SmartBlogs on Food and Beverage

Bruegger’s Enterprises was acquired last week by Le Duff America, the North American subsidiary of the French firm Groupe Le Duff SA, which operates 60 La Madeleine Cafes in North America as well as a variety of French café and bakery brands across Europe and South America. Bruegger’s opened its first bagel shop in Vermont in 1983, and the chain was acquired by Sun Capital Partners 20 years later. Under Sun’s ownership, Bruegger’s turned around flagging sales, grew to about 437 stores in 27 states, the District of Columbia and Canada, acquired the Timothy’s coffee shop chain and diversified the Bruegger’s menu with new food and beverage offerings. Last week’s merger creates an international bakery and café company with almost 1,200 restaurants and $1.5 billion in annual sales.

I spoke with Bruegger’s CEO Jim Greco, who will stay on to lead the U.S. chain, about what this means for the 300-store fast-casual chain that made its name in bagels and has been building both its store base and menu diversity in recent years.

Why did the sale make sense at this time?

Sun Capital and our management team acquired Bruegger’s in August 2003 so we had been in the transaction for seven and a half years, and over that period of time we had accomplished a lot, which created a lot of shareholder value. So this seemed like the right time for us to realize that value.

Will the Bruegger’s name remain?

Yes. We also own almost 140 units in Canada, under other brands, and we’ve already started a process of rationalizing our brands so we have the right brand in the right location. With this merger, it gives us more brands to include in that mix so we expect that the process of finding the right brands for the right spaces will continue, with even more brands to take into consideration.

The multibrand strategy is about having the right brand in the right market.  Some are better suited to ready-to-serve environments, some are better suited to a more casual or leisurely environment, and some are beverage-focused.

What kinds of changes can consumers expect to see under the new ownership?

I think they’ll see some new products that will be shared between the brands, and they’ll see more product innovation generally, and some locations they’ll see some new brands or perhaps some co-brands. Places that they’re familiar with for one of our brands they may see two brands — muffins, Timothy’s co-branded — more iterations going forward.

Bruegger’s has been growing, both in the number of stores and new menu offerings, especially beverages. Will that change?

Beverages are definitely a focus area for us, an area where Bruegger’s leads in the bakery café section, there’s been a lot of beverage knowledge we’ve been able to share from our Timothy’s brand, so there’s that process of broadening our beverage … which will probably spread to other bakery café members of family as well.

Folks will see new items in the dessert segment, people will see some new sandwiches and salads over the course of the year, and then of course there will be some new beverages this summer.

Image via Bruegger’s