Ingredients: A sensible business plan, a large target market, controlled spending, and a little bit of good karma
Celine Ikeler owns Karma Baker, a vegan and gluten-free bakery in the Los Angeles area that serves up just about anything you can think of (ALWAYS gluten-, egg- and milk-free), from oatmeal chai sandwich cookies and chocolate cake to baguettes and pizza pockets. Karma uses Organic Gluten-Free Baking Flour Mix, a vegan, nut- and bean- free blend that it sells direct to consumer online and in-store.
The company opened its storefront in 2013 and ships orders nationally. The store racks up about $500K annually and caught recognition from several celebrities like Kim Kardashian, who has a thing for its chocolate cookies.
Ikeler has a dedicated kitchen to ensure her products are safe for those with celiac disease or severe wheat allergies. At the time she opened, finding bakeries that carried gluten-free and vegan products was challenging. Narrowing her audience seemed dangerous but she never doubted it was the way to go. Now, 2.7 million people (including those without celiac disease) have reduced or eliminated products containing gluten. Ikeler believes that integrity is critical when creating a business. One must truly believe in what she is making and doing.
What are her marketing and growth tips?
Ikeler started out in her home kitchen, selling to local cafes. When she outgrew it, she rented kitchen space from another baker to keep expenses low. Then her husband left his job to partner with the business and an investor “came out of nowhere” to partner with the couple. Still hoping to have a dedicated gluten-free facility, Ikeler happened upon a perfect space while out running errands. The location already had a large kitchen, walk-in fridge, freezer, two huge ovens and a commercial grade mixer PLUS 250 cookie sheets and a dozen tables and racks. A door closed for one business was a door opened for Karma.
Demos and product tastings are important for a new food business. When people tasted Karma’s products at farmers markets and in stores, they became fast fans.
What led to Karma’s success? “For us it was to diversify,” says Ikeler. “We started as a wholesale supplier to cafes and grocery stores but found ourselves in a kitchen with a cute little storefront, and customers tapping on the glass asking when we’re going to open. It wasn’t in the business plan, but we stuck an open sign in the window, and now have a bakery store. While that built itself up with word-of-mouth, we also did farmers markets all over Los Angeles and even the beaches. This got folks to know about us and we directed them to our store and the grocery/cafe locations close to them. It was like free advertising and now we had three revenue streams. Once we closed the farmers markets we could focus on building a website to service the nation. So now we ship our bestsellers and our flour blend nationwide.”
The business lesson here is that entrepreneurs need to focus on those opportunities that generate the most revenue, sometimes stepping outside their comfort zones. In order to scale, founders sometimes need to abandon less profitable and more labor-intensive activities (like the local markets).
What good “Karma” does Ikeler have for other foodpreneurs?
“Be as clear as possible about what you want and then ask for it. Whether it’s a kitchen location or a certain kind of employee, clarity is essential. Know why you are doing what you are doing. Set small goals and intentions and move towards them.”