“410 Degrees” is the name of a booming new cookie company, which was started by two young entrepreneurs in San Diego and is taking off like lightning. 410 Degrees’ cookies caught my attention at the Market, which I wrote about in my AC article, “La Jolla California’s Open Air Market: Capitalism is Alive and Well.” Here, I interview chef and owner, Derek Jaeger, who explains some secrets of his cookie company’s business success.
Lorraine:Hello, Derek. Thank you for taking time from your new business for this interview. I’m Lorraine, also known as “the cookie monster” among my colleagues and cookie expert on the consumption side. I noticed lines forming at your cookie booth at the Open Aire Market in La Jolla. I had your cookies; they’re delicious. What’s your secret?
Derek: Underbaked. That’s a slightly harsh word, only because it can scare consumers. We bake our cookies at 410 degrees and take them out of the oven a minute early. Our cookies are baked as we feel all cookies everywhere should be baked: for a crust-like texture on the outside, and soft on the inside. Most people bake their cookies until they’re completely baked. The problem with that is they will continue to cook for 4-5 minutes after coming out of the oven. Stale overbaked cookies are the sad result.
Lorraine:The first cookie I bought from you cost $2.25. Last time it was $2.00. I’m glad to see you lowered your prices, but don’t you think two dollars is a little high for one cookie?
Derek: Our ambitions are large, and although our price point seems high initially because “it’s two dollars for a cookie” is the first thing people think, we completely stand behind our pricing.
We know we are bringing something completely new to the world of baked goods, i.e., very high quality and original cookie flavors. The public, however, has a predetermined sense of how much a cookie is worth. So our crazy objective is to BREAK this notion of value and to BUILD a whole new standard for cookies. We have to convince people that this isn’t just a cookie, but really something else: it’s a new experience. And the only way we can do that is from the flavor and quality of our product, which is why we give tasting samples at the Market, and why we bring so many new flavors every week.
Where Pinkberry took yogurt and where Ben and Jerry’s took ice cream, we want to do that with cookies. When Ben and Jerry’s first began selling ice cream, people thought their prices were crazy, almost four times the normal ice cream. But today, when people think Ben and Jerry’s they think “high-end,” “premium,” “unique,” and many don’t have a problem paying more for less because they know the quality they’re getting.
We’ve done our research on how to price our cookies as well. Uncle Biff’s cookies are the main competition in San Diego; people know Uncle Biff means cookies. They cost $1.75 each, and they are smaller than ours. I’ve bought a dozen cookies in Austin, Texas, for $46 online. I searched for the most expensive cookies and I found them, expecting them to blow me away. They too are smaller than ours and really nothing stood out as amazing. Whether they are more expensive or less, we can genuinely say that we believe our cookies are better than the competition.
Lorraine:Your confidence is showing. Besides the price, what else is special about your cookies?
Derek: Each cookie is essentially handcrafted by us. We weigh and roll every cookie to make sure consistency and quality are perfect. Also, we have a couple of extra, labor intensive steps that we do to really make the flavor stand out. It’s a cliche to say we use the highest quality ingredients, but we really do: Callebaut Chocolates, organic butter and peanut butter, dried berries as opposed to raisins. We toast all nuts that go into our cookies, use fresh organic herbs, but no preservatives, oils, or artificial ingredients. We even use a beet extract to color our Red Velvet Cookies.
Lorraine:How will you measure success?
Derek: Beyond anything, I want people to be happy and enjoy our cookies. As long as people get to try new stuff we are putting out, then I feel like I’m doing my job.
Lorraine:Tell me a little bit about how you got started.
Derek: Adam, the other owner, and I are both graduates from the University of Arizona. The idea for a customizable cookie company was his project through the Entrepreneurship Program in the business college. I was poised to graduate with my nutrition degree and pursue a career in pharmacy. Adam showed me his business plan and the idea for this company. I told him I wanted in.
We had mutual friends in college, and when we found out that both of us had this crazy passion for food, we decided to have a tailgating feast for all of them. That night we started experimenting with flavors and ideas. The first cookie we came up with was our Rosemary Balsamic Olive Oil cookie. We took our first bite right out of the oven, looked at each other, and said “wow.” From that day on, we knew we had something. I dropped all plans for pharmacy, and he went 100% on board with the business plan. We moved out to San Diego along with a couple of friends, and Adam and I started up the business. Currently it is still the two of us, working very long hours and doing very well.
Lorraine:How did you come up with your company name?
Derek: “410 Degrees” is our name because that is the temperature we bake at. We actually struggled to come up with a name for our company for over two months and we went through probably 100 ideas. But we realized we had an odd baking temperature, so we knew it was an original name. We went for it.
Lorraine:Unique company name, for sure. So are your red cookies. Are Red Velvets your signature cookies?
Derek: We currently have 18 Signature Cookies. The Signature Cookies are either completely original cookies (e.g., our Cinnamon Roll Cookie), or they are proven combinations that we know people love (e.g., Some Mores, based on a chocolate bar with a toasted marshmallow between graham crackers). The Red Velvet is our most popular cookie, which is why I call it our Signature of Signatures. It’s based on Red Velvet cake. Actually, many people haven’t had Red Velvet cake, and our cookie is their first experience in the Red Velvet mini-craze. Unfortunately for these people, they’ll be disappointed with the cake after trying our cookie.
For people that don’t know the history of Red Velvet, it’s pretty interesting. Back in the day when cocoa wasn’t so heavily processed it had a slightly reddish hue to it. When the cocoa combined with a traditional acidic ingredient in the Red Velvet cake like buttermilk or vinegar, the resulting batter was red. People really like our Red Velvets because it’s not vanilla, it’s not chocolate, it’s different but is still a flavor that’s very recognizable to our palate. And the color is just amazing. We use beet powder to color them red.
Lorraine:How did you choose San Diego for your start-up?
Derek: We picked San Diego not only because of the weather, the tourists, the community, but because no one EVER says anything bad about San Diego! Tucson, our home town and college town in Arizona, wasn’t the right market for our start-up. Los Angeles would have been too fast for us initially. But most of all, I just love the city. The diversity of the people, the laidbackness of everyone is so refreshing.
Lorraine:You’re pretty laid back yourself, yet driven by your passion, savvy with your business sense, and a competent, courageous, and energetic young entrepreneur. I wish you and Adam continued business success and two dozen Red Velvets to go, please.
Oh, and, got milk?