Changing the game: How next gen Verena Bahlsen balances innovation with family legacy
Verena Bahlsen, next generation entrepreneur and co-founder of food innovation incubator HERMANN’S, is looking to drive her family’s business into the future. She spoke to Susan Lingeswaran about history, being disruptive, and preserving legacy.
Verena Bahlsen is a rebel. By her own admission, the fourth-generation heir to Germany’s renowned cake and biscuit manufacturing dynasty never wanted to work in or around her family’s eponymous business. At any one time she wanted to pursue a career in fashion, hotels, be an artist, or a writer—anything that would allow her to be creative and original.
But creativity was definitely not something she thought she’d find on Bahlsen’s factory floor.
“I had been taught for so long that business is where originality goes to die,” she muses from her office in Berlin.
“Business is for grownups—it is rational, it is spreadsheets—it is not a place to express new, exciting ideas or be dynamic. Total bulls**t of course, but that is honestly what I believed and because of that I never, ever wanted to follow my father into it.”
Bahlsen, 25, is refreshingly honest when discussing the mistakes she has made in the past. Now, as co-founder of Bahlsen’s new food innovation unit HERMANN’S, she speaks with such excitement and eagerness about her family’s business that it is hard to believe that until only recently, she could not identify with the brand at all.
And who could blame her? In 2016, whilst celebrating the company’s 125th birthday, German media declared that as one of the country’s first national brands, Bahlsen, and their most famous product—the Leibniz biscuit—were synonymous with heritage, tradition, and obligation. One of Germany’s largest daily newspapers, Süeddeutsche Zeitung, weighed in declaring the biscuit a “monument to German design”. Meanwhile, marketing experts opined that after launching 5,000 products, Bahlsen had “remained market leaders on the shelves and in the heart of consumers for over 100 years” and should stick to its traditions.
Not words a next-generation millennial looking to be original wants to hear.
“Our business is named after our family and in Germany there is a super-heavy sense of heritage and so many connotations and expectations of preservation that comes with it,” she says. It also has an important fiscal responsibility, employing 2,830 people, with a turnover of €559 million ($671 million) in 2017.
Such was the magnitude of the family name, Bahlsen’s father, Werner Michael, made the conscious decision to shield his four children from the business to allow them to grow up without the pressure. The result was that while Bahlsen was free to pursue any career she wanted, the one thing she could not connect with, was the business she actually owned.
“It is an industry where things are frozen in time—big manufacturers making things like bread, cakes, pasta, milk that started 100 years ago and doing it all exactly the same ever since. It didn’t resonate with me or my generation who want to do new and exciting things,” she says.
A new discovery
Things were about to change. Werner Michael’s decision to hand over ownership of the family business to his four children when Bahlsen was just 13-years-old, triggered a series of discussions, which sparked his daughter’s interest.
But the move was made primarily, Bahlsen says, to prevent a terrible history repeating itself.
Bahlsen’s grandfather, also named Werner, upon his death had given his two sons and daughter—Werner Michael, Lorenz, and Andrea—equal ownership of the company. It resulted in years of fighting between Werner Michael, his brother, and Andrea’s widower Gisbert van Nordek, over company management and leadership.
The much-publicised struggle eventually led to the tripartite division of the group in 1999. Werner Michael kept control of the family’s iconic Bahlsen brand, Lorenz left to establish snacks-based company Snacks-World, and van Nordek was handed control of Bahlsen’s Austrian and Swiss subsidiaries, Bahlsen GmbH and Kelly. Then the families ostracised each other. Still to this day, the families do not speak.
“My father was super concerned the same thing would happen to us so he gave the company to us really early,” she says.
Aware that he and his children were getting older, at the end of 2015, Werner-Michael gathered his family together to talk about the succession process.
“He said over the next couple of years I want to talk to you guys about how this transition will go legally—not who runs the company, but what we want to do with this company in the long run, starting with purpose,” she says.
“So we explored why Hermann [Bahlsen’s great-grandfather and founder of the company] built this company when he did, what beliefs it was built on, and if we can transition those beliefs today in the same way.”
The answers Bahlsen gathered during that family meeting turned out to be the turning point for her and a lightning rod for her creative side.
“I found out Hermann was not a baker—which sounds like a banal fact, but it was a huge discovery for me—I grew up being told that I come from generations of bakers, but that was total bulls**t,” she says.
In fact, Hermann Bahlsen was a merchant who travelled around the world in the 1890s, finding ideas for products, technologies, and businesses. All the ideas he found he would bring back to his factory in Hanover, including installing a conveyor belt system he had seen abattoirs use in Chicago’s meat packing industry.
“Hermann was brilliant at finding, and I thought if we do not assume we have a company for baking anymore, instead we can have a company that is brilliant at finding opportunities and using those opportunities to grow as a business,” she says.
“It meant that from then on we could align our organisation, the people that work here, and our long-term strategy on finding instead of just baking.
“I found that super exciting.”
Big ideas
Newly armed with the real history of Hermann and all the possibilities it opened up for her, Bahlsen’s interest in the family business was starting to pique. Problem was, she was stuck in London, bored with the business management course she was studying at King’s College University. That’s when she met Laura Jaspers, former assistant of Werner-Michael, who was now working for Bahlsen’s UK marketing team.
“One day we were talking about how the mass food market was being called into question as a whole by a society that is more aware and critical than ever about things like sustainability, what ingredients are being used to make food, and what they are prepared to buy,” she says.
“We realised there is so much innovation happening with food, but it was not the established industry doing it or even talking about it—it was tech people, it was scientists, it was bloggers.
“We thought, ‘Hang on, if established businesses, like Bahlsen, cannot develop innovation themselves, maybe we can build a company that finds innovation that is happening in the market, import it, connect it with an established business, and help make it useable within their company’.”
With an established food business behind her, and resources at her fingertips, Bahlsen thought she was in the perfect position to marry the two concepts, and make money doing it.
She summarily quit her degree at King’s College and together with Jaspers, got to work creating their business, named HERMANN’S as a tribute to her great-grandfather. Although completely funded by Bahlsen Group, it was decided HERMANN’S would be built as a separate entity from the family’s business.
“We started talking to mentors, we found people in the consultant space who were working on brand strategies and innovation strategy, we went to strategy workshops, and we saw there was a very practical way to build a strategy as a 100% daughter company of Bahlsen,” she says.
“Now we have a huge network of entrepreneurs in the innovation space, which we call our ecosystem that we are constantly learning and picking new ideas from.”
The result is a hip, dog-friendly, creative space in Berlin—a consultancy, platform, and restaurant—all working in harmony to bridge the gap between start-ups and big business. The consultancy finds food innovations to import and works with established businesses to adapt it for production. The platform, Bahlsen says, is to get the industry to rethink nutrition, products and supply chains, as well as tackle big challenges facing the industry, such as sustainability and waste.
But the star of the show is its restaurant, which Bahlsen uses to reach out to the public and where HERMANN’S can test new innovations on consumers. It holds regular events, hosting guest chefs to exhibit their creative ideas on a willing audience, and runs workshops about alternative ingredients. Only earlier this year, guests were invited to HERMANN’S to experience a six course zero-waste dinner, created by the team at Restaurant Nolla in Helsinki.
The concept has stirred enthusiasm in Berlin. Daily newspaper Berliner Zeitung called it “revolutionary”, while food website Essen and Trinken opined that with food waste, sustainability, and plastic use now firmly in the public conscience, HERMANN’S is a necessity. Since then, food enthusiasts have come in droves, curious to learn more about the future of food.
“That is the best bit—when people come here, they do not just eat the food, they think deeply about it, they discuss it,” Bahlsen says.
“We are trying to break down barriers and it is not only people in the industry we want to convince, we want to start a conversation with the public.”
Rebel without a cause
But while Bahlsen excitedly established her new venture in Berlin, not everyone was pleased with what she was doing—especially the Bahlsen’s board back in Hanover.
“There was zero understanding why something like this was needed and people thought I was calling into question the value of our existing business and the way they do things because I was building an entity that was rethinking it,” she says.
“We sell biscuits and cakes that use flour, sugar and eggs, but I was trying to find alternatives to flours, sugars, and sustainable packaging—they didn’t get it.”
There was no reasoning with the team, Bahlsen says. Getting HERMANN’S off the ground was down to the fact she had complete backing from her father, who had always been open to new ideas.
“What is special about family companies is that both my father and I, all we truly care about is sustaining this business long term and creating a business that endures beyond our generation,” she says.
“There were constant exchanges with my father and constant reassurances that ‘Yes, I was calling his business into question, but I was doing it in the interest of the whole Bahlsen Group’.
“There was no way that I could convince our existing business to back me.”
But once HERMANN’S was up and running things started to change.
“Once HERMANN’S was not just an idea, but something you could see, engage with, and actually taste, that was the moment our team back at home [in Hanover] got interested,” she says.
Such was the board’s turnaround, HERMANN’S was quickly brought into the family business, and a separate innovation arm, TET Ventures, was established to invest in new innovation companies, and launch its own innovative products.
“Bahlsen is now set up like Google is—on one hand you have the core business that is making money and you have the other, in our case TET Ventures, that focuses on exploring new business models that hopefully become your future core business,” she says.
Stepping up
Surprisingly for Bahlsen, this whirlwind entry into her family’s business came more naturally than she ever thought possible. Looking back, however, she says the relationship with her father, and how they interacted, sowed the seeds for her eventual role.
“I remember when I was 15 and on summer holidays in the US, my father and I used to wander around the supermarkets and discuss packaging design, talk about new products and what kind of flavours were becoming cool,” she says.
“We shared this complete natural love for this business and I did not realise at the time how unique that was, it was just something I did with my father—we bonded over food, products, and brands.”
But while jumping into the food industry was easy for Bahlsen, with no formal training, she needed some help transitioning to being an entrepreneur. She still works regularly with two coaches—one organisational psychologist and one personal coach—to challenge her thinking and strategy.
“I have been working in this job for four years now and I discovered the biggest inhibitor to my own success was trying to copy my father—I was killing myself trying to emulate him. I am not like him, I am an introvert, and I find meetings with lots of people extremely stressful,” she says.
“My biggest ‘Ah ha’ moment was realising that it is totally okay and there are millions of different ways of being an entrepreneur and it is a mistake to think that to honour my father’s legacy I have to copy him.”
And it is that epiphany that Bahlsen hopes will inspire her in the future. In the next five years, she wants to shape HERMANN’S into a small boutique consulting company, helping the traditional food industry transition itself into being more dynamic.
But perhaps the biggest role she has to contend with is the futureproofing of Bahlsen Group. With Werner Michael retired from the operational business since 2018, and a non-family executive installed to run the company, Bahlsen has switched her immediate focus to working with her father to figure out the long-term strategy of the family business.
As a next-generation disrupter pushing for innovation to be at the heart of the Bahlsen business model, she has her work cut out for her.
“Family businesses have the challenge of being around for generations and the next generation feel an enormous pressure to protect what is there and are taught protecting it means leaving it exactly the way it is,” Bahlsen says.
“But that is completely wrong—developing and changing the business is the only way to preserve and honour it.”
So what’s next for Bahlsen? With her siblings not involved in the family business, will it be down to her to eventually take the helm?
“Right now, I do not have an ambition to run the family business operationally, but also, the decision of succession is not up to me,” she says.
“I just want to do what I feel is important and exciting, and I still have so much to learn.
“So it is all to play for, as they say.”
