Choco Leibniz, Puff Pastry Biscuits and the famous Leibniz Butter Biscuit: Over 90% of German-speaking households know the name Bahlsen according to the company website. Their annual production volumes and sales are growing, they export to the US, Europe, Middle East and now Asia. Founded in 1889, this family-owned business relies not only on tradition and nostalgia to stand up to powerful competitors such as Nestlé, Mondelez or de Beukelaer. What other factors are responsible for the Bahlsen’s success?
Hermann Bahlsen’s “Cakesfabrik” was founded in Hannover with 10 employees. The breakthrough came with the famous Leibniz „Keks“ (derived from „cakes“ by Bahlsen himself, the word was even entered in German dictionaries), later breakthroughs came with ice cream waffles and “Russian bread”. Now in its third generation, the family business has so far survived global economic crises, two world wars, as well as competition from global corporations such as Mondelez and Nestlé. There was also plenty of internal turbulence. Power struggles between the two Bahlsen brothers Lorenz and Werner in 1999 led to them split the company into ‚sweet’ and ‚salty’ divisions. In recent years, the company has presented itself as more successful than ever: with 559 million Euro in sales, more than 2,800 employees and annually increasing their production volume of more than 140 tons.
Success factor 1: Keeping the team on board
Founder Hermann Bahlsen was known for prioritizing the well-being of his employees – a great exception in those days. He offered production rooms designed by artists, further education, a library, a dentist – and Germany’s first employee magazine. Hermann’s grandson Werner also tries to harmonize the strategic requirements of a competitive company with the satisfaction and loyalty of his workforce. With perks such as flexible working models, free biscuits and, above all, involving his staff in chronically risky change processes within the company. All relevant departments were heavily involved in the strategic decision-making processes and thus contributed to difficult measures, such as necessary job cuts.
Success factor 2: Daring to Change
Bahlsen was open to innovation and improvements from early on. This is especially true for their products, which cater to the changing tastes and consumption habits of biscuit lovers in ever new shapes and sizes. They also kept setting standards in production. Bahlsen produced on an assembly line before Henry Ford, and Germany’s first so-called thermoplastic rigid pack with welded aluminum foil was produced in Hannover. Again and again, there were strategic realignments to equip the family business for international competition – including the switch to lean production or towards a more customer-oriented rather than technology-oriented production. Again and again they managed to keep their staff on board, maintaining their link with the company. Until, in 2012, a misstep happened.
Success factor 3: Learning from mistakes
Working with McKinsey consultants, Bahlsen decided to quit the traditional Christmas biscuit business and close one of their 4 plants. But what was meant to improve competitiveness led to a “revolt” among executives, who felt overwhelmed by a decision that was not rooted in the company. Instead of forcing the strategy, Werner Bahlsen stopped and listened. That same year, he went back to the drawing board – and this time the strategy was drafted by working groups across all departments. A course correction that proved successful. Even tough measures, such as shifting the power of the traditionally more powerful production engineers over to sales and marketing, were deemed justified to future-proof the company and were thus supported. The trust of Bahlsen’s employees in their company remained largely intact – a challenge in every change process.
Success factor 4: Trying out the new
Even after 130 years, Bahlsen’s desire for innovation is still a main driver. The company survived the economic crisis in the 1930s with the help of innovative ideas such as the cheap “Expressdose”, filled with take away biscuits. Today, new launches such as the successful Pick up biscuit bar or ever changing special editions of well-known Bahlsen biscuit classics go to market every year. Bahlsen’s marketing has also always been picking up on trends. Bahlsen’s brand name was Germany’s second neon sign in Berlin in 1898, while the young biscuit bar Pick up is advertised with influencer cooperation, display ads and targeted content for social media. All this, while Bahlsen’s next generation is in the starting blocks. Hermann Bahlsen’s great-granddaughter Verena founded Hermann’s, a restaurant and international network for food innovations. Bahlsen’s urge to experiment remains unbroken.
Take aways from Bahlsen: MARMIND Top Tips
Involve your employees in strategic decisions – they are a decisive factor whether a new strategy works or fails
Learn from your mistakes – only those who openly deal with missteps can grow and improve.
Stay curious – past successes are no free pass for the future.
This article is based on the sources below (German):