Pretzels: the next croissant

Like many dreams, Mr. Gottenbusch’s venture in the wholesale arena started with a leap of faith two years ago. “I built this facility with no wholesale customers,” he said.

However, he saw pretzels trending in Europe and knew it wouldn’t be long before they became popular in America. Even in parts of northern Germany, where his family comes from, pretzels have become omnipresent, unlike in the past, when they were only popular in southern Germany’s Oktoberfest and beerhall culture. “Now you can’t walk down the street without seeing people with a pretzel in their hands,” he said. “It’s completely changed. It’s the fast food of Germany. It’s certainly the signature item.”

“Knowing that it’s that big in Europe, and Americans haven’t seen the authentic product, it’s like the croissant in the 1980s,” he continued. “People back then didn’t know what a good croissant was. Now, they understand what a good croissant is. Yes, there are bad croissants and good ones. I want to be the good pretzel — the best pretzel. I want to introduce people to a new world of pretzels.”

The company began automating soft pretzels three years ago at its original 40,000-sq-ft commissary, which also supplies Servatii Pastry’s retail bakeries with an array of European-style breads, rolls, cookies, sweet goods and desserts. That commissary and the retail business are now overseen by Mr. Gottenbusch’s brother, Greg, vice-president who also apprenticed in Germany and specializes in pastries.

“Centralized baking ensures consistency from store to store,” Mr. Gottenbusch explained. “It improves efficiency with centralized larger-run sizes. They provide an opportunity to redesign equipment sets to match the larger scale. Finally, the cost per square foot for retail space is always higher than the cost of baking space.”

Initially, he bought the automated twister to reduce labor costs and overhead as well improve margins in the burgeoning wholesale pretzel business. “We were running out of room at the commissary so we had to find another building to just handle our wholesale business,” Mr. Gottenbusch said. “The new bakery freed up a lot of space in our commissary to help grow that side of the business.”

Then in 2014, before the new facility was ready, large orders began to pour in. First, a deli merchandiser for the Columbus, OH, division of Cincinnati-based Kroger asked if the bakery could supply soft pretzels to 123 of its retail stores in the northern section of the state. It was part of a broader initiative by the division to feature more locally made products in its stores.

“Our biggest hurdle initially was transporting fresh-baked pretzels,” Mr. Gottenbusch recalled. “In some ways, they’re like baguettes with a 12-hour shelf life. So we started experimenting with flash-freezing the pretzel immediately after baking. Once we started flash-freezing pretzels, the opportunity existed to expand our market and provide frozen product through distributors.”

More recently, a foodservice distributor is putting Pretzel Baron on the national map with a pretzel-and-dip combination pack that just began selling in April. The initial order was so large that it took the new bakery several weeks just to fill up the pipeline.

The key to the bakery’s efficiency in the wholesale arena involves few changeovers. “What I’m doing is nothing short of a 16-hour run,” he noted. “If I can go for a week-long run so we’re not doing changeovers, that’s great. My goal is to run 24 hours a day, five days a week with no changeovers on the run, and then do a changeover on the weekend, if necessary. That will improve our bottom line and eliminate a lot of my cripples.”