Back to bake: Gregory Ritmire had chosen a career as a securities lawyer, but the family business--Giuliano's Delicatessen & Bakery--chose him.

BUILDING a career as a New York securities lawyer, Gregory Ritmire never saw himself behind a desk at an industrial bakery in Carson.

But family beckoned.

Specifically it was his mother, Nancy Ritmire Giuliano. She had been running the family's business, Giuliano's Delicatessen & Bakery, since her husband died the year before. It was time to hand the reins to a younger generation or sell out.

"This is the last thing I thought I'd do," Ritmire said. "I have a passion for real estate and the law."

But after seven years at the helm of Giuliano's, Ritmire has embraced the business. The sweet smell of baking bread wafts to his office door, which opens directly onto the floor of the 27,500-square-foot factory. Giuliano's Carson facility runs around the clock and manufactures close to 400 kinds of bakery and dell products. Between 12,000 and 15,000 loaves are delivered daily to an area bounded by Santa Barbara, the Mexican border and Phoenix.

Wholesale customers account for roughly three-quarters of the business, with bakery items making up the lion's share. Offerings include specialty bread lines for restaurants and hotels such as Houston's and the Ritz Carlton, and sandwiches for student lunches in the Los Angeles Unified School District.

On the retail side, the company owns and operates stores in Redondo Beach and two at City Hall in downtown Los Angeles.

Search for authenticity

Ritmire's step-grandparents, Francesca and Gaetano Giullano, grew up around Boston, where authentic Italian delicatessens were a familiar part of the landscape. But when the couple arrived in Southern California in the 1940s, they discovered that Italian delis were rare. In 1946 the Giulianos opened one in Gardena, and six years later they added a bakery at the same location.

Their oldest son Bob started running the company, and after operating in a single location for a quarter century, he expanded the business in the 1970s by franchising. The chain peaked at 13 locations in Los Angeles and Orange counties, and Bob also built a manufacturing facility in Carson to supply the stores. The increased production capacity allowed Giuliano's to grow the wholesale bakery business.

Ritmire's path was quite different. After graduating from the real estate finance program at UCLA, he decided to start a brokerage with his best friend in Japan (Ritmire is fluent in Japanese), where they rode the Japanese real estate boom. He moved to New York in 1993, earning a law degree and joining the securities practice at Well Gotshal & Manges LLP.

He had helped his parents with the business over the years, finding store locations, for example. When his mother decided to pull back, he mulled it over and thought he saw a chance to employ his skills in finance, law and real estate. It also offers long-term security.

"I had a great job in New York but the long-term possibilities are here," said Ritmire. "I don't mind working 14-16 hour days for this."

Rising to the challenge

The company has phased out the franchise operations, which had posed quality-control challenges and proved time-consuming to oversee. The last franchise was acquired last May and remodeled to become the flagship store in Redondo Beach.

Ritmire proudly pointed out the company's two 1,000-pound mixers, the second of which was purchased last year. He explains how the bread works its way across the factory floor, starting as raw ingredients, going through mixing, baking, bagging and finally out the door for delivery.

Trying to maximize economies of scale, he buys in bulk, ordering six months' worth of flour at a time. He has also implemented cost-cutting measures, such as installing more energy efficient lighting. "It's a constant process," said Ritmire. "We're becoming more efficient. Whatever the state of the art is, we'll try to implement if it's not too expensive."

He acknowledges that the operation is not as automated as big players like Interstate Bakeries Corp. or Grupo Bimbo, but with Giuliano's niche player status, large-scale efficiency isn't everything.

"Our niche is as a specialty bakery and dell," said Ritmire. "We have large bakeries that buy our specialty products from us because we can do it more efficiently."

Thomas Kuk, president of the American Society of Baking, agreed that even with the consolidation of the industry, there's room for companies like Giuliano's. "That leaves opportunity for smaller niche markets to come in," he said.

Kuk also noted the two driving factors in the industry: freshness and convenience. Market share has shifted to large discount stores such as Costco Wholesale Corp. and Wal-Mart Stores Inc., said Kuk, but also to specialty retailers catering to consumers who want a high-end, fresh out-of-the-oven product.

Ritmire anticipates a large jump in wholesale business, thanks to a contract signed with a large discount store he declined to name. He's also considering changing the mix of wholesale and retail, envisioning company-owned retail stores as the main revenue generator in the next three to five years.

"Our No. 1 concern is that we don't jeopardize quality for our existing customers," said Ritmire. "'Slow and steady' has been our motto. We want to be able to fund this with our own resources and our own cash flow so it has to be a slow, steady growth."

PROFILE

Giuliano's Delicatessen & Bakery

Year Founded: 1946

Core Business: Manufacturer and distributor of wholesale and retail bakery and dell products

Revenues in 2002: $8.5 million

Revenues in 2003: $9.1 million

Employees in 2002: 126

Employees in 2003: 139

Goal: Open gourmet takeout stores, coupling traditional items with grab-and-go products at a reasonable price

Driving Force: Maintain family style and high quality