Of all the businesses that had to drastically pivot during the pandemic, restaurants made the most changes to their core business operations from setting up takeout ordering systems, making space for outdoor dining and instituting new levels of food and personal safety. Not to mention taking care of their own employees.
But a few restaurants went the extra step—by making their popular menu items available as a CPG product. One such restaurant, was Xiao Chi Jie in Seattle who began selling their xiao long bao soup dumping as a frozen D2C product, along with accompanying steamers and sauces.
Xiao Chi Jie co-founder, Caleb Wang, spoke to Foodboro about what inspired them to start selling, and shipping, their delicious dumplings nationwide.
What prompted you to start selling your dumplings direct-to-consumer? Obviously, the pandemic forced this pivot — but it’s also a huge undertaking. What made you decide to go for it?
At the beginning of the pandemic, we started doing it locally, and it was really well-received. We found it filled a need for folks, and it also filled a need for us as a business to keep our staff employed. Then, people actually started reaching out to us from across the country asking if we shipped; that was the first lightbulb moment when we thought this could translate into a nationwide business.
Especially because we couldn’t find any xiao long bao (the type of Chinese soup dumpling we specialize in) that was either high-quality or at a reasonable price point available in grocery stores or direct-to-consumer… and we thought that should exist. That’s when we decided to dive in and go for it.
Can you tell us a bit more about the dumplings and what makes them different from others out there?
When people in the U.S. think about Chinese food, it often tends to be Americanized dishes created to fit the Western palate. This is particularly true for anything aimed towards the at-home market that we see lining the frozen food aisles of grocery stores, like dumplings. Those versions are pre-cooked (which really impacts dough integrity and the overall flavor profile) and instant-microwaveable (because steaming was often seen as “too foreign” or too hard a step for the average customer).
Conversely, our xiao long bao are frozen from fresh and specifically designed for a home experience, with the maximum integrity of both the dough and flavor profile preserved. It’s been a long and meticulous process, but we’ve tested every element of our recipe and frozen logistics process (the best dough to filling ratio, soup content, type of ground meat, freezing technique, etc.) to create a version that’s actually meant to be frozen and steamed at home, and result in something as good or better than most dim sum restaurants.
And it’s not just about the product: the end-to-end experience — from the price (which we wanted to keep accessible), packaging, unboxing, guidance on how to steam, and customer service — also differentiates us from anything else out there.
How do the dumplings bring that “restaurant experience” into the customer’s home?
It definitely helps that we’re a restaurant — and have experience serving customers in a restaurant! But what we’ve done beyond using that perspective is to look critically at the details of what changes between getting served soup dumplings at a restaurant vs. having them at home, and what’s missing from the existing takeout and grocery store options.
For example: if you order soup dumplings for takeout, what’s that experience like? (Answer: they arrive to you an hour or so later from when they are steamed, so they’re usually cold and the soup inside has congealed. Not a great experience.) Or, if you go shopping in the freezer aisle, what’s that like? Well, you can’t find them in most grocery stores, and if you do, they’re pre-cooked, mass-produced, and often end up soggy (and nothing like what you’d have at a restaurant).
We used all those insights to inform our R&D, product design, and ultimately, the end-to-end customer experience, which includes the option to buy a bamboo steamer, instructions for steaming at home, and sauces.
What were the early days of business like?
Tons of learning about how to build new business from scratch, and so much that we’d never known before in running the restaurant. (For example: how to use routing software, how to set-up an online site to capture payments… things like that.)
Every week we were growing, modifying, setting up processes, ditching those processes for something we found worked better. (It’s been a long road since March of 2020 when our chef Brian Yong made 20 bags a day himself versus our current staff of 15 making hundreds of bags each morning) There was a lot of rapid movement and change as our demand grew, and the entire team had to be ready for that.
What has been the hardest part of launching a product so far?
Perfecting the customer’s end-to-end experience on a nationwide scale. At a restaurant, you can very tightly control that experience; the cycle to understand if and why a customer isn’t happy is very self-contained, and you can make changes quickly. But as you scale into a nationwide business, you might not hear about something that went wrong until a month later, and all of a sudden you’re thinking through everything you did over the past month that you should be fixing. In response, we’ve built in a lot of processes to understand the customer experience in a much shorter timeframe.
Also, as you scale from making, let’s say, 100 dumplings to 10,000, a 1% error used to impact one person; now it impacts 100-200 people. So you have to be much better in terms of quality assurance and control, and building in that process to your operation.
How has the shipping process/logistics been going so far? Frozen is notoriously difficult to ship; are any tips or insights you’d like to share on this?
I don’t think the frozen logistics network really exists to be able to do what we want to do on the scale and price point that we want to do it at, which is why it’s been so hard. So in addition to scaling a best-in-class soup dumpling, we’re also actually building our own frozen logistics network and process to be able to deliver to customer’s homes.
The strategy for frozen shipping has been to have warehouses across the country which allow you to hit the entire nation through ground shipping versus air. This allows you to cut a huge chunk of the cost on each shipment and keep prices low. Pre-COVID, you could have two warehouses across the U.S. accomplish this. With COVID and the explosion of e-commerce sales, all carriers have gotten so unreliable and shrunk their maps, so now that you really need at least 5 warehouses to be able to do this reliability.
No company has built that kind of network yet, and so we have had to do a lot of gymnastics in our process to compensate for that and try to build in as much margin of safety for our customers as possible. Specific things we have done include doubling the amount of dry ice that is recommended, only targeting specific states in our marketing efforts, instituting a “melt-free guarantee” policy even when the carriers are not honoring claims, and communicating a ton with our customers.
Overall, when you’re dealing with frozen shipping, you have to be super data-driven, so you know really quickly when something’s going wrong and can react to it. We are super proud that we got our reliability up to 98%+ this past week, our highest ever, and especially in the middle of summertime.
What can we expect next?
We want to be the go-to brand for authentic Chinese street food.Broadly speaking, if you look back a couple of years, there was no best-in-class Asian food for this particular niche (or any other niche) in the CPG world. And now you’re really seeing that expand; for Asian coffee, sauces, and so forth. We want to be that for Chinese street food.
We want to bring you exciting flavors for some foods that you may have heard of (like soup dumplings) but also dishes that you’ve never heard of (like lesser-known kinds of noodles or Chinese BBQ). We have a lot of new products in the works, so stay tuned!