PODCAST: MìLà's Dumpling Revolution from Restaurant to the Retail Shelf with Jen Liao

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Transcript

Jen Liao: There's always been chinese food, but it's mostly been in the format of having it at home, where your parents are making it home style, or in restaurants. There hasn't been a lot of, like, chinese CPG companies out there. There are some incumbents, and of course, there are chinese grocery stores, but it really hasn't made its way over to american grocery stores in more recent years.

Announcer: You're listening to CPG launch leaders, the show where we interview new product trailblazers. Get ready for inspiration and secrets from the front lines of CPG innovation. Now, here are our hosts, Darcy Ramler and Alan Peretz.

Allan: Welcome to CPG Launch leaders. I'm Alan Peretz, and I'm here with my co host, Darcy Ramler. With us today is Jen Liao. Jen is the co founder and president of Miele, a modern chinese food company that serves up chinese culinary experiences like soup, dumplings, and noodles straight to customers homes.

Darcy: Jen, we're beyond excited to have you on to talk about your pivot from a restaurant concept to a frozen d two c, and now making big strides in retail distribution. Before we dive in, we love to start each episode with one particular question. Currently, what new product has caught your attention in the marketplace?

Jen Liao: Yeah, thank you so much for having me on. And right now, I would say Thor scare yogurt, uh, is a favorite because we actually have a one and a half year old at home, and he really likes yogurt. And Thor doesn't have any added sugars, which is a little bit more unusual for the yogurt space, but high protein, so we love it.

Darcy: And I have to say, I'm a big fan. As a mom of two, I also am a big fan of Thor.

Jen Liao: Nice.

Allan: So, as we mentioned in the introduction, the, uh, origin of Mila starts with a Seattle based restaurant. Uh, but like so many other companies, Covid hit you in 2020, and it left you looking for new ways to keep your business up and running. Can you share a bit more about that start and, um, how it worked?

Jen Liao: Yeah. So we had started the restaurant October 2018, and then, as you mentioned during COVID we had shut down. It was only for three weeks, and then we actually were up and running again doing takeout, uh, for example. But during those three weeks, we started to experiment with frozen soup dumplings. So, uh, our first product in our restaurant was actually something called Shenjin Bao, a pan fried soup bao. And it's a Shanghaine street food. It was my husband and co founder's favorite food, which is why we went that route. And the soup dumpling is actually the cousin of that that's more well known in the states. But in Shanghai, Xinjiang, Bao really reigned supreme for soup dumplings because it is the cousin. Then, during COVID uh, when we started to experience experiment with it, that was the first item that we actually went into to see if we were able to freeze it and deliver it and kind of maintain that good consistency and quality restaurant product.

Allan: I didn't realize until you just said it that your husband was your co founder. My wife was actually my co founder. Uh, how's that been?

Jen Liao: It's been pretty good. Yeah. I think, um, we actually started our relationship. We've been dating, I guess, now married, but dating over the course of ten years. And the first four years of our relationship was long distance. So we worked out a lot of things around communication and building a strong foundation. So when we went into building the company together, I think that really helped a lot, to be able to communicate well with each other and resolve problems. But beyond that, we're very complimentary. So I think in terms of, like, different topics and functions, um, were very complimentary and then different phases of even a single project where one of us maybe starts it, the other picks it up and the other finishes it, for example. So we just do a lot of passing off so that things don't get blocked, which is great for us.

Darcy: I'm sure navigating not only a business pivot, also being married to a co founder can be challenging. But as you made the transition from d to c, how did you decide to focus on dumplings as the first offering that you guys were going to be able to provide?

Jen Liao: Yeah. So because our hero product in the restaurant was the sin jump out, and this was kind of the cousin of it, we already had a base formula in terms of the recipe for the filling and the dough. And then we actually had, um, thought about buying a machine and got the machine, but it wasn't a fit for the product that we had in the restaurant. So we started to experiment on it for this purpose of soup dumplings. And we just made a couple of bags to start with and sent out kind of like a Google form and a Paypal link for anyone who is interested within the local region of just, like, small little Facebook and WeChat groups that, um, we had created. And people started from there. We saw that there was enough demand to run, for example, a whole week of production to create some bags, and then word of mouth spread from there. And then we tested out some, um, online advertising. It was so cheap at the time that we were able to test a lot of different things and see if there was maybe product market fit, and it just started to grow from there.

Allan: So, speaking of product market fit, I understand from the first conversation we had with you that you use social media, uh, a lot to get customer feedback and help, uh, product development. Can you tell us a bit more about that process?

Jen Liao: Yeah. So in the very beginning, we just had the paid ads, and then we did have Instagram, but it was run by myself and it was run very poorly. Now, we do have a pretty built out, um, TikTok platform, Instagram platform, plus YouTube. We mostly do YouTube shorts. And then we have, of course, a very large email customer base from anyone who has subscribed or purchased previously. And we do a lot of testing with our customers to get feedback directly. So this might look like, for example, reaching out, um, in the form of a poll on our Instagram story, asking things like, do you know the difference between a pot sticker and a gyoza? Do you like soup, dumplings or dumplings? And very simple questions just to gauge the very beginning of things that we might have, um, be thinking about in our innovation pipeline. And then for email, we'll do a lot more extended surveys. So we'll build out, you know, ten question surveys and then also ask for people if they want to be a beta tester with us or if they're willing to get on the phone for a 30 minutes conversation. Um, I think this has been so valuable for us in building this out because it is a little bit of a new space. There's always been chinese food, but it's mostly been in the format of having it at home, where your parents are making it home style, or in restaurants. There hasn't been a lot of, like, chinese CPG companies out there. There are some incumbents and of course there are chinese grocery stores, but it really hasn't made its way over to american grocery stores in more recent years.

Darcy: And do you feel like when you entered, I mean, obviously taking it from the social side, it was able. You were able to really see we are on the cusp of something very disruptive as you're hearing from consumers, as you're hearing kind of, not only is it a category that there's a desire to obviously be a consumer for, but that there's sustainability to, you know, you're on the upswing of a category really starting to launch into the space.

Jen Liao: Yeah. So I think a couple of things, uh, in some of those customer interviews that we did. So our last set was actually two years ago where we did very extensive, qualitative, kind of on call customer interviews. And there were a lot of people that we talked to where they said they never bought a product, a food product off of the Internet, they never bought a frozen food product off the Internet. They barely used any delivery apps, and they rarely actually bought frozen products, even in the grocery store. So we're like, what? Why did you buy our product? This actually doesn't make any sense to us. And for them, they had just said, uh, at that time, at least, the novelty of it was really what drew them in. Like a frozen soup dumpling. I've never seen that, and I can get it shipped to my door. That is just, like, such an incredible experience. And I think they were very intrigued by it. And I think what's, uh, helped us solidify our position is being able to deliver on that promise of that customer experience. So after they receive it, there's still skepticism because they don't usually do this type of thing. And then when it turns out to be a high quality product, they're very delighted, and so they want to share with other people. So that's kind of been the foundation of that. And where we saw that, we had hit on something potentially a little bit special. Um, outside of that, we're very data driven. And as far as we can tell, we have started to build the soup dumpling category itself. So chinese food, as a broad category has always existed, but soup dumplings has more than doubled since we had started. Of course, there are other providers out there, but for 40% of the soup dumpling search volume, people are putting Miele at the front of that proactively. So that is an indicator that we are growing the market, which is pretty cool for this very specific category. But chinese food, of course, is so broad, there's much more to go.

Darcy: Nothing like having a branded term over there with, right. So as you're navigating, obviously, rapid adoption and growth with Mila in 2020 and beyond, what have been some of the biggest challenges you've faced in scaling up from local distribution to national shipping? You know, as you talked about, not only consumers never necessarily purchasing an online product or an online food product, but a frozen product. I mean, there are barriers that exist to that journey.

Jen Liao: Yes. So I wouldn't say there has been one single large problem or thing to solve for. It's just been a continuous, um, I think, continuous journey and path to unlock and unblock many, many different things. So, like you said, we're frozen products shipped online. That is pretty unusual. Plus, we started that over Covid. So first of all, frozen shipping, d two c is not a very widespread thing, just in general, because of all of the requirements around, uh, shipping, packaging, plus dry ice, how you handle it. And then our product is actually more sensitive than ice cream in terms of melting. So we have to over pack to make sure it doesn't melt. So for the dough, once it melts, it sticks together. And because it's a soup dumpling, if it stays together, the soup will leak out and it's no longer a soup dumpling. So for ice cream, it does deteriorate in quality. If it melts, but you can still consume it, it'll just be worse quality. So we kind of had to figure that out the hard way where we didn't expect that to begin with. And the during COVID part is all of the different shipping networks were also transitioning from having entirely enterprise networks over to residential networks. And they did have, for example, like 97, 98% guaranteed on time delivery before COVID had hit. And then they took away all of the guarantees and it actually had dropped to 77%. So if you have over 23% failure in your shipping, um, that is a disaster for any kind of company, even beyond a startup company that just began doing this. So we did have to sort all of that out. We worked with our warehouses to build out very, very robust data analyses on when they were shipping it out. We would only ship Monday through Wednesday. We would track all of them and proactively reach out if we saw that it crossed a threshold of however many days it was in transit and then check with the customer to see if it already melted. If it did, we would just replace it, no questions asked. So that was kind of on the backend logistics piece of it. I think the other big component was that we actually started with vertical integration up, uh, from the get go. So we actually manufacture our own product and we always have. And that is, as we learned, unusual for the CBG industry. We did not know that because we didn't come from the CBG industry. I think it has benefited us as a moat, but also I think that was a challenge in the beginning since we were naive about how things worked to begin with. But that was a very big undertaking, to build out a factory equipment, um, the whole production line. And then as we scale, it also continues to evolve.

Darcy: There's a reason they say ignorance is bliss, right? When you don't know what you're getting yourself into, you can avoid a lot of, a lot of sticky situations. There.

Allan: So probably related to that factory. I understand you took on some investment in 2022, and I assume that's opened up some doors for the business, but could you talk us through that a little bit and any learnings for other founders? Uh, yeah.

Jen Liao: So we took on the investment, 2022. We started the conversations, let's say, October 2021. So it was over, like, a two month period that we did the whole diligence closing process. And I would say so for us, we had bootstrapped up until that point, um, of just our own dollars, plus profits from the restaurant, for example, that were from our share to build out the manufacturing. We were very lucky in that Covid had a lot of empty spaces. So we were actually able to take over some spaces at almost no cost. And it was just incremental above and beyond what we required from the factory. Um, so we were able to get that stood up even without the investment dollars. However, we couldn't build out all of our equipment and production lines, and we couldn't build inventory without investment. Plus, we couldn't invest in growing our team. So I think, um, what was really strong about our position going into fundraising was that we could have done this perpetually without raising money at that point. So we went into it from a position of strength, of, like, if this is not favorable to us in terms of the terms, we don't have to take this. So we can go into it saying, okay, we're running a very responsible, sustainable business where it's first order, profitable on our d two c sales. And even though we'll grow slower, we can still continue to grow and do that for some period of time before we look at investment again. And I think that really helped us in the conversations, because then it was really more about how can this investment accelerate our growth, rather than kind of, like, stand up our company, if that makes sense. And so the acceleration and growth is what we focused on of, uh, building inventory and then building out our team for that next phase.

Darcy: So a little birdie told me that Mila was not actually, uh, the first name that you were thinking about as you ventured into d to c. Can you tell us about maybe a little bit about the first name and about the branding and the name change that came about?

Jen Liao: Yeah, sure. So our first name was Shaoje XCJ, and that's actually still the name of our restaurant, our first brick and mortar restaurant, that's in Bellevue. So this means street food alley or street Food Avenue. And for us, when we had opened the restaurant location, that was the intention was to open kind of like a night market, hawker stall type of concept that sold purely street food. And as we went into d to see, I think that just wasn't really the right set of food or experience anymore. Street food is meant to be experienced live. You cook it right there, you hold it, and you're walking around with it. Like, that's just a totally different concept. And so the name itself, I think, no longer fit the purpose that we had for D two C. And beyond that, of course, Shao Zijia was a great name for our location, where we did have a larger chinese audience. They immediately knew what this stood for and, you know, they didn't have to search it. For example, going online, this was incredibly difficult, I think, for an online search term. And I think just the practical reality of it is we should look at what is a better name that also fits the growth of our company. As we were expanding our chinese food portfolio more broadly, so we started to look at names. It was very hard because we wanted to embrace this duality of being chinese and american. So our third culture piece is very core to our company. Um, so we ended up actually using the name of what would have been our daughter's name if we had a daughter, but we had a son. And so for Mila, it means honey and spice. And it was, we really liked that for food because everything is, has, uh, sugar and spice, and it can be anything in between. And so for our daughter, it was like, you can choose to be anything you want. You can be sweet, you can be spicy, you can be anything in between. You can be neither of those. And we really liked that concept and that ethos for our company as well, where we were creating something a little bit new and owning our own space. And we could do it in the way we wanted to.

AD: Jesse: Hi, Jesse. What brings you to the airport, Mike?

AD: Jesse: I'm off to the headquarters to share an update on the big launch.

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Jen Liao: This is the final call for flight 723 to Chicago.

AD: Jesse: Looks like we'd better go. Thanks for the tip, Jesse.

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Darcy: Can you talk a little bit about once you landed on Miele, how did that new brand identity influence your marketing presence and really customer perception of, you know, as you said, you went from this amazing restaurant concept to really coming into, how are we going to market this brand and move it forward with consumers?

Jen Liao: Yeah, so, um, it actually took more than one year to roll out the new brand. And I think the closer we got to the rollout, the more daunting it became, because the year before we were still quite small. And then a whole year later, we had three x. And so by that point, we were like, oh, my gosh, is this going to be a mistake? I think in that change, we really wanted to keep some of our core concepts, which was this duality of, you know, chinese american, but also, I think, how do we honor our chinese roots, which is our heritage and where we're drawing inspiration from, but also layer on the modern evolution part of it, and not having that be the entirety of our brand is like traditional chinese food. I think we really care about bringing it into the modern times, putting our own spin on it, our own take, our own flavors. And so we like this layering piece of it. So our original brand had collage elements and we wanted to bring that through and keep the collage element. And then the red color we kept. That was a very strong brand signal. Um, and actually, we had first, uh, revealed this new brand at Expo west, uh, in 2023. And it was about two weeks before we did our actual rebrand. And at Expo west, uh, people came up to our booth and started questioning us. They were like, how dare you steal XCJ's concept? And we're like, I mean, I love that, you know, XDJ, I love that you've made the connection that these are similar and you're kind of like, wait, why are you copying them? Like, there definitely was something resonating with people, that this was still, still a continuity from the last brand and it reminded them of that. So I think that gave us a lot of confidence going into the rebrand that, um, we had maintained some of those core aspects really nicely, but was able to broaden what we could do with the brand.

Darcy: And it taking a year, it really did become like your second child, your daughter, if it took a year for the branding, it is a process, without a doubt.

Jen Liao: Yes, exactly.

Darcy: Did you use any, I know you said you use social and you've used your consumer insights. Did you use any of that as you were going through the rebranding process to get a little bit more of, okay, how are our current consumers going to feel about this, you know, they. It can be such a sounding board when you're going through an evolution.

Jen Liao: Yes. So we did. It was very hard to test. So we did try to do things like splice new potential names onto our bags and then surface them in ads or in surveys to see if people like them. But because we hadn't chosen the name yet, we hadn't done the full logo. It just looked kind of awkward. So I think directionally, our first test at least told us it's not worse than what we're doing. So even though it's not styled correctly, it's not an actual logo. It's just kind of a piece together thing. People weren't dropping off. Um, it was actually maintaining. So that was a good step of like, okay, I mean, at least it's a one for one replacement, which is good. So let's move forward to the next step on how we would test some of this. Um, and then beyond that, we didn't do a whole lot because we kind of already committed to it. Um, what we did do was because we were contemplating rolling out in retail as well, which happened around the same time as our rebrand. We did do a lot of retail packaging testing, which went into how we updated our packaging for d, two, c. And so we did do some online tests for packaging. We did probably four rounds of that to test out different logo compositions, different colors, different, you know, like we have the abstract hot air balloon. We weren't sure if that was going to be too crazy, for example, but people really liked it and liked that element of bringing in that humor or imagination into the brand. So we carried through with that. So we did do that type of testing. And then once we did the rebrand and roll out, of course, there were some people who said, I really liked your old brand, why are you changing? This is not good, etcetera. But I think because it came from, um, a place of authenticity for ourselves and we had a north star around it, we were able to explain very genuinely why we did this. And I think that did resonate with people. So it wasn't just like, oh, we chose a random name and we need to do it because somebody told us to do it. Um, and we actually had real reasons driving it. I think that was accepted pretty quickly.

Allan: So, Jen, you alluded to the transition to traditional retail from, uh, DTC. Were there other changes you had to make from a packaging standpoint or a product standpoint or how you sold to the shopper?

Jen Liao: Yes. So, um, I mean, our retail, our bag online is 50 count, and that is very large for any kind of conventional grocery store. So we actually have ten count in our retailers. Um, we also needed to test a lot on instructions. So because online, d, two c, you have the entire Internet as your canvas, where you have social media, you have your website. It's not just the packaging. You have so much more room to be able to educate the customer on how do you cook it properly and how do you freeze it, how do you store it. All of these things that are new for this new product, um, and format that it was coming in, there were soup dumplings, but most of them were microwaved beforehand. And so then, um, going into retail, you have to be able to tell that story very succinctly, only on the package. So we did extensive testing on the instructions going into retail. Of course, we looked at the size of the bags, the counts of the bag. Um, the design remained pretty similar because we had done that testing upfront. Um, but that's a lot of what we had to do going into retail. Also, we did have to make a big ingredient change. So all of our d, two C products before that point did have MSG. And then going into retail. A lot of retailers require no MSg. I think there is a lot more education around MSG now. It's still a little bit of a hot topic. I think retailers do understand that it's not necessarily the same as some of the other preservatives, for example, that are banned substances. Um, but it's lagging. And so I think for us, our biggest goal is still around accessibility and being able to share this food with more people. And so for us, we're like, okay, we can see if we can formulate something that's clean label, that tastes exactly the same without compromising on quality or taste. And if we're able to do that, then we can go into this. If not, we'll kind of have to decide from there how to approach this. But we were able to formulate something that, uh, was one for one.

Allan: I love your point about the digital canvas and how rich that is and how you can use that to engage people on, um, how to use the product, storage, all of that. Did you link to your digital content somehow in the packaging?

Jen Liao: Yes, we have a QR code on the back of our packaging, and QR codes are notorious for not working, but we actually have about a seven or 8% QR code scan from the back of our packaging, which is very high for a physical package. Good. So all of them, I mean, it links to an instruction page and we orient the whole page around that.

Darcy: So your approach to retail is a bit unconventional as you started with club stores before moving into other retail formats. Can you talk a little bit more about this strategy and why it's been a successful strategy for Mila?

Jen Liao: Yes. So this made a lot of sense to us because our pack sizes were so large to begin with on d two c. So going from 50 count into Costco actually was a really great move into, um, kind of like a family pack value size pack type of thing. Um, also part of it is, ah, for Costco, their demographic of shoppers is definitely right in our core audience. So I think that really made a lot of sense. And then beyond that, because we are vertically integrated, we do have to take into account building out capacity on our manufacturing lines, which is a little bit different than some other CPG companies that use co packers, and they don't have to really worry about that when they're building out new lines. So there's a lot of different things that kind of made sense for that. But what this meant was we had to be even more disciplined about our pricing across every single retailer before we set foot into any single retailer. So most of the time, I think you do have to be careful when you go into a national rollout or a really big retail partner. But a lot of brands will start with, you know, smaller chains to test it out, which we also did do locally. But because we took on Costco so early, that meant that we had to build out our price slope right from the get go from day one.

Allan: How do you describe your target shopper? Uh, you mentioned Costco had a, um, shopper that was very much in line with who you expected to sell to. Are there different groups or is it really one group that you're going after?

Jen Liao: Uh, it is interesting because our d two c is such a large pack size. I think that's been self selective. So I think right now our target shopper online has been between 25 to 45, even up to 55 households of two to four, um, rather than one to two, for example. Um, and I would say in terms of geography, it actually matches up with the census quite closely. So any kind of area with population density, we see those hotspots exactly reflected the same as well. Um, and then in terms of ethnicity, we do see a little bit more like of an asian audience, but actually not like the majority of our shoppers. So, uh, we do see pretty broad appeal in our audience base.

Darcy: I do think after just even recently being at Expo west, you are seeing a large surge in just where people are taking flavors, really bringing, commercializing more of traditional asian influenced foods. I mean, there is definitely a trend that is happening from a flavor palette, from a vehicle, whether it be from a goysa or. I, uh, mean, I definitely saw more down that line than I ever have at Expo west, which is exciting.

Jen Liao: Yes, exactly. Yeah, I think the category has continued to evolve and there's a lot of attention on it, which is amazing. And then I think it's just like, we need to bring good products to the space.

Darcy: Absolutely. So, looking forward, what are some of the goals that you really have for Mila as you continue to expand your retail footprint? You focus on the d two c side.

Jen Liao: Yep. So for us, it is this year we're moving into a new facility to support our growing demand. Um, we are expanding our retail footprint, as you just, uh, mentioned, and then we're continuing to build out our product innovation pipeline. So we are testing other product lines that we'll be releasing later this year and, um, seeing how that does.

Darcy: Is there anything you want to hint or share at as far as new product lines or anything that you are really looking forward to?

Jen Liao: Um, so we do have a, ah, limited edition noodle that's dropping in a couple of weeks on May 5. And then we do have, um, we already have our vegan soup dumpling on pre order that we will likely bring onto our menu pho. We had released Lunar New Year pho soup dumpling and that was a huge hit. So we're looking to bring that back as well to add to our menu. And then later this year, it may or may not be related to dumplings.

Darcy: Lots of delicious things, it sounds like.

Jen Liao: Yes.

Darcy: So I know we always talk about, you know, the successes, and Mila has been such a success out there in the marketplace and also breaking conventional, you know, ways of doing d two c business, especially in the frozen place and in a new category. But with all successes, there's always challenges as well. So what would you say if you. One lesson you feel like you really took from being innovative? I mean, you obviously took large risks. You took large risks with your husband and your partner. Um, what would you say one of those lessons would be for you?

Jen Liao: Uh, I think just keep testing. I think there's always a lot of tests that you can do that are lightweight, that will give you some kind of signal and not being dogmatic about, like, if I think people ask, like, how do you know there's product market fit and when there is product market fit. You know, there's product market fit, there's a pull from the market, they're asking for it, there's demand from it. You cannot fulfill it fast enough. And that just happens. And if you haven't gotten there, I think there does need to be some tweaks around, like the product or the marketing or the branding or package. There's like so many different factors, and it's all about just going one variable by variable and eliminating which one will actually unlock the next phase, for example. And there's lots of tests to run to do that before just changing the whole thing.

Darcy: Absolutely. Test and learn is definitely. And as you said, you use the best market, which is your true consumers.

Jen Liao: Yes, exactly.

Darcy: Well, Jen, thank you so much for taking the time to talk about Mila and the story that exists within the brand. A testament to innovation, resilience and the power of delicious food. And a primer for how to launch and scale frozen d, two C and retail. It is stories like yours that remind us to keep innovating, stay inspired, and let's continue to redefine the world of CPG innovation. Thank you so much.

Jen Liao: Thank you for having me on. Great conversation.

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