How the cookie crumbles

Bahlsen family withdraws from management of cookie empire

Werner M. Bahlsen
He's still committed to his cookies. Source: dpa

Almost every German has munched on it, be it sugar-loving kids or elderly matrons over a cozy coffee klatsch: the iconic Leibniz butter cookie. After all, it has been on the market for more than 120 years and is known across the country. And even many sweet-toothed Americans or Brits are familiar with the treat.

The famous cookie has been the key product for Bahlsen’s economic success. In 2015, the German company sold over 2 billion of its bestseller in more than 55 countries. Overall, Bahlsen generates annual sales of €559 million. The family-owned company has always kept an eye on tradition. But now the cookie empire from Hanover is overhauling its leadership structure.

On Tuesday, chief executive Werner Bahlsen, announced that he is handing over the operational management of his company to a four-member management team. The 69-year-old will then join the newly established board of directors. “In the future, I will look after the strategic direction and startups,” he said.

“We talked a lot about the business, but not about the generation change. This is one of the biggest risks in family businesses.”

Werner Bahlsen, outgoing CEO, Bahlsen

Shortly before the company celebrates its 130th anniversary, there will be no member of the Bahlsen family managing the group’s operating business. But Mr. Bahlsen doesn’t view handing over his life’s work to someone else a bad thing. After all, 99 years ago four directors also ran the family business, including two women, he explained. The father of four is convinced that Bahlsen will ultimately remain a family business. His eldest son Johannes, 30, emphasized in 2014: “We grew up with the company, we will continue it.”

In 2017, the 2,830 Bahlsen employees produced 142,000 tons of cookies, bars and baked goods at six sites in Germany and Poland, which the company exported to 55 countries. For Mr. Bahlsen, who also represents German family entrepreneurs at the CDU Economic Council, leaving the operating business is part of his sustainability strategy.

“The last generation did not care enough about the transition,” Mr. Bahlsen said in an interview with Handelsblatt last year. “We talked a lot about the business, but not about the generation change. This is one of the biggest risks in family businesses.” This led to a division in 1999. “My brother took over the salty snack business for chips and peanuts, I took over the sweets business, my brother-in-law real estate and some foreign subsidiaries,” he said.

Mr. Bahlsen also wants to do things differently from his father, who still came to the office every day at age 80. That is not beneficial for the company, he is convinced.

Bahlsen
The cookie monster would be delighted. Source: dpa

From now on, Mr. Bahlsen will focus on matters such as the planned sugar tax in Great Britain or sustainable palm oil in Malaysia, while also cooperating with startups and searching for new products in supermarkets. He is also considering acting as an investor for food ventures.

Mr. Bahlsen is currently preoccupied with various startups and new business ideas. One of these is the network for healthy and innovative nutrition that includes Hermann’s restaurant in Berlin, which his 25-year-old daughter Verena co-founded. Another is called Raw Bite, which is trying to win over new customers with fruit bars.

Mr. Bahlsen, who joined the family business in 1975, has a lot in store for his new role as a board member. Bahlsen’s “Strategy 2025” aims to double sales. The company will also no longer be Germany-centered and will diversify. Already, more women than men work for Bahlsen today, and 30 percent of the management is female. Daniela Mündler will be part of the new four-member management team – alongside Michael Hähnel, Scott Brankin and, beginning this fall, Jörg Hönemann.

The concrete role Mr. Bahlsen’s children will play in the company hasn’t been decided yet. Johannes, who works for an automotive supplier, is now on the board of directors, Verena takes care of Hermann’s, while Andreas and Julia are not yet working for the company. However, all four have held shares for 20 years, while Mr. Bahlsen still holds 5 percent. But he stressed: “The company is not a playground for entrepreneurial children, under the motto: ‘I’ll just give it a try’. We are responsible for over 2,500 employees.”

Anja Müller writes about family and small- and medium-sized firms. Stephanie Ott is a writer and editor for Handelsblatt Global in New York. To contact the authors: mueller@handelsblatt.com, s.ott@extern.handelsblatt.com.

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