Down-to-earth founder of Dot's Pretzels shares recipe for success with Minot entrepreneurs
Dressed casually in a zippered jacket, striped henley and dark slacks, Henke was every bit the "neighbor next door" whose unpretentious charm has endeared her to so many. Throughout the one-hour session, she talked with refreshing honesty about the decision to sell the Velva, N.D.-based company to Hershey in 2021 and assured people that the candy giant has continued operating the North Dakota plant with the same team.
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MINOT, N.D. — Much like the pretzel mix that made her famous, Dorothy “Dot” Henke displayed a blend of homespun charm, irresistible flavor and even a dash of zest during a Facebook Live presentation to Minot-area entrepreneurs Thursday, July 14.
The founder of the beloved Dot’s Pretzel brand spoke to a roomful of aspiring and current entrepreneurs, business leaders and Dottophiles (people who just plain love Dot) at Minot’s Carnegie Center as part of Start Up Minot’s monthly networking/business showcase event.
The crowd of 75 was “about double” of the usual turnout for the monthly speaker event, said Mark Lyman of the Minot Economic Development Corporation.
Dressed casually in a zippered jacket, striped henley and dark slacks, Henke was every bit the "neighbor next door" whose unpretentious charm has endeared her to so many. Throughout the one-hour session, she talked with refreshing honesty about the painful decision to sell the Velva, N.D.-based company to Hershey in 2021 and assured people that the candy giant has continued operating her plant in Velva with the same team and the same process.
“The beautiful thing is that every business is as usual at all the plants, as far as I know, for right now,” she said. “I do know they are doing some renovation in the North Dakota plant, which I’m very happy to hear. So just keep your prayers going that they keep that one open, because that is the story. That’s where it began and that’s where it should continue."
Henke also doled out bits of advice, such as her habit of developing a rigorous “pros and cons” list for every company decision, the wisdom to constantly seek feedback from the employees and customers who knew her product best, and the five principles that helped guide every stage of her company’s journey.
Those principles — passion, professionalism, versatility, engagement and authenticity — weren’t always easy to live by.
Professionalism “took a lot for me, because I am that average person,” she told the group. “To be that person to do what I’m doing right here is very hard.”
And Henke ultimately decided that, in order to be her most authentic self, she would not stay with Dot’s after the Hershey’s deal. “I did not take the contract with Hershey’s,” she said, her voice occasionally wavering with emotion. “As my five things, it was not me. I just didn’t think I could do it. So I’m just doing this sort of thing. It’s hard to do because it isn’t mine anymore. But it’s still mine. I’m still the founder.”
Strawberries, spreadsheets and snack foods
Born and raised on a dairy farm, Henke learned the lessons of hard work early. She helped pick strawberries from her mom’s huge garden and gathered eggs from their chickens to sell for grocery money. Before and after school, she milked cows. After that, she studied.
She graduated from Wahpeton High School and earned her accounting certificate from the North Dakota State College of Science. She worked in finance and insurance for years while also raising two sons and a daughter with husband, Randy, a Minot farmer.
Henke’s life changed after tasting an almost-perfect Chex mix at a wedding. She especially liked the butter spindle pretzels in the mix, but found the seasoning too spicy. “I think it was to get you to drink more beer, actually,” she joked.
Determined to improve on it, Henke tracked down butter spindles at Menards and started experimenting in her own kitchen to get the mix just right.
Her pretzels were a big hit at gatherings, so when a relative asked Henke to send bags of the snacks as Christmas gifts to friends in Arizona, she did as asked.
Afterward, those who sampled the pretzels kept asking where they could buy more.
Prone to modesty, Henke thought “they were just being nice.”
But their interest sparked something in her. People might actually buy them. She and husband Randy started out selling pretzels from concession stands at football games. “It was very successful,” she recalled.
Then she decided to test-drive the Pride of Dakota Showcase in Williston. “Ohmigod, I could not believe it. People actually dug into their purses — guys with their wallets — and gave me money.
“But the biggest thing was the expressions of consumers like you, showing the love, and they actually loved it and that is what got us going,” she said, still visibly moved at the memory,
The couple decided to take their little sideline to the next step. They studied a map of North Dakota, then targeted convenience stores in communities of more than 1,000 people. Each store was sent sample boxes to dole out as freebies to customers. “We thought if they could sample, there’s a good chance that people would buy,” she said.
At this point, follow-up, persistence and organization paid off. Henke said she “called religiously” to every store carrying her pretzels, then kept careful notes on how the snacks were selling, whether they wanted more and how often she could check in with them without becoming a pest.
She also leaned on a decision-making process that had served her family well on the farm. Every major decision would undergo a rigorous “pros” and “cons” test and the end results informed what they needed to do next.
From one tiny kitchen to big opportunity
Her next challenge was finding a commercial kitchen. Minot had been hit by the oil boom and a flood, so rents had soared. Finally, she found a tiny kitchen at the Velva grocery store, which the owner let her use after the baker was done.
“I baked there after-hours. Hauled in my Buick ‘88, hauled all my stuff into there, hauled it all the way back again. Ohmigod, it was awful. But I got strong,” she quipped, flashing a quick Rosie the Riveter bicep curl for the appreciative audience.
As demand grew, she searched for larger quarters. She found a building in Velva, but it was far from manufacturing-ready. “It had no water, it had nothing,” she recalled. “I was down there scrubbing floors and everything else for quite a while.”
The city of Velva had deemed the structure a renaissance building, so the Henkes received tax breaks for the first five years as they improved it. Velva’s EDC also granted the business dollars to pipe in water and make other infrastructure improvements.
“Velva guided me, they listened to me and they gave me their opinion. They did support me huge,” she said, adding that she and Randy returned the favor by ensuring Velva was highlighted with a star on the North Dakota map decorating every Dot’s package.
In the beginning, Dot’s production line was largely manual and incorporated ingenious hacks like cut-off orange traffic cones to funnel boxes of pretzels into bags. Over time, the company would expand to more automation and add additional facilities in Kansas and Arizona.
Once the business gained momentum, she said, its growth was phenomenal. The company grew 8% each month. Henke often worked from 6 a.m. to 11 p.m. seven days a week. And if someone called in sick, she and Randy would find themselves working the line or filling in wherever needed.
Even then, Henke said she tried to answer every email and phone call from customers. There was no shortage of them, because her phone number was on the bag. She urged the audience to also maintain communication with their customers, even if they said things that might be hard to hear. “Consumers are that important to you.”
Henke also believed in supporting her employees by providing excellent benefits and listening to them. "My employees worked for Dot, for me," she said.
In return, she relied on them for taste-testing the numerous flavor combinations she brought to them as part of her R&D process. "My employees got to taste more crap," she said, as the audience laughed. “But I always wanted to be criticized. When you have the flavors that are out there, they are because of my team."
When the company had to find a way to reduce baking and mixing times to increase production, it was the employees who thought of a way to do so without sacrificing flavor or quality. “The team solved so many problems,” she said. “I can’t thank them enough. It's always a team effort."
A twist in Dot's journey
Even as Dot’s sales and reputation grew, she still sometimes found it difficult for some vendors to take her company seriously.
After one supplier consistently failed to meet Dot’s supply needs and kept sending a sub-standard product, the normally low-key North Dakotan found herself needing to dig deep to summon her inner tough guy.
“I had to get very, very stern at that meeting,” she said. “And that’s not me. I’m usually called the marshmallow, not the firecracker.”
As she explained to the group, “Sometimes you have to be very passionate. You fight for what you have to do to get what you need, and we needed that.”
One of her most difficult business decisions was selling the company. By that time, Dot’s had partnered with RDO, which gave them the contacts and clout they needed to compete with the Frito-Lays and Old Dutches of the world.
The Henkes liked that RDO was a family-owned, North Dakota company, and that they were able to agree on a partnership with something practically unheard of today — a handshake. She said the two companies worked as a team and she learned a great deal from the large organization.
But when an offer from Hershey’s came, it was too sweet to resist. “RDO did listen to me a lot of the time, but when it came down to the end, no. I had to sell, because they wanted to sell. It was very hard,” she said.
Henke said she understands that it was probably the smartest business decision for that point in the company’s growth and that “dollars speak more” in the world of commerce. But for her, it had never been about money. It was about growing a business, working as a team and seeing how much people loved their product.
“Dollars did not mean anything to me,” she said. "I had retired. I didn’t need all this. So to lose my baby was hard.”
Since Hershey's has acquired Dot's, it has expanded distributorship in the eastern United States and introduced more flavors. "Hershey's has so much more distribution. I’m hoping they go up to Canada because Canadians just want us so badly," she said. "Whatever they do, it’ll be great.”
Today, Henke remains an active partner in the family’s farming operation. She also told the Minot group she has her doors open for new entrepreneurs to bounce off ideas. “We’ll be like a ‘Shark Tank,’ but when I think about that … I think they would have eaten me up alive. I will not do that to any of you,” she said.
Henke also encouraged the Magic City to continue supporting entrepreneurs through avenues like its Start Up Minot Academy . "It's a wonderful way to learn, bounce ideas off each other, share pros and cons and just a great way to listen and communicate with others doing the same thing," she said. "Dot's Pretzels was not my dream. I had no idea this was going to happen to me. But make (your business) your dream."