Islip deal will keep bakery, jobs on LI

An Islip Town bakery has scrapped plans to move to North Carolina in favor of combining operations and preserving 466 jobs.

Wenner Bread Products Inc., a maker of frozen dough and partially and fully baked breads used by supermarkets, discount stores and restaurants, will spend $3.3 million on new equipment and renovations to its Ronkonkoma plant. That factory will eventually house work now done in four buildings in Bayport, which will be sold to fund a portion of the modernization project.

Beset by high costs, particularly for electricity, Wenner Bread's owners decided reluctantly to move to Lexington, N.C., last spring after years of being wooed by at least six other states.

Weeks later, however, they reversed themselves when New York State offered an allocation of low-cost electricity and an $800,000 grant. Islip Town also promised changes in land-use regulations to ease the sale of Wenner Bread's Bayport complex.

"We didn't want to leave; Long Island is our home," said Richard Wenner, president and chief executive of the second-generation, family-owned business. "The problem is our electricity costs are unbelievably high compared with our competitors, in some cases four times higher. . . . Something has to give, and that's why we were going to North Carolina."

Wenner, his brothers John, Bill Jr., Danny and Larry, and their mother, Mary Jane, have all had to focus on the bottom line more because the bakery lost money in 2007 and 2008 after flour prices soared. The family couldn't fully pass along the increased costs to consumers and had to stanch the red ink with their own money.

"We're running the business OK today, but we want to become stronger, to grow," said Richard Wenner, whose parents opened a retail bakery in 1956 in Queens, and then moved to West Islip.

Consolidating five buildings into one and installing machinery capable of producing the same amount of bread in far less space will save money. Some construction costs will be covered by the state grant from Empire State Development Corp.

However, the big savings -- more than $800,000 a year -- will come from lower electric bills because of a New York Power Authority allocation, according to Wenner Bread's energy consultant. He said the bakery currently pays about $4 million a year for power, which represents about 5 percent of total expenses and is the third-largest expense after ingredients and labor.

The authority's chief executive, Richard Kessel, met twice with Wenner Bread executives. His spokeswoman referred questions to Gov. Andrew M. Cuomo's office, where a spokesman didn't provide a comment.

Wenner Bread derives 75 percent of its $100 million in annual sales from frozen dough used by customers' in-store bakeries. Wenner Bread also sells partially and fully baked products. Customers include Waldbaum's, Stop & Shop and Pathmark grocery stores, discounter Walmart, and restaurant chains such as Denny's and Boston Market.

"Wenner Bread is an important part of Long Island's food manufacturing industry, which is one of our priority industries" in terms of development, said Andrea Lohneiss, director of  the development corporation's regional office. 

Lohneiss was among the state and town officials who met with Wenner as a group less than two days after he told Islip officials about planning to exit New York. The intervention was organized by Islip Supervisor Phil Nolan and William Mannix, director of the Islip Industrial Development Agency.

"Within 36 hours of receiving Richard Wenner's letter, we met with him to find out how we could help," Nolan said. "We didn't want to lose the company, because it feeds a lot of families, gives people decent lives."