Operations

How Wetzel's Pretzels achieved 35% growth in 3 years

Wetzel's Pretzels achieved 35% growth in jus three years. The Pasadena, California brand is a leader in the snack category and thrives on innovation and a growth mindset.

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February 15, 2023 by Mandy Wolf Detwiler — Editor, Networld Media Group

Wetzel's Pretzels is at the top of its game and the snacking industry, according to company officials. The Pasadena, California-based pretzel brand achieved a 35% growth from 2021 to 2022, and QSRweb.com talked to CEO Jennifer Schuler to learn what's fueling that growth, how the company is thriving and what sets it apart in the growing snack field.

The brand was founded in 1994 in Pasadena by Rick Wetzel and Bill Phelps, who ran the company until 2019 when Schuler took over. Today, there are more than 350 locations. Of those, 35 are corporate owned. The rest are franchised.

Jennifer Schuler, CEO of Wetzel's Pretzels. Provided.

"We've always been a super-premium player in the category," Schuler said in a Zoom interview, "the real fun brand, fresh and forward in our flavors, very West Coast in our branding. And so we've always been the category leader in terms of innovation, and I think snacking is a category where you're seeing a ton of growth today."

As the company has grown, it's been able to gain more traction in the snack market. People are eating differently than they used to, Schuler said, which has become less about the number of meals in a day and more about mini-meals meals on the go. Portable items like the pretzels and hot dogs that Wetzel's serves fit that criteria for modern consumers.

Keeping the brand contemporary and exciting has been paramount to company officials. Having nearly 30 years in the industry, Wetzel's is hitting a second generation and staying relevant is important. "Now you've got people who remember going to the mall as a kid to go shoe shopping and stopping for a pretzel at Wetzel's," Schuler said. "Now that's a tradition and something they're able to repeat with their own children. It's more powerful when you're tapping into that emotion and nostalgia for people."

On the menu

Topping menu sales are the Wetzel Bitz, bite-sized pieces of pretzel with a dipping sauce that are snackable and sharable and can be portioned out, Schuler said. They come in original, almond crunch, cinnamon and the fastest growing flavor, Pizza Bitz.

Aside from pretzels, there are also Wetzel dogs wrapped in dough (mini dogs sell well) and lemonade, creating more of a mini-meal that is popular in snacking right now. The brand continues to see growth in lemonade. With a marked decline in soda sales, lemonade fits that need, particularly with a fresh lemonade product. There's much Wetzel's can add to its lemonades to mix it up, including fruit and fruit purees.

In 2021, the brand released a mango boba lemonade, layered with mango boba pearls and a fresh mango puree on top. It was flavor forward and had more texture than traditional lemonade.

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"We've also been focusing on flavor innovation and being in Southern California with a really heavy density of Latinx population here and they're a key customer base for us, we have launched two products that have done incredibly well for us," Schuler said.

Those include Choco Churro Bitz cinnamon sugar pretzel bites layered with Ghirardelli chocolate sauce with a dulce de leche on top served open with a fork – and a frozen horchata, a rice milk drink, topped with some cinnamon.

"I feel like Gen Zs are flavor explorers. The world is very global for them," Schuler said. "The United States is more diverse than ever and people are traveling more than ever and using food as experience. The more we help create experiences at Wetzel's through being able to explore new flavor profiles, the more relevant I think we are to today's consumer."

About 75% of Wetzel's Pretzels locations are in malls, and those consumers are using malls for experiences and entertainment, such as the addition of movie theaters, virtual gaming parks and golfing outlets. Those malls also have more food service options than ever before, creating more competition.

"As people are using (malls) in an experiential way, we have to make sure that we're leveling up and providing using innovation to provide new experiences," Schuler added.

Growth

Schuler attributes the 35% growth in sales from 2021 to 2022 to her leadership team and the fact that the snack category is growing in general, as well as the brand's focus on innovation. Wetzel's Pretzels has adopted a growth mindset in general, she says. The team, which runs lean, is focused on personal growth as well as the growth of the company.

"We find that the more we're focused on that, and doing our work with purpose and using that as a platform for personal growth, the more naturally the growth is coming for the organization," Schuler added.

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Aside from the brand's traditional mall units are its non-traditional outlets, including food trucks, airports, locations in Walmart stores and c-stores and a partnership with Macy's department stores. The average customer goes to a mall every other month, Schuler said, and non-traditional locations give the brand added exposure and brings pretzels to the people. "Food trucks in general we loved because the brand is so playful and fun and we just thought the design of the food truck, when that sunny yellow truck showed up, it's the equivalent of the ice cream truck showing up in the neighborhood. Kids light up and adults love to indulge and enjoy it to," Schuler said.

Food trucks are also a good entry model for a potential franchisee because of the less expensive start-up costs over a full-scale brick-and-mortar store.

The brand is focused on ensuring profitability for its franchisees. In the end, Schuler wants a great product that guests love that creates a successful business model for Wetzel's Pretzels' franchisees.

"The heart of a successful business model is simplicity and streamlining your menu (and) streamlining your operations so that they can focus on great service, great products, clean stores, etc., which is very challenging in the industry right now and particularly with labor challenges," Schuler said.

As a result, Wetzel's Pretzels is thoughtful and deliberate about the products it brings to market. Those go through a lot of internal testing and market testing, and it looks at external trends in its internal data. The goal is to add products without disrupting the franchisees' business model with expensive equipment for new menu items.

Franchising is the "lifeblood of the organization," Schuler said, creating a business model that changes franchisees' livelihoods and builds generational wealth.

Wetzel's Pretzels plans to open 40 units in 2023 and those will be a mix of traditional mall stores as well as non-traditional outlets. In 2022, it opened 29 stores, with high-profile locations like the LAX airport and its Macy's partnership.

To potential franchisees, Schuler said they need to be excited about any concept enough that it will help propel them during the challenging times that will inevitably come. "You need to balance that excitement and optimism and sense of hope that an entrepreneur has with a very conservative financial model," she said. "It's hard to do that because as an entrepreneur you're looking ahead to see what's possible and what you think you can do and the vision you have for where you think you can go."

About Mandy Wolf Detwiler

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Mandy Wolf Detwiler is the managing editor at Networld Media Group and the site editor for PizzaMarketplace.com and QSRweb.com. She has more than 20 years’ experience covering food, people and places.
 
An award-winning print journalist, Mandy brings more than 20 years’ experience to Networld Media Group. She has spent nearly two decades covering the pizza industry, from independent pizzerias to multi-unit chains and every size business in between. Mandy has been featured on the Food Network and has won numerous awards for her coverage of the restaurant industry. She has an insatiable appetite for learning, and can tell you where to find the best slices in the country after spending 15 years traveling and eating pizza for a living. 

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