If someone were to write the classic American dream tale, the story behind Sugar Bowl Bakery just might be the ideal subject. The Ly brothers (who arrived from Vietnam in 1979 as refugees with very little in the way of money, resources, or connections) at first struggled to make ends meet.

“My brother and I worked many odd jobs—including as newspaper carriers, janitors, and another brother was a dishwasher,” says Andrew Ly, co-founder and chairman. “After years of hard work and perseverance, we pooled our money together to purchase a humble neighborhood bakery in San Francisco for $40,000.”

In 1984, the five Ly brothers took over Sugar Bowl Bakery, a small but charming storefront operation in the Golden City. They started with a collection of products baked from family recipes that had been perfected over decades and generations, delighting neighborhood customers with their treats and building a loyal following.

Now, just under four decades later, Sugar Bowl Bakery has grown to a nationwide operation, selling its array of brownie bites, madeleines, and other sweet treats at retailers coast to coast. Ly credits the producer’s longevity to the operation’s firm commitment to family values.

“I believe our company’s success is based on five guiding values: humility, simplicity, family, creativity, and integrity,” Ly relates. “Our mission is to deliver people joy through delicious desserts.”

Getting started

When deciding upon a business to help build their family resources and name, baking was a natural choice, considering the family’s history of baking and enjoying such goods.

“Given the French’s influence in Vietnam (France colonized Vietnam for over a hundred years), we use French-inspired family recipes, passed down by my mother,” Ly shares. “She would make these little sponge cakes in the shape of fish, which symbolized abundance in my culture, during celebratory times like Lunar New Year.”

When the brothers were honing their first madeleine, they used that treasured recipe as a jumping-off point. Instead of the fish shape, they opted to pour the batter into a shell-shaped mold for a classic madeleine.

The Sugar Bowl Bakery started off serving coffee, pastries, and other food. Then, in the early 1990s, the city’s rapid growth brought increased foot traffic, and hotels looking to purchase premium pastries for hungry guests.

“A few years after that, we focused our business as B2B and sold a variety of baked goods to local hotels,” Ly says. “From donuts to croissants to our infamous Madeleines, we were selling more than we ever expected while also bringing a smile to people’s faces.”

Leveling up

By the start of the new millennium, business at the Ly brothers’ operation was humming along. Then, a group of buyers from Costco Wholesale dropped in for a tour of the bakery. The professionals were instantly smitten.

“I remember that they tried our Palmier, and loved it so much that they asked us to remake it in better quality,” Ly states. “So we did, and that opened the door for us to sell at Costco in 2000. Getting the Costco executives to be interested in our product wasn’t easy; it took a lot of time and effort to build these long-lasting, trustworthy connections.”

Over the years, the company continued growing—first on the West Coast, then with customers clear across the country on the East Coast. However, the miles that the fresh-baked products had to cross to get to New York City, Boston, and other East Coast fans created a few challenges.

“Because we were shipping our products 4,000+ miles away, our products had to be priced higher; we never wanted our products to be too expensive because we like to think of them as ‘affordable luxuries,’” Ly intimates. “We also wanted to reduce our carbon emissions to not hurt the environment further.”

The operation began plans to put down roots on the East Coast. Doing so, the brothers figured, they could reign in prices for their customers on that side of the country, cut transportation costs, and better serve communities in that part of the country.

Courtesy of Sugar Bowl Bakery

“In 2016, we started looking for a bakery on the East Coast so we could expand and reduce our carbon footprint as well as to create new customer opportunities. We knew it was a risky move, but we also know that opportunity will always include some risk. So, we signed a contract to buy a bakery—the day before COVID-19 hit. Right now the bakery is in great shape and it was a worthwhile decision.”

Keeping it in the family

While the brothers have some of the same challenges and conflicts that most sibling sets experience, Ly says the occasional struggles are worth maintaining Sugar Bowl Bakery’s familial ownership.

“Although there are a number of benefits to remaining family-owned and-operated, my favorite is that you don't lose the culture. Our family and this organization remain very close-knit,” Ly says. “Right now, there are five family members who work at Sugar Bowl Bakery so we try to embed our core values to our teams so we all work, advance and succeed with the same mentality. We do this by pacing ourselves because we want to teach people right and we know this takes time.

What’s more, Ly says, money isn’t the only way to gauge how well the company continues to perform.

“People like to measure success by looking at raising numbers in publicly traded companies; however at Sugar Bowl Bakery we know we are succeeding as long as we go in the right direction regardless of our speed,” he says. “It is OK for us to have one step backward and take two steps forward.”

Future forward

“Sugar Bowl Bakery will always make great and delicious baked goods for people,” Ly proclaims. “Our organization works off of 80% to 90% core values and 10% to 20% focusing on innovation, whether it’s new products, new flavors, new packaging, or new business concepts. We want to make sure we are viewed as a relevant, trustworthy, brand, so people feel a connection with our desserts and our family.”

And, Ly states, the Sugar Bowl family extends beyond the group of employees who are related by blood.

“As we’ve been doing since we’ve opened our first store, we plan on ensuring that our space is a safe working environment for our employees who have become family to us,” he says. “Taking care of our employees and stakeholders will always be a priority to our business structure because they’ve helped us grow by going one foot before the other. People who work inside always have the opportunity to get promoted, but I also like to explore outside talent if needed.”

Earlier this year, Ly stepped down as CEO, handing the reigns to Joel Feldman, previous president and COO. Ly says he first met Feldman more than 10 years ago, and hired him to serve as COO more than five years ago. While Feldman doesn’t happen to share the Ly name, he shares the qualities that drive the company.

“He has become part of the family, and he really shows that by treating all employees equally, regardless of who they are,” Ly says. “When I was growing up in Vietnam, traditionally the eldest son would inherit the family business or take over the helm to run the business in disregard to capability; from the start, we’ve never operated Sugar Bowl Bakery with that outdated ideology. We only want capable, driven, and experienced people to lead our company, not someone that was simply born first in a family. Being open to bringing outside talent is a crucial factor for our organization’s success.”

Today, while all the original Ly siblings besides Andrew have retired, family members remain in service to Sugar Bowl Bakery at various levels:

• Nephew Mark Ly, sales manager in charge of key accounts
• Nephew Steve Ly, sales manager in charge of key accounts
• Nephew Michael Ly, vice chairman and vice president of corporate affairs
• Nephew Kevin Ly, director of R&D
• Sister-in-law Lisa Ly, office assistant
• Nephew Hugh Ly, assistant to the director of financial planning
• Robert Tsui – Sales Support (nephew in-law. Married to a niece.)

While Sugar Bowl Bakery has grown exponentially over four decades, won a number of local and national awards, and been hailed as an American business success story by President Barack Obama in 2013, keeping close to the family principles is the accomplishment Ly treasures most.

“We are proudest to be able to work together as a big family including the people who we hired from outside of the Lys,” he says. “We will continue our journey by bringing joy to people by making high quality products, maintaining high integrity, and treating our people right.”