Bakery-cafe segment set to rise again with fresh new products
BY PAUL FRUMKIN
While operators in Nation’s Restaurant News’ Second 100’s bakery-cafe segment have not been immune to the ravages of the economic storm, experts agree
that chains in the sector are comparatively well-positioned
to ride out the recession.
Two key players, Bruegger’s Bagels and Corner Bakery,
both saw years of consecutive quarterly same-store sales
growth come to an end, as consumers pulled back on spending in the face of the deep economic downturn.
Nevertheless, observers and chain officials express
optimism about prospects for the segment as the economy
begins to right itself.
“Bakery-cafe is one of the top-performing segments in
the restaurant industry,” says Dennis Lombardi, executive
vice president of foodservice strategies for WD Partners in
Columbus, Ohio.
Some of the segment’s measurable success, Lombardi
says, is courtesy of the bakery-cafe sector’s “800-pound gorilla,” Panera Bread, which ranks in NRN’s Top 100 survey.
But, “there is still a lot of growth opportunity for the
other bakery-cafe chains,” Lombardi says. “One of the
things driving growth is that [the chains] have a lot of
latitude in terms of what they can offer as products. They
can play to multiple dayparts.”
In addition, he says, “bakeries connote goodness, freshness, wholesomeness — and those can be strong customer
motivators in unsettled times.”
Corner Bakery, the 100-plus-unit brand based in Dallas,
saw 25 consecutive quarters of positive comparable-store
sales end in the fourth quarter. Nevertheless, Diana Hovey,
senior vice president of marketing, says the brand is drawing
spending-shy customers by offering flexibility, customization and value. In the spring Corner Bakery launched its line
of “Mom’s Sandwiches,” which offers a choice of fillings and
breads accompanied by chips and a pickle for under $6.
Corner Bakery also debuted its
Morning Rush breakfast for $2.99,
which offers a choice of freshly baked
bagels with a variety of hand-whipped
cream cheese and coffee.
It also brought back the $6.49
BBLT — bacon, bacon, and local tomatoes — a popular LTO that focuses on
seasonal produce.
She adds that the chain is continuing
to expand this year, and has opened
seven new locations so far — three of
which are in the new markets of El Paso,
Texas, Phoenix, and Jackson, Miss.
The recession also brought to an end
Bruegger’s Bagels’ 19 consecutive quarters of positive comparable-store sales
in the first quarter of this year, says
chief executive James Greco. But while
the quarter was down by 1 percent to 2
percent, the Burlington, Vt.-based chain
did not take any price increases this
year to offset the decline.
“Traffic has been relatively strong,”
Greco says, adding that Bruegger’s is looking for improvement in the third or fourth quarters.
To help spur traffic, Bruegger’s is focusing on several areas, including new-product rollouts, such as its panini line
priced around $6. It also hired street teams to drive around
neighborhoods in Minneapolis-St. Paul, Pittsburgh and
Boston to promote the brand. Bruegger’s also is stepping up
its social-media presence.
Au Bon Pain, based in Boston, has been working on new
menu items — particularly more healthful options, such as
soups with lower sodium content. But the economy also has
compelled ABP officials to take a harder look at pricing, says
senior vice president Ed Frechette.
“For the last three or four
years we never talked about
pricing,” Frechette says.
“Lately, though, the topic has
been how do you continue to
attract transactions.”
In the spring, ABP introduced a 99-cent cookie add-on
and launched a bagel, cream
cheese and coffee promotion.
ABP also recently introduced
a barbecue line that includes a
choice of barbecue chicken or
barbecue brisket on a farmhouse roll; a barbecue chicken
or barbecue brisket wrap; and
barbecue chicken salad. Prices
range from $5.99 to $6.39.
Bagel specialist Einstein
Noah Restaurant Group Inc.,
under its new chief executive
Jeff O’Neill, launched several
initiatives, including stepped-up marketing efforts and the
rollout of limited-time-only, lower-calorie lunch and breakfast menus. The Lakewood, Colo.-based chain tested such
items as a 350-calorie ancho chicken wedge.
Canadian coffee-and-donuts icon Tim Hortons Inc.,
based in Oakville, Ontario, saw same-store sales rebound in
the first quarter ended March 29. The chain also established an overnight beachhead in New York City through its
co-branding deal with Coldstone Creamery, which opened
three Tim Hortons in midtown Manhattan.
Following that the New York-based multiconcept Riese
Organization rebranded all 13 of its Dunkin’ Donuts shops
into Tim Hortons — the final outcome of a legal wrangle
between Riese and franchisor Dunkin’ Brands. ■
Dallas-based Corner Bakery is drawing customers
with flexibility, customization and value, it says.
BAKERY-CAFE CHAINS RANKED BY U.S. SYSTEMWIDE SALES
LATEST- PREC.-YEAR YEAR
RANK RANK
CHAIN
FISCAL
YEAR-END
U.S. SYSTEMWIDE FOODSERVICE SALES*
(BY FISCAL YEAR, IN MILLIONS)
LATEST PRECEDING PRIOR
1
2
3
4
5
1
2
3
4
5
Einstein Bros. Bagels
Tim Hortons
Au Bon Pain
Corner Bakery Cafe
Bruegger’s Bagel Bakery
TOTALS:
Dec. ’08
Dec. ’08
Aug. ’08
Dec. ’08
Dec. ’08
$433.5
370.0
307.4
246.0
200.0
$1,556.9
$400.0
345.0
287.8
224.0
178.0
$1,434.8
$367.2
288.0
268.3
197.0
164.0
$1,284.5
*Actual results, estimates or projections
Source: NRN research
BAKERY-CAFE CHAINS RANKED BY GROWTH IN U.S. SYSTEMWIDE SALES
(Year-to-year percentage change)
LATEST- PREC.-
YEAR YEAR
RANK RANK CHAIN
FISCAL
YEAR-END
LATEST*
VS.
PRECEDING
PRECEDING*
VS.
PRIOR
1
2
3
4
5
4
2
3
1
5
Bruegger’s Bagel Bakery
Corner Bakery Cafe
Einstein Bros. Bagels
Tim Hortons
Au Bon Pain
AVERAGE:
Dec. ’08
Dec. ’08
Dec. ’08
Dec. ’08
Aug. ’08
12.36%
9. 82
8. 38
7. 25
6. 81
8.92%
8.54%
13. 71
8. 93
19. 79
7. 27
11.65%
*Actual results, estimates or projections
Source: NRN research
BAKERY-CAFE CHAINS RANKED BY NUMBER OF U.S. UNITS
LATEST- PREC.-YEAR YEAR
RANK RANK
1
2
3
4
5
2
1
3
4
5
CHAIN
Tim Hortons
Einstein Bros. Bagels
Bruegger’s Bagel Bakery
Au Bon Pain
Corner Bakery Cafe
TOTALS:
*Actual results, estimates or projections
FISCAL
YEAR- YEAR-END NUMBER OF UNITS*
END LATEST PRECEDING PRIOR
Dec. ’08
Dec. ’08
Dec. ’08
Aug. ’08
Dec. ’08
520
496
287
184
113
1,600
398
458
268
184
101
1,409
336
434
254
188
98
1,310
Source: NRN research
BAKERY-CAFE CHAINS RANKED BY GROWTH IN NUMBER OF U.S. UNITS
(Year-to-year percentage change)
LATEST- PREC.-
YEAR YEAR
RANK RANK CHAIN
FISCAL
YEAR-END
LATEST*
VS.
PRECEDING
PRECEDING*
VS.
PRIOR
1
2
3
4
5
1
4
2
3
5
Tim Hortons
Corner Bakery Cafe
Einstein Bros. Bagels
Bruegger’s Bagel Bakery
Au Bon Pain
AVERAGE:
Dec. ’08
Dec. ’08
Dec. ’08
Dec. ’08
Aug. ’08
30.65%
11. 88
8. 30
7.09
0.00
11.58%
18.45%
3.06
5. 53
5. 51
- 2. 13
6.09%
*Actual results, estimates or projections
Source: NRN research
