England native and baking entrepreneur Tracy Claros is already focused on Christmas due to making most of her money during the holiday shopping season. So despite 90-degree-plus temperatures, she’s been thinking ahead to cooler months and has begun the often nerve-wracking planning and logistics needed to ensure sales are jolly.
Claros moved to Austin in 2003 to start a dessert company, having reasoned the United Kingdom’s market was overcrowded, while the U.S.’s had little exposure to British desserts. She launched The Sticky Toffee Pudding Co., based on the British dessert classic, in 2004, but it hasn’t been easy. She hadn’t reckoned on U.S. demand for more sophisticated chilled deserts being almost non-existent compared to the U.K. and the rest of Europe.
The holiday sales peak results from most consumers viewing her product — moist sponge cake with finely chopped dates covered in a buttery toffee sauce and served warm — as a rich holiday treat and buying accordingly, which makes keeping her company afloat during the rest of the year a challenge.
It has taken time and bitter experience for her to figure out the extended planning cycle to ensure her puddings get on stores’ holiday shelves. “When I started, I’d approach a customer in September or October,” she says, “but even if I had a great idea by then it was too late.”
Major food retailer chains like HEB and Costco make the big decisions for the holiday period around August, she says. Hence she’s been flying around the country to meet supermarket managers and ensure her company doesn’t miss out on a crucial period that accounts for 65 percent of sales.
She flew to Seattle and Atlanta recently to confirm orders with Costco totaling 50,000 puddings. She also flew to a meeting with a Baltimore Costco but came away with no order. It was a long way to fly only to be told the store’s customers buy chilled desserts at the bakery or from the freezer, but aren’t accustomed to getting them from the refrigerator — which is where her puddings are most suitably placed due to the ingredients.
Idiosyncrasies found within the U.S. dessert market, which Claros has encountered and had to overcome, have thwarted other much larger dessert companies.
James Averdieck, who founded the renowned British dessert company Gü, started looking at the U.S. dessert market in 2010. Gü products normally remain chilled throughout the supply chain and he didn’t want them sold in the freezer section, he says, where they’d face stiff competition from bigger brands such as Häagen-Dazs and Ben & Jerry’s. He was also concerned stores might defrost them after the expiration date and damage the brand’s reputation for quality. Gü’s products contain cream, eggs and butter, giving them a short shelf life.
“An added layer of complexity is the U.S. is so huge,” says David Wilson, a partner with Greenseed Group that advices food companies considering entering the U.S. market and is assisting Gü, which is about to launch in the U.S. within a month. “If your product has a shelf life of three weeks and it takes a week to truck it from New York to California that’s a real challenge and is why so many U.S. foods are frozen.”
The U.S.’s immense geographic size also results in significant regional differences in terms of consumer habits. Bakeries tend to sell a lot of cakes in Southern cities such as Houston and New Orleans, though that declines farther west, says Jim Murphy, owner of Sweetish Hill Bakery, an Austin go to for cakes and cookies for 35 years. Baked goods also prove popular in coastal areas but ultimately that varies with each place, with influence from culture and weather. If you grow up eating ice cream and jelly, he points out, that’s likely what you’ll shop for.
Despite the challenges, Wilson says the underdeveloped dessert market in the U.S. means there is great potential and in cities like Austin, New York and Chicago customers are increasingly purchasing fresher foods on a more frequent basis, similar to Europe.
“I think chilled desserts are on the cusp of exploding onto the market,” he says, “and as new concepts emerge in urban centers they’ll start to move into the mainstream."
Claros has weathered many tough times while promoting her puddings to an often fastidious market, but she has resolutely baked on. Her small company only has three employees, taking on another three part-time during the pre-holiday push. Her ability to survive has resulted from passion for her product, tenacity and deft logistic conundrum solving.
She’s had to max out credit cards and bounce between British and American banks to find willing lenders. She dispatches online orders herself, printing out address labels in her Austin home and preferring to know that each order has been dealt with correctly. She sources packaging material from Denmark due to insane U.S. prices, she says, but must account for up to two months delivery time. Last year, packaging to fulfill a customer’s order — who bought four times more than expected — got delayed. “I was panicking.”
Claros isn’t the only Austin-based food company that has to contend with sales spikes and attendant complications. Sweetish Hill Bakery produces fruitcakes and pies for the holidays and must plan ahead or risk “getting killed by overhead costs,” Murphy says.
Gourmet fiery food company Austin Slow Burn experiences two sales spikes, co-owner Jill Lewis says. Sales used to spike at Christmas, but that changed after the company launched its green chile queso. Now, August’s Hatch Chile Festival and the last month of the football season — particularly Super Bowl weekend — account for peak sales and result in a crammed kitchen and refrigerator as the company tries to match demand.
As sales increase for Claros, it appears the U.S. is coming round to desserts like hers — Oprah Winfrey’s magazine, O, described her pudding as the “sexiest English creation since Colin Firth.”
Despite progress, Claros wants to smooth out her annual sales graph and is developing a new line of fabulous flapjacks that avoid any chilled dilemmas to generate more consistent sales, she says. But that’s led to a new dilemma: how to retain handmade quality while increasing production economically.
“I don’t want a better price if my product’s not fantastic,” she says, “as that’s the base of what this brand is about.”
Ironically, Claros discovered the bona fide British dessert when she studied at the University of Texas at Austin during her 20s. Her mother sent the recipe for the pudding that astounded Claros by its deliciousness, she says, and eventually led to an idea for a company. She expects to pass $1 million in annual sales for the first time this year.
The proof, they say, is in the pudding.