A Further Explanation

The short explanation for Happy Happy Happy’s closure is this:

  The current market for high-quality fresh-baked gluten-free
dairy-free desserts is not yet large enough to sustain a
medium-sized baking facility in New York City.

A little elaboration. When Happy Happy Happy opened its bakery in Manhattan its facility was envisioned as only the first step of a business plan for a much larger baking operation. The idea was to establish a presence in the gluten-free, lactose intolerant, and vegan/vegetarian communities and then expand operations to accommodate a greater volume of business. And for the last 15 months the plan worked well. Business increased as visibility of our brand grew. Word of mouth and response to our products was uniformly positive. And most importantly to us we were creating great tasting all-natural products that were absolutely gluten-free, dairy/lactose/casein-free, yeast-free, peanut-free and free of trans fats, hydrogenated fat, colorings, dyes, extracts, preservatives, guar/xanthan gums, and artificial additives.

By January 2006 we had exceeded the capacity of our small bakery. The time had come to expand into a bigger space and hire more personnel. We had willing investors and the money was there. However, it had become apparent via research and empirical knowledge that the market was not. The volume of customers in the New York area necessary to support a larger gluten-free dairy-free baking facility for our fresh-baked products was not yet present. We explored many ideas that would allow us to reach greater numbers of people and find a solution to this problem. We rejected them because these solutions would have either compromised the taste of our products, added prohibitively to their manufacturing cost (already much higher than our competitors, ingredients such as Belgian cocoa and Tahitian vanilla beans being quite expensive), or would have contradicted our baking philosophy by adding chemicals, ingredients, or preservatives we would not abide. As such rather than invest hundreds of thousands of dollars on personnel and on a facility that in the long term would lose money, we made the very difficult decision to close Happy Happy Happy.

Two additional observations:

  • There is a perception among some in the gluten-free community that there is tremendous growth in the diagnosed celiac population. Although there is growth, it is incremental not exponential. And although there is an estimated 2 million undiagnosed celiacs who might benefit from gluten-free products they are indeed undiagnosed and can not be counted on as consumers of these products.

  • Many of the current potential customers for gluten-free dairy-free baked goods are themselves bakers. As such they are less prone to make the effort to obtain baked goods like the ones created by Happy Happy Happy – those that are fresh baked and best enjoyed within a couple of days of being made.

Will Happy Happy Happy ever return? Perhaps. We will watch the market carefully and should we ever come to the conclusion that the customer base for our fresh-baked high-quality gluten-free dairy-free products has grown to a viable point for our business, we will build that larger baking facility we had originally planned.

Many thanks to all our wonderful customers who supported us.

Happy Happy Happy
March 22, 2006