Instagram is the new storefront

Albany Business Review / How can you grow a specialty food business during a pandemic? For these Albany region entrepreneurs, the answer was social media — and things started rising from there.

Photo by Donna Abbott-Vlahos / Albany Business Review

Andreas Mergner’s business was perhaps the least suited to surviving in a world with Covid: an “escape room” team-building experience that required groups of six people to be in a small space together for up to an hour.

So when Mergner’s business closed in March with little hope of reopening, he dove into a long-simmering passion: baking bread.

“I gave it to some friends and they were like, ‘Dang, this is the best bread I’ve ever eaten.’ And I was like, ‘OK, well maybe I can sell it,’” Mergner said.

He used some extra space behind the escape room business on Central Avenue in Colonie to build out his small operation, where he baked two days a week. But don’t call it a bakery — Mergner’s storefront is virtual, an Instagram account called The Bread Butler where customers can order online and have loaves delivered to their doorstep.

“I had always planned on doing a delivery model because I thought, even with the best bread in the world, nobody really wants to go to the bakery,” Mergner said.

Now Mergner is baking five days a week and has invested $50,000 to create a commercial kitchen where the escape room once was. The former pharmacist turned computer programmer now sees a future in baking.

The Bread Butler is part of a growing array of specialty food businesses in the Albany region that have followed a similar path: popping up on social media and taking hold during the pandemic. Instagram has now become a marketplace for the delivery of small-batch bagels, cookies, dumplings, pizza and cakes. Customers come fast and expect excellent customer service. And the cooks behind the profiles are finding a low-cost entry into the food industry at a moment when traditional restaurants are struggling.

A template for the success of these pop-up businesses is also emerging. The product tends to be an indulgence for customers (nobody needs a $7 loaf of bread); it always looks delicious on Instagram, which inspires both the order itself and the excited post once it arrives; and it must travel easily, allowing delivery to the customer in a day or two.

It’s easy to see how that model was a perfect fit for stuck-at-home life during the pandemic, but Mergner believes his business will last long after the current delivery craze ebbs.

“Bread is a staple, so having it delivered to your door, hanging on the doorknob, is going to be amazing,” Mergner said.

He thinks avoiding the traditional bakery model gives him an edge: It avoids high overhead costs, and allows him to specialize in what he sees as the best bread in the region — at $7.50 a loaf, it’s made with organic flour and delivered fresh.

“Who’s buying those 50 different things? People come in for one or two specific things. So my draw would be the bread,” he said.

This type of business, however, is not without its challenges: Figuring out the most efficient way to run delivery or pickup; responding to a near-constant flow of Instagram messages; and scaling up a commercial cooking operation when space is scarce or expensive.

“It’s very exciting, but it’s stressful and you have setbacks,” Mergner said.

Super social

Tahiem Smoot has never had to advertise his product much.

Friends and family would always ask him to bake cakes and pies, and eventually Smoot thought he could sell them. His mother said nobody would pay for them outside of holidays; his daughter didn’t think he could sell more than 20. Now he regularly sells that many in a day, operating as Misses Kisses Pies on Facebook and Instagram.

“One of the beautiful things about our business is, it’s basically 100% organic. I make an item for a customer, I take a picture of that item, and then people say, ‘I like that,’ and then they get it and tell a friend,” Smoot said.

That cycle epitomizes the growth trajectory of these social media bakeries: Posts on Facebook foodie groups or Instagram pages rack up likes and shares, and quickly amplify the reach of a product.

“If you have a good product, it’s not difficult to create a presence on those kinds of sites,” he said.

At the same time that social media expands Smoot’s reach beyond what a traditional storefront might allow, it also creates a different set of expectations.

“Customers don’t have the ability to taste or touch or smell your product, the only thing they can do is view it, so especially in the beginning, it has to look right to draw interest there,” he said.

Attracting orders isn’t where the challenge ends: Customers ordering on social media also expect service to come as quick as they can double-tap an image of what they’re buying.

It’s a struggle Mergner has faced as his business has grown, too. He said he gets overwhelmed with questions from nearly every customer that orders his bread: When will it arrive? Why is it taking so long?

“You’re going to get your bread, but just relax. … I don’t think customers realize how much is involved in making it,” Mergner said.

Bread seems simple. So do bagels. But when Bryan Tusch took to Instagram to turn his passion into a small side business, he also didn’t realize how much time it would consume.

Tusch started his business, The Bagel Dad, two years ago as a way to keep up his baking skills — he studied pastry arts at Johnson & Wales University in Rhode Island but now works for the state Department of Health. He would bake once a week or once a month in his home kitchen and deliver the bagels himself to friends and family.

But during the pandemic, demand took off and he found himself spending at least four hours per week just handling direct messages on Instagram and coordinating with customers.

“Everyone is eating bagels,” Tusch said.

He eventually created a website with the help of his wife and co-owner, Jeannine, to handle orders outside of Instagram.

Doing delivery

All three businesses, whether they’re operating from home or a commercial kitchen, lack a brick-and-mortar storefront, which means the best way to get product to the customer is delivery.

When Mergner started out, he used his coding skills to write a custom algorithm that determined the most efficient route to reach all of his customers.

But when orders started flowing in rapidly from all over the Albany region, Mergner switched over to professional software that could handle the demand. He now has 100 weekly subscribers in addition to the one-off customers that fluctuate each week.

“I didn’t have time to be like, ‘Let me shop around or let me write some more software.’ I was like, ‘OK, I’m going to be baking every day for nine hours, and now I also have to hire two drivers right now,’” he said.

Customers can now have Mergner’s bread delivered as far north as Saratoga Springs, south to Selkirk and west to Schenectady. The model works, and remains profitable, because his drivers make so many stops along the way. He says he could deliver as far as New York City if he had enough customers between here and there.

Smoot also sees delivery as something of a challenge — it’s more convenient for the customer but comes with much more work for his business.

Misses Kisses Pies usually turns around orders in 24 hours, and sometimes the same day if it’s ordered early enough.

“They appreciate the intimacy of ordering something and having it brought right to their door. And they rave about our customer service,” Smoot said.

And there’s one other advantage: Running a made-to-order delivery model means Smoot doesn’t have to keep any excess inventory and worry about selling it.

The Bagel Dad has a simpler delivery model: All customers order on Friday and have the bagels delivered over the weekend. Tusch’s weekly bake of 130 bagels usually amounts to 10 or 12 orders, which he delivers himself.

It also gives him a chance to have masked, socially distant conversations with his customers.

“The one thing I didn’t expect was the amount of reconnections I’ve made with other friends,” Tusch said.

Scaling up

There are obvious benefits, especially in the age of Covid-19, to operating these microbusinesses: no payroll, little interaction with the public and in some cases, virtually no overhead.

While Mergner has put significant money and real estate behind The Bread Butler, Tusch operates The Bagel Dad out of his home, and Smoot is baking Misses Kisses Pies from the commercial kitchen at Reigning Life Family Church, where his family belongs in Albany.

Making certain baked goods from home and selling them online is allowed under New York state’s home processor exemption, according to the Department of Agriculture and Markets. But all three entrepreneurs dream of growing their businesses beyond the Instagram feed and creating full-time careers in the food industry.

Mergner has already dealt with some of the growing pains: Although he already had the physical space for a kitchen at his escape room business, he quickly outstripped his 12-loaf bread oven and found himself baking 9 hours a day.

He tried to purchase five more ovens, but they were back-ordered for months. So he went in a different direction, buying one huge oven instead. Then he bought a walk-in cooler, quickly bringing his investment into the tens of thousands.

“I think one of the most important things that no one talks about is the whole mental, emotional part of it. Being a business owner, unless you already have money and it’s not a risk … For a normal person that has got credit card debt and has limited savings and a normal job, it’s everything,” Mergner said.

The pressure is lower for Smoot and his wife, who both work for New York state; the cake business remains a side project for them. But Smoot definitely sees a path to going full-time with his baking.

“I can clearly see the demand is there. As many pies or cakes as I can make, I can easily sell,” he said.

He’s not sure when he will get there or what it might take — but he says he wants to let the demand dictate the business model.

“You get a huge amount of satisfaction when you see somebody post something that they purchased from you and it brings them real joy and happiness,” Smoot said.