Upper Crust: former executive's gourmet sensibilities and marketing expertise bring bread business to rise.

FIVE years ago, when Carol Head decided she wanted to leave the corporate world and become her own boss, the Stanford M.B.A. looked at nearly 100 businesses to buy in every imaginable industry, but couldn't find one that met her criteria.

After all, she not only wanted to sell a product of "high, high quality" but one she could afford, among other qualities.

"I had only so much money," she said. "I also wanted some thing that was scalable that I could really grow."

Head, who over the prior 25 years had held executive marketing and operations positions with the L.A. Olympic Organizing Committee, Times Mirror Co. and Bizrate.com, finally found the perfect fit in 2002: Oliver's Backerei, which makes and supplies gourmet artisan breads to restaurants and retailers.

She bought Oliver's from an actor, who had been running the business in L.A. since 1994. The actor had worked with company founder and German baker Oliver Zaenglein, and took over when Oliver died the next year. Head changed the name to Oliver's Artisan Breads.

Head funded the purchase with all of her savings, a second mortgage on her home, and a small business loan. While she didn't have much baking experience she appreciated good food and was impressed with the product and the business's heavyweight customers like Whole Foods and Trader Joe's. She also knew the company needed some business direction and an infrastructure overhaul.

"I was buying a customer list and a set of recipes," said Head. "I've been able to really build on it."

Indeed, since then, the bakery moved out of its 2,000-square-foot plant into a leased 6,000-foot facility in San Fernando where the company remains today. Along the way, the original staff of 17 she inherited has grown to 37 and annual revenues have tripled to $2 million.

She also ramped up product development, working with her bakers to double the number of doughs Oliver's offers. On any given night Oliver's mixes 60 different doughs--from basic whole wheat to Santa Fe chili cheese--and produces 3,000 to 4,000 items.

She said she grants nearly any feasible request she gets from both existing and potential customers, a service she believes helps differentiate Oliver's from giant competitors like La Brea Bakery and II Fornaio.

For a local restaurant recently seeking a "signature table bread," Oliver's created a tiny, delicate loaf made with ramps, a type of wild onion. For another eatery, the company developed a Belgian chocolate bread to be used for French toast, which was especially challenging since chocolate is highly acidic and can kill yeast.

Though restaurant sales make up a whopping 90 percent of Oliver's revenues, the company creates custom products for its retail customers, too.

"You can say, 'I want you to develop this five-grain sandwich bread or a curry loaf or a brioche with peppercorns or a yeast-flee bread,' and they're able to accommodate that," said Derek Harrison,

Facility Team Leader at Whole Foods' Commissary in Vernon.

Ups and downs 

Over the past four years, Oliver's has begun selling to trendy L.A. restaurants including Patina, The Newsroom Cafe and Boa Steakhouse as well specialty grocery stores like Vicente Foods and the Henry's Markets chain, which has 30 locations throughout Southern California and Arizona. Head also landed an account with Whole Foods of Northern California, which includes 19 stores.

Though Oliver's has been supplying Southern California Starbueks with bread for their packaged sandwiches for the past several years, in 2005 the coffee retailer announced it would begin using one uniform bread in all of its stores nationwide. "It was certainly painful news to get," she said. "But we aren't big enough to supply our products nationwide so we're caught in the middle."

Though Oliver's has already lost half of its Starbucks business, and will lose the remainder this fall, Head said Oliver's revenues continue to grow and she expects to end the year with at least $2.3 million in sales.

Though all of Oliver's breads are handmade, the more handwork or gourmet ingredients that goes into a bread, the more it costs wholesale. A classic baguette is $1.29; larger loaves go for about $2.25 and $3 each, and a more intricate kalamata olive rustic loaf costs about $4.90.

"If anybody is going to buy bread based on price, they'd never buy ours. They have to have a consumer base that will recognize quality bread and understand that there's a different price point," Head said.

Over the next year Head wants to pump up the retail side of the business to account for 30 percent of overall revenues. To help reach that goal, the company is beginning the process of becoming certified organic and will revamp its labels to say so.

"The consumer base is growing for organic products," said Holly Givens, communications director for the Organic Trade Association, which projects the overall organic market will grow 11 percent annually between 2007 and 2010. According to Givens, bread and grain products represent about 10 percent of the $13.8 billion organic market.

To expand even further, Oliver's installed a blast freezer last year which freezes bread quickly enough so that its taste and consistency remains intact when thawed. Oliver's now ships to restaurants and retailers in Colorado and Philadelphia and will begin hiring regional salespeople to widen its geographic reach this year. It's more than Head might have imagined when she bought a bakery four years ago.

"This business is 24 hours a day, 7 days a week. We have not missed a day of baking since I bought the company, including the day we moved," she said. "If you're opening a restaurant at 7:30, you need the breads to be there for toast at 7:00. Period. End of discussion. Every day."

Oliver's Artisan Breads

Year Founded: 1994

Core Business: Wholesaler of premium artisan breads

Employees in 2005:33

Employees in 2006:37

Goal: To continue growing both the retail and restaurant lines of business

Driving Force: Customers seeking high quality breads, service and custom products

BY LIZBETH SCORDO

Contributing Reporter