While the Bakery-Cafe segment remains the smallest category in terms of the number of brands represented, it managed to post the largest aggregate sales growth rate in the Top 100 census universe.

The Bakery-Cafe segment — comprising Panera Bread, Tim Hortons and Einstein Bros. Bagels — generated an aggregate year-over-year systemwide sales gain of 11.9 percent in the Latest Year, which covers chain fiscal years closest to the end of 2012. By comparison, the Top 100 universe’s aggregate year-over-year sales rose 5.3 percent, less than half of the Bakery-Cafe surge.

Data

• Top 100 Rankings and Results

Growth was driven not only through  sales generators like new menu items — including Tim Hortons’ Grilled Panini sandwiches, Panera’s pastas and Einstein’s Super Grain Bagels — but also by unit development and a focus on catering, online and drive-thru operations. The category increased its aggregate number of locations by nearly 10 percent  to 3,023 units.  

Segment leader Panera generated U.S. systemwide sales of $3.6 billion in 2012, a vigorous leap of 12.8 percent over the $3.2 billion generated in 2011. Scott Davis, Panera’s executive vice president and chief concept officer, attributed the chain’s positive results to “a series of drivers.”

Davis said catering has been strong, and increases have run into the double-digits. Drive-thrus have been “another big win,” he said, adding that between 10 percent and 15 percent of the chain’s U.S. units now offer a drive-thru option.

The bakery-cafe segment is led by Panera Bread.

Malcolm Knapp, president of New York-based consultancy Malcolm M. Knapp Inc., also observed that Panera was the first chain in the segment to offer Wi-Fi, “which has gone a long way toward establishing [Panera] as a ‘third place’ [to gather for consumers]."

Tim Hortons appears to have U.S. growth back on track. With 804 units open in the United States at the end of 2012, the chain saw U.S. systemwide sales grow by 12.5 percent to $539 million in the Latest Year.

The Top 100 census tracks U.S. sales and unit figures only, which means Tim Hortons’ largest market, Canada, is excluded.

Tim Hortons has worked to promote its Grilled Panini sandwiches and leverage the platform by introducing Breakfast Panini sandwiches, which the chain says have been popular menu additions. Earlier this year, the chain also introduced Thick Cut Bacon, available on any sandwich.

In 2012 Tim Hortons also introduced a retail line of coffee, decaffeinated coffee and lattes in a single-serve K-Cup format.

Einstein enjoyed upward momentum in 2012, as well, increasing systemwide sales 4.4 percent to $455 million. The brand has been growing through several initiatives, including a new emphasis on franchising, a more aggressive catering push and continued expansion of nontraditional units, said Jeff O’Neill, chief executive of parent Einstein Noah Restaurant Group Inc.

Einstein had not been open for franchising, but 2012 saw the addition of 40 franchised locations, and there are another 140 units in the pipeline, O’Neill said.

Einstein also continues to grow its catering business, which now accounts for nearly 10 percent of the menu mix.

“We’re not bumping up against any headwinds there, so we’re hoping to grow it to 15 percent eventually,” O’Neill said.

New menu items, like Bagel Clusters , as well as the extension of the Bagel Thin sandwich line, have driven customer trial. But O’Neill said Einstein’s best-selling sandwich is a traditional favorite: Nova Lox & Bagel. Sales of the item rose by 15 percent last year.  
Nontraditional unit growth continues to propel Einstein, as well. The expansion of licensed units — operations located chiefly in colleges and universities, hospitals, airports and military bases — brought its total number of nontraditional units to 258 in 2012, up from 239 outlets in 2011.

While these types of units can fuel overall growth, they can tend to generate lower sales than more traditional units. Including operations from smaller-footprint locations that hold lower volumes can contribute to a decrease in a chain’s estimated sales per unit.
 
For example, Einstein recorded a 3.4-percent decline in the Latest-Year ESPU to $694,100. Tim Hortons, which has increased its use of self-serve kiosk locations — which are counted as units for the Top 100 census — saw its ESPU slip 2.5 percent to $710,100 in 2012.

By the numbers

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Contact Paul Frumkin at [email protected].
Follow him on Twitter: @NRNPaul