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Click here to view an online photo gallery detailing Galaxy Desserts’ operation.
Click here to view an online photo gallery detailing Galaxy Desserts’ operation.
“We've always been focused on individual-size desserts-each one its own piece of art,” says Heather Sears, director, marketing and sales. Although more conventional in Europe, individual-size desserts weren't even on the radar in the United States 10 years ago.
“A lot of very small bakeries can do what we do in very small volume. And, there are a lot of big bakeries that can do standard, basic cakes at very high volume,” says Paul Levitan, co-founder, C.E.O. and president. “The niche that we think makes us really unique is to take what's done in very small quantities at high-quality local bakeries, produce those at volume and sell those to national customers.”
Galaxy Desserts began in a production facility in San Rafael, Calif. in 1998. “That's how it all got started,” Sears says. “We're now in Richmond, which is right across the Bay, in a much larger and much nicer production facility. We've grown like crazy over the past 10 years. We started out as being primarily a Northern California business, and we've literally gone from there with exponential growth every year. We keep hiring more people, expanding with new products and new customers and new geography.”
Developing a unique concept
In its 10 short years of existence, Galaxy Desserts, Richmond, Calif., has recognized that it occupies a unique niche within the baking industry with its focus on creating French-inspired, high-quality, individual-size desserts. Jean-Yves Charon, Galaxy's co-founder and master pastry chef, dictated that direction. As a pastry chef who learned his art in France, Charon emphasizes quality more than quantity.
Levitan and Charon each had their own bakeries when they decided to merge their interests into one. Charon had served as the executive pastry chef at Harris Restaurant in San Francisco for several years, before founding Paris Delights. After graduating from Stanford Graduate School of Business with his MBA, Levitan purchased a small specialty bakery called The Cheesecake Lady. Levitan and Charon met through baking industry events and eventually cultivated a relationship. Galaxy Desserts was born out of the realization that each partner's product lines paired well together, thus money could be saved by merging the two businesses into a single entity.
One of Charon's particular specialties, the croissant, also has become one of the company's core products. The butter croissant is a 144-layer pastry made with 32 percent butter versus the typical American standard croissant containing 18 percent butter. Mini butter, chocolate and almond croissants, sticky buns and Danishes also are part of Galaxy's morning pastry line.
Other products in Galaxy's portfolio include individual tarts; crèmes and mousse cakes; classic cakes and cheesecakes; classic Parisian macarons; cannelés, a French pastry from the Bordeaux region with a fluted, caramelized exterior and vanilla-bourbon-rum custard center; and mousse duos, the pairing of two mousse flavors in individual plastic shot glasses.
Achieving growth through diversity
“We introduced mousse duo shots about two years ago. Still, to this day, we are one of the few out there doing them with actual packaging, which cuts down on labor,” Sears says. “You'll see a lot of shot glasses filled with desserts, but in most of those applications, the bakery is filling up their own shot glasses with a pipeable bag.”
Sears credits the restaurant Seasons 52 for raising the profile on the bite-size dessert trend. “Typically, desserts are a small percentage of revenue at a restaurant. When Seasons 52 introduced its mini-dessert line for $1.99, its dessert revenue quadrupled,” Sears says. “They realized it's hard to say no to dessert when it's reasonably priced and comes in small portions.”
Much of the company's growth can be attributed to product and process improvements made by Charon, who continually applies his pastry art skills and his knowledge of food science toward new innovations.
Galaxy Desserts has received recognition for its rapid growth, as well as its quality. The company has been listed among Inc.'s list of the 5,000 fastest growing private companies in America for the past two years. Its French butter croissant has been featured as one of Oprah's favorite things on three separate occasions. Its chocolate ribbon, triple mousse and grand sequoia cakes received silver medals, and the chocolate truffle marquise cake a gold from the National Association of Specialty Food Trade's Sofi Awards.
While these accolades certainly contributed to the company's growth, its presence throughout multiple business channels also has increased its brand awareness. Galaxy sells its products in four business channels: specialty mail-order catalog; bulk packed for foodservice, including restaurants, hotels, in-store and retail bakeries, most of which is sold unbranded; private label packing for various retail establishments; and branded consumer packaged goods.
Galaxy has a fairly robust business in the specialty mail-order catalog business. During the past holiday season, the company drop-shipped 13,000 packages out of its warehouse in a single day and sold close to $1,000,000 in mail order alone in December, according to Peter Biro, who is one of six European interns working at the company.
Specialty mail-order catalogs allow Galaxy to develop a relationship with consumers it wouldn't ordinarily have, Sears notes. Pairing a catalog, such as Williams-Sonoma with Galaxy Desserts, is a particularly good match for both companies, considering Williams-Sonoma's customer base and the products Galaxy provides, Sears adds.
The consumer packaged goods side is new for the company, having been launched last summer. The line, called Galaxy Desserts Jean-Yves Charon Collection, includes six SKUs, and is sold in the freezer section at supermarkets across the country. Products include mousse duos, chocolate lava cake, triple mousse cake and lemon tart. “We took the best selling products out of all our SKUs and put them in package form,” Sears says. “The philosophy behind it is we've got these great products and great recognition of our brand in the trade and from our specialty catalog business, why not launch that out to the consumer? Our consumer packaged goods line is a very small percentage of our total business, but it's an important one, and it's growing. It's a strategic initiative for us over the next couple of years.”
Galaxy's production area is organized by business category. Output from the croissant room accounts for about 30 percent of the company's business, and the mousse room and baking room produce about 40 percent and 30 percent output respectively.
While certain procedures in the production of Galaxy's pastries and desserts have been automated, Charon holds firm to his belief that croissants must be hand rolled, so the dough isn't pressed too tightly. “We can cut the dough and fold the dough mechanically, but I haven't seen one machine-rolled croissant get the same flakiness as one rolled by hand,” Charon says.
Croissants are produced with about 200 lb. to 250 lb. batches of dough that are alternately folded with butter into 144 layers. Croissant dough rests for one hour before more butter is added, and then the dough rests for another hour or two. The dough is then cut, hand rolled and blast frozen. Croissants are sold as frozen dough and are proofed and baked by the end user.
“About 90 percent of our line is thaw-and-serve, 8 percent is frozen dough and the remainder, for example the lava cake, is fully baked and has to be reheated,” Sears says.
Including croissants, chocolate lava cakes, crème brûlée and mousse cakes, Galaxy makes about 100,000 individual desserts and pastries per day-a number that increases dramatically during the holiday season. It also can produce about 60,000 shot glasses of mousse per day.
In the mousse room, custom-designed double depositors can fill two different flavors of mousse consecutively, such as dark chocolate and milk chocolate, for improved efficiency. Once the plastic shot glasses are filled, white chocolate shavings are added by hand before the mousse-filled glasses enter the spiral-cooling tunnel in the packaging room.
When Galaxy moved to Richmond in 2005, it rented 26,000 sq. ft. of a 104,000-sq.-ft. building. Six months later, it expanded to 36,000 sq. ft. One and a half years ago, the company added another 16,000 sq. ft., bringing the total to 52,000 sq. ft., which makes its current production area triple the size of its original facility in San Rafael. Still, Levitan anticipates further expansion. “We think when we're ready, our neighbors will be happy to share,” he says.
A $2.7 million investment by Pacific Community Ventures, a San Francisco firm that invests in companies that help provide economic gains and jobs in low-income communities, helped Galaxy with its most recent expansion.
Two new rack ovens were installed, bringing the total to six. The newer ovens cook more evenly than the old ones and use less gas, Charon notes. The facility already housed a 300-pallet freezer and a 50-pallet holding freezer, but a new 400-pallet freezer will allow for more rapid product turnover. A production room for croissants was built and specifically set up to streamline efficiency. Because 1-lb. sticks of butter must be individually wrapped and pressed before the lamination process begins, the room was designed so butter pressing can begin earlier in the process.
A new packaging room, housing four lines feeding into a spiral freezer with 90 ft. of conveyor, began operating last September, but not without some problems. “We certainly had a couple of hurdles in the fall,” Levitan says. “Right now, retail is growing faster than foodservice. As we've gone from foodservice to a higher number of packaged items, keeping up with that side of demand involves equipment. We had some growing pains trying to get everything packed, and pretty much ended up packaging 24/7.”
The new packaging equipment, in conjunction with some of the other capital improvements made, doubled the company's capacity, Levitan notes. “Without that, we wouldn't have been able to have all that growth,” Charon adds.
Operating with business savvy
Although Galaxy has implemented a fair amount of automation into its processes, its intricately designed desserts require much hands-on work. As such, costs must be closely monitored. An innovative, automated, fingerprint time clock helps the company do just that.
Before production employees begin their assignments, they each place their thumb against a scanner and punch in the number of the product they're working on, which enables management to track direct labor by product by batch.
For example, management assesses the average labor per case for lemon tarts. The last four times tarts were made, average labor costs were better than average, which means production operated fairly efficiently, Levitan notes. When labor costs are above average, he'll get together with people to discover the cause of the inefficiency.
“We really study how much it costs us to make something and whether we're getting better or worse,” Levitan says. “What this really helps us do is understand profitability by product or lack thereof, and it helps us price new products. It's always a bit of a guessing game, but this takes some of the guesswork out of it. It's so much easier to manage a business if you have the right data. If you're not doing this, you're going out and making lots of educated guesses and lots of assumptions.”
As one of its core values, sustainability is constantly a work in progress. The company recently enrolled in a program called SmartLights with Pacific Gas and Electric Co., one of the large utilities in the area. Now, all of Galaxy's freezers are monitored and controlled online. They cycle on and off when they reach a certain temperature. Energy trend charts track amperage and the percent time the compressors run in each separate freezer zone.
Levitan expected a 30 percent to 40 percent utility savings to run the freezers during the next year. Data from the program shows energy use has dropped from 110 amps last November, about the time the system was installed, to 70 amps on average. “There's our 36 percent reduction in just the past four months,” Levitan says.
Pastry art blended with science
Charon belongs to the Research Chefs Association (RCA), which combines food science and the culinary arts. “It's a great combination because we combine taste and the science to make a product,” Charon says. “Pastry is 50 percent art and 50 percent science.”
“We were asked to match a product, a very good quality tiramisu,” Charon says. “We had a problem getting the right match on the mascarpone. To do mascarpone cheese, you need cream and citric acid. We took the pH of the mascarpone and took the pH of our product and did a correlation of the two. We adjusted our product to the same pH to have the same final result of their product. That's combining science at the same time as art to make the tiramisu.”
Right now, Charon is developing a process for making mousse in large vats using fermentation. Mousse derived through fermentation reportedly has a smoother, less gelatinous mouthfeel.
Galaxy recently added custom equipment to make crème brûlée. “I don't know if anybody else in the United States can do crème brûlée in volume, but we can,” Charon says. “You don't design the product first. You design the process first, then adapt the product to the process. For the crème brûlée, we bought the steam-jacketed kettles so we can be very precise about controlling the temperature. In layman's terms, if the temperature goes above a certain point, you get scrambled eggs instead of crème brûlée. If you don't get it hot enough, it doesn't cook properly. When we look at the new process we are putting together, we will be able to adapt a lot of our products to it-crème brûlée, lemon tarts, the mousse.”
Charon uses his knowledge of food science to improve quality and resolve potential product-related issues. And, he uses art to create the decadent desserts for which Galaxy is famous. Levitan immerses himself in the business because of his passion for the products and his entrepreneurial spirit.
“We both love desserts. It's not an accident that we're here,” Levitan says. “We still look at it like we're a small player in this business, and we feel we have a lot of room to grow.”
Headquarters: Richmond, Calif.
Management: Paul Levitan, founder, president and C.E.O.; Jean-Yves Charon, founder and master pastry chef; Tony Lee, sr. production manager; Tom Michenfelder, maintenance manager; Laure Chatard, director, inside sales; Heather Sears, director, marketing and sales; Rohana Stone Rice, controller and director, human resources; Marie Diaz and Emilie Kientz, QA Managers; and Yury Zabello, purchasing manager
Product lines: French-inspired pastries and desserts, including croissants, sticky buns and Danishes; individual tarts; crèmes and mousse cakes; classic cakes and cheesecakes; classic Parisian macarons; and Cannelé, a French pastry with a fluted, caramelized exterior and custard filling
Business channels: Bulk-packed for foodservice, including restaurants, hotels, in-store and retail bakeries; mail-order specialty catalog; private label; branded consumer packaged goods
Plant size: 52,000 sq. ft.
Production areas: Segmented by croissant production area; mousse preparation and filling; and baking room for cakes and tarts
Throughput: More than 100,000 cakes per day: croissants, chocolate lava cakes, crème brûlée and mousse cakes; can make about 60,000 shot glasses of mousse duos per day
Sales: About $20 million (fiscal year ending June 30, 2008)
Number of employees: About 200