Baozza Eyes American Market, Freeze out Heavyweights Hot Pockets

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While most Beijing businesses were busy scaling back, pinching pennies, and nervously forecasting the fallout from COVID-19, one company decided to do the opposite. Baozza, which has captured the hearts and tastebuds of Beijingers since launching four years ago, always dreamed of going global. In fact, it was part of their initial business plan, bolstered by the fact that the idea found its footing thanks to focus groups conducted in Los Angeles. However, given that the West lacks traditional bao makers capable of crafting a fluffy dough that’ll withstand steamers, fryers, and microwaves, owners Loren Heinold and Alex Cree understood that China was the natural site for their research and development, as well as a fitting market for their new product.

"China is the world’s center of steam dough expertise," says Heinold. "From factories to R&D facilities to baozi masters... there was just a lot of learning to be done here."

The Baozza R&D team consisted of German food scientists, Italians on flavoring duty, American chefs, and Chinese mantou masters

On the surface, Baozza’s story is one we’re all familiar with: Expat comes to Beijing, finds a Western niche missing in Eastern markets, and goes on to create a wildly successful brand out of it. What few people know, though, is that while Heinold and Cree are the visionaries behind the Baozza, wealthy American investor and owner of the NBA’s Dallas Mavericks, Mark Cuban, has since become the financial muscle, having signed on as one of the pair’s earliest backers two years ago. Cuban is well known for his role on the US television show, Shark Tank, where ordinary folks pitch business ideas to successful entrepreneurs in a bid to secure funding. While a few lucky participants are granted capital to pursue their dream, a large part of Shark Tank’s entertainment value comes from the puzzled looks and incredulous commentary the “Sharks” offer those who present less than profitable ideas.
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So how exactly did Heinold and Cree land the coveted Cuban bump? "It was a purely cold email," says Heinold. "Alex took a guess at his Dallas Mavs email address, sent a blind, cold email, and got a response like five minutes later. He personally responded, and said, 'I like the idea, send me your business plan.'"

"The baozza is an homage to pizza and baozi, but it's also a completely new and different product," says Heinold

Over the next ten months, Cuban would check up on Baozza’s benchmarks and progress every couple of weeks. Impressed with what the guys were doing and the continued support they received from the community, he finally agreed to put up his first round of funding. While Cuban was doubtlessly taken by the idea itself, he also largely signed on because of Heinold and Cree’s intentions to bring Baozza Stateside, confident that it could give more seasoned players in the microwaveable snack industry such as Hot Pockets a run for their money.

"[Hot Pockets] has become a 'tired, old brand' – that’s Bloomberg’s words, not mine – but because of coronavirus, their sales went through the roof," explains Heinold. "So we see a chance to go in and do something that’s more fun, that’s healthier. You know, we’re not using any of the additives or preservatives or the 200 chemicals that are going into Hot Pockets. So something fusion, fun, steamed, quick. That’s the plan."

Initially, Baozza's international distribution was slated for 2021 or 2022. However, when COVID-19 erupted and the team found themselves working remotely, unable to engage with hands-on work and daily operations, they decided it was a good opportunity to focus on the expansion.

Part of bringing baozza to the US will be a branding overhaul to educate American consumers about the legendary baozi

"COVID really pushed us to look at the international expansion a lot faster than we had planned to," explains Heinold. "We probably would’ve waited another year or so, but we couldn’t be out there going to sales meetings or doing a lot of things that we otherwise would have, so we sat there, pen and paper, and said what do we want this next year, next two years, next three years to look like. And we decided, yeah, let’s bring the fight to Hot Pockets and to the US now, let’s not wait.”

Whereas Cuban’s Dallas-based team will help out with marketing and packaging design, Baozza recently hired their first US employee to oversee the supply side and work with the team in Shanghai, where the product will continue to be manufactured and distributed from. Likewise, Heinold’s business partner, Cree, is also moving back to Los Angeles, with the hopes of having their own production facility up and running in the US by early next year.

Asked if Hot Pockets is aware of the impending competition, Heinold says that, "They’re not aware of us yet… We’ll make sure they’re aware of us pretty soon though."

Images courtesy of Baozza

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