Welcome To Given Ovation

SPEAKER_00 0:00

Welcome to another edition of Give in Ovation, the Restaurant Guest Experience Podcast. I'm your host, Zach Oates, and each week I get to chat with industry experts to uncover their strategies and tactics you can use to create a five-star guest experience. This podcast is powered by Ovation, the AI feedback and operations platform built for multi-unit restaurants. Learn what's actually happening in your restaurants and exactly how to improve while driving revenue. Learn more at ovationup.com.

Why John Joins Great Harvest

SPEAKER_00 0:29

And today we are joined by John Dikos, who is the CEO of an incredible brand, one that I have been going to for years, Great Harvest Bread Company. But this isn't John's first foray into the food and bev space. He's been a killer burger chicken guy, mod pizza, and he actually started off in finance and then made his way into the restaurant industry after doing some work there. So, John, welcome to the podcast. Thanks for having me, Zach. I'm excited because we didn't have any Great Harvest where I grew up in New Jersey, but a lot of my family lived out here in Utah. And so we would come out to Utah, and that was like our daily stop. We went to Great Harvest, picked up our bread, and then we went to the pool. That was like our thing to do. And it actually was shocking when I grew up and I found out that Great Harvest was a chain. It seems like so local. And it seemed like I thought it was just right there in uh Provo, Utah. But turns out, little did I know, tons of locations. So, John, first of all, like let's just start here. What attracted you to take this position at Great Harvest?

SPEAKER_01 1:39

Uh, people, people and product. I mean, the short version of the story is I was pitching a private equity firm. I pitched a number of them out raising money for a company I was with previously called KillerBurger. And I think Adam Sanders was a guest on your show not long ago. Love Adam. A dear friend, close colleague, still root for them on the sidelines here. But I was out doing that and met a bunch of different PE firms and ran into Pat Sagrew and Satya Ponru at New Spring Capital. We kept in touch for several months, talking about the potential investment in Killerburger, which they ultimately passed on, but then talked about this opportunity that was coming around the bend. And as luck would have it, the timing was really good. And so he said, Hey, what about doing this with us? And so it was a really cool people showing.

SPEAKER_00 2:30

You went from pitching to getting pitched.

SPEAKER_01 2:33

It took about six months. I wasn't sure where it would go, but I, you know, back to don't we all? It's like we follow people more than we follow brands in this industry. And it just seemed like the perfect timing to join a couple of really sharp investors, Pat more the operator, and Satya, kind of a finance background into this investment. So when I considered it, there were just a number of things that made sense to me, starting with, frankly, the kind of Western and like wild culture and background of Great Harvest, right? Founded in Montana, et cetera. I still remember meeting you, Zach, outside their restaurant leadership conference. And I could see the moment we met and you talked about Great Harvest, I'm like, you know the brand. And when you mention Utah, I go, ah, that makes sense. One of the strongholds that we have as a brand across the country. So as soon as I was alerted to the opportunity and went to a bakery near me and started doing my homework, I remember going a long time ago, maybe 15 years, a long time. I'm a lapsed customer previous to this. But boy, how many brands are out there that have stood the test of time for 50 years, gone through all sorts of different ownership structure, administrations, economic events, you name it. And the fact that they had this incredible commitment to this product, and we sell more than bread, obviously. But the fact that it's foundational to what we do and that the brand's commitment to bread, just as true as it was in 76, is true today. We'll talk more about that later. But I don't know too many brands that you can kind of say that about. And so, yeah, for a host of reasons, people, product, and otherwise, I considered it. And the more I dug in, the more I agree with the thesis. And by the way, this is only the third owner of this 50-year-old brand. And so the founders for about 20 some odd years, Mike Ferretti and his partners for 20 plus years. And now we're the third owners of this brand.

Staying True While Building Forward

SPEAKER_00 4:28

Well, and one of these brands that has so much nostalgia, but as we talked about, it's like you need to build that nostalgia every day, not just rely on what was, but look to the future. And so now that you've been at the helm, you're approaching your two-year mark here in the next few months. What are some things that you want to see in the future of Great Harvest?

SPEAKER_01 4:49

Yeah, I'll start with what's staying the same. Um, and so number one, I mean, just this amazing network of franchisees. It's kind of a brand that, as it was founded, was very laissez-faire as it relates to everything other than our wheat, our proprietary wheat. Again, we could talk about that in a bit. How we mill the wheat, how we prepare using this pretty old school sponge and dough process to mix and knead and proof and bake our bread on site in our bakeries, not something that's generally done at scale because it's hard and does lead to some inconsistencies. But I wanted to stay true uh to these core beliefs. Uh again, better for a story than a long soliloquy for me, but around our wheat farmers. I there's just these stories that are unheard of. So if I forget, please remind me later. I want to talk to you about some of our farmers. But staying true to that, staying true to our wheat, staying true to this uh scratch baking in our locations, and staying true to kind of the promise to our guests and to our teams that we're gonna keep it local. Many of our franchisees can do what they want beyond the wheat and the baking in terms of the products they add and some of the sweets and goodies that they do or how they show up in their community. Newer franchisees, it's gonna be a bit more of a structured approach. Most of a kind of modern franchising relies on consistencies and formulas and recipes and learning management systems and systems like yours, right, that deal with the guest interaction. But we're gonna allow our legacy franchisees, many of them very responsible for building this brand along with the corporate side, to pick and choose, right? What they see and what they like that's coming down the pike. So we're just starting with what we want to stay true to and committed to, the opposite of saying, oh, what's the cheapest week? Who cares where we get it? Let's start outsourcing this stuff. No, the opposite on product, on people and on investments, on infrastructure, on people, we had to make some very tough decisions. Every leader out there, and you as a founder know this full well. It's difficult when you get into looking at a team and saying, I have to be, in the word I use, I have to be relentless in chasing the brand's potential. And the moment anyone or anything gets in the way of its potential, you have to move past it. You have to find a better way. And sometimes that means, unfortunately, changing who's in a role. And so we had to do this work on the front end to met with everyone one-on-one on the company, learned what they did, learned where our gaps were, developed a five-year roadmap, and then sat there kind of looking in the mirror first, like, okay, this is what I think we need to do. And then we started doing that. And so there was this changing of the guard in order to make investments in areas that were lacking, let's say data as an example and benchmarks and metrics that were helpful and usable for our franchise partners and for the brand. We had to be relentless and chasing those things. And sometimes that meant not investing in thing A and instead investing in thing B, or not having a person who, amazing human beings as they were, maybe weren't up for this next run or this next ride of the brand's evolution. That was a big part of the first year, taking stock of that, making those decisions, and then sharing it. And in every case, everyone lands on their feet, in their next role, happier, you know, and so, but again, that was a big first year. And then year two, I would just I'll summarize it by saying really starting to make material progress. I mean, it's 36 items on our roadmap for this year alone. So you can imagine a five-year PE sponsors looked and said, are you sure, you know, that this isn't too it's easy for someone to sit down and say, here's where the brand needs to go. The harder part is what can we realistically accomplish in this time period with this amount of resource? And so far I'm feeling really good about where we are, I'll just say year to date across our 36 different things.

SPEAKER_00 8:56

That's a lot of change, but that's what's being requested right now, required, demanded of our modern consumer. And so as you think about that modern guest, what do you think is the most important aspect of guest experience?

SPEAKER_01 9:08

What's funny? I looked at your questions and I, you know what came across my mind when I first saw that? You know, when you walk into any type of establishment, kind of retail or restaurant, thinking mostly about restaurants, coffee shops, et cetera, there's this knowing glance when you walk into an establishment, you either get it or you don't. And I would just say, again, it could be coffee shop, restaurant, it could be a pub, that type of place. It could be busy, it could be busting at the seams. But all you got to do as someone who works there is look, catch the person walking in the door and give them that I got you. Do you know? It can be a knowing glance if it's too far away. It can be a hand gesture, it could be a vocal, hey, welcome in. I think that first moment, that first impression, again, it starts a little bit with the physical plant, but then it immediately moves to someone that says, I got you. And then what I love about our brand, again, I've never seen this in any other brand. Maybe Chick-fil-A would be the one exception where I remember in the early days when they were still in food courts, all this sampling that they would do. I don't know if you can recall that, but I remember being surprised, like, all right, what's this? We have a breadboard. And in almost all of our locations, it went away during COVID for necessity. And then some franchisees kind of like decided not to bring it back. It's the minority. But in the vast majority of our locations, when you walk in, even from the bakers in the back, you'll hear welcome in or something along those lines, welcoming. And then immediately you're met with a at a breadboard. And it's literally a breadboard with a cutting knife, a couple of loaves of bread. And it's like, what did they bake that day? What are they pushing? What are they excited about? And we don't call it a sample, it's a taste. Would you like a taste? Would you like a free taste of our bread? It's not meant to sell, i.e., sample, sell. In the background, of course, that's what's going on, but especially for new guests, a really thick, generous slice of bread with freshly baked bread with a little bit of butter, we do all our own infused butters and stuff, but you can imagine uh some type of butter on this warm steaming uh slice of bread, and you're eating this in line, or you more likely give it to your kids, or your kids are eating it, what that does to free you up for what do I want today? I'll just stop there. If we execute that every day, I mean, from a competitive advantage perspective, I don't know how we miss that. Again, as long as product is right and pricing is reasonable, where do you go and get that kind of an experience when you walk in the door?

SPEAKER_00 11:40

And quite frankly, there's a also like a gifting mentality, right?

SPEAKER_01 11:44

Like I especially in where you are. It is very big bear in that market. Our customers love great harvest gifting.

SPEAKER_00 11:52

Yes, because I mean, like I grew up in New Jersey. When I came out here to live in Utah, and people would like to leave baked good is on my doorstep. I'm like, I'm not eating those. Like they go right in the trash. Like, I don't know who I don't like.

SPEAKER_01 12:03

I see someone make I grew up in New Jersey too. So I can say this without poking. Northern New Jersey, yeah. In the Verona uh Montclair area of northern New Jersey. I would I say the same thing. It's just such a contrast with that really warm love thy neighbor. We see it in other markets, but nowhere does it crescendo around the holidays like it does in the Salt Lake market for great Arvis.

SPEAKER_00 12:24

It's a separate business. Well, I mean, I think about this. Like, we also have like these minky blankets here, right? Really expensive blankets. And people give them as gifts all the time because it's like it's something that's nice, it's thoughtful. I could use it, but it's also not like so personal that I'm not giving you wall to uh art to hang on your wall. And I think that that's one of the great things about Great Harvest is like it's not the cheapest bread out there. So I know like I'm not bringing you a bag of wonder bread. Like this is thoughtful homemade bread. And even though I bought it, it's still thoughtful. And uh, you know, I just actually dropped off some, went and got some great harvest, and I dropped it off to a couple of friends around here just to say, hey, thank you, because they helped me out with some stuff. And and it's one of those things where it's like it's a nice gift, and and that just getting to the point of it doesn't have to always be the cheapest, but it's gotta be the quality, and you gotta feel it. And a great harvest, you walk in, you feel it, you smell it, and I think that's one of the great things about it. And as you're thinking about tactics, I mean, obviously, this warm slice of bread with butter, and I'd get mine with honey on it too, and that whole wheat bread with uh honey and butter, it's like, yeah, I'll buy an extra pumpkin loaf because this

The First Impression That Says I Got You

SPEAKER_00 13:42

is like just so good, it makes you feel good. What are some other tactics that you would recommend to improve the guest experience?

SPEAKER_01 13:49

I mean, look, number one, back to appreciate the homework you did on us, still appreciate how authentic our meeting was and the way you lit up. And then I talked to our friends at ICR about you, and they were like, oh, yeah, of course we know Zach. And I knew your name, but I don't think we'd met face to face before. My point is, I really value authentic relationships. And look, we all have our bias, right? We're all trying to accomplish certain things. It's okay to state what those are, but you can still reserve that authentic side of things to really light up. I don't know. I just I think there's something magical when we hold authenticity a bit up on a pedestal and use it carefully. My point is, I was doing some homework for this, and I'm visiting bakeries as I often do every month. I was traveling last week across the Midwest and came into, or two weeks ago and came into one of our bakeries. It's Crown Point, Indiana, and they run ovation. So back to previously, before this group came in, we had several different, obviously tech stack kind of initiatives over the years. We've kind of um torn up the playbook and are totally rewriting it. Many of our franchisees have been choosing whatever path they wanted as it relates to tech. And it was great to hear that they have it, that they use it, they really like it. It's definitely one of our, it's on our roadmap, is one of our next frontiers, is having something that allows us to engage directly with the guests at scale, and most importantly, can kind of solve those issues that are solvable in the moment and thank them for their patronage and see what we can do to bring them back. I've got a short little story here that actually combines someone I plan to plug later in the podcast with data and systems. And that really is back to hospitality. You have this authentic initial meeting, let's say you've never been in, and all of a sudden you're greeted by someone, you try, you know, this amazing slice of warm bread, or your kid does, and you watch them light up and see how much that lights us up as parents, right? And then as you're going through, you have your engagement, you buy something, and you leave. We've learned previously we didn't have this data. We didn't have a data warehouse. We weren't storing any information centrally and owning it and refining it and appending it. We finally have that, and it's a voluntary basis, about 60 bakeries uh in on this data warehouse, again, voluntary. And what we've learned

Turning Bread Into A Giftable Brand

SPEAKER_01 16:10

is the customer funnel, all the products are not created equal. When you enter, and you just mentioned it, when you enter through Honey Hole Wheat specifically, and then have a couple of other products along the way, the stickiness of that gas over time is extraordinary compared to the gas that comes in just buys an entree call it, say a sandwich and leaves. That stickiness is X. And I think it's because the story, the flavor profile, all those things that happen with our honey hole wheat, we get to tell the story. Do you know where this wheat came from? Do you know when it was milled, et cetera, et cetera? I think back to data and back to like how do we tell guests that at scale and back it up? I credit Chipotle in the early days of Fast Casual's formation, right? Pinera and Chipotle kind of led the way, as far as I'm concerned, in the early days of what Fast Casual was. And as Chipotle told the story about Nyman Ranch and the farmers and the proteins and cleaner meats and what that meant and what was possible, I don't think any of us thought it was possible. And then you look and see the story, I just think this business success has been almost unrivaled until fairly recently. But then two, look at the real good they did raising awareness on certain things, helping other brands buy at scale proteins that they didn't think they could afford, only because you know they were chasing Chipotle's purchases later than Panera Jump In and others. But I just think back to the point where are we going with this? I mean, we want to meet and know our guests intimately well. You tell me a brand that wasn't relentless in pursuing the guest experience. I'll go on and on about this, but just one other little plug, Horst Schultze, I think he was the COO, eventually president, but COO of the Ritz-Carlton. He wrote a book, forget the title. I loved it. I read it years ago. And it spoke about how much work they did to understand their guests at a level that very few brands know their guests, and then empower the team to take care of that guest in the moment. Right famously back in the day, a housekeeper had a $2,000 no questions asked policy to solve guest issues on the spot with no permission. And of course, general managers have this sort of authority in a hotel. But a housekeeper or a bellman, to me, this is the next frontier. Like we got our product dialed, we're going to get the basics of our tech stack dialed, and then we're going to chase customers on where they come through the product funnel. We have many products and where they end up and how we can refine that and make sure we're telling the story, identifying first timers, et cetera, et cetera. And then I think our story, when told at scale, is going to have a huge kind of evolution or renaissance on the brand's popularity. I am so excited for that.

SPEAKER_00 19:00

And I couldn't agree more because you've got the, shall we

Data And Tech That Serve Hospitality

SPEAKER_00 19:05

say, the starter of this amazing guest experience? And I think that like giving it the right proofing, having the right dial set in, it's like there's nowhere but up to go, even though things have been going so well. And I think that like staying true to the brand is so key. Now I know we're almost out of time here, John, but who is someone that you think deserves an ovation? Who's someone that we should be following?

SPEAKER_01 19:29

I call him young man. I'm getting I'm getting up in years. Uh just hit 51. Whoa. I thought I was older than you. Dude, I gotta eat more bread, John. Look, you could. Uh uh, that's kind of you. I look, there's a young man named Drew Nathwani. And Drew and his partner Patrick founded a company called Quantive, Two Eyes. And I sent along a little info on where to find them. I bring it up not just to plug a company or a product or tool. I was fortunate in getting to know him early on in his career or maybe midway through his career at Starbucks, where he spent a number of years. He speaks our language. He speaks the language of an operator and an analyst within restaurant retail, right, food concepts. That's a big deal because then he's gone and built his roadmap, his engineering, his brains, but me constantly telling him what I and we in this industry want and need. And he's been able to build a POS agnostic, which for us is critical. We have over 14 POS systems in our brand currently, but a POS agnostic data warehouse that allows for daily batching and loading. And then you drop an AI layer that's been trained, not randomly, but trained by us on our brand, and through Droove and his knowledge of a senior analyst at Starbucks to really help us understand what's happening in the data, serve it up and give a franchisee literally an email address, Roger. Just ask Roger. One of our franchisees tried to set a meeting with Roger because he was so good and realized, okay, this is actually an AI agent. But you can ask Roger any questions about your bakery. Tell me about product mix, tell me about this. And so, you know, it's 30, 40% of the guests are generally traceable or trackable. And it's amazing what you can learn. And so I just got to say, for a small, medium-sized brand that can't afford, right, kind of a top shelf tech stack and team and all that, to just slowly invest our way into it. He and Patrick have been game changers for us in this era of Great Arbus. Amazing.

SPEAKER_00 21:34

I checked them out after your uh recommendation about it. It looks like a really cool website. Uh, I connected with both of them on LinkedIn, excited to learn more about them. But John, how do people, you know, first of all, we got to have you back on because we do need to talk about the farmers still, because I know when we chatted about that and I said, what makes Great Arvest so good? Uh, when we were chatting at in Phoenix, and you went off about the farmers, and it just was like, what an amazing perspective to care so much about soup to nuts, where things come from and what that means.

SPEAKER_01 22:04

And I think Can I just say one thing in 10 seconds I know I'm not good at distinct? Picture this. It's about 10 wheat farmers total, all in the golden triangle of Montana. Though the quality of wheat across the high plains states is all quite good. Many argue that the Golden Triangle of Montana is like the Napa Valley for wheat. It's everything from altitude to soil to humidity, temperature, all of these things yield this amazing high protein, high quality wheat. We've been buying for the better part of 50 years from essentially 10 give or take wheat farmers. Some have planted three, 400 acres of specific wheat varietals. Kim Holland, I'll plug him. He's been planting 350 acres of Fortuna wheat just for great harvest.

Montana Wheat Farmers And Full Traceability

SPEAKER_01 22:55

Yeah, for 30 years. It's amazing. We test every single batch that's delivered, every batch gets tested for glycephate, gets tested for protein quality, and then we bake with it. And only after we bake with it, we say approved, it goes into a bin. Wow. Each of these bins gets blended certain fields of wheat that we know yield a certain kind of flavor and quality. I just don't know many stories out there with that level of traceability and kind of small farmer buying. We buy a couple million pounds of this wheat every year. Uh so anyway, that's my quick version of the farmer plug.

SPEAKER_00 23:33

Well, I love that. I love that, John. Well, how can people find and follow you in Great Harvest?

SPEAKER_01 23:38

Well, in the very near future, as you know, we're going to be releasing some additional information. We'd love for folks to check out greatharvest.com and check out our corporate Instagram handle. There are many, but at Great Harvest, there's about 11,000 followers on that. We're looking to see that jump up on Instagram would be a great place to check us out.

SPEAKER_00 23:56

Okay, well, 11,000 and one after

Where To Follow And Final Takeaways

SPEAKER_00 23:58

this podcast, at least. Well, John, appreciate you joining us on Given Ovation and for reminding us to bake authenticity into every guest experience. Today's ovation goes to you. Thank you for joining us on Given Ovation. Thanks, Dap.

SPEAKER_01 24:11

Really appreciate the opportunity.

SPEAKER_00 24:13

Thanks for joining us today. If you like this episode, leave us a review on Apple Podcasts or your favorite place to listen. We're all about feedback here. Again, this episode was sponsored by Ovation, a two question SMS-based, actionable guest feedback platform built for multi unit restaurants. If you'd like to learn how we can help you measure and create a better guest experience, visit us at ovationup.com.