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Sweet Struggle

In its critical season, Termini Bros. looks for the right recipe to survive tough times.

Vincent, left, and Joseph Termini in front of their family's store. Many Philadelphia small businesses like Termini Pastries are struggling in the tough economic climate. (Michael Bryant / Inquirer)
Vincent, left, and Joseph Termini in front of their family's store. Many Philadelphia small businesses like Termini Pastries are struggling in the tough economic climate. (Michael Bryant / Inquirer)Read more

The young Termini brothers - Joey and Vinny - had planned this meeting to pump up their employees for the furiously busy holiday baking season.

They knew that the economic news was horrible and that their staff, a multicultural stew of immigrants and locals, was worried. We're family, the brothers would say. We're going to do everything we can to get you through this.

But as they met with the staff early in November, a barely contained Joey Termini was all tough love.

Someone had used the wrong-size cutter on a cake that morning. The mistake meant that the foundation pieces for 225 servings of a dessert for a major banquet client were too small.

Joey and Vinny, the third generation of Terminis to lead Termini Bros. bakery in South Philadelphia, discovered the problem after the pastry had passed through several hands. What followed was a frenzy of baking and decorating so the client would get the dessert - in the right size - on time.

"If something doesn't come out right, I can't sell it, and if I can't sell it, we lose money on that product," Joey said, his hands resting on a wood-topped table his Italian immigrant grandfather had used. What would happen, he asked, if the bakery had sent out the wrong cakes and lost the account?

"We charge a premium price," he said. "The product has to be premium, too."

As his stone-faced crew crowded around, Joey emphasized that the bakery was heading into the holidays, the time that would make or break its year. Sixty percent of the business comes in the last three months. With the economy diving, no one could afford mistakes.

"This economic environment is a scary, scary time right now," he said. "We've never seen anything like this before."

The price of pignoli

Joey, 35, and Vinny, 30, are facing the biggest business challenge of their lives. In the last few months, powerful economic forces have whipsawed their business, a family-owned bakery with five outlets, a mail-order division, and some big catering clients.

First there were skyrocketing prices. Sugar. Eggs. Flour. Pignoli (pine nuts). Fuel for their delivery trucks. Everything was up. A lot. The brothers spent an extra $85,000 on ingredients during the first eight months this year, a 30 percent jump. The big question was whether the Terminis could hold the line on prices. They were well aware that their cakes and cookies - beautiful and rich as they are - are not a necessity.

Then the mortgage crisis hit. And the credit crisis. Stocks tanked. Layoffs, foreclosures and bankruptcies started dominating the news. Frightened consumers held on to their cash. Experts warned of a dismal holiday shopping season.

Around the country, bakers have had to raise prices and lay off workers, officers of the Retail Bakers of America said.

Now fuel and some ingredient prices are dropping, albeit more slowly than they rose. That takes some pressure off, but the brothers are approaching Thanksgiving and their biggest day - Christmas Eve - with no idea how their sales will be affected.

So far, business is holding up, but Joey is seeing some "tweaks." The big Italian cream cakes - $40 - aren't selling like they used to, and couples are choosing less elaborate wedding cakes. In the stores, customers are going for $2 cake slices instead of $4 pastries.

Joey and Vinny have little doubt that the holidays will bring back their faithful customers, the ones who take their Termini's tradition so seriously they line up outside in the dark on Christmas Eve to pick up their cannoli.

The Terminis are counting on people like Gregory Roberts, a retired corrections worker. Roberts went to the South Philadelphia store last week from his home in Abington for an Italian cream cake, vowing to share his 10-pound treasure with no one but his wife. Was the price too high? "Not for this," he said.

But what if customers buy less? What if companies that purchase Termini's cookies as presents for clients - companies that aren't buying with their hearts - cut back?

This was what worried Joey and Vinny as they urged their workers that afternoon to make every moment count, to scrape out every drop of beaten eggs, to make sure there was always something in the energy-hog oven, to imagine every cake they made at the center of someone's holiday table.

The bakery supports 50 people now, 50 people with homes and families. The Terminis have never laid off an employee, and Joey and Vinny don't want to start now.

Family, tradition

The original Termini brothers, Giuseppi (Joey and Vinny's grandfather) and Gaetano, founded Termini Bros. bakery in 1921, in the boom before the Depression. Those were simpler times, and the men, toughened by war, lived with their families above their store on Eighth Street near Tasker. They worked from 6 a.m. to midnight, by then so tired they could barely climb the stairs. They couldn't afford an employee until the 1940s.

Giuseppi, known as Joe, passed day-to-day operations to his son, Vincent, in 1976 but worked until 1994, when he was 95. Longtime employees and customers have known Vincent's sons, Joey and Vinny, since they were children. They are Vincent and Joseph to friends outside, but have not been able to shake their little-boy names at the store.

Now wiry men who look much like their grandfather, they started running things after graduating from college: Joey from the food-marketing program at St. Joseph's University and Vinny from the Culinary Institute of America in New York.

Their mother, Barbara, 62, still has a hand in the financial operations, and their father, 70, runs a cafe across the street. The brothers consult their parents on all major financial decisions.

For such young men, Joey and Vinny are intensely traditional. They grew up in the bakery, enveloped by a family pride so intense they never considered working anywhere else. They create new products, but their grandfather's recipes for Italian cream cake and cannoli are untouchable. They believe in hard work and top-notch ingredients. They use credit sparingly, a habit they say is serving them well.

They think they're positioned to weather the downturn. As their neighborhood has changed from Italian to a mixture of longtime residents, Hispanics, Asians and young professionals, the Terminis have opened stores near the stadiums, in New Jersey and, most recently, in the upscale food court at the new Comcast Center. They started a mail-order division and sought more wholesale customers.

After ingredient costs began rising, Joey and Vinny, who bid out their orders quarterly, started buying larger quantities. When a supplier told Vinny in the summer that 50 pounds of sugar would go from $20.50 to $28.50, he bought six skids (15,000 pounds) to lock in the lower price. That was soon used up, and Vinny paid $23.95 for sugar that was delivered last week.

Knowing that some customers are hurting, the Terminis are offering cheaper alternatives, such as the cake slices. During the World Series, the bakery made simple cupcakes decorated with the Phillies P. Thousands were sold.

The markup is higher on the smaller fare, so the brothers can maintain their profit even as patrons spend less.

Now they're in new territory, with no way of predicting how much people will buy this week and next month. Customers might buy more because they're eating at home more. Or they could trade down to grocery-store bakeries. Or cake mixes.

Food usually does well in bad economic times. Pat Pilla, the vice president for sales of a Cherry Hill bakery-supply company, Puratos Corp., said he thought a recession would be easier for bakeries than rising ingredient prices had been. He called the last 18 months the most difficult he had seen in 30 years in the business.

Bakeries that will survive run a "tighter ship" and do a better job of separating themselves from the competition, added Vikram Verghese, Puratos' vice president of marketing. "They're the ones who always come through in tougher times."

The Termini brothers see little choice but to make the usual amounts and see what happens. They won't be surprised if business is up - or down - by 20 percent.

One thing they won't do, they say, is cut corners with inferior sugar or pignoli. Quality, they said, is the core of their brand, what keeps their customers coming back.

"I think we're going to get through it just fine," Vinny said one morning as he sipped coffee at his father's cafe.

"People really feel if they're going to eliminate things from their Christmas table or Thanksgiving, it sure isn't going to be Termini's."

Joey worries that corporations, about 15 percent of his business, will cut back, but said he thought individual customers were hooked. They might buy fewer cannoli, but they'll buy.

"If Uncle Steve comes home with his Acme cannolis, they're going to throw him out."

Famed for cannoli

Wedding cakes and cookies were the bakery's mainstay during the Depression, but starting in the 1940s Giuseppi and Gaetano built their reputation on the cannoli, a sweet, sturdy hunk of Sicilian soul food they sold for 15 cents.

Today, the crunchy cylinder of deep-fried dough filled with sweetened ricotta or cream remains the backbone of the business, priced at $3 - same as last year.

The bakery sells thousands every Thanksgiving and Christmas, stockpiling unfilled shells in 150 plastic barrels - 850 cannoli per barrel - before the holiday hordes arrive. In a stroke of bakery theater, salesclerks squeeze filling into the shells from hanging bags only after a customer places an order.

This fall, the bakery made 5,000 shells a day in the back of the Eighth Street store, where all the baking is done. The baking crew worked quietly, concentrating on its production goals, which are spelled out in two-hour increments by the Terminis.

The shells are, literally and figuratively, the hard part. The dough is just flour, a little seasoning, shortening, and the surprise ingredient: burgundy. It's a tough concoction, and it takes power to roll it into quarter-inch-thick sheets. In the early days, Guiseppi lugged a bag of dough to a bakery five blocks away to use its dough sheeter. Now the Terminis' $25,000 sheeter rolls and cuts the dough into discs.

The discs are wrapped by hand around maple dowels, with the dough's edges glued together with egg wash. Then the wrapped dowels are immersed for 40 seconds in vats of 400-degree shortening. Not that it's timed; they just know. The shells emerge from the fat looking a little like hard tacos with the pox.

Precision is key. If the egg wash is brushed on sloppily, the shells stick to the dowel and break when the wood is removed. If the bubbles that dot the cookie's surface are too big, the caramel-colored shells break in the barrels and must be used quickly.

On a recent rainy day, Joey didn't like what he saw. Too many big bubbles. He conferred with his head baker and sheeter. They concluded the weather change was to blame and made adjustments.

Problems such as that lead to waste and dissatisfied customers, Joey said. The bakery can afford neither.

Hopeful for the holidays

The Terminis were hopeful last week. Corporate business was holding up, although, as Barbara Termini pointed out, many of the groups they were feeding had scheduled their meetings a year ago. The first big mail orders for cookie tins had started coming in.

The bakery cranked out cookies all week and shifted to Thanksgiving pies on Friday, especially their most popular ones - coconut custard, pumpkin, apple and banana cream.

Joey agonized over how many to make. He thinks individuals will buy fewer pies this year, he said, but the bakery still might sell more because of the new Comcast Center store. He settled on 2,500, a few more than last year. If demand is higher, he'll just pour on the work this week.

"I can stay all night and make pies with my brother" and the crew, he said, "and they're willing to do it. Our philosophy is and always has been: 'Whatever it takes.' "

As he told the staff during the meeting that afternoon, he's confident the bakery will be fine.

"We're going to be here for a long, long, long time," he said after he finished lecturing about the poorly cut cakes. "Long enough for your grandkids and my grandkids to still be here."

A Big Shopping List

Termini Bros.' baking needs from Labor Day to New Year's:

Ingredient Pounds

Granulated sugar 62,000

Flour 40,000

Ricotta cheese 18,000

Shortening 15,000

Egg whites 10,000

Cream cheese 6,200

Pignoli (pine nuts) 6,000

Brown sugar 6,000

Chocolate 1,200

Milk (gallons) 1,800