Understand The Business of Food Rests On "Practical Passion"
In the past, it was possible to have just an amazing product, word of mouth was enough. But now the changing market and economy means a food entrepreneur needs more than great tasting products. There are so many tools today to get the word out that are free and of course they take time to implement. Social media and social word of mouth is a must when starting a food business and launching new product. Maria Baugh, co founder of Butter Lane Cupcakes in New York knows this and grows her business with the Zero Moment of Truth.
Practical Passion - Success is More Than Great Tasting Food
My point is interesting here. Her practicality stems from 2 other partners, one runs day to day biz and the other is the real food person. Linda's palate drives the icing flavors and Pam has the MBA and keeps things on track from a business perspective. I think they are like a 3 legged stool… a really solid team. Who is the gatekeeper on "practical pricing"? It is really a group decision.
When they first opened on Nov 2008, they were priced too low. "We use real vanilla beans for example. You want to price your product so it is not so much cheaper yet keep it affordable. Commodity prices vary so they are very disciplined about continuously monitoring their costs and prices. Balancing their costs allows them to stay competitive and keep products in the all important $3 or so range.
Here is an example of Practical Passion. They started out using an organic dairy… Organic Valley was their supplier. Six months in, they took a long hard look at the books. Continuing this way was going to do us in, an example is $5 for butter vs. less than $2 for conventional butter. They tested the market with 2 options, Organic cupcakes at a higher price vs. Natural at for less. Consumers voted heavily for Natural. To stay in business this was a critical decision.
Maria says, "You have to be practical OR you won't have the luxury of having a business to be passionate about! It involves compromise."
3 Legged Stool Successes
Maria has a journalism background worked with magazines for many years. "Having worked at different magazines over the years I've made a lot of contacts, which has helped us get coverage in The New York Times, Glamour, In Style, etc. Former colleagues and friends have been so supportive and great about Butter Lane." The 3 partners in her business have complementary strengths. Maria has contacts in PR, Pam Nelson runs the day to day operations and Linda Lea, the executive producer of Chopped and Sweet Genius on the Food Network, is the food expert.
Always Searching for New Marketing Strategies
Maria is always finding free ways to get the word out. "Sometimes I just Google "what's new in social media or social marketing", etc. When I first was introduced to ZMOT it completely resonated with me immediately. This goes back to my own shopping and research. Maria is just like a normal consumer. She does much research on items she buys and does it via internet so why would her customers be any different.
"I see it every day on Four Square, Yelp, Twitter, Facebook… we try to have a voice in the conversation on cupcakes. We want to be in the conversation for the consumers for their first impression of us and we recognize that the customer may not come in until much later. In other words, they may have read a lot about us and done a lot of research about us long before they walk through the door. It's in our best interest to be engaged with them while they're doing the preliminary research. Or at least make it apparent that we're involved in the conversation and care about our online reputation. I want to instill a sense of community around our brands and to do that you need to be in that conversation and express your level of interest in the consumer and tell your story with accuracy and your values as a brand."
Plans for Expansion
Maria said "We are now in Park Slope, Brooklyn and I'm sure we will expand again. Going from one to two has been an experience. You more than double the challenges and problems with 2 vs. 1. We're the same group now running and managing the same complexity of two locations with more staff, different neighborhood, different customers etc. Each of these on their own would be one thing-both of them combined is harder than it looks".