Liz Gutman and Jen King developed a prototype for a small-batch candy manufacturing business in 2007, when both were attending the French Culinary Institute in New York City. Two years later their Brooklyn business, Liddabit Sweets, earned a vendor slot at the Brooklyn Flea Smorgasburg, a well-known artisanal flea market.
Almost immediately, the homemade candies and sweets began generating buzz from NY Magazine, Food & Wine magazine, The Today Show and other media outlets. The recognition generated the candy maker’s first wholesale customers. Because of its growing brand recognition, word-of-mouth advertising and in-house marketing, the roster of accounts swelled to 60, including such notable retailers as Whole Foods, Murray’s Cheese Shop and Brooklyn Larder.
The problem: Growth was becoming more difficult for Liddabit Sweets. The candy maker has moved four times to accommodate increased business, and it currently shares its leased kitchen space in Brooklyn with other food manufacturers.
"It poses a lot of different challenges. We can't access the space when we need to, which limits our growth," Gutman said.
Business continued to increase, and the two founders knew it was time to move again. After being rejected by traditional lenders, Gutman and King turned to NYBDC.
"We had been turned down by three different banks. We couldn't even get equipment loans," Gutman said. "If not for NYBDC, we would have had to pursue private investors. That would mean giving up shares of the company, which we aren’t eager to do."
NYBDC issued a $321,200 loan through its new NYC Food Manufacturers Growth Fund that allows Liddabit Sweets to move production to a 2,250-square-foot facility at 220 36th St. in Brooklyn, one block from its existing kitchen space.
The targeted growth fund is a joint venture with the New York City Economic Development Corp. and Goldman Sachs' Urban Investment Group. It will provide up to $10 million in affordable growth financing for New York City's small, food-manufacturing sector, a critical piece of the city's economy.
Qualifying businesses may use the loans to buy equipment to increase efficiency and production, hire workers to expand production, or purchase inventory.
Gutman expects Liddabit Sweets to triple production once the new manufacturing facility begins operating in May. The company is using the growth fund loan to fit-up the location and buy equipment and inventory, and for working capital.
The increased production will feed Liddabit Sweets' first retail location, a 270-foot shop inside Chelsea Market in Manhattan that the chocolatier began occupying in September 2013.
"Chelsea Market has been the cause of a huge jump in revenue for us," said Gutman, who noted that sales from Liddabit Sweets' first retail store have increased the company's revenue more than 30 percent.
Liddabit Sweets currently employs nine. The new production facility will feature the company's second retail outlet, adding one more opportunity to increase revenue. At least two employees will be added, one for production and the other for retail sales, with more to follow as production grows.
From Left to Right: Jen King and Liz Gutman, Owners of Liddabit Sweets
Pictured Below: Liddabit's Chelsea Market Location