Today's New York Times business section had a front page article about Zingerman's, called A Corner Deli With International Appeal. I have fond memories of Zingerman's, as it opened when I was a doctoral student in Organizational Psychology at The University of Michigan in Ann Arbor Michigan back in the early 1980's. I thought it was one the greatest places I had ever been, with fantastic sandwiches, delicacies from all over the world, and a great staff. But I hadn't followed it very closely over the years.
I do recall that, even in the early days, The New York Times called it the greatest deli outside of New York City. But until I read the article and did a bit more homework, I hadn't realized that this little deli --which still exists in an unassuming part of town -- was now part of a 30 million dollar a year business with over 500 employees. Founder's Paul Saginaw and Ari Wienzweig remain the owners and remain dedicated to quality ingredients of all kinds, and expanded to other areas including a brisk mail order business and other areas including their own brand of coffee. Now they are world renowned for their quality foods, and many people trek to Ann Arbor to visit the deli rather than The University of Michigan. That little deli now brings in about 10 million a year. Even though it it is still almost impossible to park nearby, the deli remains the emotional and financial heart of the business. What I was most taken with, however, is that that Saginaw and Wienzweig have grown this business by focusing in the quality of their products and service, and on treating their employees very well, and treating profit as a secondary goal.
They share their financial results with everyone, including in the newsletter for customers. They make modest margins because they buy expensive ingredients and treat their suppliers fairly, are so devoted to quality in other ways, and give so much back to their employees (the return this year on their deli's 10 million was 5% and, on the mail order business's 8 million, was 3.5%). As the Times reports:
Along with hourly wages, vacation time (as much as six weeks after 20 years), health and dental care and food discounts, full-time employees receive “gain sharing,” which pays out if their part of the company exceeds its annual business plan......The structure also helps explain why margins remain low even as revenue has risen. To pay employees, support local producers and contribute to the community, “a big piece of it is charging enough money,” Mr. Weinzweig said.
After living in Silicon Valley so long, where there is so much greed, and just about everyone seems focused on squeezing every cent of everyone around them -- employees, customers, suppliers -- Zingerman's is a refreshing reminder that financial greed isn't always the first priority for every owner and manager. It reminds me of Kurt Vonnegut's poem Joe Heller, which as I have written here before, Vonnegut allowed me to reprint in The No Asshole Rule. Paul Saginaw and Ari Wienzweig seem to believe, like Joe Heller (the author of Catch 22) did, that they have enough, and that using their talents to create something beautiful and to give back along the way is a better thing than maximizing their personal wealth at every turn. Indeed, the article ends with two great points from the founders:
But Mr. Saginaw said profit, in itself, was not Zingerman’s motivation. “We’ve had dozens and dozens of opportunities to franchise, sell the name, take the check and walk away,” Mr. Saginaw said.
Instead, Mr. Weinzweig said, the idea was to create a special experience. “Our goal in 2020 is to leave our world better than it was when we came here,” he said.
P.S. In addition to The New York Times article, check out this INC article on Zingerman's, called The Coolest Small Company in America