April 18, 2020

Everyone is baking — and entrepreneurs are rising up to meet the demand

A look at the numbers behind the latest quarantine craze, and the small businesses that are filling a gap in the market.

Four weeks ago, Aaron Caddel was in a sticky situation.

He’d been forced to close both the San Francisco and Los Angeles locations of his popular bakery, Mr. Holmes Bakehouse. In a span of 72 hours, all 60 of his wholesale customers — about $3m worth of business — canceled their orders indefinitely.

“I had single mothers on staff begging me to keep their jobs,” he told The Hustle. “So I just had to turn to solution mode: How can I create an insurance policy against this economy?”

The 28-year-old noticed two things: 1) the quarantined masses were baking their own bread at home for the first time, and 2) ingredients were in short supply at the stores. Why not tap into his supply chain, sell an all-inclusive kit — yeast, flour, detailed instructions — and empower his customers to bake their own Mr. Holmes loaves?

He had no experience in e-commerce. But he did have a 4.2k sq.-ft. warehouse, a staff of skilled bakers, and 121k Instagram followers. Could he pivot his business on a dime?

Caddel is one of many small business owners recalibrating to serve a rapidly growing class of housebound bakers.

To better understand this trend, I spoke with some of the world’s biggest yeast and flour companies, surveyed more than 900 bread enthusiasts, and spoke with entrepreneurs who are stepping in to fill gaps in an overwhelmed supply chain.

The rise in at-home bread-making

In the age of COVID-19, bread-baking — a 14,000-year-old craft — has experienced an upswing in popularity that many experts say is unprecedented.

The boom began around March 13th, when President Trump classified the virus as a national emergency. As states across the country announced stay-in-place orders, many Americans turned to baking as a way to relieve stress, pass long hours at home, and insure themselves against potential food shortages stoked by panic-buying.

Zachary Crockett / The Hustle

We asked readers of The Hustle to weigh in on why they took up bread-baking during COVID-19. A few themes among the 900+ responses:

  • Comfort: “There’s something therapeutic about simplistic, repetitive tasks.”
  • Stress relief: “I work in healthcare, and baking bread has been a nice distraction from all the madness.” 
  • Self-reliance: “We need to get back to our roots and learn how to do stuff instead of depending on others.”
  • Unity: “It’s nice to ‘break bread’ with friends in a new socially distant way.”
  • Low cost: “How can you beat 10 fresh hoagie buns for less than a buck?”
  • Store avoidance: “There’s no way I’m going anywhere near a Trader Joe’s.”
  • Boredom: “My graduate student son and his girlfriend moved in with us and we all needed a way to pass the time.”

For some respondents, like Michelle Cousins, baking bread provides a sense of empowerment in a time when many things are out of our hands.

“I can push, and pull, and take out my frustrations on this mess of flour and water and yeast,” she wrote. “Maybe it’s my need for control at a time when I feel I have very little over my own circumstances. It seems almost primal.”

For others, it is simply an excuse to buy new tools.

“I bought a dutch oven, mason jars, flour cloth towels, a proofing basket, a spatula, and bread razor,” says Mitchell Steere, a software developer from Michigan. “All in all, I have about $140 into supplies and equipment, so I figure I only need to bake another 69 loaves before I start seeing an ROI.”

These bakers have flocked by the thousands to r/Sourdough (170%+ increase in the subreddit’s followers since January) and other digital dens of dough devotion.

According to data from Chicory, a tech company that helps websites like Delish and Betty Crocker monetize their recipes, articles on how to make sourdough starter saw a 1,258% spike between March 8th and April 4th.

Zachary Crockett / The Hustle

Inspired by photos of freshly baked loaves on Twitter and Instagram, the newly minted Boulanger class has upended the baking supply chain.

According to the analytics tool Jungle Scout, search volume for bread-related products on Amazon has exploded. In the last 30 days, “all-purpose flour” has seen 320k searches — a 3,618% increase over last month.

Various queries for yeast have ballooned by as much as 5,343%. Bread mixes, bread pans, and bread books (particularly, Ken Forkish’s 2012 classic, Flour Water Salt Yeast) have seen jumps of over 400%. Many products are sold out or are on backorder.

Zachary Crockett / The Hustle 

Some companies are having a hard time capitalizing on this demand, simply because their production can’t keep up.

Red Star Yeast, a subsidiary of the largest yeast manufacturer in the world, has seen a sales bump of 647% since last year and is currently experiencing 3x its usual web traffic. But the company’s spokeswoman, Kelly Olsen, says Red Star — which is used to filling large bulk orders for restaurants — can’t package and transport consumer-sized servings fast enough to fill order requests.

King Arthur Flour is in a similar twist.

The 230-year-old company sold 6.6m bags of flour in March and experienced a 30x increase in online sales of its 5 lb. all-purpose flour. It is currently sold out of most of its offerings and has increased milling output and shifted transport from rail to truck in a bid to be ramped back up by May.

“The quantities we’re seeing now are double what we see during our busiest holiday months,” says Bill Tine, the company’s VP of marketing. “The demand is simply unprecedented and is outpacing the inventory in our warehouses.”

Bread machines — which were owned by 25m Americans during the ‘90s before falling out of favor — have seen a 652% bump in online sales. Now, popular brands like Cuisinart are ramping up production on a device once thought to be antiquated.

“We were out of stock for a short period of time due to demand but are now back in inventory this week,” says Cuisinart’s marketing director, Mary Rodgers.

As major corporations flounder to meet demand, a number of intrepid entrepreneurs have stepped in to fulfill our doughy desires.

Knead for speed bread

Aaron Caddel describes himself as “the opposite of an alpha leader.”

When he started Mr. Holmes Bakehouse in 2014, he was a 23-year-old college dropout who suffered from frequent seizures — the result of a benign (since removed) brain tumor. Perennially fitted with bespoke glasses, black skinny jeans, and a backward baseball cap, he looks more like a math rock frontman than a baked goods titan.

But when COVID-19 struck, halting his retail ($2m/yr), wholesale ($3m) and burgeoning franchise deals in Asia and the Middle East ($20m), he flipped into “shark mode” to save his company.

Aaron Caddel (top) converted his Los Angeles croissant warehouse into a fly-by-night packaging center for his new e-commerce bread kit venture (Courtesy of Mr. Caddel)

He called his suppliers and negotiated a deal on several pallet loads of yeast and flour. He spent long hours learning the skeletal fundamentals of e-commerce. He designed a box with his team, figured out how to package small pouches of yeast and flour, and created a dedicated digital sales landing page in a matter of days.

Typically set up for the 3-day production cycle of croissants, his warehouse was converted into an ad-hoc shipping portal; his employees — some of whom are “among the most badass croissant laminators in the country” — are now on packing duty. 

Two weeks ago, Caddel and his team launched the fruit of their labor: a $25 bread starter kit that includes everything needed to bake a loaf at home.

Caddel reports the company has already sold thousands of kits to people in 47 states. He has since expanded his line of offerings to cookies, scones, and pasta, and is (ambitiously) aiming to scale the kits to $100k/day in sales by next month.

He is reinvesting profits in his staff and has committed to donating 20% of certain sales to elementary schools. “I want to be the Girl Scout Cookies of the public school system,” he says. “The sales we’re doing is amazing, but I want to grow the company during this time — not just create some kind of float.”

Caddel isn’t the only entrepreneur filling a void in the beleaguered bread supply chain.

Gwynne and Jay Marks run the Marks Trading Company, a spice provider in Adrian, Michigan. In the early days of COVID-19, the couple saw their sales drop by 75%.

Then, a wholesaler contacted them with a proposition: He had yeast but couldn’t find a way to package it for consumers; they had tiny plastic packets. The resulting yeast packaging partnership boosted online sales by 300% and has floated the small business through the crisis.

140-year-old sourdough starter for sale on Etsy (Courtesy of MomsSanFranSourdough)

On Etsy, no less than 300 sellers are hawking bread starters, heirloom yeast, and artisanal flours.

Among them is Patricia Blais, a 92-year-old retired teacher who has sold more than 3k packets of her 140-year-old sourdough starter — $5.95 for 2 tablespoons.

She says business really started to take off around mid-March when California counties were first ordered to shelter in place. This month, her entire family has pitched in to help fulfill a 350% surge in demand.

Some bread-makers have also taken to social media to offload fully cooked goods.

When Cody Howell, a commercial production assistant from San Diego, found himself out of paid work last month, he sourced some flour from a local casino wholesaler and began posting his sourdough on Instagram at a “pay what you can” scale.

To date, he’s netted $1,588 from 96 loaves — enough to cover his overhead expenses and pay his $1,455 monthly rent.

“I typically get started at 6 am and wrap things up for the night around 6-8 pm,” he says. “Most of the baking process is passive anyway, so it doesn’t feel like work. But I do have to dedicate time throughout the day to it.”

Cody Howell goes door-to-door, dropping off his loaves at a safe distance (Courtesy of Mr. Howell)

All over the country, long-time bread-bakers have taken to Craigslist, Facebook Marketplace, and eBay to offload yeast packets, 10 lb. bags of flour, and bread machines to a deprived public.

Manny Reyes, of Sausalito, California, is looking to get $40 for his Breadman Ultimate, about half of what he paid for it. (“I figured everyone is baking so why not put this up for sale,” he writes.)

Little baggies of bread starter — many of which resemble teeners of cocaine — can be found in abundance for $5 to $20. Some have names (“Bread Pitt,” “Bubba,” “Wilson”) and come with elaborate genealogical histories.

After talking to all of these bread enthusiasts and the entrepreneurs serving them, my curiosity got the best of me.

I don’t particularly love cooking (only 10% of Americans do). I’ve never really baked (unless you count those pre-made Toll House cookies). In general, I feel pretty indifferent toward food (yes, I’m a cretin).

But after a month of indoor confinement, the escapism of baking is appealing. As a civilization, we’ve baked bread through world wars, pandemics, and depressions; there must be a reason the great Spanish writer Miguel de Cervantes once wrote that “all sorrows are less with bread.”

So, last week I bought a bread kit and decided to give this thing a whirl.

At yeast I tried

Shortly after 1am on a recent weeknight, I hovered over the oven wondering when — or if — my loaf would finally rise.

I’d fed the starter some all-purpose flour and 9 tablespoons of ice water. I’d entombed it in my refrigerator next to a pair of expired kiwis for 24 hours. I’d plunged my fists into the sticky mess and kneaded until my palms hurt. I’d assigned it a name (Pierpont) and coddled it like a newborn baby.

On more than one occasion, I’d wondered how a bubbly mass of fermented microbes had temporarily become the most meaningful thing in my life.

My loaf emerges (Zachary Crockett / The Hustle)

In the end, the process wasn’t especially calming or therapeutic. It didn’t stoke the flames of pioneerism or self-reliance. It wasn’t cheaper than the loaves at the corner store.

But for a brief moment in time, it incubated me from the harsh realities of the world outside of my kitchen and engendered some small sense of communal existence.

There was solace in knowing that thousands of other people all over the world were simultaneously making their own Pierponts, and Bubbas, and Vincent Van Doughs. They, too, hunched over countertops, crafting challah, focaccia, Japanese milk bread, babkas, and beignets.

In a moment of pride, I texted a picture of my work to Caddel. I’d used his bread kit; what did he think of my craftsmanship?

“Just know, I’m here for emotional and spiritual support 😂,” he responded. “But in confidence, you under-kneaded and under-proofed that dough.”

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