Bread And Butter Business

“One said the product was good and there was no problem with the price,” Sachar says. “The other said the quality was good, but the price was too expensive. So I put the price up 25%. I figured, ‘I’m a small guy; I can’t do high volume anyway’.”

Such confidence in his product, combined with marketing savvy and practicality, has helped Sachar to make Aroma Bakery and Catering thrive. In a highly bread competitive market - ranging from the well-known bread brands on supermarket shelves to national franchise operations and little corner hot-bread shops - Aroma turned over $5 million in 2003-04. The small guy of 1998 has grown up.

Product range - and lots of it - is a key to Aroma’s success. At the Aroma Cafe nestled among the warehouses of Collingwood, local workers stroll in for a coffee and a muffin in the morning, consider a felafel wrap for lunch later, or perhaps a loaf of olive bread or ciabatta to tuck under their arm on the train ride home. But that is just a little of the huge range being turned out in the bakery beyond the counter.

Aroma’s bread category alone includes 145 products. Apart from the shopfront cafe in Collingwood, there are eight franchises, and Aroma supplies bakery items and prepared foods to big caterers such as Spotless Group and ALH Group. Sachar says: “We make over 300 products. It makes life harder but more interesting. Instead of [needing] four or five bakeries, I can offer a supplier everything.” He makes changes to Aroma’s product range every 3–5 months to keep its offerings fresh and stay ahead of competitors who copy his products.

Sachar came to Australia from Israel in 1980; his partner, Mary Carabott, was born in a bakery in Malta. Before starting Aroma, they owned a textiles and garment manufacturing business. Seven years ago they sold the business and began looking for something else.

Sachar says: “I thought about food. After all, you have to eat.” Sachar and Carabott researched the baking business thoroughly. They spent about 18 months developing their own recipes and went to Paris to study baking. Aroma uses no chemicals or added sugar and its bakery products are made from one of three naturally fermented sourdough bases.

They came back to Melbourne and transformed their textile warehouse in Collingwood into a bakery and cafe. But success was not immediate and there were staff difficulties too, particularly in keeping bakers who could produce a quality product. Sachar says: “Mary was about ready to give up. It took 12 months to break even, and 18 months to make a profit.”

Aroma began hiring staff from many nationalities, which was an inspired move. The new staff have been loyal to company and a source of ideas for new products. “Since I have had a big mix of nationalities, education, backgrounds, we have been more reliable, more consistent.”

Aroma has grown rapidly in the past two years, with turnover increasing by 40% in 2002-03 and by 20% in 2003-04 over the previous years. Eight Aroma Bakery Cafes have been franchised in the past two years.

“We make the franchise very easy,” Sachar says. “The concept is excellent: in one business you have two businesses: a hot bread shop and a cafe. We took out the things that are hard to manage: the chef in a cafe, or the bakery in a hot bread shop.” All food for the stores comes from the Collingwood bakery. Any shortfall can usually be supplied within an hour.

Franchisees pay $44,000 for the licence as well as costs of renovation and equipment. Aroma supplies uniforms, computers, training for a month, support afterwards and marketing.

Aroma has plenty of room to grow, according to Sachar. He says bakery output could be increased by up to 50% and subcontracting some products will enable further expansion. The subcontractors will be people who have been working in the bakery and know the product.