 Oh, and welcome to Connecting Hawaii Business on Think Tech Hawaii. My name is Kathleen Lee, owner of Kathleen Lee Consulting, and I am your host for this program. Think Tech Hawaii is a platform that encourages civic engagement through conversations that educate, enlighten, and inspire. We are currently live streamed on ThinkTechHawaii.com as well as on Think Tech Hawaii's Facebook page. And if you are tuning in, you can send in your questions live at questionsatthinktechhawaii.com. With all that intro being said, I am pleased to welcome our guest for this afternoon. And I want to go over how I met him. It's actually, it was through a networking page through Facebook, which is a testament to the power of social media. Please welcome to the show, Ryan Sung, general manager of Honolulu Cookie Company. Hey, Ryan. Hi, everybody. Thanks for being on the show. So tell us a bit about yourself before we launch into talking about managing the family business and how Honolulu Cookie Company has pivoted during COVID-19. Yeah, sure. So in that kind of intro or that Facebook networking side, I kind of wrote a little bit about where my background is. But to go over that a little bit, I was born and raised in Hawaii on Oahu here. I went to Kaiser, so public school, not private school, but not to think any private school would be there. And then eventually after high school, I moved out to California where I attended a community college and I eventually transferred to USC. From the total time I was gone, I'd say from after high school, it was about ten years before I kind of got the call back where my parents, this is a family business, so my parents were wondering if I was interested in learning the business. And so that opportunity, I think, was great. There was no pressure for me to come back at all, but I think it would have been a missed opportunity if I didn't take it and take advantage of it at that time. So I've been back for about five years now. My background is actually kind of interesting. I was a kinesiology major at USC, which is kind of like the pre-med route. I wanted to do something in the kind of health field, but that didn't quite pan out to what I eventually wanted to do. After college, I worked in advertising, so my last job before I came back to Hawaii was working at Pandora in the ad sales department, so kind of the ads that you get served on your Pandora platform, that's kind of what the department I was in at least on the West Coast. So those annoying ads that you get all the time and what brands pay for to get an eye or an ear on it. And then I came back and kind of learned the business from the ground up starting at the retail stores, just as a sales associate, getting training that way, learning what the customers wanted, and then kind of going to the different departments, manufacturing, kind of quality control, marketing, et cetera, et cetera. So training through that route and then eventually becoming the general manager to essentially learn how to manage. It's not a skill that can be so much taught rather than learned on the job. And then luckily, we have an amazing team to help guide me as well, but it's been about five years since I've been back, so definitely a ton of learning experiences during that time. That's very cool. And then you took over in 2018. Did I get that right? Yes, I think so. I don't have the exact date somewhere around there. So you were now the general manager of this company that was built by your family a few decades ago. And with that, what are some challenges that you have ran into? Just challenges in general. And then we can launch into the challenges that COVID-19 has brought to a company such as yours, who was heavily reliant on storefronts, right? Yeah, so I'd say there's probably several challenges. Internal challenges is a big one. Battling kind of those internal, I think a lot of people have that in their mind when they join a company or get a position that is a little bit uncomfortable for them initially. And imposter syndrome is probably how people refer to it as much. That was probably in the beginning, coming back to a company that when I left Hawaii, it was maybe less than 100 people that worked there. When I got back and started learning the business, I think it was close to over 350 people. So essentially learning the business and making sure that what I'm doing is perceived as correct and proving to others and along those lines. That was probably one of the biggest challenges I dealt with initially. It wasn't so much learning the business. It was more so making sure I was living up to whatever expectations that were set or even not set just based on what was in my head. That's one of the challenges. Another one is definitely and obviously kind of going back to that challenge. It's gotten a lot better for sure and it all just comes with experience. Eventually I got a lot more comfortable and there's things I'm always learning still. I never kind of shut myself off to learning experiences. So that continuously makes me more and more confident as I go on throughout the years. But kind of the second one, this is an interesting one too is the challenge of working with your family. Family business is unique in a sense that I wrote this in that kind of agent hustle network post, but unique in the sense that there isn't as much professionalism probably as there should be. We definitely have with my parents and I at least a relationship where at times when it suits them I'm their son and at times when it suits them I'm the general manager. So it kind of goes back and forth a little bit, but I'm super fortunate to actually work with my family. I enjoy it personally and those are just kind of little speed bumps here and there and it's just kind of what goes into working with the family business. On top of that the kind of the last challenges and probably there's more, but it's just developing the managerial skills and leaning on a lot of our executive team, making sure our team members are happy and they're also exemplifying the values that we set for the company and just making sure all of that tracks in line with kind of what vision we set for or whatever goals we have to attack for any given year. So just constantly developing myself is another thing. This role as like family, like general manager is my title, but it is definitely fluid in a family business. I'm not sure if that's even a Hawaii thing too where the roles are a little more fluid. You take on multiple hats and it's not exactly, these are your responsibilities stay within your wheelhouse. It's not so structured like that. So there are things that we always constantly have to pivot and deal with what comes our way. So I'd say those are probably the three challenges I'd have and then this is just maybe a side one, but making sure that the business is thriving and in a healthy state for my gen, not only for my generation, but even for any future generations for the family business, because this is definitely something that I want to carry on as like a legacy business and make sure that I respect what vision my parents had in place as well and then kind of take it on in whatever form it evolved into eventually because it's always growing. That sounds like a lot of responsibility and rightfully so. What are the other hats that you wear or what like the, as far as the umbrella of what your title or your position goes, like what other tasks or delegations have been upon you? Yeah. So I'd say my day-to-day in general is making sure I'm tracking with the team. We are a little bit smaller of a company now after COVID, but that's it with most businesses now, but making sure I'm tracking with the team, understanding that what everyone's workloads are like, if everybody's moving towards the same strategy, making sure we're all moving in the right direction, the same direction, because if you know that direction isn't set, then we could be going all over the place. Keeping track in track and in line with everybody also helps me communicate with my parents, Keith and Janet, who are not so much in the day-to-day involvement of the operation side of things, so making sure I can help communicate that to them and then disseminate the information that they give me as well to see, okay, how does this fit in our timelines of projects and whatnot? So over that umbrella of stuff that I just mentioned is probably just management, essentially. And then beyond that, right now it's definitely, this is kind of a newer role with the pivot, it's business development I'd say I'm heavily involved in right now, and that comes in play with making sure that our business is sustainable and we can continue to work towards our recovery and then, you know, this is somewhat of a game to make it to the recovery period and entering, I'd say last year was survival mode and this year is definitely a little less than that, I don't even know what you would call that, that mode, but it's somewhere slightly less than that where, you know, there is actual survival and recovery maybe, that's like it's right in between because recovery and survival, because we're not quite at recovery yet, I'd say that would happen once, you know, Hawaii's tourism industry begins to recover in a little more significant of a way. So I'd say those are my major two roles and, you know, sun. Which is also somewhere in there. Yeah, like I said, what is convenient for them? So you're mentioning how you and Honolulu Cookie Company as well as most organizations and businesses in Hawaii are on the road to recovery right now. But let's talk about that more and then we're like after you respond to this question we're going to go into break but what are like how has the pandemic affected the operations over at your business and like what have you guys come up with? I know you had mentioned Costco earlier but and I don't know if that came from COVID or that was already in the works prior to that but yeah, so how has the pandemic affected Honolulu Cookie Company? Yeah, pandemic has definitely hit very, very, very hard for our business. You know, I might speak a little bit where it sounds like I'm a little bit numb to it at this point and that's purely off the fact that we've been through over like almost going on a year of this kind of pandemic state. Initially there was so much uncertainty, really scary time. Remember just waking up every day every morning and seeing okay what's going on in the news what's going on like how many cases okay we're shutting down again and it just kept rolling out right. Eventually I think most people got to this the state of mind where it's acceptance and then just kind of figuring out how to pivot so you know we didn't stay in that panic mode for too long we definitely had to plan and we had to make very, very difficult decisions during this time. We've scaled back our business quite a bit. I mentioned that you know prior to COVID we had over like 400 employees actually and we were ramping up in multiple shifts. The demand just plummeted because there was no tourism after a while and most of our capacity was dedicated to our retail stores and so you know now we're sitting at a quarter of that amount of people essentially and so it's still a decent amount of staff but for a business that was at the level or I guess at the scale that we were at it's really difficult to scale back that quickly and there's so much infrastructure just set in place for that style of business to operate that you know we have you know so many leases out there and we have so much warehouse space to hold everything that we needed to before and all of a sudden it just turns off and like you know the flick of a switch it's it was extremely difficult to pivot like that on top of making sure we are keeping our employees safe by you know coming up with the protocols and all that kind of stuff temperature checks hand sanitizing the social distancing all those protocols went into place because you know we have to essentially write them from scratch there was no real guide as CDC was you know spitting out stuff every so often and constantly changed so you know we wrote the protocols as best we could and constantly kept updating them but in terms of kind of the pivot of the business I'd say a big part of our business survival strategy and you know contingency planning or continuity kind of planning is making sure that we can cut expenses as much as possible and that's purely out of survival all that thought so we are going to go on break but I want you to pick up from that how Honolulu Kuki Company has pivoted in order for the business to survive so we will be right back welcome back to Connecting Hawaii Business on Think Tech Hawaii my name is Kathleen Lee of Kathleen Lee Consulting and our guest for today is Ryan Sung a general manager of Honolulu Kuki Company so when we left off he was talking about the challenges that the organization went through because of COVID so let's start with there Ryan so you were talking about the challenges and how you guys had to pivot like start from like what the challenges were and then go from there yeah so the challenges were you know some of it were making sure we were putting together the correct protocols during COVID with our employees that came back I should probably start one step back actually because there were challenges being shut down we in March we actually shut down our entire operations it was a Thursday before the governor shut down the state and so we did that like how widespread that is when you say entire operations like how many stores yeah that was 19 locations across Oahu, Maui, Guam, Las Vegas and so every store probably has a staff of seven to ten people also and so much product in them as well and so shutting down and making that call prior to actually having it mandated was more in line with the values that we have as a company right we want to protect our employees that was first and foremost we saw the COVID you know news hysteria essentially going off during that time and you know we wanted to make sure we were providing a safe environment to work in and so we made the call to shut down Thursday prior to the governor shutting down I think the governor shut down the Monday after that and so just flicking that switch off is extremely difficult where we were essentially everybody was you know okay everybody don't come to work the next days we're going to reevaluate where this is going we thought we're just going to be shut down for two weeks you know and you know we we decided to continue to pay everybody their full benefits and their scheduled shifts and whatnot for those two weeks too and so once it started to become more apparent that this while we wasn't going to turn around as quick as we thought we we then had to make those major changes and calls where you know I think we were a month in at that point where we finally made the announcements to essentially furlough start furloughing staff to start to turn that engine down because there are no stores that were open I'd say we also shut down our operations or manufacturing operations that includes making the cookies obviously we didn't need any cookies because nobody was here to sell them to and then our order fulfillment and our e-commerce type of operations that we send product out so we shut everything down and everybody worked from home and so that was probably the biggest challenge and right after that I think it was like a month and a half or a month in where okay things started to maybe slightly reopen here and they're not tourism but you know you can start to take back your businesses and essential business functions and we started to get more guidance here and there and so you know order fulfillment was kind of our e-commerce was the first thing to kind of turn back on we could do that in a safe environment we set up the the space so everybody was far apart from each other and whatnot and then setting all the protocols in place make sure we'd have no visitors and so on and so it eventually got down to I think sometime in I want to say June or actually May May ish we we have to offload a bunch of product we had a lot of product at our warehouse and so that product supplied seven days worth of inventory to the to the stores and all of our customers and so we had a warehouse pallets and pallets and pallets you know I mentioned there's like probably 30 or 40 pallets I can't even remember it was a lot but you know a pallet is a large amount and so we we essentially reached out to some partners that would might be interested in pulling these products essential businesses that were open foodland was kind of one that helped initially and getting some of our products offloaded and then there was a Costco that eventually kind of turned around to this new pivot partnership so the plan initially prior to all of COVID was yes we wanted to ramp up some type of wholesale strategy where we were offering you know a little bit more of a snacking type option at at our wholesale partners rather than just gifts that wasn't going to happen until maybe 2023 or so so all of that plan essentially moved up quickly to 2020 and it was based on the fact that now we had this new capacity that we never had before because we were solely functioning on making sure we can keep up with our retail store sales and so once all that turned off we had to find another you know essentially spigot to turn back on and it took a lot of time but I mentioned in May that's kind of when those conversations happened and in October or November I think it's October actually October was when okay this is where the Costco and eventually it evolved into Costco mainland west coast where okay all of that work during from May to November on making sure we knew okay what type of packaging we wanted to create for Costco all that kind of stuff does the strategy work is all a yes and then it actually turned out to be a great bet for us where it is definitely critical in helping to sustain our business now we have some scale that we're able to work with Costco on the mainland and our customers on the mainland who typically would come to Hawaii at during the year that no longer can come here you know are able to go to Costco and buy you know it's essentially kind of like this large cost that's our there's a tag on this is one of the prototype samples initially actually you're holding up that is what is now available at Costco in the mainland in the mainland yes the 16 ounce bag of miniature chocolate chip cookies essentially is kind of the snack snack item so this is the same recipe and everything as our chocolate chip cookie full size cookie and the mini bites cookie that we have at our stores but that's what we saw as a great platform to initially run out to Costco with and on top of you know not only the Costco side e-com is definitely something we're heavily investing to because getting products out that's a no-brainer for every business right now is that direct to a consumer type of business model and making sure we can build that strategy out a little bit so at the hand in hand with wholesale and the e-commerce directed consumer parts of our business those are kind of the two that are making sure we can stay afloat until the retail side of our business that revenue center starts to turn back on and tourism starts to come back you know that said there are some stores open but it's definitely not the hand the majority of them all of them are just still scraping by essentially um and making you know hopefully tourism comes back but you know we'll see what happens with retail as time goes on but the entire landscape has changed and so we just need to be able to keep up with it and um and then you know just the last piece of this Costco strategy is that is kind of that core product that I mentioned that that was the good introduction and we finally got to the point where okay we have seasonal flavors that come out at our own stores and so Costco is going to participate on and this is you know this is all planned Costco is somewhat verbally committing to participating in this lemon seasonal flavor that we have that's always popular during the March season for us we release our own lemon flavors and so we're going to make a snack size version of that lemon so I bring that up because it brings it somewhat uh to fruition the strategy that we set forth and it was the way I sold it through was okay we're going to do this chocolate chip cookie and seasonally we'll rotate in new flavors and this is the first seasonal flavor that we get a test with Costco to see if the strategy is actually working chocolate chip is doing very well um lemon we'll see if that does very well too but it's just it's somewhat surreal seeing the actual strategy roll out into what we actually thought or we might we thought might work and it seems to be working so fingers crossed we'll see what happens well on that note it looks like we have a viewer question that ties into what you were talking about so let me just read that aside from your partners in Okinawa and Guam are there plans or thoughts about an international expansion to help diversify the venues for income generation yeah so international expansion that's an interesting one um that's a little harder to do the expansion along those lines but we did we have a partner in japan that already we've been working with um they mainly helped us get into these catalogs that were meant for like jtb jcb type of customers that travel to hawaii and to get like a catalog that they can order on me i get from and so those partners we had worked we worked with them to try to help pivot our e-commerce business so what we did was essentially uh you know our thought was how do we make it more convenient for our customers outside of hawaii to get our products and the only way is to get the products to them and so we are working with our partner to provide him inventory essentially to sell our exact number of views that we sell on our own website in the u.s as mirrored in japan and so they can order in japan a two-day shipping kind of thing shipping is fairly cheap in japan once it gets there it's obviously not cheap getting the product there um but that's one part of the business and then we do have plans to expand this snack type of wholesale product out to japan as well potentially maybe even korea but these are all somewhat still in the works and it does take really long to get to that point u.s was you know five months worth of time and this might not be as long as five months because we have somewhat of a you know the executed plan in place and so now it's just kind of making sure we work with the importers and all that kind of stuff properly so there are definitely plans to get product outside of hawaii just uh what type of product is a little bit more limited and i think that'll keep somewhat of the exclusivity in hawaii for people wanting to come back to our stores still um that kind of desire well on that note we are coming to the end of our segment that actually went faster than i thought and i learned so much from your operations any final words and how can people learn more about your company yeah of course uh you know i'd say the easiest way is to sign up for our newsletter online um you can go to our website on www.cookie.com to do that uh follow us on social media that's a really good way to see what we're coming out with we're still doing seasonal rotations of packaging flavors we have promotion uh promotions that we run several times uh throughout you know every every month or so and so that is the best way if you want to keep up uh to date with what's going on and you know i encourage you to continue to support local business as much as possible because everybody needs it for sure thanks ryan for coming on the show today and thank you to jfidel and the entire staff at think tech hawaii we had haley helping us out today for making the show possible and on that note um thank you again ryan and we hope everyone has a great rest of your day