It was 1978 and recent University of Michigan graduate Ari Weinzweig needed a job. At the recommendation of a friend, he began working in the dish room at Maude’s, a (now closed) restaurant in Ann Arbor and stayed for the next four years, moving from dishwasher to prep cook to kitchen manager.
Weinzweig quit in late 1981 and two days later got a call from Paul Saginaw, a former general manager at Maude’s. The pair decided to open a deli about a mile north on Detroit Street on March 15, 1982 and name it Zingerman’s Delicatessen.
Reception was positive right out the gate, largely because of a focus on quality food sourced from various parts of the world.
“This was the early 80s; back then you couldn’t get extra virgin olive oil, fennel pollen, aged goat cheese,” says Saginaw. “We went to Switzerland to find the best cheese maker, Spain to get the best saffron. No one was doing that and it made us stand out.”
Word spread quickly and soon Zingerman’s was one of the hottest spots in Southeastern Michigan. Weinzweig and Saginaw expanded the deli in 1986 and in 1991 renovated the house next door to accommodate more seating.
Business has only gotten better. Today, Zingerman’s has multiple businesses (not franchises) under its umbrella, including a leadership training facility, catering company and bakehouse. The company is regularly seen on Food Network, and in publications such as Food & Wine, The New York Times and USA TODAY. Weinzweig is a published author with titles including A Lapsed Anarchist’s Approach to Building a Great Business and most recently, A Lapsed Anarchist’s Approach to Being A Better Leader.
How has the company achieved such enviable success and widespread public attention while staying a small business in 113,000-person Ann Arbor?
We sat down with Saginaw to find out.
OF: What is your staff turnover rate?
Paul Saginaw: Around 40 percent, which is very low for the food industry, where 300 percent is the norm. We have employees who’ve been here 10 and 20 years.
OF: Why is your rate so low?
PS: We have a very robust benefits package and contribute 75 percent of health premiums for employees. We have gain sharing, which is basically profit sharing. And every one of our businesses contributes 5 percent of their profits each year to an emergency relief fund for our employees.
OF: When did you start getting noticed outside of Ann Arbor?
PS: Probably five years into running our business. We were bringing in really great food from far away, which spoke to the international community in Ann Arbor. In a very real way, we changed the way people eat in this town.
OF: To what do you attribute your success?
PS: We are not brilliant and didn’t come up with patented products or secret formulas, but we’ve always worked really hard and our desire to be great and provide an incredible experience has overridden everything.
When Ari and I started the business, we had a very clear vision of what we wanted it to be. We wanted it to be the best at what we were doing and we wanted to be unique, which meant that there could only be one of us. We wanted to grow deep in our community, not wide.
OF: Why don’t you want to grow as big as possible?
PS: We believe in the silly notion that there is such a thing as having enough. When you believe that you are already wealthy—we have modest salaries—it is unbelievably liberating. It allows you to be risky.
OF: What is a unique component of Zingerman’s internal culture?
PS: We practice open book finance. Everything is driven by our annual plans and everyone is asked to participate in the creation of those plans, which are incredibly detailed. Every employee, including dishwashers and cashiers, owns a line of financials and is responsible for posting numbers. It is a way of showing that the company values each person’s input.
OF: What are your plans for the future?
PS: Ari and I plan to keep on working. We have succession plans but, really, my succession plan is death. As for the business, we have a plan for what we’d like our business to be in 2020, which includes 12-18 food related businesses.
OF: How can small business owners achieve Zingerman’s-level success?
PS: Start with a vision, one that is inspiring, strategic and well-documented. Clearly define what success looks like to you. Start with the end in mind and then devise a plan for how you will get there.
And then stick with your plan. The vision won’t only tell you what you will do; it will tell you what you won’t do. It will be a filter to push opportunities through. You need to have the discipline to say yes or no to an opportunity and keep to your vision.
Photo credit: Courtesy Zingerman’s
Katie Morell is an independent writer and editor based in San Francisco specializing in business, travel and human interest topics. Her work has appeared in USA TODAY, Hemispheres, The Writer, Destination Weddings & Honeymoons, Chicago Tribune, Chicago Sun-Times and many others.