By Michael Carmichael
January 8, 2009
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Grand Traverse Pie Company continues to thrive in a growing sector of the restaurant business. The secret, according to co-founder and president Mike Busley, is the pie.
As an increasing number of Michiganders are facing the prospect of having to adjust to being out of the automotive sector; Corp! talked to a Northern Michigan entrepreneur who faced a similar situation in the mid-’90s. Dave Busley and wife Denise founded the Grand Traverse Pie Company in 1996. We asked how the idea came about.
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“Denise and I met at Michigan State,” he replied. “We were both Michiganders - she was from Kalamazoo and I was from Lansing. We started our careers in 1980 in Southern California. And, after about 15 years of that we decided to come home to Michigan. We had a couple of kids and I just didn’t want to wonder - given the insecurity and downsizing going on in the aerospace business at the time [Busley, an engineer by training, worked for Lockheed] - if we were going to get laid off. We just didn’t have a passion for our work despite the fact that we were both successful in our careers. All this coincided with my 40th birthday and we wondered if this was it, was this who I am, is this it for now? What is the point that you come to before it’s too late to change?” he asked himself.
Deciding to Return to Michigan
Busley explained “that was one motivator. The other was that we wanted to move back home. We both wanted to live in Traverse City, even though we hadn’t before. So we kind of reverse-migrated and moved back this way. But, what were we going to do? The idea was that we would have our own business so the job security would be up to us. But what was that going to be. We couldn’t afford to buy an existing business so we would have to invent one.”
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Busley said that he and wife Denise had “wandered into a small pie shop in Julian, California, which is a small tourist town east of San Diego up in the mountains, in apple country, and we fell in love with the feel of that business. It was mainly apple pie, it smelled great, everybody was having a great time, you could literally see the fruits of your labor (pun intended) on a daily basis. In a big corporation you write reports - there’s no sensual taste-sight-smell kind of thing - it’s a business trip to present a proposal to the Department of Energy. It’s kind of hard to get excited about that kind of thing after 15 years.”
At about that point, inspiration hit them. “Here we were looking at a pie shop. It looked simple enough that we thought we could figure it out. Of course, we had never baked a pie before. Fortunately, Liz Smothers, who owned the Julian Pie Company, said she’d train us. ‘I’ll teach you the business, the ingredients, the recipes, the equipment, the space - everything you need to know to make pie.’ So we learned the pie business but needed the money to actually start a pie company in Traverse City.” A local banker who believed in the couple put his name on an SBA (Small Business Administration) loan and, combined with their own money, it was enough to get the Grand Traverse Pie Company in business.
A Family Affair
Busley picks up the story from there. “Another aspect of the appeal of starting our own business in Traverse City was that our kids could actually interact with us on a professional level. When I was at Lockheed I was behind a wall of security guards and digital ID cards. The kids couldn’t see what I did or where I did it. So here at GTPC I could take them with me to get supplies, they could learn from me as I did things that they could actually see - no report writing. I could teach them a work ethic, and communications skills and management - in addition to how to make the bed and how to play catch. Neither one of them is going to take over the business, that’s not what it was about. Denise and I wanted to make sure that during those formative years our kids could learn more things from us in addition to what they could learn in school. The pie business could connect us with our family and our community. That’s kind of our core.”
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Deciding after a few years to expand beyond their original fruit pie shop, the Busleys decided to expand their offerings and their physical operations by franchising their pie shops. “We have franchisees that reflect the company’s core values. The Grand Rapids franchisee, Dave Standfest, is a pastor at New Hope Church and a very charismatic and visionary entrepreneur. He has his four kids very involved in his pie shop. He acquired the franchise in Grand Rapids as an opportunity for his family to be involved. Tina Divita over in Norton Shores, near Muskegon, works very closely with her daughter Nikki. Scott Byrd up in Petoskey has his two junior high kids working in their pie shop - they really know the pie business. Pie is all about family anyway, that’s what I love about it. Pie is about connecting. What’s more natural than motherhood and apple pie? When you smell a pie cooking you probably can experience some fond memory of family and growing up,” Busley reminded us.
The Business of Pie
According to Technomic, the Chicago-based national food industry consulting firm, there are four main categories of dining: quick service - fast food such as McDonald’s; fast casual; casual dining - such as an Applebee’s ; and fine dining, such as a Capitol Grill or Andiamo’s in the Detroit area.
The fast casual segment is further broken down into eight categories, including bakery café, the niche occupied by Grand Traverse Pie Company, Panera Bread, Au Bon Pain, Cosi and similar establishments that combine baked goods and in-store dining.
“Fast casual,” Busley tells us, “is where the ambience is greater than with fast food, the flavor profile is greater, the price point is somewhat higher, and you don’t get waited on. It’s a growing segment. We have a unique and best-in-class product and the margins are good.”
Technomics placed the growth rate of the segment at 18 percent in 2007 (the latest figures available) compared with only 5 percent for quick service.
Busley says that “those are the criteria, really, for success in any business. Is the market growing - along with the segment I’m in? Can I be perceived as best-in-class? And are the margins good? Obviously everyone’s being pressured by material costs,” he continues, “but if you’re creating something - such as pie - instead of just buying and selling a product that exists, you’re ahead of the game.”
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Even in Michigan fast casual is a growth segment. Busley says that “the casual diner is under a lot of pressure. People don’t want to spend as much, they don’t want to spend the 20 percent tip, they don’t want to wait as long. They want to feel they can come in and define their experience - in a pie shop, for instance - where they could walk in and just have a cup of coffee - unlike casual dining places, for instance, where they want you to come in and have a meal. You can just come into our pie shop and have a meeting. There’s that big table we have - some of our shops even have a separate meeting room - and fire up your laptops and have an instant meeting. We’re there for you to define your experience. We offer more ambience, more flavor, more nutritional options than a fast food establishment - or a coffee shop - and people can move up to us without a large increase in price. Those who want to move down from casual dining can move down easily because you still have a warm and inviting facility and you have good food, but you don’t have alcohol, you’re not waiting as long and you don’t pay as much,” he explains.
Growing the Pie
Busley says that they “made a conscious decision to grow the business. We looked at our two main advantages: our pie and the fact that we’re a Michigan company - Grand Traverse, the region, have a mystique. We thought that would resonate strongly, especially in Michigan, as well as in Chicago and in neighboring states, where the Grand Traverse region evokes positive feelings. If we execute properly, if we choose our franchisees and our locations properly, there’s no reason we can’t succeed in ways the more prominent players in our category have seen.”
Working the ‘Net
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One way in which GTPC is growing is via the Web. Busley says that “Internet sales are positive for the year and we’re shipping our Michigan pies to the whole country. Our store sales may be down slightly, but there are other fast casual companies that are down significantly so we feel we’re doing pretty well, all things considered. Our Web site goal is two-fold: drive traffic to the retail shops and build e-commerce. We’re starting to use Facebook and other social media sites as well as search engine optimization to help build awareness and buzz and increase traffic to the site. We want people to understand where we are - both physically in their communities and socially, via our culture, our values. We’re even working on optimizing our presence on iPhones and BlackBerries so that when people call up a restaurant map we’re there. We are also using the Web to increase our corporate business as companies discover that sending a Michigan-made pie to 200-300 customers all over the country gets a very positive response.”
Other, more traditional marketing methods are being used as well. Busley says that “we’re starting to do some co-marketing with compatible companies such as Cherry Republic. We’ve created a couple of signature sandwiches that use their ingredients, and we sell some of their products in the retail section of our pie shops and they in turn promote us as well. It all helps reinforce our positioning as a northern Michigan company, working with another well-respected northern Michigan company.”
Make It In Michigan
As with many Michigan companies, Busley and GTPC feel that Michigan is getting a bad rap. “It all leads to a notion we’re promoting of Make It In Michigan,” he explains. ” ‘Make it’ meaning we’re all going to succeed in Michigan, but also that we make our pie in Michigan, we make it with Michigan apples, Michigan cherries, Michigan blueberries - we bought more than a million pounds of Michigan fruit last year. We want our guests and everyone else to know that we’re doing that, not just because they’re fruit from Michigan but because they’re the best, period. We’re proud of that.”
Toward that end GTPC is going direct to Lansing with their message. “We’re going to be serving pies - cherry, apple and blueberry - to the opening session of the Michigan Legislature,” Busley says. “We want them to support not only the concept of making it in Michigan, but making the right decisions for all of us as well. We sent them to Lansing to do that, to look down the road past next month and then not come back until they find compromise that’s good for all of us. We want them to overcome past paradigms and get Michigan moving forward again,” he exclaims.
We couldn’t agree more.
