Founded in 2001, BackWerk has since developed into Germany’s biggest food service bakery. It also has outlets in three other European countries. In an interview, CEO Karl Brauckmann not only reveals the secrets of the company’s success, but also reports on the partnership-based cooperation with its franchisees and on the current reorientation process aimed at establishing BackWerk as a feel-good-food provider.
Mr Brauckmann, BackWerk is seen as Germany’s biggest food service bakery. What do you believe to be the most decisive factors in this success?
Our success is based on three pillars:
Firstly, we operate in a continuously and rapidly changing market which requires a constant willingness to innovate and the ability to adapt to changing customer needs. The latter have changed considerably since the foundation of BackWerk in 2001. We have therefore also developed from a local supplier offering an inexpensive range of bread and bread rolls to a snack and food service provider. We now provide a fresh and high-quality range of modern snacks as well as hot and cold beverages, an offering that is very well received. We put our heart and soul into the development of new, trendy products, such as our superfood range. And I think that our guests can sense this commitment.
The second pillar is formed by our partnership-based franchise model. We provide our partners with the freedom to think and act entrepreneurially. After all, those who view themselves as independent entrepreneurs, and not only as agents working to implement the instructions of others, also develop their own ideas. There is also the fact that our partners invest their own money and thus work with a corresponding level of commitment to remain competitive in a hotly contested market. This results in a high level of adaptability and a constant willingness to innovate, both on our side and on the side of our partners.
We view our democratic brand as the company’s third pillar. What we mean here is that BackWerk is a place where everybody likes to go – from school pupils during their break to business people on the way to their next meeting and friends wanting to take a breather during a shopping tour.
BackWerk was acquired by Valora in 2017. What benefits will BackWerk gain from this takeover?
Valora is a godsend for us! The new ownership means that we have greater planning security and long-term development prospects. We are delighted that we will be able to continue on our growth path at even greater speed in future under the umbrella of Valora.
The cooperation also yields various synergy effects: everybody involved will benefit from the link to other strong food and retail brands. Cross-selling opportunities will also come about for Valora’s own brands, including ok.-, or as a result of us implementing Ditsch products. There is also Valora’s expertise in the management of small-scale concepts at highly frequented locations, something we are benefiting from greatly.
What plans do you have for BackWerk in 2018?
We are currently already represented with outlets in Germany, Austria, the Netherlands and Switzerland. We will continue to focus on these countries as part of our expansion activities, with Switzerland, being somewhere we also want to grow. The local expertise of Valora of course helps us here.
Another of our objectives is to further increase the profitability of the individual stores. To this end, we have launched the “BackWerk 2020 Modularisation” project. As part of this project, we will take a close look at each individual BackWerk outlet and analyse them on the basis of specific criteria, such as sales optimisation and savings potential.
Last year, we also already initiated a process of strategic reorientation. While we have until now primarily offered snacks to go, we are increasingly developing into an indulgence destination with feel-good food in various space formats. A flexible interior concept, a product offensive, a new logo and new colours are supporting us in implementing this strategic reorientation.
BackWerk now has more than 340 locations managed by over 200 franchise partners. How do you ensure that you do not lose your proximity to your customers despite the growing number of points of sale?
The key lies in our decentralised organisation combined with the decentralised management at a local level. Our partners on the ground are those who ensure proximity to guests and who are in direct contact with them. The growing number of locations changes nothing in this regard. And we of course talk to our partners on a regular basis. Furthermore, we are in constant dialogue with our guests thanks to social media and our central complaints management. We also conduct regular customer surveys and analyses to ensure that we keep our finger on the pulse of our guests’ needs and are able to respond to them. Our proximity to our guests will remain a decisive factor in the company’s success going forward.
Due to the great competition in the out-of-home market, it is essential to address the constantly changing needs of customers in a timely manner. What do you believe will be the trends that shape the market this year?
Conscious and healthy nutrition is and will remain a trend. Here, it is important to know where the products originate from – with regionality being a keyword – and what they contain in terms of additives, allergens, etc. Guests are also expecting an increasingly high level of product quality – including and especially when they are in a hurry. Nevertheless, attractive pricing will also always remain important.
The BackWerk franchise system has won several awards in recent years. What can this success be attributed to?
That’s right, we have already been recognised as having the best franchise system both in Germany and Austria. The partnership-based cooperation with our franchise partners is important to us. For example, we have the solidarity fund for partners who find themselves in need through no fault of their own, as well as a “Partner Representative Board” elected by the franchise partners. There are also regular events for our franchise partners, such as our annual general meeting, various strategy conferences and regional partner gatherings. These events are informative in nature and organised jointly. We also attach great importance to the selection and training of our franchise partners by our Operations team and the training academy.