Only eight months old, City Bakery already supplies each of the top 20 rated restaurants in Denver.
Though Owner Michael Bortz opened City Bakery last December, the company's relative youth is deceiving. Eight years ago, Bortz and a partner opened their first wholesale bakery in the area, but the partner wasn't long for the business and soon looked to sell his share. Lucky for Bortz, it was 2000, and the bakery café trend was just starting to hit its stride.
Paradise Bakery Café out of Phoenix was looking to move into the Denver area, and Bortz convinced them to buy his partner's stake in the company in exchange for supplying Paradise Bakery Café its baked products. Bortz spent the ensuing years baking for Paradise and putting together a stable of 50 to 60 wholesale accounts of his own. The Paradise group eventually sold to a local Denver area franchisee who was not interested in the bakery side of the business.
“The franchisee told me that a move to start my own business was great for them, as they weren't interested in wholesale baking. They just needed their own bread; wholesaling wasn't their business,” Bortz said. “They basically gave me my wholesale accounts, said I had earned them, and wished me luck. So even though I started only eight months ago, I had good local accounts already started.”
Bortz spent months looking for the proper location. He wanted a space that included most of the equipment needed for baking, but he was leery of leasing. Instead, he bought a 4,000-sq.-ft. location in an industrial park adjacent to downtown Denver and equipped the plant himself.
“The real issue with most restaurants is people spend millions on the build-out, and the return on investment is just not there,” Bortz said. “But anyone who wants to get in our business and do it right, somewhere along the line, you have to pay the price.”
Since opening in December 2007, Bortz has grown his list of accounts to 90, and annual sales are on target to surpass his initial goal of $750,000 and reach nearly $1 million.
“I would say our business is 75 percent breads and rolls, 25 percent desserts, tea breads, and so on. When wheat prices hit a high point, I thought I'd go after the sweet stuff and the wider margins of sweetgoods,” he said. “I can sell a cheesecake for $20 and make $15. We have a great base of bread; we just need to make the numbers work on top of that foundation.”
City Bakery employs 12 people and runs seven days per week. The schedule is demanding, but the bakery needs to supply restaurants fresh bread every day, particularly for the high-end restaurant accounts.
“The first year is tough,” Bortz said. “A lot of blood, sweat and tears go into it, but next year, I'll be established, so hopefully the frantic pace will slow down.”