Blazing My Own Path

A Passionate Businesswoman, Having a Blast and Enjoying (Almost) Every Minute

An interview with Shelly Goldenberg

www.cheliquechocolate.com

www.Shellyscakestudio.com

Interview by Jeff Yoskowitz and Kathryn Gordon at Hesperides Incubator Kitchen, Hawthorne NJ

Kathryn:  So Shelly, I know from being your Mod 4 instructor at The Institute for Culinary Education (ICE) for chocolate and decorated cakes that you make absolutely stunning cakes, but now you have added chocolate to your repertoire.  Can you explain that transition and your vision for your business? 

(A note from Kathryn…  When Shelly told me “she made cakes,” I postponed looking at her website, because I didn’t know the quality of her cakes. Shelly’s were actually so beautiful, that as soon as her externship chef, Francois Payard, took a look at her portfolio she was asked to create the cake for the opening of his store at The Plaza Hotel). 

  

Shelly:  I love learning.  I love learning new techniques, challenging myself artistically, and setting challenges for myself.   I had a successful cake business before I ever started at ICE, but I was highly motivated to learn more about chocolate during my externship and post-externship training. 

Jeff:  Okay, so let’s start with talking about your cake business. How did you get started?

Shelly:  I used to be a lawyer, and for 10 years I had a high profile, nice job in Israel.  Then 6 years ago, we moved to NYC “temporarily” for my husband’s business, which gave me an opening to drop my old job and to start doing the more creative things that I was interested in doing but was too scared to do in Israel because it would have meant leaving the security of my lawyer’s salary.

When we moved here, as a mother, I wanted the best cakes for my 3 kids, so I took some classes with Toba Garrett and Betty Van Nostrand. I volunteered to make cakes for friends, then I sold my first one for $40 and my business began.

Kathryn:  Why did you begin the pastry & baking program at ICE?

Shelly:  From the beginning, my cakes were gorgeous but I got feedback that they should be moister.  My baking initially kind of sucked!  Clients weren’t getting the same enjoyment eating the cakes as they were looking at them.

So, instead of creating the whole cake from scratch myself, I hired a professional baker to make my cakes, which I then decorated.  It was cheaper for me to do just the fondant work. That didn’t work out though. 

Jeff:  That sounds like a pretty reasonable set up.  How come it didn’t work out?

Shelly:  I realized that the baker wasn’t quite following my buttercream recipe.   My pistachio buttercream recipe, for example, is delicious.  I really worked hard on it and I felt the tastings I did for the clients myself didn’t match the final product.

I wanted complete control of the process and the technical knowledge to get there, so I went to ICE.  At the time, I also wanted to learn how to do chocolate, and I thought I would eventually start selling chocolate to my cake customers as party favors.

 I wanted people to eat my product and react with “Wow -- that’s what it’s supposed to taste like”!

Jeff:  You’re still doing cakes, although now you’re focusing on chocolate?

Shelly:  Actually, I believe I can do both.  They are both seasonal businesses.  I find the highest demand for chocolate in the winter, and now that it’s summer, the wedding season cake orders naturally pick up.

Right now I have two websites, although I am thinking of merging them into one and presenting a cohesive artistic vision for my business. At the moment, I work alone until we’re in the high demand for each season, and then I take on interns and seasonal employees.  (I use the free ICE career placement services when I need people).

Jeff:  So what’s the vision for your business, since demand is growing in both segments?

Shelly:  I am at the point where I can see my success, and what I need to do now is sit down and make some plans.  The chocolate and cake businesses do run a bit differently from each other.  To continue to do both, I need a business map to visualize for myself what kind of experience I want to give to my clients.  I need to be the one to innovate, to bring out a new collection each season (like in the fashion industry).  But I think I’m “done” being the only one in the kitchen.  To be successful, I need to spend more time marketing. Other people under my supervision can execute my formulas especially in the cake baking, and production line for the chocolates. I will always retain final creative control over the cake decorating, though.

Kathryn:  You have pretty chocolates and you’ve modified your packaging for the various chocolate holiday seasons.  Did you design it all yourself?

Shelly:  Yes and obtaining packaging in runs of less than 5,000 is never easy.  But in the end, I found a great small company who will do a small quantity of custom print boxes.  

Kathryn: In starting your business, did you take advice from anyone?

Shelly:  I actually did everything myself!  I did my own market comparison of competitors of artisan chocolates and then priced out my chocolates by lowering my prices by 10% compared to my competitors. I built my own websites and I took my own photos.  I drew my own logo of a cocoa bean and gave it to a graphic designer to digitize it.  I designed my own packaging to be eye-catching.  In short, I took no advice from anyone. 

Jeff:  How did that work out?

Shelly:  I’ll tell you honestly, I started my chocolate business as a way to thoroughly learn the way to produce chocolate, school myself in new techniques, and see if I was able to build a high production line of something I never did before, but always wanted to learn.  I started in September, 2011 with no specific plan beyond having as many people as possible love my chocolate! Luckily, because people do like my chocolate, it has grown into a small profitable business. 

Now I have some challenges, and an urgent need for a more structured business plan.  I sent out my own online newsletters through Constant Contact.  Through that, I was able to sell $10K in chocolates in the first 3 months and was able to buy a tempering machine with the profits.   I also sell directly at gift fairs, and find that a very good way to move my product so I will continue to do that through the fall. 

I was introduced to a broker, who got me into 6-7 retail stores in NYC like Garden of Eden and West Side Market.  That gave me volume, but I had to sell at half price for wholesale versus what I can make with direct sales via the internet, or in gift fairs.

Kathryn:  Right now you’re producing in an incubator kitchen. Is that working out for you, and how did you get there?

Shelly:  When I went looking for a space to produce the chocolates, I started in a “warm kitchen” in the back of a cookware store.  It was tiny, but only $20 an hour and the very nice owners didn’t charge me for using the space past 5 pm!  I got myself a real bargain, but it was hard to work there for any production efficiency.  I Googled incubator kitchens online and found this space. 

The best part about this contract is I can rent a small amount of permanent space with no ovens nearby, and rent additional cold storage space for chocolates and/or production space for my cake orders as required.  It’s very flexible and cost-effective.

Kathryn:  Given the type of production spaces you need, do you think it makes sense to focus on only one of your businesses?

Shelly:  I find the high end, custom cake business to be easy for me to manage.  You have ample notice for a project, and there’s nothing to stock.  Since I’m pretty much the only one working on the cake, I’m under tons of pressure just before the project, but there is no overhead except for rental of the kitchen when needed.  For artisan chocolate, it’s more complicated. I need stock, have to care about shelf life, need to have more marketing and sales follow-up, and there are more people involved.

Jeff:  A very experienced business person once told me you can’t truly run a business successfully if you have to manage every single detail and aspect of it yourself.

Shelly:  I am seeking a partner who will help me with the business part of the business. I have lots of ideas and I know that I can sell the product because people love it, but I need someone to help with the financing and marketing, because I am not good at it.   

Jeff:  Do you have time for your family?

Shelly:   You know, I wrote up a plan of how much time I wanted to spend a day with my kids, my husband, the gym, my businesses etc.  It added up to more hours than are in a day so that didn’t work and I threw the paper out!

Recently, I started working with a branding company that gave me a long list of questions to focus on things that are very relevant, and will help me structure my plan to grow my profits and balance my life commitments. 

Jeff:  OK Shelly, thank you very much for your time today.  And thanks for the chocolates!  How about we plan on talking to you in a few months, when you’ve finished your branding survey analysis. We’d love it if you can share it with us.

Shelly:  Yes, that would be great!

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Bringing a Packaged Product to Market

Meet the Entrepreneur
An in depth interview (with future follow up) to explore the lessons learned by others like you in the baking business

Interview with Jenny McCoy and Diana Lovett by Jeff Yoskowitz and Kathryn Gordon

Name of business: Cisse

www.experiencecisse.com

This is the initial interview in a series with the partners of Cisse, a partnership to bring “guilt free” free trade cocoa products to the consumer

Jeff:  First of all, what is everyone’s involvement?  Are you partners in Cisse? 

Jenny:  Diana and I are co-founders of Cisse and will be managing the day-to-day operations.

Diana:  I am the fundraising, financing and business operations side of the business for long-term-growth planning, and meeting supply chain logistics.  For example, all the cocoa is ethically sourced, and I will manage those relationships because I have worked in developing countries, non-profit enterprises and socially responsible businesses before. 

Jenny:  My background is baking and pastry.  I went to culinary school after high school and worked in restaurants for over 10 years.  Last summer, I met Diana and we decided to work together on the brand development for Cisse. 

Diana:  Jenny is responsible for product development, and will do any required business writing given her interest and background in writing cookbooks.  Jenny will represent the brand from the food side and be the name and face of the brand. For this to be a successful partnership, we refined our roles right from the beginning and established a business partnership through legal papers (regarding vesting, likenesses, profit sharing, etc.).  After this formal structure, our roles fall into natural patterns given our particular backgrounds and passions. 

Jeff:  Did you use attorneys?

Diana:  In the beginning we used a friend-of-a-friend as a third party for negotiating the general terms, and then turned the specifics over to an attorney. 

Jeff:  Are you self-financing?

Jenny:  Diana has provided the seed capital and we are now evaluating financing options, raising additional capital. 

Jeff:  Was there a particular defining moment for deciding to go into business for yourself?

Diana:  You can purchase product at a fair price in communities to help support community development and I felt that the price premium for doing it ethically and through fair trade practices was do-able.  This business became viable when I met Jenny. 

Jenny:   A few years before meeting Diana, I was thinking about the bigger picture and what would challenge me beyond restaurant work. I wanted to transfer my work as a pastry chef into other projects.   An editor at Epicurious introduced us and our initial conversation led to a request to be involved more as a partner than a consultant.   It helped me that I was talking to my very business savvy, conservative father and he said:  “If this is something you want to do, this sounds like a cool opportunity.” That did it for me, and I took the leap and said okay to Diana.

Jeff:  So you have a partnership, and everyone knows their roles. What happened next?

Diana:  The phasing of the sales channel dictates every other aspect of how we structure the business.  Our focus is on long term growth and ultimate profitability.  We felt the grocery sales channel was the best fit, since it has a national presence.  That initial decision focused our energy. We knew that Whole Foods was the biggest player and they were the company we needed to approach.
 

Jenny:  We set up a deadline to race towards – the Whole Foods “Round 9” category review deadline (which includes items such as cocoa mixes and baking mixes).   We started to work on product development, which meant me getting into a kitchen while we were simultaneously working with a graphic designer and doing market analysis.  We wanted something that would be accessible and generate repeat sales, nothing too crazy like lavender brownie mixes (which might only appeal to a group of pastry chefs!). 

Diana:  Jenny’s teaching background and cookbook writing project helped a lot with being able to focus on consumer needs.  Given our business model, the core ingredient had to be ethically sourced, so we went to the Dominican Republic to meet with the farmers. 

Kathryn:  How did you decide who to work with on this project?

Diana: At first it was cold calling for brokers, suppliers, graphic designers, co-packers, etc. We started with a list of questions and put the answers in a spreadsheet, to make an analysis and an apples-to-apples comparison possible.   Otherwise we’d still be floating in a sea-of-data! 

Jenny:  We found some good fits through people who were also starting off and were very enthusiastic about working with us, like our graphic designer.  

Diana:  The costs for the initial development of our website, logo and packaging ranged from $2,500 to $140,000.  It was definitely interesting to see that price range! 

Jeff:  So designing packaging is always interesting -- tell me about it.

Jenny:  It’s amazing, learning that a small box of cocoa mix, or a baking mix, has to have so much stuff on it!  It was overwhelming.  Bar codes, our story, what shade of blue? There was the hurdle of getting through the actual design and then finding printers to generate a small run for samples.  30 pieces per SKU is very expensive!  We had to call and convince people we were legit and going to grow as a company to get it done without a run of 15,000. 

Diana:  The consumer design interface took so much time – we didn’t know what would be required.  Each step is so interrelated.  Jenny had to finalize the recipes before the nutritional panel could be generated, for example.  It takes a lot of manpower to get all those deliverables in.

Kathryn:   What’s the timing of when you approached Whole Foods to market?

Jenny:  We had some counsel from an insider’s perspective in the form of a meeting with the Whole Foods Round 9 product manager about a month before submitting the product.  They originally asked if we could be up on the shelves in 1-2 months, but it will about 5-6 months when we think we’ll be ready (aiming for this September).

  

Jeff: Can you tell us a bit about the product development?

Jenny:  I learnt that my 100% is too much -- that the product I initially designed was “too rich” or “too fancy” for what the ultimate product is going to be on the shelf. My 100% would have cost too much to produce for a variety of reasons.  Maybe my original method to make that brownie was too involved for basic steps in consumer baking.  Maybe I would have preferred a richer chocolate percentage, but it wouldn’t appeal to a wide range of people.  I had to adjust my recipe approach from a 3-star restaurant experience, to make a product I still feel good about, and see how people react to the products that can be made from these mixes.

Kathryn:  Did you put together any formal tasting panels or focus groups for the product development phase? 

Jenny:  It was mostly informal through families and friends.  One interesting experiment was when I baked all available brownie mixes and all available cocoa mixes and had everyone react to it versus mine. That feedback was instrumental in reformulating my recipes.

Jeff:  If you were able to achieve the quality you’re looking for, how about the price point?

Diana:  Well, that’s a production volume question.  To get gourmet ingredients with a socially responsible angle to them is the overall challenge – but luckily we’re now within their range for the price point. 

Editors:  We’ll track the progress of Cisse putting their products on the shelves of Whole Foods and report back to you!

Short bios on Jenny and Diana:

Diana Lovett, Co-Founder: While completing a Fullbright program and a year of volunteer work at an orphanage in South Africa, Diana became committed to a lifelong pursuit in creating social justice. Her experiences at such an early age inspired her to pursue a B.A. in African Studies at Yale, followed by an M.A. in Internal Development Studies from the University of Cambridge.

Her many experiences include being a legislative analyst for Governor Bill Richardson and being Director of Regional and International Campaigns for singer Alicia Key’s charitable outlet “Keep A Child Alive.”

As culmination of all her experiences, Diana co-founded Cisse, a small business that combines her dedication to social responsibility by aiding small growers of cocoa to ear living wages, and her love of chocolate.

Jenny McCoy, Co-Founder: Jenny held positions in a variety of Chicago’s top restaurants including Charlie Trotter’s, Blackbird, Gordon and Bittersweet Bakery.

After traveling to various countries to broaden her culinary vocabulary, Jenny completed a B.A. in Food Writing at DePaul University. She returned to the pastry kitchen where she would run three restaurant pastry departments for Emeril Lagasse.

Jenny has also worked in New York City as the opening pastry chef at Marc Forgione; for A Voce, where she oversaw pastry operations for both their Madison Square and Columbus Circle locations; and at celebrity Tom Colicchio’s flagship restaurant, Craft, where she helped earn its second three-star review from the New York Times.

Finally, Jenny won the 2011 Rising Star Pastry Chef Award; is the spokesperson for the Almond Board of California; and is working on her forthcoming dessert cookbook, to be published by Rizzoli in 2013.

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