Rustic Bakery Founder Carol Levalley
With an idea for a handmade cracker, this fashion entrepreneur wound up starting a popular bakery-cafe.
RUSTIC BAKERY FOUNDER and president Carol Levalley is a rare breed: equal parts creative and practical. She’s someone who can simultaneously dream up a gourmet menu and build complicated spreadsheets, design granola packaging and crunch numbers for a kitchen remodel. When she launched Rustic Bakery with husband and partner Josh Harris in 2005, the idea was simple: they would make and sell organic artisan crackers. Little did they know their exponential success — Rustic Bakery crackers, crisps and cookies are now found in markets across the U.S., Canada, Japan and the Middle East — would lead to four local bakery-cafes that have quickly become casual dining landmarks in Marin. Levalley, for whom Rustic is a second career, sat down to talk to us about diving into a new vocation and managing the challenges of rapid growth and success.
How did Rustic Bakery and the Rustic brand come to be?
Well, I was an art major in college and after college pursued a career in fashion. I had a successful career in apparel in L.A. and started my own label in high-end casual women’s wear — kind of boho before boho was a thing. So, I’d had a career in apparel for about 20 years when I started to think about getting into the food industry. I’d always loved to bake and had been making crackers to go with artisan cheese for friends and family. I thought, “Well, I’m going to take a look at the best cheese shop in S.F., Cowgirl Creamery, and see if they have anything like these crackers.” I went to the Ferry Building shop and saw that they didn’t have anything handmade to go with the beautiful selection of cheese they offered. I contacted the Cowgirls (cheese-company founders Sue Conley and Peggy Smith), arranged for a meeting, and took them some samples, which they loved. They said, “We’ll take 50 cases a week.” So that was pretty amazing.
Was it a bumpy transition from apparel to fine food?
We were kind of stumbling around, as it was all new to us — we knew how to manufacture but didn’t know anything about the food industry. The Cowgirls were our mentors. They helped me develop eight flavors of flatbreads to go with their cheese. On October 13, 2005, we sent them their very first case of 50; they were true to their word, as that was what they said they would order.
Was there a particular hurdle you faced as you launched the business?
Yes. We were renting a commissary (shared) kitchen when we heard about a kitchen for sale down on Magnolia in Larkspur. We had a business plan and it included eventually buying a kitchen. It turned out this kitchen for sale in Larkspur had everything that we were looking for. The owner came to us and asked us if we would like to buy the lease for the bakery, but we didn’t have $200,000, which was the price. So, I said to Josh, we can create a company and create shares and we’ll pull in family and friends and come up with $100,000. Of that, we’ll offer $40,000 for the bakery and we’ll run the business on the remaining $60,000. The crackers were getting a great response, and we couldn’t keep up with the demand from places we were already shipping to. So, it was kind of a no-brainer for everyone to jump on board. But then convincing the owner of the bakery that she should sell it to us for $40,000 was another thing. She took the offer. It had been for sale for quite a while with no offers, so she took our offer and we were off to the races.
That must have been terrifying.
I don’t remember ever feeling scared. I remember feeling like I was on a path that I had to keep going on. It just made sense. It was really, really hard work to get the business started. I have never worked that hard in my life. I’d be up by 4 at the latest and do all the morning bake myself. My day was from about 4 a.m. to 6 p.m. in the bakery. We had planned to just make the crackers, but the landlord said that in order to purchase the bakery lease we had to have a retail component. So I said,“Okay, we’ll open a cafe. We’ll just make some croissants and serve coffee and it will be very simple.” Then, as soon as we opened the doors, it was popular. But it was super challenging because we now had a new retail business and a new wholesale business. It was a lot at once. We were very small potatoes. I remember at the end of the day when we first opened the cafe, we had $500 and I said, “Oh my gosh, Josh, this is amazing!” I was thrilled.
You seem comfortable learning as you go.
For better or worse, I have a tremendous amount of self-confidence and I always feel like I can figure it out, one way or the other. In the face of adversity, I respond well and figure out solutions. For me, it is important to see the entire path ahead of me. If it isn’t entirely clear what the right move is, I wait. I wait until I really feel certain. That approach has never let me down. Very often it is a “Eureka!” moment, and then everything falls into place.
Has opening in Marin been critical to your success?
Yes. Marin has been very supportive of an organic business. Originally, we approached the Cowgirls because I knew they would like the fact that I wanted to make organic crackers. Then we decided we would make our whole cafe organic. I serve people the way I serve food at home. It is very personal, 100 percent my creation, and always with the highest-quality ingredients. My philosophy is get the best you can. That wouldn’t have worked in a lot of places because organic means more money and organic does not have the value in some communities the way it is valued here in Marin.
Your cafes are incredibly popular. Do you intend to continue to grow?
The four cafes we have right now feel really good. We are looking at another location that we are pretty serious about, but we’re not in active expansion on the cafe side anymore. We built our 25,000-square-foot plant in Petaluma in 2015, and we just took on another building, so we have doubled our space to 50,000 square feet of production facility. We’ve been able to grow our wholesale business very quickly. Manufacturing is a lot easier than starting cafes.
In February Rustic Bakery was in the news; what happened?
It was a bit overblown, but what happened was we had a run-of-the-mill, ordinary I-9 document audit. ICE conducted over 4,000 of these employment eligibility verification audits last year in California alone. All of our I-9 documents were in order and turned over to the auditor for inspection upon the request. The auditor found that some of the documentation on the forms was unable to be verified and we were told to give the employees in question an opportunity to provide verifiable documentation and if they could not, we would have to dismiss them.
How did you respond?
Over the last 10 weeks, we have hired and trained a large group of people to replace the employees we lost. It has been a difficult process and challenging to keep our cafes open during the transition. I would like to thank my general managers and bakery managers, who pulled together as a team to keep Rustic Bakery going after the audit. Lastly, I want to thank our amazing customers, who have been supportive throughout the process.
What would you say to a young artisan producer?
Love what you’re getting into because it’s going to be your life. You know you hear stories about how a woman lifts a car off her kid? Well, I feel like that was the kind of energy I had when I first started, for the first five years of this business. I don’t even know how I did it. No idea.
What are you most proud of about your business?
The Rustic Bakery Cafes have become community gathering spots, cornerstones. That is what (as a cafe) we wanted to be, and I think we succeeded in filling a need for that. It’s so fun when you’re here at Larkspur Landing on a nice day and all the tables are full outside and you see people bumping into their neighbors and friends. That is what Rustic Bakery is — the heartbeat of a community.