Too much Pepper, not enough dough

A popular Corydon Avenue bakery that struggled under alleged mismanagement by Winnipeg entrepreneur Pepper Foster is now up for sale.

Pennyloaf Bakery, known for its sourdough and sweet goods since it opened in 2015, was purchased by Foster and accountant James Fiebelkorn in June 2022. The shop closed its doors on Christmas Eve last year, but social media posts indicated the closure was temporary at the time.

In January, bakery staff told the Free Press they had quit Pennyloaf en masse after concerns with Foster and his wife Vanessa Foster’s management of the business. Fiebelkorn said he’d been paying the mortgage since, but, after deciding it would not be feasible to reopen and try to continue co-ownership, the building at 858 Corydon was put up for sale this week.

“It just didn’t make sense to try and rebuild it when I’ve got a partner that I don’t want to be with anymore and I can’t trust,” he said Tuesday.

“I’ve been covering all the costs for the mortgage and utilities and everything out of pocket. I can only do that for so long.”

Fiebelkorn said Foster has 50 per cent equity in the company, but has not invested any money and was brought in to help generate sales. He plans to go to court to seek de facto control of the business.

The building is listed at $1.2 million, and Fiebelkorn said he’s open to the idea of interested buyers taking on the Pennyloaf brand.

“I got into this thing predominantly as an investment and it was just a bad investment,” he said.

Pepper Foster and his twin, Chip, who gained fame in the 1980s and ’90s for their surf-inspired tie-dyed clothing and Saturday-morning cartoon on U.S. network TV based on their exploits, found themselves back in the spotlight locally after they announced they would be purchasing the beloved Winnipeg KUB bakery brand last January.

A year later, KUB bread was nowhere to be found on Winnipeg store shelves; Pepper Foster acknowledged it was a difficult industry to get into.

A Selkirk bakery owner claimed he was forced to shut his doors for nearly two weeks after giving Foster financial control of his business as part of a partnership related to producing KUB bread there.

When contacted in January, Foster said he was hoping Pennyloaf could reopen. He could not be reached for comment Tuesday.

Fiebelkorn said he regrets getting into business with Foster, but allowed that the industry is a difficult one.

“With the type of product that it is, being handmade, essentially, the labour cost is very high… the consumer will only pay so much for a given product,” he said.

“This is going to happen to a lot of small businesses, you’re just going to see them be gone.”

After pandemic restrictions ended and people were able to return to bakeries and other food-service businesses, the expectation for many was that revenue would increase as life slowly returned to normal.

Instead, about 50 per cent of owners in that sector report their revenue now is lower than it was in 2022, Manitoba Restaurants and Food Services Association CEO Shaun Jeffrey said.

It’s hard for Jeffrey to see Pennyloaf go — Winnipeg has few bakeries as it is, he said, and the city is not a competitive place to open one or another food-service business right now compared to elsewhere in Canada for several reasons, including the high material cost of crime, little investment in Manitoba from larger companies based out of the province and a lack of funding and professional-development opportunities from the provincial government.

“There’s so many back-breaking operational requirements in our industry, compared to other industries, that it’s very hard,” he said. “If you’re not full-bore-tilt, busy all the time, it hurts. You can’t operate profitably.

“But we’ve also heard from national restaurant companies… that spoke specifically about not being willing to invest another dollar in Manitoba until our province becomes more comparable to provinces around us.”

Winnipeg is dealing with a two-to-one ratio of closures to openings, Jeffrey said.

“I’m just watching places close left, right and centre. It hurts. We’re losing some pretty key businesses here,” he said.

However, a block east of Pennyloaf, another bakery opened its doors last summer.

Honey Bunny Pastry Shop is a lifelong dream of owner Vira Volt, an immigrant and former legal assistant from Ukraine, whose small, unassuming patisserie specializes in European sweets.

“We just decided to try,” she said. “It’s better to try and say, ‘OK, we tried, at least we tried,’ if it doesn’t work.”

She doesn’t know much about Pennyloaf, but has learned a lot about the industry in the few short months she’s been open at 832 Corydon.

She and her husband put every cent they had into the bakery and she’s had to quickly learn to navigate dips in customer traffic and the high cost of ingredients as Honey Bunny chugs toward its first anniversary.

“(Early on), everything was wrong, what we did. Now I understand, very slowly we are getting experience and learning what mistakes we made,” she said with a laugh Tuesday.

“It’s going very slowly now. It’s the first year. I didn’t expect anything in the first year — most of the businesses don’t survive in the first year, especially food businesses.”

Volt is the only baker on staff at the moment, but she hopes to expand at some point.

It hasn’t been an easy journey — in the midst of seeking loans for the business last year, the house they owned in Ukraine was destroyed by Russian troops — but she has no regrets.

“It’s super-hard. I didn’t expect it to be that hard…. I hope, when we have more experience, it’ll be easier for us,” she said.

“I know many business owners around (Winnipeg), they’ve told me, ‘Just survive for the next 15 months, then it will become easier.’ So we are waiting for 15 months to pass.”

malak.abas@freepress.mb.ca