This story is part of NRN’s Second 100 special report, a proprietary census ranking the foodservice industry’s largest restaurant chains and companies by sales and unit data, among other metrics.
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Sales at segment leader Au Bon Pain rose 6.8 percent from the Preceding Year.
While the Second 100’s Bakery-Cafe category grew at a brisk pace during the Latest Year, experts said there is still plenty of opportunity for chain expansion within the small segment.
The Bakery-Cafe category — which consists of Second 100 chains Au Bon Pain, Bruegger’s Bagel Bakery and Corner Bakery Cafe — posted aggregate Latest-Year U.S. systemwide sales of $846.1 million, an increase of 8 percent over $783.3 million in the Preceding Year.
Average estimated sales per unit, or ESPU, also grew in the Latest Year, rising to more than $1.5 million and reflecting a modest 2.6-percent increase over the average ESPU in the Preceding Year.
Darren Tristano, executive vice president of Technomic Inc. in Chicago, said the segment’s players are well-positioned for future growth.
“The bakery-cafe chains redefined the way Americans view breakfast, and they offer options that are both healthy and indulgent, and locations that are well-suited for normal [dining] occasions, business and family occasions,” Tristano said. “And they’re still in a growth stage — a big part of which is due to a lot of opportunity in strip malls and end caps. We’ll see growth [in the segment] for years to come.”
He also predicted that the fast-casual chains in the segment will continue to take market share from such family-dining stalwarts as Denny’s and IHOP, which also rely on breakfast as a major sales driver.
Leading the growth charge in the Second 100 Bakery-Cafe segment is Dallas-based Corner Bakery, which was acquired by private equity firm Roark Capital Group in 2011. The revitalized brand posted U.S. systemwide sales of $296.4 million in the Latest Year, a 13.6-percent hike over $260.9 million in the Preceding Year.
Corner Bakery also led the pack in the number of units added during the period. It grew from 129 locations in the Preceding Year to 147 in the Latest Year, an increase of nearly 14 percent. Of those 18 new units, 12 are franchised and six are company owned.
• Second 100 rankings and results
Diana Hovey, chief marketing officer for Corner Bakery, said that with the acquisition by Roark, the brand has embarked on a franchise push that is expected to more than double its number of outlets in three to four years.
“We have almost 300 committed franchise locations,” she said.
“They seem to understand how to position themselves for quality and value,” Tristano said of Corner Bakery. “They’re in a good position to compete with [Top 100 segment leader] Panera Bread.”
Corner Bakery also continued to upgrade its menu last year, notably with its popular breakfast panini selections.
“We do paninis better than anybody, and we’re looking to expand our ownership of the category,” Hovey said.
Catering also continues to be a major growth area for Corner Bakery, accounting for 20 percent of total sales, she said. To help drive continued momentum in the sector, Corner Bakery has rolled out online ordering for its catering business.
In the midst of its 30th anniversary celebration, bagel specialist Bruegger’s has been focusing on the core elements of its business, according to Judy Kadylak, director of marketing for the Burlington, Vt.-based chain. Bruegger’s, which is owned by Groupe Le Duff S.A. of Rennes, France, is working to upgrade its menu and ingredients. For example, fresh-cracked eggs are being tested in a couple of markets, Kadylak said.
“Egg sandwiches are a core of our business,” she said. The chain also is testing an upgraded bacon product.
In addition, Bruegger’s plans to launch a co-branding test this year with Caribou Coffee in Minnesota. The two chains expect to open three co-branded units by the end of the year. The test calls for three different unit variations.
Bruegger’s had 291 locations at the end of the Latest Year, down one from the Preceding Year. It is planning to open 19 corporate and franchised units in 2013.
The chain reported sales of $210.9 million for 2012, an increase of 2.8 percent over 2011.
Au Bon Pain also saw its U.S. systemwide sales rise in the Latest Year. The 197-unit Boston-based brand posted sales of $338.8 million, up 6.8 percent over the Preceding Year.
Contact Paul Frumkin at [email protected].
Follow him on Twitter: @NRNPaul.
