Skip navigation
ron-shaich.gif Photo by Kate Weiser, Courtesy of Life Alive

What is Ron Shaich up to?

The Au Bon Pain and Panera founder focuses on slow, sustainable growth and “Sherpa management”

Ron Shaich is back. The former CEO of Panera Bread has been rallying against the Wall Street mentality of short-term demands for a while now, and he's increasingly putting his money where his mouth is by supporting restaurants through his $300 million investment fund, Act III Holdings.

As Shaich sees it, act one for him was founding Au Bon Pain, while helping to establish the bakery-cafe segment. Act two was purchasing and growing what would ultimately become Panera, a chain he grew to more than 2,000 units and in the process helped create fast casual as we know it. He later sold to JAB Holding for $7.5 billion.

In the last few years, as he’s turned his focus to investments, he's funded Mediterranean fast-casual chain Cava Group Inc., including supporting the company's takeover deal of Zoe's Kitchen, valued at $300 million. And he's funded Clover Food Labs, a hyperseasonal Cambridge, Mass.-based vegetarian chain with about a dozen units.

Recently, Shaich has taken an active, hands-on role in Tatte and Life Alive, two Massachusetts-based concepts.

Shaich and Act III's involvement and investment in these chains "allows [the entrepreneur] first and foremost to not worry about capital," he said. "If I'm running a great business, they shouldn't be focused on capital."

Tatte is a highly designed bakery-cafe from Israeli baker Tzurit Or who Shaich met when Panera invested in her brand. Tatte is best known for its pastries, an all-day brunch menu and various types of shakshuka. Act III is a majority investor in Tatte giving Or the freedom to "focus on the magic instead of the day-to-day grind," Or said.

Shaich personally acquired Life Alive, a plant-based fast-casual mini-chain in 2015. The restaurants serve organic grain bowls, salads and smoothies from a display kitchen. He installed Leah Dubois, his former personal chef, who introduced him to the brand, as culinary directory. For Dubois the arrangement is simple: "He allows us to do what we're good at."

Getting to a Resolution


Photo by Abigail Connor, Courtesy of Life Alive

Act III in many ways, is the logical next step to Ron's life work. In typical three-act plays, act one is the setup, two is the confrontation, and three is the resolution. After setting up national brands and establishing entire restaurant segments, he confronted what's wrong with the way they grow. Now he's trying to fix things.

Over the past few years, he's become a forthright commentator on the perils of activist investors (who he fought while at Panera) and short-term business decisions (he was pressured to raise prices quickly while at Panera). 

Act III looks to combat these issues with a different type of funding and investing.

"We have what we call founder-friendly capital," he said. "That means if we fund you, I'm going to commit to funding you for all the follow-on rounds."

Then there's what Shaich is calling 'Sherpa management.'

"I think for every thousand people who ever dream of building a national brand in the food industry, one of them makes it," he said. "Some people say it's tougher than climbing Mount Everest, and the reality is there are so many different ways to get in trouble, there are so many opportunities to slide off the mountain... one of our strengths in private equity is actually as a Sherpa guiding that process.”

Shaich said, unlike other investors, he and his team is in it for the long haul, too.

"This is $300 million dollars of our own money; we don't have limited partners. We're not looking for an exit position; we'd be quite happy staying with these businesses for decades with what's called evergreen money. No pressures from anybody."

Building a better alternative


Courtesy of Tatte

The chains Act III invests in will grow, Shaich said, but in their own way at their own pace.

"Act III was set up to help our partners focus on being a better alternative, not have people in the boardroom who are worried about how they can sell this company in two years or three years," Shaich said.

"Competitive advantage comes from thinking long-term," he added.

Life Alive is opening its fifth location, the second under Shaich, in a few weeks. "Something that Ron talks about a lot is one cafe at a time," Dubois said. "We're focused on what we're doing right now and being authentic.”

A slower pace has allowed Dubois to work with her vendors, many small and local, as she scales, "making sure they can grow with us."

Tatte has over a dozen locations, but Or designs each cafe herself.

"We are not compromising on anything we do,” and "it takes longer,” she said.

That seems to be fine by Shaich.

"It's not about being a flash in the pan,” he said. “It's actually about building a sustainable business.”

Contact Gloria Dawson at [email protected]

Follow her on Twitter: @GloriaDawson

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.