• Mariella Bauer

"Let's give this a try."

(Reading time: 4 - 8 minutes)

Elly Seidl1Handmade. Instead of rapid growth, the Munich entrepreneurial family Rambold and their chocolate manufacturer Elly Seidl focus on careful expansion and uncompromisingly high quality (picture above: Helmut Rambold (left) and Maximilian Rambold).

"I am no opponent of growth and sales increases," says Maximilian Rambold, one of the three managing directors of the Munich-based chocolate manufacturer Elly Seidl. "But", he says, "that's what the parents "instilled in their sons from an early age", growth must be healthy. That is why the 42-year-old marketing expert also thinks "five percent better than ten".

Rambold says this not without reason. In 2014, demand - "I don't know why" - has suddenly risen by double digits, "an incredible growth spurt". This then almost led to a crucial test for the entire company. "My brother and the 15 confectioners could hardly cope with this without endangering the quality level of chocolate production. We have extremely high standards. Who pays one or two euros for a single chocolate if he cannot be sure that it is outstanding? In fact, he was almost glad when the boom died down again.

The chocolate manufacturer Elly Seidl is one of the larger representatives of a small industry that produces chocolates by hand. The club of confectioners estimates their number in Germany at 150 to 200 and their annual turnover at around one billion euros.

The biggest strategic challenge for these companies, which offer a special product and have a turnover of between five and 15 million, is to decide whether they want to remain great or become great. Leysieffer recently demonstrated the risks that rapid growth entails. The family business Leysieffer, like Elly Seidl a medium-sized chocolate manufacturer, pushed ahead massively with its expansion and went bankrupt in 2019. The company could only be saved by the entry of a majority shareholder.

"That will not happen to us," Maximilian Rambold is convinced. "Our strategy can best be described as 'trial and error'. We try new things, but we are careful, avoid big risks and are also prepared to take a step back again and again if we see that it doesn't work.

So far this strategy has been successful. Currently, the factory has around 60 employees, 15 of whom are confectioners, who produce more than five million chocolates annually, plus cakes, pastries and seasonal products such as honey cakes at Christmas. It sells the goods in the six Elly-Seidl shops in Munich and the surrounding area. Master confectioner Oliver Rambold, 48, is the master of the bakery. Father Helmut Rambold, 80, internally called "voice from offstage", is still standing in the bakery every day. "Not at five o'clock in the morning any more, but he can be expected from midday onwards," says Maximilian Rambold.

In the 1960s, Rambold senior had started making fine chocolates for Munich shops in a "tiny bakery in a Munich backyard cellar". Among others, also for the delicatessen shop Elly Seidl. In 1918, the single waitress Barbara Seidl opened her shop in a prime location in downtown Munich, which was named after her daughter Elly, who was eight years old at the time. In 1928, daughter Elly took over the business and married a confectioner who brought the knowledge for the production of chocolates. In the 1970s, the company owned two shops, which were already leased at that time. Only a part of the chocolate production was still run by Elly Seidl himself.

"As a kind of pension", according to Rambold, the chocolate production was now also to be leased. In 1972, Rambold senior read this in the newspaper, "and took up the offer immediately," says Maximilian Rambold. "Because his goal was to become as independent as possible from his external customers. And the name was established, the brand was introduced, something could be made of it."

Since then, everything produced under the name Elly Seidl has come from the Rambold family. In 1981, the couple also leased an Elly Seidl branch and expanded the production capacity for chocolates. "Everything piled up on top of each other on 80 square meters of confectionery - it's unbelievable what my parents produced in this small area."

The lease on the store was subject to conditions. For example, a certain amount of chocolate and pralines must be purchased from outside manufacturers. That's why his parents would have sold tons of sweets, chewing gum, chocolates from the German manufacturer Leysieffer and chocolate from the Swiss manufacturers Lindt and Milka in the 1980s. "They were delicacies in those days. Today, only advertising suggests that they are manufactured goods. Instead, it's mass production."

In the 1980s, Rambold Sr. therefore propagated the move away from third-party products and towards chocolates produced in-house "in the sense of brand reinforcement". While around 30 types of chocolate were produced in-house in the 1970s, 50 to 60 types were added in the 1980s. At the beginning of the 2000s, they even had 130 to 140 varieties of chocolates in their counters, says Maximilian Rambold. But then they found that the large number of chocolates confused customers and the sales counters had to get bigger and bigger. Trial and error. "Today a good 100 varieties of chocolates, from Almendras, an almond nougat praline, to lemon butter, a variety of butter cream with lemon, are handmade by 15 confectioners. That's quite enough," says Rambold.

The handicraft has its price. The customer has to pay at least one euro per chocolate. But depending on the processing and raw materials, it can also be considerably more. Nevertheless, for some types of chocolate, such as the caipirinha made of sugar cane juice, limes and canache, the raw material and processing are so expensive that the selling price should actually be 30 percent higher than the retail price. Because customers love pralines, they remain in the assortment - actually too cheap. The mixed calculation at the point of sale makes sure that it still works.

In the late 1990s, the family is offered the opportunity to open an Elly-Seidl shop in the central area of Munich's new airport. "My brother, already a master confectioner at the time, was thrilled. One million passengers every day, the gateway to the world, if only one in a thousand bought, you could do a huge business." But the reality is different, because "people who go away don't spend money, and when they come back they just want to go home. And the rent for the store was exorbitantly expensive." Try and error. When the lease expires, the experiment is terminated immediately.

Elly Seidl2

Almost simultaneously, the Elly Seidl brand is up for sale. The heiress, also an Elly, wants, according to Maximilian Rambold, ten million marks, at that time an exorbitantly high sum. After lengthy contractual discussions, the parties agree in 2000 on one million marks plus life annuity for Elly. "A sensible house number", says Rambold, because the success of the Elly Seidl brand has been based on the commitment and ability of Rambold senior since the 1970s and not on that of the name giver Elly Seidl.

Even during the sales negotiations, Rambold's parents bring their sons on board. "They wouldn't do it without us." They found the Elly Seidl GmbH. Three years later, the sons Oliver and Maximilian become shareholders, initially with 30 percent each. Today the brothers each own 33 percent, the father 34 percent. The father's written individual power of attorney - without his okay the sons could not make any company-relevant decision - was also dissolved.

Oliver Rambold has been Managing Director for Production since 2004, and since 2009 Maximilian Rambold has been responsible for Marketing, Administration, Shops and Personnel. A constellation that holds potential for conflict. If, for example, the marketing expert wishes for "a knitted praline" for the Christmas business and the brother rejects it "as crap from a production point of view", it could become very emotional. In principle, such conflicts are resolved at the family kitchen table. Finally, the parents are available as discussion partners. "We've never gotten into a stalemate like this before."

In 2005 it is time for the next expansion attempt. The family opens the first online shop "with the help of a friend of a friend of a friend". Can that work? Will the chocolates survive shipping in the usual quality? Slowly and carefully the family gropes its way into the new shop, avoids the summer heat, and initially ships only in winter. In the Corona year 2020, online trade accounts for ten percent of sales. And at the same time it strengthens the brand and awareness level, because orders come from all over the world.

In future, the Rambolds in Munich want to test so-called pop-up stores, temporary shop units in shopping centers. "They don't have to be large, industrial style, clear edges, here we can also try out completely new products," says Maximilian Rambold. For example, new types of chocolate, the development of which is costly and time-consuming, taking up to six months.

In the next two or three years, Rambold senior is due to hand over his shares in full. The family-owned company wants to get external help from specialist lawyers and a management consultant. "On the scale we are now, this is necessary," says Maximilian Rambold. They already have two or three concepts in the drawer, "but they are not yet ready for discussion". They will probably start to work their way towards the solution. Trial and error. ®

Author: Mariella Bauer

Photos: Denise Höfle

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