319. Meet the Little Moons cofounder who scaled to £60M revenue w/ Vivien Wong | Little Moons

0:00Hi, I'm Vivien Wong, co-founder of Little Moons Mochi Ice Cream.

0:03Amardeep Parmar:So, okay, Little Moons is obviously now nationwide, they're global, they've done so many amazing things. But people haven't heard of it yet somehow. Can you tell us what that is? So Little Moons are little balls of ice cream wrapped with mochi, which is a Japanese soft sweet dough. And so we're sold in all the grocery stores, six in a pack. and they are seen as relatively healthy because each bite is between 60 to 90 calories each. And so I think they're the perfect indulgence. So you've obviously come a long, long way in the last few years, right? Tell us, like, where is the company now? Like, where have you grown to?

0:38So this year we're targeting 60 million in revenue, but we started the business 16 years ago from scratch. We've had to manufacture our products from day dot. and it's just been a great journey that I've embarked on with my brother Howard and four years ago we got our first external investment with L. Catterton which is a private equity company and that working with them for the last four years has been great.

1:04Amardeep Parmar:So there's like so many different things we're going to ask you and like come fingers kind of back to there. So if you go back to the origin get right so starting with your brother and like with my siblings like I love them but there's no way we could run a business again like we'd like argue so much. How did that come about? Like, how did you build this together and start it out? I think we always wanted to start a business together. There was always the assumption we'd do it together. I wouldn't have even considered starting a business with anyone else. That's strange. I never questioned it.

1:33But I think we built a brilliant business together. And although building it hasn't been 100 % smooth, like we were talking about it before, how it's really changed our relationship particularly when the first 12 years before we brought on a CEO we were just talking about business every day but starting from the beginning my parents worked really hard as most Asian immigrant parents do and so as the older child I was tasked with being a responsible one when my parents weren't in the house which was often we would both have to do our homework together I might cook something light for lunch during school holidays and we're working from home that's if we weren't working from the bakery that my parents had so we've just been really close we've wherever I go my brother used to have to come with me like bike riding he'd sit on the back so we've always been incredibly close and we continue to be incredibly close and you asked me about the journey of how it's affected our our relationship I'd have to say we've definitely had our moments like I'm not gonna pretend that it hasn't we haven't had some tough conversations but at the end of the day he's always going to be family he's always going to be my little brother and so we can have a massive blowout about something stupid and then I'll go make a cup of tea and I'll of course offer to make him one as well and so I think that's the beauty of running being running a business with a family you'll always be family and we're both incredibly different in terms of personality so that's also been great for running the business because he sees things from a very different position to to I and it just means that you're you know, you're managing risk better, you're looking at design differently, you're looking at like tastes differently and so I think we've worked really well together.

3:12Amardeep Parmar:And what was the trigger for Little Moons as the first idea? So my parents have a Chinese bakery and one of the products that they make is mochi, but with red bean which was the traditional way that the dessert is made. And my brother and I had tried mochi with ice cream in both Japan and America and he really loved the product, He thought, and I loved it too, but we just thought it was the tradition of the dough, which was slightly chewy, but with something quite contemporary with the ice cream. And the brands that we tried in both those continents, we didn't think the ice cream was really up to scratch.

3:45And we thought we could do it better. So when we had the idea to make mochi ice cream a better, more elevated product, that's how we thought we'd start doing it. And that was coupled with both of us worked in the city. We could see Japanese food was definitely on the rise. There was an itsu on every corner. Yosuch was such a cool company. And the offering for dessert wasn't great. And we just thought we could do that. We could step into that void. And that's really how we started. We never thought our business would ever be as big as it is now. But we started with let's supply great Japanese desserts to restaurants.

4:18And if we grow the market enough, maybe we can launch into retail, which was always our plan.

4:24Amardeep Parmar:And the scrappy early days, right? You might be able to then make some of them. but then trying to then okay how do you get like a restaurant to like first try out how did you start to get the first people to like take you on board and start to stock you it was literally just walking into the kitchen and asking to speak to the head chef um because they they don't pick up the phone like how do you phone the head chef from a restaurant you phone up i don't know yo sushi headquarters that's not a chef like yo sushi is different i think somewhere like maybe nobu you'd speak to reception they'd never pass you through to the head chef and so it was just a matter of also not only just going into restaurants like that, but I met a lot of the chefs through trade shows.

5:02So I did the restaurant show in, I think it was Earl's Court back then. And I met a lot of the chefs through that. So I think through doing those trade shows, through just going to Japanese restaurants and speaking to the chef directly, you just slowly build that relationship up. And when we finally got listed at Yo Sushi, they requested that their distributor list us. and then through their distributor, then we were introduced to lots of other chefs.

5:27Amardeep Parmar:And you said about how you and your brother got like very different skill sets and very different ways of thinking. How did that work in the early days? What were you kind of leading on? What was he leading on? So we didn't know this when we first began. It was, we just tried to do everything and obviously things would slip through the cracks and I'd be like, well, I thought you were ordering the milk. No, I thought you were ordering the milk. And so obviously arguments would ensue. And so I think it was probably about, we worked like that for about five years until we brought on a ned a non-executive director and mark our ned said to us i think it would be really good for your working relationship for you to split roles because that way there's accountability there's clear lines of accountability of who was accountable for what and and so we split mark sales and marketing to my brother and i did operations and finance and all that sort of side of things and it was true it meant that there was clear accountability of who had to answer to who type thing.

6:21And that really helped. And he also suggested that we take an insight test, which is that personality test to decide what colour you are. And when the results came back, we were absolute polar opposite. And actually, one of the things that they said was, if you're about to ask Vivian to discuss a big topic, which my brother loves, you have to email her first and say, I would like to speak to you about these following topics. It's please, can you take some time to think about it? And we'll meet in three days' time. And that is exactly how I like to think, because before he'd just be sat across the desk and ask me this big question, big strategic question, and I'm not ready, and I'm probably in the middle of doing something else, and I can't have discussions like that.

7:00So it was incredibly insightful.

7:02Amardeep Parmar:That's really interesting, because I think we and me, my co-founder, right, we have the similar kind of thing of where we just jump around so much, and sometimes, like, I'm trying to focus on one thing, and then we'll talk about something massively different. So when you were in that first five years before you were doing that, how did you function then, before you kind of had the spit rolls? I think we got quite frustrated with each other and I think that's the whole point of learning. I never saw my brother in that role before as a business partner. I always saw him as a little brother so I assume I would just ask him to do something and he would kind of do it.

7:31Or if he didn't do it, I'd be like, annoying brother. But when you're running a business together, it matters that something is done or not done as opposed to just like around the house, like take a glass of the kitchen doesn't do it. So I think it really, it was frustrating for the first couple of years.

7:45Amardeep Parmar:And you said as well, Hapao, like the different stages of the business, there's different things that you enjoyed and different things you didn't enjoy. In those early days, like what do you love the most looking back? And then what maybe was more on the shadow side? I really loved doing everything. I think that's how my brain works. I think most entrepreneurs are very good at lots of different things. And I think specialising in a specific area is more challenging, I think. But so I really liked my days were so varied. Like one day I'd be helping to pack boxes. Another day I'd be recipe testing.

8:16Another day I'd be going out to the shops to meet, you know, clients or see what else is going on in the market or meeting chefs. And I love the variety of my day. But as your business grows, I think your role changes a lot. And you have to be a lot more specific and deep dive on a lot more topics. And sometimes that's

8:33Amardeep Parmar:less fun and you said as well how it looked to me was like now when you talk to people most people recognize they're like oh wow you do that yeah but obviously it's a period before that where people didn't know what it was and you had to explain it was there like a tipping point or like was it just a slow thing that over time it changed it was definitely slowly but i would say anecdotally speaking when we opened a pop-up in bond street station that is when i started meeting new people they'd say were you at bond street i saw something like that and i'm like yes that's exactly us because I don't even know the numbers but the number of people that come through Bond Street Station you couldn't miss us we're right by the exit every day for about three months that's when people started thinking oh I think I know what brand you're talking about and prior to that I was just explaining what mochi was soft sweet dough what are we you know all of this so that was the tipping point when was that I feel like that was about um I want to say about 2015 2016 16, around then I think people started recognising the brand.

9:34Amardeep Parmar:And we're in that phase as well where you're working hard, we need to explain what the brand is, explain what the product is. How did you keep yourself going? Where was that resilience coming from? What was pushing you forwards? I think we were making money selling to restaurants, so that was what was driving us. Even though our brand wasn't growing, our sales were growing and that kept us motivated. And we sold internationally quite early on, so we replicated the model that we had in the UK selling to sushi restaurants. across Germany, France, across the whole of Europe and the Middle East back then.

10:04And then when we decided to launch into grocery, we launched into Whole Foods first. And then there was a new set of motivations because suddenly your branding looked great and how could you tweak it? So there was always something new to go after.

10:16Amardeep Parmar:And you said you're going internationally early as well. What was the thinking behind that? Like what was your strategy? Just because the market wasn't large enough to support us in the UK. So we just thought this trend of Japanese food is growing in all the other European countries and the Middle East, why wouldn't we go for that as well? And you said you ran the operations side. I'm guessing operationally going to other countries is probably quite difficult. Yeah, there was a lot of like export rules you need to look up, lots of paperwork to fill in. That, you know, I think a lot of things that people don't talk about with running your own business is the minutiae and the amount of boring work that you need to do.

10:51And so filling out those export forms, not fun at all. When things get rejected at the border, not fun. But that, you know, all those tiny little steps that we take just meant that we learned for next time how to do it better. And I think growing a business is just times a thousand, you know, little things times a thousand every day.

11:08Amardeep Parmar:And like, so going to restaurants is one thing. And once you started to go into grocery, what made you do that? Was it just something you're always trying to do in the background and then something clicked or? I don't know I feel I feel like there was a sort of like a swell of um popularity of mochi and so for example I always tell this story but we got an email from a chap who had been eating at Yosushi and you could see them taking out the chocolate mochis out of packaging so he twigged they weren't making that on site so he climbed through their bins to look for the packaging and that's how he got our email because we have a label on there saying you know chocolate mochi made by little Moons.

11:46And then we started getting bloggers because the bloggers started becoming like food bloggers started becoming big and they would be reviewing, I don't know, ramen bars. And they'll say this ramen bar buys Little Moons the same as this other mochi bar. And we were like, how, how do you know our brand? How do you know that it's one company making all of this? And so we started realizing that consumers started recognizing our business. So that's when we decided to launch into Whole Foods and we sort of designed our packaging and launched it. And And I think that's where we started to get greater brand recognition.

12:19Amardeep Parmar:And also say like the B2B side versus the B2C side has been like super different in terms of getting things out there. So obviously if you're organically getting food bloggers to talk about, yeah, it's great. But was there, I guess, a new challenge? You had to try and get stocked is one thing, but then making sure that the sales going through there too. And was there any changes you had to make or things that were new challenges? Totally. So marketing was quite new to us. When you're in a restaurant, there's only a limited amount of dessert, like four desserts you can pick. So we had like one in four chance of being chosen.

12:47But when you go into a Whole Foods or a grocery store, there is so, so much choice. How, you know, like you said, getting onto shelf is one problem. Getting off the shelf is another. So we're quite new to Instagram. I don't think Instagram was that developed back then. So having to build an Instagram page, having to learn about advertising and all the different areas of advertising. We did a lot of sampling. So we did a lot of events. and so looking at different events we could sample that because we thought if someone tried Little Moons they would love it but prior to that they wouldn't necessarily know what the product was so we sampled everywhere and widely.

13:21Amardeep Parmar:Because yeah like you said the challenge is one thing is like if it's like a product people know what it is already then you just need to be the best of that kind of product. But you also need people to want to try the product too and you're kind of like both evangelizing not just your own brand also the mochi in general so that people want to try it right yeah and it almost you were kind of the leaders of that that kind of charge too and like educating people about that so you said about the pop-ups yeah was anything where on that journey where you had to deal with some of the struggles where people weren't understanding or not getting it and like how did you deal with that i've had people spit out mochi in my hand and i've apologized to them for not liking the texture like you know really early doors when you're sampling it but that so we we did have to educate the whole market we built a whole category ourselves So we sampled a lot of mochis.

14:07And so I was recently on a panel on Whole Foods with a lady that's starting a paneer brand, which is super popular. All the aunties? Yes, exactly. And I can see her struggle there because paneer, I know it, I love it. But trying to get new audiences to it, how do you cook it, how do you eat it? It's the same struggle. But it's just it's such a delicious product. You just need more people to discover it. And I think it's all about discovery.

14:31Amardeep Parmar:And obviously you said about the PE deal a few years ago, right? how did that come about and like what was that why was that the next stage of your journey our business had gone viral on tiktok and our revenue had just i don't know tripled in size overnight and our growth continued with that trajectory so our ned mark said to us guys i know you've never ever built this business to sell or to get investment like you we just wanted to run it as a family business but if you ever did want to take some money off the table now is the time to do it. And so we had a big discussion and we considered it.

15:04And we decided, yes, we're going to get some outside investment and de-risk from just, you know, everything, putting all of our money reinvesting back into little moons. We had nothing to show for it. And so that's why my brother and I agreed. And that's why we decided to go for investment from Elcat. And with them, we thought we could build a bigger factory and bring on expertise to continue the growth of the business.

15:27Amardeep Parmar:Hello, hello. I hope you've enjoyed the show so far. I'm Amiri Parma, co-founder of BayHQ and the host of this show. For those of you who don't know, BayHQ is the community for high growth Asian heritage founders and investors in the UK. Over 7 ,500 people have attended our events, 200 people have been for our impact programs, and obviously there's been over 250 episodes of this podcast. If you want to join us and take part in the program and come to the events, go to www.bahiehq.com forward slash join. We also just released our first ever book called Startups for Outsiders, which you can get on Amazon now and the link is in the bio.

16:08Amardeep Parmar:Hope to see you soon at our event. Hope you enjoy the rest of the episode. And I know you always like release new products and you've got different product ranges too. How do you go about thinking about which product ranges to go for and like which ones make the most sense it's interesting to begin with we thought we were going to launch our chilled mochi first that was going to be our hero product um and so we because we were selling that to sushi like yo sushi our best-selling product was our cheesecakes which are the chilled products so our chocolate ganache and the cheesecakes and we thought we'd launch with that but then for some reason through sampling we found out that ice cream mochi was the one that captured people like the most viscerally they would eat and be like oh my god it's ice cream, it brings so much joy and their face is just lit up.

16:51So that's why we then focused on mochi ice cream. However, we do still do our chilled mochi as a different line. And then I think it's just consumer need, like what's the next thing that people seem to be looking for, which is why we launched Mini Moons, which are bite-sized mini mochis, because the market has also changed. Everyone's a lot more snacky now. They want to eat smaller bites. And so that's where we're just trying to serve our consumer need. And that I think you've always got to look through the lens of your consumer when you're thinking about new products.

17:20Amardeep Parmar:Where else have you seen consumers change in your market as well over the last decade? I think the way that people eat has changed so much that everyone is so much more open-minded for food. I think Indian food has always been really popular, but now there's like subsets of Indian food. It's not just curries like we're doing with paneers and chai tea is doing really well. And there's different types of Japanese food. So before it was just sushi and everyone thought raw fish was odd. Now everyone loves sushi, but then there's ramen coming up and there's teppanyaki and all the different sort of parts of Japanese food.

17:49So I think that's where the consumers are now really well-traveled. You see it all on Instagram as well. So you can see what people are eating in India and Japan and America. So trends spread so much more quickly on social and that needs to be reflected in the market where you live. So I think everything's moving a lot quicker. And then obviously, like GLP One's is having a massive impact on how people are eating. I think you've just got to be mindful of the impact of all of this when you're thinking about your product range.

18:16Amardeep Parmar:You said how you wanted to run as a family business originally. Was that just like, was it you wanted to avoid investment at the beginning or is it more just like that's just what you knew? You didn't really know about the options, about other financial options available? Truthfully, I didn't. I think my brother was sort of more financially savvy and his group of friends were very into banking and M &A and so I think they understood how that worked. But for me, less so. But also, my parents built their business without borrowing money. Like, as Asians, we don't like to borrow money. Like you live within your means, you grow the business as quickly as you can grow it, but without borrowing money.

18:49And I think it was hard for my parents to have borrowed money, even if they wanted to. And so I guess I had that mentality a little bit, which is why it was so unusual for a brand to be self-funded for the first 12 years. But that's what we did, because I did try to borrow some money from the bank, but they wouldn't lend it to me. And so ultimately, that's what's happened.

19:07Amardeep Parmar:Yeah, because it's interesting that we see a lot of Asian founders where at the beginning, They don't really, either they think the option's not right for them, or like you said, it's where the kind of family dynamic of, well, my parents built a business without borrowing from banks, so then why would I do that? But in some terms, like you said, when you have now got the investment in, that obviously has helped you grow a lot quicker because of that, right? And how has that PE money helped at Los Mines? I think with Elcaterton, we chose them because they are brand specialists and they really understand brands.

19:38and from doing some wider reading I've heard that private equity like to cut quality to improve the margins and all of that but LCAP were never going to do that and so that's why we chose them as a partner but also we work really well with their operating partner Jeremy Saunders so he he's an entrepreneur himself he started businesses himself he understands factories he knows all about that building side of things as opposed to just working with a financial partner because I think there's a lot about business that you can't see from just a spreadsheet you need to have experienced it And so we had that with Jeremy.

20:09We have that with Jeremy. And so I think it's been helpful when he's helped us recruit talent, for example. He's got experience of lots of other businesses that are growing from 50 to 100 million turnover. So it was good to bring that expertise on board.