chain about to spread its presence across the country, there were no more Otis Spunkmeyer stores opened after 1983. Rawlings was discouraged mainly by the high overhead costs that hobbled what otherwise would have been strident progress. His belief in the market strength of fresh-baked cookies, however, had not weakened, so he decided to approach the business from another angle. His strategic change in stance produced a far more powerful company than the retail chain that existed between 1977 and 1983.

The Rawlings Family currently reside in a large estate in Piedmont, California.