This is a writing sample by “nycghostwriter,” AKA Barbara Finkelstein. It is a “Lunchbreak” column about Yoni Siletski, founder and CEO, Yoni’s Pretzel Challah, published in the May 1, 2019 issue of Ami magazine. You can get professional ghostwriting services from a published non-fiction writer. Email me or fill out the short form on my contact page.
Position: Founder and CEO, Age 30
Industry: Baked Goods
Established: 2016
Number of employees: 4 (Plus 4 contractors)
Location: Teaneck, NJ
Challah as we know it originated in Germany or Austria in the Middle Ages. Since then, Jewish bakers around the world have developed a trove of challah recipes, from the humble braided egg loaf to the Sephardic-inflected za’atar twist. When baker and chef Yoni Siletski entered the challah fray in his late twenties, he zeroed in on the pretzel challah. Yoni’s Pretzel Challah products are now on supermarket shelves in 13 states, including New York, Georgia, Illinois, Florida snd Connecticut.
In Yoni Siletski’s words
Long before I went to cooking school, I showed a passion for food. I was always hanging around kitchens in Teaneck, my hometown, peeling carrots, dicing onions, slicing deli. When it came to choosing a career, food preparation was a natural choice for me.
Most of my friends in the Jewish day school system went to college, and my decision to study at Le Cordon Bleu in Pittsburgh made me something of an outlier. But if you have a feel for cooking and baking, as I did, I cannot recommend cooking school enough. I came away with a broad-based knowledge of everything food. I learned about sauces, soups, meats, game, local sourcing and international foods. I discovered that I really liked hors d’oeuvres, especially combining as many different flavors into a single bite. Equally important, I was exposed to the business side of food. No matter how talented you are at sales, you are not born knowing how to make financial and marketing decisions. My education didn’t teach me every last thing about food, but it gave me a solid foundation in the business and craft of cooking and baking.
I got my training at a general education cooking school, but you can also seek out a kosher culinary arts school in the New York area.
Where were you in your life when you decided to start a pretzel challah company?
I was in the middle of running my own fleyshig and pareve catering business. We did a lot of Shabbos delivery and parties with an emphasis on “little bites:” Lots of hors d’oeuvres and single spoonfuls of chicken, beans and rice. Because of my familiarity throughout my youth with restaurants and caterers, catering was my comfort zone. As I hit my stride, though, I wanted to expand into the wholesale business. I had seen the pretzel challah before, but nobody was mass producing it. I smelled a market niche and I went after it.
What challenges did you encounter when you wanted to move away from catering into the baked goods business?
For a year I ran both business in conjunction with each other. It was insane. But I had no choice. My daily living expenses didn’t disappear. And whatever savings I had went into paying my home mortgage.
I remember one pre-Rosh Hashanah rush where I worked 72 hours straight. My catering business was mostly focused on Shabbos deliveries, but at the yom tovim we performed the same service. That year we had around 100 individual online orders. Plus we had to deliver to more than 100 stores. Fortunately, I have a good network of per diem workers, people I have met over the years, and I am able to call on them in a crunch.
What appealed to you about entering the wholesale market? Was it potentially more lucrative than catering?
Both businesses can be lucrative. Leaving catering was more about having a family life. As a caterer, I was working until one, two o’clock in the morning, and then going back to work at six a.m. Catering was fine for when I was single, but once I got married and had a few kids, I needed to earn a living with regular business hours.
How do you define the Yoni’s Pretzel Challah brand?
We’re the only pretzel challah that offers unique flavor options. We do an olive zaatar, a jalepeno, a chocolate crumb. Instead of a raisin challah, we offer a currant-cranberry-cherry pretzel challah. We have put products out in the market that didn’t exist before us. We are also egg-free vegan. The products I plan to release in the future will be egg-free vegan too.
How did you settle upon the recipe you use for Yoni’s Pretzel Challah?
I tested my challahs out on family and friends. My goal wasn’t to sell what I like. It was to sell what other people like. I went with the recipe where I get the most popular feedback.
Why did you choose a recipe without eggs?
I made a marketing decision. Kosher and vegan are the markets I felt I could attract.
In fact, 95 percent of my market is geared to Shabbos. The rest I sell to grocery stores in New York City, and those people buy it during the week. Most of my challah is baked between Tuesday and Wednesday, and it’s delivered between Wednesday and Thursday, and even Friday morning in some places. It’s always fresh for Shabbos. And by the next week, we have fresh products again.
There’s no way to keep a product like bread fresh without using some kind of stabilizer or preserver, is there?
Absolutely correct. Yet we did not want to go the chemical route. Instead of using propionic acid — the commonly used preservative — I opted for natural options, like vinegar or cultured wheat. They’re not as long-lasting as the chemical alternatives, but in time we’ll see more innovation in the area of these “clean-label alternatives.” I do put on my packaging words to the effect of, “Eat right away or freeze until you’re ready to eat.”
With the ingredients I use, I get an extra five or six days of shelf life, not three or four weeks, like some of the other commercial varieties. But I don’t expect my pretzel challah to last into the next election cycle!
How did you scale up from baking for family and friends to baking for a mass market?
When I started out, I was baking in a catering kitchen. I was able to bake 100 challahs at a time. Through the connections I made in the catering industry over the years, I rented baking equipment and could bake 400 challahs at a time. By now we are looking to expand again. We’ll be moving into a facility with higher capacity. And we’ll be leaning into the experience of bakers who have gone the same path I’m on now.
Like others bakers early in their career, I still do not own my own facilities. Like them, I continue to rent other people’s bakeries in their off-hours. This is standard operating procedure for a new bakery because nobody starting out has $400,000 for their own equipment.
You’d be surprised how many products are produced exactly this way. Go to specialtyfood.com. You’ll see that 80 percent of branded retail products are manufactured in some other facility. It’s smart and advantageous to use somebody else’s equipment until I have sufficient business to acquire my own. My goal one day is to own customer-tailored equipment suited to my specific needs.
Do you outsource any of your baking?
I actually do a combination of renting equipment and outsourcing.
For the challah, I rent space and I have workers. The baking schedule is consistent. For other specialty products, such as sourdough, multigrain, ciabatta, brioche and focaccia that I’m not set up to make — boom. I call up some bakers I know and we make it happen.
How do you prevent employees from stealing your recipes?
There’s an inherent risk in having partners, employees or co-packers. We learned this the hard way when one of our original co-packers copied our formula as cheaply as he could and tried to sell it under his own label. This was incredibly upsetting for emotional and financial reasons. He went after all my customers. Undercut me by two dollars a challah just to get into their stores. We had to spend a small fortune to end his unfair competition. Now he is legally required to make a large number of concessions with his version of a pretzel challah. Moral of the story: Get your people to sign a non-compete, non-disclosure/non-use agreement before engaging in any business with them.
Incidentally, none of my big customers bought from this guy. They recognized that his business model was pure geneyve (גניבה) and they were turned off. I was grateful for their loyalty.
How did you go about getting kosher certification?
This wasn’t terribly hard because I was using other people’s facilities already under kosher supervision. But I do have to pay for certification for my own brand. I started off at a local bakery that only had local certification. I wanted broader certification, so I called Star-K. They sent their people down to certify my ingredients and processes. They continue to do random inspections as well. We have an on-site mashgiach who audits the ingredients during production. He keeps a master file and we stick to it.
What went into creating appealing packaging for your products? What did you want the packaging to convey?
The original packaging for the pretzel challah did not come out the way I wanted it to. It was too commercial looking. I want my packaging to convey a natural homemade feel, so it should be browns and tans. The new packaging is going live now. The packaging for our buns and sliced bread is exactly where I want it to be. In short, packaging has been an expensive learning curve for me.
How did you learn about distribution?
I started off by knocking on doors myself. I did that for the first couple of years. But you can’t depend on yourself forever. You need distributors to get out there to make sales. I hire them at an ultra-reduced cost, and then they go out and resell at my normal wholesale cost.
A lot of my distribution savvy has come from schmoozing with other vendors. I had a big learning curve in the beginning, that’s for sure. I grossly underestimated the importance of adhering to certain industry standards.
One of my biggest problems, for example, was under-pricing my goods. Especially in the bakery world, because there’s so much competition, and because your product spoils so quickly, the vendor has to guarantee the product. If it gets moldy or goes bad, we take it back. And what am I going to do with the leftovers? Can I resell them if they’re in good condition? Do I just throw them out? Do we donate them to a food pantry? These were all issues I had to figure out.
I don’t want to underestimate how hard it is to find the right distributors. For example, I don’t sell direct to Riverdale (Bronx) and Connecticut anymore. I have a distributor handle that market. It took me three years to find the best guy to deliver to Riverdale and West Hartford for me: Somebody who meshes well with the company mission, somebody who has the same sales and people values. You’re basically looking for somebody who acts like a partner without actually being one.
Right now we are in thirteen states. Chicago, Atlanta, West Hartford, Phoenix. We hire trucks to deliver to all the major American cities with big Jewish populations.
Regarding leftovers, what do you do with them?
If the product is in good condition, I dice it up and sell it to a hotel that uses it for bread pudding. This amounts to 200 pounds of plain challah bread cubes. Any flavored challah in good condition I donate to Shearit HaPlate of Bergen County (New Jersey), a not-for-profit committed to minimizing the waste of kosher food within our community. I also donate leftover bread to kosher soup kitchens in Brooklyn, Queens and Bergen County.
How do you hire your employees?
We use word-of-mouth referrals as well as indeed.com and craigslist. Each prospective employee has a two-week trial period. We set compensation goals and state clearly if employment is on a commission or bonus basis. Either way our employees have a vested interest in their own good performance.
What did you find most challenging about starting your business?
Being the Everything Guy. Doing the bookkeeping. Doing the driving. Doing the product development. Doing the marketing, which was non-stop: Posting on social media platforms, such as Instagram and Facebook. Sponsoring non-profit organizations in return for publicity and access to potential customers. Cutting up bread for taste demos at supermarkets. Developing point-of-sale signage. I was a one-man show until I was able to make enough money to hire people. The whole juggling act of trying to start a business without money is exhausting.
About marketing: How do people find out about your products?
I still market our products the way I did right from the beginning. In addition, I carpet-bomb the web. People can get our products through our company website, on Amazon, MakoletOnline, KosherValet, ShopRite’s instacart, walmart.com, Facebook and Instagram, to name a few. We are highly visible.
Did you have to borrow money to start Yoni’s Pretzel Challah?
Unless you are born rich, you have to borrow.
If I want to grow, I need to borrow. If I’m just using the money that’s coming in, I will have so little left at the end of the day to reinvest into the company. Without borrowing, it would take me 20 years to grow the way I want to. I have a line of credit at a bank and I have taken some short-term loans from family.
You didn’t have a business partner?
No one other than my wife. She has been my number one support, even while she has worked full-time as a speech therapist at a private school for special-needs kids. Her career is completely different from mine. But tasks like constructing emails — her education on that front has been advantageous for the business. I’m more with my hands, she’s more with the computer.
At what point were you able to hire? Who did you hire?
As a first step, any business should hire a bookkeeper, at least part-time. It’s not enough for you to use QuickBooks. Once you gain more customers, you must keep track of where the money is coming from, and where it’s going out to.
After the bookkeeper, I needed a driver. I had been doing all the deliveries, which took up most of my week. I discovered that it’s hard to run an office out of a delivery van. Even though in some ways, I still do that!
When did the business start to take off?
Right away. The feedback I received after our pretzel challah launch was tremendously positive and the business grew more quickly than anybody ever thought it would. This put me at a crossroads: Do I stick with catering, which gave me and my family a good living, or do I venture into new territory? My answer came after our daughter was born. As I mentioned, catering is practically 24/7. You work breakfasts, lunches, brunches and dinners. I was being split in many directions. My wife and I knew something needed to change. Because I had done test marketing on my pretzel challah, I wasn’t leaping into the unknown. Based on customer response, I believed our challah had a following.
My uncle gave me some great advice in the early days of my business.
I had an opportunity to buy myself into a supermarket chain. There’s something called slotting, which refers to the practice of supermarkets charging you for their prime shelf space. Bird’s EyeTM, for example, has paid, let’s say, $10,000 for each one of their slots in the freezer.
I went to my uncle and said, “I could get the money to do this.” He said, “Don’t do it. Grow slow.” It’s better to have slow organic growth than force your product on a consumer base that doesn’t exist yet. You might believe your product is, well, the best thing since sliced bread, but if people aren’t buying it, you’ll suffer a big financial loss.
In another case, a supermarket chain in New England wanted a certain amount of money. I could have given it them and they would have put me in 140 stores. We would have had to have done aggressive demo-ing and advertising. It could have taken a year for the product to take off. My uncle said, “You’re better off starting in smaller stores and have those customers talk it up. Then go back and re-solicit the supermarket deal in two years once you have the customer base in that area.”
So, first I went to the smaller kosher stores, then to the bigger kosher stores and then to the mainstream supermarkets. Today we are in Shop Rite, Fairway, DeCicco’s, Geissler’s and others outside the New York area. In part I work with brokers to get into these places. I have two sales people on staff as well.
Sounds like your experience can be applied to other businesses.
Absolutely. When you are just getting started, don’t bite off more than you can chew. Grow slow.
Are you able to talk about annual sales?
I’d prefer not to. I don’t want to tip off my competition.
You mentioned getting advice from your uncle. Is he your business mentor?
Yes. He’s actually my wife’s uncle. He sold dried fruits and nuts to supermarkets. I follow his advice whether I agree with it wholeheartedly or not. He was in the wholesale business for 40 years. He was bought out and he was able to retire happy. I want the same life, so I follow his advice to a T, even when I disagree with it. More often than not, he turns out to be right. Any time I have an issue, I call him.
For example, I asked him if I should put somebody else’s label on my challah. He said don’t do it. It’ll only take away from my brand. Some day, he said, after I have an established brand, I can make a comparable pretzel challah by cutting corners and selling it more cheaply on another label. But that comes much later down the road.
I asked my uncle what I should do about a competitor coming into the marketplace. He advised me to pay attention to what they’re doing, but keep my own mission front and center. Emphasize the selling points you offer and they don’t. If my challah sells for five dollars and the competitor sells for three, do I drop to three too? My uncle advised me to hold steady. Matching the competition’s price reduces my brand equity. What do I do if a customer doesn’t pay me? My uncle advised me to give laggards a discount if they pay early.
I inevitably encounter gaps in my education, and that’s where my uncle is my mentor.
Has Yoni’s Pretzel Challah undergone any unusual adventures?
There was the time a delivery truck in Canada headed for Florida got stuck in a snowstorm. I had to load the van with product and drive it down to Florida overnight myself. The truth is, I have had more than one occasion when I had to pull a 48-hour “all-nighter.”
My wife Dana has shared in some pretzel challah adventures too. She was four months pregnant when we had two deliveries to make. She went in one direction, and I went in the other. (Dana corrects me. She says she was eight months pregnant.)
How do you deal with stress?
I’m a relaxed kind of guy, but I do have times when I need to talk things out, mostly with my wife. Usually when I make a decision, I feel good about it and move on. Sometimes you just have to trust your gut.
I have a newborn and a two-year-old, so I don’t have much time for recreation, like movies and golf!
What’s the impact of your Jewishness on your business?
Having Shabbos promises me one day a week to relax. I love it and I look forward to it all week long.
From a social and business standpoint, being Jewish has given me a network I have known my whole life. The first people I sold to was everybody I knew. I reached out to people who owned stores or restaurants or catering operations. Having a tight-knit Jewish community got the ball rolling for me.
What are your next steps?
Obviously, the Jewish Shabbos market is primary. After Pesach, I’m going to add a little packet of salt to our pretzel challah. The customer can basically make a super-pretzel by putting some water on the crust, adding the salt, throwing it in the oven, and voila, you have this huge braided pretzel in the middle of your dinner table. I’ve also created a separate label with all the specific Jewish branding taken off for the secular and non-Jewish crowd.
Also in the offing are new bakery products, including sourdough and multigrain breads (available after Pesach). I’ll have a hot pretzel option in the frozen foods section. Later in the year I’ll release a line of unique salad dressings and sauces. And for these, I’ll require a minimum two-week lead time on big orders because I’ll need to know when to rent manufacturing time. I have already prototyped a dessert pretzel stick, one chocolate chip and crumbs, the other dried fruit with cinnamon crumbs. They are both delicious, but I will let my customers be the judge.
