In 1881, Adam Otterbein, a German immigrant, opened a bakery on the corner of Fort Avenue and Jackson Street in Baltimore. The basement was for baking, with the first floor serving as a retail store and the upstairs being his home.
This month, Otterbein’s Cookies, a family-owned business based outside of Baltimore, is celebrating its 140th anniversary.
Adam Otterbein’s great-great-grandson, Ben, is the general manager of Otterbein’s Cookies, the fifth generation of the Otterbein family to head the business — a success he attributes to the company’s relationship to the community and a willingness to evolve.
“I can’t tell you how many people I talked to that start the conversation with ‘My grandmother has always had these in her house, and my parents always had them in their house growing up, and now I buy them for my kids,’” he said. “And I think that means something that we have a special spot as a product, as a food in so many people’s lives, not just on their grocery list.”
And, Ben says, the business has survived because the family has been willing to change.
In the mid-1990s Otterbein’s was struggling, he said. Grocery stores were adding bakeries, and his father, Mark, who was heading the business at the time, had to decide between closing it or changing how it operated.
Mark chose to take a risk.
The business’ cookies had long been their top seller, so Mark decided to try selling the cookies wholesale rather than in retail. They would stop selling their other products and eventually began making the cookies by machine rather than by hand.
“Listening to him tell stories, it is kind of hard to believe that he came out the other end,” Ben said.
The longevity of a family-owned business such as Otterbein’s can be a rarity in the United States. In 2012, the Harvard Business Review reported, about 70% of family-owned businesses fail or are sold before the second generation can take it over.
Oliver Schlake, a clinical professor at the University of Maryland’s Robert H. Smith School of Business, said there are several factors that could inhibit the growth of family-owned business in the U.S.
Schlake’s family has owned a bakery in Germany for at least 75 years, but he said family businesses can struggle to survive in the U.S. He attributed this to a number of reasons, including the hesitancy among some business owners to be open to organic growth, which is growth by increasing output and enhancing sales from within.
For a family-owned business to have success in the U.S., Schlake said it is important to uphold traditions and “have an active, symbiotic relationship with the community.”
“You expect people to pay a premium because you’re selling them something that is more satisfying than just getting food,” Schlake said. “It’s not just calories … you’re eating an experience, you’re eating into a tradition.”
At the same time, Schlake said relying too much on tradition can be “a very dangerous trap” for family-owned businesses. It is important to strike the balance between upholding traditions and evolving.
Otterbein’s hit its stride in the early 2000s. And now, the business — based out of a manufacturing facility in Windsor Mill — makes millions of cookies each year, Ben said. He would not share their annual revenues.
Ben said that “part of the magic” of the business is there is no pressure among family members to work at the business. There are about 28 full-time employees, but only three are part of the family.
Ben and his dad tried to “run away” from the business at times, but he said life called them back.
“In some ways it doesn’t feel like a job, it just feels like life,” Ben said.