Interview: Gail’s boss Tom Molnar on high street survival and sustainable sourdough

When Gail’s bakery co-founder and chief executive Tom Molnar switches his camera on, he looks every inch the surfer he was, growing up in the sunnier climes of Cocoa Beach, Florida. His tousled hair and open neck T-shirt stand in stark contrast to the depressingly gloomy and grey late August day outside. 

After commiserating over the weather and pining for brighter days and azure blue breakers, the talk turns to Molnar’s circuitous journey from America’s Sunshine State to London. He studied aquatic ecology in the US, and says his first dream was to become a fish farmer. As happens with so many other youthful dreams, fiscal realities got in the way. 

“I really wanted to get into aquatic ecology, but I owed a lot of money. I was desperate to pay off my student loans,” he recalls. “So I got a job with Cargill, a food company, and I ended up trading commodities for them.”

Molnar ended up moving - by way of an MBA at Insead Business School and a period spent surfing in Mexico – to Switzerland and France, before arriving in the UK in the late 1990s when he worked with management consultancy McKinsey.

It was in London that a nagging annoyance gave way to the germ of an idea that would become the high street bakery chain Gail’s. “London is such a great city, but it just had such poor-quality bread at the time. I just felt that something had to change,” he says.

Now on a mission, Molnar and his business partner Ran Avidan began speaking with people in the food industry and, as he puts it, “stumbled” into then-struggling baker Gail Meija. 

“She was just so serious and bloody-minded about making sure there was good bread in this town,” says Molnar. “But she was such a small part of such a big city and, for all her effort, she was struggling.”

While the public may not have then been aware of Meija’s bread, she had established connections with some good restaurants. While the product spoke for itself, Molnar felt the people looking after the pounds and pence weren’t doing enough. The upshot was that the three went into business. 

Back from the brink

After five years solely supplying chefs, Molnar and Meija opened their first bakery in 2005 in Hampstead, North London. However, it was not until 2011 that the business really exploded, following a £10.5m investment from entrepreneur Luke Johnson. 

Over the next eight years it blossomed from six locations to 60 - the majority of which within easy distance of its West Hendon head bakery. In 2016, Gail’s opened its first store outside London, in Oxford, while Molnar has also personally invested in another bakery in Manchester.

Then came the pandemic. Almost overnight, Gail’s suffered the same fate as so many of its high street competitors, forced to furlough staff, shutter stores and put any plans for further expansion into indefinite suspension. Prior to that, the business had enjoyed record profits and sales to the year February 2020, with pre-tax profits of £2.8m from sales of £61m. 

Nearly all of Gail’s 68 stores were closed during the pandemic, or only open for takeaways. 

“We shrunk down to 10 or 11 [trading] stores at one point. We went through a really tough time, there’s no doubt about that”. 

But it wasn’t just his business that was suffering - with restaurants closed, Gail’s suppliers were struggling too. Out of necessity, Gail’s Pantry was born - a new click-and-collect range featuring everyday items from restaurant-grade mayonnaise to fresh eggs, all sourced directly from Gail’s suppliers. Customers can also buy a range of cereals, nuts, seeds, grains and pulses from stores. 

“No matter how good an idea is you can’t sell anything unless people actually want it”

“I remember early in the pandemic, being on the phone with suppliers saying they were having trouble selling their cheese or whatever. We had all these people who were doing an amazing job supplying us all of a sudden had no place to sell their stuff to.

“That’s where the idea for Gail’s Pantry came along” says Molnar. ”But it was only an idea at the time. No matter how good an idea is you can’t sell anything unless people actually want it.”

Since its launch, Gail’s Pantry has been going well according to Molnar, and adds another weapon to the bakery chain’s growing online arsenal. The bakery has had a long-standing partnership with Waitrose, Harvey Nichols and Ocado alongside running its own ecommerce site.

It has also recently partnered with on-demand start-ups such as Getir and Gorillas as well as more established players such as Deliveroo and Just Eat. Rather than see these start-ups as needless middlemen, Molnar says they are fast becoming a key component of food retailers’ business model and tap into the changing way that people want to buy food. 

“I think having all these different ways of delivering that product to people is healthy”

“It’s amazing how quickly this area has grown in the last two or three years. For us, our commitment is that we want to make really great stuff easy to find. I can see no reason why something like great bread shouldn’t be as readily available to the customer as Coca-Cola. So I think having all these different ways of delivering that product to people is healthy.

“A lot of people at the beginning said ’don’t give your product to them [Gorillas, Getir], make customers come into Gail’s’. But I don’t want to make people come into my shop, I want them to want to come into my shop. It’s a different mindset.” 

While the coronavirus has led to more of an online pivot for the bakery, Gail’s is still committed to the UK high street, and Molnar and his team have plans to open dozens more locations in the next three years. 

Waste not, want not

While Molnar’s mind is predominantly focused on pushing on with Gail’s post-pandemic recovery and continuing its growth - both in bricks and mortar and online - the planet is another issue he is thinking about. 

With his love of the ocean and of the creatures that live there, combined with some of the alarming reports being published by leading climate scientists, sustainability and plastics are issues Molnar returns to throughout the interview. 

In July, the retailer unveiled its ‘Waste Not’ sourdough range, with the loaves made from “offcuts of ingredients” from other bakery items. In August, it unveiled a five-store pilot trial in London with Ocean Bottle. From August to October this year, Gail’s has pledged to fund the collection of 20 plastic bottles that would otherwise go to waste or into the sea for every drink bought by customers using an Ocean Bottle.

Ocean Bottle designs and makes smartchip-enabled reusable water bottles from plastic recovered from the seas. The chip in the bottles help fund plastic collection and drive sustainable behaviour. 

“[Ocean Bottle] is such a damn good idea. My philosophy has always been that if we can use Gail’s to help people trial some things that may help the planet, or the wider world, then that’s what we should be doing,” he says. “Baking is what we worry about every day. But, when people come along with a good idea, and we can help them, then we will.” 

To say that the waters have been rough for Molnar and his team the last 18 months or so would be an understatement. But having kept its head above water, Gail’s has emerged out of the pandemic a more agile and diverse business and Molnar’s eyes have once again turned to the horizon, keeping an eye out for the next opportunity to roll through.