April 25, 2016
Handout Art/Philly Pretzel Factory
A single pretzel from the Philly Pretzel Factory, which will hand out free pretzels for National Pretzel Day on April 26. Philly Pretzel Factory was founded in 1998 by Daniel DiZio and Len Lehman.
Founded in ’98, the Philly Pretzel Factory pretzel is practically ubiquitous in Philadelphia: If you're not grabbing one at a work party, you're snagging one on the way to the train at Suburban Station or picking one up at just about any city-hosted event. It is, in a sense that's probably more literal than hyperbolic, the ultimate Philly snack.
In light of National Pretzel Day on Tuesday, April 26 — during which the Philly Pretzel Factory will give away free pretzels at all of its 100-plus locations — we picked the brain of company president Marty Ferrill. Here, Ferrill, who heads the brand's franchising efforts, opened up about everything from spreading the business to Texas to competing with Auntie Anne's.
It's interesting that you've had leadership roles at two Philly snack staples, having been director of research and development at Rita's Water Ice. What’s the crossover between the two?
Whenever you take a regional food, the challenge is — pretzels aren’t regional, they’re definitely national, but the Philly-style pretzel is a regional product. And the same with water ice with Rita’s. They’re a regional food. And when you take them outside the areas where people grew up with them, it definitely takes the customer some time to get used to the product. Anywhere we’ve gone, people have loved the product. I think that’s the unique challenge, just getting people used to creating that habit of eating the product when they need it. Philly Pretzel Factory, a good example is we have 100 pretzels on the menu, and when Philly people see 100 pretzels on the menu they understand that easily — ‘I can bring them to the office, or the soccer game,' whatever. Outside the market, it’s ‘One-hundred soft pretzels!? Why would you need 100 soft pretzels?’ It just doesn’t resonate, what the use of the product is.
Marty Ferrill, president of the Philly Pretzel Factory.
How much of your sales are from events and catering?
It depends on the store, location and market. Some stores, the wholesale business, which is selling to schools, hospitals and making daily deliveries, sometimes is as much as 50 or 60 percent of a store's business. A lot of stores, the majority, it’s closer to 15 to 20 percent. It’s still a traditional retail business where you're dependent on the people around you to come in and buy pretzels and party trays and things like that.
Who would you say is your competition? Auntie Anne’s? Wawa?
Well, we’re in the snack category. So we’re definitely competing with snacks in general. So, whether it’s a Philly-style pretzel or ice cream or anything, it’s this indulgent product. It's not something people need. We have to compete with a lot of those in the snack categories. Auntie Anne’s, the pretzels are pretzels. Their product, we always say, is completely different from a Philly-style pretzel. We don’t look at them — especially in this market, really — as our direct competitor, because of the different styles of the products. Theirs is much sweeter — it’s, we say it’s kind of a donut shaped as a pretzel, as opposed to a real pretzel. Especially in this market, where people have grown up eating Philly-style pretzels. Outside of this market, they’re obviously much stronger than us — 1,000 locations. So when we go to markets where we're not well-known and they are, people need to try ours next to theirs and they say ‘Oh this is different.’ And they like ‘em. There’s space for both the brands.
What makes a Philly pretzel a Philly pretzel? Aren’t ingredients pretty simple when it boils down to it?
Well, you’d think. But that’s probably the one big difference: the real difference is definitely the dough and what we do with the product, compared to a traditional — not just Auntie Anne’s, but there are lots of companies out there with a mall-based concept of a pretzel. Our pretzel is made with a different type of flour than those types of brands use. Ours is much denser; it’s what we call a high-protein flour. We buy this flour that allows the product to be much firmer, crisper on the outside. It gives it a definitely different texture than what you would see in a traditional mall-based pretzel. Those are softer and have an almost donut-like consistency, whereas ours is definitely a more hearty, traditional-style pretzel. And we don’t put butter on top of our pretzels and things like that also. So that changes the flavors as well.
Nachos, for example, are outpacing most other salty snack foods in the U.S. — like potato chips — in sales growth. Is it hard to keep up with changing interests?
It’s definitely a challenge of always trying to be a little innovative in terms of how you do things. We’re always going to be first and foremost a pretzel brand. Over the years, we have evolved. When we first started, when the founders started, they had traditional pretzels and sodas and that was it. Over the years, we’ve added pretzel dogs to the menu, a cheesesteak pretzel to the menu, bite-sized pretzels to the menu and party trays — which are also a big part of the business. Coming up now, we’re going into a real busy time for us, because in the spring graduation season people are having [pretzels] at graduation parties. You're going to have a couple pretzel trays alongside the cookie trays, the chicken nugget trays, whatever else you might have. ...
That's another thing that separates us from the competition is you buy this product in bulk — at a good value, too.
Any new stores opening?
We’re definitely growing with new stores. The majority of the locations we’re opening at this point are outside the Philly market. The Philly market is almost sold out. There are a few pockets here and there we find we can put a couple stores. But mostly the growth is Maryland through Virginia, in Florida now through the Carolinas, and going north up through North Jersey into New York — that's where the next phase of our growth is at this point.
... We are opening one in Texas this year, too. We have interest all over the country for putting locations. We’re somewhat conservative in terms of where we’re putting the stores right now. That store in Texas, we have a [guy in New Jersey] whose cousin wants to take it to Texas. And we decided if he’s going to be a partner he’s a good fit to sort of test the waters with someone who already knows the brand and understands it. That’s why we’re doing that market right now. We’re still primarily focused East Coast and trying to develop that, just from a logistics standpoint.
What do you think you can improve on in the future?
Products are definitely a part of it. We’re always looking at what new product we can bring in, that may help us grow sales or create interest in the brand. I think we focus every day on the real basics, how do we do a better job every day delivering great fresh pretzels, great customer service in a convenient, inviting atmosphere? Those are the basics we really focus on the most.
Do you happen to know the origin of National Pretzel Day?
I do. There was a Pennsylvania representative — [Robert S.] Walker, I believe his name was, a big fan of pretzels —and [he] decided to lobby for pretzel day and was able to get it through. It’s one of these days like National Donut Day and all these things. It's a big day for us, obviously. We're excited there’s a National Pretzel Day. It’s turned into one of our busier days of the entire year, even though we’re giving the product away for free in our store. It turns out to be a good day for the store and our transactions are increased that day from people coming in for the free pretzel.
What's your best-seller that's not the original pretzel?
The standard is No. 1, for sure. The pretzel dog is No. 2, if we’re going outside the pretzel arena. We sell a lot of pretzel dogs, all-beef Dietz and Watson hot dog wrapped in our pretzel dough. They do really well. A great little snack or light lunch. People buy those every day.
