Business

Winnipeg Free Press - PRINT EDITION

King Pie's dough starts to roll

By: Martin Cash

Posted: 07/14/2009 1:00 AM | Comments: 0 (including replies)

A Winnipeg business's attempt to establish a new mass-market fast-food meat pie venture has been forced into a more humble approach and is reaping some early rewards.King Pie hit some significant snags trying to import the meat-and-dessert pastry store franchise into Canada from South Africa during the past couple of years.

After initially launching in spring 2007, franchises sputtered from lack of awareness and advertising dollars and were not able to approach the level of popularity of the thriving, 300-store South African chain.

A handful of franchise stores were opened in Winnipeg, Calgary and Vancouver by the second half of 2008, but all but one have closed, with only the corporate-owned Polo Park store remaining open.

Meanwhile, after sinking millions of dollars into high-tech production equipment, King Pie's manufacturing operation in Winnipeg, Kudu Foods, had to shut down earlier this year for several weeks after racking up some impressive bills before any serious revenue flowed.

Things started to turn around after bringing in food brokers Glen D. Ross Agencies this spring, and the company is starting to find some customers in the institutional sector.

Production started again early this month and orders are coming in from the likes of Headingley Correctional Centre and the RCMP Training Academy in Regina.

"We think this is going to be a real good-news story," said Brian Ross, of Glen D. Ross Agencies.

Ross believes the King Pie meat-and- dessert pie product will catch on, but will take time.

"At some point, they are not going to be able to keep up with demand," he said.

King Pie president Maurice McCarthy said, "We're not out of the woods yet. There is still a lot of missionary work needed to get the franchise business going."

With its new foray into the institutional food service business, the company is in the process of beefing up its balance sheet.

Last month, Kudu Foods received approval to try raising about $2.5 million in new equity through the province's community enterprise investment tax credit.

If those efforts are successful and the company's product starts to gain traction in the institutional market, then King Pie might try to re-enter the franchising business.

In the meantime, about 10 people are working again at its Archibald Street production plant after about 16 were laid off earlier this year.

McCarthy said the company might have been overly optimistic about its early prospects, but it was hard hit by the financial and economic crisis that struck North America last fall.

A plan to refinance the building that housed production was promised, delayed, then fell through as the credit crunch enveloped Winnipeg last fall.

But with specialized production equipment imported from The Netherlands in place, new orders coming in and potentially new investors coming on board, McCarthy believes there is plenty of potential.

"We will be poised and ready," he said.

martin.cash@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 14, 2009 B4

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