Too Good Gourmet employs a full-time illustrator to create package designs.

After five years of building a brand and a reputation, Too Good Gourmet found itself with a wad of cash and dwindling options. For Amie Watson and Jennifer Finley, the company’s mother/daughter team, their contract bakery already had given 100% of its capacity, and there was no room for more orders. Additional contract bakers were available, but was that going to elevate the company to the next level?

The only option was to build a bakery, says Finley, Too Good Gourmet’s president, which is what she and her mother did. They took their cash and built a 42,000-sq.-ft. cookie bakery in San Lorenzo, Calif., about a 30-minute drive from San Francisco.

The bakery opened its doors in 2004, and as the company approaches its second full year of production, the company is operating on all cylinders. But it was not always this way.

“When we moved here, I can honestly say that we did almost everything wrong,” Finley says. “It was a lot more difficult than we thought.”

The most significant problem was the delivery of the company’s 80-ft. tunnel oven. Manufactured in Denmark, the oven was lost in transit several times. By the time the oven was up and running, it was August 15, well after the scheduled installation date.

“We made sales commitments based on the [previous] date, so we started that holiday season two and a half months behind,” says Watson, Too Good Gourmet’s chief executive officer. “We never caught up.”

However, the company did survive. And in 2005, “We made money, and we did a lot of things a lot better than we did in 2004,” Watson says.

This year, the company is more prepared. With two years of baking experience and a new bakery production manager who has more than 30 years of experience, Too Good Gourmet is operating at peak performance as it prepares to ramp up production for its holiday season, which begins in June.

It’s always holiday season
It is June, and Finley has a snow globe on her desk. If it were March, she still would have the snow globe on her desk. It is there 365 days a year as a reminder that it always is the holiday season at Too Good Gourmet.

About 70% of the company’s sales are recorded in the last quarter of the year from the time the leaves start to change until December 26. The company’s line of cookies is ideal for the winter holiday season, but not because of their decorative shapes or red and green icings. Instead, Too Good Gourmet’s cookies are packaged in decorative boxes that make most consumers do double takes.

Finley and Watson first modeled the packaging after the popular snack Animal Crackers, but quickly realized that kids were not the target market. “We are selling to adults, specifically women, who are looking to give our cookies as party favors or gifts,” Watson says.

Giving cookies as gifts may seem like a stretch to some, but Too Good Gourmet has mastered the practice. “The key is a great cookie, great packaging and a low price,” Watson says.

Perhaps more important to the new customer is the quality of the packaging, not necessarily the quality of the cookie. Since it was founded, Too Good Gourmet has raised the bar on packaged bakery foods, going so far as to employ a full-time illustrator. This illustrator works with Watson and Finley to create a variety of packaging designs that feature everything from holiday ornaments to ribbons.

In May 2004, Too Good Gourmet moved into a 42,000-sq.-ft. plant that houses all of the bakery’s operations. During the last quarter of the year, the plant operates three shifts a day, seven days a week, producing more than nine tons of cookies each day. This generates about 70% of the company’s sales.

The company changes its packages yearly, always presenting new ideas to its customers. Its most popular package, says Renee Schouten, Too Good Gourmet’s sales and marketing manager, is a brightly colored deco tube containing 8 ozs. of cookies that retails for about $8. Other popular packages include the company’s gift and purse boxes, and storybook designs.

The designs on these packages are dominated by the company’s two seasons: holiday and spring. From bright pastel colors to popular holiday characters like Santa Claus, the company’s packaging is designed to attract consumers and be offered as unique gifts.

It’s what’s inside that counts
Inside of Too Good Gourmet’s carefully crafted packages are equally as carefully crafted cookies. The company bakes more than 40 different types of cookies, with most being extensions of its four main types: tea cookies, chocolate chip cookies, shortbread cookies and snickerdoodle cookies.

Watson and Finley created the formulas for these cookies in their kitchens when the company was more of a hobby than a full-time job. Today, little about the cookies has changed. The bakery strives to use wholesome, natural ingredients that commonly are found in kitchens throughout America. “If you don’t have a cookie that tastes like it was baked at home, than you lose a lot of appeal,” Watson says.

In addition to homemade appeal, Too Good Gourmet bottom ices most of its products, which provides points of distinction. “Our forte is taking a cookie and enhancing its value by putting on a bottom icing,” Schouten says. “It’s our signature and we’ve learned how to do a million things with chocolate.”

The company manufactures three sizes of cookies, and sells a stable of complementary products, such as graham crackers, pretzels and fortune cookies, which are brought into the facility baked, and then enhanced by enrobing and innovative packaging. The company also sells a line of jams, teas and dips under the Too Good Gourmet brand.

Too Good Gourmet formulates more than 40 different types of cookies. Most of these cookies are varieties of tea cookies, chocolate chip cookies, shortbread cookies and snickerdoodles.

Sales are evenly divided among three channels: gift baskets, department stores and private label. The gift basket industry is an ideal fit for the bakery’s lineup of products. And most importantly, gift baskets are an extremely lucrative market with $2 billion in sales nationwide. It’s also a very scattered industry, with industry members that include Sam’s Club and companies operating out of garages.

Department stores, such as Neiman Marcus and Nordstrom, also are an ideal fit for Too Good Gourmet’s decorative packages. The new plant and increased capacity allowed the company to build a successful private label business, baking store branded cookies for large, national customers.

Manufacturing cookies
Before entering the manufacturing business, Too Good Gourmet used a copacker to bake its cookies, and operated a small 3,000-sq.-ft. space to package cookies and fulfill orders. Sales were conducted out of Finley’s home, which was converted into a makeshift office for the company’s sales team.

Since May 2004, the company has conducted all of its business out of a 42,000-sq.-ft. plant that houses all of the bakery’s operations. Production is extremely cyclical.

During the first half of the year, the company runs one 8-hour shift. In the beginning of summer, Too Good Gourmet starts taking holiday orders, and by August, production begins to ramp up. During the height of the holiday season, the bakery runs three shifts a day, seven days a week, producing more than nine tons of cookies each day.

During the off-season, the company employs about 40 people in production. On the first shift in November, more than 100 people are working. Allen Herman, Too Good Gourmet’s vice president of operations, manages bakery production and has brought 30 years of baking industry experience to the facility.

Since Herman joined the company a little more than a year ago, the plant has streamlined production, creating a consistent flow while still maintaining flexibility. Dough is mixed in a 1,200-lb. horizontal mixer. After mixing, dough moves into a trough and is transported manually to the cookie line. A dough hoist lifts the trough and deposits dough in an extruder that produces three sizes of cookies: nuggets, 1-in. cookies and large cookies.

The cookie line was designed in Denmark and features an 80-ft. tunnel oven with two zones. The oven’s flexibility, Herman says, allows the company to manufacture a wide variety of products with minimal changeover times. After baking for 12 minutes to 13 minutes, products cool for 35 minutes to 40 minutes on a cooling conveyor.

The company’s line employees manually take cookies off of the cooling conveyor, and pan and rack the cookies. The racks of cookies are wheeled to one of three enrobers, which completely enrobe the cookies or bottom ices them. After being enrobed, cookies are conveyed through cooling tunnels at a temperature of about 45°F to set the chocolate. The company is installing a large inline enrober that will be able to automate the production line even more, Herman says. When the enrober is installed, cookies will travel from the cooling conveyor to the enrober, eliminating the timely process of manually panning and racking products.

After cookies have been enrobed and cooled, they are packaged immediately. Large cookies are packaged in trays and smaller cookies are packaged with an automated vertical form/fill/seal machine.

Too Good Gourmet ices most of its products. The company says the icing enhances the cookies’ values and provides points of distinction.

The final step in the packaging process, constructing and finalizing the packages, is extremely labor-intensive. The company operates three work stations during the holiday season that are abuzz with workers who construct the unique packages into their final shapes, and then glue any necessary ribbons or trim to each package.

Improving operations
“Our goal is to do the same thing we’re doing now, but do more of it and do it better,” Finley says. Also in sight are plans to expand. The company is building another facility behind its existing plant that will house the production line. The current facility will then be used for packaging and as a warehouse. The new building is scheduled for completion by the end of summer.

Too Good Gourmet also plans to capitalize on new distribution channels, such as direct to consumer. The company currently sells products to upscale supermarkets, but sees opportunities in mainstream stores.

In its very short lifespan, the company has found success by staying true to its roots: maintaining homemade-style formulas and continually pushing the boundaries of what packaged goods look like. With the new plant and increased capacity, Too Good Gourmet is ready to take the next step as a significant player in the upscale cookie market.

 

Company Profile Too Good Gourmet Inc.
Headquarters: San Lorenzo, Calif.
Plant size: 42,000 sq. ft.
Production lines: Upscale cookies. Also sells a line of jams, teas, dips, pretzels, graham crackers and fortune cookies.
Distribution channels: Evenly divided between gift baskets, department stores and private label.
Key personnel: Amie Watson, founder and chief executive officer; Jennifer Finley, founder and president; Allen Herman, vice president of operations; Renee Schouten, sales and marketing manager.