Au Bon Pain, which was sold by founders Ron Shaich and Louis Kane in 1999 so that they could better focus on building Panera Bread, was reacquired by the company yesterday. Panera also announced that Blaine Hurst, who joined St. Louis-based Panera in 2011 as SVP of technology and transformation and was named president last December, will replace Shaich as CEO on Jan. 1.
“Shaich, who helped revolutionize the restaurant business while making Panera Bread one of the largest chains in the country, is stepping down … to ‘better allocate his time’ between Panera, the company’s new owner [in a deal announced in April that closed in July], JAB Holdings, and his personal investments. He will remain Panera’s chairman and will be ‘a significant investor in the company,’” Jonathan Maze reports for Nation’s Restaurant News. “His departure comes months after JAB acquired Panera in a $7.5 billion deal.”
Shaich and Kane started Au Bon Pain, which went public in 1991 and bought Saint Louis Bread Company two years later, Jessica Dye reports for Financial Times. “Saint Louis Bread Company later changed its name to Panera — Latin for ‘bread’ — and sold off Au Bon Pain in 1999 …. Panera has more than 2,000 bakery-cafes across the U.S. and Canada. Boston-based Au Bon Pain operates about 300 locations in the U.S. and globally.”
“This is the right time for me to step down as CEO while still staying involved in the business as chairman. I returned in 2011 because our growth was slowing and we needed to reposition Panera as a better competitive alternative with expanded growth opportunities. And I’m happy to say we’ve done just that,” Shaich said in a statement. Kane died of cancer in 2000.
Au Bon Pain will be part of a Panera initiative to develop in new real estate channels, including hospitals, universities, transportation centers and urban locations, among others, according to the company. Terms of yesterday’s deal were not disclosed.
“The two brands have strikingly similar menus, selling sandwiches, salads, soups, and coffee with an emphasis on nutrition that many fast-food competitors do not have,” Kate Taylor writes for Business Insider.
“A lot of people have talked about this in the context of closing the circle, but that isn’t what it’s about,” Shaich tells the Boston Globe’s Janelle Nanos. “This is a great strategic acquisition ….”
“Whether that might mean the merger of the two companies under the Panera name, he said, was still too soon to know,” Nanos adds.
Staich’s “denouement is very much like that of Howard Schultz, who stepped down as CEO of Starbucks in April to become executive chairman. Both men are known for their outspokenness on social issues and for spending more than 30 years building small cafe companies into global brands that have become one with their own identities,” observes Zlati Meyer for USA Today. “Shaich prides himself on Panera's push into digital, 100% clean menu and loyalty program.”
“Panera undertook a decade-long overhaul of its menu, reformulating its food to be free of artificial ingredients, a process it completed earlier this year. The chain also recently began to post the amount of calories and added sugar in its beverages on its soda cups and began selling smaller-size portions of its entrees to children,” Julie Jargon points out in the Wall Street Journal.
“Panera has become one of the most successful restaurant chains in the country, following a period of slowing sales and profit declines as the company tried to solve a problem of long lines at its cafes. The chain turned a corner in early 2016 and has since posted sales and earnings growth that have outpaced the industry, leading to a surge in company shares,” Jargon reports.
As for JAB, the investment firm backed by Austria’s billionaire Reimann family, “they want to be dominant in coffee and restaurants that sell coffee,” Michael Halen, an analyst at Bloomberg Intelligence, tells Bloomberg’s Craig Giammona. “They’ve been very aggressive over the last few years.”
Indeed. JAB’s acquisitions include “Keurig Green Mountain, Krispy Kreme, Caribou Coffee, the Einstein Noah Restaurant Group, Peet’s Coffee & Tea and Stumptown Coffee Roasters — a buying frenzy that has jolted the food industry,” Giammona points out.
Now that’s a caffeine buzz.