Yishi Foods: Waking Up the Instant Oatmeal Category

By Annie Wang

Yishi Foods

WAKING UP THE INSTANT OATMEAL CATEGORY

When was the last time you were excited about instant oatmeal? For most, instant oatmeal conjures up images of shelves on shelves filled with flavors like apple cinnamon, maple syrup, and just plain oatmeal. But, Yishi Foods, launched during the pandemic, is painting over the largely grayscale breakfast offerings of the present day with a bright swatch of Asian inspired instant oatmeal flavors. The company makes flavors like Taro Bubble Tea, Toasted Black Sesame, and Matcha Latte.

As of this story’s publication, Yishi will have launched into 524 additional Whole Foods locations, bringing their total retail placements to 1,000 nationwide. And customers aren’t the only ones excited about the new product. To date, the company has raised over $3-million in funding from backers like XXY Ventures, CompanyFirst, Bill Skeens, and the Dorm Room Fund. So where did Yishi Foods, a brand growing with such rapid velocity, begin? And where are they headed?

CORE BREAKFAST MEMORIES SPARK A BOOMING BUSINESS

The story starts in Qingdao with the hearty aroma of a delicious Chinese porridge. Yishi Foods’ CEO and Co-Founder, Lin Jiang, would wake up on crisp mornings to her mother’s culinary flexes, one of which was a hearty black sesame porridge. Delicious, nutritious and satisfying, the memory of this breakfast would stay with Jiang even as she moved to the U.S. for school at the age of 19. Fast forward post-graduation and Jiang, living on her own as a consultant in the U.S., found herself constantly reaching for unhealthy snacks to get her through the day. In an attempt to find something that would make her less groggy, she turned to oatmeal. Though her body became less sluggish, her mind quickly became bored with the limited flavor offerings found in instant oatmeal.

Still hoping to find a healthy snack, Jiang started making her own flavored oatmeal, starting with the black sesame porridge her mom used to make. Not long after, the office was abuzz with her creations. Coworkers put in requests for different flavors. Some even asked if they could buy Jiang’s oatmeal. After becoming a student at the University of Chicago’s Booth School of Business, Jiang pursued her Asian inspired oatmeal idea as a side project, eventually quitting her job to work on the business full time.

Like many entrepreneurs, the first year in business Jiang started at a smaller scale, working in a commercial kitchen with her co-founder and COO, Ze Li, and gathering feedback from early adopters through pop ups at yoga studios and farmers markets. As an immigrant without experience in the food industry, Jiang took time building up her

network in the space and learning the ins and outs of the food industry. In April 2020, Jiang launched a

Kickstarter for her business, then named Crave Natural, and successfully raised $11K+ to fund an initial production run and grassroots make campaigns singular. The fledgling brand then launched in August 2020, first testing their products in local Chicago markets. After almost a year of iteration and learnings, Jiang and her team rebranded and launched in June 2021 as Yishi Foods in what Jiang called a “low key” launch. “We didn’t run any ads.” says Jiang, “All of the content on our social pages are from our own team: fun videos playing with products, recipes, oatmeal photos…We also reached out to influencers on IG and asked them to try our products for free.”

LAUNCHING AND GROWING THROUGH THE PANDEMIC

When I caught up with Jiang last month over video, she was just a day away from boarding an eight hour flight on her way to a well-deserved European vacation. In some ways, it’s a perfect reflection of this new era of post-COVID operations as things begin to shift toward a new normal.

Because of the company’s hyper focus on solving and building infrastructure for their operational challenges during the pandemic, they are now reaping the benefits as the world begins to open up. For instance, while their sales volumes have gone up, helping to offset some of the costs due to inflation, supply chain hang ups leading to delays, and labor shortages, their overall costs have risen. Thankfully, in the company’s original financial model and forecast, they’d budgeted for the need to hire additional operations folks. As such, bolstered by the solutions they built during COVID, Yishi dove right into solving these challenges.

“We hired more people on the operations team to help manage all the complexity at every step of the supply chain,” says Jiang. Now, they’re seeing the benefits of their hard work tackling supply chain and logistical issues during the pandemic paying off. For one, the company doesn’t expect any more stocking issues. “We’re coming out of a tunnel,” says Jiang, “I think our supply chain will be a lot more robust.”

The team has learned a lot of lessons about supply chain logistics and finding the right co-manufacturer and how to maintain and manage their growing production needs. “After working with [our first coman], we realized the importance for a coman to have an inventory reconciliation system,” says Jiang, “This is one of many things a professional coman should have. It’s important to have records of inventory so you can track things and make sure numbers match reality.” And the switch comes at a great time as the company has grown out of their old coman. These days, the company is struggling with making enough product to keep up with demand.

ADVICE AND THE PATH FORWARD

Over the next six months, Jiang and her team will be hyper focused on further growing their distribution, launching into their next 524 Whole Foods stores, leveraging data to increase their competitive edge, and achieving a sustainable business model.

When it comes to practical advice for new entrepreneurs, Jiang suggests focusing on organic marketing to give your brand the time to get feedback and refine your products and find the right customer fit. According to Jiang, focusing on organic marketing allowed Yishi to conserve capital in the early stages since selling online is becoming more expensive. Jiang also advises brands to build in a robust margin for their products since launching into retail is both expensive and complex. “There’s a lot of ways to spend money for retail distribution,” Jiang says, “…a new brand will have to do promotions to at least get people to try their product, so a healthy margin will support that.”

Outside of Yishi Foods, Jiang is excited to connect with and learn from other CPG founders.