In Israel the concept of packaged baked goods practically doesn't exist. There are bakeries everywhere where you can find a thousand types of challa every Friday. Everything is abundant and just so fresh. Great bakeries include Berman's and Chaba by the shuk, Angels (because it's open 24/6), Meafeh Neeman, Marzipan, English Cake, the list goes on and on.
I also noticed that the bread in restaurants is so much better than its US counterparts.
Ps. Regarding butterflake in teaneck, it is really amazing but it isn't cholov Yisroel.