Entrepreneur bakes up Starbucks’ sweet pastry plan
Acquired by Starbucks in 2012 for $100 million, La Boulange is shaping up to become the food arm of the coffee giant. The object is to make food a more lucrative part of the menu, while emphasizing taste, quality and presentation.
Seattle Times business reporter
La Boulange at a glance
Founded: 1995 by French baker Pascal Rigo
Headquarters: South San Francisco, Calif.
Employees: About 1,000
Scope: 22 cafe bakeries, plus national wholesale accounts
Sold to Starbucks: 2012 for $100 million cash
Short Starbucks-made video of Rigo: http://bit.ly/ZL5Wus
SOUTH SAN FRANCISCO, Calif. —
Savvy as Starbucks is about coffee, it has not had much luck with food.
Although the chain revamps its pastry case every few years, sometimes with promises about “health and wellness,” food represents just 19 percent of its U.S. sales.
That may be up from 10 to 12 percent a couple of decades ago, but “we’re not where we want it today,” Chief Financial Officer Troy Alstead said in an interview.
Starbucks is looking to Pascal Rigo to change that.
Rigo, the founder and operator of a midsized cafe and bakery chain in the San Francisco Bay Area called La Boulange, sold his company to Starbucks last year for $100 million.
He stayed with the company and is now charged with transforming the Starbucks pastry case over five years. He has a large budget at his disposal, although the exact size is confidential.
Rigo, who does not speak so much as he effuses, is excited to be well ahead of schedule and under budget.
He is on track to improve not just the pastries at 8,000 U.S. Starbucks, but also — within two years — their sandwiches, salads and other food.
“It’s going to be unbelievable,” he said.
The first new pastries debuted in Bay Area Starbucks this spring and are set to roll out at 348 stores in Seattle on June 4. (Cafes at the airport and in some grocery stores will not have the food yet.) Other cities will follow until coverage is nationwide by August 2014.
Some customer favorites remain, including croissants, pumpkin loaf and lemon loaf, but with new recipes that do not include hard-to-pronounce ingredients such as guar gum. The new effort also has eliminated all preservatives except nitrates in the ham-and-cheese croissant.
Then there are an array of new goodies, from chocolate croissants to that ham-and-cheese croissant to chocolate molten cake.
Good bread for all
Rigo, 52, fell in love with baking as a 7-year-old boy in Paillet, a village in the Bordeaux region of France where the mayor was a baker and Rigo’s mother ran the post office.
His other passion was traveling, inspired by his father’s career as a French diplomat in Africa. (Rigo was born in Chad, but moved to France before his second birthday.)
He spent six months studying in California as an international trade major in college.
“I loved it,” he said, “but I didn’t love the bread.”
Thus was born Rigo’s dream of bringing affordable, delicious bread to the masses in the United States — the way it is in France.
After working at major bakeries in France, he took a job in the early ’90s in the wine industry so he could get back to California. Within a year, he was baking bread for Los Angeles restaurants and, within two years, he had launched his own Bay Area wholesale bakery.
The name La Boulange came in 1999, after he had opened the first retail store, below the San Francisco apartment where he lived with his family. La Boulange means “culled bakery” in French; a boulangerie has both a retail store and its own oven.
Rigo financed the startup with savings and a credit card, and used a French bread oven he found in Mexico. Because he didn’t own a car, he made deliveries with a rental van.
Now there are 22 La Boulange Cafe and Bakery locations in the Bay Area, served by a 40,000-square-foot industrial bakery near San Francisco’s airport and the original, much smaller bakery in that first retail shop.
Rigo was on the verge of expanding the chain — he had brought in a major investor to help finance it — when Starbucks approached him about selling the whole company.
The idea of 8,000 pastry dispensaries already in place appealed to Rigo’s aim of making good baked goods an everyday luxury.
“Good taste is going to be the driver. If you make them pay (too much) for that, I don’t think it works,” Rigo said. “It’s not very exciting if it’s just for people who travel and have a lot of money.”
He also was impressed by Starbucks CEO Howard Schultz, who came to dinner last year at Rigo’s home in the Noe Valley neighborhood of San Francisco.
Rigo remembers two things from that night: He overcooked the halibut, and he connected with Schultz over their shared vision of offering high-quality products to a broad market.
That night, he also laid out a plan for taking La Boulange-style pastries national.
Although Rigo’s 1,000-employee company was comparatively small, he had no doubts about his ability to create a large-scale operation for Starbucks.
A key would be training big commercial bakeries — including some that have worked with Starbucks for years — to follow La Boulange’s recipes.
It also would be important to freeze the food after it comes out of the oven, which keeps items fresh without preservatives. Starbucks stores are installing freezers at a cost that Rigo declined to disclose. Baristas will warm the frozen pastries in ovens currently used for Starbucks sandwiches.
“Since how long you didn’t have a warm muffin?” Rigo asked with a twinkle in his eye.
Another major factor in Rigo’s overhaul is having a system nimble enough to make changes quickly. There will be just 45 days from idea to market, for example, if La Boulange decides to put more lemon in the lemon loaf.
That fast reaction time is possible in part because La Boulange is finding local sources for ingredients. In some cases, that means flavor variations rather than the uniformity that most fast-food companies aspire to.
The apples in Starbucks’ caramelized apple cake, for example, will come from Washington for cafes in the western U.S. and from Michigan in the East. Chocolate croissants will have Colombian chocolate in the West and African chocolate in the East.
“It’s going to be fun,” Rigo said. “We could have key lime in Florida and beignets in Louisiana. The idea is things are changing all the time.”
Making a statement
Along with changes in recipes, the presentation of the food will change, too.
It involves a lot of pink.
Pastry cases will be lined with pink paper, and muffins and cookies will leave the store in pink “La Boulange” bags also bearing the green Starbucks logo.
Pink is not a corporate color of either Starbucks or La Boulange, but the companies want to bring to mind old-fashioned bakery boxes and to capture customers’ attention — or as Rigo put it, “be disruptive.”
Alex Lakas, a regular at a Starbucks near the San Francisco software company he co-owns, said he appreciates the relatively low price points.
“If it’s under $6 for breakfast or lunch, that changes my entire life,” he said. He leans toward the $2.50 cheese danish.
Mark Reyes, a longtime Starbucks barista and cafe manager who is helping with the La Boulange transition, said baristas like being able to tell customers more about their food.
“As a barista, we know the coffee varietal and flavor profile and where it comes from, but never who the baker is,” he said. “Baristas now can say who baked this.”
It might be the same commercial bakery that made the pastries before, but now it comes under the La Boulange brand, a name some people know and others can find out about.
A sandwich if you want
Next on Rigo’s agenda is revamping the non-pastry food. That involves a lot of tasting and spitting, the way wine and coffee tasters work.
As Rigo makes his way to a recent tasting of grilled-cheese sandwiches inside the industrial bakery and commissary near the airport, he gets a lot of hugs and European-style kissing on both cheeks from employees.
He walks past pallets stacked with 50-pound flour sacks, a giant container holding 180 gallons of canola oil, and a line of women placing sticks of chocolate — called batons — inside unbaked croissants.
Then he walks past gurneys filled with hundreds of small loaf pans. Starbucks breads now will come as tiny full loaves rather than slices.
Finally, Rigo reaches the tasting room.
It is decked out in pink, with a mock-up of a Starbucks pastry case filled with new food being considered.
Current front-runners include carrot salad, potato salad and chicken curry salad. Schultz’s favorite, Rigo said, is the egg-white salad.
The salads can be turned into sandwiches with the addition of toast or a croissant, as can plastic boxes with sliced meats or marinated vegetables.
“You make a sandwich, or you don’t,” Rigo explained.
He eats one with marinated eggplant and red peppers, spinach, mozzarella cheese and tomato pesto.
“I have a warm, toasted sandwich that took me two minutes,” he said.
Prices are still being worked out.
Rigo tastes the grilled-cheese sandwiches and decides there might be two bread options, nine-grain for adults and lighter Pullman bread for children.
One of his lieutenants was heading out of town to see a Starbucks supplier to find a way to take the butter flavoring out of the egg patty used on Starbucks sandwiches.
“I have a feeling they’re going to end up with butter,” Rigo said.
Melissa Allison: 206-464-3312 or firstname.lastname@example.org. Twitter @AllisonSeattle.
As a result of an editing error, an earlier version of this story incorrectly identified Noe Valley as just ouside San Francisco. In fact, it is a neighborhood of San Francisco.