Sugar Bowl finds its focus
July 1, 2012
by Shane Whitaker
When relocating all of its production to the East Bay less than four years ago, Sugar Bowl Bakery streamlined its operations, focusing on value and volume while dispatching variety.
“We want to be great at a few things and not mediocre at a lot of things,” said Michael Ly, vice-president and general manager of the Hayward, CA-based bakery. “If you do too many things, it’s hard to be great at any of them.”
That’s not to say that Sugar Bowl Bakery did not produce quality baked foods when it was making nearly every kind of sweet goods, including torts, tarts, fruit and cream pies, cookies, cakes, muffins, and much more for a wide variety of food service accounts. Its roots were firmly planted in the retail baking business, but the family company slowly transitioned into the high-volume wholesale arena with the success of its premium brownies and cookies.
Today, Sugar Bowl Bakery, which previously made more than 350 different products and sold at least 750 SKUs, produces only six bakery items.
As it did at its previous home in San Francisco, the company operates in two plants named for the streets on which they are located within walking distance from one another in an industrial district. The new plants are sited just south of the Hayward Executive Airport. Sugar Bowl initially acquired the 56,000-sq-ft Sabre facility in 2006 and moved its donut frying operations to this plant shortly thereafter.
In 2008, the company purchased the nearby Corsair plant, where it now produces Petite Palmiers, Petite Brownie Bites, Madeleines and Duets, a muffin-like dessert made with half brownie and half madeleine cookie batter. At its Sabre plant, Sugar Bowl makes only Old-Fashioned Donut Gems and Apple Fritters.
Sales of Sugar Bowl’s products continue to grow 20 to 25% annually, according to Andrew Ly, the company’s president and CEO. Although the company’s overall yearly revenues dropped after divesting its food service business and retail locations, he reported that Sugar Bowl’s annual sales once again surpassed $40 million this past year.
Cost + quality = value
Sugar Bowl Bakery offers premium products at a great value, according to Michael, noting the company’s commitment to manufacturing the highest-quality baked foods using a limited number of superior ingredients.
Although the bakery takes pride in the cost of its products, he pointed out that its prices are not always going to be as low as those of its competitors. “You can’t compare a product made with butter versus one made with margarine,” Michael said. “Value is not only price. Value is what you get for the price, and even though our price is a little higher than the general market, the quality is a lot better.”
While many families may not eat out as often because of the current economic situation, Andrew said, they are still looking for ways to reward themselves, and Sugar Bowl Bakery’s sweet goods provide the small indulgences these consumers desire. He also noted that people feel proud bringing Sugar Bowl’s products to their parties, and the company wants to offer the value to allow them to do that.
For example, its package of 28 Madeleine cookies retails for $6.99, which rounds to about a quarter per cookie, and Michael noted that its cookies are basically the same, if not higher, quality than those for which consumers would generally pay $1 per cookie at most bakeries and coffee shops.
In addition to value, the company also wants to increase its volume. “We know that if you don’t have a good value, you can’t drive volume,” he said.
To improve value to consumers, Sugar Bowl Bakery generally sells its products in large packages. Recently, a retailer wondered whether the bakery’s 32-oz package of Petite Brownie Bites priced at $6.99 would be too costly for its shoppers who were used to a smaller product with a lower price point. However, the Petite Brownie Bites became one of its top sellers. “Once we got that proven success, they were willing to bring in the Madeleines and Palmiers,” Michael said. “They learned that there is a market for premium baked goods and those consumers are willing to pay a little extra for them.”
Taking care of customers
Sugar Bowl Bakery’s sweet goods can be found at 15 of the Top 25 US retailers and distributors. “That is a huge difference from where we were in 2008 and is something we are very proud of,” said Tinamarie Bent, national sales manager.
Although its products are sold in more than 7,000 stores across the US and abroad, the company still has only about 10% market penetration nationally, according to Michael. “We know our products are very good,” he added. “It’s just a matter of time before we gain more market share.”
Sugar Bowl Bakery could be looking at opening another bakery closer to customers on the East Coast should its business continue to build.
“Our goal is to be one of the best-run bakery operations,” Michael said. “If you have a world-class bakery, then your customers know that you are committed to taking care of their needs.”
Sugar Bowl Bakery was built on a culture of continuous improvement. “We are not satisfied standing still,” he said. “I can’t say exactly where we will be in five or 10 years, but I know we will be better than where we are now. If you look at our nearly 30 years of history, every year we have done better than the previous year.”
The company’s ability to adapt and change has led to its success. “We always look for improvement,” Andrew said. “Improvement is the moving target. But whatever happens, we will always stay focused and do the right things.”
As Michael said, “We never knew 20 years ago that we would be making Madeleines or Palmiers. But the fact that we are product-loyal and always want to do what is best for the company is what makes us successful.
“It’s amazing what you can do if you are always looking to improve,” he continued. “You do your best. You hire the right people. And in return, revenues increase, quality increases, safety increases, efficiency increases, and your customer list increases. After time, you get exponential growth because of those underlying core principles.”
In addition to its focus on customer service and making great products, Sugar Bowl Bakery’s efforts to reinvest in the company’s future propel its success. “If you look at the past four years, with one of the worst recessions in this country, we invested more than $20 million into our future,” Andrew said. “As the economy starts to pick up, the future of our business is going to be very bright.”
Quality to its core
While Sugar Bowl invests to improve efficiencies, it will never cut corners or sacrifice the quality of its products. “Quality will always keep doors open for us,” Andrew said.
Therefore, quality stands at the forefront of any capital investment, according to Steven Alman, operations manager. “The No. 1 thing we talk about with our suppliers is that we don’t want to compromise the process or procedures. And if we must, we make sure that we don’t sacrifice any of the quality and goodwill that we have built into our products,” he said.
Mr. Alman said he had never seen a manufacturing staff like Sugar Bowl Bakery’s who “had a very core knowledge of the bakery techniques that need to go into quality.”
He also praised the company’s communications system for making everyone aware should issues arise and allowing all to participate in the decision-making process. Communication breaks down when different parts of a company such as production and distribution are not working together, but “within this company, you don’t have that situation,” Mr. Almond said.
To help Sugar Bowl become even more efficient, Mr. Alman initiated lean manufacturing concepts designed to remove waste. “It eliminates the frustration that people take home with them from work,” he said. “You can work with less downtime, and you also are saving energy because you can produce more products on a cost per basis.”
Updating with automation
When relocating, Sugar Bowl moved much of the equipment from its previous plants in San Francisco — some it continues to use and others sit idle. However, the company purchased millions of dollars in new equipment, including a new automated line for the production of Petite Brownie Bites, Madeleines and Duets at the 58,000-sq-ft Corsair facility, which dedicates nearly 38,000 sq ft to processing and packaging.
“We knew [purchasing this new line] was a risk, but we knew it was even a bigger risk to not try and become more efficient and have the lowest cost to produce these items,” Michael said.
Processing on the Line No. 1 starts in a Tonelli high-speed planetary mixer, producing 900 lb of batter per batch, which in turn, makes more than 14,000 brownie bites. A Savage Bros. butter melter prepares this ingredient and pumps it automatically to the mixer.
After mixing, the removable mixing bowl is rolled adjacent to the line, and a pump pulls the batter into a hopper located above a Hinds-Bock high-speed multipiston depositor. Batter is portioned into silicone-glazed pans that then travel along Capway Systems conveyors. At the Capway oven loader, pans are aligned and fed into a C.H. Babb air impingement tunnel oven, which features 12-ft-wide by 55-ft-long useable hearth.
The bakery chose this oven after completing baking trials at the manufacturer’s technical center. The oven’s variable-speed circulation fans deliver heated air through adjustable top and bottom distribution ducts, reducing bake time and enabling greater control over the products’ finished appearance, color and moisture, according to its manufacturer.
After baking, a Capway depanner uses a vacuum to remove the brownies and place them on adjacent modular plastic conveyor belt to an IJ White spiral cooling conveyor. Kevin Ly, R&D/equipment manager, said the spiral system extended the shelf life of brownie bites by nearly 20 days because it cools the products faster and more uniformly than when done on racks.
“You don’t have to just add a bunch of preservatives to make baked foods last longer; you should look more into processes,” he said, noting how changes in cooling had a major impact on a its product’s shelf life.
In the packaging area, arms on two high-speed robot systems pick up the cooled, randomly oriented pieces and place them into plastic trays. Each pick-and-place system has three delta-style robot arms, which together can package approximately 800 pieces per minute.
The packaging robots represent Sugar Bowl’s most recent investment on this line, and enable the bakery to minimize human touching of its products. Final adjustments were being made to the robots during Baking & Snack’s visit in March. This large technology investment enabled the bakery to minimize human touch on its products.
A Seal-a-Tron shrink packaging system secures a band around the lid, and packages travel through an Eriez metal detector before being loaded onto display-ready cases or into boxes.
When the company makes Duets on this line, a second accurate, high-speed depositor handles portioning of the second batter.
The bakery also makes Palmiers at this facility; however, production of these cookies is not nearly as automated as the Line No. 1. Spiral mixers create dough for these products, and a dough chunker lifts dough pieces into the hopper above the sheeting system that extrudes the dough into a wide sheet.
Another pump lays a thick strip of butter down the center of the dough sheet, which then folds around the butter, creating a dough book. The dough books are cut and folded onto sheet pans, where they rest prior to being hand-fed through sheeting rollers that laminate the dough.
Dry material dispensers layer sugar across the dough sheets before they are fed through the reducing rollers, and then the workers fold the dough sheets and again run them back through the sheeter. More sugar is spread across the dough, which glistens by the time this step is completed because of the sugar. These layers of sugar will caramelize during baking.
After being worked for a while, the dough is again placed on a pan to rest before being formed and cut by a guillotine into its final cookie shape. The cut cookie dough pieces spend at least 6 hours in a freezer before they are loaded onto the oven band. Freezing the dough slows down baking for a more even bake.
Sugar Bowl Bakery plans to invest in new equipment to further automate production of Petite Palmiers in the future, according to Michael.
While similar in size, the Sabre plant has less than half the space of the Corsair facility dedicated to production and packaging. This plant features a Belshaw donut line that portions and fries donut gems. Apple fritters, generally packaged in 4-packs, are portioned using a Reiser Vemag and then fried in one of a dozen Avalon batch fryers. Both products receive a coating of glaze after frying, and the products are packaged and go through a metal detector prior to loading into cases.
Sugar Bowl remains committed to its roots of making high-quality premium baked foods. But the company also has begun investing to make its processing and packaging operations more efficient, which, in turn, allows it to provide even greater value for its customers.
“Good marketing opens the doors; great quality keeps the doors open,” Andrew concluded. “These innovative machineries will allow us to make quality products extremely efficient and consistent and will always allow us to give that value to our consumers.”