Local cookie company whips up big deal with Starbucks

NORFOLK

Three years ago, Lucy Gibney quit her job as an emergency room doctor to start a business selling the allergen-free cookies she first made for her son.

She had no idea how sweet those treats would become. Today, Starbucks begins selling Lucy's cookies in about 6,000 of its more than 11,000 coffee shops nationwide.

Her business "went from 5 miles an hour to about 95," Gibney said.

Starbucks is the largest distribution deal to date for Dr. Lucy's LLC, which produces four kinds of gluten-free cookies out of a small commercial kitchen off Tidewater Drive. Along with growing business from other customers, including supermarket chains across the country, the Starbucks contract has pushed Dr. Lucy's to multiply its production twelvefold - from about 30,000 cookies per week a year ago to about 375,000 now.

The company signed a lease for 12,000 square feet in Norfolk's Central Business Park, where she will consolidate her offices and factory. The new kitchen will automate operations and improve efficiency by adding large rolling racks that slide into ovens, a huge industrial mixer that can handle more volume and walk-in refrigerators.

Dr. Lucy's also tripled its work force in a year, to more than 40 last fall. "It was exciting to actually hire people in this economy," Gibney said.

She declined to disclose sales for Dr. Lucy's.

The growth came faster than Gibney anticipated, even with more and more people demanding gluten- and allergen-free products. Her son, now 6, is allergic to most of the eight major recognized allergens - wheat, milk, eggs, tree nuts, peanuts, soy, fish and shellfish.

Gibney, a North Carolina native who came to Norfolk to go to medical school, developed her products after trying to bake safe but tasty treats for him. Lucy's products include soy, which her son can eat and helps keep the flavor and texture that good cookies have, she said.

Dr. Lucy's started selling mostly in local natural-foods shops, such as Organic Food Depot and The Heritage Store in Virginia Beach, and in 28 Farm Fresh supermarkets. Now, the cookies appear on shelves of hundreds of Whole Foods Market, Harris Teeter, Giant and Stop & Shop supermarkets, said Paul Gibney, Lucy's husband, who still works as an ER doctor while handling the company's sales and distribution.

Starbucks Coffee Co. discovered Lucy's in June 2008 at a New York City trade show for specialty food producers. Gibney said she began talking seriously with the coffee chain last spring, and had its order in hand by August.

Starbucks added Lucy's as part of a new lineup of "on-the-go" snacks, many of them healthy or low-calorie options. The stores sell Lucy's chocolate chip, sugar and cinnamon varieties in four-cookie packs for $1.50 or boxes of 16 for $5.95.

Starbucks doesn't discuss the terms of its supplier contracts, said Lisa Passé, a company spokeswoman, in an e-mail. She wouldn't address whether the company will expand the Lucy's offerings to more stores but said it wants to see how customers respond.

Lucy's association with a retail name as ubiquitous as Starbucks "could potentially be a watershed development for us," Gibney said. "Obviously, it depends on sales."

Carolyn Shapiro, (757) 446-2270, carolyn.shapiro@pilotonline.com