Dufflet Rosenberg, founder and CEO of Dufflet Group Inc.
You can smell the sweetness a block away as you approach the headquarters and production bakery for Dufflet Group Inc., tucked into an industrial stretch of Toronto. However, founder and chief executive officer Dufflet Rosenberg says she's become immune to the sugary scents she breathes day in and day out.
In a career spanning 38 years, the mainly self-taught Ms. Rosenberg, 58, nevertheless, hasn't lost her sweet tooth nor her love of creating pastry.
She started the business in 1975, as a 20-year-old baking cakes out of her mother's kitchen for the Cow Café, a University of Toronto hang-out. From her first bakery on Queen Street West to the current sprawling location, growth has been driven steadily by demand. Her commitment to premium ingredients and her imagination with desserts have made Dufflet a respected name and a multimillion-dollar business in a highly competitive industry.
Ms. Rosenberg took on a business partner Danièle Bertrand, now the company's president, in 2006, to handle sales and marketing.
Moving into shelf-stable packaged goods has opened the door to wider markets for confections and chocolates, already available across Canada and selectively in the United States and Asia.
Ms. Rosenberg and Ms. Bertrand are sole owners of the private company, which has about 150 employees.
Question: What got you out of your mother's kitchen and into setting up as a business?
Answer: There were a lot of people who came into the Cow Café asking me to bake for them. I hired one person, then two, still working out of my mother's home kitchen. The big push came in 1978, when the original Just Desserts café opened at Dupont and Bedford Streets [in Toronto]. That really required me to start scaling up a bit. I couldn't bake out of my home any more. Of course, it's not legal for entrepreneurs to do any kind of food production out of their homes – although I'm sure people are still doing it – but we had to move because it had become very public. Everyone who was baking for Just Desserts had to start setting up commercial kitchens, so it kind of started a whole industry of its own.
We moved to Queen Street in 1980 – bought ovens, hired more people – and opened as a store in 1982. It grew very quickly between 1980 to 1983. When there wasn't enough room, we moved into a factory in 1985, doubled that space with an addition, and then moved to our current building in 2009.
How did you first get financing?
It was a combination of success through the business and bank financing. We purchased the [factory] …so that gave us some equity as well.
How did you develop your business skills?
I evolved out of necessity. I started when I was young so I didn't have a business background. I learned over the years that, when you need professional advice, you seek it.
What were the roadblocks along the way?
Labour has been the biggest challenge in the past, finding good qualified people to work. Supervision: You can't be in all places at all times, so just burning out was an issue at the beginning. If you get one bad egg in the batch, it can be very difficult. But, eventually, they'll be gone because the team won't stand for it. If someone doesn't fit, they'll leave or I'll have them leave but they don't last long in that situation.
I also wasn't paying myself what I should have been paid for the first 10 years of the business in order to keep the business going and growing.
What's the biggest difference between then and now?
When I started out there was pretty much just me and Carole's Cheesecake doing this.
It seems like everybody is going into the cake business today. How do you handle the competition?
People trust us. We have the length of time in business and a following because of the quality and variety and everything else we've been doing right all these years. We have customers who've stayed with us for over 35 years. There's a lot of 'here today and gone tomorrow' people in the cupcake and cake world. A lot of those are probably not making a living. Maybe they have one shop and it's a lifestyle business. There are lots of little places that make their cupcakes or donuts in the back, put them out and sell them. When they're sold out, they're sold out. We're not in that environment. Our clients need to know that our product is going to be consistent day in and day out, whether they need one cake or 50 cakes.
We often hear the complaint that "your product is everywhere." They may think the quality has gone down because of that or maybe they don't want it because the other guy has it, but that's part of growth in any world, any industry. What we try to do is maintain that specialness about our product, so we're constantly launching new items. We change seasonally, rotate items and stay very creative. The creativity keeps it exciting.
Why did you decide to take on a partner in 2006?
The business came to a point where it was just too much for one person to handle. In order to grow to the next level, we needed another person to lead the ship and generate that kind of growth.
How did you go about choosing a partner?
I interviewed and had meetings with a few people but they didn't have the kind of experience I was looking for. Danièle [Bertrand] cold-called me and we met several times. I went away to think about it for awhile and, six months later, went back and started serious discussions focused on making sure we were complementary. Mostly we discussed what we both liked and how we'd handle difficult situations. It took another six months to put the deal together. Danièle came in as a financial partner as well. She had experience with large companies [in senior sales and marketing] so she had the knowledge of how to handle large key accounts.
What clinched it?
Her level of expertise, confidence and knowledge of baking. Danièle isn't a baker, but has been cooking since she was 15 years old and loves it. Anyone else who approached me didn't have those features. They may have had a business background but didn't understand this kind of business. It's hands-on. It's not like I just sit in my office and control things. Danièle really wanted to become an entrepreneur and get all in with both hands and feet. You have to be passionate and dedicated to what you do because you're in there whenever and wherever you're needed. You have to be willing to make those sacrifices.
Why did you add chocolate into your production line-up?
It made sense. Chocolate is our No. 1 ingredient so there was synergy in the product and knowledge of the ingredient. It gives us enough of a line to be interesting to a company or a broker and for us to be more efficient. Initially, David's was a partner and then we bought the company. The David's name stays.
Dufflet's production bakery was awarded the BRC Grade A Global standard (a leading global safety and quality certification program accepted internationally) last year. What does that do?
It's really required as you grow. It's a prerequisite. A lot of large accounts, even within Canada, won't do business with you if you don't have that certification. When we do business in the U.S. and beyond, say in the Asian countries, they want to know we have that certification, that you're governed by a body that they respect. It's a common language. It basically comes down to that they know they can sell the product and not have trouble with it.
What's the biggest challenge in working globally?
As you grow in distance, you need to send your product frozen. [Products with the Dufflet name are natural with no preservatives.] You don't want to waste your shelf life in transport. The challenge is in managing it. It's only bad if people don't manage it properly. People have a real misconception about frozen in the cake field. I was surprised when I went to Europe to take some courses and found out that everything was frozen. Even the smallest of shops freeze because it's actually an asset to your production and flavour development. Not everything of course – it wouldn't work for the almond meringue cake.
What's your biggest challenge now?
The world of 'no negotiation' is definitely challenging. We were just talking today about dairy prices. It's a monopoly. We have no option. We have to buy at whatever the price is and we cannot increase our price and pass it on. You have to be inventive – in recipes, production, becoming more efficient.
It's also challenging to make products the same every single time. We're not like Sara Lee, where it's coming off a line. It's very hard in the food industry when it's a 'hands on from scratch' kind of business like we are. Being constant is so important to our clients because they want to be able to rely on what they get.
What about production errors?
We believe in checks and balances but nobody can catch everything. They sometimes happen. Let me say that we're very supportive of Second Harvest.
What's the secret to consistency?
Dedication, great employees, people who care about the product they're producing. We've had some of the same supervisors with us for over 25 years.
What kind of relationship do you have with staff?
I eat with everybody – whoever is in the lunchroom eats with me. We talk about basketball games mostly because that's what everyone is into. We have a big summer barbecue and staff parties. I like to get a lot of feedback from staff because I'm not on the line every day. Often they'll figure out new ways of doing things that I would never have thought of and we'll document that.
What's most stressful to make?
Wedding cakes. We've put all sorts of processes in place to try to make it as foolproof as possible, but taking the order, delivery, set up and handling leave so much room for error. We're good at it but keep trying to get better to make sure the bride is completely happy.
What's your advice for people who want to get into the industry?
I tell people to do what I didn't do – go to school, do the co-ops, get some experience. There's a fabulous two-year program at George Brown [College]. If you can't manage that, do the courses in continuing education. Vancouver and Montreal have some good schools, too. If you have an unlimited budget, there are some fantastic schools in the U.S. and Europe but they are super-expensive – it's like going to Harvard. Also plan ahead. Think about the investment it's going to take and do your business plan now.