Two new commercial bakeries to fire up $9M in London investment – London Free Press (Blogs)

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What began as a side hustle baking bread at home has turned into a $4-million investment in London and another win for the city’s agri-food sector.

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Unbun Foods, a commercial bakery specializing in grain-free and gluten-free products, is opening a factory that will supply stores and restaurants in Canada and the U.S.

“We consider ourselves one of the most innovative bakeries in the world. Innovation is at our core and having our own facility allows us to innovate,” said owner Gus Klemos. “This opens up a beautiful situation for us. I want to have my own factory so I can control costs and quality.”

Unbun is renovating a plant on Stronach Crescent, near Fanshawe College, and will begin baking there by year’s end, he said. It now provides gluten-free products to Mr. Sub, Pizza Pizza and Burger’s Priest restaurants and sell its breads, buns and other baked goods in Metro and Sobeys, to name a few stores, he said.

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Unbun has contract bakers in Mississauga, Ottawa and Texas baking for it now and the opening of the London operation will see work shifted here from its Ottawa supplier.

“It’s exciting. I love it. I feel like I’m the luckiest person in the world. We’re grain-free, gluten-free and focused on super clean ingredients. We want to make the healthiest baked products you can have.”

Klemos already has hired 23 workers as he prepares for production and will add more workers when baked goods start rolling off the line, he said.

In addition, another new commercial bakery is also on London’s horizon. Panela Bakery Factory recently closed a deal to buy 2.4 hectares of land on Innovation Drive and plans on opening a 2,800 square metre (30,000 sq. ft.) factory in two to four years, more than a $5-million investment, said managing director Matin Sanaat.

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Panela makes protein bars and filled Middle Eastern cookies. It has a small factory in Mississauga and sells to grocery stores across the Toronto area, Calgary, Edmonton and Vancouver and is looking to grow into the U.S. market, specifically the Detroit and Chicago areas.

“There’s a better path for our business in London. London is a great hub for food production. There are a lot of companies here now,” he said.

Unbun and Panela join The Cakerie and Dr. Oetker as London baking businesses with a national reach.

Panela has been in business since 2015 and has seen steady sales growth, leading to the London investment. “We have grown year-over-year and we anticipate this growth and demand means we will need increased production,” said Sanaat.

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These two new food industries underscore the city’s effective strategy to build its food sector, said Kapil Lakhotia, chief executive of the London Economic Development Corp.

“It’s another testament to the success of the food and beverage strategy. It has helped diversify our manufacturing base. These are big wins.”

For Kemos, building his own plant is a chance to invest in his hometown, where he attended Lucas secondary school and Western University.

“I’m a London native and this is an opportunity for me to come back and set up a factory. I have a lot of family here and it’s great to see them,” he said.

He also will be establishing a sales and marketing office in Austin, Texas in a move to grow U.S. sales.

Before the COVID-19 pandemic, Unbun sold much if its products to restaurants and chains in the U.S., but as they closed or saw sales slow, he quickly moved to sell to stores and found willing partners.

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“Two-thirds of my business was restaurants and we had to pivot quickly. That business started to grow, we were fortunate to be in an area where we are able to grow. Now a lot of business is coming back.”

In 2017, Klemos was working for a technology company in Toronto and trying to lose weight, but didn’t want to cut out the bread products he loved. He began home baking as a way to make low-carb breads, and that lead him to create gluten-free as well. He liked his products so much he began baking and selling through a website he created.

He ended up quitting his day job and opening Unbun in 2018, working out of a commercial kitchen in Toronto after borrowing money to start the business.

“I was eating a lot of paleo products and nothing tasted good. There was nothing out there. I became obsessed with it,” said Klemos. “All of a sudden, orders started coining in.”

ndebono@postmedia.com