Meet the Chef

Underground Creamery: How Josh Built the Business of His Dreams Through Hotplate Drops

Rishi Talati

Josh from Underground Creamery

Rishi

Hey, Josh, this is Rishi from Hotplate. Thanks so much for your time, man.

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Josh

Of course. How are you doing?

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Rishi

Doing great. So, I just had a few questions for you. I wanted to learn a little bit more about you and your business. So why don't we actually start off by you just telling me a little bit more who you are and what you do.

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Josh

My name is Josh. I make ice cream. I own a little company called Underground Creamery, and it's quite a popular thing here in Houston. It's an ordeal. Underground creamery is a direct to consumer e-commerce ice cream concept. It's not exactly a shop. We produce everything throughout the week, and we do drops- which gets people excited. We rotate flavors every week. We have a little pickup window. Once you have your order number, you pick it up at our window. Then after that, you go home and go enjoy your pint or share it with friends.

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Rishi

What got you into making ice cream?

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Josh

I used to review it out of curiosity's sake. Back in the day around 2016, rating ice cream was within the fitness community on Instagram. There used to be bodybuilding forums at bodybuilding.com and people would rate different ice creams. I started a food page thinking I would be eating out but I was too broke to do that. I was back on track with my short lived powerlifting career. I was very focused on that, so I didn't eat out that much. Ice cream was a treat for me. I would buy pints and ship them from all over the states. After spending all that time eating and spending all that money, you'd want to take a stab at it yourself. That's how making ice cream became a hobby for me. I would just post things that I make on social media and I wasn't really interested in soliciting it. It was just a post to share I made this. It was good. It was. It wasn't good. I could have done better. All my trials and tribulations were pretty much documented on social media at that time. But I never did anything to sell it, and I didn't think I would be selling whatever I created like I am right now. It's still pretty unreal for me.

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Rishi

So you kind of said you started selling it. What led to that? When did you know that your business was starting to work and that you should do it full time?

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Josh

I used to be a rampage for Southwest Airlines and I would take my ice creams to work. When we have downtime, I would just take my ice cream in a cooler, and we had a freezer over there, and I would let my coworkers try them, and they said I got really good feedback from them. And then all of a sudden, I started, you know, bringing some to work to sell. And even with the high price of $10 a pint of ice cream, people were buying. People were giving me shit for it. And then all of a sudden, I would clear out my cooler every time I brought some.I just kept at it.

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Josh

I have been making ice cream almost every day since 2018. Whatever I create, I don't really eat that much of it. It's literally impossible for me to eat that much at the rate that I make them. So I have a backlog. I had to buy a deep freezer just to store them along with the stuff that I bought for my personal stash. And then I just kept getting hit up on Instagram. Hey, can I buy that? Can I buy that? How can I get this? Looks awesome. How can I get this? I think late 2018, people started hitting me up and I started selling it. I had to manage my inventory. I had a Google Doc and a live spreadsheet where I would take orders. I updated that live sheet so you could see the inventory go down. Back then, I had 10 flavors available with one or two each so whoever gets to me first, they secure theirs.

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Rishi

That's literally insane. Wow.

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Josh

Then they pick it up in my apartment. The model that I did back then, it's not far from the model that I do now. What I have right now is just a little bit more legitimized. I have a commercial kitchen I share with a cookie company. We're still growing, still figuring things out. That's where we are.

Rishi

When did you kind of feel like things were working or was it kind of just always there?

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Josh

The demand was always there. I feel like if you produce anything unique, there's always going to be someone intrigued by it. I make unique flavors, which now, looking back, none of the flavors that I've made back then was unique now. There's a lot more artisanal ice cream around, and you kind of just bounce off ideas of each other.

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Rishi

What would you say your secret sauce has been? There's a lot of people that sell food, right? But you've had this demand from day one, and you've clearly been exploding. What do you feel like you're doing that others aren't? What's your secret sauce?

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Josh

You really have to be a nerd about what you're doing. You have to be super excited about what you're producing. You have to believe in what you're producing. And if you have those values and not veer off of it- it's just like, if I make a very subpar product, I'm not going to sell it. So it boils down to what kind of ingredients I use, what kind of quality of ingredients that I use. You have to create something where the quality doesn't drop, because a lot of people who sell food, food is a tough business and the margins are small, you know? And even now I feel kind of weird charging $14 a pint of ice cream, you know? But then again, the results are still there. No matter what the price is, no matter how many I make, it's still gone in seconds. I'm super grateful that that's a problem, that I'm on the spectrum of those problems. So that means the growth is there.

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Rishi

I'm curious, how do you feel like it's been scaling your business? It sounds like the hard part is just keeping up with the demand and figuring it out. What has it been like going from your apartment, doing 10 pints to your commercial kitchen? What's that process been like scaling your business?

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Josh

The whole process is luck, honestly. Well, with hard work comes luck, right? You meet the right people. I'm fortunate enough to have met the people I share a kitchen with because we both started as popups, and then they wanted to go brick and mortar. They wanted to find a brick and mortar shop, but I knew at the time that I wasn't really ready for that. I proposed something. We barely knew each other- Pudgy's Cookies, and I barely knew each other at the time. We've been doing a few collaborations here and there, and then it was just a hit. We started Ice Cookie Sundays at some one of the popups and we hit it off. We were both looking at spaces and now we are basically family. It was just such a good partnership because cookies and ice cream make sense. Building a team is definitely a key factor. That's what helped me a lot to scale because I was spending a lot of time- 14 to 18 hours. Some days just cranking out ice cream. When I started the business, we had a tiny machine. So my friend and I, she was unemployed because of COVID, she was just helping me out. 12 hours for 60 pints of ice cream. It was just really insane. Now I have the right equipment to run the show now.

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Rishi

That's ridiculous. I mean, now you're doing like hundreds.

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Josh

We're hitting thousands most of the time. So each drop with Hotplate, we try to go for 900. And then after the drop, we make extras just to sell through in retail at Pudgy. There's definitely contention with my business model. There is a limited supply in the food business which is kind of wild. Food is pleasure to me. But you also want it to be accessible, right? For the last three years, it was never accessible. So that's the challenge that I'm figuring out. We're getting there. Whatever is not sold or not picked up through Hotplate, you can come into Pudgy's cookies and get a pint. Having that has opened up to more customers.

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Rishi

Speaking of your customers, how did you start building your following? And how do you think about getting engaged with your customers in your community? How did you start building your following?

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Josh

I spend a godly amount of time on Instagram just messaging back and forth with a lot of people. You have to have that humility that you know. As much as it seems like I'm inactive on Instagram, I'm engaging with my customer base there quite a bit. Whatever negative things they say, whatever positive things they say, you really have to engage with those kinds of things. You gain that trust with each other- a good example is a customer getting air pockets in ice cream. We make almost a thousand pints of ice cream. If I made them all it would be up to my standards. But my team is human. They make mistakes. So, you need to talk to your customer base.

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Josh

When you get messages on Instagram, I respond to every single one, or at least I try to in a timely manner. I think engaging with your customer basis is super important. You ask them, did you like it? What did you not like about it? I'm in a very subjective industry so making sure you care about your customers is 101.

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Rishi

Just to make sure I understand, it sounds like you started by dming your customers back and forth a lot.

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Josh

Yeah, even back then when I was reviewing ice cream, it was an open discussion, right? So, when you speak to a person who doesn't consume as much as you do, you need to engage in those kinds of conversations. That's how you gain trust, especially in this social media driven world. Especially when you use social media as one of your marketing tools.

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Rishi

Makes sense. What do you think about content making and social media for your business? You know, that's actually a great segue into that topic because, I had talked to one chef named Dumpling Club, and they were saying that half of the product is Instagram and half is the food itself. How have you thought about your Instagram and how you curated it since the beginning?

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Josh

So, in the beginning my wife Emmy curated the Instagram when I started the business. The grid that we have is beautiful. It's our branding colors, and then we just alternate it every week. My business page is very straight to the point. I have no other things on there besides my video and the product that I'm selling. Which I do get that you don't get as much engagement doing that, but it's clean and straightforward. All the information that you need to see about my business should be on there, including your website. People try to game the algorithm, but those people that care about you will try to find a way to keep up with you. That's the biggest word of advice I do for new food businesses.

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Rishi

Your advice is to just keep the content consistent and make it just about the product and nothing else.

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Josh

For example, Pudgies has gotten really successful. They hired a media guy that makes content for them. They've been creating reels that show the process of how they make their new cookies. The process. Showing the process is always also a good thing. People love seeing that shit, seeing how they're being made, how it's being handled, you know?

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Rishi

Interesting. Why do you offer drops and pop ups versus a brick and mortar?

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Josh

The drops are the only thing I know how to do. I do drops because you're guaranteed revenue doing it that way. It avoids food waste because you are selling what you made. If I take orders in the beginning of the week, and your demand is super high, you'd be stuck fulfilling those. I'm at a point where I still want to have fun with my business. I want to create new things every week. I want to push my team to be able to handle the workload and to be able to teach them how to make new things. Let's say I sell 1000 pints, but 4000 people are on the website trying to get it. That's going to be maybe 45 pints that you have to make of the same flavor that will take you the whole month to fulfill. I just don't want to mess around and find out. The drops are something I can control.

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Josh

That's just a part of it, too. We do walk ups once a month. I went on vacation, and my team made ice cream, like a lot of ice cream. Without the tools, without the urgency of the drop, people don't know about it and they can only buy so much. What we've learned is with the Hotplate feature, is not everyone is on social media all the time. So SMS reminders are a powerful tool that your customers are aware. Like I said, the ones who want it and want to help, are going to find a way to keep up with you. The text notifications definitely help. And, you know, there's a sense of urgency when you do drops.

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Rishi

So it sounds like you did the popup, and without that urgency to buy, you said people didn't know who you were. But also, it sounds like, did you ever undersell or did you end up selling out?

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Josh

We sold out in one week, but it's slow trickling. It's nice to have that revenue stream, because we're not selling when we're in production mode throughout the week. It's good to have all that revenue upfront. That way it can have a checklist of what I can buy for that week. So whether we sell 700 pints or 900 pints, I have an idea of what I can buy or what I always spend that money on. If we need other dry ingredients, you can just plan better in that regard. But again, you have to think about your customer base as well. Some people love the drops, and some people don't love the drop. So you kind of have to figure out, you know, a happy medium. For us, providing through inventory at Pudgy has been helping us grow a bigger customer base. So whatever they see on instagram, they probably won't get it because it's already sold out. But, hey, try. Try some of the products that we make there in store.

Rishi

Yeah, yeah, that makes sense. So I've asked you this before, but it's a little selfish question. Why Hotplate?

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Josh

Why Hotplate? Well, I've used Squarespace, Square, Shopify, and there are just certain features that are not food business friendly for those items. For a small food business where you can't produce as much, there's features like limitations, cart holding, or text messages- there's just a bunch of features that just help us out. The user interface of Hotplate is very straightforward. As much traffic as anyone gets, it's held up pretty well. Instead of having the complete error codes just like my Squarespace website just crashing, just a bunch of errors everywhere. That's why I still use Hotplate to this day. We've been together for what, a year now?

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Josh

Yeah, yeah, yeah. We started using Hotplate over a year ago. I've been happy with it so far.

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Rishi

Me too, man. And then a couple more questions. What's the biggest benefit Hotplate has brought you?

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Josh

Just outreach to the community. Instagram is cool and all, but if you don't play their algorithm game, a lot of people won't see your posts. And that's just the reality of it. And everyone has cell phones, and you have the text message feature. That brings people back in. That's a very nice feature. I would say, trust me especially if you're a food business. Use Hotplate, please.

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Rishi

What was the biggest positive surprise about switching over to Hotplate?

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Josh

It's just very straightforward and it's built for the food business. I can't say anything negative about it. The fees are charged to the customer and you don't have to pay anything. The Square platform charges 3% of your total sales. It's hefty when you rake up revenue.

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Rishi

Right. You have like a monthly fee and then some. My last question for you is where you feel like your business is heading and where you feel like Hotplate is heading. If you could wave a magic wand and improve Hotplate's features, what is the next thing for you?

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Josh

What would it be for me? It's a complete POS system- that would be great. I think people who use Hotplate can propel their business a little bit more, which is why it's such a great tool for your business in my opinion. The capabilities of the platform itself; even knowing that it's run by what five people, it's just super impressive. You have multi billion dollar companies that will crash on you. You get the fucking Nike app which has billions of people trying to buy shoes and it will still crash on you. Don't let the technical difficulties sway you from using a platform especially when it's built for propelling your business.

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Josh

You have the text message capabilities which will ping your customers that you're about to sell food. That's a good marketing tool in itself, you know? If you have a good social media presence, combine that with a genuine business, I think you're set up. You're setting yourself up for success. Like I said, Hotplate is perfect for starting a business, but if you ever decide to go brick and mortar, that's another thing I think Hotplate is going to be supporting in the future. Just all in one system, you know?

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Rishi

We definitely want to create more broad awareness that you can sell food this way, that way you can operate alongside a brick and mortar if anything. Why strictly do that when you can utilize Hotplate store on the side, right?

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