Local Bakery Supplier Johnson Bros. Expands Into National Brewery Supply Business

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Edward A. Ornelas for the Rivard Report

Jesse Reyes (left), vice president of Brewery Direct, and Kevin Johnson, CEO of Johnson Bros. Bakery Supply, give a tour of the Johnson Bros. warehouse in Northeast San Antonio.

Legend has it that 17th-century monks fasting for Lent relied on a dark, malty beverage made with yeast and so laden with nutritional value they called it liquid bread.

Now, the largest bakery supply company in the state, whose business it is to deliver the goods to many of the bread and cake bakers of the region, is toasting its success in not only reaching the 25-year mark, but also entering the craft brewer supply market on a national scale.

Founded in 1994, Johnson Bros. Bakery Supply is a San Antonio-based bakery supply business with clients as big as H-E-B and small as the local panaderia throughout Texas and surrounding states. It operates warehouses in Dallas and San Antonio, and distribution centers across the country.

The Johnsons, brothers Kevin and Blain, got their start when the out-of-state bakery supply business they worked for began cutting corners on service. Fearing a loss of personal and professional credibility, they struck out on their own. With funds from a local donut shop owner who invested and the sale of their homes, they were able to lease warehouse space and establish an inventory.

Eventually, with some right-sizing that involved closing a warehouse in Houston, where competition was fierce, they were able to thrive. In 2012, Blain Johnson sold his interest to his brother to pursue missionary work full time. Today, Johnson Bros. does $55 million in business a year and operates two cake-decorating supply stores, with two others run by franchisees.

The company’s 95,000-square-foot warehouse on Interstate 35 North is stocked floor-to-ceiling with pallets of enough flour to fill 10 semi-truck trailers, plus bags of sugar and oats, boxes of shortening, yeast, fillings, icings, and even ate de membrillo, or quince paste.

Edward A. Ornelas for the Rivard Report

The Johnson Bros. Bakery Supply warehouse is full of flour, sugar, and other baking ingredients.

In a temperature-controlled space known as the chocolate room, where the aroma matches its name, there are boxes stacked high of Belgian milk chocolate callets, Guittard semisweet chunks and milk chocolate shavings, caramel loaves, pecans, almonds, and chocolate liqueurs. This is where grocery chains and others procure chocolate tulip cups for elegant desserts of silky mousse.

Edward A. Ornelas for the Rivard Report

Kevin Johnson shows off a new product, the Over the Top Cake Supplies Party in a Box cake kit.

The warehouse also features a lab where Johnson Bros. invites its customers and their employees for cake-decorating classes and other product demonstrations. Johnson Bros. recently began supplying frozen yogurt stores and a new soda business in San Antonio, Southside Craft Soda. This spring, the company’s Over the Top Cake Supplies division will launch its party-in-a-box cake kit.

But just four years ago, Johnson Bros. added malts and grains from various producers and ingredients like rice hulls to its inventory, becoming a one-stop shop for craft beer brewers who needed not only those items but also the yeast, sugars, flavorings, and things like toasted coconut, chocolate, and even graham cracker crumbs that bakers use.

“Baking and brewing use the same ingredients – one you put in the oven, one you boil,” said Jesse Reyes, vice president of Brewery Direct, Johnson Bros.’s brewery supply side. “It’s always funny that this business has so much synergy. Bread and beer, it’s the same thing.”

In the ’90s, Kevin Johnson said he watched an independent bakery and craft beer supplier in Waco get bought out by a bigger company. He knew the business had been good, even at a time when there weren’t as many breweries as today. He tried to partner with the big national suppliers, but they told him he wouldn’t make it in their world.

So Johnson Bros. established its competitive advantage in the market by delivering products as needed, unlike the two national suppliers, saving brewers time and shipping costs. Still, they struggled to get their foot in the door.

“Luckily, being local we had some local businesses wanting to work with us. One of them was Southerleigh Brewery. We just happened to open at the same time,” Reyes said. “That was one little snowflake, so we started collecting more snowflakes and continued on.”

Last year, the brewery supply business brought in $2 million for the company, which is currently serving 80 percent of the breweries in the San Antonio area, plus several in Austin, Dallas, Houston, and a new one in Mission. “We have 125 customers in Texas. So we took a big chunk of the market,” Reyes said of beating the competition. “There are about 400 breweries and distilleries in Texas. In three years, we’re about to take half.”

Last year, the company rolled out the business name Brewery Direct and began licensing other independent bakery supply shops as partners around the country. Its first was A. Oliveri & Sons in New Jersey, then came three others, and this year, they plan to add at least two more. One is an ice cream distributor in Ohio. “He is ecstatic because he has all the equipment like us, all the facilities, but he has no winter business,” Kevin said.

Ingredients may be the same, but that’s where the similarities end between the baker and the brewer. “We’re now a liaison between the two industries,” Reyes said. “They are two different industries. The marketing, the sales, the storage – everything is completely different. So a lot of my job was to go in and marry the two and get them to understand it’s the same business, but two different customers.”

“Bakers and brewers are like night and day,” Johnson added. “Very different. But both very prideful. It’s definitely a craft.”

Johnson said his oldest son, who recently graduated from the University of Texas at San Antonio, has joined him in the business, and his youngest son also will start there when he finishes college. More Johnson brothers.

Until then, Johnson has set his sights on building a manufacturing plant, opening a home-brew supply store in Dallas, and expanding to other markets. “Our plan is to be nationwide in the next five years,” he said, “if we can find the proper distributors that will provide the kind of service we expect.”

As with the bakery business, brewery customers range in size from the BJ’s Brewhouse chain of restaurants based in Waco to Islla St. Brewing, a two-man operation opened less than four months ago just around the corner from the Johnson Bros. warehouse.

“My brother and I got into small-batch beer, and we use craft beer as a way to make South Texas and San Antonio culture approachable,” brewmaster Josh Peña said of Islla St. which he runs with sibling JD Peña. “We use authentic ingredients – chamoy, empanadas, tamarindo. We have one beer that is a Selena tribute beer, and other beers dedicated to our grandmother and grandfather. … Our whole mission was to tell their story, the American dream.”

Beer and bread, it turns out, is part of that story.

On Sundays, the Islla St. brewers recreate Sundays with their grandmother by laying out a spread of pan dulce and serving beer in the tap room they decorated to look like their grandfather’s backyard.

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