Guilt. Maybe it’s basic instinct or just a quirk of human nature for some people when it comes to eating dessert. But for Just Desserts, “guiltless” desserts aren’t in its DNA. After more than four decades, the San Francisco-based company remains focused on pure indulgence through its modern interpretations of classic American desserts. Yet for those who feel a bit of remorse after giving into temptation, the company may have stumbled onto the next best thing.
“No Regrets” — as in “having your cake and eating it, too” — is the name of the campaign, which has multiple faucets to it. From bite-size portioning to organic and vegan product expantion, No Regrets is the result of the company’s growth and investment in new equipment and ideas. Just Desserts bakes from scratch using familiar ingredients, such as butter, whole eggs, cream cheese, real carrots for carrot cake, and chocolate — up to 20 percent chocolate — in some of its top-selling products.
The No Regrets initiative also includes a growing line of single-serve treats and brownie, blondie, muffin and coffee cake bites, noted Michael Mendes, CEO and managing partner of Just Desserts. In addition to providing portion and calorie control, the snackable bites allow the business to broaden its demographic base by attracting millennials, grab-and-go consumers and younger, smaller families. The bites also serve as an alternative to its full-sized cakes, which traditionally skew toward a more mature, affluent audience.
“If someone eats one of our bites, they feel satisfied,” says Craig Tokusato, who helps lead marketing efforts. “If they eat more than one, they’re simply enjoying the second bite with no regrets.”
Since joining the company three years ago, Mr. Mendes and his go-to-market team have spent hundreds of hours conferring with its in-store bakery customers — in addition to conducting custom research — to glean insights. The result is a comprehensive brand strategy that works on multiple levels through interrelated platforms.
Perhaps the biggest initiative involves rolling out packaged, thaw-and-serve organic and vegan sweet goods geared toward in-store bakeries and, later this year, to the freezer section of grocery stores, according to Mr. Mendes.
When it comes to organic and vegan, he adds, the phrase “no regrets” sometimes takes on a different meaning, especially if taste doesn’t match expectations. As a result, Just Desserts worked on countless variations of its organic and vegan formulas to make them just right.
Built for expansion
Just Desserts invested millions moving production from its aging and cramped Oakland facility into a renovated 75,000-sq-ft building located on seven acres in nearby Fairfield, CA. The SQF Level 2-certified facility opened in May 2015 — a short six weeks after closing the Oakland operation — and is specially designed with separate storage areas for proper handling and segregation of organic, vegan and allergen ingredients.
The brownfield bakery — which is USDA Organic Certified through California Certified Organic Farmers — also houses an 11,600-sq-ft freezer that’s three times larger than the one at Oakland. The extra capacity allows the bakery to freeze its products — all of which contain no artificial colors, preservatives or trans fats — almost immediately after packaging to seal in freshness. ISBs just need to slack out the labor-saving desserts and sweet goods to put them on display.
In 2016 the company purchased a new Tonelli planetary mixer and Babbco impingement oven to double throughput, lower cost per unit and, most importantly, strengthen consistency and heighten quality from batch to batch of its delicate bites and other products. “Getting the mixing and the baking right was the most important part of the process,” Mr. Mendes says.
To compare the new production line with its PLC-controlled oven (which can handle up to 150 different recipes while reducing bake time by 35 percent) to the original direct-fired oven, Mr. Mendes uses the analogy of an old-time television set. “It’s like going from black-and-white to color,” he says.
“On the older oven, you could only use temperature and time to adjust the quality of the bake. Having the added capabilities available of the impingement baking controls on the new oven allows us to modify the process in real time. We can also interface remotely with Babbco to have their engineers monitor the oven performance, allowing us to obtain greater efficiencies while maintaining quality.”
Over the next year, the company will be looking to further automate depanning, cooling, decorating and packaging. While the first stage focused on maximizing the quality and consistency of current and new items, Mr. Mendes anticipates the next round of upgrades will likely provide an even greater return on investment by reducing labor and increasing yield in the packaging and decorating areas.
Such savings will allow Just Desserts to bolster its marketing initiative to build its in-store bakery brand, educate consumers about organic and vegan items, and expand its national presence even more within the channel.
Clearing the organic hurdle
By driving volume and streamlining production, Just Desserts also plans to close the price gap — perhaps one of the biggest barriers between organic and conventional baked goods.
That’s especially true for inviting value-conscious consumers to buy organic foods, and for increasing the frequency of purchases by millennials. This group has embraced organic more than other demographic and rejuvenated the $20 billion food category over the past few years. “People really value organic, but they just don’t value it as much as it costs for most products,” Mr. Mendes observes.
Currently, Just Desserts’ organic treats on average sell for an 18 percent premium to conventional goods, but it’s striving to slash the gap to the low double-digits or even a high single digit. That’s a modest premium that many consumers are more willing to pay in order to trade up to organic, according to the company’s research.
Most of the premium comes from the higher costs, limited availability and shorter shelf life of organic ingredients — all of which impact yield. “We’ve gotten into the heart of ‘Why is organic so expensive and what can we do about it?’” Mr. Mendes says.
Managing the sourcing and the use of organic ingredients becomes vital. “We can’t do much about the cost of organic eggs, but that’s only part of why organic foods are so expensive,” he explaines. “If you buy more organic eggs than you need, due to their short shelf life you have to use them in your ‘natural’ products, and that’s going to drive up the costs as well.”
Baking a better bite
Introduced in 2014, organic and vegan products now represent about 30 percent of the company’s overall annual sales, which Mr. Mendes anticipates will double over the next few years.
“Just Desserts is supporting long-term growth in a scalable platform through investments, not only in its modern facility, but also in brand franchise and product innovation,” he says. The resulting staff is an all-star lineup for the brand.
Mr. Mendes assembled a management team consisting of food and retail industry professionals who were seeking a more adventurous stage in their careers. “We assembled a group of entrepreneurially-minded individuals,” he says. “In a smaller, more focused operation, we need people who are hands-on and will embrace the grittiness. We’re sort of like a Silicon Valley startup company, except we’re in the food business.”
In addition to Mr. Mendes, Mr. Tokusato, and Ms. Chan, the team includes Leighton Mue, CFO; John Wohlgemuth, vice-president of operations; Amresh Raj, and plant manager and director of quality assurance. Overall, the Fairfield facility has 33,000 sq ft for processing, 20,000 for packaging, 12,000 for warehousing and 10,000 for offices. Sales, marketing, R&D and administrative offices remain in San Francisco.
More than 100 people — including transfers from the Oakland bakery and a swath of new and seasonal employees — work at the company. Typically, the bakery runs 7 a.m. to 3:30 p.m. on one packaging and two staggered production shifts five days a week. “Training is an ongoing program with so many new people joining the company since the bakery started up,” Mr. Wohlgemuth says.
During sister-publication Baking & Snack’s visit, Just Desserts was cranking out about 250,000 brownie bites on its new production line. In the mixing room, 2,500-lb totes supply whole eggs and other liquid ingredients while flour and sugar come in bags. Because all Just Desserts products are made from scratch — no prepared mixes — the bakery uses a Savage Bros. block butter melting system and a Groen chocolate melting system.
The new Tonelli planetary mixer significantly boosts capacity, allowing the bakery to create 1,200- to 1,300-lb batches instead of the 250-lb ones created by four Hobart mixers brought over from the former Oakland facility. The mixing bowls are rolled over to two Hinds-Bock depositors that can handle eight 48-piece pans per minute. And this year Just Desserts will install two more Hinds-Bock depositors that will double capacity and improve the application of streusel, which adds another layer of texture and crunch to its coffee-cake bites and other sweet goods.
After depositing, the pans travel along a CBF Bakery Systems conveyor and oven loading system to the Babbco 55-ft, two-zone impingement oven, which Mr. Mendes calls “the heart of the operation.”
Applying the artisan touch
After baking, the bites and other undecorated cakes travel around an ambient spiral cooler for about 30 minutes. The bakery plans to install a second cooler this year to accommodate the increased throughput created by the new depositors. “As is often the case, one bottleneck — such as the depositors feeding the ovens — creates another,” Mr. Mendes says. “They’re always a moving target.”
Downstream in the cake decorating and packaging areas, many of the modular systems can be moved around to reconfigure or bypass them and create four different lines, accommodating the bakery’s wide variety of products and SKUs. The bites, for instance, are manually loaded into plastic cups or trays that come in 8-, 12-, 16- and 24-count sizes. The trays then travel through a Nita system that applies Belmark and All American labels and Mettler-Toledo metal detection before cartoning.
On a separate line, cake decorating combines automation with the art of hand-decoration. For example, 6-, 8- and 10-in cakes pass through two Unifiller System machines that apply icing to the exterior and center of the cakes. Decorators then hand-decorate the cakes, smoothing icing around the base and applying a variety of toppings depending on the item. After applying the plastic domes, the 6-in cakes travel through an SIS metal detector before being manually packed four to a case. The palletized products are then wheeled into the storage freezer, set at below 0°F, and held for up to a week while a third-party lab conducts microbial tests.
To protect the desserts, decorators apply a dollop of icing on the base of the cake that, when frozen, secures it to a golden liner attached to the square base, which doubles as a serving tray for consumers. Likewise, its cupcake plastic packages have a crimp or indent on the side to secure the liner and hold the cupcakes in place. So even if the package flips upside-down while being shipped, it won’t shift or damage them.
And for Just Desserts, such attention to detail is critical to its long-term success. It’s all about doing everything just right.
“In five years, we’ll see a much larger company thriving from its long-term view of investments in consumer- and retailer-centric innovation, quality and efficiency,” Mr. Mendes predicts. “We have built a manufacturing platform that will allow the significant business expansion we anticipate in the future and that we have already begun to experience in the past year. We are taking many big steps today to build a much larger, scalable franchise that can drive growth in the overall market for desserts and sweet snacks.”