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March 3, 2010 > Life is sweet

Life is sweet

By Simon Wong

Andrew Ly came to the United States in August 1979, aged 24, after escaping Communist Vietnam by boat in 1978 followed by nine months in a refugee camp in Malaysia.

"I arrived with neither a word of English nor any means of support. I didn't have a US high school background either but I attended ESL school, passed the GED test then attended City College of San Francisco for three years and graduated with an AS degree in Computer Information Systems. A friend convinced me to go with him to San Francisco State University from where I graduated with a bachelor degree in Financial Accounting in 1986."

Ly decided to remain in the Bay Area to help his brothers, who had also managed to leave Vietnam. They operated a small coffee shop called Sugar Bowl Bakery (SBB) on Balboa Street in San Francisco's Richmond District. Acquired in 1984 with $40,000 of hard-earned savings, daily sales of coffee and doughnuts amounted to around $300. Ly's goal was to open retail stores like Starbucks but with food and, by 1993, the brothers had seven locations.

Around the same time, the hospitality industry changed. Hotels and hospitals stopped making their own pastries and sourced from third parties like SBB. Ly saw the opportunity to develop a wholesale commissary to supply hotels with baked goods.

While there are now only two coffee shops, the manufacturing company has grown with 2009 sales reaching $40M. The four manufacturing plants, two of which are in Hayward, will be consolidated into two plants; production will cease in San Francisco at the end of March. SBB employs 250-300 people, depending on shifts and production levels.

"Our facilities in San Francisco have limited space. Trucks are difficult to maneuver and working conditions are not as good for our staff compared to Hayward. San Francisco tends to be more expensive and, if you compete nationally, you cannot provide value to consumers. We strive to provide the best quality, best value and best customer service, so are always evaluating options to make things better and cheaper without compromising quality," explained Ly.

"We moved to Hayward because it's a great city. Hayward is close to CA-92, Highway 101, I-880 and I-680. Logistically, this works for us. Land, buildings and working conditions are great for our staff. The city is very business-friendly; the Council and city staff understand small businesses and have been good to us," he added.

Customers range from local cafes and retailers to hospitals and hotels to national and international retailers such as Safeway Supermarket, Walgreens, Starbucks and Costco Japan, Taiwan, Korea, Mexico, Canada and US. Labeling varies between countries. Although the company must satisfy local regulations concerning ingredients, a given product is essentially the same regardless of export destination. Some of the larger customers manage international distribution of SBB's products themselves.

Hayward operations occupy 120,000 sq. ft., combined and mass produce doughnuts for Starbucks and Petite Palmiers, Petite Brownie Bites and Madeleines, three of the five products supplied to retailers, such as local supermarkets, Asian supermarkets, Costco, Safeway and Walgreens.

SBB has about 700 lines, including croissants, pastries and cake, for the hospitality and convention industries. This is labor-intensive. A chef might order a cake, with the message "Happy Birthday Andrew," and it is delivered with other pastries to the hotel.

Much time is spent on R&D with analysis of the market, trends and competition and works closely with customers to evaluate the potential success of a conceptual product. Similarly, the business listens to customers' own ideas and concepts to ensure a product becomes reality.

"Versatile machinery means we have an excellent product-range. We ensure concepts work with our equipment; that way our production lines provide the value, quality and competitive pricing for our customers and consumers," stated Ly.

The family-owned company nurtures its growth by re-investing in its human resources, plant, machinery and logistics. SBB considers applications for employment locally and from all over the Bay Area; often, families relocate to Hayward because of the good working environment and what the city has to offer.

SBB has received numerous awards including the Small Business Administration's "Small Business of the Year 2008," the US Department of Chamber of Commerce, Minority Business Development Agency's "Supplier of the Year 2008," San Francisco Business Times' "Andrew Ly, Most Admired CEO in the Bay Area 2007," Consumer Business Review's "Bakery of the Year" for 10 consecutive years and has been one of the fastest-growing private companies in the Bay Area for more than a decade.

Ly's office is adorned with photographs of friends and family. He and his brothers appreciate what they have and what others did for them when they arrived in the US. They generously support the community and agencies that helped. SBB was a Jade Sponsor for the recent Hayward-Yixing Sister City Gala fundraiser on February 6.

As for the future, SBB would like to grow further but expansion incurs expense before benefits accrue. So far, there has not been a need to raise external capital. Should it arise, the company would favor a good partner who can add value and expertise.

For more information, visit www.SugarBowlBakery.com or call (510) 782-2118. For sponsorship and donation enquiries, email donations@SugarBowlBakery.com

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