to local Chinese-owned markets. “Eight of us
lived together in a two-room apartment in
the Tenderloin district,” says Andrew.
Five years later, by pooling every extra
nickel and dime they had scraped together,
the Lys had managed to save up about $40,000.
“A friend of ours had a little coffee shop across
the street,” Andrew says. “It wasn’t doing well.
He decided to sell.” In May 1984, Ly-owned
Sugar Bowl Bakery—a small coffee and
doughnut shop in the Richmond district of
San Francisco—was born.
Just as they had worked to reach business
ownership, every member of the family
pitched in to make the business a success.
Those who had other jobs moonlighted at the
bakery. They had no plan other than what
Binh refers to as “moving ahead, step by step,”
earning enough to support their families. “We
did not specifically assign jobs,” says Andrew,
who became an American citizen with his
brothers in 1985. “But we figured out how to
split everything up so things were being done
24 hours a day, seven days a week.”
Even Andrew, who was taking English and
business courses while also working at school
to cover his expenses, was helping out in the
bakery at night. “When I met my wife, our dates
were often delivering doughnuts,” he says.
For a family with no practical experience
in business or baking, it was a learn-as-you-go
tightrope act. “We studied trends. We learned
from others; we hired people to come in and
train us on how to make better products, how
to add more products,” says Andrew.
The most important lesson, he says, was
quality, something that, along with effort
(“There is no substitute for hard work,” he
says), quickly became the mainstays of their
company. “Marketing opens the door, but
quality keeps it open,” he says. Even in these
tough times, as prices for staples have skyrocketed, Andrew says they will never compromise on quality. “I’d rather sacrifice
margin than sacrifice quality. You lose quality,
you lose the faith of your customer.”
By 1986 the shop had expanded its reach,
selling not only to local customers but to convenience stores and other coffee shops, and was
netting about $150,000 annually. They decided
in 1986 to invest in real estate for a second bakery. In 1990, the brothers bought a third.
Retail or wholesale
At this point, the family was presented
with a choice: Continue along the retail path,
becoming what Andrew described as “the
Starbucks of baked goods,” or diversify. As it
happened, the solution presented itself.
In the late ’80s hotels were trying to cut
costs by cutting back on baking their own
pastries. Sugar Bowl jumped on the opportunity to make products for hotel bakeries. They
became a custom bakery for several San
Francisco hotels. That, in turn, led to the
development of high-end wedding and specialty cakes.
Then the brothers discovered that there
was a demand for laminated dough.
Laminated dough allows constant folding,
which in turn enables a baker to make treats
such as croissants. The company in 1993 got
an SBA loan to purchase their main San
Francisco facility, which spans nearly a block,
and began a frozen-dough division, complete
with a fleet of trucks serving its primary customers—Las Vegas casinos—as well as other
businesses throughout Northern California.
The final step was to expand into packaged items for retailers such as Costco, for
which the Lys have developed several successful creations, including Petite Palmiers,
Madeleines and Petite Brownie Bites.
A bakery powerhouse
The area surrounding the intersection of
Toland and McKinnon streets, about 10 minutes south of downtown San Francisco, is a
nondescript industrial neighborhood, nothing more than an unassuming collection of
large, squat, flat-roofed warehouse-type
Name: Sugar Bowl Bakery
Owners: Tom, Binh, Andrew, Sam and
Address: 1963 Sabre Street
Hayward, CA, 94545
Contact at: (510) 782-2118
Products at Costco: (varies by region)
Petite Palmiers, Petite Brownie Bites,
Comments about Costco: “Working
with Costco buyers has helped us improve
as a business, in terms of quality and
efficiency. Costco is a model of both.”