In this interview, we spoke with Sadie Scheffer, gluten free maven, and the Founder and CEO of Bread SRSLY. She offered candid perspectives on striking the right balance between daily operations and high-level strategy; the pros and cons of growing more slowly; and tricking your crush into dating you through the medium of baking. For all the aspiring food entrepreneurs out there, we hope you find Sadie's answers refreshingly real, and encouraging!
Jonny Price, Director of Business Development at Wefunder: Can you start by telling us what you do at Bread SRSLY?
Sadie Scheffer: Bread SRSLY is a gluten free and vegan sourdough bread company based here in the Bay Area. We got started in 2011 in my apartment -- a little before the cottage food laws came into effect, so we were illegal for a while!
In my personal role as owner and founder, I do a little bit of everything. We’ve been experiencing some exciting growth recently, so my focus has been on hiring for the last couple of months. Now that we’ve hired the people we needed to, my focus will shift to training and onboarding them -- if I had known what I was doing when I started, I would have written these training manuals at the beginning, but as usual with a startup, we’re playing catch-up with that!
JP: How did you get into it?
SS: I started baking with gluten free ingredients in 2009, when I moved to San Francisco to follow my college crush, Jesse. He was gluten intolerant. But when I got here, Jesse was not interested in dating me...which was a surprise to me! But I was very determined and smitten, and so I racked my brains to see how I could trick him into hanging out with me. And I decided that if I had delicious baked goods that he could eat, then that would maybe do the trick. So I got my hands on some gluten free ingredients, and just started experimenting. I was a little stubborn, and didn’t want to use anybody else’s recipes -- I wanted to make them mine. So I just started to make stuff up. I didn’t even measure anything, I just used handfuls. And any time anything came out well, or even “better than terrible”, I would invite Jesse over.
Me and Jesse started dating after a year -- which was probably the longest year of my life! And another year after that, I discovered that I was also gluten intolerant. But by then I had all these recipes. Jesse and I were already living together, and we were already keeping a gluten free household.
Around the same time, I also got really into in wild fermentation. I was making sauerkrauts and pickles, and was interested in sourdough, but I was bummed that I had missed my window of opportunity there, because I had just found out I was gluten intolerant, and sourdough is made with wheat flour.
But even though I thought it probably wouldn’t work, I was determined to give it a shot, so I left out some test flour and water in a bowl on the counter, and fed it once or twice a day. And after about a week it started to bubble. And I realized that gluten free sourdough was possible!
So I then started experimenting with my bread recipes, and working on my sourdough starter. I killed a couple of them, but the third starter was the one that stuck around, and it’s still the one that we use today.
JP: ...What is a starter?
SS: A starter is like a “mother”. It’s the culture, the living part of sourdough. Sourdough is a collection of wild yeast and bacteria, and they work together to ferment and break down a bread dough.
JP: And had nobody figured out gluten free sourdough before?
SS: I think some people probably had. But nobody had really shared it, or taken it to market.
JP: There’s a lot of biology here! Do you have a biology background?
SS: I don’t. I have an Art and Engineering background. But I have learned a lot about bread theory and bread history, and things like that.
JP: Were you already a bread enthusiast, and then you came into Bread SRSLY? Or the other way round?
SS: No, I was definitely not a bread enthusiast before I started the company. I was a fermentation enthusiast, but not specifically bread. In fact, not bread at all -- I was more focused on pickles. I have just picked it all up as I have gone along.
JP: So that was how Bread SRSLY got founded. What about where the company is now?
SS: Well we just hired our 19th employee. We are based in Berkeley, and just signed a lease on our first commercial kitchen that’s entirely ours. This is a huge deal for us! We’re 7 years old and we have always been in someone else’s kitchen. We’re not operating in it yet. We just built our new oven, but it hasn’t been hooked up to gas, power or ventilation yet. And there’s a few more equipment purchases we need to make before hopefully we open it up and begin operating in about a month.
And in terms of revenue, last year we did about $1.4M. We are on track to do about the same this year, because we had to scale back our capacity because we moved into smaller kitchen. But now that we’re moving into our own kitchen, and expanding capacity again, we are expecting to start growing again in 2019.
JP: Over your years running Bread SRSLY, what are some of the biggest lessons you've learned, which you can impart to other early food entrepreneurs?
SS: The best lessons are probably all of the tiny ones. And honestly you probably have to just wait until you mess it up the first time. I could tell you all the things I’ve learned, but I might have actually heard them all before I made them! But it takes the trauma of experiencing them yourself for them to stick.
But let’s see...do your books right the first time -- with an accountant. That’s a lesson I’m still learning!
Have a comfortable cash buffer. The right way to do this is to actually do your cashflow analysis correctly and early. The other way is to just have too much on hand, so you don’t need to perfect your cashflow analysis.
Never underestimate the power of your network. No connection is too small to turn into something really surprising. Get out there and meet people, tell your story. Be personable, be nice, be generous. People will remember that, and they will want to be on your team.
JP: And what about right now, what keeps you up at night these days?
SS: Err.. a lot! Definitely moving into the new kitchen. Which includes everything from how can I better execute my food safety training for my kitchen employees, to how can I afford this new depositor machine, to how can I change Sunday’s schedule? Just so many operations challenges. Right now I do our operations, even though I am totally unqualified for it.
JP: On that topic, as the CEO of Bread SRSLY, how do you balance those operations with the company’s high level strategy?
SS: That’s been a real challenge actually. My staff are really incredible -- there are 6 of us in the office, and 13 in the kitchen. I spend most of my time with the people in the office, which is our marketing director, our account manager, our facility project manager, our finance and administrative manager, and our administrative assistant. I hired them all in part because they are all pretty good at being independent and self-managing. What that translates to, now that I have learned how to be a better manager, is that they can all make decisions and contribute to brainstorms, and the direction of the company. And there is a lot of trust and transparency on our team -- we can all be very direct and open about how the business is going.
And every time we hire a new team member, that enables me to step back from the day-to-day a little more, and focus on the bigger picture.
JP: How have you gone about raising capital to-date?
SS: Mostly through Kiva. I first met you about six years ago, and have now done three Kiva loans. They offer 0% interest loans for small businesses, and I was able to get a $5K, a $10K, and most recently a $25K loan. They have all been crowdfunded, and it’s a wonderful tool. And also a great marketing tool -- it’s a good network to be connected with.
And that’s most of the funding we’ve gotten. We got a $5K grant from Intuit because we won a contest. And I have definitely put in most of my savings. And I got a couple of thousand dollars from my dad -- thanks dad!!
But beyond that, we have just grown at the rate of our cashflows.
But now we are coming into a time when we need to increase the capital we raise.
In many respects it has been nice to grow to this stage without taking on outside capital. But there have been some big disadvantages as well -- we could have grown a lot faster, we could be in more markets with more SKUs, we could have hired for operations, freeing me up for higher level decisions sooner, things like that.
So our growth rate has been slower, but that is not a bad thing -- necessarily. In the tech sector, a slow growth rate would be very undesirable, because it’s so competitive and fast-moving, and your only asset is your intellectual property. But it’s less true of the food CPG world. We now have an established brand so we are not totally under threat from competitors.
And another big advantage of the slower growth rate for me personally is that it gave me time to learn over the years -- how to be a baker, how to run a kitchen, how to be a manager, how to be a great hirer. I’ve grown a lot as a person, and I could not possibly have grown any faster. So if we had brought on funding, then I would not have been the right fit for the CEO.
JP: Right! I think that’s a really good point. I think sometimes when you bring on outside capital, especially venture capital, it puts a lot of pressure on to deliver the hockey stick. And sometimes that can break a company. Whereas if it had had a more natural evolution of growth like you’ve had, then the company could have grown in strength over time, and had a higher probability of surviving. So the growth rate is slower, but it’s less destabilizing.
JP: What other food entrepreneurs do you admire, or aspire to emulate?
SS: Miyoko of Miyoko’s Creamery. Her business is killing it! And her products are beloved by the vegan community. She’s got a really good thing going, and she is so clearly passionate, not just about her product, but about veganism and animal welfare. I am not vegan and I eat her products personally.
I’m also really excited about Just Date Syrup, which is run by my friend Sylvie. She was a physician who decided to go into the food world, and try to offer this alternative sweetener that is made from dates. She’s just a lovely person, and has a beautiful brand.
JP: And lastly, what are you loving eating or drinking right now?
SS: Well it’s mostly home cooking these days!
I just got some Nana Joes Granola in the mail. They sell the broken bits of their granola bars on their website, and I just got a big old box of that, which I am very excited about. It’s like a cookie disguised as a granola bar, but you don’t feel like you’ve eaten a cookie afterwards. And they’re all made by hand, and she is a lovely lovely person, and super passionate about her product.
And I’m excited about Early Girl Tomatoes -- they are just beautiful sugar gems. So I’ve been buying them from the grocery store and the farmers market, as they’re in season right now.
JP: Do you know they are they called Early Girl?
SS: I don’t know that.
JP: I’m going to look it up. [And the answer appears to be partly because these tomatoes are short-season tomatoes that ripen early, and partly because the company that first marketed them in the U.S. wanted to complement the name of their existing “Better Boy” varietal]
SS: And the other thing I really like right now is Millet Tots. They are a brand out of Colorado, and they are basically tater tots made out of millet, an ancient grain. They are gluten free and potato free, and I happen to have a weird potato allergy. So I love millet tots -- they are a very nice indulgence.
Thanks so much to Sadie for being our first interviewee in this nascent Epicurean community. You can follow Bread SRSLY on Instagram here and Facebook here, and buy their delicious wares (or learn where to find them) at their website here. Enjoy!
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