Melissa Ben-Ishay is a mom, baker, and founder of Baked by Melissa, the New York City-based brand famous for its signature, bite-size cupcakes and treats.Melissa joins us (again - we’re honored!) to provide an update on the company that bears her name and how COVID-19 has shaped her as a leader. If you like our podcast, please subscribe!

 

 
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Bill Gullan:

Greetings one and all this is Real World Branding. I'm Bill Gullan, President of Finch Brands, a premier boutique brand consultancy. Thank you for joining us. We are welcoming back today, Melissa Ben-Ishay. I actually have recorded with her on the 6th of August. Melissa is the CEO as she will tell us, and Chief Product Officer co-founder and all kinds of different things. The company that bears her name, Baked by Melissa. And she's going to take us through sort of almost a tick tock of, of how they've managed the quarantine and, they, as well as many other retailers overnight, the business went from a vibrant successful in a booming economy to being closed and with a workforce and a team that one cares about and wants to do right by with a desire to help the business grow and flourish and be stable through this period of time, as well as everything.

Bill:

Everyone's really tested as a leader here. And Melissa's, as is her want, is very honest about that. And she'll take us through what hopefully is the beginning of a rebirth for many, many brands, Baked by Melissa included. The E-com business is still a successful and operating, everyone go there and hopefully the retail stuff will all be back online too.

Bill:

Melissa Ben-Ishay from Baked by Melissa.

Bill:

Melissa Ben-Ishay, Co-founder, President, Chief Product Officer of the company that bears her name, Baked by Melissa has come back to join us.

 

Melissa Ben-Ishay:

CEO.

Bill:

CEO! Sorry, I'm going by LinkedIn. I would never downgrade.

Melissa:

No, now it's CEO. It took me eight months to change it, but I changed it.

Bill:

Congrats. We have not only Co-founder and President, we have CEO of Baked by Melissa. Melissa Ben-Ishay, thanks for coming back to hang out with us.

Melissa:

Thanks for having me now.

Bill:

Of course, we always love having you and interacting with you always provide some inspiration and some joy to me and to our team. And so for those who may not be as familiar living under a rock, so to speak, catch people up a little bit on the company that you've built in our building, and maybe what life was like up until about the middle of March. And then we'll talk about COVID. So tell us about Baked by Melissa.

Melissa:

Sure. Baked by Melissa is a bite sized cupcake company. We founded it in 2008 after I was fired from my job in advertising. At the time, I was baking my tie-dye cupcakes for everyone and anyone. I have a very entrepreneurial spirit and always wanted to start a business with my brother. So straight from being fired, I went home and baked four batches of cupcakes; my tie dye cupcakes, cookie dough, peanut butter cup and s'mores. Sent them to work with my best friend's little sister from the PR firm she was working at, loved them, put me in touch with her caterer. Literally two weeks after being fired from my job in advertising, I was doing events standing behind these bite-size cupcakes as Melissa of Baked by Melissa.

Melissa:

And we had E-Commerce before I even did that first event. Bakedbymelissa.com, you could go to in 2008 and purchase a hundred cupcakes using PayPal that I would bake out of my apartment and deliver by foot using the subway in Manhattan.

Bill:

Wow.

Melissa:

We hustled and did everything we could to take advantage of the opportunity we had to sell cupcakes for a living, which really was my dream come true or my dream. So I knew I needed to do everything I could to make that happen.

Melissa:

I worked with my brother. We founded the company together along with three others, all who has skills that each one of us did not. And together, instead of using equity, we used human equity to build this business. We opened 14 retail locations over the course of not too many years. We have a thriving eCommerce business and have had that since 2010.

Melissa:

For a long time, we were focused on opening retail locations in the different areas of Manhattan. And more recently we expanded outside of Manhattan. We have a retail location in Garden State Plaza Mall in New Jersey, one in long Island in the Roosevelt Field Mall and we have a retail location in JFK airport in the Jet Blue terminal. We also ship our cupcakes nationwide. And as of February, 50% of our business was retail and 50% of our business was E-Commerce. So orders placed through our website.

Bill:

That's excellent. And I know that that one of the sort of core principles of the brand is to help make life sweeter. Could you talk a little bit about what has enabled the company to build, you think such a strong following and to have such a profound impact on people? Everybody can't help but smile when eating or seeing Baked by Melissa. So what's the secret of the brand?

Melissa:

We make people happy. We founded the company on the heels of the recession in 2008. And at the time, we gave people the opportunity to experience something delicious that brought them back to their childhood. It was just the bite and it made them happy instead of going out and buying a hundred dollars pair of jeans, they were spending $3.00 On cupcakes and it worked.

Melissa:

And I think the timing of that was pretty incredible and spot on. And it really gave us the opportunity to understand who we were very quickly. We knew we had best-in-class products. I mean, the response you get from somebody when they experience Baked by Melissa for the first time is out of this world and still gives me goosebumps to this day.

Melissa:

I think my ability to bring you the perfect bite that reminds you of something you loved as a kid, is a big part of that make life sweeter. And what I've found since March, is that people always need that escape no matter what is happening in this world, that its soul food. It's just a quick smile and it's still free because it's just the bite. And if you want to try every flavor you can, because it's still less calories than eating a giant cupcake or two.

Bill:

Yeah, no doubt. And you can sample a lot of different flavors. You talk about bringing things back to childhood, I mean, one of the hallmarks of the brand, at least as we've always experienced it and given your talents as a baker, but also you're compromising quality standards, I mean these ingredients ... uncompromising quality standards, these ingredients are wholesome, like real stuff. I mean the peanut butter and the jelly, the other things. These are brands that we know. And it's amazing what goes into each of these.

Melissa:

Yeah, for sure. I mean, we have a variety of flavors that are always changing. We have our core eight flavors, our OGs, the original grades, but every month we have a mini of the month, we have three seasonal flavors that always change with the season. And then we do promotional flavors based on what's happening during that time of the year, whether it's Pride or Valentine's Day or Christmas or Thanksgiving, or back to school even. We know our customer. She's just like me. She's a working mom who doesn't have enough time in the day to think about everything and we give her the perfect solution for any celebration or gift she needs to give. And like you said, the ingredients, I won't compromise; peanut butter, the marshmallow fluff that you could buy on the shelf, hard chocolate, Reese's peanut butter cups, Oreo cookie, I mean, the ingredients are most important because it's just a bite and that bite needs to be perfect every single time.

Bill:

No doubt. And there are gluten free and vegan; a bunch of different options. There's macarons now.

Melissa:

Yeah. Thank you.

Bill:

A ton of stuff for the discriminating pallet who wants to enjoy these incredible little sparks.

Melissa:

Cupcakes for everyone.

Bill:

Yeah, no doubt. And so in that spirit, you were talking about February you get ... You have 14 retail locations, the business is half and half now, which is an equilibrium that I know took a while to get to. Talk a little bit about how you all experienced kind of the onset of the quarantine and a little bit of what it felt like inside the business having to make obviously some tough calls impacting teammates and customers, and obviously everyone's health. What was it like in early March, from the role that you occupy?

Melissa:

Great. Let's go right back to the first two weeks of March. So the first week of March, there was slight growing concern in the Baked by Melissa office. Listen, I'll come to work with my arm falling off. That's who I am. And I give a thousand percent to Baked by Melissa every day, unless I'm like sick, sick. When I had pneumonia, I didn't come to work. But you know, there was growing concern in the office the first week of March about the coronavirus and quite honestly, I thought it was a load of crap and I was not ready to give people the opportunity to work from home. Everyone knew that Melissa feels that working from home is not real work. So, that was my stand the first week of March.

Melissa:

The second week of March, I was in the bakery for a photo shoot. We do all of our product photography in the bakery. I'm the creative director. And so I was sitting in the bakery with my art director, my vice president, and a couple of others and we're reading the news as it comes in. I mean, I'm sitting in the conference room the first week of March reading articles about not a single child who's been infected. It's all these like China's studies. And then the second week I talked to my brother who I look up to and he, at that point had already started to quarantine and I was like, "You're nuts." I remember him asking me how I'm feeling. I'm like, "I'm feeling great, why? How are you feeling?" He goes, "I'm a little scared." I was like, "Why?" I'm just focused on Baked by Melissa and like what I need to do.

Melissa:

Then the Thursday of the second week of March, when we left the photo shoot, I actually brought my team back to my apartment to feed them dinner. I just wanted to get everyone together, which is ironic because it was the last time we were all together. My parents were watching my oldest and when they brought back home, they kept their distance from all of us. Like my mom's sitting in the corner of my apartment. And I think that's actually the day that they canceled school. So right away, I knew how serious it was. And we had everyone work from home and maybe it was even the day before. We were earlier than most. So we gave everyone the opportunity ... I think it was anyone with asthma or immune or compromised disorders had the opportunity to work from home at the very second it became a real concern here.

 

Melissa:

And then after school was canceled, I was like, "Oh," and they did it in a two week increment, you know? And so then anyone who could perform their duties from home had the option to do so. That was for one or two weeks. And obviously we had planned to keep our stores open and technically believe it or not Baked by Melissa is considered an essential business. We could have stayed open for pick up and delivery, but on Saturday, March 15th, this wave came over me like our Federal Government is not ... You would expect, in this type of situation to have guidance as a business owner. And because I didn't feel like we were seeing the leadership I would have expected, I took it upon myself as a leader and a business and as somebody in a position to impact the way other people perceive what's going on, we closed our stores.

Melissa:

We didn't offer pickup or delivery because the safety of humans is the single most important thing in the world, without question; over business, over anything. Actually, along those lines, that first week of March ... We saw what was going on and people were starting to get scared. So I did bring the creative team and the marketing team together in the conference room in our office and I was like, "Guys, this is real. We're not going to move forward with what we had originally planned for the marketing calendar in March. Let's reevaluate." People are going out and stocking up on toilet paper. We're not just going to say buy cupcakes for your party. I think we need to talk to people delicately. And we need to show them that we understand the way they're feeling today. And I actually think our ability to pivot and recognize the shift in our customer and the world and apply that to our messaging and product offering and marketing is what allows us to stand on two feet today. Our team is incredible.

Bill:

Yeah, no, we've seen that firsthand. One of the first things we did in the quarantine on a similar calendar, just sort of shifted everybody home was to send everybody a box of this stuff just to bring some smiles because there was a lot of uncertainty at that time. There still is, but it was a different kind. We just didn't even know what was going to happen the next day.

Melissa:

Thank you.

Bill:

Our team, I think it helped create some comradery and some joy and some sweetness during this. Your team is incredible. What are some of the things that as a leader ... You talked about different moments of how to keep people together or how to make business decisions that are good and human. Anything that we've sort of learned about ourselves or about the company or about our teammates during this, that only a crisis of this magnitude might reveal?

Melissa:

I learned a ton about myself.

Bill:

Yeah.

Melissa:

I gained confidence in a lot of ways in my outlook on life and business, which is you can do anything. And like nobody is more well equipped. I mean, look, what's going on, nobody has the answers. We all just have what we know and understand and we could only use the information we have to make informed decisions. And so I think nothing is impossible. It's no secret that I came into this role of CEO in December and I didn't want it. I was going to sleep at night leading into the holidays, complaining to my husband about the responsibility I had as CEO. I am used to focusing on product and brand and marketing. But when I have to go to sleep thinking about how we could bring in additional revenue, very much outside of my comfort zone.

Melissa:

And then I took us through our most successful holiday season and I was like, "Okay, thank God." And then as a seasonal business, we went right into our busiest week of the year, which is Valentine's Day again, sweating, like, who am I? This is responsibility I never wanted or thought I would have. I'm so used to working alongside a CEO and here I am Melissa and the CEO and we freaking killed it. And then you find yourself in a global pandemic and I'm like, "You know what? This is mine." Nobody can lead this business better than me. I can't believe I didn't have the confidence and wherewithal to go after this role before. But I couldn't have. I've experienced things over the past few years that have put me in a position I'm in today and given me the confidence I have to do my job.

Melissa:

What's going on is terrible. The pandemic ... I mean, the lives lost and the lack of direction and how we need to approach this is ... I have no words. And I am a big believer in silver linings and optimism and finding positivity in everything and seeing every challenge is an opportunity to learn and grow. And I think like the bigger the challenge, the more of an opportunity there is to learn and grow. That's what I've taken from this, from a business perspective. And it's given me more confidence in my ability as a business leader so that's great.

Bill:

Yeah, no, it definitely is. Sometimes it's tests like these, that bring that out of us. Your significant other, at least last time I heard was very active in the bakery side of the business. He's a baker. How has that ritual changed at all? If at all? Obviously the E-commerce business needed to be, and as an essential business, the food supply is important, cupcakes, or anything else, what was it like for him and for the production staff during this?

Melissa:

You know, that is the most incredible part of this story. Our bakery did not skip a beat. Safety is the top most priority. Without our bakery, we have no product to sell. And we literally closed our doors and we ran a cashflow what it would look like without retail. And we could only last like three weeks in terms of cash on hand. But we still had to close the stores. We couldn't close the bakery, but what we could do in the bakery is make the environment as safe as possible. And we knew we needed our shipping business to get through COVID.

 

 

Melissa:

And the truth is we're not through COVID and it could change at any moment and we could be royally effed. What we could do is focus on making sure everyone in the bakery is safe and so we obviously ... we got PPE for everyone right away. We have plexiglass dividers in all the workstations. We're following social distance and protocols. We have the bakery professionally cleaned and sanitized three times a week on top of all ... We're food service so our cleanliness and our protocols are in line with the FDA. We're great without it.

Melissa:

We also put together a one shooter to just outline for everyone that your safety is our top most priority and here's what we're doing to keep you safe. And for a period of time, we actually didn't let anyone into our bakery except for the skeleton team that we had working, which was definitely an added challenge. I mean, in terms of keeping up with the capacity and making sure we can make enough cupcakes and ship enough cupcakes, we definitely lost a lot of business in those first weeks of March, but the whole business shifted to focus on shipping and E-Com and what we could do. If you focus on what you can't do, you're screwed.

Bill:

Right. No doubt. And so speaking of what you could do, we're recording this in technically the first week of August, the sixth. What's the right ... I know that some carry out has reopened. What's the sort of current status and plan for resumption of the sort of in-person side of the business?

Melissa:

We have almost all of our retail locations reopened. They're open differently than they were before COVID. We are operating on one shift a day, with one employee working, at any given time. There is no shift change because we don't feel like it's the safest thing we can do right now. Everybody's wearing PPE. We allow one customer in the store at a time and we strongly encourage our customers to place pickup and local delivery orders.

Bill:

And so how has that been going so far? Has some of the demand come back? I mean not everybody ... New York is different than anywhere else too. I mean, there was a curve that was massive and that has been flattened to a large degree, but there's still a lot of work to be done everywhere but especially in New York, given the density and precautions to be taken, but how's it been so far?

Melissa:

So we feel that, or we felt, and the impotence behind reopening is that New York's reopening so is Baked by Melissa. We're New York, born and baked, and we need to be there with everyone. We're all in it together. And so that's why and how we started reopening. And I mean, I didn't have high hopes. I didn't expect foot traffic to be nearly what it was and it's not, but we are doing better than I anticipated. There are definitely people in Manhattan walking into our store and purchasing cupcakes. Oh, we're also only selling pre-assorted packs. Before you can walk in and pick your cupcakes and they'd be boxed up, but we feel that's not as ... we have everything packed fresh at the bakery and delivered to the store daily to make sure that there's nobody touching cupcakes unnecessarily.

Melissa:

We're doing well. We're doing better than I anticipated. I mean, it's a struggle. The retail portion is a serious struggle. We're not making money at retail, but sometimes you do things for your brand and your customers because you're dedicated. And that's what reopening our stores is.

Bill:

Well, it's a little slice of ... I mean, it's not normalcy, but it's a tentative step in the direction of that and that probably has benefits beyond the financial outcome. I know that you're right, everything is-

Melissa:

They also allowed us to bring back our team.

Bill:

Yeah, right, right. I was going to say.

Melissa:

We're paying rent anyway.

Bill:

Yeah. Right. In terms of what's next, obviously you're right, all of us are touch and go and it's day by day and obviously the E-Commerce business is huge and we're getting into back to school, whatever that means these days and retail is sort of back or coming back online. What are you hoping to see the next couple of weeks?

Melissa:

So I'm a lunatic. It's August sixth and I am knee deep in holiday planning because you could only do what you can do. And I know that Q4 and the holidays is our biggest time of year. Without COVID, it's our biggest time of year. So what we're doing is, we're taking everything we learned from Q2 and now applying it to our Q4 planning and I am the group leader of that, to say the least. I am the Q4 cheerleader, crazy person running around. All I think about and all I'm focused on is what we learned and how we're applying it to Q4 and I'm doing it now. Every single year for the past 12 years, I get this itch in August like we need to be planning for the holidays. And this is before COVID and I've never been in the driver's seat.

Melissa:

I've been the crazy person and they're like, "Okay. We still have time." I'm like, "No, no, now!" And so now I'm in the position to actually do something about it. I'm like, "Oh, we're doing it now." And you know what? The process has been incredible. I think I've been doing it for like two weeks meeting with each head of each department and going through and having these great conversations and, oh man, we're going to be ready and we're going to do everything we possibly can because we need it. Every business ... There are a few lucky or PPE, they're doing great. We're fighting so hard. We know we have a product that makes people happy and we're doing everything we possibly can this time.

 

Bill:

We'll let you get back to the fight, but we're so grateful as always for your friendship and your insight and your wisdom, and everybody's going through this together and experiencing it in different ways. The company that you've built in our building has a leader who's ready to scrap and claw and bake and put smiles on faces all around New York and well beyond and for that, we're grateful and excited.

Melissa:

Thanks. Thank you. Yeah. So if you're listening, go to bakedbymelissa.com, we have so many unique offerings right now geared towards today. We're actually ... we have an activity kit, which comes with the a Baked by Melissa coloring book and colored pencils for kids, which my kids are obsessed with. And we're working on some fun stuff for back to school too, because you know, we're here to make your.

Bill:

Yeah, no doubt. Everyone, take Melissa's advice. Thank you for joining us. Have a great day.

Bill:

Many, many thanks to Melissa and continued best wishes for her and the Baked by Melissa team. This is a super cool brand and business and a great leader who like many others has some headwinds that are beyond everyone's control but, as you know, life is about how we respond to these things. And as you can hear them, Melissa's ready to rock and we think so highly of her and apologies for a little bit of the clicking. I think the audio was going in and out as it happens to do these times. And for whatever reason, AirPods don't seem to work great for recording on this medium. But anyway, that's too much sausage making, I guess, but grateful that you're with us. As always three way race to support us and help us out at Real World Branding. One is to subscribe so you don't miss a thing and you do that by clicking subscribe in the podcast app or store of your choice.

Bill:

The second is to rate and review, that helps us get found. Give us a five star rating if we deserved it. Give us a review saying, "Hey, brand new business builders, you'll love this. Their guests are great. The host is not so much, but the guests are really informative." And then third, let's keep our dialogue going on Twitter at Bill Gullan @Finchbrands, ideas for future guests, shows, topics, whatever the case may be. We really have fun doing this, particularly for me sitting in my daughter's office in our basement. It is a connection to the outside world and people that we respect and trust every week. So we're grateful that you're enjoying it too, we hope and we'll sign off from the cradle of liberty.