F&B Interview: SugarMoo
SugarMoo co-founder Raki Phillips talks about leaving the corporate hotel world to launch an online dessert bakery
What happens when “a construction guy” and a former hotelier get together to launch a new F&B concept? Most people’s first guess perhaps would not be a dessert-only bakery and especially not one wholly built around a delivery-only model.
The idea seems quite whimsical at first, but when Caterer Middle East quizzed co-founder Raki Phillips it became clear that he had done his homework.
“We narrowed our plan down to a dessert franchise and we flew to New York, met with a donut company and realised it was not the right fit for Dubai, or for us," he explains, referring to himself and his co-founder Jawad Yehia.
Undeterred, the pair — who have been friends since university — came up with their own concept, with Phillips remarking: “It was the best thing we could have done because we got to create something from scratch.”
So, what attracted them to the dessert sector in particular? “It’s less competitive, you can be very creative with desserts and the profit margins on desserts are high,” he responds. The latter is because, for one, the shelf life is longer.
“You can bake a cake, eat it three days later and it will still taste good — unlike with rotisserie chicken or a shawarma, for example,” he explains.
Given the Middle East’s sweet tooth, entering the dessert market here must have seemed like a safe bet — with the right angle at least. “We looked at the [dessert] market in Dubai and thought, you either have cupcakes or Arabic sweets — and we wanted to be an anti-cupcake establishment. We realised the delivery market in Dubai is a US $750m business per annum, of which desserts were non-existent, Phillips reveals.
After coming up with the initial idea, Phillips and Yehia spent about four months on R&D, looking at the best way for them to deliver desserts and what the right products would be, so that they could successfully “deliver to you right upon your craving,” as he puts it, leading to the creation of “Dubai’s first online dessert delivery business”.
The name, SugarMoo, suitably quirky for such a business, represents the two most common ingredients for desserts — sugar and milk. In keeping with that train of thought, the company prefers to keep its ingredients list full with familiar names, choosing to go down the natural route for all its dessert offerings.
“We only use natural ingredients, and we don’t use any sweeteners or chemicals. As much as possible we get our supplies locally and we work with local farmers,” he tells Caterer Middle East.
Although a business founded on satisfying cravings is unashamedly focused on indulgence, Phillips says SugarMoo strives to tick all the consumer demand boxes through the formation of its healthier line.
“We launched HealthyMoo because, while it’s great to indulge your sweet tooth, it’s good to look out for your health if you are someone who is conscious of obesity or all the effects that desserts can have,” he explains. “We offer four desserts as healthier alternatives to our main dessert range: chia seed pudding, oatmeal goodness cookie (flavoured with a little honey), raw energy bomb (date-based) and our allergy-free cake that has no eggs, flour or butter. It still tastes very good but it’s gluten-free.”
Ever the entrepreneur, Phillips reveals that to help promote this line, SugarMoo partnered with some local gyms to give away its raw energy bombs.
He says that the point SugarMoo wanted to get across was that “you can get the sweet stuff for your celebrations but if you want something healthier, we do the same thing — and without any sweeteners”.
The primary focus of SugarMoo however is serving up guilty pleasures — its slogan is ‘you crave, we deliver’ — and to do this, Phillips and his business partner once again zeroed in on a way to differentiate the company.
“We pride ourselves on our hybrid desserts. We invented a new thing called a ‘Cupookie’, which is a cookie cup that you can fill with whatever you want. It’s very funky and that’s been our product that we trademarked,” he shares.
“Our number one seller is our red velvet Oreo — it’s a great cake and outsells everything by 30%,” he adds. The young company — launched in November 2014 — has now grown to the point where it has outgrown its facility.
“We’re in the process of moving as we have reached capacity. It was great for our first year but now with our app being launched, more clients and the kiosks, we need a new central kitchen. The kiosks is the next big thing for us,” Phillips says.
Branching into kiosks marks the first physical retail space that SugarMoo has occupied. While the business launched with a delivery model because Phillips and Yehia did not want to open a shop, the co-founders have reached a point where it wants to explore new avenues, driven partly by customer demand.
SugarMoo’s first kiosk in Dubai opened in April — shortly to be followed by three more in Dubai and Abu Dhabi.
Addressing what it was that appealed about kiosks over traditional outlets, Phillips states: “It’s a fraction of the rent but you still get the same volumes.”
Describing the kiosks, he continues: “We went for a bold, masculine design but still in [the SugarMoo] feminine colours because we know that 74% of our customers are female. Our kiosks have large display cases so you can physically see the desserts, and we’ll also serve coffee and funky milkshakes.”
The expansion to permanent outposts has required the business to expand its workforce. Phillips says SugarMoo recruits from “all over” in terms of regions and that its chefs are given “full creativity”.
“We have doubled in size over the last year — we have 14 people right now and we are about to hire 10 more, due to the kiosks. When we launched the business, it was with just six or seven people, including myself. We worked out of a very small facility at the beginning and now we are fitting out a full-on bakery in Al Quoz [in Dubai] from scratch, designing it the way we want to design it, so it’s very good to get to this point,” he comments.
Sharing his experiences in growing the business, he adds: “We hired a really solid team at the beginning and they’ve been with us since day one. I have learnt, for a small business, hire slow, fire fast. It sounds harsh but if you feel someone is working out, take care of them, and if not, find an alternative. It is so important to take your time when recruiting.”
SugarMoo’s new central bakery in Al Quoz was chosen for its location in the city in order to make quick deliveries. Besides this core business, however, and complementing the new kiosk venture, the company has secured regular business with F&B outlets.
“A lot of hotels and restaurants outsource their desserts to us. We feel that many restaurants are great at doing the drinks, the entrées and the appetisers, but when it comes to desserts, it’s always an afterthought. A pastry chef is very different to a regular chef; one is chemistry and one is cooking, and people don’t realise that, so you end up seeing the same desserts everywhere.”
He explains that SugarMoo works closely with restaurants to come up with desserts, so that the outlets can offer something a little bit different. “We develop, create and deliver their desserts, then teach their teams how to promote those desserts and teach their commis how to garnish them, if needed. We deliver them fresh daily or weekly. Often in hotels, chefs are so busy working on other elements that they outsource their dessert buffets to us, so we produce them and send them packaged and ready to set up,” Phillips elaborates.
More than 25 restaurants outsource their desserts to SugarMoo and the company is doing the same with a number of hotels, both in Dubai and Abu Dhabi.
Drawing on his own career experiences to drive this side of the business, Phillips shares: “I have been a hotelier since I was 19. You go to different hotels and the desserts are always the same, and they tend to be quite bland. We decided to give people an alternative from the regular hotel dessert. There are also a lot of cost efficiencies to outsourcing desserts and it gives properties the chance to focus on their strengths. If restaurants don’t have a pastry chef, why not outsource to the experts?”
In terms of what inspires new creations, Phillips says he keeps an eye on global trends as well as Pinterest.
“We are inspired by bakeries in Australia and Japan, where we see a lot of creativity. The great thing about social media is you can see trends without having to travel but if it’s really good, I’ll book a flight and go just to try that dessert. In my hotel career whenever I would have to travel I would drag whoever is with me from hotel to hotel, and now it’s changed so that we’re going from bakery to bakery,” he says.
Besides being a quick and free research tool, social media is also integral to growing a new business — especially one that’s as visual as a bakery. Phillips says Instagram is the company’s fastest growing social platform, and that he also keeps a close eye on Zomato, where SugarMoo is in the top five highest rated dessert shops in the UAE.
He also utilises Google Analytics to track SugarMoo’s customer base and, by doing this, realised that 60% of customers ordered through a mobile device, which is why the brand launched its own app. He also notes the highest and lowest sellers of each month were, so the company can adapt to “what works and what doesn’t”.
This is one of the reasons Phillips is relieved that the initial plan of becoming franchisees did not plan out.
He remarks: “The beauty of doing your own concept is the flexibility to adapt to the market. If you’re part of a franchise you are very restricted on the changes you can make.”
On the other hand, going at it alone is not without difficulties. “We self-funded the entire business with a few other partners, so it’s not like we have a big corporate company behind us. It’s me, my co-founder and a few other investors, which is why, it’s so important to do things ‘lean and mean’ but without sacrificing quality or customer service.”
So, what’s next — would a move beyond the UAE be on the cards? “Doha and Saudi are interesting markets to us; the latter for the sheer population and because it’s a sophisticated market when it comes to food. Egypt is another market we could do well in. We have had about seven franchise requests all the way from Angola to Japan but we want to be realistic, and grow at a healthy pace. We don’t want to rush into anything. We want to stay true to the core of our business,” he explains.
Growing while keeping the characteristics of a small company could prove to be an interesting challenge, but Phillips is adamant about retaining SugarMoo’s ‘homely’ style.
“I love how quickly we can make decisions and I hope we never get to that point of bureaucracy [you see with large corporations].
“I definitely want Sugar Moo to be a brand that’s known for creativity, quality and really kick-a** desserts more than anything. If you focus on that, and customer service, the business will grow.”