If you’re wondering how to grow your retail food business, you’ve come to the right place. Amanda Wadsworth, the Founder of Tiny Pies, shares her journey of going from sharing a commercial kitchen to opening her first, second, and now third location. We will learn how she bootstrapped her business, how she thinks about product market fit, and doing experiments in marketing and sales.
Summary:
- Throw Events And Get Bigger And Aligned Brands To Sponsor And Promote It To Build An Early Audience
- Invest In Great Packaging And Photos For Farmer’s Markets
- Get Into As Many Farmer’s Markets As Possible To Build A Customer Base
- Enter Contests To Increase Your Odds Of Publicity
- Determine Whether It Makes More Sense For You To Go Brick And Mortar Or ECommerce
- Continue Partnering With Larger Brands To Grow Your Social Media Presence To Drive Traffic And Try A Direct To Consumer Model.
- Invest In The Best Product Images You Can Afford For Your Website Or Digital Funnel
- Model All The Ways You Could Grow – New Markets, Increasing Existing Market Traffic, Or Wholesaling
- Use Financial Modelling To Create Experiments With Pre-Measured Risk/Reward Ratios
Interview:
Chris: What is Tiny Pies and when and how did Tiny Pies get started?
Amanda: My mom, Kit and I Tiny Pies in 2011. Tiny Pies are small, handheld pies made with high quality ingredients, just like your grandmother used to make them, only smaller.
Chris: What did you do before Tiny Pies?
Amanda: In 2007, after spending 10 years raising my two sons, I became a licensed Realtor so that I could have the flexibility to be involved with my sons. I worked as a Realtor for a small real estate firm for about a year and then became interested in sustainable real estate practices so I became an Eco Broker. Soon after that I partnered with a fellow Realtor and co-founded the Eco Series. The Eco Series was a monthly lecture series that focused sustainability in different areas like food, lifestyle, building design, etc. We would produce lectures that were open to the public. Some events would have 50 + people and others were considerably larger. We promoted online through our own e-mail lists. The events cost money to produce so we would seek sponsorships to underwrite the events.
Chris: A lot of business owners want to get sponsors for an event. How did you do that?
Amanda: I would make a list of companies whose brand aligned with ours and I would then cold call them. I would say,
“I’m Amanda. I co-founded the Eco Series, and this is what it’s all about. I think that your brand really aligns with what we’re trying to do. We would love for you guys to get involved. This is how we think you could be involved and this is how we would promote you and your brand. I think it would be really good for you to be associated with us as a small growing brand.”
Almost 85% of people I’d call were willing to support because it actually was an aligned brand.
Chris: How do you transition from real estate and green construction technology to owning a bake shop?
Amanda: I’ve always loved to bake and I grew up baking with my mom and my grandmother. My mom grew up baking with her mom and grandmother. Food has always been important in my family; we have always cooked and eaten dinner together. Love was shown through food in my house and especially at my grandparents house. My grandmother, dad, and aunt would cook for hours, making huge feasts for all of us to enjoy. Those are very happy memories for me. Dessert was always an important part of the meal. Some of my favorite memories in the kitchen were with my mom and grandmothers baking desserts of all kinds. And even today, when I get stressed, I like to bake — it always makes me feel better.
One day my youngest son asked if he could take some of the pie we had for dessert the night before to school in his lunchbox. I said no because it was going to get all over the place. And he said to me, “Why don’t you just make something I can eat with my hand?” My mom and I got to thinking that that wasn’t such a bad idea and from that conversation, we started playing around with recipes in our kitchen. Coincidentally, I had just been to California and shopped at the farmer’s market. The idea of making a product and taking it to the farmer’s market was very interesting to me and I thought that I would really enjoy doing that someday.
We played around with recipes for a few months and worked on the perfect hand-held pie. We had family and friends taste our pies and they loved them. We began to research similar products and found that there wasn’t anything similar to what we had created in the marketplace. It was also clear that there was a trend for small snack sized portions. After months of R&D, we made an appointment with a farmer’s market director and she loved our pies and invited us to the market. That’s how Tiny Pies was launched. The name Tiny Pies was a clear description of what we were making and we loved it and decided that that would be the name.
Chris: As Austin based small business consultants, a lot of our business owners started at farmer’s markets before going brick and mortar or CPG. How did you prep for the farmers market and how did you perform?
Amanda: We had a few weeks to prepare before we launched at the market and we needed to come up with a brand so I contacted Toby Sudduth, who was an award winning packaging/ brand designer. He created our brand / logo and packaging design. The first day at the market customers kept asking us what grocery stores we sold in – – they were so impressed by the look of our pies & the packaging that they thought we were an established brand. We explained that it was our first day at in business and they couldn’t believe it. We also sold out of all 75 pies!!
Chris: How much of a role did packaging play in the farmer’s markets?
Amanda: The packaging played a considerable role in our initial success because the packaging/ logo made us look like we were an established brand & made us look established. It elevated our brand and made people more confident in our products. Brand / logo / packaging design is critical to the success of a brand. Outside of how good your product tastes, it’s the next most important thing. If a customer isn’t drawn to the brand, they won’t pick up the product.
Chris: What do you do after that first market?
Amanda: Like I said, we took 75 pies to the first market, and it took us all night to get ready for the market. It just so happened to be MLK Jr. Day that weekend and we participated in the Peace Through Pie event at the Missionary Baptist Church in Clarksville. They were hosting a pie contest and allowed us to enter. We won 1st place in the “best new product” category. We had such a great 1st day of business…we had sold out of all our pies at the market and had won a 1st place prize…I knew from that moment that we were going to be a success and that I was on the right path. I launched our Facebook page that day and started posting photos of our product.
Chris: Ok, so you are on this path. What do you do to grow initially?
Amanda: We went to the farmer’s market every Saturday and slowly started to add more markets to make more money. By the time we stopped doing farmer’s markets, we were going to three or four a week. We were promoting ourselves on Facebook and started getting direct orders as well. Customers were placing specialty orders at the market and through Facebook.
Chris: How did you decide to scale from farmer’s markets?
Amanda: I walked into every single grocery store and coffee shop and would ask who the buyer was and how I could get in touch with them. I’d usually just get an email and so I’d write them an email and ask if we could get on their shelves. The email was pretty simple:
“Hey this is Amanda, and we started a company called Tiny Pies. This is what they are, and we buy quality ingredients and source from local farms. We think our product fits well in your coffee shop and we can deliver it to you. We’d love to just bring you some samples and once you try them, you’ll know it’s something you want in your store.”
Then we made our first big investment: We signed up to participate in a local wedding show. And it was incredible. We brought samples and had a big display and photos of all the products and how we could package them. We talked to hundreds of potential customers until we lost our voice and we were a big hit… noone had a product like ours before and we were disrupting the wedding cake industry. The convention cost about $1,200, but we more than made our money back.
We realized that we needed a website where costumers could see our product and learn more about our company, so we hired a photographer, Jody Horton to shoot photos of our pies and then hired a Christie Zangrilli to design our website.. The photos were expensive; especially at that period of time in the business but the photos were amazing and they helped launch our brand; they were integral to our success . Product photos are so important to conversion on a website. We know the pies are tasty, but we needed the customers to see it for themselves, and the photos helped with that.
Chris: How did you afford to have the capacity to make all these pies?
Amanda: We worked out of a commissary kitchen, one where everyone shares space. It was really hard to find a kitchen at the time and in the beginning we baked out of the Delta, Delta Delta sorority house kitchen on the University of Texas campus. You are required by law to bake from a commercial kitchen so it’s a no-brainer to start in a commissary/ ghost kitchen until you can afford your own space.
Chris: Any advice for other people shopping for a commissary or commercial kitchen right now?
Amanda: It is going to come down to what you can afford but I think the best thing you can find is a kitchen where you can have your own space that is designated as yours 24/7. That way you can have your tools, your machines, etc. and people can’t touch them.
Chris: Ok, so you have the kitchen, you have a website, you have distribution to farmer’s markets, and some grocery stores and coffee shops. What do you do at that point to go to the next level?
Amanda: We were really fortunate and had a lot of national press early on. One day, I got a call from someone at O, The Oprah Magazine, and she said “we want to highlight your product in our upcoming O List.” She said they needed samples shipped to them and if they liked them, they would get back in touch. We ended making the O List in September of 2012.
Making the O List was a game changer. We received so much attention after that. The O List created a bunch of interest in our brand and we were featured in The Huffington Post, CNN Small Business Network, The Cooking Channels, Unique Sweets program and the Katie Couric Show to name a few. This obviously generated a ton of online sales so we had to learn how to ship our pies very quickly and all of a sudden we had this healthy direct to consumer channel. We continued to ride this publicity for a few years which helped us build enough of a following to open our first store on Burnet, in Austin, Texas.
Chris: Can you tell me about your pricing strategy, margins, that sort of stuff?
Amanda: I have to admit that in the beginning, we were not great at it. We under-priced most of our pies. We would add up all our ingredients and try to break it down by the number of pies we could make from each unit, and then we would add some sort of mark up. We didn’t have a target margin at that point.
When we first started, the pies were $3.5 and now they are $4.75. We gained valuable knowledge by attending the Fancy Food Show in San Francisco. They offer many different educational classes that are super helpful and we sat in on one about determining margin. This class was a game changer. I think we just had such great product market fit that that helped us have some buffer until we figured out our finances a bit better.
Chris: A lot of people start with a store and then go CPG. You went the other direction. Can you tell me about that logic, that process, and what you looked for in a location?
Amanda: We had this vision of a bakery and a storefront the whole time but it took a lot of money we didn’t have, and it took three years for us to find the right space. We wanted a good walking neighborhood with a lot of foot traffic – -where people would actually walk over. We wanted to have parking and visibility from the street. We also wanted to get a second generation kitchen so we could avoid a complete build out. Opening our first store was one of the most stressful thing I’ve ever done because we were operating on a shoestring budget — bootstrapping all the way.
Financially, the markets were limited to a certain amount of hours that they were open. So we just made the bet that if we could be open X more hours, we could do Y more business and be able to pay our rent. That worked initially but as you open more locations it gets more complicated. We are now working on opening our third location in June of this year in Westlake. We have wanted to be in Westlake for a while but have had a difficult time finding the right location. When this opportunity came up with work with the owners of Blender and Bowls to open a “food court” concept we jumped on it. We’re really looking forward to opening our 3rd store.
Chris: What sort of targets did you guys set when budgeting for this third location now that you have more standardized financials?
Amanda: We have clarity on what our margins need to be to make a profit and we the numbers in a model that showed that this location would be a great investment.
Chris: How do you grow store traffic?
Amanda: It’s mostly done through social media, blogs and e newsletters. We don’t do much paid advertising. We also partner with other like-minded businesses and cross promote on social media. We also do a lot of giveaways and change our menu regularly to keep the interest of our customers. We have been really successful working with influencers as well. We currently have someone running our social media but I work alongside them and help write copy so the voice on social media is my own.
Chris: The Ronin Society is focused on small business consulting and have found a special niche with brick and mortar and CPG hybrid businesses. What do you think is the future of brick and mortar CPG like Tiny Pies as an industry?
Amanda: I’m not sure what the future holds as far as brick and mortar stores go – – all sales channels have their problems and pain points. I think we’ll continue to open retail locations but are looking closely at other channels as well. Since COVID, customers are getting use to curbside pick up, local delivery and shipping. I see the revenue channels growing and not going away when we go back to “normal”.
Chris: Amanda, your Superpower seems to be that you take action and aren’t afraid to try different things in your business. How can other business owners develop this mindset?
Amanda: Entrepreneurs are a different breed … to be an entrepreneur you have to be okay with uncertainty. I run models with my finance team to prove concepts but sometimes it still comes down to what your gut is telling you to do. We create financial models and run experiments based off of the models. We always know the worst case scenario and if you’re okay with the worst case scenario than it makes sense to run the experiment. Being able to pivot quickly and adjust when needed is key to being successful.
Chris: What other things should I have asked you about today that that would be useful for other people to know based on the experience you’ve had?
Amanda: Being an entrepreneur is the hardest job I’ve ever had but it’s also very rewarding. I’m grateful every day for the Tiny Pies team that I work with for without them we would not be where we are.
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