Betting on the new local economies: I'm expanding my business

I own a small bread bakery in West Philadelphia. My business is expanding in a shrinking economy and consumer spending. Why? Keep reading and have a peek at the bright future that is ahead of us; even if it's a challenging road to get there.



A bit about my bakery. I started this bakery in my house with 15 people on an email list. I just sent out a weekly email and said "this is what I'm baking; pre-order and pickup your order on Friday on my front porch." Hand-made sourdough breads, locally grown organic whole grains, milled at the bakery, local ingredients mostly.

Grass roots expansion. The word spread quickly taking on a life of it's own, seemingly totally beyond my control; and the bakery operation slowly crept into my basement with the addition of more ovens, sinks, refrigerators, etc. Seeing the writing on my bare basement walls, I began to look for a real commercial kitchen and spent 1 1/2 years planning and renovating a small space in an existing local cafe to put my bakery; I moved the bakery, got all the required permits and certifications.

Since moving into my own commercial kitchen, I have kept the same business model that I started with: direct sales to people through internet order forms; slow growth with the goal of building lasting connection and loyalty with a strong customer base; high margins (revenues minus costs) and low volume.

Here is a nicely edited video of the bakery move from the basement. We moved the entire contents of the bakery with bicycles, no trucks.



Sustainable Business model. I have been convinced that the high volume, low margin business model is going to very problematic in the emerging economy. The key is flexibility. When low margins, small changes in supply costs (like the huge spike in food prices last year) puts the whole business model in turmoil. I was able to ride the spike in food costs without raising my prices, because I had high enough margins on my products to sustain the changes without changing my business model.

Instead, I got creative. I found new markets for my products and invested in sustainable packaging (reusable bags), used barter and bicycle transportation for delivery, and almost eliminated waste in the bakery. For example, I create only one home-sized trash bag of garbage a month; the rest of my "waste" in composted or recycled.

When the recession hit, I added an option on my order form to donate bread to hungry people. My customers can now donate $1 to $40, or more, to an account that use to give away bread to people. I have matched most of the donations, but essentially the program allows my customers to support the bakery in baking fresh quality bread for people who need bread. A comment from a hunger organization I am working with:

Thank you for your generosity with Intercultural Family Services. Myra and Kim told me how much the families loved the bread and sweets you provided. Oftentimes, people in need of food are used to getting the food that no one else wanted or expired foods. When you are hungry, you usually eat it, because that is all that you have. When you give someone good, wholesome food prepared with care, as you did, I feel that you are also nourishing them with dignity. Thank you again.

And now expansion. This week I am launching a daily fresh croissant and bagel delivery for area cafes and small sweet shops in a 2 mile radius in West Philly. This is a major expansion for my small bakery which will, if all goes well, double or triple my overall sales in just a few months. There is great support in my neighborhood for this venture, and I'm marketing it as a way to help fix the broken economy. Invest in your local economy; in businesses whose CEO's live in your community, send their kids to the same schools as yours, who really care about the employees and where the waste they create ends up. This is the way of the future; and I'm investing and betting on it.

I'm lucky I live in an supportive community for this venture. The local food economy here is strong and growing.

Our collective future. Any stimulus package needs to include motives for small businesses like mine to expand, hire people, and support the community that hosts them. It's the key to our long term future. I don't reject the "global" economy, as long as it's firmly rooted in a strong decentralized local economic engine that builds on the benefits of having access to international trade. We have gone into depending on the global engine as our food; but we are going back to building at our roots. Local, small businesses is the future. And there is great hope; even if the times are challenging. Thanks for listening.

Here is an effort to get you hungry; I'm just a small time baker after all is said and done:




*Update: Here is a link to my web page; many a commenter has been asking: www.fourworldsbakery.com

The most efficient bread machine is really simple...and cheap

Occasionally I get email newsletters from the baking industry. Little of what I see there is relevant to my little bakery; but occasionally I will follow some links to see what's going on out there. This article had me laughing so hard I was forced to stop myself from laughing because I wasn't getting enough air. It's certainly not meant to be funny; but it's so utterly incomprehensible, even to me as a baker, that I forgot I was reading about a bread machine. Here is a taste:

Pan bread systems have evolved in the last few years to use extrusion on a wider variety of products. “By using multiple metering pumps on the ADD Divider, AMF has been able to increase extrusion line speeds while reducing the work on the dough,” says Larry Gore, AMF Automation Technologies, Richmond, Va. “This has broadened the range of bread styles that can be made using extrusion, and further reduced the cost of production by increasing scaling accuracy and minimizing maintenance.” For those breads that still require volumetric dividing, AMF's new servotech divider and Cycone rounder package uses precise feedback from the servo controls on the ram and knife to accurately scale with minimal pressure.

In other words, they are trying to get their robotic machines to be gentle on the dough and actually scale the dough accurately; without beating up the pans so much they have to be replaced constantly. You know .... trying to replicate the most efficient and effective machine for making bread: Hands!!!

And ... oh yeah ... we could actually hire people with hands to make it.

The making of a wedding challah

I got my first order for a festive wedding challah and we had a blast baking it. Here is a picture of the happy couple (Zoe and Ken) on their wedding day yesterday, just before saying the blessing over the challah.

This loaf is 3 challah, stacked on top of each other. The tricky part is stacking them in such a way that the top braids don't fall off; and of course, we don't want the whole thing to topple over in the oven during the oven spring.

It worked. Just after they came out of the oven with the proud bakers:

We baked two of them. One we are dehydrating. After it's dried out, we are going to shellac it (to seal out moisture) and use it as a decorative display piece for the cafe. Come by the bakery at 4423 Chestnut and take a look. I will update this posting with a picture of it displayed at Kaffa Crossing when it's up.

This challah was just as delicious as all the Four Worlds Bakery challah. Here is the proof:

This was not staged. I just happened to found him all by himself communing with this challah. And I just happened to have a camera in my pocket. Really! I promise!!

The future is here: Four Worlds Packaging System

I have spent over two years focusing on the substance of the Four Worlds Bakery product; but until recently, I have put very little attention into packaging. The substance counts big time, but proper outside packaging is necessary in creating a successful product for any market. This week, we are launching the first big leap into a new bakery packaging system. I am writing this to give the details, illuminate the big picture and to invite your efforts to make this work.

The Big Picture. It will take extra effort from all of us to make this work. Although this is just a small step in solving many of our societal problems, this micro-effort is a large symbolic step for the future of business practice: our success will be an inspiration and model for other such efforts in the future. As our economy changes, so must our business and consumer practices. Creating waste no longer makes sense in the emerging economy. But we have to give up some conveniences and put forth some effort; and invest in a long-term waste reduction program. So I invite you to be part of this small effort.

The bakery is making a very large initial financial investment into this system (I had to put up $1200 just to print and buy the bags; and I had to buy labels, tags, washable containers, extra labor in managing the system, new shelves to physically store the bags, etc.), but in the long-term, we save big money in packaging costs. This means increased margins for the bakery products and reduces the likelihood of price increases with inflationary pressures; and might even result in price decreases while other bakeries will be raising prices. As the price of disposables go up, our costs will not be as affected. Our goal is to prove that eliminating waste is not only morally right, it makes financial sense. But we have to break out of the micro-consumer lens of seeing every transaction in isolation; we have to look at the big picture. And we have to be willing to look at and confront the costs of the waste we create with every purchase. This system is such an opportunity because you will have to do your own math and decide what makes sense for you.

The packaging system...the details. The system is quite simple. You pay a one-time $10, non-refundable, fee to get into the system; you opt-in to the system via the online order form, the next time you order. We tag 3 reusable logo-printed bags (pictured) for your exclusive use and we will pack your orders in your bags only. The bakery will technically own the bags, but will grant you exclusive use of the bags tagged with your name. The bags are made of 100% recycled materials; are 100% recyclable, washable, large enough for big orders and small enough for single loaf orders, and reusable. And, most importantly, due to it's white color, they are "flour proof."

Babka will be packed in washable, reusable plastic containers, instead of disposable plastic bags. Every time you pickup an order, you return one of your tagged reusable bags (washed or cleaned if necessary) and washable babka containers at the pickup site. If we go to pack your next order and we don't have a bag for you (due to you not returning your bag), we will charge you $5 for a new bag, which will be tagged with your name on it; so then you will have an extra bag in the system as a cushion for the next time you forget to return a bag. We will wash and sanitize the babka containers before reuse; and label them so you don't accidentally mix them into your other dishes at home. If a bag is damaged or unusable because of our transportation system, we will replace it. The $.25 fee for plastic bread bags will still apply.

You can opt-out of the system and request disposable paper bags, but we will charge you a $1 packaging fee plus another $.25 if you choose optional plastic bagging for the bread. The $1 packaging fee is waived for first time customers.

Croissant containers, for now, are still disposable. We have factored the costs of these containers into the cost of the croissant, but it doesn't work for orders of less than four croissant units. So we charge a $.50 fee for the container if you order less than 4 croissant.

The thinking behind this system.

1. Financial. Part of my plan in not increasing prices to reduce costs in as many areas as possible without giving up quality in the actual bread products. So one of my targets is the use of disposable bags and packaging. After crunching the numbers, the long term savings are pretty clear. But it will take effort from all of us to realize these savings; we have to give up some convenience.
2. Moral. Using disposable products reflects a mindset that fails to consider how our everyday actions will affect future generations who have no say in what we do today. While the use of some disposable products might make sense, many such conveniences are just wasteful and not sustainable in the long-term; and are an utter inefficient use of the our communal earth's resources.
3. Vision. This bakery is so much bigger than just making good bread and pastry. It's about sustainability; a model for business where the consumer is connected to and provides essential feedback for what direction the business will take in the future. It's a cooperative effort to build and maintain our local community and connect with one another; and to become more aware of the blessings in everyday life.
4. Connection. This is yet another opportunity to connect the baker with the consumer; a never-ending loop of energy exchange which is the essential underlying element that makes Four Worlds Bakery unique. All the outer manifestations (ie great bread) are merely a reflection of this goal of heightening our awareness of this connection.

An invitation. Please consider joining us in this effort by opting into the new packaging system. And realize it's so much more than a $10 fee and an promise to return the bags. This is an investment for your communal future; and a more satisfying way to live. We can be the change we seek. We just have to put forth some effort.

The Nature of Four Worlds Bakery Customers (updated with feedback)

Last week I published a piece in my weekly email about my relationship as a baker with my customers; and the unique relationship with customers at Four Worlds Bakery. Here is what I wrote:

Insights. I was thinking about the evolution of Four Worlds Bakery last week; especially the unique relationship I enjoy with my customers. During the first year of operation, I noticed an emerging pattern with sales. New customers would show up with great excitement and sometimes even obsession. After a month or two the orders would get smaller and, for many customers, they would just stop ordering after awhile; or just order every month or once every two months. And there was a constant stream of first or second time customers who didn't order again at all. Infusion of new customers has always kept my sales in growth mode, even during seasonal lows tides in the bakery business.

But this pattern of customers falling off worried me until my recent insight on what might be happening and the result. Given my unique distribution system, one really has to go out of their way to get Four Worlds Bakery products. You have to figure out this crazy system, plan ahead and order, remember to pick it up during specific times, actually pick it up at maybe inconvenient locations, and then remember send in a check or pay somehow (or get pestered by me reminding you to pay your balance). And of course, you have to have a certain toleration and appreciation for the inconsistencies inherent in the use of natural yeast starters and my constant need to experiment with very established products. This system will not work or fit into many peoples lives at all. And after the New-ness of the products fade, it becomes a burden few are willing to go through to get a weekly order. But it's the few who have continued to order regularly that is the base of customers that keeps Four Worlds going on a day-to-day basis. And that base is very diverse economically (ie on their income levels).

And that base has grown slowly into a very consistent, loyal following that is the dream of every baker to have. As much as I am after quality ingredients and quality processes to make bread, I am after quality customers with a long, established relationship with the bakery. And it takes time to develop such a strong foundation. So I am no longer worried about customers who disappear for awhile; and I'm more focused on building on the relationship I have with those who have toughed out the inconveniences of my ordering system; those who "really want what I have to offer." And it's that extra burden you have to jump through that really tests your appreciation for the kinds of breads I am baking. And it's this feeling of serving you that keeps me motivated in the long hours I have been working to build up this bakery organically.

So here is some of the comments customers wrote back to me with:

It is true it is tougher to buy FWB bread compared to Arnold's. However, you
overlooked the value of ritual to individuals. I ride my bike to Pennypack Farm
on Friday afternoons to get the bread order. What is that worth? Your
system isn't so crazy--you've admirably kept the prepay balances correct (ain't
easy and I am impressed). As long as that runs well, the only complaints will be
about bread (and they're few). You have a great model. Indeed, you blaze a trail
for other artists. I ask myself, when I retire, what business could I start and
run like Michael has done? --Customer in Horsham

Michael - thought your insights on customer loyalty were right on. for me, i find that i have a tendency to overorder and the freezer always has some of your breads!! i might add that those of us who live in groups have to negotiate with others even down to what bread we will eat!! -Customer from Havertown area

I'm happy to call myself one of your loyal customers! We were without your products for 2 weeks and I'm so happy to be able to enjoy them again:) --Customer from Havertown area

Some notable comments about the City Paper Article

City Paper published an article about my baking journey last week; and there has been some interesting comments posted on the City Paper web page, in additional to comments emailed to me:

There are two things the article glosses over. First, Michael's breads are exceptional, the product of the high level of skill and consciousness he brings to the process. Second, what is just as unique is the relation he establishes with his customers. Prior to Kaffa Crossing, all his bread was pre-ordered, and distributed to sites across the Delaware Valley. He has very openly documented his struggles and joys in getting his business going. He has garnered the loyalty of "friends" who buy his product (it costs a little more) and strongly support his efforts. His approach is a good model for any artisan who wants to engage in righteous work. -Horsham customer.

Thank you for this wonderful article about our challahman! Michael was baking his bread out of our house ( the "collective" off of baltimore ave) for two years, and although the smell of hot onion bagels sometimes woke me at 6 am, it was wonderful having Michael's baking energy in the house. I loved watching him juggle pans on the kitchen counter every Friday morning, totally absorbed, with a grin on his face. He's not working in the house anymore, but we still have the delicious fruits of his labors... oy, the babka! --One of my 5 housemates in W. Philly

I just had just found out about Michael's breads a few weeks ago. I see exactly why they call him "Challaman" (The Challa is unreal!!) His story is very inspiring, and should be a wake up call to all. You should be happy in life. -Brett from ?

I knew him when... he was still practicing law in a holistic way. Michael was a great help to me professionally and spiritually. I recall fondly his excitement at his discovery of his love for baking and times we spent talking about his dreams of baking truly extraordinary artisan breads. It brings much joy to watch my young friend take flight. I have also been to see him at Kaffa Crossing. The food there is wonderful and Michael's baked goods are out of these Four Worlds! His croissants are nothing short of amazing. Try some, you'll like them! --C.T. in Jenkintown

Wonderfully well written article about a truly outstanding person. Being Michael's father is not making be biased. We love his baked goods and our only sorrow is that we are in Texas and you have him in Philadelphia. So soon we have to come to Philly to break this great bread with our son.Thanks for your wonderful article. -My parents from Georgetown Texas.

Thank you for the comments. Feel free to leave additional comments here on the blog.

Feedback on your Feedback

Through a cerain viewpoint, life is just a cycle of energy moving around. As we interact with each other, we are simply moving energy around, whether we are aware of it or not. In this great baking adventure, I have learned much about life through this energy cycle between me, the baker, and the people who eat the baked goods. And in the past few weeks, I have been thinking much about this aspect of my art form.

Here I want to focus a bit about, what we would normally term, "negative" feedback. That is, feedback where a customer comminicates to me "complaining" about a product; or aspect they found not to their liking. Here are some examples of such comments:

"Last week the spelt levain was the best ever. The texture was amazing, and the flavor really full. Bravo! The babka on the other hand, was not my favorite. It had a slightly dry quality, and tasted slightly of "refrigerator", and had a bit of a more slick feeling on your tongue after chewing. Also, I didn't receive the two bagels I ordered." -Customer from West Philly

[Note: this came in the same day as the prior comment] Lately the loaves of spelt levain have been tougher than usual and very hard to chew. did you change ingredients? would like them to be a little more soft. thank you. -Customer from Havertown area.

Labeling Problem: Michael, you advertise loaves by weight. Last pickup, scales were out at Pennypack, so I weighed my loaves. They all came up short. I know this is not because you attempt to defraud customers, but because loaves shrink, because of temperature, humidity, and ingredient variation. Nonetheless, you should make clear what is the contract. Is one buying 2 pounds raw, pre-baked weight, or 2 pounds of packaged bread. -Horsham customer

My mind is interesting to watch when I get comments like this. My first reaction is usually "ego"-based or "small'-mind and it says something like this: "I am a failure since I can't please this person; I expect my products to be perfect, everytime; and it's just not acceptible to have inferior products leaving my bakery." A tyical reaction in my mind to this message is to look outside myself and attempt to blame the customer for the problem.

But this thought doesn't last long before my "large"-mind takes over and says: "Wow, this customer cares enough about my breads to tell me when it doesn't meet their expectations; what an incredible gift to know that people are really paying attention to how my breads are each week, and even take the time to let me know about their experience."

So in checking-in with myself about my reaction, I noticed that this type of feedback has a peculiar effect on me; going way beyond the substance of the comment. That is, the comment itself takes on meaning. The realization that people are "paying attention" prevents me from getting lazy. It's as if all of my customers are watching everything I do in the bakery. This goes beyond a parent figure watching over my actions, judging me. This is about tapping into a resevior of exchange of energy that is taking place as I bake for all the people who are eating the food. There is literally an exchange going on at all times in the process, although much of it is out of our awareness. So every comment I get, positive or negative, is a reminder to me that I am part of this exchange and I am not working alone or in isolation. I am more able then to tap into a higher level of Awareness of the exchange of energy.

But without the feedback, I forget. It's like I need a constant reminder that people are paying attention; and they care about what they are getting. Ultimately, I bake to tap into this Awareness; baking is just a means to make this happen for me. So every comment I get is pushing my Practice along. It's an amazing gift and a blessing.