By Veronika Joy

Tracy Claros, founder of Austin’s Sticky Pudding Co., personally delivers her specialty puddings to a local Fresh Market in North Austin. It’s 5:36 p.m. when she leaves her home near downtown. The 24 dessert cups are sealed, labeled and boxed. The roads are congested, but her merchandise needs to be restocked.

Claros, 47, has a personal attachment to her product. Her idea to start Sticky Toffee Pudding Co. in 2004 evolved from emotion rather than a business plan. Claros sells only to certain grocery stores as she competes in food shows and builds her brand.

“I make my puddings like I would make [them] for my family,” Claros said. “They are homemade, small batches with all natural ingredients. I wouldn’t make it any other way.”

For her signature flavor, sticky toffee, fresh dates are shipped from California, soaked in espresso and made with all natural butter. She uses pure 100 percent cacao.

Baked individually in authentic British pudding molds, the cakes are then soaked in a buttery toffee sauce. To seal in freshness, the heat-to-ready desserts are frozen and delivered to Dallas, the main shipping point for many national grocery stores.

In England, baked desserts are often called puddings, Claros said.

Claros should know. She hails from the Lake District of northwest England, where the pudding originated. As a student, she attended University of Texas in communication science and disorders before moving back to England. For 10 years, she worked in the speech pathology. When Claros was thinking about moving to the U.S., she returned to Austin.

“One of the biggest things about the States in general, people are very positive and supportive, as opposed to Britain,” Claros said. “People there don’t have this upbeat attitude.”

Six years down the road, business instincts have proven successful for this small business owner. The proof is in the pudding.

At the beginning, Sticky Toffee Pudding started selling to four stores in Austin. Now, the product has distribution in Boston, New York, Atlanta, Sacramento, San Francisco, Seattle, Colorado, Texas and Minnesota. Whole Foods Markets carries the puddings in eight different national regions. The Fresh Markets also do substantial selling nationally and in specialty stores.

Claros’ artisanal products are labor intensive and time consuming. She has five people working on production with seasonal fluctuations.  She says her first goal wasn’t making money. She wanted customers to take pleasure enjoying a unique dessert.

“I asked myself, ‘How can I make this fabulous product?” Claros said.  “How much would people be prepared to pay for it?’”

Some customers complain about the price. A five-ounce pudding retails for around for around $6, but Claros says she won’t cut corners to bring the price down.  Her individual-sized plastic containers cost 15 cents each.  Specially made in Denmark, they are microwave and oven safe.

“I never think how can I make this product less expensive. I sacrifice my own profit margins to make sure the product stays good,” Claros said.

So far, the approach seems to have worked. Among the over 500 stores that carry her product, 300 are Whole Foods stores. Distributors there say Claros has the right approach. Bakers there say Claros’ connection to her product makes it viable alongside other baked goods.

“There’s an initiative and a drive from each of the businesses we carry in our stores,” said Brett Peterson, a Whole Foods Market bakery team leader in Austin. “Tracy pushes the envelope. She tries to progress her business.”

In October 2006, Claros produced about 20,000 cases, 75 percent of which were sticky toffee pudding, the rest being mostly chocolate and lemon flavors. Sales started at $70,000 in year one. In 2008, Sticky Toffee Pudding had 80 percent revenue growth from 2007; in 2009, revenue increased 10 percent. Now the company stands at $500,000 with projections of $1,000,000 in 2011 with new accounts coming online.

Claros says her marketing advantage is uniqueness. She competes in food shows as a way to display her brand. She recommends that small businesses spend profits on sales and marketing, trade shows and promotions.

As a part of her business plan, she sets aside 20 percent of the income on sales and marketing, including attending trade shows and giving discounts.  Locally, she markets the puddings by contributing to many fund-raising events. For the rest of her profits, 50 percent goes to cost of goods and 30 percent goes to a general and administration fund.

In June 2010, Sticky Toffee Pudding won gold in the “sofi” awards for the “Outstanding Baked Good, Baking Ingredient or Cereal” category, her second win since 2007, when her English Lemon Pudding stole the show. Her product was recognized in the top five Specialty Food Trends of 2010 as a “Hand-crafted Local Heritage Food.”

The National Association for Specialty Food Trade, which gives out the sofi awards, is a nonprofit organization that fosters commerce and interest in the specialty food industry. NASFT members submitted over 2,257 entries across 33 award categories, and 30,000 people attend its New York convention.

“People love personalities behind products, and Tracy Claros has a great story to tell and a clear passion for her products,” said Louise Kramer, communications director for NASFT.

Kramer says Claros exemplifies many entrepreneurs because of a niche product that is hard to duplicate.

“Our consumer research shows that many food enthusiasts enjoy treating themselves to little luxuries such as a toffee pudding, and are willing to spend a little extra for just the right product,” Kramer said.

Wal-Mart, General Mills, Kraft, Stouffers and Costco also attend these food expositions. These big buyers from the different conglomerates look for these “First-to-Market” product lines. Claros has received calls from Costco and Wal-Mart in past years to expand her enterprise nationally.

Claros has turned down these offers. She refused to have her product become another item with a long-lasting shelf life.

But this holiday season, Claros signed with Costco Texas and California.

Claros’ decision to partner with Costco to sell the Sticky Toffee Pudding will be under her specific guidelines. In Oakland, California, Claros completed her production run with Costco bakers at their state-of-the-art facility.

Also, in light of her second win, Whole Foods Market added another two regions to the eight nationally that already carry her delicacy.

“There’s so much in this specialty food industry. And most people’s object is to be bought out,” Claros said.

She’s not afraid to turn down offers that might jeopardize the quality of her puddings.

According to the NASFT, in 2009 more than $60 billion in U.S. sales came from “specialty foods.” These products are authentic, cultural in origin, have specific processing rules and are in limited supply.

Eighty percent of specialty foods and beverages are sold through retailers, including supermarkets, natural food stores and gourmet shops.

On Nov. 9, Claros presented her winning confection at a press tasting event hosted by NASFT. The event highlighted NASFT’s 2010 sofi gold award winners — the latest specialty food trends as holiday gift options.

Sticky Toffee was selected as Chicago’s “City Choice” at the foodspring.com Specialty Food Pavilion at Chicago Gourmet. Also selected as Washington DC “City Choice” from all gold winning products.

Claros is looking forward to the holidays. She’s decided to reduce the shipping charge in half. She’s interested to see how the results turn out.

“I think when people buy stuff online, they don’t mind paying for the product, but the shipping costs put them off,” Claros said. “Instead of reducing the price in product, I’ll cut the cost in shipping. I’d rather sacrifice margin than sacrifice quality.”

Sticky Toffee Pudding online sales were up 400 percent in November. So far in December very strong online sales – Claros projects to be up at least 100 percent.