This upbringing taught Liu Spellman the value of sharing authentic Chinese cuisine and inspired her to open her first Dumpling Daughter store in 2014. Based on her family’s recipes, she now sells dumplings, made in a factory and frozen fresh, in its restaurants and grocery stores.
These frozen morsels, along with other products sold on Amazon, grossed more than $4.5 million from November 2022 to October 2023, according to documents reviewed by CNBC Make It. Liu Spellman says his three restaurants, all in the Boston area, are responsible for most of that revenue and sell up to 4,000 dumplings a day.
Dumpling Daughter is intentionally less glamorous than Sally Ling’s. Liu Spellman modeled it after his father’s advice. He told her that if she entered the food industry, she shouldn’t “open a high-end restaurant. (Instead) create a business model where you can sell a lot, but you’re not always obliged to be there,” Liu Spellman, 41, tells CNBC Make It.
Here’s how Liu Spellman used her parents’ advice to start a restaurant chain and why she branched out to create a more profitable brand:
Despite their success, Liu Spellman’s parents did not want her to work in the restaurant industry. The restaurant ended their relationship, and her father urged her to find a career that would allow her to be a “self-sufficient woman,” she says.
She moved to New York and worked in finance for five years. Despite her demanding job, she realized that she preferred cooking and going to restaurants rather than going to the office.
“As you grow up, you think about the highlights of your childhood, and in a way, I really wanted to relive those moments,” Liu Spellman said. “I also wanted to pay homage to (the legacy of) my parents.”
Liu Spellman with his parents Edward Nan Liuand and Sally Ling.
Courtesy of Nadia Liu Spellman
So in 2008, she left her job with $97 in her bank account. and moved in with her mother, who ran a Sally Ling store in Fort Lee, New Jersey. She worked as the restaurant’s general manager for two years and used her observations to develop a business plan for a “quick service” restaurant.
Liu Spellman married his childhood sweetheart, Kyle Spellman, and returned to Boston in late 2010, the year after her father’s death. Soon after, the plan to launch Dumping Daughter was put into motion.
Liu Spellman spent about $120,000 — the majority of which came from two loans from family members — to launch the first Dumpling Daughter restaurant in her hometown of Weston, Massachusetts.
The press “naturally” followed: “People were excited to see the next generation of what my parents had built,” she says.
Then came the crowd. Three months after opening, Dumpling Daughter had lines “out the door and around the building” and was often sold out, Liu Spellman said. “There were times I would stay in the freezer and cry for 30 seconds…and I would come out because there were 40 people…waiting for food.”
The Dumpling Daughter factory freezes dumplings raw, just like her grandmother did, to ensure freshness.
Inventory wasn’t the only challenge: In 2015, two former Dumpling Daughter employees “opened an exactly copied restaurant” called Dumpling Girl less than 40 miles away. far. Liu Spellman filed a federal lawsuit, and the competitors quickly sought a settlement.
The legal drama hasn’t slowed Dumpling Daughter’s momentum: In 2018, it opened a second location.
“I was very happy with a restaurant, but it was the customers and the response we received that forced me to expand the brand,” says Liu Spellman. “No matter what’s going on in your career…don’t let all the noise disrupt your goals.”
Dumpling Daughter saw steady growth until 2020, when the Covid-19 pandemic forced restaurants to adapt to survive. Liu Spellman’s team launched a direct-to-consumer website, where customers could order boxes of the same frozen dumplings directly to their home.
“I really feel a personal obligation to my parents and to Chinese cuisine to introduce this style of dumplings to the world,” Liu Spellman told CNBC Make It.
The strategy worked, and the Dumpling Daughter eventually began selling more products, like her special brown sugar and chili oil dip, on Amazon.
Boxed dumplings – sold in grocery stores across the East Coat and Midwest – and new products now account for about a third of the business, bringing in a little more than $1 million a year.
Despite its multi-channel success, Dumpling Daughter is not yet profitable. This is not uncommon for young online companies: E-commerce margins are initially thin, but “scale helps,” consulting firm McKinsey & Company reported in 2021.
Most restaurants are profitable, but by a narrow margin. The average restaurant has a pretax profit margin of about 5 percent, according to the National Restaurant Association.
“In a consumer product line, you have to spend money for people to know who you are (and) find you online,” says Liu Spellman. “It’s a very scary business to me (because) you’re losing money because you’re spending…on growing the business.”
Liu Spellman estimates it will take at least two more years for Dumpling Daughter to become profitable, but hopes the brand’s e-commerce efforts will eventually make it a household name. Her goal, beyond just expanding the reach of her business, is to enable Dumpling Daughter to serve people as long as possible.
“I know that I cannot follow in my parents’ footsteps forever, that I must create a brand, a feeling or a product that serves today’s customer,” says Liu Spellman. “They definitely served customers in the 1980s, but I think Dumpling Daughter is going to serve customers today and beyond Chinese comfort food.”
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