Advice Line with Christina Tosi of Milk Bar

25:20Birmingham, okay, cool. That area. Awesome. Thank you for calling in. Thanks for listening to the show. So, tell us a little bit about Cotton Clara. You sell like craft kits and like describe them. So they're designed to be beginner friendly. I kind of saw this market, you know, 10 years ago and it felt so old fashioned. And I felt like there was a gap for design led, modern kits that appeal to people that have a kind of design conscious and want something beautiful in their home. And what can you get? Like you make, I mean, is it like embroidery or sewing? Like what are the things that you make?

26:01So depending on the kit, so you either create a kind of a little work of art that is framed in the hoop that you stitch in and then you put it on your wall. Or one of our really popular kits is a friendship bracelet making kit. Oh, nice. We have paper craft kits, all different types of things. We have a flower press kit. So it depends which kind of craft you choose. Awesome. And you said you started this 10 years ago, about 10 years ago? Yeah. I mean, the seed of an idea was 10 years ago, but really the business got serious in 2020, kind of end of 2019, 2020. And you sell everything direct to consumer or do you also sell into stores?

26:42It's about 60 % direct to consumer and about 40 % wholesale, but wholesale is really growing at the moment, especially wholesale to the US. Okay. And are most of your customers in the UK and Europe or also, So you mentioned wholesale to the U.S. Where are they coming from, your customers? Most of our wholesale customers are in the U.S., but most of our D2C customers at the moment are in the U.K. And where do you sell in the U.S., by the way? We sell to Barnes & Noble, Anthropologie, and then loads of kind of shops, independent, small, or maybe small in America, but in the U.K., they're huge. And give us a sense of your annual sales.

27:19Like what do you expect to hit this year? Yeah, this year we've just had our best year yet, And we turned over$1.2 million this year, or last year. So that was our best year. Great. Amazing. So that's a huge milestone. And before we dive in further, what's your question for us? So our question is, our business serves three different markets. So gifting, craft enthusiasts, like your classic crafter, and then the kind of wellness movement. And we're not sure which positioning will best drive the scale we need to build a truly profitable business. So we'd love advice on how to identify the audience most likely to buy repeatedly and how that should shape our product development and our route to market.

27:59All right. So gifters, crafters, wellnessers. Yeah. Okay. Who do you – where do you go to? Okay. Christina Tosi, I want to bring you in. Crafting, cool business, over a million dollars in sales now. Awesome. She's doing great. but there's some choices and decisions to make. It is so true. I mean, Chloe, first off, congratulations, 1.2 million. That's huge. Second of all, I want everything on your – I'm a crafter. I was raised by women. The granny spirit is alive and well in me. It's definitely how I was raised in all of the free time we crafted. Craft kits did not exist, so you had to raid grandma's basement for thread and for old pieces of fabric, the fabric store, the yard sales, that sort of stuff.

28:47I also think it's a really interesting moment where you're at where, to your point, like that the business really started taking off in 2020, right? That shows a macro trend, but an interesting one because I see your business as crafting, acknowledging that gifting and wellness are ways that crafting finds its way into people's lives that aren't just thinking about crafting first and foremost. Well, also, at least in the US, what we're seeing, we're seeing a lot of like, there's a reason Etsy took off. But there's also a reason why craft stores like the Big Box, Michael's, Joanne, a lot of those crafting first stores have suffered on just like a brick and mortar real estate basis.

29:30But also when you look at our other big boxes like a Target or a Walmart, they're doubling and tripling down into this crafty spirit. You're on to something. You're onto an activity that we picked up in the pandemic that we haven't lost, right? That we're continuing to find really, really dynamic stickiness with, joyful stickiness with. As a baker, I am a believer that the activities where we get to create and bring things to life, whether we're being serious about it or not being serious about it, are activities that are going to continue to be really powerful for us in an age that continues to be increasingly digital right we feel like that like the potential is massive and huge yeah for kind of this industry what do you like where what do you want to do with with cotton clara is it is it international expansion is it um how are you thinking about that i appreciate the like what are we but i am curious the sort of like what do you want to be yeah we want to be a big global brand we want to get people making all over the world.

30:39But I want to be a brand that does that in a sustainable way. So yeah, we're dreaming really big. Got it. Okay. Here are some thoughts that I have for you, Chloe. I wonder if, and this is something my husband and I, my husband's also an entrepreneur. This is a game we play at home all the time. When we're faced with a challenge of like, is it this, is it this, is it this? We force ourselves to create one additional option. So when I hear you say, are we gifting? Are we crafting? Are we wellness? I go, what if you're none of those things? What would you be? And if I had to force myself to come up with another word, it's makers, right?

31:19Like what is the why? What is the stickiness? I think it's because people are making something. Like when we are at a crossroads at Milk Bar and we're trying to figure out, is this the right product or is that the right product? Is this the right language? What's going to be sticky? we go to our community first and knowing that you have a 60 % DTC customer base, pull them. They may have some of the answers. They may give you some texture that helps give you direction. And then the other thing that I think could just be cool, I have a friend named Elisa. She's actually a neighbor of guys in San Francisco on the West coast.

31:57She fell in love with baking and for her, baking is about like community. She started doing this thing a few years ago called Cake Picnic. Oh, yes. And she has gotten sponsors. Very famous. And now she throws these things and people come together in a park one day and they eat cake together. It's literally a party as an excuse to eat cake. Yes. And people make these beautiful elaborate cakes. They do it at Golden Gate Park. It's incredible. So part of me is like, what is the maker's picnic where people come and cross-stitch together or friendship. I mean, girl, I'm a friendship bracelet wearing fiend over here.

32:36Like you need the idea of making, crafting, whatever it is to get out much further beyond growing your business. I believe that's going to be a secret to your global domination and success and getting us excited about being makers. All right, Chloe, take it for what it's worth, but I have a slightly different perspective, which is I actually think that your customer is the repeat customer. Like it doesn't matter if they're a gifter and they're buying or if it's – I think craft enthusiasts probably is the most challenging because they are probably often looking for the best value or lowest price, let's say, not even best value.

33:17But it's like – and I think the wellness thing is really interesting, right? I don't think it's a trend. People aren't – they're looking for ways to find fulfillment, spiritual meaning. And for better or worse, it's a massive exploding industry when you consider everything that fits inside of it. So, I mean, I think that you want to start looking to see who's buying your stuff more than once. Who's buying it four or five times a year? What is it about them? Maybe contact them or see if they will talk to you in exchange for a free product. And just download who they are, why they're buying it, what they like about it.

33:56Because I think every decision you make, whether it's a marketing campaign or social media or whatever you can put into that, it should all answer that question. How do we get people to come back? How do we deepen the relationship with them? Wait, can I say one thing about the wellness thing? Because I like where you're going in it. my caveat or my sort of like asterisk that I'd say to it is it is wellness, but it's inherently a joyful wellness pursuit, right? And so how do you think about what the right word choice is? Because if you use wellness too closely, it's going to feel like you're saying, eat your vegetables and we as humans are going to run in the other direction.

34:34So what is the like wordsmith of this look like as you're, so you have a few different options when you go to talk to your repeat customers and in and is it about unlocking creativity yes are they creativity kits and not crafting kits you know etc etc play i really love that play i think that's a great idea unlock you don't want to say wellness exactly it's like you're hitting people over the head that you want to talk about unlocking creativity or and you can also start to explore potential partnerships with really big candle brands or you know products that are sort of wellness ish or adjacent that where you might have people interested in doing some kind of cross promotion or collaboration.

35:15This leads into this other idea, which could be, I mean, it takes some energy, but could be worth it. Like a vertical, just a business vertical, a completely separate part of your business, where you start to work with brands, you know, brands that we've had on the show, like Airbnb or Canva, Milk Bar. I was going to say, can I get a Milk Bar cross-to-cheek? Yeah, I mean, I'm looking at some of your designs here and they're cool, like little bento boxes and ramen. And you could potentially, you know, Canva has a giant staff like convention every year. Thousands and thousands of people from around the world.

35:51Like, could there be some kind of collaboration where you can stitch a Canva logo or, you know, something like that, which could be an interesting, totally separate business? Yeah. No, that's great. all amazing ideas and yeah lots to think about chloe congrats on the business cotton clara uh good luck thank you thanks so much going thank you bye bye i i the thing i love about this these kits is that uh you can be completely useless like i am really i've you know i have a lot of patience for cooking but for some reason like i just can't get my head around this but i think because this is easier this is like yes she's got things where it's like paint by numbers i could get into that also a friendship bracelet i mean i know your kids are like cusp too old but like i make friendship bracelets all the time like i bring embroidery thread in a little sewing kit on the plane with me because it is just it's something that i can make for someone else it makes me feel good it makes them feel good at like because once you do it guy you'll be hooked you'll be like, I can't believe I made that.

36:58I'm sure. Your friendship bracelet era is about to begin. Something tells me. It's about to begin. All right, we're going to take another quick break, but we'll be right back with one more caller. Stay with us. I'm Guy Raz, and you're listening to The Advice Line right here on How I Built This Lab.

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39:48Welcome back to the device line on how I built this lab. I'm Guy Raz. And today I'm taking calls with Milk Bar founder, Christina Tosi. So, Christina, ready for our next call? Ooh, let's go. All right, let's bring in our final caller. Welcome to the advice line. Tell us your name, where you're calling from, and just a little bit about your business. My name is Christy Clement. I'm calling in from Washington State, and I'm the founder of Vashon Island Coffee Dust. So we make spice blends to flavor your coffee without sweeteners. So there's no coffee in coffee dust, just real spices, cinnamon, cardamom, cayenne, things like that, to add to your coffee.

40:23and it's a clean alternative to creamers and syrups. Or if you're a black coffee drinker, it's just a fun way to change it up in the morning. Oh, awesome. Welcome to the show, Christy. So these are, they're powders, but they're not sweetened and it's not like a powderized milk. It's just spices that you add to the coffee. Yeah, so the whole idea is they're blends. Some people already add some cinnamon or nutmeg to your coffee, right? And these are super fun blends. So we have a gingerbread blend. We have a couple of spicy ones, a hot mama and a spicy papa that have cayenne in them. And the Hot Mama, for example, is cocoa and a little bit of cinnamon, some cayenne and some sea salt.

40:59That's it. Interesting. And does it, I mean, I'm curious because if you add that to coffee, it doesn't necessarily dissolve, right? I mean, how does it like integrate with the coffee? Do you really get those flavors? You really do. Yeah. So we get our spices ground extremely, extremely finely. And that helps to dissolve in. I'll also hit it with a frother. So you can add it to your coffee after you've made it, just dust it on top. That's what most people do. You can also froth it with your milk. Oh, I like that. Or you can add it to your grounds, use a little bit more, but you can brew it with your whole pot.

41:34How long, when did you start this business? About five years ago. This is a COVID baby. I used to be an IT consultant teaching software teams to act like startups. Nice. But I've never been in the food business. and I was a new coffee drinker during COVID, filling as most new coffee drinkers do, their coffee full of junk, right? Cream and sugar and things like that. But a friend introduced me to spice blends adding to coffee and I was able to get off the cream and the sugar using that method. And I just fell in love with it. I started playing around with other flavors and as work started picking back up at the end of the pandemic, I thought, all right, well, I don't have time for this.

42:13I'll just buy it from somebody because I was completely addicted at that point. But nobody made it. And so I knew I had to start a business. All right. Vashon Island. That's the island in the Puget Sound, right? It's in Puget Sound. Puget Sound. Forgive me. Yeah. In near Seattle. Okay. So you are selling these how? Where? Mostly through your website? We have five different channels. We're on our website. We do a lot of in-person markets. We do Etsy. We have a wholesale channel. We're in about 50 independent gift stores and coffee shops across the country and we sell on Amazon. Awesome. And how'd you guys do last year?

42:48We did 277 ,000 in revenue and we've been profitable from day one. So, and we've been doubling our revenue. Amazing. Okay. So, so before we dive in, what is your question? So I know many coffee dust customers discover us through gifting and then become loyal buyers for themselves. And that flywheel feels really powerful, but I'm not sure how to deliberately designed for it. Christina, I suspect you had a similar challenge with Milk Bar, and I'd love both of your thoughts on how I can intentionally create that gifting, loyal buyer loop. All right, Christina, Fashion Island Coffee Dust. Christy's looking for some ideas on how to get those people coming back again and again.

43:30Thoughts, ideas, questions? You know, it's so, first of all, Christy, congratulations. One, I think it's a great concept. People's drink ritual is truly that. It's sacred. It's a ritual. And I think because we all love food and flavor, the sweet spot of what you're doing makes a lot of sense. When we started Milk Bar, first of all, my goal was to have a bakery and stay alive. I did not anticipate being a gifting experience. I thought I was just selling a warm cornflake We talked to it, marshmallow cookie out of the oven or a slice of, you know, um, cake unfrosted on the sides or a little ding of soft serve.

44:08And the DTC part of our business, we launched our care package business just so we could reach someone that was never going to make it to our New York city bakery. But what we realized really quickly that was that it became a thing. Um, if it is gifting, you have to think first and foremost about, of course, the take rate, right? Who is, who is gifting it? And then how do they want it to appear as a gift? How do you make their job as the gift giver as big and brilliant and easy as possible? So thinking about, you know, we chose literally shipping in the mail. It's insane to use a white box, right?

44:44It doesn't arrive in pristine white box order. But babe, in a sea of cardboard Amazon boxes, when that box arrives, we have social media that's just people being like, oh my gosh, I can see this white box with a pink milk script in a sea of cardboard, right? Like how does it show up in a way that gives someone that tingly, joyful, right? Like, I love that. And I think it's the same thing. If gifting is your segment, really, really thinking about that. And there's going to be some tension points, right? Between what is absolutely the most efficient and what is going to feel giftable and gift worthy, then you're thinking about, okay, so how do I afford nicer packaging?

45:27Can I bundle it with a frother? And then it's an even cooler experience, but I can actually charge more and afford for the nicer packaging because a frother doesn't actually cost that much money. Then when it's being gifted, how is it showing up in someone's life? For us, it's usually like a high value occasion. It's someone's birthday. It's someone's graduation. It's someone's wedding. For you, it might be a housewarming gift. This is going to be, it's free marketing for you, girl. It's like a Trojan horse, right? You get to be on their coffee counter. So what should that look like from a coffee counter standpoint?

45:58You don't see my coffee in my house because no one has figured out how to make the coffee experience look pretty enough to sit on the shelf of my kitchen. And so it gets tucked away in a cabinet. Is there something beautiful that's also efficient in the way that it is used that can enhance someone's coffee station? Like those little things I think are really important. I'm, I'm, look at me, I'm like in and so excited for you and going to try all these dust, but I'm also going, I drink coffee in the morning, but my evening tea, I want the healthful cinnamon, turmeric, ginger, nutmeg. I want that in my tea at night.

46:32And so that's the other thing that I would just, you didn't ask for this advice, but I'm going to give it to you as a very impassioned consumer. I have beverage rituals that extend beyond coffee. And I believe that your dust could extend there too. And that could be an interesting way to expand and grow business. They absolutely do. And we do tend to, when we first explain it, it's really about the coffee, but we do, when we send it out, send a little info sheet on what else you can use it in because it is other beverages, but it's also, you know, add a little cocoa column, which is cocoa and lavender to your whipped cream and with some strawberries.

47:07It's amazing. I had a customer one time tell me they used captains on chicken as a dry rub. Like blew my mind, right? It sounds like you have a fair amount of UGC user-generated content anecdotally or otherwise, right? Like, did you know you could use captains on your next chicken bake? You know, did you know you could, you know, add this to hot water and get an incredible tea? You can steep this in your hot chocolate, et cetera, et cetera. Like you can really test and learn what's sticky for your regular customers without it feeling so direct of like a repeat ploy as opposed to giving them more reasons to come back because they hadn't thought about using your product in a different way.

47:48You know, I was thinking about what you were saying, Christina, and I totally agree. Because I'm looking at this product and I'm thinking, okay, you know, you want to focus on like making it really easy and frictionless on how to use it. And you had mentioned, Christy, that you sprinkle it on frost coffee or something because I just figured people just mix it into the coffee. So initially I was like, well, maybe you should have a QR code with a video. Maybe you do that already when people get it. Like here's a video. Here's me making it. Here's how I love to do it. But actually the frictionless side of this is to think about how do you make this so easy, right?

48:24Like a K-cup, right? I looked this up. You don't need a license to make a K-cup. I guess the patent or whatever expired over 10 years ago. So anybody can make a K-cup-shaped pod where you just stick it in, and that's it. You've got it. You've got all the flavors and the benefits, et cetera. That's great. I love that. I mean, it's not easy to do right away. And sure, in the meantime, you want to figure out again how to create repeat customers, right? Because you want people to use this every day. Yeah, yeah. Christy Clement of Ashen Island Coffee Dust, thanks for calling in. Good luck. Thank you guys so much.

49:03It was a pleasure. I appreciate it. Yeah, thanks. God, Christy. Christina, you are like, wow, you're a business school professor because your practical advice is so good. You too. School of hard knocks, right? Yeah. To run and grow a business over the last 18 years, right? Like you learn a lot about what you don't know and then you learn to stay super duper curious and passionate about what you don't know. Yeah. You know, truly. Before I let you go, I want to ask you one final question, which is if you could go back 18 years to, you know, in those early days when you built out Milk Bar, what would have been helpful for you to know back then that may have made it a little easier or better or maybe not?

49:43I don't know. You know, I spend a lot of my time these days reflecting probably because I'm waiting for a batch of, you know, cookies or cake, whatever it is, to bake. It's not the early day advice, believe it or not. It's probably like the year three, year four, year five, all the way to like maybe year 10 advice. And it's really simple. It's you know what you know better than anyone else. Do not lose the way. As the founder, as the entrepreneur, you know what you know about your business better than anyone else. So stay open and curious, but do not ever shortchange what you know. You may not have a business degree, right?

50:26You may not have all these other things that these other collaborative partners or mentors have, but I'll tell you the one thing you have that no one else has, and it's what you know to be true right here. And that's one thing. I'm saying it to you because I remind myself of it every single day. Once I learned it, I thought, ooh, I'm never going to forget it. Christina, thanks for coming back on the show. I had so much fun with you today. Thanks for having me, Guy. It's great having you. That's Christina Tosi, founder of Milk Bar. And by the way, if you haven't heard Christina's original How I Built This episode, you've got to go back and check it out.

50:59Really great episode. Super fun and funny. And here's one of my favorite moments from that interview. I just remember my Blackberry kept buzzing and buzzing. And I was like, what is going like? Did the bakery catch fire? Is my family OK? What could this possibly be? And I had all these voicemails. And my favorite voicemail was from this woman in Kansas City who I think maybe was someone's grandma. And she was just like, well, I heard, you know, Anderson Cooper talk about this crackpot. And I just, I'm never going to make it to New York. So, like, would you mind shipping me one? And it was like, are you going to tell her?

51:36Are you going to call her back and tell her no? Because I was not going to call her back and tell her no. And we now have an online business where you can email us. And that is like, when opportunity knocks, what are you going to say? Like, not today. When it's time to rise to the occasion, you rise. Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free at GuyRoz.com or on Substack. And of course, if you are working on a business and you'd like to be on this show, send us a one-minute message that tells us a little bit about your business and the questions or issues that you're currently facing, because we would love to try and help you solve them.

52:19You can call us at 1-800-433-1298. Leave a message there and make sure to tell us how to reach you, and we'll put all of this information in the podcast description as well. This episode was produced by J.C. Howard with music composed by Ramtin Arablui. It was edited by John Isabella. Our audio engineer was Jimmy Keighley. Our production team also includes Alex Chung, Carla Estevez, Casey Herman, Elaine Coates, Chris Messini, Catherine Seifer, Carrie Thompson, Sam Paulson, and Neva Grant. I'm Guy Raz, and you've been listening to The Advice Line on how I built this lab.