Pastries to your door: How Melbourne bakery Goldeluck’s Doughnuts is going national, despite COVID-19
Goldeluck’s Doughnuts has managed to keep growing by venturing into a space few bakeries have dared to venture in the past: e-commerce.
It’s not everyday your local Melbourne bakery starts packing up orders to ship across the country.
But then again, Phillip Kuoch isn’t your garden variety baker.
Five years ago Kuoch, then 21, was a full-time university student with no baking experience and no clue he’d eventually find himself trading three of Melbourne’s most quoted bakeries through a pandemic.
But Kuoch, who has driven Goldeluck’s Doughnuts to prominence in less time than it typically takes to finish a baking apprenticeship, is showing no signs of slowing down – pandemic be damned.
“I feel like we’ve been planning for every situation possible,” Kuoch tells SmartCompany.
Like most food retailers, Goldeluck’s hasn’t been immune to the COVID-19 crisis, with its three stores in Lakeview, Eastland and Croydon experiencing a 50% fall in traffic almost overnight after the Morrison government advised residents to stay at home in March.
But unlike many others, Kuoch has managed to keep his books in the black over the last two months, and instead of laying off staff, he’s actually hired five more.
“Our online store has grown like 1,400% in the last month,” Kuoch explains.
“In every circumstance there’s always a business opportunity, and for us it’s been an opportunity to step up and take charge.”
Pastries to your door
Goldeluck’s certainly isn’t the only business that’s pivoted to e-commerce in the face of a public health emergency that’s forcing people to stay home.
But while bakeries and postage have been around for thousands of years in one form or another, seldom has the postie dropped a pastry in the letterbox.
There’s a long list of good reasons for that; we’re not talking about shipping shoes here after all, and the pivot hasn’t exactly been a cake walk, if you’ll pardon the pun.
“To be honest, it’s been really hard … it’s not as simple as UberEats or Deliveroo,” Kuoch says.
There are two prongs to Goldeluck’s e-commerce strategy: the surprisingly large gifting market and what Kuoch has dubbed “survival packs”.
“We identified during this time a lot of people aren’t going to be seeing each other to celebrate anniversaries, birthdays and things like that,” Kuoch explains.
“So we decided to package our products into little gift boxes and allow people to personalise the boxes and add messages.
“Almost every single customer shopping with us is buying for someone else.”
Then there are those you might expect to walk out of Woolworths with two trolleys of toilet paper. For better or worse, there are more people looking for easy access to the essentials at the moment, and that’s where the survival packs come in.
Stocked with a loaf of bread, two litres of milk, pies and pastries, the packs are delivered daily and have been designed for families looking for a stress-free way to tick something off their lists without heading down to their local.
In many respects Kuoch is lucky. He’d already been building the infrastructure to launch online ordering sometime in the future for a while, which allowed the business to scale up e-commerce much faster than it would have otherwise.
That’s important, because in this particular segment of the e-commerce game scale drives sustainable margins, allowing Goldeluck’s to move forward without bleeding out.
“Delivery is expensive,” Kuoch admits, laughing at the realities of his cost base.
“We’ve been navigating the issue for 18 months, so we’ve been able to find some ways to cut costs … we were using couriers before but now we’ve switched our staff to doing deliveries.
“It costs us a bit more once we reimburse staff for petrol, but it’s the right decision at the moment,” Kuoch says.
Goldeluck’s currently delivers within 30 kilometres of Melbourne’s CBD and within a 10 kilometre radius of its bricks-and-mortar stores.
Shifting gears: Australia-wide
But Kuoch has big plans and in June will launch an ambitious nationwide delivery program that will see his bakery business venture into territory few bakeries ever do.
Initially the new vertical will be sold on a limited menu, but Kuoch hopes to gradually expand the offer and eventually start delivering overseas as well.
Moving forward, the business owner expects the success of his online business to change the way he thinks about bricks-and-mortar expansion.
“Before coronavirus food businesses were pretty much the only growth areas in shopping centres,” Kuoch explains.
“But with recent developments, it’s highlighted that retail and shopping centres can be inconsistent and dependent on so many different factors … overheads are insane as well.
“After seeing the success we’ve had with online it’s something we want to pursue further, because we can scale it much faster.
“If we were to try to expand interstate with bricks-and-mortar, it would take us years.”
