Always the optimist, Gary Gottenbusch projected a banner year for Ditsch USA. And why not? Since the president of the Cincinnati-based company started up the wholesale bakery in 2015, the burgeoning demand for its Bavarian soft pretzels has fueled double-digit annual growth and prompted the business to invest — and reinvest — to boost its capacity and new product potential.
“When I first opened the bakery, I didn’t even know what the main product was going to be. I thought it was going to be the 6-oz twist pretzel,” Mr. Gottenbusch said. “Since then, pretzel sticks and bites have been such a huge part of our business that those three items have become our top-selling products.”
Overall, Ditsch USA produces about 80 SKUs of frozen, par-baked soft pretzels for foodservice, in-store bakery/delis, retailers, and even other bakeries and food manufacturers. It specializes in everything from mall-style pretzels and difficult-to-automate items to gourmet snacks and signature, custom-made products specially formulated by Mr. Gottenbusch, a third-generation master baker who received his training in Germany.
“We complement what other food companies are doing in the market to become a part of their product portfolios,” he said. “Our capabilities set us apart — whether they’re clean label, inclusions, packaging or unique traditional shapes and recipes. Our team focuses on finding the right product to support our partners. The capability of the team is such that we can do this at scale, of which I am immensely proud.”
Because the business had been so robust, in January the company completed yet another investment that was designed to set the stage for a breakout year. This time, it started up a second state-of-the-art production line that effectively tripled the capacity at its 100,000-plus square-foot facility.
“During the past few years, our growth was quick mainly due to the recipes we were able to bring to the market,” Mr. Gottenbusch said. “We remain traditional bakers, with bigger tools and equipment.”
Shortly after the line fired up, the pandemic hit. Mr. Gottenbusch’s first concern became how to keep a skilled workforce that had grown from 10 to more than 110 over the past five years.
“We didn’t want to rebuild. We wanted to keep everything going well,” he said. “We were wondering, ‘What can we do to make that happen and not pay people to stand around and clean the bakery?’ ”
That was a tough proposition because a large part of the pretzel business had been in foodservice, driven by new product development to create new flavors and shapes with wholesome ingredients.
Specifically, it wasn’t just that restaurants, hotels, catering, schools and other foodservice institutions closed. Any soft pretzels that were served fresh — whether they were as appetizers on the menu, in bulk bins at in-store bakeries or as grab-and-go hot pretzel sticks for convenience stores — now needed to be prepackaged, individually wrapped and sealed or twist-tied for food safety reasons.
“That business is pretty much gone for now,” he said. “It took about two or three weeks. We reacted early with our health measures working with our European colleagues, and then set about looking to support our partners with our wider packaging capabilities. Our recipes, capabilities and company values have been key elements that our customers have valued during these times. We want to ensure that everyone has a good chance at maintaining their businesses in these times by offering great products to Americans.”
Despite the national shutdown nobody could have predicted, Mr. Gottenbusch observed that the timing of the company’s investment couldn’t have been more fortuitous.
The new equipment included new flowwrappers, baggers and other systems that paved the way for Ditsch USA to serve the new retail-ready packaging that its customers are now requesting for food safety reasons.
That move found itself on a fast track in a matter of days. It wasn’t an easy transition. Like many wholesale bakers, Ditsch USA scrambled to diversify its business and adjust its operation in a matter of weeks. The company worked with c-store and retail customers to shift from bulk to bagged or individually wrapped.
The two-pronged approach worked as its growing list of customers sought to keep up with demand for the onslaught of prepacked pretzels that could be served as a snack or part of a meal.
“More than half of my current business is now flowwrapped,” Mr. Gottenbusch said. “Any package with a fin seal at the end of it is what sells today. Sealed packaging gives confidence to our customers who may have food safety and security concerns. That’s how the market has changed during COVID. This coupled with healthy recipes gives our partners unique selling points. It’s a complete product line for today’s consumer.”
By doing so, he added, the bakery kept everyone safe, fully employed.
“And we’re getting back to being booked out for six weeks on our production schedule,” he said. “I’d like to plan out for eight weeks, and we should get there soon. Eight weeks is the perfect schedule, so we can plan ahead to meet customers’ needs and operate our bakery as efficiently as possible. If possible, I’d even like to hire some more staff. I want us to do our part to support a return to employment in our country.”
This article is an excerpt from the June 2020 issue of Baking & Snack. To read the entire feature on Ditsch USA, click here.