Once Named Yelp's #1 Bakery In U.S., Izola Forced To Close Through End Of Year In San Diego's East Village

October 28, 2023

Once named as the #1 bakery in the United States by Yelp, Izola has been forced to close through at least the end of the year in San Diego's East Village. 

In early 2020, Jeffrey Brown and Jenny Chen returned from a trip to Europe to find themselves in forced quarantine together. After jumping aboard the bread-making trend that emerged in the early days of the pandemic, the duo began selling their breads and pastries from a tiny space above Brown's former photo studio in a building on 13th and G streets in San Diego's East Village. Using rock climbing equipment, the couple would take pre-orders and lower a rigged basket to the sidewalk beneath to maintain social distancing with customers. On their first day in business in June 2020, 12 croissants were lowered from their third floor window to customers below. The word quickly spread and curiousity of the operation flourished, as did the couple's passion for their newfound hobby-turned-business. 

As the pandemic subsided and restrictions were lifted, Izola repurposed the former photo studio into a cafe space for customers to enjoy their baked goods with coffee and live musical performances. The space eventually became a destination for hungry customers with long waitlists and lines out the door. Demand grew to a boiling point when in June 2022 crowd-sourced review platform Yelp named Izola the #1 bakery in the United States
Inside Izola
After operating for more than three years with only a Class B Cottage Food Operation food permit issued by the Department of Environmental Health and Quality Food and Housing Division, which is typically limited to very small businesses making food products in their own home kitchen, the bakery is now forced to either scale back its operations or substantially upgrade the kitchen and restaurant space. The company is also in the process of applying for a Type 41 Beer & Wine liquor license. 

"It is with an incredibly heavy heart that effective immediately, IZOLA will be temporarily closed," wrote Izola in an email to its subscribers. "We've outgrown our Cottage Food license and must complete a planned renovation before we're able to reopen again on our new license."    

Although Izola intends to reopen in approximately 90 days, the timeline depends on the renovation, permits and approvals. Izola is currently asking for help in restaffing its employees during the company's down time. 

"At this time, our immediate focus is on our team of 33 incredibly kind, hardworking, compassionate people," continued Izola. "We are putting plans into place to provide all the support that we can during this difficult time for them. If you or someone you know are looking to hire some of the hardest working, brightest people in the business, we would love it if you email Jenny so that she can share your opportunity with the team."
For well over a year, Izola has planned to move into a 4,790 square-foot building in the Azalea Park neighborhood of San Diego's City Heights in order to scale their operation to meet demand. In addition to opening a new production facility and cafe, the team hoped to purchase a bake truck in order to ship their breads and pastries to eateries around the city, as well as launch an Izola bake-at-home program. There is no word on the status of the new location. IZOLA has already received more than $1 million in investment funds through Mainvest.

"Currently, IZOLA is licensed to sell food to consumers from its current location at 710 13th Street (Ste 300) San Diego, CA, under a Class B Cottage Food Permit issued by the Department of Environmental Health and Quality Food and Housing Division (the “DEH”)," explained the Izola team on its Mainvest page. "The Class B Cottage Food Permit requires that a permittee have no more than one full-time equivalent employee (other than owners and their immediate family and household members) and no more than $50,000 in annual revenue. IZOLA currently exceeds those limitations (IZOLA currently has 16 full-time employees and generates approximately $150,000 in monthly revenue). IZOLA understands that to receive a new permit to accommodate its current business operations, it will have to renovate its kitchen at the current location, which will include, among other things, new flooring, new wall covering, additional plumbing, and a dedicated dishwashing area. IZOLA has submitted renovation plans to the DEH and is awaiting approval. Once approved, IZOLA intends to get bids and suspend operations at the  bakery during construction and until the new permit is issued. Since many aspects of the construction and permitting process are outside of IZOLA’s control, IZOLA cannot guarantee that the new permit will be issued within a specific amount of time. The new permit does not have revenue or employee headcount limitations. The DEH could demand immediate compliance with the Class B Cottage Food Permit until the new permit is issued. If that comes to pass, IZOLA may have to reduce the scope of its operations until it is in compliance with the Class B Cottage Food Permit or suspend operations until the renovations are complete and the new permit is issued, which may adversely impact its revenue projections.  It is also possible that the renovations and/or securing the new permit may take longer than anticipated, which will also adversely affect its revenue projections. Further, the DEH has the authority to fine IZOLA up to 3x the cost of the new permit or $2,790 total.  Management believes that any short-term suspension or reduction in its operations due to the expected time to renovate and receive the new permit, or any monetary penalty related to its non-compliance with the Class B Cottage Food Permit, will not have a material long-term impact on IZOLA’s operations.  However, this may not be the case if IZOLA is forced to close the bakery or materially reduce its operations for an extended period of time."

Izola is located at 710 13th Street, Suite 300, in San Diego's East Village. For more information, visit izolabakery.com.