The Recipe for Launching Your Second Product

0:01The launch of new video episodes on YouTube is right around the corner April 1st. You can subscribe now. That way you get notified every single week. The link is in our episode description. We'll see you there. Thank you so much. There is sometimes this urgency to go fast and to launch as quickly as possible. But I think taking the time to perfect a new product is really important and to make sure that you have lots of proof points. Hey, everyone. Welcome to Shopify Masters, your companion for starting and building a business. I'm your host, Shuang Esther Shan. Are you ready to launch a new product?

0:48Our guests, Michelle Jimenez-Majotto and Andrea Majotto, are actually going through this process right now. They've just come back from Expo West, one of the top natural food trade shows in the US where they just announced that the company is expanding beyond their famous pizza cupcakes. Michelle and Andrea are here to share the lessons from selling at food markets and grocery stores, appearing on Shark Tank, launching a new product, and rebranding. Thank you both for joining us. Thank you for having us. Nice to see you. Yeah, well, pizza cupcakes sounds both cute and delicious, and you've done so much with the product.

1:30But I wanted to ask, we wanted to take things back to the beginning. If someone is coming up with a new idea, how can they validate that whatever recipe or whatever product they're creating can actually resonate with a wider audience? We honestly stumbled upon the idea of the pizza cupcake. It wasn't something that we intentionally sought out and said, oh, we're going to create a frozen CPG brand. And what, you know, what are the opportunities out there. It all happened really organically and it started on our first date. An expectation was like to take her to get a slice of pizza like most New Yorkers do.

2:10But I said, well, I'm going to show you how to make pizza. I think that would be more fun and interesting. And so using the background in the culinary and being from Italy, that's what we did. And so pizza cupcake was really like the first date and like kneading the dough and making the sauce. That was the funniest part. But then from there, that's where we started bringing this to friends and family, like housewarming parties and birthday parties as our contribution to the party. And that's really where we saw the wide audience accepting the item and enjoying it and raving about it. And so like I grew up in the U.S.

2:55with American convenience foods, you know, those 90s pizza bites from the freezer. And when we made these little, at the time, we weren't really calling it the pizza cupcake. Andrea was saying pizzette because he grew up in Venice, Italy. Pizzette, which are actually sold in local bakeries versus pizzerias. and it just reminded me of those, you know, pizza bites that I grew up eating. And when he tried it for the first time, he was like, oh, this is very different because he never had anything frozen before. And so we just wanted to combine that American convenience with Italian quality and authenticity.

3:28And we just saw there was an opportunity from that point on. Amazing. Well, I love the pipeline from date to business idea and you launched in November 2018 and you had one hero product for the longest time. Where were some moments in time or even data points that made you think about developing new products and expanding? Yeah, for us, like, I guess, like, it wasn't just like a moment. It was more of a pattern that we kept seeing on customers, like noticing, you know, the product in all these different occasions. But like, they were asking, oh, when are you going to come out with something different, like for a breakfast, for example?

4:12So that caught me a little bit off guard. As an Italian, we don't really do much breakfast like they do here in the U.S. We're used to order brioche and espresso, and that's pretty much here. There we go, back to work. And Michelle is the one that was more into it. She's a very breakfast person. She loves eggs. And when she heard the first customer saying that, she was like, we got to do it. And so looking at the market and seeing what's available, I mean, really, that's how we came with the idea of like going to the breakfast area first and trying to bring in, again, like we talk about dates before, but like another big thing that I showed Michelle like how to do was like the slow cooked scramble eggs.

5:01And so we wanted to bring into the market that creamy, scramble-out texture that felt like there was nothing like it in the frozen section. And that's how we kind of like started this whole journey of breakfast and egg and cheese breakfast cups. That's really, it all started from there. Yeah. And I also think like with our signature dough, no one really knows this, but during COVID, we, you know, Andrea and I would go to the kitchen. We were baking every single pizza cupcake by hand and the leftover, you know, dough mix that we had, we would make loaves of bread and deliver it to some of our friends and family.

5:44And people just loved the bread. And I was like, oh my gosh, margins are so great for just, you know, making a loaf of bread. Like, why don't we just do this? There's no ingredients that you need. And so we just realized like eventually that it was a perfect dough recipe and a great vehicle for us to include different fillings. But it took us years to kind of get to the point that we're at right now to really expand and create product extensions outside of pizza. Yeah, it's the perfect cup for anything you want, essentially. Exactly. I guess like one big thing for us was, yeah, sure, it's great to bring it to friends and family.

6:22Everybody loves the product. But really, Smargesburg was our test of like, okay, let's see if people are actually going to pay for this product. So really testing first that this market allows you to understand if the product is a good fit for the market and how much people are willing to spend. Because again, we use high quality premium ingredients, but not always that is the immediate solution to get traction. Yeah. Well, I also assume that the product development process maybe have changed, right? Back in 2018, when you were developing the first thing, it was like a fun activity that you guys had together.

7:03And now you had years of experience and data collection. What did you change this time around when developing the breakfast cups? A hundred percent. Like the main difference coming from a culinary background and working in a restaurant, you have a certain set of skills and knowledge. But when it comes to manufacturing at scale for the volumes that we're doing right now and for a product that is not freshly made every day, but it's frozen, there were a lot of different changes that I had to apply to the recipe and also into shelf life and which type of ingredients, how did they react together? and how do we keep the label clean from any additives or synthetic flavors or things that are pretty common nowadays in the food ingredients.

7:58So we wanted to maintain that clean label flavor profile and textures the same, which is really hard in the frozen aisle. So I would say, yeah, it did take a lot more steps, But we learned so much from the pizza cupcake that it kind of made it a little bit easier than starting from scratch. Yeah. Well, maybe we zoom out a little bit. Michelle, for you, I guess, what is the vice for founders who are going through process where you might be testing and iterating that they should keep in mind when they're trying to perfect a new product? It was years of us developing this recipe. so it wasn't something that we launched in the market immediately and I would say my advice is you want to lead with your hero skews and the flavors that you know are going to work and you have a lot of market data that you can reference that will tell you I mean there there is a reason why margarita and pepperoni are the top or cheese I would say are the top two flavors and skews and what's most common across many brands that are in the freezer section and there's a reason to that And even when we tested at Smorgasburg, Andrea was so fancy, he would do sopa de santa, he would do fungi with parmesan cheese, he would do zucchini.

9:14And at the end of the day, people just wanted pepperoni and margarita. And so you have to listen to your customers and what they like. And same thing for breakfast. I mean, a classic egg sandwich. And we knew we wanted to start with that flavor first because the popularity of it and also the demand for it in terms of sales. So that is the first SKU that we're launching with. And then in terms of iterating, I wanted something because I am, I feel like, I wouldn't say I'm an egg connoisseur, but I do eat eggs for breakfast almost every day. So that was like, you know, for me, really important to have something that was quick and easy, that could be a grab and go, but also felt like it was homemade and it didn't feel like a frozen sandwich that we were preparing in the morning.

10:00So Andrea did a really great job. And, you know, with our recipe, there is some cream cheese in it, which makes it creamier and not dry. And the scrambled egg does feel like it's like a slow cooked egg, which is something that we would do every morning together. Well, Andrea would cook it because I didn't have the patience to wait 20 minutes to make the slow cooked scrambled eggs. But this kind of is like a quick alternative solution that gives you that same flavor profile and also that consistency that tastes really fresh. So I would say that, you know, there is sometimes this urgency to go fast and to launch as quickly as possible.

10:40But I think taking the time to perfect a new product is really important and to make sure that you have lots of proof points before you launch in retail. So for us, it was actually food service. So we were able to launch the product in food service first. And we launched last year with University of Connecticut in a few of their cafes on campus, got tremendous like positive feedback and then also started presenting it to others, potential like C-Store customers and got really great feedback from that and went to a bunch of different shows where we sampled the egg and cheese breakfast cups prior to actually even launching it in retail.

11:22So that was for us kind of our smorgasbord while like being able to introduce it to the market, get feedback from chefs, potential customers, and then even selling it into some of these customer locations. Yeah. It sounds like an incredible process because you were able to learn from customers and take their feedback through these events where you're serving them and getting that live reaction. Such an exciting launch, but also that comes with the rebrand as well and managing the changes there. Why did you consider changing the branding for the company as well? Well, so when we first started, to be honest, our brand was actually our product, vice versa.

12:05So we weren't thinking of bigger picture, again, outside of pizza in terms of other eating occasions that we could potentially tap into. And so, you know, it kind of limited us. We love the name, the pizza cupcake. I think it contributed to the success early on. People are like pizza cupcake. Is it sweet? Is it savory? It drives that curiosity, people wanting to try it. But on the flip side, it also then is like, okay, if you want to do something in breakfast or a snack or in dessert, it's really difficult because then that question of the dough, is it sweet or savory is really confusing to the consumer.

12:43And so we knew that we had to create a master brand and rebrand to Incredifols, which is actually something that is a name that we came up with. We worked with an agency to develop the master brand name and we brought in experts to help us because Adria and I are not experts when it comes to creative direction and creating like a brand new name. And so that has been a process that took us almost a year and a half until we were able to land on a name and create the new brand. And so we're very, very excited. And even though we're still attached to the pizza cupcake, it's not going anywhere. It's becoming a product line under Incredibles as Breakfast Cups is a product line under Incredibles.

13:25Yeah, so exciting. And I know that this is just like one element of it. You have also so many relationships you're managing. Pizza Cupcakes was sold online, retail, food service, events. How are you thinking about all those relationships and different channels with the launch of Breakfast Cups in May? Well, we're very, very excited for the launch of Breakfast Cups. We're actually launching in Target nationwide. So we'll be launching in retail our four-pack egg and cheese breakfast cups. And then also our four-pack pizza cupcake margarita and pepperoni will be available in Target nationwide as well in May.

14:03And so to support the launch, we're starting off with kind of like a pre-launch in April at Coachella with Camp Poosh, where we'll have our food truck pop up. We'll be sampling the products. And then from there, we're going to do a lot of activations in real life, activation sampling activations with our food truck, tapping into different communities in L.A. and in Brooklyn, mostly like New York City area, to really create community and driving trial of the product. And then in addition to that, we have the food service and online as well with customers being able to order pizza cupcake online and then getting it shipped to your door or, you know, going to a sporting event, finding pizza cupcake there or on campus at their, you know, local cafe.

14:50And then even with C-Stores, we have a really exciting launch where we're introducing our two-pack breakfast cups into one of the largest vending companies nationwide. wide and it's actually a microwavable solution. So you can pop it in the microwave for a minute and 10 seconds and it's ready to go. So we have, I feel like a lot of different touch points across different distribution channels. But our main focus is really is on community and our consumers. Yeah. Well, it sounds like such a great holistic approach where you have so many channels to interact with the community. When a founder is thinking about activations in that same realm where they can have a butterfly effect in their investment of time and energy.

15:32What's your advice to them to find the right opportunities? I think it has to make sense and it needs to feel organic to the brand and obviously ladder up to what the overall objective is for that partnership. And so we partnered with Camp Push, their team at Coachella last year, and it was really successful. And so for us, you know, we wanted to partner again this year and introduce a new product and it's the right demographic for us. It's, you know, it just, it makes sense. So I would first make sure, you know, the overall objectives are aligned with both parties that are involved and that you're working together versus it feeling super transactional, if that makes sense.

16:15Andrea I know that you know starting at Smorgasburg so many different events food service Coachella the element of like that immediate reaction of someone tasting something is like validating how your product is so what's your advice for making sure an event goes smoothly when you're operating behind a food product make sure they have enough because when you don't it's always an issue um that's joking aside like it's definitely like making sure that the operational part is um straight and like very very organized because um especially events like this um and i can make an example with expo too because the expo west we weren't prepared i would say the first year but when you start to get that large amount of people coming in all at once you gotta be prepared.

17:09Like one oven is not going to make it. We had to get four on the food truck for the Coachella event and also for the Super Bowl that we did in LA a couple of years ago. It just make sure your operations are very, very well organized. Make sure you have enough product and make sure that you have somebody that knows how to serve it because nobody wants to eat a burnt product. And, you know, we've seen that. So anything can happen. So just be ready, be prepared. Yeah, for sure. When you're going through the expansion, when you're bringing in new suppliers, working with different agencies, hiring people, how has the scaling side of the company been for you two?

17:53Well, we're still a very small team. Last year, we doubled our team. And by doubled, I mean we went from three, including Andrea and I, to six. So we're still pretty lean and really bootstrapped in that sense. In the beginning, it was really a lot of just us working with contractors, freelancers to help us and taking on opportunities that we knew we could execute on. Sometimes you are given opportunities that seem really, really exciting. but sometimes you might not just be at the stage where you can execute it properly or even fulfill the demand. And I think Andrea and I have always been really honest with one another and understanding that this seems really great, but it's just not the right time.

18:43And sometimes saying no to these large opportunities is so difficult, but in the long run and in hindsight, it was always the best decision. So I would say that you just want to make sure, like Andrea said, you want to be prepared And you can always get your foot in the door. It's always hard once you get that opportunity and you don't deliver on it to get a second chance. I mean, I feel like this industry is not as forgiving. And if you're not able to deliver, you might not get that second opportunity. So you just want to make sure that you can deliver. And in terms of scaling for us, we've approached every opportunity with that kind of mindset.

19:19And if we were not 100 % convinced or just, you know, certain that we could fulfill that opportunity or, you know, blow it out of the water, we wouldn't move forward with it. And then how about you, Andrea? How has scaling been for you? In the manufacturing side, it's been fun because once you get to scale where you have bigger volumes, you can really play with more suppliers. You can look for suppliers and be seen where before, you know, especially for us that we started during COVID where a lot of, you know, the sourcing was really limited. it allows me to find more people, find more products, scaling the manufacturing on the way that we make it and having more people that can help with the planning.

20:13Like Michelle mentioned, we increased the people working with us, especially like on the supply chain, on the planning side, which was not on my big forte, I would say. So the planning really helps on getting to scale the right way, like not wasting any ingredients or making sure that you balance your inventory correctly. Like those are all key elements of the scaling of our operations. And for me, yeah, it's been obviously it's a lot. I mean, you can see the grades, right? They all grew in the last couple of years, but it's just part of scaling a business from a small commercial kitchen to now producing thousands and thousands of products every day.

21:04Yeah. And then, Michelle, to your point, right, you were saying that there are times where you have to say no to opportunities. opportunities um when i guess like when you're in that moment of decision and you're looking at what to say yes or what to say no to what is your advice when thinking about and evaluating those opportunities i think number one is if you can afford it so for us it was mostly a financial decision um at first you know to see okay can we actually afford this can we hit the target price point that they're requesting? Do we have enough margin? Are we going to have to subsidize this growth or is it actually a profitable opportunity for us?

21:48And so that was ultimately how we would evaluate it because everything seems really great. And does it add to the volume that we need? So in the beginning, when you're really small, there's a lot of additional costs when launching with new distribution, talking on the retail side, well, mostly on wholesale for retail. If you're launching with a distributor, there's slotting fees, there's refills, there's all these additional costs in addition to what you have to pay to the retailer. And sometimes it's just not feasible. So we just couldn't afford those opportunities. And then other times it was more like, you know, the expectation of from us to participate, you know, with a launch, like we just couldn't afford that marketing investment that would be required on our end.

22:38So we just had to wait until it was the right time. And we had the, the cash to, to participate. So what was the reception like at Expo West and how did it feel to finally reveal the new product? Oh, it was really exciting. Uh, I think, you know, Andrea and I were a little nervous because, you know, it's the industry and, and I don't know. And a lot of our peers were there and also people that we've worked with and the buyers and the feedback was really positive. So it was really nice. And, you know, to see everyone's reaction, trying the egg and cheese, cause you know, we have actually haven't been to an event where we sample that many people at the same time, trying the breakfast cups.

23:23And so to get that, to see that initial reaction was for me, I was really happy. I was also nervous because Andrea wasn't so sold on breakfast. He's like, I don't think people are going to love this. And I was like, people are going to love this. I didn't know they were going to come in the afternoon to eat breakfast, but that I didn't expect. They're just eating it all day and people getting like, you know, cause last year at Expo West, we sampled 10 ,000 pizza cupcakes. Um, this year we sampled a total of 8 ,000, a combination of, of egg and cheese and, um, the pizza cupcake margarita. Wow. And also our new four cheese flavor that we also exhibited.

23:58And it's a new flavor that we launched with Whole Foods as a seasonal item this past winter. So it was just really, it's just really exciting. And I think it brought back memories of Smorgasburg because Andrea was baking and, you know, I'm talking to customers or, you know, attendees and it was fun. So I'm really happy and I can't wait to see the reaction of when we actually launch in store and Target. it. Well, it's an exciting time, right? And I'm so glad we're catching you when you reveal this new product and also the initial launch with Target. Cause I think this in between period is also very important.

24:33You're probably going through your checklist to make sure the launch goes smoothly. What are some things we're focused on for the next few months? Well, what we're focused on is number one, making sure that we deliver all of the purchase orders from Target in full. So the team has been doing a really great job making sure that, you know, on the manufacturing side, we're all set. There's no, we're shipping on time. In full, no orders are being shorted because that's also really important. When you're launching, especially with a retailer like Target, you cannot short ship. It's not good and you get penalized for that.

25:12And then secondly, you know, is really transitioning everything over starting to in April, we're going to start transitioning on social media, communicating, creating different videos to explain the transition and the why as well as the education, which I think is really important. We want to bring our current customers with us on this journey and start sharing it. And then in May, the full transition will happen with the rebrand. Our website will change from thepizzacupcake.com to incredibles.com while still keeping the pizza cupcake, you know, e-com section there. So customers can still order pizza cupcakes, but really telling that story and then partnering with different creators.

25:58And we're launching our brand ambassador program next month as well that we're very excited about. So it's a hundred brand ambassadors that are part of our community. These are, you know, day ones of pizza cupcake fans that are going to partner with us and to help share the messaging and educate their community on the transition of pizza cupcake to Incredibles. Well, we chatted through so many things, and I have to ask you about your experience on Shark Tank. What was the experience like, and how did it affect the business? roller coaster so we applied online um and it was actually right before covid and then when we got the email from the from the casting producer he you know she was like oh you made it to the next round and andrea and i were like oh my gosh what are we going to pitch we don't even have a business but uh because everything was catering corporate caterings we were at you know doing the outdoor markets with smorgasburg we were doing city field so this was even before we did d2c And then that's when we were like, let's try home delivery.

27:05You know, we pivoted to local delivery within the five boroughs. And Andrea and I were doing the deliveries ourselves, making the product. Then we were able to get, you know, our Shopify site up, our website up and running, which was really instrumental to keeping the business afloat. That we were able to have an online store and then start shipping orders. and then when we aired on Shark Tank, we did a million dollars in revenue right after airing and we were on pre-order for three months because we just did not know, again, what the results were going to be and if people were actually gonna buy it online.

27:39So that was another proof point for us. And when we realized, okay, there's an opportunity for this potentially in retail outside of D2C. And so it was exciting and nerve wracking all at the same time. I don't think we've ever experienced so many emotions And Andrea and I were still running the business day to day. So operationally going on Shark Tank was really challenging for us because we were the ones baking, fulfilling, shipping all the orders. But thankfully, we were able to transition to a 3PL partner who could then fulfill our orders for us for Shark Tank. But I would say that it was a huge milestone for us and what had really saved the business and started the new chapter for the pizza cupcake.

28:27It was the gasoline on the fire that really made us figure out e-commerce very, very quickly. Well, to wrap things up, Michelle, I would love to get your thoughts on when a founder is in that moment of deciding between focusing on their hero product or expanding, what's your advice to make the right decision? I guess it depends on the stage of the business. So I think if you're launching and it's still really early on, So I would say I would focus always on going, for me, going narrow and deep on your top two or three SKUs and making sure that you are exceeding, you know, the benchmarks within that category.

29:08So unit velocity, you know, dollars per store per week, it's really important to make sure that you're at the top before you start adding incremental SKUs. and then another thing is that you know it's always nice and that's why we're doing it we're adding more skews but we also don't want to add skews that aren't incremental to your existing skews on shelf because then you're going to cannibalize sales so doing a test in certain regions is what we did so with whole foods we launched an lto with whole foods for our four cheese and the data show that it was actually incremental to margarita. The differentiation within the product offering was there.