A survival story to a success story
To survive and be in one piece was the only thing on the mind of Ly family on that fateful day. It was a tough decision to leave behind the life and land they knew so well. But the conditions were grim in the war-ravaged Vietnam and the only way to survive seemed to be away from the land of their forefathers. Braving rough seas, the family set out into the pirate infested seas. Soon their boats capsized way before reaching land. The Ly family finally made to a refugee camp and they knew they had survived the worst phase. With grit and resolution, they looked forward to make a better lot for themselves in the new land
The fall of Saigon was the time of reckoning for the Ly family. The brothers sat together to decide for the family and its future. Finally, they decided to get of the country. The year was 1978. They managed to get a boat to Malaysia. After a stressful passage through the seas, getting past pirates and other troubles, they finally landed in Malaysia. At the Red Cross refugee centre in Malaysia, they found safe haven. From here, the Ly family migrated to USA over a period of time. By 1980, all of them had reunited in San Francisco.
And in the land of dreams, they started to put life together and dream. They found jobs and started to save. In 1984, with pooled resources and bought a small doughnut shop by name of Sugar Bowl Bakery. That was the humble beginning of a big success story.
The initial investment soon went up to become a preferred manufacturer of a line of desserts at two 55,000-square-foot manufacturing facilities. The produce was sold through retailers like Costco, Safeway, Kroger and others across the United States.
The Doughnut Business becomes bigger
When Ly family bought the original Doughnut shop, the sellers passed on some of their recipes of doughnuts, muffins and croissants. Andrew Ly, the ambitious young man was industrious as well as hardworking. He learnt English and graduated from San Francisco State University with a degree in accounting. He was a self-starter with drive and his business acumen soon saw the Doughnut shop selling pastries to 7-Eleven and other doughnut shops in the Bay Area.
Soon Andrew Ly was taking business further. He met hotel managers, convention centre staff and universities who were on the lookout for suitable associates to outsource their bakery operations. He tapped the opportunity and created a food service division, ultimately becoming the largest food service provider in the Bay Area, serving some of the hot new start-ups at the time like Google and Yahoo.
Several years later, a team of Costco buyers were on a visit to Sugar Bowl Bakery when processing line noticed a multi-layered Puff Dough Cookie. Made to highest quality standards, with all butter and folded with more than 300 layers of doughs, the product was approved by Costco for mass retail. Renamed Palmier, the cookie became so popular that it soon found its way to Costco stores across the US. This was another turning point in the history of Sugar Bowl Bakery.
Delivering at Scale
As the General Manager and Vice President Michael Ly put it, “It was a big change moving from food service to high volume manufacturing for retail.” He went on to add “In food service locally, a big customer might want 1,000 brownie bites an order. With Costco you might have to make 600,000 brownie bites consistently every week. It’s a much different business, a different level of scale.”
With their reputation intact is producing on scale, other orders came along. Safeway, regional grocery chains, and national retailers like Kroger and Walmart too were interested. This led to major expansion of Sugar Bowl Bakery from its initial single production unit to multiple plants with state –of-the-art facilities. Today Sugar Bowl Bakery manufactures few million items a day, baking Brownie Bites, Palmier, Madeleines, Duet Bites and Apple Fritters.
Value for Money
Competition is always tough. To get around multiple factors and write home a profit, Sugar Bowl began by giving the end customer value for money. “Our go to market was to make much higher quality cookies in big volumes and sell them at a great value due to our ability to lower our manufacturing cost. We bought ingredients at high volume to receive good pricing” Ly said. “Consumers now buy our high-quality baked goods from retailers and get much greater value than what they’d get at a cafe. When we were in food service locally, we had more than 750 items, but it was very hard to scale due to complexity. We changed our business model to focus on just a few items at the lowest cost. We knew by doing that we could dominate our category. We have become the leader of high-quality bite-sized baked goods in the supermarket bakery perimeter area”
The strategy paid off and Sugar Bowl Bakery’s strategy has achieved double digit growth for many years straight.
Migrating to NetSuite
With exponential growth, Sugar Bowl Bakery discovered that its management became more time consuming and demanding. The existing Microsoft NAV system the company was using was found to be incompetent and way to complex. And its troubles cropped up, even trouble shooting was complex. The executives were demanding a less complex, yet flexible system that could be customised without much trouble. But the company was reluctant as too much was at stake on a usual migration which might call for more resources and disrupt the business.
NetSuite was finally selected over SAP Business One as it was cloud based and simpler to use.
“We knew we wanted to keep scaling and didn’t want the complexity of anything including the servers to be a bottleneck,” Ly said. “We didn’t want the ERP system to hold us back.”
NetSuite served the purpose. Real-time insights into its business were unified into the system and it helped Sugar Bowl transform from lot-based accounting to standard-based accounting. Business performance evaluation could now be done in real time detail.
Happy with NetSuite’s performance, Sugar Bowl Bakery, one of NetSuite’s early food manufacturing clients, implemented the Advanced Manufacturing module in January 2018.
“We have a lot of discipline on the manufacturing floor now,” Ly said. “Now we’re really into a stage where we can do continuous improvement and analysis related to KPIs to control cost on the manufacturing floor.”
Thus, powered by NetSuite, the success story of Sugar Bowl Bakery is poised for more. With nights and shop floor discipline, Sugar Bowl Bakery believes that It is can grow further to serve the entire East Coast.