“Don’t get too comfortable with professional career success,” advises David Lohrentz, co-owner of Madison Sourdough Company, a popular bakery on Williamson Street. “It makes it hard to leave – it is better to be a little frustrated and unfulfilled.” That advice may seem ironic, coming from one of the owners of the popular destination for brunch, baked goods and sweet treats. David credits his entrepreneurial success to the inspirational tutelage of Robert Pricer and the Weinert Center for Entrepreneurship at the Wisconsin School of Business at the University of Wisconsin–Madison.
David appreciated the multidisciplinary education of the entrepreneurship program at Wisconsin when he was a MBA student. He learned a lot about a wide range of business topics, from supply chain to business strategy, with practicum-heavy classes. David was not the only graduate from his year (1999) to become a successful entrepreneur. David graduated with Neil Peters-Michaud, founder of Cascade Asset Management, a national leader in responsible IT Asset Retirement solutions for businesses and institutions across North America.
David did not become an entrepreneur right after he graduated, though. He didn’t feel the time was right so he sought out a professional position. He took a job with Amcore Bank in their loan department. David’s hiatus from entrepreneurship would not last long, though.
One of the things Lohrentz looking for in entrepreneurial opportunities was a fragmented industry, with many small companies competing. That was one of the things that drew him to Madison Sourdough. When he took over the business with business partner Andrew Hutchison, it had some strengths but David and Andrew identified some changes they could make to improve the business. For example, at the time, Madison Sourdough Company was pursuing a wholesale strategy, but was located in a strip mall which was not conducive to wholesaling operations. The new owners had to decide whether to continue the wholesale strategy or pivot to a more retail-driven strategy. They ultimately decided to move the business to a location to Willy Street, which had the best of both worlds.
The second opportunity the owners identified was to become a vertically integrated operation. By making products and selling them to retail customers, they believed they could lower their cost of goods sold compared to other retail food businesses. In order to do this they increased the number of products and opened a café and retail bakery in 2010. To take it one step further, David and Andrew recently imported a unique, Osttiroler cold stone mill, to be able to mill grain into flour to the specifications needed to develop new products for the bakery. In addition, they also opened a Patisserie next door to the bakery in Feb. 2015.
The mill is a beautiful work of art that resides behind a glass window, visible from the cafe’s retail area so that customers will see how they grind flour. Unlike most stone mills with vertical mill stones, this mill has a horizontal orientation. Since the flour is not fighting gravity, it can spin a lower revolution than a vertical mill. Therefore there is less heat from friction, and minimal loss of flavor and nutrition.
David and Andrew purchased this mill in part because they believed they could increase quality and reduce cost. Also, they wanted to improve the supply chain of locally grown grains in southern Wisconsin, and they felt that buying direct from grain farmers would allow them to give better guidance as far as what grains work well for artisanal bakers.
David and Andrew expect 2015 sales to be four times the sales when they acquired the business in 2009. However, they still see many opportunities for growth in the greater Madison area. However, they don’t see growth as a means to an end, but rather something that comes naturally if you provide a quality product with good service.
While David did not become an entrepreneur immediately after graduation, his experience as an MBA in the Weinert Center for Entrepreneurship at the Wisconsin School of Business was integral to his long-term success. As the class of 2015 enters the world with newly minted degrees, David’s story will be one of inspiration to not be deterred by a lack of short-term success.