CULINARY INNOVATOR AND ENTREPRENEUR
Yih-Ming Hsu, founder of Sip! Extraordinary Drinking Chocolate
Yih-Ming Hsu, Penn CAS’91 and GSFA’95, has a wide-ranging background but entrepreneurship was never really on her radar. She completed her undergraduate and graduate degrees at Penn in biology and landscape architecture, respectively, and enjoyed a career in landscape architecture with an emphasis on environmental planning and restoration. Yih-Ming put that career aside to raise and home-educate her three sons, one of whom has special needs.
Yih-Ming’s sister, En-Ming, is a world-renowned pastry chef. Chef En-Ming has topped every list and won nearly every important award in the culinary world, including serving as the Team Captain of the first and only US pastry team to take home the gold medal at the bi-annual Coupe du Monde de la Patisserie in Lyon, France.
During Covid, En-Ming spent a lot of time skiing in Utah where she noticed a large amount of hot cocoa being consumed. Inspired by the thick rich hot chocolate served in Europe, she had the idea to create a blend of drinking chocolate that is not as intense as the European style, but far more luxurious, creamier and less sweet than traditional American hot cocoa.
The two sisters co-founded Sip! Extraordinary Drinking Chocolate in 2021 with a product that was decadently unique and En-Ming’s credentials as a pastry chef. Shortly after launching, they landed a huge order from a sports venue in Las Vegas and sold out their first production in one month. Getting into this distributor’s system has set them up to be able to sell nationally at the wholesale level.
And, if you’re craving a delicious rich, creamy hot chocolate? Shop here at the WAFFA Female Founders Store to try the Sip! Extraordinary Drinking Chocolate exclusive line of rich drinking chocolate mixes. These luxurious mixes can also be used to spike up a favorite liqueur, served cold or even blended into a frozen delight. Sip! sources US-made products and partners with nonprofit organizations that provide meals to hungry children and work toward ending childhood hunger.
What inspired you to start your business — what opportunity in the market are you seeking to address?
The inspiration to start Sip! goes back to my sister, En-Ming, who is a world-renowned pastry chef. During Covid, she was spending a lot of time skiing in the Utah mountains where she noticed a large amount of hot cocoa being consumed. She loves European hot chocolate, which is thick and rich, but she knew it’s not particularly popular here in the US. She decided to create a premium drinking chocolate that is not as intense as European drinking chocolate but, compared with American hot cocoa, is more luxurious, creamier, and less sweet. A happy medium!
My background is wide-ranging, and entrepreneurship has never really been on my radar. I completed my undergraduate and graduate degrees at Penn in biology and landscape architecture, respectively, and enjoyed a career in landscape architecture with an emphasis on environmental planning and restoration. I put that career aside to raise and home-educate my three sons, one of whom has special needs. However, when my sister approached me about partnering with her to create Sip! Extraordinary Drinking Chocolate, it was a surprisingly easy decision. I’m always up for new challenges, and I thought, “If this fails, at least I’ll be stuck with a lot of leftover drinking chocolate created by an amazing pastry chef!” No, seriously… I saw Sip! as a product that was decadently unique, and En-Ming’s credentials as a pastry chef backed up what I believed had great potential.
What are one or two of the biggest wins or most encouraging experiences you’ve had so far?
About a month after launching, we had two experiences that were particularly encouraging to us as a new business. First, we landed a great opportunity to supply our products to a large sports venue in Las Vegas. A stringent and complicated process is required in order to become a supplier to that venue, so we worked with a national distributor to make it happen. That was a huge step for us that we did not foresee so early in our business. Less than a month after launching, we had sold our entire wholesale bulk stock and needed to schedule a second production, which we had not anticipated doing for at least another 5 or 6 months! Now that we are in the distributor’s system, we are poised to sell nationally at the wholesale level.
Our second success truly inspired us. We partnered with The Bread Bakers Guild of America to help them raise funds for a newly built bakery in Uganda’s Oruchinga Refugee Settlement. This bakery is run mainly by refugee women and is an important source of nutritious food for all the refugees — particularly the children. We held a 2-day fundraiser and donated all profits earned from the sales of our products. We set a goal of $500, and much to our surprise, we more than doubled that goal and were able to donate $1,040 to help sustain the bakery. As we told our customers, $100 means the bakery can make 2,500 rolls to feed the children; our donation equated to over 25,000 rolls!
What has been one or two of your biggest learnings so far?
The entire process of building Sip! has been an ongoing learning experience. Neither my sister nor I are experienced businesswomen, and we are bootstrapping our operation. We rely on a wide variety of online and in-person resources, including SCORE and the Small Business Development Center, to help guide many of our decisions. We also seek advice from trusted friends in the food and beverage industry. One of our biggest insights has been that, in order to meet our high standards throughout all aspects of our business, we need to be creative in how we achieve these standards given our limited budget.
What surprises have you encountered as an entrepreneur? Something out of left field?
One of our goals is to exclusively source from and partner with US companies. As a microbusiness, the challenges we have met in trying to achieve this goal have been both enlightening and surprising. We often hear companies talk about how much they love to work with small businesses, but in our experience, it’s not realistic from a cost perspective. For example, our drinking chocolate is small-batch. This means our ingredient costs are incredibly high due to our relatively low volume needs. Additionally, our costs are significantly increased because our production volume is “less than load” for freight and nowhere near a “truckload.” Packaging proved to be even more challenging in order to attain our premium branding goals while staying within budget and not sourcing from overseas. Eventually, with growth, we anticipate being able to lower our costs and pass those savings on to our customers. In the meantime, our current high costs and desire to keep our expenses in the US are definitely a surprising challenge to us.
How can the WAFFA community help you?
I only recently learned about WAFFA — circuitously through a Penn Alumni newsletter about Wharton’s Venture Lab. I’m so glad to have found this amazing resource and look forward to meeting other women entrepreneurs from Penn. I know there is quite a bit more to learn about running and scaling our business. I feel like there are layers and layers that will inevitably unfold with time, and with each layer, we will be faced with new unknowns. I hope that WAFFA will be able to help us address any challenges that may arise as my sister and I navigate the mighty river of Sip! Extraordinary Drinking Chocolate!
Check out Sip here!