Dumpling Daughter CEO Nadia Liu Spellman didn’t grow up in your average mom-and-pop restaurant.
Her parents owned Sally Ring’s, a popular upscale Chinese restaurant in Boston. For decades, she watched her mother and father serve and entertain celebrities such as Julia Child and Yo-Yo Ma.
That upbringing taught Lew Spellman the importance of sharing authentic Chinese food and led him to open his first Dumpling Girl restaurant in 2014. She now sells factory-made and fresh-frozen dumplings to restaurants and restaurants based on her family’s recipes. grocery store.
Those frozen meals and additional items sold on Amazon generated more than $4.5 million in revenue from November 2022 to October 2023, according to documents reviewed by CNBC Make It. Lew Spellman says her three restaurants in the Boston area generate most of that revenue, selling up to 4,000 dumplings a day.
Dumpling Daughter is intentionally less glamorous than Sally Ling. Lew Spellman modeled it after her father’s advice. He said that if she were to enter the food industry, she “shouldn’t open a fine-dining restaurant.” [Instead] Let’s create a business model where we can sell a lot, but we don’t have to be there all the time,” Lew Spellman, 41, told CNBC Make It.
Here’s how Lew Spellman used his parents’ advice to start a restaurant chain and why he branched out to build a more profitable brand.
learn the tricks
Despite their success, Lew Spellman’s parents did not want her to go into the food and beverage industry. Her restaurant caused a burnout in their relationship, and her father encouraged her to find a career that would allow her to be an “independent woman,” she says.
She moved to New York City and worked in the financial industry for five years. Despite her demanding job, she realized that she preferred cooking and being in restaurants to the office.
“As I get older, I think about… [the] I wanted to highlight your childhood moments and relive them in a way “I remembered that moment,” Lew Spellman said. [legacy]. ”
So in 2008, she quit her job with $97 in her bank account. He then moved in with his mother, who owned a Sally Ring store in Fort Lee, New Jersey. She worked as a restaurant general manager for two years and used her observations to create her plan for a “quick service” restaurant business.
Lew Spellman married his childhood sweetheart Kyle Spellman. He returned to Boston in late 2010, a year after his father passed away. Soon after, plans to launch Dumping Daughter were put into motion.
recipe for success
Lew Spellman spent about $120,000 (mostly financed by two loans from his family) to launch his first Dumpling Daughter restaurant in his hometown of Weston, Massachusetts.
“Naturally,” the press followed. “People were excited to experience the next generation of what my parents built,” she says.
Then the crowd came. Three months after opening, Dumpling Daughter had lines “out the door and around the building,” and was often sold out, Lew Spellman said. “There was a moment where I stood in the walk-in freezer and cried for 30 seconds…and then I went outside because there were 40 people waiting for food.”
Inventory wasn’t the only issue. In 2015, two former Dumpling Daughter employees opened a “total copycat” restaurant within 40 miles called Dumpling Girl. Away. Lew Spellman filed a federal lawsuit, and competitors quickly sought a settlement.
Courtroom drama hasn’t slowed down Dumpling Daughter, which opened a second location in 2018.
“I was very happy with one restaurant, but the customers and the response we got inspired me to grow the brand,” says Lew Spellman. “No matter what happens in your career, don’t let the noise get in the way of your goals.”
Folding in e-commerce
Dumpling Daughter grew consistently through 2020, when the COVID-19 pandemic forced restaurants to adapt to survive. Lew Spellman and his team have launched a direct-to-consumer website where customers can order boxes of the same frozen dumplings directly to their homes.
The strategy worked, and Dumpling Daughter eventually began selling more products on Amazon, including a signature brown sugar and chili oil dipping sauce.
Boxed dumplings and new products sold in Eastcourt and other grocery stores around the Midwest now account for about a third of the business, with annual revenue of just over $1 million.
Despite Dumpling Daughter’s multichannel success, it has yet to turn a profit. This is not unusual for young online businesses. E-commerce margins are initially low, but “scale helps,” consulting firm McKinsey & Company reported in 2021.
Most restaurants are profitable, but it’s a close call. The average restaurant’s pretax profit margin is about 5%, according to the National Restaurant Association.
“With consumer product lines, you have to spend money to let people know who you are. [and] “Finding you online,” says Lew Spellman, “is about finding you online.” “That’s a very scary business to me.” [because] You’re actually losing money because you’re spending money to grow your company. ”
Lew Spellman expects Dumpling Daughter to be at least two years away from profitability, but he hopes the brand’s e-commerce efforts will eventually make it famous. ing. Her goal is not just to expand the company’s reach, but to keep Dumpling Daughter available to people for as long as possible.
“We know we can’t just do what our parents told us forever, and we have to create a brand, a feel, and a product that works for today’s customers,” says Lew Spellman. “They definitely served a customer in the 1980s, but I think Dumpling Daughter will serve a customer today and beyond Chinese home cooking.”
Don’t miss: Want to be smarter and more successful with money, work, and life? Sign up for our new newsletter.
obtain CNBC’s Free Warren Buffett Investing GuideThis book compiles the millionaire’s #1 advice for everyday investors, the dos and don’ts, and three key investment principles into a clear and simple guidebook.