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2017 Top 100: Panera Bread leads strong category

Mergers and acquisitions are becoming a powerful factor in the Bakery-Cafe segment

This is part of the Nation’s Restaurant News annual Top 100 report, a proprietary ranking of the foodservice industry’s largest restaurant chains and parent companies.

Mergers and acquisitions are becoming a powerful factor in the Bakery-Cafe segment, one of the Top 100’s best-performing segments.

Among the 12 segments in the Top 100, the Bakery-Cafe group — made up of Einstein Bros. Bagels, Panera Bread Co. and Tim Hortons — had highest average growth in Latest-Year Estimated Sales Per Unit, or ESPU, at 7.0 percent.

The segment’s Latest-Year 7.0-percent growth in aggregate segment sales was bettered only by Beverage-Snack (10.4 percent), Chicken (10 percent) and Limited Service/Specialty (9.7 percent).

The pending acquisition of segment sales leader Panera Bread Co. by JAB Holding Co. of Germany for $7.5 billion, a move that will take the company private, positions the Panera Bread chain for growth, experts say.

 “Now that they are private, they can play for long-term returns,” restaurant industry researcher and analyst Malcolm M. Knapp said. “All the pieces are in place.”

“Panera decided to go all out and own ‘healthy’ foods and that, along with [design] changes in the stores and bringing in the technology piece [for loyalty and guest self-service], has taken three years, but now they’re reaping the rewards,” he added.

Panera’s delivery-catering initiatives, including development of hub production facilities, may quicken its sales-building march, industry watchers note.

JAB previously took Einstein Bros. Bagels parent Einstein Noah Restaurant Group Inc. private in November 2014. 

Einstein Bros. Bagels officials said two key drivers behind Latest-Year performance were “strong growth coming from the catering channel and product-innovation efforts,” including the launch of sandwiches with fresh eggs. The chain also increased the pace at which it remodeled stores and added sister concept Caribou Coffee products to reposition the locations as Coffee & Bagels stores.  

Tim Hortons led all Top 100 chains — not just its Bakery-Cafe peers — in Latest- and Preceding-Year growth in ESPU, at 14.9 percent and 17.5 percent, respectively. That improvement, in large part, was linked to Tim Hortons’ change in ownership to Restaurant Brands International in December 2014.

Under that new parent, Tim Hortons management likely culled some underperforming conventional restaurants along with 46 “non-standard shop/kiosk” operations in 2015 when it terminated agreements for 172 U.S. locations — or 19.5-percent of the Prior Year’s total franchised unit count.

Contact Alan J. Liddle at ala[email protected].

Follow him on Twitter: @AJ_NRN

TAGS: Fast Casual
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