Emily Winston, founder of Berkeley’s Boichik Bagels, was shocked when she first saw the digital newsletter sent by Lula Financial, the email’s subject line stating that the business’s customers “deserve to be poor.”

Taken aback by the email’s contents, Winston said the Oakland financial firm’s reaction to her $3 bagels seemed “extreme.” She added that she considers her product to be an “affordable luxury.”

The initial newsletter sent by Lula Financial was met with scrutiny by both Winston and the other small businesses who responded to her screenshot, prompting a look into why being a Berkeley — and Bay Area — business can mean charging more for goods and services.

Recently, the cost of simply establishing a new business in the city has become notoriously expensive, according to Winston.

“It is so expensive to be a small business in Berkeley, especially nowadays,” Winston said. “I’ve been amazed going through the process of building this. Getting this off the ground has been by far the hardest thing I’ve ever done.”

Established in 2019, Boichik Bagels opened on the corner of College and Alcatraz avenues following the closing of the original Noah’s Bagels, according to a previous article from The Daily Californian. Known for its traditional New York-style bagels, Boichik Bagels received recognition from The New York Times in March.

While Winston acknowledged that a $3 bagel is not a commodity product, she said she believes it an accessible price point for a food product that she considers to be “really good stuff.”

Winston noted that other businesses in the area also charge similar prices for their own goods. For example, she pointed out that Peet’s Coffee also sells its baked goods and coffee at about the same price point.

As for Boichik Bagels’ location, Winston noted that her business is situated in a neighborhood where people “vote with their wallet,” the neighboring residents choosing to spend more money for high-quality products, according to Winston. 

“If you want an awesome, world-class quality bagel and it’s worth it to you, then this is for you,” Winston said. “If you want the cheapest bagel available and don’t care about the flavor, then by all means go somewhere else.”

Elliot Sharifi, owner and founder of Obour Foods, echoed many of Winston’s sentiments, adding that the trade-off is “quality versus cost.”

Founded in 2017, Obour Foods is an artisanal hummus and tahini producer based in San Francisco, according to its website. Its products can be found in farmers markets across the Bay Area.

Noting the difficulty of starting a business in the Bay Area, Sharifi said there were many obstacles he had to overcome before Obour Foods could come to fruition.

Prior to even selling his products to customers, Sharifi needed to form a limited liability company — for contract and leasing purposes — before beginning the search for a commercial kitchen space.

“All of the difficulties in running a business come down to the cost of housing,” Sharifi said. “The Bay Area is not an easy place to build housing in. Prices have gone up. People making your food and who are not making $100,000 a year are getting squeezed out.”

Sharifi knows of very few businesses selling expensive goods that do not also face high production costs, he added.

In the Bay Area, limited real estate availability, higher taxes and increasing property crimes and insurance rates all coalesce into products that are more expensive for customers, according to Sharifi.

Josey Baker, founder and owner of Josey Baker Bread in San Francisco, said being a business owner means being forced to make tough decisions with regards to production and product pricing. Comparing the Bay Area to the rest of the country, Baker noted that housing costs and living expenses, in general, are especially high in the region.

“We’re subject to those harsh realities,” Baker said. “The choices you make with real estate, the ways you compensate your staff, the ingredients you use, the customer experience you pursue — these all go into the cost of your product.”

In response to the email from Lula Financial, Baker said he thought the statements made in the newsletter were “ridiculous” and bad financial advice.

He added that while he understood that the author’s intention was to be comedic, he believed the blanketed criticisms to be “mean-spirited,” pointing out that being a business owner in the Bay Area is difficult and that Winston and her team are making “incredible food.”

“In our current climate, mass-produced food is artificially cheap, and so the reason that her bagels cost as much as they do is because that’s how much it really costs to make those bagels,” Baker said.

Responding to the criticisms, Benjamin Packard, founder of Lula Financial, said in an email he respects small businesses that bring jobs to the community and that the email was only meant as a joke.

According to Packard, humor is his way of making financial planning more accessible. Packard added that the newsletter was just a reminder to his clients to be more “conscientious” about their spending.

“It’s more than food; it’s nostalgia and childhood,” Winston said. “It’s such an affordable luxury. It seems preposterous that he would single it out.”