Spurned bidder for Koffee Kup and Vermont Bread proposing new in-state commercial bakery

A spurned bidder for the closed Koffee Kup Bakery and subsidiary Vermont Bread Company is trying to launch a replacement business to mass-produce donuts and English muffins for statewide distribution from facilities in both the greater Brattleboro and Burlington areas.

Massachusetts’ East Baking Company had hoped to buy Koffee Kup and Vermont Bread in the spring of 2021 after their owners abruptly closed both businesses without explanation. Instead, the Georgia-based Flowers Foods — the $4 billion maker of such national brands as Wonder Bread — secured and shuttered the Vermont bakeries in a surprise last-minute sale.

A year later, East Baking Company has purchased the equipment used to make Koffee Kup’s donuts and Vermont Bread’s English muffins. But with Flowers Foods unwilling to sell its empty buildings, East Baking is making a public plea for help finding property.

“We think there is a market for fresh Vermont-made baked goods,” East Baking spokesperson Jeff McCarroll said Thursday. “But finding commercial real estate and spots where labor is available is very challenging.”

The plans come 17 months after some 150 Koffee Kup workers in Burlington and another 100 Vermont Bread workers in Brattleboro found their manufacturing and distribution plants suddenly closed in April 2021, leading a judge to appoint a receiver to sell the assets.

Amid several bidders, East Baking jumped into the public spotlight in May 2021 when it requested and received initial state authorization for up to $2.4 million in Vermont Employment Growth Incentive money to restart the plants.

Three weeks later, the receiver announced that Atlantic Canada’s largest family-owned bakery, Mrs. Dunster’s, was his “preferred purchaser” — only to change his mind days later and award the Vermont businesses to Flowers Foods. The buyer reported “no immediate plans to reopen” any of the still-shuttered plants and instead took over Koffee Kup and Vermont Bread’s shelf space in stores.

East Baking Company at first questioned whether the sale to Flowers Foods violated the federal Clayton Act, which prohibits mergers and acquisitions that “may be substantially to lessen competition,” and the Sherman Antitrust Act against monopolies. But the Bay State company dropped its objections in court and instead decided to pursue its own business.

The potential for a new commercial bakery comes as a US District Court judge recently certified a class action lawsuit filed by former Koffee Kup and Vermont Bread employees. The plaintiffs charge that the companies violated the federal WARN Act, which requires large employers to provide 60 days’ notice of a mass layoff.

The case, which is seeking back wages and benefits for up to two months, is pending in court in Burlington.

Want to stay on top of the latest business news? Sign up here to get a weekly email on all of VTDigger’s reporting on local companies and economic trends. And check out our new Business section here.

Did you know VTDigger is a nonprofit?

Our journalism is made possible by member donations. If you value what we do, please contribute and help keep this vital resource accessible to all.