A holy profitable endeavor

A holy profitable endeav

By ARYEH DEAN COHEN
October 29, 2009 14:10

 
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When you call yourself Holy Bagel, people naturally have expectations: divine cream cheese, heavenly lox. But until 1995, Holy Bagel chain owners Zev Wernick and Ari Dubin didn't know nothin' 'bout baking bagels. They'd eaten their share, sure - Wernick growing up in New York's Suffolk County and Dubin on the Upper West Side via Atlanta. But making one? Not a clue. Today, 14 years later, the two inseparable partners ("I spend more time with Zev than my wife," quips Dubin), have turned the chain into a huge success story, with more than NIS 10 million in sales last year. And yes, that's Ari pulling out a tray of poppy-seed bagels - some of the 7,000-8,000 a day they make for distribution to their stores and a variety of other customers, including some cafes - from the oven in the Jerusalem factory they opened in 2006, while Zev supervises preparation of some of the 150 quiches for the week, both still very much hands-on owners. Success hasn't been easy: They've weathered a whole shmear of challenges, from terror attacks to "the third intifada," as Wernick calls it - the building of the Jerusalem light rail line that forced them to move their downtown shop across the street. But having just completed catering the circumcision of Prime Minister Binyamin Netanyahu's grandson, they've come a long way from NIS 2,500 salaries and 18-hour days, relying largely on the old American adage: The customer is always right. "Yes," says Wernick, 44, now of Beit Horon. "You say yes - not to everything, but we try to accommodate people," even if a customer asks for a cinnamon raisin bagel with lox, peanut butter "and some other thing that didn't belong," he recalls with a grin as we tour the Talpiot factory. Bagels didn't figure big in their minds when they arrived here, but perhaps fate brought them together as workers at Bonkers Bagels on Jaffa Road in 1995, next door to where they'd eventually open their own place. "It was an idea missing in Jerusalem at the time, and they decided to try it out," Dubin, 43, of Jerusalem's Armon Hanatziv neighborhood, recalls of Bonkers' beginnings. Sent by the company to the US, he "went to every bagel store in New Jersey where I lived, and New York City," learning how to make dough. On his return, "I proceeded to get an education not only in bagels but also in business." For Dubin - who still thanks his father for insisting that he get an accounting degree - it was "exciting" to see the hordes demanding bagels, but the lack of serious business acumen eventually flattened Bonkers, he says. They left after four years when they got an opportunity to buy another existing bagel store near the Jerusalem Central Bus Station. They'd considered other food options, but concluded: "We'd invested four years of our lives in bagels, and this is what we do," says Wernick. "I think we each borrowed $5,000," recalls Dubin. "From family, and a little bank loan," adds Wernick, the pair often completing each other's sentences like an old married couple. "That's all the money I had," says Dubin. "Literally, we were taking all the dough we had and putting it into dough." THAT CATCHY name? "There were others: Bagel Factory, Jerusalem Bagel... it just came to us simultaneously... We're in Jerusalem, the holy city - Holy Bagel," says Wernick. Clever, yes, but they still took flak from both the secular - angry that a simple bagel needed to be tied to anything religious - and the religious, "who called up and said: "How can you attribute something holy to a bagel," recalls Wernick. Indeed, to get approval for their Geula franchise which opened this year, they had to change the name to "H Bagels" to get the kashrut certification they needed. The name Holy Bagel, by the way, is patented. Their initial six-month plan was to make the existing location profitable, with no thoughts of expansion, says Dubin, "We said: 'We're going to do customer service and take care of the people.' I still like to think that Holy Bagel is run on customer service, and also our great human resources," Wernick says proudly. From employees they suddenly found themselves in charge and alone, doing hard physical labor, while also tackling the bureaucracy for vital Health Ministry licenses and all-important kashrut certificates. Wernick still remembers a "one-eyed mashgiah" they had to endure as the Modern Orthodox pair learned things about kashrut they never knew before. They also learned how to maneuver in the bureaucracy, Dubin realizing it wasn't worth fighting over everything, but Wernick insisting they also "be a little Israeli... You have to confront and push... you can't always accept everything." "GREAT CUSTOMER service, great bagels, great coffee" was what Wernick was offering when Holy Bagels opened in January 1999. Dubin agreed, although he had to turn down someone who "wanted to take the coffee machine home for the night." Starting out was daunting, especially since "we didn't have a sugar daddy with an endless amount of money" to help them if they floundered, Dubin notes. They'd come in at 5 a.m. and stay till closing time, sometimes bringing in family to help. They worked six-day weeks and came in Saturday night to paint the place. "When we first opened, the original owner sold 70 percent burekas and 30% bagels," remembers Dubin, "and we reversed those numbers within a year," giving away bagels and offering other promotions. While the clientele was about 80% American at first, soon more Israelis began buying bagels, after having visited the US "and coming back loving bagels and cream cheese and lox," Wernick says. And then, one day, someone asked if they did catering. "Neither of us had done any, but we didn't want to say no, so Zev and I looked at each other and said to them: 'Yes, we know how to do catering,'" says Dubin of that pivotal moment in their business history. It was a small affair and all went well, the first step to bigger and better things that ended up with the prime minister's event, which featured homemade cheesecake. Today they do 30 to 50 jobs a month nationwide, about 45% of their business, Dubin says. Not too long ago they had four events for hundreds of people on the same day - in Beersheba, Tel Aviv, Holon and Rehovot. "We had 20 to 25 people here at 3 a.m., and at 6 everybody was ready. I don't get excited," says Wernick. Of course, not all of the events end up like the circumcision they were headed to in Gush Etzion when "a truck smashed us from behind, and totally destroyed the food, with two workers taken to the hospital," remembers Dubin. "We were lucky because the mohel was behind us and couldn't get there, either." Another car was dispatched for the caterers and a special OK from the police got them to the brit on time. When a spot on Jaffa Road opened in 2002 in what had been a Dunkin' Donuts, they decided to go for it. "We ran for the location and we signed for a very high rent, and on the first day we opened up there, several explosions went off in town," recalls Wernick. "Several months later... the Sbarro bombing happened, and our sales dropped 50%." "Pack it in, pack it in, it's over," he thought at the time. The bank called. Initially they worried their business was done for - others were closing all around them. "My mom would always say at the time: 'You could come back.' What do you mean come back? We had come home - it wasn't an option," recalls Wernick. Relying again on customer service, along with "honesty and belief in God, in each other... we just worked harder and got through it," he says with satisfaction. "A different kind of intifada," as Wernick calls it, or the building of the light rail system - which saw the knocking down of the building their store was located in, forcing a move across the street - also hurt. "We're down 40%-50% in town" as a result, says Dubin, but the catering side has picked up. "There are ups and downs... you have to look at a business over an extended period of time." AS FOR the catering, it grew via what Wernick calls with a smile "word of mouth." Moreover, when Ra'anana and Modi'in residents tasted Holy Bagel wares at local functions, they asked why there wasn't a store in their cities. Expansion followed to both, with franchises opening in Modi'in in 2007 and Ra'anana this year. "We're getting more Israeli clients now also because they're demanding service, and I think they get it when they come to our stores," he adds. The same goes for the catering line. "We're believable... If I say I'm going to be there - even when we had that accident - we were still there on time and ready," Wernick says proudly. He wants his customers "to be happy... if you're not happy, something's wrong." The company motto - "Good isn't enough, make it better!" - reflects that desire to please. Not everything worked. An attempt at a spicy bagel for Israeli palates flopped. Dubin notes "a turn toward the more natural and healthy bagels" like whole wheat, and a sugar-free bran bagel is proving a hit. Whole wheat and plain are still the most popular, he adds. Wernick says they've resisted raising prices. "We're reasonable, and you're getting a good product... Our expenses are high, but we don't skimp on the cream cheese and want to be in business for the long term." While they started roasting their own coffee, they don't see themselves competing with Cafe Hillel or Aroma, though they have nothing but praise for the two chains. Dubin's not worried, seeing the bagel business as a "niche" market, while Wernick notes happily that "there's never a wrong time for a bagel" except during Pessah, "our Holy Bagel holiday. We love Pessah." Another bagel attribute: If you give one to a young child, "he's quiet for half an hour, 45 minutes," he jokes. MENSCHES IS the word Wernick likes to use when describing the type of staff he hires, teaching them "to be sociable to people... and let them see that we're honest - I still say that's the whole business." That formula seemed to be working on a visit to the Jaffa Road store on a recent weekday morning. Nesya Cohen, 21, working the counter, said: "I work hard on my patience, speak pleasantly, offer things, give them a smile, a nice look - and they continue coming." That's all regular customer Mike Kramer, 80 plus, needs. "I've had success with them all the time; when we used the catering business, it was a success also. I just like butter and a bagel, and I spend 15 minutes doing it and it helps me feel more satisfied with the day," he explained. Manager David Chykly was ensuring that any customer walking into the store "would be spoken to within three seconds, whether there are three people in the store or 50... we try to make sure that we're not only there to help them, but also to be their friend." Meanwhile, Jeff Weisberg, a customer formerly of New York, was giving his cinnamon raisin bagel high marks. "It's the best bagel in town, first of all. Their display is amazing, the service is great, they're very generous and it's hard for me to go somewhere else because the food here is so satisfying. It makes me want to come back." Throughout their inevitable ups and downs, they've stressed what Dubin calls "derech eretz," in all their dealings. "We both say this all the time: I'm a customer, I'm a supplier, I'm a worker - I ask myself how I would want to be treated," says Wernick. ARE THEY the Ben and Jerry of the Israeli bagel business? "We've compared ourselves to them," Dubin says with a humble smile. Wernick outlines one definite similarity: support of charity work and recycling of waste materials at the factory, a warren of rooms where workers - many new immigrants from the US to the UK to Ethiopia - use the word "family" when talking about the overall atmosphere, as they chop zucchini, prepare trays of cakes or brush a lasagna with tomato sauce. "There's no other place like it - they treat you well, they give you more than you need... there's nobody like this," says Haya Godly-Davis, 18, of Jerusalem via Teaneck, manager of the cold foods room and one of more than 70 Holy Bagel employees, as she prepares trays of brownies. Wernick sees the recycling efforts, hiring of special needs employees and other good deeds they do as "helping, showing Israelis that we can participate in Israeli society and have a positive influence." He doesn't think only American values have modeled the company into what it is today, but also what he calls "a human being ethic." The pair - whose almost 11-year successful partnership Dubin laughingly calls "a sexless marriage" and which both stress is vital to a business - are both eager to give back to a country that gave them a chance, and where they've succeeded so well. Dubin talks of "consolidating in Jerusalem, improving our stores, improving the image. We'd like to expand more outside the city, but I think that's going to take some time and more investment and management to do that." Can others succeed as they have? "You have to write a business plan," says Dubin. "It's not enough to have a great product, the ones who succeed weren't undercapitalized and I see that happens a lot: not enough money in the beginning." "I say to future olim: You can do it," says Wernick. "Yes, it's going to be difficult... Be prepared not to make a lot of money or any money in the beginning. But like Ari said, everything I have is also from here. I came with a backpack and a little bit of money... I met my wife, my children were born here, my business - everything. So during tough times, when my mother said: 'Come home' - I already was home." So here they are, two American immigrants in the Holy Land, doing some holy work, making Holy Bagels. "People don't believe me when I tell them I work in a bakery," says Dubin as he pulls out another tray of bagels, sprinkling others with toppings. "Whereas in America I was somewhat lost, I have found myself in Israel. I got married through the business... Everything that's good that's happened to me has happened in Israel, and I'm grateful to the state for what I've been able to do here, for allowing me to have my own business." n

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