Sep 09, 2020

How to...

Flex up and down with production

New York ceramicist Jono Pandolfi had built a successful business providing bespoke stoneware to restaurants and hotels. Then 2020 happened. His brother/general manager Nick Pandolfi outlines how they managed the increase – and decrease – in demand.
Firing up

Back in 2004, one of Jono Pandolfi’s early commissions was for MoMA, making bud vases for the museum’s café. When its manager, the restaurateur Will Guidara, moved on to fine-dining bastions Eleven Madison Park and Nomad, he commissioned Pandolfi to make the dinnerware. For a person working solo with just one studio manager, it was a huge step up in scale.

To manage logistics, Pandolfi secured a 50% deposit, boosted it with a small loan and had moulds made that enabled the production to be done at another facility. ‘It was way too big of a jump to do it in his own studio,’ says Nick.

From here, Pandolfi grew organically, hiring an intern here, freelance potters there, and slowly installed extra kilns and wheels as business confidence started to build. Marketing activity comprised of a single trade show annually and sending out a glossy catalogue to every Michelin-starred restaurant in the US plus the nation’s fanciest golf and country clubs.

The brand had always been funded on its own cash flow, with small amounts of debt swiftly paid back, but two years ago the brothers deemed the time was right to take on some risk. Pandolfi had enough historical growth, a global client roster of famous chefs and kudos from upmarket magazine editors.

‘We ended up getting a line of credit from the bank, purchasing another very large kiln, hiring people and trying to forecast demand and match it, to get our lead times down and ahead of the curve,’ says Nick. ‘We knew we needed to get some good talent and really the only way to do that is to pay salaries and provide health insurance and paid time off. The last two years we’ve grown about 50% a year – that’s the sort of rate we’re comfortable with, where we don’t have to constantly reorganise the business, hire people or buy new equipment. That can get really chaotic. Growth at all costs was just not our goal.’

Flexing down

Looking back, Friday 13th March was an ominous pivot point. ‘We had about 30 large jobs in progress,’ recalls Nick. ‘By the following Monday pretty much all were either put on hold or cancelled. We came to a screeching halt.’ Staff were laid-off and the studio closed. Orders were close to zero, but the brothers rolled up their sleeves and started figuring out how to reinvent the business.

Cash flow was the starting point. The company typically takes a 50% deposit and the remaining 50% in receivables after an order ships. Since many of its clients had also shut down overnight, Nick assumed he was going to have to write-off all of that debt. ‘I immediately restructured our own debt and tried to push off as many obligations as I could, including our rent, and we extended our line of credit,’ he says.

Next, e-commerce. Having built a following with food obsessives, the brothers realised they had an opportunity to sell directly to an under-tapped market – wealthy white-collar folk who had not only retained their jobs but had more disposable income.

‘E-commerce was never our focus,’ says Nick. ‘And it was sort of, “Oh my god, why didn’t we do this earlier?”, because it’s a much higher margin business.’ Shifting their gaze, the pair have now targeted their B2C operations, improving their customer experience with smarter, more sustainable packaging and creating new limited edition pieces for online sale, including a fermentation crock made with high-profile Bon Appétit editor Brad Leone.

‘It’s been gangbusters,’ says Nick. ‘Our online business has tripled compared to last year. We were in an okay cash position to begin with, and having a much smaller staff and high e-commerce sales have put us in a cash-flow-positive position. Now Jono and I are just trying to figure a way to keep that going, to keep manufacturing… I just hope we can get our team back soon.’

In numbers

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