Upper crust

Despite its success, quality and Old World charm, our Small Business of the Year kneads the dough.
By Amanda Parry

Blink and you’ll miss it. In the vast Triangle suburbia, along a parkway featuring strip malls and sprawling apartment complexes, sits La Farm Bakery. Flanked by a Papa John’s Pizza and a Caribou Coffee, La Farm oozes European charm in Cary. French music plays on a loop, 18th century wooden beams crisscross the ceiling, and head baker Lionel Vatinet, 41, calls out to people in a (real) French accent. Customers hear about the centuries-old traditions that go into the food. Images are evoked of simple village life, where breads were baked with local ingredients in communal ovens.

Beneath this Old World simplicity lies a modern business acumen. Not a local? Order online. Want to know more about Lionel? Read his blog. Seeing expansion possibilities? Talk to co-owner Missy Vatinet, who created a software program and training manuals to recreate the shop in any storefront in America. There’s nothing simple about La Farm or its success.

What opened as a two-person operation in 1999 has 27 employees. Sales have gone from $496,000 the first year to more than $1 million in 2006. The Vatinets, a husband-and-wife team, project revenue exceeding $1.25 million this year, 12% of which will come from off-site sales. In May, Whole Foods Market added La Farm breads to its Triangle stores, and restaurants such as Ruth’s Chris Steakhouse and Biaggi’s serve La Farm products. Internet sales were introduced after a mention on The Rachael Ray Show in March. An item in O, The Oprah Magazine, will tout its gift sampler.

“Just as there are recipes for food, there are recipes for business,” Missy, 38, says. “We wanted to create a system that would allow these artisans to do what they do best, profitably.” Their recipe for success has made them Business North Carolina’s Small Business of the Year. Judging this year’s competition were Ira Weiss, dean of N.C. State University’s College of Management; Kevin Schoolcraft, whose Matthews-based Masterpiece Staircase and Millwork Inc. won last year; and Ben Kinney, BNC’s publisher. All cited quality as a major component in the their decision. “A real story about returning to roots,” Weiss wrote in his remarks. “High-touch quality production of food in a time of mass production.”

La Farm carries handmade bread, pastries, tarts and sandwiches, all made daily on the premises. The staple is the bread, which comes in 35 varieties, including Asiago parmesan cheese and walnut sage. Everything is preservative-free, and local and organic ingredients are used whenever possible. The business is the perfect match of the Vatinets’ talents, he a formidable baker, she a veteran of the retail-food and restaurant industry. Their conversation about La Farm is as likely to include the terms brand platform and service infrastructure as pain au chocolate or yeast starter. They are hands-on with their business, a round-the-clock operation in which bakers begin preparing breads at midnight and the last sales clerk doesn’t leave until after 5 p.m. Lionel (pronounced LEE-onel) can often be found chatting with customers, encouraging them to taste different varieties and bringing them back to the baking area to show how it’s done.

La Farm has its origins in the neighborhood bakeries Lionel grew up with in France. A native of Paris, he got his first taste (pun intended) of the baker’s life as a teenager, when his best friend began dating a baker’s daughter. The three would hang out at the bakery sampling bread fresh from the oven, and Lionel began to imagine himself in the industry. He enjoyed the casual conversations between baker and customer, as well as the art and craft involved in shaping and baking bread. His parents, who ran a grocery store in the Port d’Orleans section, were eager for their son to learn a trade and arranged for him to spend the day as a baker’s apprentice. He loved it, and when he left school at 16 — common for teens pursuing vocational training in France — he was accepted into another apprenticeship to learn baking from the country’s masters.

He spent seven years breathing, sleeping and, yes, eating bread. He traveled the country and learned everything from how to shape dough to what bread’s molecular structure looks like. “A few years in, my mentor told me I was born to be a baker. I fell in love with the mystery of yeast and rising bread.” He graduated as a maitre boulanger (master baker) and a member of Les Compagnons du Devoir (The Companions of the Duty), a French guild that encompasses a variety of artisan and trade organizations and dates to the 12th century.

Vatinet took his expertise abroad, working as a consultant for restaurants and bakeries in England and Canada, as well as the U.S., Caribbean and Middle East. He eventually moved to America, training bakers and designing breads for businesses such as Panera, La Brea, Acme and Zabar’s. In 1994, he helped start the San Francisco Baking Institute, teaching artisan bread making. It became clear that not only was there a demand for gourmet breads but that it was growing. His perceptions weren’t wrong; Census Bureau figures show that sales of artisan breads increased steadily during the 1990s, part of a larger trend that saw Americans developing a taste for specialty foods. A growing economy and an increase in travel abroad were the main reasons, according to the Mintel Group, a London-based market researcher.

Lionel’s dream of opening a French-style bakery in America was starting to look like a decent business venture. Around this time, he met Missy Eide at a trade show in Chicago. A native of Syracuse, N.Y., she had grown up in Roanoke, Va., and had graduated with a degree in hotel and restaurant management from Virginia Tech. She began her career working for Austin, Texas-based Fresh Fields in 1992, opening branches in cities such as Richmond, Va., Charlotte and Washington, D.C. She went on to work for Brinker International — led by restaurateur Phil Romano — in Dallas, where she was part of a team that launched Eatzi’s, a chain of gourmet takeout shops. After three years at Brinker, she joined the Richmond-based Restaurant Co. and worked for Dick Ripp, whom she considers her ultimate mentor.

By the time she met Lionel in 1997, she had decided she wanted to start her own business. She quit her job, then took three months off to travel in South America. When she returned, Lionel suggested they open a business together. Missy wasn’t keen on the idea. She knew that partnerships have greater failure rates than individually run businesses and that personal partnerships do even worse. But his enthusiasm grew infectious. “I thought, if we could do the bakery business, we could definitely beat the odds for marriage,” she says. (They wed in 2005; by then, the business was a success.)

They traveled the U.S., Canada and France, studying successful bakeries and food retailers. They looked at the best markets, which seemed to be major cities such as New York, San Francisco and Boston. But it was when they researched up-and-coming ones that they found La Farm’s home. Seeing that real estate was doing so well in the Carolinas and Virginia, they ordered a $12.95 demographic study of the Triangle — where she had relatives — and found that the Raleigh suburbs had the right mix: middle-class, educated and well-traveled. The couple felt out “pocket markets,” spending time in neighborhoods. They chose a storefront in a shopping center along the not-then-finished Cary Parkway, banking on the idea that the road would guarantee lots of traffic past their place.

Setting up the shop became a family affair. Her father, a general contractor, came from Virginia to help with renovations. They were crucial to what Lionel calls the “theater” aspect of the business. He wanted customers to see the bakers at work and to be able to speak to them, just as he had at the bakery that inspired him. So they left the storefront open, with no wall separating the production and retail areas. Lionel’s parents flew in from Paris, and every morning his dad would help with the baking. Missy’s aunt and uncle, who live in Raleigh, also helped with the setup. They all took turns getting the word out by standing at the intersection in front of the shop, passing out samples to motorists.

The bakery opened in October 1999 with a simple menu: eight varieties of bread, including their signature sourdough, cinnamon buns, cookies and coffee. When the doors opened at 7 a.m. the first day of business, a line was waiting. In 31/2 hours, they were out of bread, and Lionel rushed to bake more. Using the only ingredients in stock, he created an Italian cornmeal loaf that customers still request.

Though the shop was popular, the timing was unfortunate. Soon after it opened, the tech bubble burst, and many customers began facing one, if not two, layoffs per household. One Mother’s Day, a man tried sheepishly to return a fruit tart he had bought for his wife, who had chided him for spending money for something they didn’t need. A clerk refunded the money but told him to keep the tart. A few months later, once again employed, he came back and paid up. Then the Atkins Diet came into its heyday, and some customers began cutting out bread. This trend reversed with the South Beach Diet, as its creator encouraged eating “healthy” carbs such as whole grains. The Vatinets introduced varieties such as nine-grain, spelt and whole wheat. By another quirk of timing, they found themselves trying to grow their business in the midst of anti-Gallic sentiment due to France’s position on the U.S.-led invasion of Iraq. But they can recall only one incident: A customer told Missy he didn’t like the French and was glad La Farm sold Italian bread. He bought five loaves. They weren’t Italian, but she didn’t correct him.

The Vatinets expanded their offerings, packaging mixes for items such as hot chocolate and crepes and began selling locally made jams and preserves. They increased the number of breads they sold but hewed to a formula Missy had laid out based on her experience in retail food. Knowing 80% of sales come from 20% of products, they came up with a core list of breads to be made every day and supplemented it with breads baked several times a week and seasonal treats. They continued to add staff, including an apprentice from Lionel’s guild in France. La Farm attracted many workers for whom English was a second language, so she created manuals with photos showing each step of a recipe or interaction with a customer. Copies — dusted in flour — can be found throughout the production area.

She also began taking steps to expand, creating a program to cost out recipes, giving potential franchisees a clearer picture of expenses. They looked at a second location a few years after the bakery opened, then decided to concentrate on one store. They did begin selling their bread at farmers markets, though this presents a challenge: Because La Farm can’t be classified as an agricultural operation, it isn’t guaranteed a stall. Markets in Carrboro and Greensboro won’t allow it to set up shop. At the state market in Raleigh, it is allowed to sell only if a stall is left after the farmers have their pick.

But loyal customers have rallied to the bakery’s aid. As the business grew, the couple was conscious of the need for a long-term strategy. Bill Weiss, CEO of the Cary-based Promar Group consultancy, went over their goals and how to reach them. One of his employees then helped develop a brand platform. Gordon Munro helped them set up a Web site. A photographer who splits his time between New York City and Raleigh, he didn’t charge for marketing photos and helped them find a graphic designer to redo their packaging. Consultant Rick Moore was so pleased to hear about their contract with Whole Foods that he delivers the loaves each morning in his car.

The Vatinets are focusing on growing LaFarm’s Internet business, in which customers are sent a slightly less-baked loaf wrapped in parchment with instructions on how to crisp it. The Vatinets hope to open a Raleigh store by early next year. They’re also working with a public-relations consultant, sending products and marketing materials to magazines and TV programs to get noticed, a tactic that secured them the mention on Rachael Ray — their cookies were featured as “Snack of the Day” — and in O's February issue, in which their La Farm Sampler will be featured as an ideal gift.

A PR specialist? Graphic designers and brand platforms? All this for a bakery? It’s becoming standard, according to Michael Kalupa, president of McLean, Va.-based Retail Bakers of America. “The days of the old-fashioned, white-paint bakery are gone. These days, it’s about color and merchandising, about grab and go, about whether the coffee is up to standard. They’ve really adjusted to the market.”