Starbucks is a global coffee behemoth, but it’s easy to forget that there was a time when it was just a fledgling coffee shop with a drive to create a “third place” outside the home and office for people to congregate.
Kim Malek remembers those days well, because she joined Starbucks when it had just 30 shops. Starting as a barista to help pay for college and later joining the corporate marketing and communications team, Malek worked for Starbucks until it had 3,000 locations, learning directly from CEO Howard Schultz as the team built the company into a game-changing global brand.
With that experience and a passion to open an ice cream shop, Malek cofounded Salt & Straw, a Portland, Oregon–based premium ice cream shop, in 2011 with her cousin Tyler Malek. It now has 19 locations on the West Coast and plans to expand eastward, and counts Shake Shack founder Danny Meyer as an investor and board member.
Kim Malek sat down for a conversation on QSR’s podcast “Fast Forward” to talk about what she’s learned from some of the industry’s most influential leaders, and shared her tips for building a creative, community-oriented foodservice business.
1. Make it a people business
Malek learned countless lessons from her days at Starbucks. Chief among them, she says, was the importance of investing in people. Former CEO Howard Schultz would say Starbucks wasn’t in the coffee business serving people, but in the people business serving coffee, and that made an impression on Malek early in her career.
“Having that experience early in my career changed the way that I think about business is,” she says. “Starbucks in the early days was the first company to offer health insurance even to part-time employees. And I remember, even as a barista, when the company went public, we had stock options. So to me, it was all about investing in your people first.”
At Salt & Straw, that commitment to people extends from the leadership team to employees to suppliers and the surrounding community. Malek says she had a passion to bring the business world together with the local community, to use a corporation to do good for the world—something she honed while working at (RED), the organization raising awareness and funds for HIV/AIDS in Africa.
It helped that Malek launched Salt & Straw in Portland, a city known for its deep commitment to community business owners and artisans. She opted to launch the brand in Portland after being stationed there for some time while with Starbucks, and says she was moved by the city’s sense of entrepreneurism and community. For someone who wanted to create a “third place” in the mold of Starbucks but using ice cream, it was the ideal launch pad.
“I wanted to have a place where someone could run into their neighbors and just have a moment with their friends and family, meet people that they hadn't met before,” she says. “That's what it was about for me, and I had a sense for the creativity that ice cream could bring forward.”
2. Don’t listen to critics
The drive to launch her own ice cream shop was a slow burn for Malek; she first had the idea in 1996. She put together a business plan and started shopping the idea around to a select group of people.
Some of the feedback she received, though, wasn’t exactly encouraging.
“I did send [the business plan] out to a few investors—not many, because I don't know that world very well,” she says. “But I got a note back from one of them, and it had red ink written all over the business plan. He wrote across the top, ‘You can't do this. Who do you think you are, Starbucks?’”
Malek persisted, and though it took 15 years to get the doors open, Salt & Straw has been a hit since day one. And while she’s received plenty of mentorship from other foodservice leaders, she says one piece of advice she gives other entrepreneurs is to not listen to everybody’s advice.
“If I had followed even half the advice I got, I wouldn't be here today,” she says. “Having a very well-defined vision and staying true to that as you grow even to this day. We have to look ourselves in the mirror and challenge ourselves to stay true to those values.”
3. Take a big swing
Starting a business is no small feat. To open the doors to a new restaurant, an entrepreneur typically needs hundreds of thousands of dollars in capital, not to mention a good amount of sweat equity.
Malek couldn’t shake the passion for opening her own ice cream shop, but she was nervous to get her idea out into the world. She believes that’s a problem for many women entrepreneurs: They don’t have the confidence to pursue their idea and tend to “save their idea for 20 years and not tell a soul until they perfect it.”
“As a woman in this sector, I would encourage people to kind of take that leap a little bit earlier than you think you should,” she says.
That’s exactly what Malek did. She cashed out her 401(k) and went to work.
“I took the leap. I knew with my whole heart that I wanted to create this ice cream shop and I didn't have any other path forward,” she says. “I knew I could go out and make more money if I needed to. … So I cashed it in and started the company.”
She knew she would need to find a business partner, particularly someone who could help with the culinary side of the business. Luckily for her, she was closer to that person than she realized. Her cousin Tyler was interested in a career change and was thinking of going to culinary school. When he heard about Malek’s interest to start an ice cream company, he took his own leap and signed on to help her.
“He moved to Portland with everything he owned in his Subaru and moved into my basement with an ice cream maker from the Goodwill,” Malek says. “Our partnership has always been really seamless. And I think it's just so amazing that I have this certain skill set and he's 180 degrees in the other direction.”
4. Make your menu an experience
Salt & Straw’s tagline is “Handmade, Deliciously Interesting Ice Cream.” And interesting may actually be selling the brand short.
While Salt & Straw serves straightforward ice cream flavors like Sea Salt with Caramel Ribbons, Chocolate Gooey Brownie, and Mint Chip, it also boasts outside-the-box flavors like Pear & Blue Cheese, Strawberry Honey Balsamic with Black Pepper, and Black Olive Brittle & Goat Cheese. Its Thanksgiving-themed menu this month features flavors like Spiced Goat Cheese & Pumpkin Pie, Salted Caramel Thanksgiving Turkey, and Roasted Peach & Sage Cornbread Stuffing.
Malek says customers aren’t intimidated by these more unfamiliar flavors because they can sample anything they want before committing to it.
A portion of Salt & Straw’s menu changes every month, giving the brand an opportunity to think big with its flavors. “Every month we use ice cream as a platform to tell what's going on that month, whether it's seasonally or something happening out in the world,” Malek says. “So I think that that also adds to the [customer’s] clamor of what's next and wanting to try it. And it makes it more of an experience from that perspective.”
Committing to telling a story through its ice cream, Salt & Straw has foraged ingredients for flavors, partnered with local artisans for flavors, worked with immigrants to tell their story through ice cream, and even once had a symphony play in the kitchen while it developed a new product.
“It's beyond really an ingredient story and almost more of a kind of food trends and social movements and other emerging artisans [story],” Malek says.
5. Don’t take shortcuts
The culinary aspect of Salt & Straw’s menu has become its calling card, one that Malek says requires a much higher investment in ingredients, no questions asked.
“We often say, if there's a harder, more expensive way to do it, we will find it,” she says with a laugh.
That’s no different as it expands to other markets. When Salt & Straw opened in its second market, Los Angeles, it chose not to just ship product that was made in its Portland facility, but rather to open its own distinct kitchen in L.A.—even if customers there might never have known the difference.
“We exported this idea of creating a brand-new local menu there,” Malek says. “We opened the kitchen, started from scratch with all new collaborations, and, the people of Los Angeles seem to respond really nicely to that. And then we went ahead and did that in each of the other cities where we operate.”
The brand is also taking a more careful approach to its expansion, committing to new systems and ways of doing business than are common in the foodservice space. Malek says growth is necessary to do the kind of good in the world she hopes to do, but that she wants to expand “in a way that no one has before.”
“We're trying to invest in our people and in the industry in a new way that we think will help redefine what it means to have a career in the hospitality industry,” she says. “Whether that's being able to hire through innovative programs with our prison systems or working locally to offer training to at-risk youth, there's just so many ways that the hospitality industry is uniquely positioned to make a difference in our communities. So I think growth could mean something really different. And if you put your money where your mouth is, people will respond to that.”
6. Ask for help
The Maleks and their team have built an impressive ice cream empire from the ground up. But they weren’t without some helping hands along the way. In fact, one of their mentors is none other than Danny Meyer, the Union Square Hospitality Group (USHG) founder who indelibly changed the New York City dining landscape with his fine-dining restaurants, and who launched Shake Shack, to boot.
Malek read Meyer’s book, “Setting the Table,” several years ago and attended a USHG training seminar in New York. At the end of the seminar, she says, an employee told her to be in touch if she ever needed anything. Malek took the employee up on the offer, and then some.
“We would call them from time to time for help with issues around supply chain or HR or negotiating deals with sporting arenas, and you wouldn't believe it, they would put their top person on the phone and help us work through intricate details,” she says.
That relationship eventually put Salt & Straw on Meyer’s radar when he launched USHG’s investment arm. He invested an undisclosed amount in the company and now sits on its board.
Malek says Meyer has been an incredible resource, particularly in helping her figure out how to grow a values-oriented brand at the right pace.
“How do you grow and keep it special? And how do you allow growth to feed your culture and make it even better and stronger?” she says. “We've been really fortunate to have investors that haven't put a lot of pressure on us to grow. A lot of what we've done is invest in our infrastructure to get ready for growth.”