Profitable Strategies To Scale a Baking Business With Phebe Rossi

22–32 minutes
Phebe Rossi

Phebe Rossi 3:04

I would love to, Odette. So first, like thank you for having me here. I always love you know, A, like, connecting with other business owners and especially like with other people that I’ve known so long, you know, getting to just share my experience and have a conversation. Thank you for having me. Yeah, so I started with my business back in 2011. And I initially launched as a farmers market business. And prior to that, I’ve never been diagnosed celiac. But it turns out, it does run in my family. I went gluten-free for health reasons, several years before that. And I love eating, I love good food. And back then back in the dark ages, there just wasn’t good gluten free baked goods available. It was literally like a tiny little lobe available in the freezer section at your local grocery store. Or it was like one tiny little cookie at a regular bakery that was cross contaminated. And I mean, who would want to get up puck me about a banana and chocolate anyway. So it was just really disappointing. But I like gluten-free and and so I was trying to find food and there just wasn’t good food available. And so I just went, Wait a minute, why don’t I make this myself. I know how to bake I know how to cook. And so I started doing product development for myself. And then several month into several months into doing that. I just went Wait a minute. There’s other people out there like me that just want good food. And so I spent my evenings putting together a business plan and then quit day job and started a business. Now I wouldn’t recommend that for a lot of people because that’s a very stressful way of doing it. But I did take the leap and I launched it initially at the farmers market business almost 13 years ago now and haven’t really looked back. I started as a farmers market. And then I started dabbling in wholesale. A lot of farmers markets are a really great way to meet local chefs, other small business owners that are looking at what’s hot, what’s new, what’s interesting. It’s a really financially responsible way to try and launch a food business, you’d have low capital costs, because you’re all working out on a shared kitchen. Or these days, you can even like license and work out of your home kitchen for a lot of products. And so it’s a lower capital expenditure to just get out, be able to get out there and kind of test the market and see if you know, yes, all of your friends like your product, but our customers going to want to pay for your products. Right, right. Yeah, so I did that. And then we launched our retail store in 2014. And then from there, we we’ve started building up a wholesale side of it, and the retail and the wholesale have always gone hand in hand, I’ve always felt like you can’t really have one without the other. My objective way back when I started this was to create community. When your dietarily Challenge is one of the most difficult things for me to experience was that alienation. All of a sudden, you know, I would go to a dinner party and I beat anything that was there. Literally showing up with what I jokingly called Pocket bread out here emergency bread in my bag, you know, you go to a restaurant, and you’re like, what’s gluten-free? And they’d say, what’s that, and then you would catch them picking their croutons off of your salad and you’re like, I’m gonna get sick, you do that. So it’s just this, this desire to create community and connections. So the idea behind Nuflours is really like, what do you met? What’s that opportunity, you know, is it your mom’s carrot cake? Is it just the best darn brownie, is it eclairs, tiramisu? All of these normal foods that can be really difficult to access when you’re dietarily challenged. And so being able to create that safe space and make it about community and connection, because what we’re creating isn’t just that it’s just gluten-free, it’s also that it’s just darn good. And it doesn’t matter that it’s made out of alternative grains or that it’s dairy free because we’ve found, you know, substitutions that make it delicious, and make it for most of our products that you can’t tell they’re gluten-free. So it’s not what you’re doing without it’s they’re doing it differently. 

Odette D’Aniello 7:38

I agree. And they could really relate to the feeling of alienation. My son was gluten intolerant, and that she was allergic to many things this growing up. So every time we found something gluten free, it was like winning the lottery that day, you know, or that time, or like going to a birthday party and a mom just kind of cared for him in particular and brought would bring gluten free. And now my death use our own insight into that feeling of community with other people who don’t have the option to eat whatever treat that is provided for them to celebrate. And now, we’re I’m wondering, like, when you created this company between, like, from the time that you were at a farmers market, the time that you were, that you went into retail, what was that like? What was that experience like?

Phebe Rossi 8:34

Rocky? Yeah, it was, it was a lot of testing, it was testing products, it was trying to see, you know, I had an original portfolio of products of recipes, formulas, what have you, that I thought would be really successful. And it turns out, you know, half of them lasted less than six months ago, there was a lot of product testing a lot of product market fit testing going on. And then just you know, taking a look at what I wanted to do and who I want it to be and if that actually set within this idea of creating a business. My objective for Nuflours was to always to create something bigger than a farmers market company or bigger than what it was at that point in time. But it’s trying to understand yourself it’s trying to understand your market and trying to see if there’s an overlap what you can successfully accomplish.

Odette D’Aniello 9:34

And have you found that have you found like the your target market and like what does that profile look like and how do you create the community?

Phebe Rossi 9:50

It’s interesting because like here with our retail store, we have a very loyal like local customer base. And it’s interesting to see how it’s shifting to what it looked like pre-pandemic. And now what it looks like post-pandemic. So we have, you know, like, because we’re a neighborhood bakery, we have like a lot of like people walking through the neighborhood. This is my favorite brownie their cup of tea or whatever. And then we have what I call our regional, local. So you know, people regulars that live in Shoreline, or you know, live in Tacoma, and they’ll come up, you know, once a month, or even once a quarter, but when they do, they’re like, Oh, my God, Nuflours, I love you guys so much. And I’ll put together you know, a pastry box, like anytime they come to Seattle, this is one of their destinations. And then we have our traveling customers. So people that come in, you know, once a month, or once a quarter to work in Seattle. And they will stop in once they fly in. And they will put together a pastry box for while they’re here in town and the last job again, on their way to the airport, to take products home with them. So that’s our regular space. And we’ve developed a pretty good destination mentality for tourists, I spent a lot of time getting Nuflours as a company listed on a gluten-free websites, I’m getting listed with a lot of interesting spaces and enlists to be that Nuflours that affect gluten free destination. So we do get a fair number of people that literally come up the hill from downtown just to go to Nuflours.

Odette D’Aniello 11:31

I can see that. I could see that. Because I mean, it’s so good. It’s so delicious. And if you’re, you know, intolerant, or allergies, and it’s like a big adventure, right? Don’t get some treats. So now, how do you, as a woman-owned business? I know that you have a good team around you. So can you tell us a little bit more about how you like, what is the structure of the business? And what’s your role in it?

Phebe Rossi 12:00

Yeah, so I am overall business management. So I oversee a couple of different groups. So we have, you know, our retail here. So we have you know, and I like to call this a tiny mighty team, you know, we’re really not that many people. But we have, you know, our retail production team here. So we have like, literally the boots on the ground people, the people making pastries, and between, like selling the pastries here at the retail counter. And then we have our other group, which was specifically focused on a consumer product, good side of it. So my focus primarily with that was operations, and just making sure that things are running smoothly there. But I also have helped out with sales and financial oversight. And, again, it was a tiny, mighty team, but it was for people working together. And just finding people that work well together in any industry is challenging. But when you have just a level of understanding of who’s responsible for what and the interplays with that you can move really quickly and really efficiently. So just having that team has been such a dream, you know, and it took me several iterations, a couple of different people in, you know, the sales the, to really hit that team that just worked and flowed really well together. But I don’t really have any recommendations on how to you know, find the best salesperson or how to find like the best financial person, it’s really about, you know, your role as a leader, and what you need, where your gaps are, and who you work well with.

Odette D’Aniello 13:53

Yeah, so what I believe I forget that really important for a leader to have a team like you have a team, like how you have a team also at home that can support your home life, so that you can run your business. And what is that? What is your life look like, within and how does that integrate with your business?

Phebe Rossi 14:17

Well, I don’t have kids. Yes. And I can actually share a little bit about my journey, you know, as a business owner over the last 12 years to those first couple of years. That person was about a year and a half. It was literally just me I was a solopreneur and so I just ate, slept, and breathed my company. And that was very rewarding, but also very exhausting. I started setting myself up for the next phase was taking a look at what I wanted to do what I didn’t want to do what I was good at what I wasn’t good at. And then I started hiring for that. So Oh, most obviously I needed, you know, more production help the stop gap. The, the pinch point in the production was literally me, I was only one person. And then beyond that, it’s like, well, what else do I need? Well, I can do marketing, but I don’t shine at it I and I honestly didn’t have the desire to learn a whole lot more about what was happening at that point with social media. So I brought on, you know, marketing and sales support. And then from there, it was just, you know, you can kind of go down, oh, well, bookkeeping, I can do that. But maybe I can outsource that for a couple of hours a week. You know, accounting, obviously, I’m not an accountant, you know, I should find someone with a newborn, you know, and just kind of going through that way. And then a passport, several years, we’ve gone, I’ve gone through several iterations of who I need and don’t need over the years. But I’m only working like 3040 hours a week, these days, which I know some people really thrive and that, for me, it’s a major adjustment, because I usually work 50 to 60 hours a week. So after years of working more, when you slow down, even when it’s, you know, good for you to take the mental space and you know, maybe strap on those walking shoes. It does take some serious mental adjustment and intention.

Oh, no. Yeah, you wear out a new pair of walking shoes in six months.

Odette D’Aniello 16:24

What are your hobbies? Like, what do you do? I

Phebe Rossi 16:27

read a lot. I’m a voracious reader, I walk a lot. And my, my partner and I just got a new house this last year, and so I’ve been learning to garden, we purchased the house from a couple who one of them she was an avid gardener. And and when I mean avid, I mean avid, she would garden about eight hours a day, like six to seven days. And so the garden was beautiful when he moved in, but a little more garden than I’m used to because I moved from a very small apartment. So I’m learning a lot about gardening and also how to get it to a point where it’s, it’s a little less overwhelming, but I really enjoy it. Like, you know, for example, this morning, I was like, You know what, I’m gonna take it a little easy this morning. It’s Monday morning, I’m not needed at work. So I got up at my usual 5am, and I gardened in the rain for about to two and a half hours, I planted some new burns. Like, why not? 

Odette D’Aniello 17:32

Yeah, life’s about right. Like, gosh, it’s not just about work. I think that’s what happens, we get so entangled. Well, so you end up just days over and, you know?

Phebe Rossi 17:46

well, it’s, it’s so easy to fall into that hole too. You know, workaholism is a thing. And I have gone through phases throughout my, you know, last decade, I’m like, oh, you know, do I work too much? Well, what does work too much look like for me. And I think it’s different for everyone. For me and my husband, like, we don’t have kids, and we both are very passionate about our careers. And so for us, it’s about are we in balance with each other? You know, like, he’s gone through phases of very large projects, where he’s working 60 hours a week, so it doesn’t matter so much that, you know, I’m working 50, 60 hours a week. He’s also gone through periods where he’s like, Hey, honey, like, it’d be nice to have a date this month. And then it’s like, oh, right, I need to readjust how I’m managing my personal life. And you know, I’m managing my my time. So I can actually have some downtime. But yeah, and it always ebbs and flows to, you know, especially like, managing a bakery during the holidays, you know, anyone in retail, and especially food, will know like you do not, don’t get sick during holidays, don’t expect time off, you know, you know, mid October through Christmas Day, it just won’t happen. But you know, for bakeries, at least ours because we’re a what I call a full service bakery. You know, our biggest day of the year is the day before Thanksgiving. Hundreds of baked goods go out the door.

Odette D’Aniello 19:10

So I’m, I want to find out about like, when do you how do you manage, like the busyness of the retail, and then the busyness of the wholesale? I know that you’re in a lot of the markets around the area. So what manage all of those in need to production one day for retail? Or is it all the same? How do you manage?

Phebe Rossi 19:35

Well, we do we do have like a weekly production schedule. So for like, the retail counter is very different. Because it’ll be you know, like, a dozen of this or two dozen of that, like, you know, every single day of the week that we’re you know, we’re open six days a week. So it’ll be like, you know, small batch for this, but then for wholesale, it’ll be you know, a pallet of this product or two pallets of that product. And so it is a very different rhythm but essentially really the way that I split it up is it’s it’s basically layered on top of each other. So you have, you know, your smaller batch, you know, process. But that’ll take, you know, frankly, like some mornings, it’ll be 30 minutes, not exaggerating, because like you, you have a lot of like you have your pastry blanks, you know, pre made, so you pull them, you bake them, you have your batters pre-made, because you’re not batching batters every single day, but you’re baking every day. So you just like pull out, you know, scoop off what you need, you know, batch that, and then you’re on to making your, you know, palette of chocolate cake, or your palette of carrot cake. But we’ve gotten our processes, so efficient that it doesn’t it just it just works. I don’t know how to explain it, Odette. 

Odette D’Aniello 20:47

You were also looking for it to expand your your production capacity. And how is that going?

Phebe Rossi 20:53

We have opted not to do that. Yeah, so I was looking at the area for you know, awesome freezer storage is looking for, you know, an alternative commissary kitchen. What I ended up doing was actually bringing on a co-packer who was not local. But that was how we were supporting that additional production. 

Odette D’Aniello 21:18

That’s a great idea. 

Phebe Rossi 21:19

Yeah, yeah. And again, like, you know, I could talk on about that, like the co-packing process, you know, I spent, I don’t know, a year and a half, two years, quite a while, like trying to find a co-packer. But at least you know, there’s a lot of bakery co-packers out there. But if you try to do gluten-free, it automatically narrows the pool to I don’t know about 5% of what’s available, if you want to be certified gluten-free, and then if you have products that aren’t within the typical parameters, like production line parameters, you know, what I call occupied cookies, then you have a really difficult time finding someone who is ready, willing and able to produce your product at a smaller scale, because you know, we’re not doing full truckload we’re not, you know, FTL, we were running a couple of hours at a time at most. And so I spent quite a while, you know, trying to find someone who was even able to do that volume, and that product type. And then we spent several months doing product development, because of course, it’s different atmosphere, you know, Seattle, is very moist. It’s not as humid in the way the southeast is. But yeah, it’s it, there’s a certain level of moisture in the air, and we’re at sea level, basically. So it’s a very specific product formula. But when you use that to any other environment, there’s going to be adjustments. And you’re adjusting volumes from you know, instead of running, you know, five dozen, you know, carrot cakes, you’re running several hundred or a couple 1000 There’s a point of informal investments, of course. And that was it was a lot of fun doing product redevelopment with a co-man. It was it was a very big learning curve.

Odette D’Aniello 22:58

That’s awesome. That that’s, that’s really cool. Like that, is I remember you were looking for a co-man. And we’re listen as a co man as a co manufacturing. Maybe explain that maybe what that means so that our listeners don’t know. 

Phebe Rossi 23:16

Sure. So how can you facture is someone who will manufacture your product for you. And it’s a pretty, it can be a pretty varied relationship, some communes will only produce the products, they won’t do packaging, etc, but some of them are what I call the full meal deal. So, you know, for example, you can have a Columbiana, who you simply send the formula to or, or send them the product and say this is the product, they can develop the product for you, they can purchase all of the packaging ingredients, etc for you, they will do the manufacturing of the product for you, they will package the product for you and they will ship the product for you. So that’s you know, like five very distinct things they can do for you and some will do all of them some will only do one or two of them, it really depends on the manufacturer. And then some of them will only work at certain volumes. So you know, most of them don’t understand their base cost and most of them won’t manufacture below a pallet or two just because it doesn’t make sense cost wise for what they have to pass on to you. Some will only work at FTL, full truckloads, which are going to be 18 pallets. So that’s a lot of product. 

Odette D’Aniello 24:39

Do they ship, this co-man, do they shipped back to Seattle to your facility and if so, where do you store it all? 

Phebe Rossi 24:47

Yeah, we ended up setting up offsite freezer storage as well. Because our you know, our facility here is so small. We had it manufactured would have it shipped to an offsite storage. And then from the offsite storage, we would set up external logistics so that our distributors would pick up from that off site storage. So we never actually touched that product. 

Odette D’Aniello 25:18

For our listeners, how does one find a co-man?

Phebe Rossi 25:25

Ah, well, II there are groups out there, you can just like, frankly, just Google co-manufacturer, you know, enter product or you know, beverage co-man. And just go from there, you’ll start getting very specific industry terms and phrases. Yeah, I started literally looking gluten-free bakery co-manufacturer. And then I came up with several dozen, most of whom I could work with for various reasons, but you call them and if they can’t work with you, maybe they can recommend somebody who can. The person I ended up working with wasn’t on any of those lists. They call me on for a couple of dozen different companies. But for whatever reason, they weren’t on any co-manufacturing lists, but they were referred to me by someone else who has a lot of connections in the baking industry. So you just start putting out there in the universe, this is what I’m looking for. And just don’t be afraid of having someone say no, but do ask a lot of questions. And always, always, always ask for referrals.

Odette D’Aniello 26:25

That is so helpful. Yep. For that, because I think that, that the baking business is a very powerful business. Wouldn’t you agree? That’s one.

Phebe Rossi 26:40

Yeah, well, like baking to me, like, ultimately, what baking and the idea of cake is, it’s about joy. You know, like I back in the day, I used to self distribute out of my rav4. And so I would know, the backward pastry box, and you know, like, labeled with where they were going. And I had to talk myself out of a couple of parking tickets, because I would park in commercial zones, and I very clearly wasn’t, but my thing. I’m sorry, sir. I’m just delivering pastry here. Let me show you. And I’d be like, Oh, well, just don’t do it again.

Odette D’Aniello 27:12

Did you have a stack of them so that they could really just for like the ticket master people, or that took them out? So but ticket maids are, guess what they’re called?

Phebe Rossi 27:24

Like pizza, like, as soon as you say the word cookies, or cake or pastry, like, people just light up at that. You know, it’s like it and it’s, you know, like, I was being honest, like, Hi, I am out doing pastry, please don’t check out me. But also just make it just like, oh, yeah, because it really is about joy. It’s about that connection? Oh, absolutely.

Odette D’Aniello 27:47

I agree with that. No, I’m just I have one more question. I know that. I know that our interviews ending you have more of a meeting to write. So couple more questions. So in terms of funding, do you have any ideas? And like, how do you fund?

Phebe Rossi 28:16

Yeah, there’s, there’s so many different ways to fund out there. Or just, you know, I funded my business over the years, several different ways to you can have, you know, working loan, there’s a lot of community-sourced nonprofits out there that you can take shortterm loans from that will lend at a reasonable rate if you’re close to bankable, but not quite. The way they’re I ended up funding. You know, like our retail space back when I opened, it was a combination of it was called Community Sourced Capital, which was a community loan, basically, you know, like people would, you know, buy squares of anywhere from 50 to $400. And we got, it was about $25,000. That way, which, you know, bought our bakery counter. But also, when I was doing that farmers market booth, I just, you know, one of one of my regulars who it turns out was a local food investor said, Hey, what are you opening a retail spot? And I was like, I don’t know, I don’t have the money for it. And he’s like, Well, how much do you need? And I was like, I don’t know. He’s like, figure that out. Let’s talk next week. And so he ended up providing me with a series of private loans over the years to fund basic like various things and a bakery. Because like, it was just me and then it was me and a couple of employees and we weren’t really bankable, but he saw what I was trying to do and understood that and trusted me because I did have a good track record I just wasn’t specifically bankable on the in some of the ways that banks are looking for. So again, like and this is gonna sound really corny but do do just put it out there and the universe and I don’t mean like, he just gives me what I want. It’s like it start telling people what you’re trying to accomplish. You Get a lot of people ignoring you, you’ll get a lot of like no, but you’ll also get people that are interested and engaged and really want to see you succeed. And if they specifically can’t help you, they will guide you or refer you to people that can. So like that person ended up like helping me get bankable. There’s, there’s a lot of grants out there. I wish they had like grant lists with me. There’s platforms like Hello Alice, which is specifically for women business owners that you can sign up and they have grants that they post on there. There’s the Women’s Business Center here in Seattle, that posts you know, like education, like free education and mentoring. There’s the SBA Score, which you can get free mentorship, and they can probably line you up with ways to get funding and financing. So there’s there’s a lot of information out there. It’s just like, what are the questions you’re asking? What stage are you in? And what’s your what’s your growth trajectory? And that will really determine how you’re going to get funding.

Odette D’Aniello 31:02

That’s awesome. So if, if any of the listeners on a contact you regarding that, I mean, I guess what would what’s the best way to find that? 

Phebe Rossi 31:14

You scan share my email, like Phebe@Nuflours.com? 

Odette D’Aniello 31:19

That would be great. Yeah. Yeah. So if anybody wants to know more about funding, their business of Phebe knows how to do that. So thank you, Phebe, for stepping up. You’ll help other women entrepreneurs on this, listening to this podcast. I’ve one more question. What if you were to talk to your younger self? What would you tell them?

Phebe Rossi 31:48

I would tell my younger self to rest myself more. One of my biggest challenges early on was that I didn’t believe I was enough to run my business. I didn’t believe that people would want to buy into me, as a business owner, and me as the primary point person for this idea that was new flowers. And because of that, I made some decisions early on with management that I would not have made if I had just trusted myself just a little bit more instead, actually, people love you. People love your food and they think you’re amazing. So why don’t you so just just trust yourself

Odette D’Aniello 32:39

And love yourself.

Phebe Rossi 32:41

And eat more pastry?

Odette D’Aniello 32:45

Well, Phebe, thank you so much for being on the podcast. I learned so much and I love how you are so positive. And you’re just like trust the universe you just curious and you know when you expect, you know the thing good things happen. So I’m so happy to know you. Thank you for being on this podcast. 

Phebe Rossi 33:06

Thank you for having me, Odette. This has been a real joy.

Outro 33:13

Thanks for listening to the Celebrity Gourmet Podcast. We’ll see you again next time. And be sure to click subscribe to get future episodes.

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