Interview with Kate McAleer Owner and Founder of Bixby Chocolate

Interview with Kate McAleer

Owner and Founder of Bixby Chocolate

By Kathryn Gordon and Jeff Yoskowitz

Kathryn:  Hi Kate!  You've been busy since you finished your program at ICE (Institute of Culinary Education). Jeff and I both had you as a student.  At what point did you decide to work with chocolate?

Kate:  I came to ICE already very interested in candy and chocolate.

I am a golfer, and as such, I had experienced a complete lack of healthy candy options available and I came to ICE eager to learn how candy is made and how to improve upon it.

That’s why I wanted to create a healthier candy bar line with pure chocolate, with no GMO ingredients, preservatives or added sugars.  The Bixby bars are all natural or organic, and incorporate exotic spices, healthy nuts and fruits. 

Kathryn:   After school, you completed a chocolate externship at Chocolat Moderne with Chef Joan Coukos.  What would you think Joan makes of you now?

Kate: I think Joan is proud of me.  She was a great mentor and she makes the most amazing chocolate.

Editor’s Note:  Food Start Up Help has previously interviewed Chef Joan at Chocolat Moderne: FoodStartUpHelp Chocolat Moderne

Jeff:   What have been your biggest challenges, hurdles and unexpected pleasures founding the business, to date?

Kate:  The biggest challenge has been just learning the trade and coming up to steam quickly on areas in the field that were foreign to me and not something you learn in school.

The largest hurdle is being a small company, yet having to compete among the more seasoned players.

All of the professionals in the field have been the unexpected pleasures.  Many have taken the time to help and lead me in the correct direction.  It has been amazing as a young entrepreneur to have mentors to look up to. 

Kathryn:  You have said that you left an early career path in academia to found your company and you returned to live at home while you built your business.  Is it ok, living again at home?  Do you ever miss the more academic life, or are you just keeping too busy?

Kate:   It's always a big adjustment, moving out of academia and out into the real world.  In order to start my business, I needed to move home--thank goodness my parents welcomed me and have been supportive.

I am always learning in this industry and make it a point to take seminars or classes to further my knowledge.  Busy has a new definition when it comes to running a start-up business--I have worked more hours than ever before and will continue to do so.

Many had warned me that a start-up is an all consuming endeavor....

Kathryn:   What's it like, to work (and live) with your mother?  Who names the bars -- both of you?  I think the names are great!!

Kate:   I feel privileged to being living and working with my mother.  I see more of her now than all of my years growing up as she fulfilled her own professional career.  I have two built in mentors--my parents are two seasoned professionals and I am so fortunate to have them available to me.

Naming is a process and lots of research goes underway when we are creating a new flavor.

Jeff:  Do you do all of your own press kits, website and other marketing?

Kate:   As a start-up we do a lot on our own.  We outsource areas where we feel we need professional guidance.  We write our own press kits.  I handle all of the social media.  We did engage assistance for our website.

Jeff: Was it difficult to source your organic ingredient sources?  Have you found minimum orders to be an issue?

Kate:   Sourcing is an integral part of this business and requires a great deal of research at all times.

We have found that the larger you are the better the pricing.  Therefore, as a small business you pay a higher price until you can grow your business.   This is one of the biggest challenges we face as a small business competing against larger companies with more purchasing power.

Kathryn:  You've only been in business for a short while, but I know you are in several regions of Whole Foods already, and recently got into more.  

Would you recommend the Whole Foods route to another entrepreneur, even if there's such a mark-up by the time it goes through a distributor to them?  

Kate:   I am privileged to be a YouthTrade certified entrepreneur--this means my company is owned and operated by a young entrepreneur under the age of 35 with a sustainable and conscious business.  

Whole Foods was the first retailer of YouthTrade products and it has been an amazing relationship.  Growing your business with distribution is a model any entrepreneur should research and understand before they delve into it--it may not be ideal for every business.

Kathryn:  You have developed one of the most clear visions I've seen for a website and packaging.  I know you talked about labeling, and a proof reading issue you had for one of the new chocolate barsﾅ

Kate:  Lesson learned:  always ask multiple people to proof your packaging before you say it’s ok to print.  It’s a costly and avoidable error.

Jeff: Is there anything else you would like to share with our readers?

Kate:   I suggest lots of research, planning and a good business plan is essential. Conviction is also another element that is key.

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Don’t Work So Much "In the Business" That You Can’t Work "On the Business"

Don’t Work So Much "In the Business" That You Can’t Work "On the Business"

Interview with Joan Coukos

Owner/CEO Chocolat Moderne

Interview with Kathryn Gordon and Jeff Yoskowitz

Kathryn:  Congratulations Joan!  You’ve come such a long way from when I helped you a bit with your launch years ago of Chocolat Moderne!  

Joan:  Yes, we just won the NASFT (National Association for the Specialty Food Trade) gold award for their overall chocolate category, Outstanding Chocolate, and silver award for our hot beverage, Kama Sutra.

Jeff:  Why did you choose chocolate?

Joan:   Chocolate may have chosen me!  I always was into food, being of a Greek background.  I was a banker and my vacations were always food-focused.  As a lay person, I tried to educate myself on the latest culinary trends. 

I visited Belgium in late 2000 and was fantasizing about something other than banking.  In November I had seen the movie Chocolat, which gave me a general good feeling, and the idea to possibly be a proprietress of my own business.

On the plane to Brussels, I read an article about Pierre Marcolini and new trends in chocolate.  I had always revered chefs and the article let me connect that.  Pierre Marcolini was a chef, and a creative human being who could take chocolate and make artisan flavors with natural ingredients and custom designed packaging.    

I decided to check out the chocolate scene in Brussels and I came across an outside antique market with metal chocolate molds.  I couldn’t put them down and I bought 2 of them, with the idea to be able to teach myself chocolate.  I knew I had the guts being that I had lived as a single woman banker in Moscow for years.  I came home and Googled truffles, bought some Valhrona (chocolate) at NY Cake & Baking, and read for the first time about tempering chocolate on a website.  I started experimenting at home to teach myself how to mold chocolates, and brought in samples to the bank where I worked. 

Kathryn: Somewhere in this timeframe, I met you, right?  I know I helped you with the production for the NY Chocolate Show that year…

Joan:  One weekend a month, all I would do was to make chocolates at my apartment.   I picked the brains of everyone at J.B. Prince, met the owners of Chocolatier magazine at the NY Chocolate Show and then I took a chocolate bon bon course where I met Kathryn (with Pascal Brunstein, MOF).   I just bought some chef clothes and showed up.

After 9/11, I was laid off and I started to form the ideas for my own business.  I started out of my kitchen but I signed a 5 year, renewable lease for this location in August, 2003.  I figured I would start without a lot of staff, and I didn’t mind working alone because I live in the neighborhood.   I started with around 1,000 square feet, and 2 years later expanded the office space by adding another 500 square feet. 

Jeff:  Is this still enough space for you?

Joan:  It is except in the height of the winter production season, when we could use more table space to spread out on.

Our business is growing and it seems to have doubled since this time last year.  We are getting ready to re-sign the lease here, because we’re maximizing the opportunity for retail.  We’re in between 2 major shopping streets, and continuously invite in bloggers for free press.  I use the web for internet marketing and we’ve added a retail counter here.  By using our production space as our retail location, I can get a higher profit margin on sales without having to carry more overhead.  We use the Square credit card system for retail sales.

Jeff:  What’s your life like?  Is it 7 days a week since you live nearby?

Joan:  Yes, it is.  We’re getting to the point this summer that we want to take off more time.  My husband works here with me, so I’m able to see him while we’re working. 

Kathryn:  What are you working on now?

Joan:  There are lots of “business things” we still have to fix.  One goal is for margin improvement.  I’m a purist, using only Valrhona and other expensive ingredients.  I also have very high end, beautiful packaging.  But I believe that packaging is my PR and it has gotten me into Barneys, Bendels and Dean and Deluca.

Jeff:  Have you experienced any shelf life issues?

Joan:  For chocolates without preservatives, shelf life is generally not very long.  My recipes are reviewed by an experienced food chemist.  Most of my bon bon fillings are ganache, praline and caramel so I always go by the shortest shelf life, which is the ganache.  If you store our chocolates at 68F or below, the shelf life is 3 months.  Moderne Bars have an 8 month shelf life, so that has been more appealing to small stores. 

Kathryn:  What have you learned, 9 years into the business?

Joan:

• I was naïve about how hard it was to sell a good product.  A lot of things were going on and Chocolate was suddenly a hot thing.  Major specialty retailers, gourmet markets and department stores wanted to carry it.  Sales have been the bane of my existence though.  We haven’t had a consistent sales effort.  Doing trade shows, we get good sales leads and have picked up new accounts that way.  Off and on, commission based sales people have helped with our sales.  When you’re wholesaling, you can’t become dependent on one primary store – you have to supplement with orders from multiple, smaller stores.
• Buyers’ tastes are often more sophisticated than their clientele.  We’re growing now because the public’s taste has caught up to our product. I’ve often been the first with my brand to differentiate myself and the market has had to come up to us.
•  We’re really small in terms of production and administrative people resources.  I have 2 full time production employees, one of whom has been here 6 years, and I also take on seasonal help.  Doing the in-store sampling and demoing is an enormous time drain, and I lost some stores because I just couldn't keep up with that.  
• I've never had a PR budget, but the Top of the “O” list, Sofi Gold/Silver awards and random citations around the country have given us press and fueled our current growth. Perhaps now an active social media strategy makes this a little less important, but when I was starting out a big PR endorsement would have been a nice initial boost.
• This has been a really good year, but our success up on the 9^th floor leads me to believe that I would have done even better from day one with a retail store.  I know retail is tough and there are a lot of ‘dark doors’ out there, but if I compare myself to my successful peers, they all have retail shops!  It makes it easy for journalists to find you and write about you.  My strategy was to take this space and start off wholesale, because Manhattan retail is so expensive.  I thought it wasn't worth the tradeoff to me for the smaller production space I would have been able to afford if I had opened with a retail outlet.   I could build brand awareness through the web, but I had low margins because I was always selling wholesale. 
• A year and a half ago we started opening the factory on weekends more often by allocating more space from the production area so we could sell our products at a higher margin 

Jeff:  Have you experienced any problems producing and selling out of an office loft building?

Joan:  No, surprisingly not.  We’re licensed by the NY Department of Agriculture, and I've been lucky with inspections.  We were the first food business for the  building management company who owns this building, and they've been pretty lenient.

It would make sense now to have our own delivery van for local deliveries, but we ship Fed Ex and UPS throughout the year. Even when it’s hot, we ship Fed Ex ground in the tri-state area and overnight second day to the rest of the country with freezer gel packs and padded insulation. 

Jeff:  At what point into it were you able to say that you were happy with your progress? 

Joan:  Things were going gangbusters after the second full year in 2006 but businesses are cyclical and progress comes and goes.   For example, I think now that I took on the additional office space a little too early, but it was better to do that than to outgrow the production space.  I wanted to create a brand rather than just be a little store, and I felt that I had established “the brand” in the first year or two. 

Additionally, chocolate has evolved as a product in the last 6 years.   Bonbon shelf life is short for artisan chocolates and only sell well around the holidays so most chocolatiers moved into solid bars. But I wanted to have a filled one, with a longer shelf life than the bon bons.  

Jeff:  Is there anything you would have done differently over these 9 years?

Joan:  It would have been good if I had paid someone to do sales, but paying a salary made me nervous.  Now I feel that decision might have been a mistake.  I've spent all my time and energy on creating the best product I can, but it’s taking longer to pay off because I can’t do everything. 

So what do you do?  I should have gone out and gotten more money sooner for a retail space and more PR and sales help.  Someone told me once:   Don’t work so much “in the business” that you can’t work “on the business” – and yet, I totally did that.  It doesn't work to make chocolate all day and then work on the business aspects at night.

Jeff: Thanks Joan!

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Words From a Food Truck Pioneer

Interview with Jerome Chang

Chef/Owner Cathcart & Reddy (Formerly Dessert Truck and DT Works)

6 Clinton Street, Lower East Side, NYC

By Kathryn Gordon

Kathryn:  Hi Jerome, it’s nice to meet you.  Tell me about how you started your business.

Jerome:  I’m an attorney who changed careers and went to FCI (French Culinary Institute) for their pastry program.  Then I got some fine dining experience in the industry for about 3-4 years.  At first, I thought I’d take the more traditional career path, like working to become the executive pastry chef of a hotel.  

Kathryn:  Why did you start off your entrepreneurial career with a desserts truck?

Jerome:  That story’s a little bit strange, and who knows, but it just sort of happened.   It seemed like a great idea, and I felt I was seasoned enough to pull it off well.

It was 2007. The time had come for the democratization of really good food.  Chefs were offering more casual dining options for really solid food other than white table cloth establishments.  At the time we were looking to get into business, there was a general movement to make really good food accessible. 

We were pretty much the first gourmet food truck out there.  If you look back at the old magazines (guides to NY), we’re in all of them when the NY food truck movement started.

Kathryn: Well, now you have a retail space. Was it always a dream to have a retail location? 

Jerome:  No, not really, especially as we didn’t have deep (financial) pockets and we still don’t.  Basically I’m a small business owner who commutes from where I live in Harlem to the Lower East Side because the rents were reasonable here.  I have one business partner, Suzanne.  I had a different partner in the beginning who left after the first year because he had never been in the hospitality business before and didn’t understand what the work entailed.

I met my current business partner, Suzanne, when I was working at Le Cirque. She had started in chocolate working with Jacques Torres.

Kathryn:  Okay, so you're both veterans then, from the Jacques Torres/Le Cirque world. That explains the bomboloni style doughnuts (“Brioche Doughnut Squares”) on your menu! 

Kathryn:  Why did you decide to transition to a set location and stop selling products off the truck?

Jerome:  Last winter, we determined it was time to retire the truck because it was on its last legs.  The whole truck aspect is a double-edged sword.

Kathryn:  Why?

Jerome:  It’s the logistics of it.  The city regulations (against parking in metered spots) don’t work in your favor and that was a negative.  There have been police crackdowns against food trucks and neighbors can complain, get you ticketed, fined and towed.  

We did use the truck to support corporate catering for film and TV, and that was a good revenue source. 

Kathryn:  When you had the truck, where did you park it at night after you closed up?  And before you had the retail and kitchen space where did you do your production?

Jerome:   Overnight the truck has to be in a Department of Health approved commissary, so it was parked in Brooklyn when we weren’t selling.    

I produced for the first couple of years in 2 different shared kitchens, beginning by working out of the kitchen of a catering company. 

Kathryn:  When I last visited, this location was called “DT Works” for “Dessert Truck Works,” and now you’ve changed your website, and some signage, to Cathcart & Reddy.  Why did you decide to change the business name again? 

Jerome:  Well, we had gotten rid of the truck and people just get confused!  They would mix us up with other trucks.  We helped create a (mobile food) movement in NYC. There were other trucks with dessert, but we were the only ones focused on desserts.

We no want to reach a wider more traditional audience. Having the truck name didn’t help and they were skeptical.

Kathryn:  You’re located on the Lower East Side and you want a more traditional audience?

Jerome:  To be able to grow, we need to reach a wider customer base.   It’s been hard here to build up a business during the day.  The most traffic on this street is at night so we’d like to attract more people throughout the day. 

Kathryn:  Do you have any regrets with the path your business has taken?

Jerome:  I have definitely made mistakes.  I think the hardest thing is to make the transition from fine dining, where we live in a bubble and all think like foodies.

As chefs, we fantasize technique and exotic techniques too much, and that doesn’t help you “run a business.”  95% of your customers don’t care about that.  You have to learn how to produce things that are easy to understand. It’s not about “pretty.”

Kathryn:  Do you think that you were prepared for what you’ve had to do?

Jerome:  I understand food costs and I did a business plan.  I think most new businesses that fail don’t make it because the owners don’t understand what they’re getting into, are not adequately prepared, and do not understand what operating their business truly costs them. First and foremost, they do not understand their food costs or how to determine it.

Note:  Food Start Up Help consulting services can assist you with determining your food costs, vis-à-vis industry standards.  Please visit www.foodstartuphelp.com

Kathryn:  I love that you’re using your iPad for your POS (Point of Sales) system.

Jerome:  Yes, it’s very easy to use.  A few months ago SQUARE came around aggressively marketing merchants, and it’s free.  I created a custom menu and can add new line item additions (products) as needed.

Note:  Square is a free system that allows you to swipe credit cards via your iPhone and turns your iPad into a cash register.  You can research whether it could help your new business at www.squareup.com.  Food Start Up Help chefs Kathryn, Jeff and Jessie like that it has in-depth analytics and reports that will help you understand your sales patterns.

Kathryn:  What would you like most to happen next for your renamed business, Cathcart and Reddy? 

Jerome:  We’d like to attract more customers.  We need more people to venture this far over on the Lower East Side.  It’s a 10 minute walk here from the closest subway, but we like the space, the rent is cheaper than other places we found, and Clinton Street is a food destination street. 

Kathryn: Thanks Jerome!

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