Sweet Smell of Success Rises From Roll Recipe and Moxie

A year ago, Claudia Gray was new to California, unemployed and a single parent. What she had, though, was a family recipe for huge, tasty cinnamon rolls, a talent for baking and an idea.

She mixed in moxie--lots and lots of moxie--and out popped San Diego’s newest food fad.

Move over, designer cookies and gourmet ice cream. Today, Claudia (Claudo) Gray, 35, is sitting on a budding multimillion-dollar food empire built around selling hot, Paul Bunyan-size cinnamon rolls to hungry shoppers.

She has already turned down a $1-million cash offer to buy her business--called appropriately enough, Claudia’s--and franchise it. More than 50 shopping center developers and operators from around the nation have contacted her about opening stores.

Banks now come to Gray, a one-time welfare and food stamp recipient, offering expansion financing. She has a store in San Diego, another in Escondido and will open a third in San Jose this fall. Her sales for the $1.25, 2 1/2-inch-thick by 7-inch-wide, 6-ounce rolls are in the high six figures.

For a person with no prior business experience, who didn’t know a financial statement or an architect’s rendering from a lump of dough, it has been quite a 12-month journey.

One would expect Gray’s head to be nudging the stratosphere. Not so. A country girl from Utah, she knows who she is, and that’s someone who still wears Levi jeans to work and is not overly impressed with money.

“I know I could raise the capital (for accelerated expansion), but there’s only so much money I need in the world,” Gray said. “I’m not a greedy person. I don’t think I need $10 million or $20 million or whatever. I just want to make a comfortable living.”

“I could sell a franchise a week . . . but I can’t do it. I just can’t do it.” Besides, she quickly added, “Then I’d be unemployed.”

Gray’s path to cinnamon roll success was circuitous, indeed. Leaving Utah State University in 1973 with a degree in English, she knew she didn’t want to become a schoolteacher. A stint as a student teacher in a high school convinced her of that.

So it was off to Washington as a government affairs assistant for the Men’s Wear Retailers of America, a lobbying group. It was exciting work, but she and her husband wanted children and the nation’s capital wasn’t their idea of a family town.

Back in Utah, Gray found work as an order service manager for Armstrong carpets, but a couple of years later she dropped out of the work force to have her baby, Dustin.

When it came time to work again, it was the early ‘80s. Deciding to use her college minor in sociology, Gray became a government grants writer for various social service and anti-poverty agencies in Salt Lake City, a job that lasted five years.

She worked for anti-hunger and anti-nuclear weapons projects. She was on the board of the local epilepsy association and the legal center for the handicapped. She served on the county board that recommended which programs would receive federal funds for social services. In the course of all that, she also was divorced.

While she enjoyed her work, the cold Salt Lake City winters gradually became overwhelming. It got so bad that, on a frigid February day, she called the airport and asked for the next flight to any warm-weather city. It was San Diego.

She had never been here before, didn’t know anyone here, but she spent that weekend in warm San Diego. Gray was hooked and, two years later, on Jan. 3, 1985, she and Dustin arrived for good, having rented an apartment sight unseen.

No one had a need, however, for an experienced government grants writer. “I had $25,000 from the sale of my house in Utah . . . and I was going through it fast,” she said.

But Gray, an experienced home baker of bread and cinnamon rolls, noticed that each time she baked the rolls at her Encinitas apartment, neighbors enthralled by the smell would invariably come by and ask for a taste.

It was then her idea took root. “If anyone could sell a cookie, they could sell a cinnamon roll,” Gray figured.

Without any prior business experience, no planning and no exploration of the market, Gray began contacting leasing agents for various shopping centers. She finally got a face-to-face meeting with David McCabe, leasing agent for Ernest W. Hahn Inc., one of the nation’s largest shopping center developers.

Doing her best to make an impression, Gray brought along a batch of her home-baked rolls, kept hot under a layer of foil.

Relying on the same technique, she heard the Horton Plaza leasing committee give its approval on May, 22, 1985.

“She brought everything to the party except a big bankroll,” said Richard Hay, Hahn company vice president for leasing.

Hesitant to approach banks for financing, Gray turned to her parents, who agreed to loan her part of the $90,000 necessary to open the store.

But there were still two more matters in need of a solution. While baking at home was no problem, there remained the obstacle of mass production. “I went to our corner pizza parlor and asked them if I could use their big mixer,” Gray said.

Four times she tinkered with her recipe and four times the rolls failed.

“They were awful,” she said.

It was two weeks before the Aug. 9 opening of her shop and a feeling of panic began to set in. But the fifth time, she succeeded. “They were almost identical to the ones at home.”

There was also the matter of what her shop would look like. Dinky, only 500 square feet, it should be something along the lines of a traditional “grandma’s kitchen,” Gray thought. What she got instead was San Diego architect Tom Grondona and artist James Sable, who were recommended by the Hahn company.

Their design was like nothing Grandma ever saw, except perhaps in “Alice in Wonderland.” Crinkled walls, moving parts, a wooden chute for oranges, exposed ceiling pipes, a hanging baker’s table with cinnamon rolls on it.

Then there was the piece de resistance: a huge royal crown on the outside with an exhaust pipe running through it that blows out the pleasant aroma of the baking rolls, enticing any and all appetites within 100 feet.

The basis for the motif was simple. How would a bakery look if the Three Stooges worked in it? Honest.

That’s why two-thirds of the shop is painted white as if with flour, why there are changing angles and why a mechanical pulley works an arrow aimed at the baker.

“The idea was to push it as far as we could,” Sable said. “It’s what I call art meeting architecture. It’s really an art installation.”

The design has since won several prestigious awards, highlighted by an honors award for interior design by the state chapter of the American Institute of Architects.

But when Gray first saw the design, awards were not on her mind. “I couldn’t believe it . . . I thought it was the worst thing in my life. I’m a country girl and I was wondering, what in the world is going on.”

“I knew they’d (Hahn company) never go for it and we’d better change it,” Gray said. But in the midst of her conversation with Grondona, “someone in the (architect’s) office walked by and said, ‘What’s that wonderful-looking thing?’ ” It was then Gray decided that maybe it wasn’t so bad after all. Now she loves it.

Open a year this Saturday, Claudia Gray’s shop at Horton Plaza has sold about 300,000 rolls. Another 150,000 have been bought at her Escondido store, opened in February at North County Faire.

Success hasn’t spoiled her. “I’m having a ball . . . no one is more surprised than me that they sell,” said Gray, who now lives in University City. “I was divorced 4 1/2 years ago . . . I had to be on public assistance and food stamps for two months. Now I’ve got a thriving business. It’s incredible.”