Trying for ‘bigger and bolder’: New CEO puts twist in Wetzel’s Pretzels
CEO Jennifer Schuler in Wetzel’s Pretzels’ Twisted Kitchen. At left she strikes a victorious pose ala soccer star Megan Rapinoe.
Wetzel’s Pretzels photos by Scott Witter
Did I want a pretzel with mango glaze drizzled with chamoy and topped with Tajin?
Or a cereal milk glaze topped with Cinnamon Toast Crunch?
Maple glaze sprinkled with chopped bacon?
Chocolate glaze drizzle with marshmallow fluff and graham crackers?
Or smothered with jalapeno cheese dip and piled with Flamin’ Hot Cheetos?
No, this was not the stuff of carb cravings spun up after a 10-day detox diet. Rather, it was three different “flights” of pretzels whipped up in Wetzel’s Twisted Kitchen, the lab where the 25-year-old Wetzel’s Pretzels brand has been working to ramp up Instagram-worthy innovation since Jennifer Schuler, formerly chief marketing officer, took the helm as CEO in January.
Wearing a pale pink jacket and matching sneakers, today she’s dancing around in front of a lemon yellow background with a loaded pretzel—Fruity Pebbles is her choice—at the behest of our LA-based photographer.
Her team, led by Marketing Director Deanna Durst and including a food stylist hired to make those pretzels look tempting on social media, is pumping out pretzel after pretzel, slathering on the toppings for photos, and then chopping them up in bits for everyone to try.
“We aspire to be fun, playful, West Coast and the innovative player,” Schuler said in an interview before the Twisted Kitchen got rolling, in the space at corporate headquarters in Pasadena, California, that’s designed to look like a Wetzel’s store, bursting with primary colors and neon lights. “We’ll do an innovation day and we’ll just bake and test all day.”
The Twisted Kitchen is part of her effort to boost the 354-unit brand from the middle of the snack pack, with a decent but not amazing 5.2 percent sales growth last year. Auntie Anne’s, by contrast, its much-larger competitor, posted 2.2 percent sales growth—lowest of the snack brands on the Franchise Times Top 200+—from its 1,984 units.
For Schuler, the idea started about a year and a half ago when visiting Insomnia Cookies in New York City, which famously delivers warm cookies to customers until 3 a.m. “These two 20-something guys came in,” she recalls observing. “Let’s just describe them as less than sober.” They got their cookies and “I expected them to inhale them. But they asked for their special carryout box—and they took photos,” she said, proving that with some food brands “the social sharing matters.”
And so Wetzel’s charged down that path, leading to all those crazy toppings as described above. “Within four months we increased our followers on Instagram by 1,000 percent,” she said, from 8,000 to 18,000.
But in the real world, at least at first, all that sharing wasn’t translating into workable products at the stores. “I was working with chefs” at first, she said. “But they were over-complicated,” like “when we had to make a béchamel sauce.”
She switched to using a food stylist, who helped the brand unlock new product ideas that could actually be made in seconds and hold up in a food case. “A hallmark of this franchise is simplicity,” said Schuler, a point that has been driven home for her since she purchased two stores of her own in the Mall of America in Minnesota and got a taste for her first Black Friday there last year. “While there’s a gazillion things you could do with pretzels,” she’s looking for—and rigorously testing in the Twisted Kitchen—ideas that will sell 10 to 15 units a day and most importantly, pass the “fussy” test. If people in the test stores say it’s too fussy, it never makes a system-wide rollout.
“One every couple of years” is the norm for full-scale rollouts, most recently Pizza Bitz, which were an idea from a franchisee, she said. “You have to keep innovating,” she said. “One, to be relevant to consumers,” and two, “today 40 percent of our business is Bitz, which weren’t even on the menu 25 years ago.”
What’s in a name?
Bill Phelps is the co-founder of Wetzel’s Pretzels, along with Rick Wetzel, and he served as CEO until early 2019 when Schuler took over. He told Franchise Times a hard-to-believe story about the brand’s name in a February interview.
“Rick Wetzel and I were working together at Nestle, we heard about pretzel stores, and we walked into a pretzel store. He and I went into the bar, and we grabbed a napkin and wrote a business plan on a napkin, and that was March of 1994. We had a store opened in eight months,” he said.
So which came first, the name Wetzel or the idea to go into pretzels? “That was like our 10th choice of our name,” he said, insisting he was telling the truth.
“We wanted to be like California Pizza Kitchen, and we were going to be, like, California Pretzels, but you couldn’t trademark that. One of my wife’s friends, who was with P&G, said, ‘You idiot, call it Wetzel’s Pretzels.’ We thought it was corny so we thought we’ll just call it Wetzel’s, and people walked up and said, ‘What is it?’ So we added Pretzels.”
The early days were rough, he said, but they got to 15 stores in three years and then took on angel investors. “Then we loaded up the headquarters with a bunch of high-paid executives and we started losing our butts,” he recalled, until one day one of those investors showed up.
“He looked at our cash flow plans, and he said, ‘I know where this one is going,’ which meant it was going bankrupt,” Phelps recalls. “We met at Rick Wetzel’s house, and we made the decision to right-size the overhead of the company and we did that in the next 60 days, and the margins have been phenomenal ever since.”
Today, Schuler leans on that legacy but faces new headwinds, particularly the bloodbath at shopping malls where major retailers are closing stores. She believes malls aren’t dying, they’re just different, leaning toward entertainment and food and that’s where Wetzel’s Pretzels fits right in. Plus, she says, the majority of their stores are in “A” malls.
Still, she’s trying to change the mix, with 70 percent of all stores in malls, down from 75 percent two years ago and a goal to get non-traditional locations up to 33 percent of the pie.
Meanwhile Schuler continues to beat the drum of innovation, and challenges her team to stay engaged with current culture by, for instance, taking them on a field trip to visit a food and wine event, which led to the creation of a bubble lemonade, Cherry Boba Frozen Lemonade to be exact, that got a mention on “Good Morning America.”
When we visited in July, Schuler, a college soccer player, was drawing inspiration from Megan Rapinoe, captain of the U.S. Women’s Soccer team that had just won the World Cup in ecstatic fashion. Rapinoe became the spokesperson for the team, standing with arms victoriously outstretched after each goal, for example, or making an impassioned speech after the victory to “hate less, love more.”
“Our theme this year is, how we can do things that are bigger and bolder,” Schuler said, and immediately after the World Cup victory she decided for the weekly team meeting, “we’re going to throw out our agenda. We’re going to talk about U.S. women’s soccer.”
One lesson: “Their focused and singular determination to win. They stayed totally focused on winning,” Schuler marveled. “Are we winning? What’s the score?” is something she wants her team to think about, along with “celebrating your wins and having fun.”
Fast forward to the end of that photo shoot, when Schuler takes two pretzels and does a triumphant Megan Rapinoe pose, one fully loaded with Fruity Pebbles in each hand, as the camera snaps away.