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Small Business, Big Impact: Hannah's Bretzel

By Anthony Todd in Food on Dec 10, 2012 7:00PM

2012_12_10_Hannah's.png In this new series, we talk with small business owners that are combining their buying power with their principles to make a difference in the world.

Most restaurants today do some kind of recycling, even if it's piecemeal. Put your bottles and cans in a bin and toss out everything else. But did you ever wonder about all the rest of the trash that gets thrown away? Nearly half of all food in America is thrown away and most of it ends up slowly rotting in landfills. Hannah's Bretzel founder Florian Pfahler is working to make sure that as little material ends up in those landfills as possible. In addition to buying organic foods and sustainable energy, Hannah's Bretzel is on the forefront of a movement towards large-scale composting and zero-waste business. We sat down with Pfahler to find out why composting is important, why it's worth his money to go more sustainable and why being an early-adopter is important.

Chicagoist: How did you become interested in sustainability?

Pfahler: I'm from Germany and I think that, growing up, there was probably a larger respect for the environment and more thought about what to do with waste a little earlier than here in the United States. But the United Sates has made great progress.

I moved to the states in 1992. I moved to New York and I remember my first lunch. The group of people that I was with took me to a deli, and I got a sandwich and a beverage and a cookie, and everything was put into separate bags and those were put into a big bag. Then they took a pack full of napkins and threw salt and pepper and mayonnaise and mustard and ketchup. I didn't ask for any of that! And I went back with this huge bag and ate my lunch and I thought, "Wow, that's unbelievable." Because, in Europe, we sit down for lunch at a table with linens and plates and glass, and you don't generate any waste. We don't eat lunch like that. So I was thinking that if I ever got involved in the food business, that was the first thing I would address. When we started Hannah's, I reminded myself of my promise from 1992, that if I ever got into that industry I'd address waste.

C: When Hannah's started, what were the challenges you faced in eliminating waste?

FP: It was more difficult than I thought it would be. How did we address waste in the beginning when we opened in 2005? There were no biodegradable items on the market! We addressed it then by ensuring a customer only gets one napkin. We flavor the food in such a way that you don't need more salt and pepper on it. We put everything into one bag. Roll it up in one sheet of paper instead of five.

We really train our guys to watch out for that. It took a long time to get it down and, even today, sometimes when we hire a new guy and I ask him to make me a sandwich, he does it perfectly and then rolls it up in three sheets of paper and gives it to me with four napkins. That means more training.

In 2006, the biodegradable market woke up. Initially we bought everything from Colorado, so in terms of sustainability, it wasn't ideal, but we felt better about it than the plastic we had been using. The drawback was that it wasn't that pretty - and it still isn't. The biggest beef I have is that the biodegradable ware you can purchase right now isn't made from a design perspective. But for us it's more importent that it's biodegradable, and it still looks good when our food is on it.

C: Why composting? Isn't all that biodegradable food just going to rot in the landfill anyway?

FP: Composting keeps things out of landfills. They get put to use again. When food waste decomposes, it becomes nutritional dirt. In traditional farming, the manure is put onto the fields for a reason - to provide nutrients, trace elements and minerals. They go into whatever grows in the field. Those nutrients are what your body needs to be healthy.

In Bavaria, we did this at home. It's wonderful earth. We grow vegetables and herbs and flowers, and the quality of the produce that comes out is just night and day. Why not re-use all of that material positively?

C: What does composting look like in a large restaurant?

FP: In the back of the house we have a long list of items that can be composted; pretty much all food waste. Once you take all the food waste out of the the waste cycle, you're done. There is no more waste. All you have is the packaging the food comes in, which is recyclable. Besides that, we don't have anything! In the stores, we try to reduce packaging by putting things on trays, and we're moving from plastic to bamboo.

We moved one location to composting at the beginning of this year. I like compositing a lot, but it increased our waste-removal expenses by about 1000% because it is very inefficient right now. The composted waste gets shipped to Indiana. The biggest challenge right now is finding facilities to take the waste to; state-certified, regulated, approved facilities. The inefficiency of the market keeps costs high and barriers for entry high.

I just spoke to the mayor's office about this. What we need to see is a real push by the state to create at least two facilities one more toward the north and one more towards the south, within the Chicago municipality so the people who compost don't have to drive two hours to Indiana.

Because it is so expensive, we only added one location. I want to have all four. We might add another one in January, depending on business, and they've also added other restaurants, so I'm hoping prices will come down. It's a very slow process. It would be greatly helped by government regulation coming in.

C: Not a lot of business owners these days are calling for more regulation. What do you see as the role of government in this process?

FP: Everyone is critical of their government. In Germany, people in general don't look at government as a problem. We look at government as a partner. And we rate the partnership - we don't say "whenever they do something, they do it bad." Government is made up of human beings just like anything else, and why can't it be held to a higher standard? What I would like to see in the States is for more people to look at government as a partner. I think societies where government is a part of the greater good attract higher quality workers and create better solutions.

C: How do you justify the increased costs of composting?

FP: I hear that question a lot. I think it's a personal choice. If you only look at a monetary transaction without anything else, then you're right. Why would I do it? I'm going to wait until it's price-competitive. Fair enough. You can go through life and make your choices that way. For me, that's Milton Friedman. Profit is the only thing and nothing else matters.

I have a company that is based on the John Mackey Whole Foods philosophy that a company has a role that is greater than maximizing profit. It has a community responsibility, it has an investor responsibility, it has an employee responsibility and a vendor responsibility. In the community, I would like to lead by example of what a business can do. By moving one location into composting, i'm not destroying my profitability. We're talking in that location, instead of waste removal costing about $800 per year, now it costs $4-5000. I'm losing $4000, but in the great scheme of things, it's not that much money. On the other hand, it allows me to participate in the discussion from the position of "I'm doing this."

It's important for society to move forward about how they use their resources, especially their waste resources. We typically look at waste as something that is discarded. There's a lot of energy in waste, and it can be used more wisely. Only societies that do this move forward and can compete.

C: What is your vision for Hannah's?

FP: By 2015, I want to be East Coast, West Coast and in the center. For me, this is a long-term trend. The awareness in this country has changed dramatically and people are looking for sustainable options. The idea that nutrition isn't just there to fill your belly but helps you to live a better life, especially as you age, is gaining traction. Businesses play into that, and it's smart. It's smart to eat right. When I started, the common idea was "If it's healthy it doesn't taste good." I think we refute that. I'm not a tree-hugger who says "You can't do this, you can't do that." I go skiing, i travel. You want to enjoy yourself, but you can do it in a smart way. That's what I've tried to do with Hannah's.

Other entries in the Small Business, Big Impact series:

- Epic Burger on sustainable sourcing.