Scones And Social Responsibility

Dancing Deer Baking's Karter has a recipe for creating a brand with values

Patricia Karter, CEO of Dancing Deer Baking, is used to hearing people rave about her company's all-natural sweets, such as its Cherry Almond Ginger Chew cookies. She also often hears praise for the $8 million company's philanthropy, green packaging, and commitment to its 65 employees and inner-city Boston. All of which makes Karter a bit chagrined. Great-tasting baked goods aside, she thinks every company could be doing what she's doing.

"We've created a brand with important values," says the 49-year-old Karter. "But Dancing Deer is not big enough to make an impact, to be a social or economic force. If I hit $50 million in sales, it can be."Karter is determined to expand the company she co-founded in 1994 and to hang on to her principles while doing so. She's already turned Dancing Deer from a startup selling homemade scones into a profitable wholesale, mail-order, and online business. Its cookies, brownies, cakes, and mixes, all packaged in recycled fiber and whimsically illustrated with stick-figure bakers and dancing deer, are found in Whole Foods Market (WFMI ), Williams-Sonoma (WSM ), and Wild Oats Markets (OATS ).

Karter still eschews artificial ingredients, and all employees receive stock options as well as free lunches. Some 35% of proceeds from the Sweet Home line of cakes go to help homeless people find housing and jobs through a coalition of Boston nonprofits. And even though the company will soon need more than twice the space of its current 18,000 square-foot quarters, Dancing Deer will stay in low-income Roxbury rather than relocate to the less expensive suburbs.

Sticking to her guns hasn't been easy. In the late 1990s, Karter nixed a deal to sell molasses clove cookies to Williams-Sonoma -- which would have doubled sales -- because it would have required her to use preservatives. Her steadfastness impressed the bigger company, which later asked her to make mixes it could sell in its stores. "They are a wonderful company," says Sally Geller, divisional manager of Williams-Sonoma's retail food division. "I have great respect and admiration for Trish and what she has done in providing high-quality products with natural ingredients."

Trained as a painter, Karter got her first taste of commerce when she returned home from Wheaton College to help her dad save his recycling business. Later, she worked as a lobbyist for the glass industry, did a stint in Coca-Cola's (KO ) marketing department, and went for a master's degree from the Yale School of Management. She was painting full-time when she met baker Suzanne Lombardi in 1994. Karter loved Lombardi's cakes and cookies, and with her then-husband Ayis Antoniou invested $20,000 to launch Dancing Deer. Sales hit $283,000 in two years and more than doubled the next. In 1999, Karter divorced Antoniou and, with other investors, bought his and Lombardi's shares. "It was a painful, difficult time," says Karter, "and it nearly killed the company."

Now, growth is top of mind. To finance it, Karter sold 10% of Dancing Deer in 2005 to Christopher Gabrieli, a managing director of Boston private equity firm Ironwood Capital. To reduce the company's reliance on the holiday rush, she's adding a line of shortbread cookies that have a longer shelf life.

Although Karter has had her hand in every facet of the business, from developing recipes to writing quirky packaging slogans, she's recently hired a marketing officer and will bring in someone to oversee e-commerce and operations. "I knew I needed help," she says. "There are 20 opportunities a day to lose your way." And Karter has no intention of letting her company, or her ideals, get lost.

By Stacy Perman

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