Chip and Pepper struggle in plan for KUB to rise again; unhappy sources say tie-dyed twins owe lots of dough By: Malak Abas Posted: 6:04 PM CST Tuesday, Jan. 9, 2024

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This article was published 09/01/2024 (1010 days ago), so information in it may no longer be current.

Any way you slice it, there’s plenty of disappointment to go around a year after Chip and Pepper Foster announced their purchase of Winnipeg’s iconic KUB bakery brand.

The gregarious Winnipeg-born identical twins, who rode a popular tie-dyed, surf-inspired clothing line to fame and fortune in the 1990s — including a Saturday morning cartoon on NBC south of the border — made headlines last year when they announced the purchase of the near-century-old brand and equipment just weeks after its owner closed the doors.

At the time, they said they hoped to ramp up the production of KUB’s typical 6,000 loaves of bread a day within four months. Today, outside of local partnerships producing small batches and selling locally, that hasn’t happened.

Pepper Foster called the bread industry “a struggle” he didn’t expect, and pointed to high costs of ingredients and manpower, along with difficulties finding a building suitable for the bakery in Winnipeg and competing with larger brands.

“It’s not like designing clothes, where you can basically have the machine and you just throw a different label on a pair of jeans or a different shirt or whatever,” Foster told the Free Press Tuesday.

“This is a very sophisticated operation. You need ovens, you need proofers, you need manpower, you need human capital, you need training.”

Some sources have told the Free Press there is more behind the trouble, alleging that during the past year, the Fosters have left a trail of late or unpaid bills. Those sources said they have had difficulty reaching the Fosters to discuss the payment issues in some cases and, in others, fought strenuously to secure what eventually came late.

“Personally, I would never work with them again,” one said.

The source, who didn’t want his name or connection to the Fosters’ purchase of the bakery published, said dealing with them was difficult and distressing.

“I lost money, I lost time, I lost energy,” he said.

Pepper Foster told the Free Press Tuesday he wasn’t aware of any missed payments related to the KUB acquisition.

“I’m not getting into that, because I’m not a controller,” he said. “We own businesses. I don’t control that, so I don’t know what the accounts payable are, I don’t want to get into that.”

“It’s not like designing clothes, where you can basically have the machine and you just throw a different label on a pair of jeans or a different shirt or whatever.”–Pepper Foster

Later in the day, Foster sent an emailed statement that said he was leading a food production and distribution organization named Authentic Food Group that managed the KUB brand, and said “under-performing” high-level staff had caused financial issues.

“In late 2023 the owners became aware that certain members of the senior management team had significantly failed to reach the sales and growth targets set for them. While this did not threaten the company in the long-term, it did result in a temporary cash flow challenge,” he said in the email.

“The owners immediately took steps to replace underperforming team members and to work to fix the financial shortfall. This work is almost complete and Authentic Food (Group) is proud to say that it will continue to provide quality food and quality jobs in Winnipeg.”

His brother, Chip, was not mentioned in the statement and could not be reached for comment Tuesday.

KUB Bakery’s former owner declined to comment.

While the Fosters entered an agreement to purchase the brand and equipment, the building itself was purchased by a different company. Pepper bought Corydon Avenue’s Pennyloaf Bakery in 2022, a small shop that makes loaves by hand at a higher price and much lower quantity than KUB did.

Pepper and his family reside in Winnipeg; Chip lives in Los Angeles.

Pepper Foster did not divulge how much money had gone into KUB in the past year. In April he told the Free Press start-up costs could reach up to $6 million and investors had already advanced funds “well into the millions.”

“Chip and I have done a lot for Winnipeg, I’m doing the best I can to help a brand that we love, and we love Winnipeg; we’d love to support that brand. We didn’t want to see that brand die,” he said. “We did this more from our heart than a business decision.”

At the Winnipeg Chamber of Commerce president and CEO Loren Remillard said he was optimistic about the project a year ago, but is not surprised to learn that it’s dealing with financial challenges in the current economy.

“Good businesspeople are good businesspeople, but sometimes, as we saw through the pandemic, great businesspeople, their businesses still struggled and ultimately had to close because of the conditions in which they were operating.”–Loren Remillard

“What makes this a unique situation is that you’re taking a long-established business, a brand, that found itself in these difficulties because of the context, the environment, the economy… now you have individuals coming in that have a track record of success, but they’re still having to deal with the realities that forced the business into closure in the first place,” he said.

“Good businesspeople are good businesspeople, but sometimes, as we saw through the pandemic, great business people, their businesses still struggled and ultimately had to close because of the conditions in which they were operating.”

Selkirk’s Upper Crust Bakery is producing small quantities of KUB bread, but cannot fulfil larger orders at big-box stores in Winnipeg.

In a joint call with Foster, Upper Crust owner Sheldon Pescitelli said their partnership was made official in December and has been going smoothly. He said Selkirk residents are excited to be able to buy KUB bread again.

“We have means right now to expand into doing some retail sales, getting into some stores. I’m really hoping this year we can expand to the point that, between Pepper and I, we can be building a bakery in Winnipeg here and going back to doing what KUB used to do,” said Pescitelli, a former KUB employee who started at the bakery at the age of 15.

The Free Press was not able to reach Pescitelli separately from the joint call.

When asked about their partnership, Foster said he would not divulge details — saying “the terms are we made a deal and we’re all happy, that’s it” — but called it just a matter of time before KUB rye was back on shelves across Winnipeg.

“We’re financing this. We’re bootstrapping this business,” he said. “We’ve invested a lot of money into this company.”

malak.abas@freepress.mb.ca