Vermont Bread Co. closes with no warning

Brattleboro plant employed 91 people; shutdown takes place less than a month after investment group’s purchase of the bakery

BRATTLEBORO — Vermont Bread Company and Koffee Kup Bakery abruptly shut their doors on April 26 and laid off hundreds of workers in Brattleboro and Burlington.

According to the Vermont Department of Labor, 156 workers lost their jobs at Koffee Kup's Riverside Avenue bakery in Burlington, and 91 workers lost their jobs at Vermont Bread's bakery on Cotton Mill Hill in Brattleboro.

Employees did not have advance warning. Workers who showed up on April 26 were greeted with a closure notice on the door.

However, on April 1, a majority of the shares in Koffee Kup were purchased by New York City–based American Industrial Acquisition Corporation (AIAC), an investment firm.

According to a news release from AIAC Senior Advisor Jeff Sands, “For each of the last four years, Koffee Kup has suffered substantial financial losses and was unable to find a way out of their troubles.”

Sands wrote that Koffee Kup was in default to several of its lenders, but that the lenders allowed the company to keep operating under a forbearance agreement.

“Employees, lenders, suppliers and customers all went above and beyond to support Koffee Kup during that time,” wrote Sands. “In the last six months, the company was unable to find a new investor/operator who was willing to commit the resources necessary to bring the company back to health.”

By last week, Sands wrote, Koffee Kup had received default notices from lenders that would no longer extend credit to cover operating expenses.

“Although many promising avenues were explored that we were cautiously optimistic would have allowed Koffee Kup to survive, those efforts have now been exhausted without success and Koffee Kup no longer has sufficient capital to continue operations,” Sands wrote.

Started in a barn

Vermont Bread Company started in Guilford in 1978 with a pizza oven inside an 800-square-foot barn on a dirt road. Under the leadership of Lisa Lorimer, it grew into the largest baker of all-natural and organic breads in the Northeast.

Its bakery on Cotton Mill Hill had about 200 full- and part-time employees as of 2005, when Vermont Bread was sold to Charterhouse Group, a New York–based equity firm that merged it with Rudi's Organic Bakery of Colorado and the Adams Baking Corporation of New Jersey to create Charter Baking, the nation's largest organic and all-natural baking company.

There were few changes in the Brattleboro operation after the Charterhouse purchase, but Vermont Bread was sold again in 2013 to the Burlington-based Koffee Kup.

Vermont Bread and Koffee Kup, at the time the two largest commercial bakers in Vermont, seemed to be a good fit.

Founded in 1940, Koffee Kup was a longtime distributor of Vermont Bread's products in upstate New York and northern New England. Their product lines did not overlap, as Koffee Kup is best known for its doughnuts, English muffins, and hot dog and hamburger rolls.

Together, Koffee Kup and Vermont Bread's products reached more than 4,500 delivery points from Maine to Maryland. The company also baked “private label” breads for grocers in the Northeast.

As of press time, there was no word on the future of Koffee Kup's operations, or how many employees would be rehired in the event the bakeries reopen.

Resources for employees

On his Facebook page, Selectboard member Tim Wessel wrote that “Brattleboro has been blindsided by this abrupt closure at VBC, and this callous move does seem to be driven by outside investors.”

He said the town is “looking into ways we or other agencies can assist.”

A representative of the United Way of Windham County weighed in on a discussion on the public Brattleboro, Vermont Facebook group on Tuesday.

“For those who are waking up this morning feeling despair or unsure of what to do next, remember you can call 211 for resources,” wrote Brandie Starr, outreach and marketing associate for the social services nonprofit.

“Call unemployment when you have the time to just leave the phone next to you on speaker, because the wait will be long,” she advised. “Call 211 for help locating food in your community, and other resources, including talk in a time of crisis.”

Starr, who recently stepped down from the Selectboard, said the abrupt closing “feels unfair and undeserved.”

“Regardless of what business decisions were made, the lack of communication to employees was/is deplorable and dehumanizing,” she wrote.

Subscribe to the newsletter for weekly updates