Cashing in on our cravings: 6 start ups reveal their recipes for success

Alexandra Cain
Business Journalist

Alexandra Cain writes regularly for the small business sections of The Age, Sydney Morning Herald and Australian Financial Review

Alexandra Cain
Business Journalist

Alexandra Cain writes regularly for the small business sections of The Age, Sydney Morning Herald and Australian Financial Review

We’re a nation of dessert lovers: in fact it could be said we have somewhat of an obsession with confection. We’re mad for macarons, crazy about cupcakes and all scream for ice cream. Here, 6 businesses tell us how they turn sugar cravings into business success.

man holding a donut

First there was the cupcake craze, then we swooned for macarons. Next came the cronut, and with it queues of customers lining up for a bite. It's obvious that Australia is in the grip of a dessert craze.But running the enterprises that make our favourite sweet treats is no cakewalk. It takes foresight, an entrepreneurial nature and a genuine passion for your product to make such a business work.

So how do the people behind these intriguing small businesses find their inspiration? We discover how they got started, how they have managed their growth and how they continually innovate to keep their business and products fresh and in demand.

  1. The Choc Pot: Banking on BloggingThe Choc Pot is a dessert bar located in Burwood, Sydney, specialising in freshly made desserts. Its signature is The Choc Pot fondant. Everything is made in-store, including marshmallows and honeycomb. When founder Deirdre Tshien started the business, she had no experience in hospitality and the shop had absolutely no brand awareness.

    So she started building relationships with bloggers, inviting them to try her desserts. “They really helped us get the word out. This strategy can go either way depending on your service and quality of products, as they aren’t afraid to be honest. But it’s a really great way to get honest feedback early.” As for what’s next, there are plans to expand next year as well as build a retail range.
  2. Xocolatl: Mastering Supply and DemandTen years ago, Christos, the patriarch of the Partsioglou family, wanted to retire to focus on his art. But his family convinced him they should open an artisan chocolate business, Xocolatl, which has two Melbourne stores. It was a hit from the start: their very first Christmas they realised they had to take drastic action or run out of chocolate well before 25 December. They worked around the clock that Christmas, giving Santa’s elves a run for their money.

    They also decided to open a second store where they could increase production in the new kitchen attached to the shop. The Partsioglous have just finished another extension and the business now makes four and a half tonnes of chocolate a year.They have focused on differentiating their product from other handmade chocolate businesses, thus giving them an edge over their competition, by introducing unusual chocolate flavours such as goats cheese and peach jelly. That first Christmas was also a lesson in ensuring they are able to easily scale up their business during peak periods such as the major holidays to drive revenue.
  3. La Belle Miette: Early AdopterAvid Francophile Maylynn Tsoi discovered the Parisian macaron craze during the summers she habitually spent in Paris trying to escape the Melbourne cold. It was the inspiration for her macaron business La Belle Miette. “Macarons have such a beautiful texture I was convinced if I bought them to Australia we would do well,” she says. Tsoi now has four stores in Melbourne, including a new one fittingly located at the Paris end of Collins Street. Tsoi has recently created a special range of macarons - a collaboration with The Australian Ballet - to celebrate their season of The Nutcracker, inspired by Act II: Land of Sweets. “Both are pretty and feminine. Macarons are also made from meringue, which has long had an association with the ballet through the pavlova, named after ballet dancer Anna Pavlova,” explains Tsoi, who is creating a longer-life range to meet demand from customers who want to take her delicious creations overseas.

    By identifying the global macaron trend before it hit the Australian market Tsoi had a first mover advantage she’s been able to parlay as the business has grown. Importantly, her commitment to producing a quality product has allowed her to develop a reputation as a premium business and form alliances with other high-end organisations such as The Australian Ballet and mark her territory in the most exclusive shopping precinct in Melbourne.
  4. Spotted Dog Fudge: Passion on Bust“I have always loved fudge but had trouble finding good quality product with nice packaging that would be suitable for gifts. I wanted to fill the gap in the market,” says former pastry chef Rosemary Cimino, explaining the inspiration behind Spotted Dog Fudge, which she opened with her husband in Woodend in Victoria in 2012.

    They now make 2000 pieces of the delectable treat each week, sold in more than 200 stores nationally. Cimino says her aim is to more than double the number of retail outlets that sell her fudge to 500 retailers in the next 12 months. “I’m also developing two new lines of sugar-free fudge due for release early next year and I’m looking at new flavours to take to market, and would also like to begin to export.”Cimino’s accomplishments show how critical it is to have a genuine passion for what you do.

    Small business owners spend almost all their waking hours working on their enterprise, so if you’re not borderline obsessive about your venture, your business will become a chore rather than a labour of love. The fact she has been able to go from a cottage industry to national distribution within two years also demonstrates the importance of having a clearly-defined picture of what real success for your business looks like.
  5.  Cupcake Central: Not a One Trick PonyCupcake Central makes 20,000 cupcakes each week, baking everything from scratch every morning from two Melbourne stores. Director Sheryl Thai had the idea for the business 10 years ago when she was in New York and had a cupcake from the famous Magnolia Bakery. When she got home she began baking cupcakes from her registered home kitchen, selling them online and at local markets and has built the business from there. Thai is not worried about an end to the cupcake fad.

    “There are several cupcake businesses in the US still doing extremely well even after 10 years. “I always say Cupcake Central is not in the business of cupcakes, we are about the experience, which is why we run Cupcake Masterclasses to teach people how to bake.

    We’ve also published a cookbook and we’re about to release a merchandise range that includes custom snapback caps.”Her strategy of horizontal diversification into areas aligned with her main business will help to protect her business should demand for cupcakes dip. It will also help her to smooth out revenue and offers protection against the normal peaks and troughs of the business cycle.
  6. Harry & Larry's Ice Cream: Quality Meets QuantityLawrence Harris, founder and director of Harry & Larry’s Ice Cream, has turned a single ice cream scoop shop in Chadstone, Victoria - that his family purchased in 1994 - into a multi-million dollar business. But it was the move out of retailing and into wholesaling that really catapulted the business forward. Harry & Larry’s now produces premium ice cream for the big supermarkets’ private labels, supply ice cream to airlines and has its own brand stocked in Woolworths.

    It’s also still manufacturing for third parties.It produces around six million tubs a year of various flavours and sizes, which works out to be around 115,000 tubs a week. “Our advantage is being able to make a good product on a large scale. The margins are better at the premium end and we make something we’re genuinely proud of.” So what's next? “We’re looking at making mousses and other frozen desserts as well as entering emerging markets in Singapore and India,” he says.

    Harris has taken a strategic approach to business growth, identifying and then capitalising on opportunities in the market. He has also not been afraid to invest in the business to be able to take advantage of growth opportunities. But although the business model has been flexible, what hasn’t changed is the commitment to producing a quality product. It’s a good lesson for other businesses: be clear about what you do but don’t be afraid to explore ways to make your products more efficiently and profitably.

Global dessert inspiration – Aussie hit or miss?

As is clear in these six small business profiles, getting the product right is the crucial step in reaching any kind of success. Some enterprises have found a new idea in an old book – developing new ice cream flavours for example, while others have looked to global trends for inspiration, such as the macaron.Here’s a quick look at some of the latest trends which have hit a home run in Australia, versus trends which are yet to take off.

Hit

  1. Still riding relatively high is the Cronut - that delectable fusion between donut and croissant that launched a dozen spin-offs since its inception in New York in 2013. Soon imitations - or Fauxnuts - were flooding menus around the world like Adriano Zumbo's 'Zonut' and MoVida Bakery's 'Dossant'.
  2. Tea is no longer just for drinking, with a French-Asian influence plating up tea-based sweets in the finest restaurants around the world. In Melbourne, Green Tea Cheesecake has been a hit for LuxBite, and Thai Milky Tea ice cream a winner for Sydney's N2 Extreme Gelato.

Miss

  1. Equally as delicious as the Cronut, but not as successful is the Frozen Smore, invented by the Cronuts creator, Dominique Ansel. Samoreas have had their moment in the US, but their Aussie impact has been slight.
  2. Vegetables yes, carrots, radishes and turnips are starting to titillate adventurous diners overseas. Californias Sweet Rose Creamery offers beetroot ice cream, while in France, Alain Passard of world top 50 restaurant LArpge has been turning out tomato based sweets for years. The trend is yet to take root in Australia.

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