Ditsch expands vertical integration and transatlantic cooperation

Valora’s 16 production lines in Germany, the US and Switzerland produced around 600 million pretzel products in 2020. In particular, the cooperation between the Oranienbaum and Cincinnati production sites has been expanded.

Both the Oranienbaum and Cincinnati Ditsch production sites will now cooperate more closely to test new products in their respective markets. Valora has also reinforced vertical integration throughout the Group by extending insourcing for BackWerk products.

The Valora Group values vertical integration highly. Ditsch makes a considerable contribution in that respect. In addition to its own shops and major distributors, such as bakeries or hotels in 30 countries, the traditional bakery supplies the Brezelkönig and BackWerk food service formats and the ServiceStore DB, U-Store and avec retail formats.

Pretzel 1
Since 1919: Ditsch stands for pretzels.

Ditsch has made another major contribution to the Group’s vertical integration in recent months by identifying extra products it can make for BackWerk. Björn Tiemann, Sales Managing Director at Ditsch, says: “We took a close look at the entire Valora Group range and asked ourselves which products we could and want to produce en masse by ourselves.”

It’s interesting to note in this connection that insourcing last year extended beyond pretzel production to include pretzel croissants. “They are specialities, filled croissants for example”, explains Sebastian Gooding, Managing Director at Ditsch. “We are thus staying true to our long-term production competency and quality strategy.”

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Last summer, Ditsch Germany dispatched burger and hot dog buns to retailers in the US for the first time.

Burger and hot dog buns for the US

Besides the increased vertical integration, Ditsch has intensified cooperation between the two Oranienbaum and Cincinnati production sites. Last summer, Ditsch Germany dispatched 14 containers with burger and hot dog buns to retailers in the US for the first time. The transatlantic burger and bun deliveries have since continued at intervals of four weeks to meet the high demand.

“The closer transatlantic cooperation is the perfect way to test demand for selected products in the other market”, says Gooding. “If they are successful, Ditsch can decide whether to produce them onsite in the US and in Germany.” The next aim of the transatlantic cooperation is to deliver pretzel bites from the US to Germany and market them here.

“Our primary aim in recent months has been to adapt the pretzel bite recipes so they are eligible for Europe. Europe applies different standards to foodstuffs than the US”, explains Tiemann. If everything goes according to plan and we can clear up the logistical side, our German customers will soon be able to look forward to new Ditsch products.

Flexibility due to own production lines

The general US market has grown significantly since Ditsch entered – in terms of volume but, most of all, regarding price, as Gooding is aware. He is convinced: “This shows that Americans value the quality of Ditsch and that they are prepared to pay more for it.” To meet the increased demand, Ditsch in Cincinnati has invested in new production lines in recent years. The second one became operational in the first quarter of 2020.

This new production line in the US came into its own during the coronavirus crisis: all the retailers suddenly had to pack all the baked produce. The investments made by Ditsch enabled the company to package its products in line with consumer preferences.

The company has also identified ways in Germany to make best use of the 13 production lines in Mainz and Oranienbaum, despite falling demand for Food Service products. “We have, for example, adapted some of the retail products and brought new creations to market – for example our grill pretzels with a garlic butter or herb filling”, says Björn Tiemann. The flexibility enjoyed by Ditsch through having its own production lines meant it was able to compensate for some of the demand slump experienced in 2020.

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Pretzel Bites: Soon available in Germany.

Developing staff

The increasing verticalisation, flexibility in the use of production lines and possible expansion of the range in the respective markets pose a challenge that Ditsch has actively addressed since the start of last year: efficient organisation along the entire supply chain is required to meet orders and customer preferences. That calls for very precise planning as well as adherence to high quality and security standards.

It takes well trained employees to manage these situations successfully. Ditsch has therefore committed to a new in-house training programme. This programme enables the selected employees to progress from production assistant, through plant operator to team leader via e-learning and training on the job. It takes 20 weeks to complete one stage.

The aim of the training is to increase stability and production efficiency through well qualified staff, thus lowering costs. Of course, ensuring the quality of the first-class pretzels is also a consideration. “Since the programme started, 15 of our staff have already completed the course. And Ditsch looks forward to putting more of its staff through the course going forward”, says Gooding.

Fotos: Noë Flum, Ditsch. / Video: QVC.