Armed with a finance degree from San Diego State University and what appeared to be a clear path into the corporate world, Kathy Phan instead found herself experimenting with Asian-inspired flavors in her parents’ San Diego kitchen.
Blending ingredients from her childhood, such as ube, taro, matcha and milk tea, into American-style cookies and brownies, Phan launched CAKED at local farmers markets in 2017 before opening a Mira Mesa storefront two years later.
What followed proved to be anything but predictable.
Less than a year after opening her bakery, the COVID-19 pandemic upended the events-driven model that had fueled much of CAKED’s growth. Rising ingredient costs, higher vendor fees and softer consumer spending have since created new challenges.
“When the pandemic hit, about 99% of our revenue disappeared overnight,” Phan said. “We pivoted to nationwide shipping and corporate gifting.”
The shift forced a rapid rebuild of the business, moving from attending festivals and events to filling online orders and corporate boxes almost overnight.
While CAKED survived, Phan said pressure on costs has persisted. Ingredients, packaging and event fees have all increased, with some organizers charging thousands of dollars for vendors to participate.
“With inflation and events not doing as well, we have to work that much harder just to stay alive,” she said.
That mindset has defined her approach.
“I’ll do what it takes to make it,” said Phan, who now employs six people. “I was working 15 to 20 hours a day, sometimes around the clock, especially before weekend events.”
Even with tight margins, Phan said a loyal customer base has helped sustain the bakery. She described CAKED’s desserts as having bold flavors and a soft texture that blends a cookie and cupcake.
“We’re still stable because people really like our cookies and we have loyal customers who continue to support us,” she said. “We made it through the pandemic that way, and I think we’ll get through this the same way.”
Before CAKED became a storefront business, Phan had no professional baking experience. Self-taught, she tested the concept by bringing samples to local businesses and asking for feedback.
“I used to walk around to businesses and ask for really honest reviews,” she said. “My friends like my stuff, but are they actually willing to pay for it?”
Encouraged by early responses, she joined California’s cottage food program and began selling from her parents’ kitchen at farmers markets.
At early events, she often introduced customers to flavors they had never tried before.
“I really mostly blew up because I started selling at the Open-Air Theatre,” Phan said of SDSU’s popular concert venue.
Initially focused on cakes and cupcakes, she shifted toward cookies and brownies due to cottage food restrictions. That pivot became central to CAKED’s identity.
“I started to focus on cookies and brownies because there weren’t a lot of specialty flavors,” she said.
Today, the bakery is known for items like its ube mochi cookie, along with pandan, taro, matcha and milk tea variations.
When CAKED first introduced those flavors, customers were often unfamiliar.
“No one knew what ube was,” she said of the purple yam.
In recent years, she has watched those same flavors move into the mainstream.
“Now I see ube everywhere,” she said. “Even non-Asian-owned businesses use it.”
At home, Phan, a 2010 graduate of Scripps Ranch High School, said her parents encouraged a more traditional career path.
“Who gets a college degree to bake cookies?” she recalled them asking.
She chose to pursue the idea anyway.
“They were telling me to quit every day originally,” she said. “Study software engineering they told me. In the current job climate my friends who are software engineers are struggling to find jobs.”
That skepticism eventually faded as the business grew. Her mother still helps package cookies when needed.
“It stems from my passion,” Phan said. “I love what I do, and I don’t expect to ever stop.”
