We’ve all heard of the sandwiches – the cheese, the bread, the meat. We know how good the food is, how it’s imported from all over the world and how we have to pay upwards of $15 for macaroni and cheese.
Zingerman’s food has become an integral part of the culture of Ann Arbor. Just ask the people who stand in lines reaching through the front doors of the deli and down the red brick of Detroit Street. It all seems simple, but there’s more to the company than the average Ann Arborite might expect.
There are seven separate Zingerman’s businesses in the city, which, together, have donated large sums to local causes, employ a surprising number of people and operate on one of the most bizarre, and, by some measures, most successful business models in the country. The deli on Detroit Street was only the beginning.
Last Tuesday, in a crowded room with a low ceiling and yellow walls, more than 25 business representatives sat and listened intently to a panel of randomly plucked Zingerman’s employees – a manager, a chef and a waitress among others – speak about the Zingerman’s way of doing business. The seminar, which lasted most of the day, cost about $1,000.
Although it brings in surprisingly little profit, the Zingerman’s business model has managed to command the attention of profitable businesses across the country. And it’s not just food ventures – at Tuesday’s seminar there was even one business representative from NBC. While corporate types listening to restaurant workers might seem strange, Zingerman’s does a pretty brisk business spreading its gospel of obsessive customer service and an egalitarian workplace. In fact, it has an entire business, Zingerman’s Training Inc., or ZingTrain, which often runs seminars out of the top floor of the café.
In the back of the room sat a lanky, bespectacled man in faded jeans with the sleeves on his t-shirt, as they always are, rolled up about half an inch. The man is Ari Weinzweig. He co-founded Zingerman’s in 1982 along with his friend and fellow food-lover Paul Saginaw. It started with a love of dining, but Weinzweig has since developed the Zingerman’s philosophy into a commodity almost as popular as the food – even authoring a few books about Zingerman’s, one of which is solely about customer service.
From the beginning, Weinzweig said Zingerman’s was going to do its own thing.
“We wanted to have a really unique place,” he said. “We knew we didn’t want a chain, or a copy of somewhere in New York or Chicago.”
When asked his favorite thing to get at Zingerman’s, he looked flummoxed.
“Today?” Weinzweig mused. “That would be the hand-made cream cheese from the creamery.”
The creamery, Weinzweig explains, makes cream cheese the way it was made a hundred years ago.
“No vegetable gum. Hand-ladled, not extruded, you know, pumped, no preservatives, no sweeteners. It’s all done by hand.”
What would he put it on? “I don’t know – a fork is good.”
Above all, Weinzweig said, he and Saginaw wanted a place where someone could really enjoy food.
“We knew we wanted a really good place for people to work, and we wanted to deliver great food in a nice atmosphere,” Weinzweig said.
With 511 employees all based in Ann Arbor, Zingerman’s is one of the largest employers in the city. According to a list compiled by Ann Arbor Spark, the area’s economic development agency, aside from the Pfizer Global Research and ProQuest offices, which have both announced plans to leave the city, Zingerman’s is probably the fifth largest non-public sector employer in the city behind Borders Group, Inc., with 1,200 employees, Toyota Technical Center headquarters with 900, ABN AMRO Mortgage Group Inc. with 850 and Dominos Pizza, with 550. Though the agency doesn’t compile employee statistics for retail agencies, it’s safe to assume that there aren’t too many other Ann Arbor businesses with more than half a thousand workers.
“Boy, that’s kinda scary, isn’t it?” Weinzweig said of the statistic. “Do we have a responsibility (to open up new jobs)? Yes. We’re staying in the community absolutely.”
But all these employees have to get paid somehow, and their wages contribute to the staggering prices. Of course, there are people who would be willing to sacrifice being treated like royalty by a multitude of employees in exchange for not having to be royalty to afford the food. But though it might not seem like it, in terms of price gouging, Zingerman’s is actually pretty merciful.
Zingerman’s brings in all kinds of exotic foods, from hot chocolate from Ecuador to oil from Italy. As you may expect, all of this foreign food doesn’t come cheap. They could be charging a lot more, though. Although Zingerman’s brought in about $31 million last year, the profit margin was slim, about 3.5 percent.
“We try to balance all these pressures, make enough money to stay in business and provide good jobs with benefits for people,” said Pete Sickman-Garner, marketing manager for Zingerman’s, “And, well, given that, we’re at about 3.5 percent.”
So why is it that ZingTrain can charge a grand a pop for training seminars in the Zingerman’s way of doing business if it’s so far from being a cash cow?
Maybe it’s Zingerman’s feel-good philosophy, part of what has propelled the small-town deli into the pages of business magazines and onto the front page of the Business Section of The New York Times. The restaurant has an aggressively loyal following and most of the employees seem to like coming to work. The principle behind the company’s success – and the trade secret that’s taught at ZingTrain seminars – lies in an inclusive company decision-making policy. First, someone comes up with an idea of how to make the company better. It could be anything from a different ingredient in a sandwich to redrawing a sign on the front door. That person, whether they’re a dishwasher or a store manager, has an equal opportunity to carry out the change. To communicate the new policy to the staff, the employees assembles a group of other employees from a few of the other areas in the restaurant, in other words, a microcosm of the company. They then work together to get the information about that decision out to customers, other employees and upper-level managers.
“The employees buy in a lot more if they’re involved in the decision than if they just hear about it from somebody,” said Joanie Mallory, a manager at Zingerman’s Roadhouse on Jackson Road. “In a way, it really helps us because it’s like they’re doing our work for us,” she said. “They’re the ones coming up with the ideas.”
Zingerman’s believes that being a great place to work and being a great place to eat go hand-in-hand.
“Oh yeah, everyone who works at the Roadhouse is really cool,” said Zan De Perry, a Roadhouse busboy. “It’s a good place to work.” It also helps to foster a sense of humor in the employees as a way of keeping them loose. When asked about Weinzweig’s knowledge about the cheese industry, De Perry said, “Oh yeah, Ari’s a cheese,” he paused, searching for the right word. “Wiz.”
That may be true, but just as much, and maybe more important, he’s a business wiz. Weinzweig and the rest of Zingerman’s staff have managed to put together a business that’s propped up the community and stayed loyal to its founding principles – good food, even if it’s isn’t turning a huge profit. And in the end, anyone who can get people to buy macaroni and cheese for $15 must be doing something right.