Business

Carolina Foods Inc., Charlotte’s honey bun maker, celebrates 80 years

On a recent afternoon at Carolina Foods Inc., a woman billed as the chief financial officer greeted visitors in a white uniform, the same clothing worn by many employees at the Charlotte-based sweet-treat maker.

The jumpsuit makes it easier to go back and forth from the offices to the bustling production floor – and seemed to suit her more comfortably than the CFO designation.

“We don’t do titles very well around here,” said Katie Scarborough, 32, explaining she has more of a strategy and operations role instead, as she learns the business from her father.

“We’re very hands on. All of us,” she said. “We’re involved in just about everything.”

That’s how it is at this third-generation family business, plugging away for 80 years to establish itself as an extensive producer of honey buns, doughnuts, pastries and pies sold in all 50 states, Puerto Rico, Mexico and Canada.

In recognition of its founding in 1934, Carolina Foods is throwing a barbecue picnic and party this Sunday afternoon at Veterans Park for relatives and its 425 employees at the plant that President Paul Scarborough said hasn’t had any layoffs. His children, Katie and Ruffin Scarborough, 28, are also involved in running the business.

Carolina Foods is celebrating enduring eight decades in a traditional corporate town, as part of an industry packed with its own challenges.

There are the high-profile national competitors vying for the same store-shelf space, from Hostess Brands (known for Twinkies) to Cloverhill Bakery (also a honey bun, doughnut and pastry maker) to Bimbo Bakeries (behind the Sara Lee and Entenmann’s brands). And there are today’s health trends and fad diets that shun sugary treats.

Paul Scarborough won’t discuss specifics about revenues but said they have more than doubled in the past five years at the privately owned company. Its Duchess brand honey buns are in Sam’s Club stores nationwide, according to the company, and its gem doughnuts and other products are in grocery stores (although not in Charlotte) and convenience stores around the country.

Carolina Foods also does packaging for “large national brands” they won’t name, at companies’ request.

Paul Scarborough and his children say the anniversary is a nod not only to his father and founder, the late Vernon Scarborough, but also to company workers.

“We’re here strictly because of good employees,” said Paul Scarborough, who is 64 and has run the company for three decades.

“We wouldn’t have been as successful as we are without (them).”

That sweet smell

It’s easy to overlook the nondescript white building and red door at the busy intersection south of uptown. But the sweet scent wafting around South Tryon Street and West Boulevard is hard to miss.

Carolina Foods has stayed as other national bakers with a Charlotte presence faded. Interstate Bakeries’ Charlotte plant, marked by the yellow Merita sign just off Rozzelles Ferry Road, closed in 2005.

Earlier this month, Michigan-based Kellogg Co. announced it will begin laying off employees at its bakery east of uptown in November, as part of its previously disclosed plans to shut down the operation. Workers produced the Famous Amos cookie brand there, among other products.

Founder Vernon Scarborough’s entrepreneurial ventures began well before launching Carolina Foods, according to the family. Grandson Ruffin shares the family story: While growing up in the Mount Gilead area of Montgomery County (about 60 miles east of Charlotte), Vernon Scarborough sold peaches that were too ripe for grocery stores from his own peach stands and truck. He was around 12 at the time.

He launched Carolina Foods as a sandwich company, making lunches in his basement that he would take to workers at local textile and furniture manufacturers. Honey buns came later as a treat to take along with sandwiches.

After World War II, the company expanded its sweets line to produce yeast-raised doughnuts and pies, produced at its first location on South Boulevard. But the original treats remained a popular draw – especially after the bakery became one of the first in the industry “to perfect the honey bun,” according to the company.

Carolina Foods was an integral part of Scarborough family life. “We grew up here, worked summers here,” Katie Scarborough said. “I used to think that my dad slept here.”

They were a hit for school field trips and for handing out goodie bags, Ruffin said. Katie worked in the office during summer breaks from high school at Charlotte Country Day, when “PaPa” Vernon ran the company.

“I’d come in with my aunt, and get his paper and his coffee. He would come in in a suit and sit down at his desk and read The Wall Street Journal.”

Over the years, they garnered attention. Food Network featured the company and its treats on the show “Unwrapped” in episodes airing in 2004 and 2009. And Duchess Honey Buns are the No.1 seller in its snack category in Puerto Rico, according to the company.

Future goals: New plant?

Inside the bustling 100,000-square-foot plant, seven production lines swirl with doughnuts, pies and buns. Conveyor belts circle above to cool off products just out of fryers.

There’s something happening around the clock at the plant, whether it’s baking, maintenance, sanitation or tractor-trailers rolling in and out making deliveries.

It all reflects a creative use of space that produces nearly 1 million honey buns a day, and even more of the bite-sized gem doughnuts.

To do more, though, the company says it needs a new, larger plant.

Not only would a new plant boost output, the Scarboroughs say, but it could also help the company get into the health-conscious snack realm in a big way if it decided to do that, with baking areas designed to meet those guidelines.

“We are challenged just in the space that we’re in right now,” Katie Scarborough said. “We need a new facility if we want to be able to grow.”

A new plant would be in the Charlotte area, Katie said, so the company can keep its employee base, which includes families and staffers who’ve worked there for decades.

For now, the younger Scarboroughs are focusing on boosting marketing and building Facebook fans to attract a new generation of customers. It’s a style that’s quite different, yet complements, Paul Scarborough’s low profile.

A family business stretching into the third generation isn’t common. Only about 12 percent of all family businesses are still viable into the third generation, according to the Raleigh-based Family Business Institute.

Paul Scarborough says his approach, like his father’s, was to neither encourage nor discourage his children from being involved in the family business. But he does share hopes for the fourth generation:

“I’d like to see it perpetuated.”

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