Why is this happening? This is a econ 101 lesson playing out in the real world. While supply and demand play a big role, the price hike is primarily due to the rising cost of commodities. In short, ingredients and associated costs are more expensive for them, so chocolate is going to be more expensive for you.
According to Hershey’s North America head Michele Buck, “Commodity prices for ingredients such as cocoa, dairy and nuts have increased meaningfully since the beginning of the year.” You can add sugar to that list as well, as American businesses continue to struggle with unfair, outdated sugar subsidies that artificially inflate prices and drive companies out of the country.
Big companies such as Hershey and Mars can raise prices to ensure their profits without fearing much of a fallout. But how does a small company such as Bacci Chocolate Design manage the higher cost of commodities taking a bigger bite of a much smaller profit margin?
When commodities go up, everything goes up. There is simply no other way to manage. And when you add in the costs of a rising minimum wage, mandatory sick leave (still under discussion) and rising health care costs, those contribute to price hikes as well. Our prices will be rising, but for now, only on the wholesale side. For that reason, we will invest in machinery that will make our delicious peanut butter cups faster and better, and will help us meet our growing orders without having to invest in more part time help. That’s a cost we can control.
On the retail side, we’ll be working off smaller margins, and we’ll have to continue to be vigilant about every penny we spend. So, when we don’t give out extra gift bags and we restrict our beautiful boxes to one pound or more of our product, we aren’t being parsimonious, we are trying to keep our prices as low as possible.
The good news is that trend watchers show chocolate remains popular, with no sign of interest waning among consumers. People buy chocolate in good times and bad, to celebrate and to comfort. Chocolate continues to be an affordable luxury, and the industry continues to grow, in spite of the hike in costs. That’s why we are so lucky to be in the business we are in, and with some fine tuning, will enjoy continued success.
News broke earlier this month that Crumbs Bakery, the cupcake vendor that burst on the scene at the height of a national cupcake boom to became a fixture in our national malls, is a bust, and is filing bankruptcy. In terms of its impact on its industry, it would be as if Godiva closed all of its chocolate shops: a very big shock to chocolate vendors everywhere.
Crumbs started as a single bakery in New York City in 2003 and went public in 2011. Its signature softball-sized cupcakes incorporated Girl Scout cookies and other treats and drew a delirious fan base. But, the fad appears to be waning. The chain began shutting unprofitable shops this year. On July 1, Nasdaq suspended trading of the company’s shares, saying it no longer met requirements for market capitalization, net profit or shareholder equity (New York Times, July 8, 2014).
So, what went wrong? I’ve got a few ideas, based on our own experiences as a chocolate manufacturer, wholesaler and retailer.
Several years ago, Bacci Chocolate Design waded into the cupcake pool ourselves, launching Boston Cupcake Girl. We liked cupcakes, had all of the ingredients on hand, and it felt like a smart move, especially for our Winchester store which needed something special to bring the people in the doors. It enabled us to test out the farmers markets, where the product was enthusiastically received. Boston Cupcake Girl lasted a while but we realized we were losing money on unsold items. No one wants yesterday’s cupcake! Eventually we dropped the line and consider ourselves wiser for the experiment.
Crumbs, unfortunately, had a single product, and honestly, not a great one at that. It was a niche product with no guarantee of continued success once the fad passed. They did not appear to be prepared to expand their line or offer other items. Additionally, their decision to locate in malls cost them a small fortune in rents. The writing on the wall was always there.
At Bacci Chocolate Design, we are keeping a constant eye on food trends to keep our business innovative and fresh. We also diversify our offerings through our corporate gifts and national reach. Boston Cupcake Girl was a great experiment, and we learned so much about trends and affordable luxuries, and where and when people enjoy eating cupcakes. Strolling a farmers market on a summer day? Yes. Trudging through a mall lugging shopping bags? Not as much.
At the recent Specialty Foods Association Fancy Food Show in New York City we were gratified to see that chocolate continues to grow as a specialty category, so we feel we are well placed to enjoy steady growth as a business.
The Crumbs story may not yet be finished. The most recent news is that reality television personality Marcus Lemonis plans to acquire the chain out of bankruptcy and reopen the Crumbs shops. He plans to take the company beyond just cupcakes, possibly adding ice cream and other snacks to attract more customers, according to news reports. That’s a good start. We’ll be watching. And we’ll also be keeping an eye on all of those frozen yogurt shops that have sprung up out of nowhere.
Take a walk down Reading’s Main Street and Haven Street and look at our local businesses. Notice anything in particular?
Many, if not most of them, are owned by women. From fashion to cookware, from wine to gourmet foods, from cupcakes to chocolates, women are the primary owners of our thriving local businesses.
It is National Small Business Week, and while we celebrate the contributions that small businesses make in every community in every corner of the nation, today I want to focus on the female business owners and our particular needs and issues.
Today, President Barak Obama called small businesses the “lifeblood of our economy, employing half of our country’s workforce and creating nearly two out of every three new American jobs,” He added, “During National Small Business Week, we renew our commitment to helping these vital enterprises thrive.”
According to the 2007 census, women own nearly 30 percent of all businesses in the U.S., and it’s slightly higher in Massachusetts. According to the National Women’s Business Council, when you add the number of businesses owned by women with the number of businesses led by women, the result is 36 percent of businesses in the country are either owned or led by women.
As a business owner, I know that owning a business is really the only way for a woman to “have it all.” It makes sense for a a woman to own a business, so she can dictate her terms and find life balance for herself. As someone who has worked outside the home for a company, I can say that it is very difficult to continue on the fast track without giving up something. Owning a business provides some flexibility, and allows us to take advantages of opportunities we would otherwise be robbed of.
That said, many of the stresses on small businesses today involve issues that will most strongly impact women, both the owners and the employees.
The twin issues of hiking the minimum wage and providing paid sick leave for all employees, even those of small businesses, will cause a hardship for the businesses and the employees, who tend to be overwhelmingly women with families. On the surface, only a heartless capitalist could come out against these issues, but dig a little deeper and you’ll see why the owners of small businesses are worried.
Anytime an employee calls in sick (and we require workers to be healthy a full 24 hours after an illness before coming back to work), we need to cover that shift, either by ourselves or by calling in another employee. If we need to pay sick leave, we will be paying two salaries for one shift, or do without the extra person, taking the shift ourselves.
I can assure you that we, like all other small businesses, will opt to do more with less, and not bring in an additional person, unless absolutely necessary. Our overhead costs are already so high that we do not hire additional personnel unless we absolutely cannot function without them.
If a mandate from the state comes down saying we have to pay employees for sick days, something will have to give. Most likely, that will mean fewer shifts for employees, and fewer hires.
When it comes to raising the minimum wage, we ask, where do the politicians think all of this extra money is coming from? The increased cost in minimum wage doesn’t equal a rise in sales or lessening of expenses, therefore, smaller companies like mine will have to, again, hire fewer people and also pass on costs to customers in order to stay on business.
We are like all small business people. We are trying to not only stay in business, but grow our business and that means hiring more employees, again, who are primarily women. We want to put people to work, but that is becoming harder and harder to do. If the legislature opts to include incentives such as lower payroll taxes or other tax benefits for small businesses, then that would certainly lighten the load. That seems unlikely, however, as it would cost the state money. But, you cannot keep imposing these mandates that are withdrawals to a company’s financials without giving them something to deposit. Not if you want to keep and encourage these small businesses, the “lifeblood of our economy,” to quote the President, to flourish.
Sometimes you meet someone and you know they are special.
That’s the case with 17-year-old Billy DeLeary The Chocolate Truffle’s newest sales associate.
“I love the challenge of selling,” he said. “It’s very nice to talk with customers, and we bond like friends. It feels more like I’m helping them solve a problem.”
Billy is the rare teen who has a plan for his future. A student at Northeast Metro Tech Vocational School in Wakefield, he’s known what career path he will be taking since his freshman year. And, he’s got a few words of advice for his peers on why they’re not finding summer and part time jobs.
“Youth are lazy and lack motivation,” he said. “They could bring a lot to the workforce, but sports and activities are more important to them. They quit a job to play sports.”
Billy will graduate as a dental assistant this spring and then head off to the Massachusetts College of Pharmacy and Health Sciences where he has been accepted into their pre-med program. After that comes dental school.
As a high school junior and senior, he worked with dental students at Tufts University, and spent two summers shadowing his own dentist to learn the ins and outs of the job.
By the time he hit middle school, Billy felt a disconnect with his fellow students, he said. He wasn’t into sports, and became the target of bullying.
“My friends turned on me,” he said simply. “I wanted to get away from those kids and start over.” At his new school Billy found a group like him, students from a multitude of towns, (the Tech serves 12 communities including Reading) who were all looking to make new friends.
“It’s an easy going crowd and there’s no cliques,” he said. Billy feels at home as one of 340 students who “all love their shop.” He enjoys the balance between academics and shop work, where he gets to use his studies in practical applications.
“In almost every shop math plays a part,” he said.
Most of the tech students plan to attend four year colleges after graduation, he said. “It’s not like it used to be, where kids go because they can’t handle school,” he said. “Now , a lot of kids go to college even if they already have jobs. Getting a B.A. can’t hurt.”
With so much attention being paid to the lack of jobs for teens, Billy said he doesn’t think his peers are motivated enough to find part time work.
“When an opportunity came up for me to have a dental job I wanted to take it, otherwise I would just be hanging out with my friends,” he said.
He remembers one particular friend who quit a sports team as a senior when a valuable work experience became available.
“I thought that was noble, to leave a team and work,” he said. “In another month or so he would be looking for work with everyone else, and there wouldn’t be anything to set him apart.”
As for the political question of raising the minimum wage, Billy said “$8.50 is a good wage for a kid.” He fears a rise in the hourly wage will lead to companies letting people go, and believes raises come to those who apply themselves.
“If you want to make more money, you have to work harder for it,” he said. “People who want a higher minimum wage are not applying themselves. They want more money for doing less, and the people who work their way up are getting screwed.”
Working this part time job has shown Billy how difficult running a small business can be.
“I saw how busy the shop was at Easter, there were huge crowds. Then it drops off. I can see how difficult it can be for a small business when the crowds aren’t swarming around, how a business can go under. You really have to realize what people want and then give it to them.”
Billy advises his peers to think about their future paths, and to start building a resume as soon as possible.
“You may be thinking about the weekend, but you should be thinking about next year,” he advised. “Think, what am I going to do for my future today? It’s less overwhelming if you think about it a little bit every day.”
Tuesday, April 1 was election day here in Reading, with seats open for Board of Selectmen and School Committee, as well as a special state election to fill Katherine Clark’s Senate seat. After taking a look at the official results at the town website, I ask myself how informed voters really are.
Approximately 25 percent of Reading’s registered voters turned up to vote at the polls. That really isn’t too bad of a number considering it wasn’t a presidential election. There was a high profile issue of voting for a debt exclusion for the library building project, and more on that in a bit.
More blank ballots were counted for Board of Selectmen than for either of those running. Citizen Blank took the Board of Assessors election handily, with 4,426 ballots compared to 34 for Robert N. Marshall, four for Kara Fratto, and two each for Frank Golden and Vineet Mehta. Blanks took the Library Trustees three-year seat with 3,652 ballots to 2,660 for David Hutchinson and 2,606 for Victoria Yablonsky.
Citizen Blank didn’t win any non-contested races. Alan Foulds, who has run unopposed longer than anyone can remember, won his moderator position without challenge, as did John Brzezenski for the two year Library Trustees seat, Thomas O’Rourke for the Municipal Light Board three-year seat, and Robert Soli for the Municipal Light Board one-year position. School Committee candidates fared better than the blanks. Blanks were also very few and far between on the ballot question asking for bonds for the library renovation project.
What it tells me, is that many voters who turned out Monday were one -issue voters. On the library issue in particular, much ink has been spilled over whether voters had the full scope of the project funding before heading to the polls. There were plenty of opinions in local media and on Facebook sites, much of it emotional and passionate, but how many people had a full understanding of the issues, and how many just voted blindly to “support the library?”
I look at all of the blank ballots and uncontested races, and the struggle to fill seats at Town Meeting, and I wonder at the willful blindness of one-issue voters. How many volunteer to serve on town boards, attend meetings, or even educate themselves through local media?
As an owner of a small business in town, I know how important being engaged in town politics and policy is. Many well-meaning people put forward ideas and proposals with no input of the people they’ll impact. And those who don’t bother to inform themselves can be swayed by passionate arguments, whether they are for increasing the minimum wage, keeping unproductive subsidies, or writing a blank check for a library renovation without understanding the data that informed the proposal.
I would love to see a stronger engagement on behalf of the citizens of this town, so that these discussions can be more fact-based and less emotionally driven. I strongly encourage my fellow Readingites to go to the polls next time, not just as voters but as candidates. Run for Town Meeting, volunteer to serve on boards, and the better your decisions will be for the families, businesses and institutions of Reading.
The kids were standing outside the Starbucks this morning, shaking a couple of cans and asking for donations to support the Reading Memorial High School Choral Department. There were two of them, boys, dressed in hooded sweatshirts, jeans, sneakers, pretty typical teen wardrobe choices. I smiled at them as I entered, and as I exited, deposited some coffee change in one of the cans. After I got in my car, I sat watching them for a few seconds, ruminating on how I blindly dropped money in the can while I didn’t recognize either boy, how neither was wearing any sort of high school identifier, no chorus t-shirt or a pin or anything linking them to the organization they claimed to be fundraising for.
Just a couple of random kids. They could be anybody.
Last week I opened an email that stated it was from a local funeral home, alerting me that someone I knew had died. “That’s kind of weird,” I thought to myself as I opened the email, “It doesn’t name the person.” Within a second or two I realized it was some sort of scam or malware, which in an act of unquestioning trust, I opened, possibly putting my computer at risk.
There seems to be a rash of scam activity going on lately Local papers warn us about falling prey to IRS, Verizon, NStar and Bank of America scammers, and who even answers the phone during the day anymore? If you’re like me, your mail is full of sweepstakes announcements and free cruise giveaways, and your voicemail is loaded with messages that your car insurance about to expire.
Were these kids outside the Starbucks really RMHS students? Probably. But wouldn’t it be smart, in this day and age, to have them wear something to identify them as such? Local organizations need to brand themselves in the same way that companies and businesses do, with recognizable logos to set them apart from the scammers and each other. We live in an era when even school groups need to professionalize their approach to fundraising, and that starts with having both parents and students dress thoughtfully and recognizably when asking resident and businesspeople for donations. How about name tags or badges? It’s not much, but it’s a start.
At The Chocolate Truffle, we offer Fundraising Days as a way to help local organizations. You pick the week, publicize the event, and we’ll award 15% of the week’s receipts from any shopper who mentions your organization. It’s a little bit of work on your part, and you have the opportunity to bring in a good amount of money, depending on the week you choose. With teacher gift season, as well as Mother’s Day and Father’s Day rapidly approaching, we’d love to hear from many of you. Put down the shaker can, and give us a call. If you have a couple of your fundraising kids in the store, wearing your brand and directing customers to name their organization, you’ll do very well indeed!
I’m not shy about telling people what will happen if they don’t spend money at their local businesses. I’m a very direct person and will tell anyone I meet that where you spend your money has a very real and significant impact on the prosperity and health of your community.
Not all small business owners are as direct as I am. Most people don’t want to ruffle feathers, even as they are gasping for air.
So, I’ll make a pitch for them.
Shopping local is not just for holidays. Shopping local is crucial to the survival of every small business in your town. No doubt you’ve noticed, and maybe even commented on the fact that many of our once special downtown shopping areas have turned into a collection of frozen yogurt shops, chain pharmacies, and tanning salons.
There is a reason for that. And the reason is you. Sorry, but there is no nice way to say it.
If you do your shopping online, you are killing your local businesses.
If you shop at cookie-cutter shopping malls, you are killing your local businesses.
About a year ago, we closed the Winchester branch of The Chocolate Truffle. It was a beautiful shop on a beautiful street, but the high rent and low sales didn’t justify keeping the store open. It was a shame, and we attributed the lack of success to lack of customer support. While people enjoyed looking at our shop, they did not spend any money there. As we’ve owned our business for more than 10 years, we know when it is time to cut our losses. And thankfully, The Chocolate Truffle is doing just fine. But we know that other businesses in our area are struggling much more than they ought to be.
The Hitching Post, a 50-year staple of Reading’s downtown, left their location due to construction and revitalization efforts, and last fall, moved in to the front of our store. We couldn’t be more pleased to have the store here. Leslie Leahy, owner of The Hitching Post, is a long time community supporter, a major contributor to town events and local fundraisers. Both of our businesses have benefited from the association.
What we need now, is for the community to remember that Shop the Block is not just for the holiday season. If you’re buying a gift, please think of The Hitching Post, and all of the good Leslie has done for the town, and how much you’ll miss her if she’s gone. When you spend locally, you are allowing businesses to hire local people, pay local taxes and support local organizations. You’ll also support a vibrant downtown shopping district, and possibly see one less chain pharmacy.
Do you have class, because we know we do!
Do you have a hobby you love and suspect it could be something more? If you are seriously considering starting your own business but don’t know how to get started, join us for a free seminar that will help you make the leap from amateur to professional. Erin Calvo-Bacci, well known in Reading as owner of The Chocolate Truffle, will draw from her real-life experiences as a small business owner and consultant, and outline the steps you need to take to get a hobby-based business off the ground. Topics to be covered include: identifying the viability of your business concept, identifying the costs of starting and operating your business, determining the value of your time, pricing your products, networking with other business owners, marketing your products, and hiring help. By the end of the three weeks you’ll have a greater understanding of what it takes to get a small business up and running, when (or if) you can expect to break even, and the next steps you need to take to get going.
I have myself scheduled to work the store in the morning and then an associate is scheduled to come in at 12:00, this will give me time to get some tasks completed: all I can’t do during the week and running the kids around to their activities.
Here’s how it does work: 9:15 store phone rings associate scheduled for 12:00 “I don’t know what’s going on, I think I have food poisoning, I just woke up and I don’t have anyone’s number to cover.”
Me: “There is no one. Food poisoning typically takes longer to affect you; you might have the flu or are sick for some other reason.”
I’m not mad that the associate is sick; I’m pleased they are calling out and not coming in affecting other people. People including employees get sick, it happens and it’s a normal fact of life. What bothers me is I try to accommodate all requests for scheduled time off, so when an employee is sick and I have to accommodate the schedule I would want them to offer to NOT take all the future requested days off to make up for the lost time. Why isn’t it happening? People aren’t motivated. People are happy with “just getting by” and they’ve been enabled by someone else picking up the tab.
I don’t want sick people around me and I especially don’t allow for sick people to work around food and understand as a business owner it is my responsibility to make sure the store is run efficiently without any risks to the public (basic food safety). I had an employee once after requesting time off, get sick and then ask for an advance. Advance??????
If employees aren’t motivated to make up lost unpaid time, what will happen if legislation actually changes so that they can call in sick and get paid? Oh and the former employee who wanted an advance was offered a management position which included paid time off, paid sick days and a raise as well as more responsibility. They wanted more money without the responsibility, so be mindful of why increasing the minimum wage and offering paid sick days will have a negative impact on our local businesses.