The $2 Billion Fortune Behind King’s Hawaiian Rolls

Forbes

The family behind the famed sweet rolls built a lucrative food empire in the United States. Now with the third generation in place, they’re hungry for more success.  Read the full story on Forbes: https://www.forbes.com/sites/chloesorvino/2024/02/08/meet-the-billionaire-family-behind-kings-hawaiian-rolls-mark-taira-interview/?sh=3effbc4962b0  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 [MUSIC]

00:03 Every hour, six days a week, 13,000 pounds of King's Hawaiian bread is baked at

00:08 their plant in Torrance, California.

00:10 Those signature buns generate an estimated 85% of the $900 million

00:16 in annual revenue that the King's Hawaiian Food Empire brings in.

00:22 It's an impressive haul for a food company,

00:25 where gross margins typically hover around 30%.

00:28 Especially considering the King's Hawaiian recipe calls for

00:32 some 12 key ingredients, which is three times as many as other breads.

00:37 And some of which can only be sourced from the original suppliers in Hawaii.

00:42 Led by Mark Tyra, the 67-year-old son of the bakery's founder and

00:47 the CEO since 1983, King's Hawaiian only has a few competitors that do even better.

00:55 But eking out a few extra cents isn't a priority for Tyra,

00:58 who has no outside shareholders.

01:01 That enables him to live by one of his father's best pieces of advice,

01:06 never be greedy.

01:07 It's wisdom that has served him well.

01:10 Through King's Hawaiian,

01:11 the Tyra family has achieved a classic American story of success.

01:16 When Tyra became CEO at 27 after his father,

01:19 revenue was $3 million annually, about $9.5 million today.

01:25 Under Tyra's leadership, the brand has found a massive cult following.

01:29 And the modest family business has evolved into an acquisition-hungry home for

01:34 emerging brands.

01:36 They have also started a Hawaiian-inspired restaurant concept,

01:40 all while remaining 100% family-owned.

01:43 Forbes estimates Tyra's extended family is worth $2 billion.

01:47 [MUSIC]

01:52 The King's Hawaiian journey began on a sugar plantation on Hawaii's Big Island.

01:57 There, Robert Tyra grew up the sixth of nine children born to immigrants

02:02 from Okinawa, Japan, who came to work the sugar cane fields in 1906.

02:08 After World War II, young Robert became a translator stationed in Japan.

02:13 Upon noticing how happy people were when biting into baked goods,

02:17 he realized he wanted to become a baker and

02:19 enrolled in baking school once he was back in Hawaii.

02:23 His father cashed out his life insurance policy worth $350,

02:27 or $4,500 today, to help launch his son's store.

02:32 With used equipment from military surplus,

02:35 Robert's Bakery opened in 1950 in Hilo, Hawaii.

02:39 The bake shop, also known for its chiffon cakes with tropical flavors like guava,

02:43 passion fruit, and lime, regularly had lines down the block.

02:47 Shipping to the mainland grew into a steady business.

02:51 King's became the Honolulu Post Office's top customer,

02:54 shipping tens of thousands of loaves a year.

02:57 Aiming to reduce the transportation costs of shipping loaves to the mainland,

03:02 Robert and his wife, Tosqueno,

03:04 mortgaged the family home to build a bakery just outside of Los Angeles.

03:09 In 1977, the production facility opened at a cost of $3.7 million,

03:14 or $18.7 million today.

03:17 The only problem?

03:19 The factory hadn't signed any mainland customers.

03:22 So Robert hit the pavement.

03:23 Two years of cold calling buyers and dropping off samples later,

03:27 the bet on themselves paid off.

03:29 In 1979, Safeway became King's first national account.

03:34 That was progress.

03:36 But the brand didn't really catch on until Robert and

03:38 Mark made a fundamental change to their signature product,

03:42 ditching loaves for shareable rolls.

03:45 They spent months cutting and rounding dough by hand

03:48 before landing on pull-apart sweet rolls.

03:51 Their signature 12-pack launched in 1983.

03:54 [MUSIC]

04:00 Hungry for more, the Tyra family pushed east to Georgia.

04:04 He built a state-of-the-art 120,000 square foot factory outside of Atlanta in 2011

04:10 with a $65 million loan.

04:13 King's Hawaiian could finally deliver rolls, baked, then immediately frozen,

04:17 to keep them fresh, to northeast markets like New York,

04:21 profitably for the first time.

04:23 Now, King's Hawaiian is eyeing events like Super Bowl,

04:27 Mark Tyra wants Slider Sunday to be the new Taco Tuesday,

04:31 as well as grilling holidays like Fourth of July and Labor Day.

04:35 Customers are buying rolls all year long.

04:38 A decade ago, some 60% of annual sales came from Thanksgiving,

04:42 Christmas, and New Year's.

04:43 Now, it's 40%.

04:46 Rather than being acquired, Irresistible Food Group is the one that has been doing

04:50 the buying.

04:51 Under John Linehan, who is the holding company's CEO,

04:55 in the last three years, Irresistible has spent around $100 million combined

04:59 to scoop up Boston-based Grillo's Pickles, where sales doubled since the acquisition,

05:04 Innovation Bakers, a supplier to Southern California's 7-Eleven locations,

05:10 and Hawaii-based Shaka Tea.

05:12 Irresistible also invested in Honey Mamas, the refrigerated cocoa truffle bars,

05:17 and mochi ice cream maker Mochi Doki.

05:21 With the business now in its third generation, the Tyras say they will continue

05:24 to rebuff outside investors and acquisition offers, and that King's Hawaiian will

05:29 remain family-owned.

05:30 Tyra believes Irresistible could soon top a billion in sales.

05:34 To get there, the company needs to sell more rolls, pickles, cheese,

05:38 and a fair amount of new products too.

05:40 A third of American households now eat some version of Irresistible's food,

05:45 but there's always room to grow, and not only in the US.

05:48 Costco's 27 locations in Japan now sell King's Hawaiian rolls.

05:52 It's bread is also sold in Canada and in 14 Central American,

05:56 South American, and Caribbean countries, as the Tyras eye Germany,

06:01 the United Kingdom, and more.

06:02 ♪ [music] ♪

06:05 ♪ [music] ♪

06:08 [BLANK_AUDIO]

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