Ismail Salhi and Johanna Hartzheim co-founded Wildgrain in 2020. Wildgrain has been wildly successful. This tasty pastry, bread, and pasta company with premium-priced products will break $100 million in revenue this year. The Boston-based asset-light company employs only 22 people. Already debt-free, Wildgrain is cash-flow positive despite its explosive growth.

The two met in Paris. Mr. Salhi came from Algeria; Ms. Hartzheim from Germany. In Paris, Salhi earned a Master’s Degree in computer science from Sorbonne University, then a doctorate in computer science from Université Paris-Est. Hartzheim earned a degree in industrial design from École Nationale Supérieure de Création Industrielle.

The two eventually married. Before that, they co-founded a consumer hardware company in the music business. An investment from Bose Ventures, Bose’s investment arm, led them to move to Boston. Bose, headquartered in a Boston suburb, is an American audio equipment company known for high-quality audio products.

“But living in Paris for 10 years had educated us on, without really knowing it, bread and pastries,” Salhi said. The abundance and quality of these products in Europe, and especially in France, far exceed what Americans have access to. France actually subsidizes bread and pastries “in a way that doesn’t exist anywhere else in the world.” They deeply appreciated being able to leave their apartment, walk down the street, and go into a “bakery serving warm, fresh, delicious bread.” Then we moved to the U.S. and realized that it’s not the same here. Good bakeries exist, but even the best bakeries around here don’t serve warm bread. They serve it cold.” Grocery breads also contain shelf stabilizers, preservatives, and other chemicals not needed in fresh bread.

Salhi explained that bread has a delicious window: “The 20 to 25 minutes after a loaf comes out of the oven. That’s the best flavor you can have. Then it decreases exponentially after that window. It is still tasty. But if you want the best of the best,” you need bread fresh out of the oven. As a chocolate chip cookie aficionado, I readily buy into this concept.

The couple’s hardware venture did not pan out. That business shut down in 2020. Around that time, Ms. Hartzheim became interested in making her own bread. She found a mentor who taught her how to make sourdough bread using new techniques: wet dough, lots of folding, and a slow fermentation process.

“And as we were winding down that startup, we started thinking about what we should do next. She was eight months pregnant when we launched Wildgrain.”

The idea was for customers to subscribe to Wildgrain, and they would ship artisanal bread and pastries ordered online. “We went through a bunch of experimentation.” They ended up with a process that had them precooking the bread using a technique called ‘par baking’ until it was about 75% done, cooling it down, then freezing it, and shipping the products to customers. Customers could then pop it in the oven for 20 minutes, finish baking it, and eat warm bread and pastries “the way they’re supposed to be eaten.”

“We went to our investor meeting with loaves of bread and French butter, and pitched them the company,” Sahal explained. “And a few meetings later, they signed our first and only VC check. We raised $750,000.

“When we started, we wanted to open a bakery and start scaling. And then COVID happened. We couldn’t do that. We couldn’t hire anyone. Nobody could come to work because it was lockdown.”

So, Ismail and Johanna, with a newborn baby, are working in a commercial kitchen, trying to scale their business. We were “waking up at four in the morning,” he explained, “taking the baby, going to the bakery. Bake, bake, bake all day. Come back home at 9 p.m., go to bed, start all over again the next day. Over and over! I realized it was not sustainable.”

They visited commercial bakeries and pitched them on making their products using their recipes, techniques, and packaging. Most said no. But a few saw that Wildgrain could become a bigger customer for them than Whole Foods or Trader Joe’s.

For the baking partners that go through the onboarding process, Wildgrain helps them free up capacity. They can keep baking in the early morning to deliver to local businesses. Because Wildgrain goes in the freezer, once that rush is over, during what were their slow hours, they can produce baked goods for Wildgrain. They can also build inventory for Wildgrain during their slow season, when demand for their products is low.

They started by working with one bakery here in Massachusetts. Now they partner with more than 60 commercial bakeries across the country to make all their products - bread, waffles, rolls, croissants, and other products, including gluten-free choices.

Once bakery partners produce enough baked goods, Wildgrain contracts with carriers to send refrigerated trucks to pick up the pallets. Frozen goods move in sub-zero trailers with real-time temperature validation and reinforced insulation.

These goods are moved to one of five frozen warehouses. Their warehouse, outbound shipping partner is Grip . Their bakery partners are located across the nation. The baked goods ship to the nearest Grip facility – Grip has facilities in New Jersey, Michigan, Nevada, Texas, and Florida. The Grip network covers 70% of the US with one-day transit, which leads to better service and lower transportation costs. Grip operates public warehouses – the goods of other businesses are also stored there.

Grip is also an innovative company. They started as a software company. Wildgrain worked with Grip before they opened their warehouses. “Their software is so valuable for us,” Wildgrain’s cofounder explained. “It’s the difference between being profitable and not being profitable.”

If you put too much dry ice, you’re paying too much for the dry ice. The box is also heavier. So, a company pays more for shipping. If you put too little dry ice, the food will spoil. The company ends up with an unhappy customer and must give a refund or pay for a new shipment. “It’s a delicate balance between a perfect experience for the customer or a catastrophe.”

Grips also help their clients save money with refrigerated cartonization logic. In the summer, Grip uses thicker liners in the box to protect the dry ice. But in winter, when it’s freezing outside, they need much less dry ice or maybe can even use gel packs, and the liners don’t need to be as thick. Grip monitors weather patterns along the forecast routes, and the software’s algorithms factor this into the pack logic.

Grip also helps baked goods innovators choose carriers based on on-time performance and cost. Freight rates change continuously, so a good carrier choice one week can be a poor choice the next.

The startup Wildgrain ended up betting on the startup Grip. “Juan (Camilo Meisel), who is the CEO of Grip, came to me and said, ‘Hey, we’re going to be in the facility business. You should give us a try.’” It was a risk because they were unproven. “But I knew that he could do it. He comes from ButcherBox, and they’ve shipped millions of boxes profitably.” Many other fulfillment centers aren’t savvy about technology. “They’re really focused on profits and not on customer experience.” Wildgrain’s cofounder added: “Grip did come to the game with a lot of technology, but also a deep laser focus on customer happiness and how they can make us successful.”

Grip was the only 3PL who seemed to grasp the economics of a high-growth direct-to-consumer business. To grow, a DTC firm needs to spend marketing money to acquire new customers. That acquisition cost can only be spent if the DTC can pay it back fairly quickly. They also need satisfied subscribers who continue to place orders. The bigger the DTC’s margin, the faster it can pay back that acquisition cost, keep growing, and remain cash flow positive. In short, not maximizing what Grip charged allowed Wildgrain to grow faster and resulted in Grip getting more business.

“So, we gradually started testing their locations, and they were outperforming every other (non-Grip) location we had in terms of on-time delivery, in terms of cost,” and in their ability to handle unexpected events like hurricanes or COVID-related employment issues. Grip managers communicate with Wildgrain via Slack. “We can talk to them all the time” without having to pick up the phone and yell at people, and still not have the problems resolved. “They’re part of our logistics, operations, and fulfillment team,” Salhi said in conclusion.

A video of Wildgrain and Grip is available HERE .