BALTIMORE, MD — In Baltimore, the fourth generation of a family long known for commercially producing baked goods along the Eastern Seaboard is about to do things a little differently at Kneads Bakeshop by H&S.
In 1943, the H&S Bakery was founded by Greek immigrants, Harry Tsakalos and Steve Paterakis. After a decades-long relationship with McDonald’s and acquisitions that led to the successful entry into the retail market in the early 2000s, the H&S Family of Bakeries is still owned and operated by the Paterakis family.
Coming through the ranks is the fourth generation of Paterakis leadership, affectionately known in the company and family as “Next Gen.” And this group is looking at bakery through a new lens.
The Paterakis Next Gen — brothers Shawn and Ryan Paterakis, director of sales and operations and director of national sales at H&S, respectively; and siblings Adam Paterakis, corporate operations director at H&S, and Kira Paterakis Nissley, leasing and special projects manager for Harbor East Properties, a Baltimore-based property developer and Paterakis family business — started to question the way things had always been done. They looked at American consumption habits and wondered if there could be a new way to make and market baked goods.
For 80 years, the H&S Family of Bakeries has successfully fed the masses through commercial baking. But the artisan market is on the rise, and the Paterakis Next Gen has taken notice.
Needless to say, they’re shaking things up a bit, and their questions have sparked intelligent reflection but also a new opportunity.
“Our parent company has supported these customers through strong, long-standing relationships,” Adam said. “Our customers kept growing, so [H&S] kept growing. We became a product of the evolution that is a high consumer market. But when [Next Gen] took a step back, reflected and asked ourselves, ‘Should we take part in the artisan world?’ We always found ourselves saying, ‘Yes, we should be there. We have the expertise to be there because it’s in our roots.’”
Those roots go all the way back to the first loaves of bread made in the basement of a Baltimore rowhome in the ’40s, but the inspiration for these young executives came from the H&S outlet store, located on Fleet Street just outside the company headquarters. For years, it’s been a great resource for the community, but the group felt that bread could tell the story better.
From the Paterakis family legacy, Next Gen set out to create the first H&S spinoff.
After extensive due diligence, Shawn, Ryan, Adam and Kira presented a Shark Tank-style pitch to H&S leadership, complete with mockups of what the artisan bakery would look like, a pro-forma P&L with sales estimates and cost analysis, and a mockup of labor models.
At last, the concept was approved, and Kneads Bakeshop by H&S was born. This marked the first time that all four came together on one project, taking on the titles of Kneads co-owners.
With Adam’s product development and operations expertise, Shawn’s sales and business acumen, Ryan’s marketing savvy, and Kira’s property development skills, the team was unstoppable.
“For Next Gen to work together on something like this was not only good because we were all passionate about it and believed in this concept, but also because this is the future,” Adam said.
“We get to interact and collaborate and develop these skills that will be necessary for the long haul as we get more involved in growing this business.”
The Baltimore area is seeing smaller bakeries pop up on corners throughout the city. For this team, the timing is perfect to capitalize on the opportunity to stand out in a space that is competitive but not yet saturated.
“It’s a burgeoning new idea in the US in recent years, but people want to experience Old World breads that Europe has been doing for decades,” Ryan said. “I’ve always been excited to sell something that has this kind of artistry behind it.”
When the doors officially opened to the public in March, people were treated to 17,000 sq. ft. of retail space that includes a walk-up counter for ordering from a full menu of bakery and cafe items as well as gourmet coffee.
With hours of operation running 7 a.m. to 7 p.m. daily, Kneads also offers light-fair dinner, including tapas and charcuterie, as well as wine, some craft cocktails, and — of course — bread all day.
Grab-and-go options are also available on the main level in a marketplace-style area, and to-go orders can be picked up at the window of a classic H&S Family of Bakeries bread truck replica mounted on the wall in the back, where an Instagram-worthy mural reads, “All you need is loaf.”
Behind that truck window, Kneads uses the Toast POS platform for to-go and carryout orders, and customers can also pick up through a streetside window. Dine-in seating is available inside or on the patio, as well as on the mezzanine level where there’s a bird’s eye view of breads, pastries and other baked goods being made on workbenches and a semiautomated line. That state-of-the art production space provides bakers like Tyler Vegetabile, Kneads’ head baker, with every tool a baker could want.
Adam had a keen awareness of what resources were needed to produce hundreds of artisan baked goods ranging from fermented breads to laminated pastries, donuts and more, thanks to the knowledge he gained from years working in operations for the larger H&S production.
“As I’ve continued my bakery education, especially around ingredient functionality, I sort of stumbled into artisan and developed this natural curiosity,” Adam said. “In this bakery, I’m able to live out that curiosity. I’m the type of person who likes to get my hands dirty, so to speak, so I love getting in here, running the laminate and really understanding all the equipment. I like to learn, and this is the best way for me to support Kneads’ success.”
This story has been adapted from the March | Q1 2023 Craft to Crumb mini-mag. Read the full story in the digital edition.
