Under The Hood: Michelle & Andrea from Pizza Cupcake
Welcome Michelle and Andrea: What’s the growth been like on Pizza Cupcake since Day 1?
The Pizza Cupcake started out as the go-to dish we made for birthday and housewarming parties for friends and family. In November 2018, we wanted to prove out the concept and started selling at NYC’s most prestigious food market on the weekends. This exposure led to our next big break when we were noticed by the executive chef at Citi Field, the home of the NY Mets and that’s when we realized there was an opportunity for Food Service distribution. We felt like we were thriving!
Everything stopped due to the unexpected events of March 2020. With normal operations disrupted, we had to pivot our business model to DTC selling our frozen pizza cupcakes online. By December 2020, we launched our fulfillment centers and began production with our co-manufacturing partner. In February 2021, we aired on Shark Tank, which was the catalyst that caused our e-commerce sales to skyrocket with 90% of our revenue from D2C sales. By 2022, we saw a 1,000% increase in retail growth, transforming our retail presence from a few hundred stores to 1,900 stores, with Walmart as our largest customer.
And for this year (2023), we're looking to continue to grow retail expansion with a revenue split of 65% retail and the rest eCommerce & Food Service.
Wow. How did your ambitions change as you went from being at a Food Hall to being in Walmart across the country in just 2 years?
I’ve always wanted The Pizza Cupcake to become a household brand that people know and love. That's always been my vision and my dream. Andrea, however, is always looking at the immediate steps with a conservative approach. I think it’s this balance between us that has helped successfully drive the business forward.
How do you expand to hundreds of stores in retail?
The key to our expansion has been our customers. A valuable piece of advice we received early on distinguished between two ways to get into retail: You can either push your product into retail or you can pull it. Pushing refers to paying for slotting (product placement or shelf space), which can be expensive. On the other hand, pulling is driven by customer demand—when your customers ask retailers to carry your product.
Let’s chat about eCommerce: How do you leverage your DTC presence?
We effectively leverage our DTC presence in several ways. Our appearance on Shark Tank continues to generate substantial website traffic. Customers typically use our "store locator" on our website and search their zip code to find nearby stores carrying The Pizza Cupcake.
This activity creates a "heatmap" of U.S. demand for our product, which we then use to show retailers the potential customer base they can tap into if they stock our product.
Our website is an excellent tool to uncover new audiences, especially with brand collaborations. For example, in 2022 we collaborated with Chrissy Teigen, releasing an exclusive flavor online. This exclusive D2C initiative helped us acquire new customers nationwide. An example of another successful collaboration has been with Tovala, the Smart Oven. Even though this partnership isn't purely D2C, it does drive significant purchases, demonstrating that eCommerce partnerships can work effectively for us.
Selling frozen foods online is so expensive: How do you make it work?
Our strategy for making online sales of frozen foods viable revolves around offering larger pack sizes on our website. Customers have the opportunity to sample our products in retail stores, and if they enjoy it, they can purchase our 24-pack or 36-pack on our website. This not only benefits us but also offers convenience and cost savings for the customers, making it a win-win situation.
What’s also helped us is finding a great 3PL partner that can ship goods using their carrier account. We're able to take advantage of volume discount pricing, further optimizing our costs.
Who is that if you’re happy to disclose?
Dot Foods and Burris Logistics.
Let's talk about the tech stack. What are some of the tools powering your business?
Klaviyo for email marketing
Hotjar for heat mapping
Business Central for operations and ERP
Zoho Desk for customer service
Airtable for all databases for SQL queries
In short, Shopify Plus is for very successful Shopify businesses. Shopify Plus can handle over 10,000 transactions per minute, can operate with unlimited staff accounts and includes personalised, dedicated help and support which makes it the perfect platform for a large business.
What do you value most in Shopify Plus?
The lower processing fees and the access to flows for tagging orders.
CPG is a hard game: What's made you guys succeed?
The key to our success primarily lies in our prudent cash management and strategic expansion.
While it's tempting to seize every opportunity, we've had to be selective, turning down several retailers and potential growth avenues when we recognized that they were unsustainable. It's okay to say, “We're just not ready at this time” and to be really transparent about not being able to fulfill an order.
Securing retail placement is one thing; maintaining your placement is an entirely different challenge. If you can't consistently deliver, you risk losing your place. So, it's crucial to ensure that any growth is sustainable and manageable.
