5/5/23

Last week, a story in VTDigger reported that King Arthur Baking would be closing down its fulfillment operation in Wilder for sales from its online catalog. Many people, however, didn’t get past the headline, which read, “King Arthur Baking to suspend online sales from Vermont.” Ever since, the company has been fending off public consternation and rumors about its plans. Here, co-CEO Karen Colberg answers some questions about what’s really happening.

What changes is King Arthur making to its operations in Vermont?

Our business is doing extremely well, and we continue to hire locally with positions open at our retail and manufacturing facilities. After much consideration, we have made the difficult decision to shift fulfillment of the remaining portion of online orders from our facility in Hartford to outside Vermont beginning June 2024. We are deeply committed to our ongoing presence in the Upper Valley and all other company operations, including our corporate offices, online sales, and our Norwich retail store, café, bakery, and school, will continue without change or interruption.

Could you elaborate on the issues that hampered fulfillment operations from the Hartford facility?

This decision is driven primarily by supply chain needs as we look to grow our business moving forward. Our costs to ship out of Vermont have continually gone up, and we have been challenged to find the number of seasonal fulfillment workers needed to support our employee-owners during peaks. Shifting our fulfillment operations outside Vermont will enable us to reduce the time to deliver to customers and to fulfill orders more cost-effectively while reducing our sustainability impact.

Karen Colberg

How will the changeover to third-party fulfillment operations actually work? And where are KAB warehouses for online sales located these days?

We have been working with third-party fulfillment partners since 2014.  Currently, the majority of our nationwide orders go through these partners.  They are strategically placed across the country to best serve our bakers.

What will happen with the employees affected by this change?

As with everything we do at King Arthur, this decision was made with deep consideration for the individuals impacted, as well as the local community. As an employee-owned benefit corporation, we are committed to taking care of our people. In keeping with that value, we provided the 19 impacted employees 14 months of notice, allowing them resources and ample time - to get training, access career support, further their education, and apply for new roles at King Arthur or elsewhere.

Has the crush of online business you saw during the pandemic abated, or did those years kick online sales to a permanent new level? Either way, what do you see happening to KAB’s business operations over the next year?

We are thrilled to say that the majority of bakers who started baking as a hobby during the pandemic have continued to do so, albeit at a lesser frequency than during lockdown, and our sales in 2022 outpaced those in 2019, and we continue to grow. We are looking forward to exciting growth in the coming year and will continue to invest in the Upper Valley and further our mission of creating stronger and healthier communities through baking.

And here’s King Arthur Baking’s official statement on the change:

We recently made the difficult decision to discontinue the portion of our online order fulfillment that is shipped out of our Vermont facility in June 2024.  To effectively manage issues of space constraints, seasonal staffing challenges, rising costs, and transit time, King Arthur has been gradually outsourcing to third party logistics partners since 2014 with the number of packages coming out of Vermont decreasing from 100% in 2014 to 21% in 2022. Unfortunately, we continue to experience escalation in similar challenges and are unable to offset these concerns with further incremental outsourcing.

We are allowing 14 months for this transition and are providing support in a variety of ways for the 19 employees directly impacted by this decision, as we want them to have ample time to find another job within King Arthur, obtain training or further their education for a new role here at King Arthur or elsewhere. Whatever their next step, our hope is that our employee-owners who work in fulfillment feel very proud of the significant contribution they have made to King Arthur over many years.

All other company operations, including online sales and the company’s flagship store in Norwich, will continue.