A Wall Street Journal article reported that JAB Holding Company, "…owner of Krispy Kreme and Panera Bread is deepening its bet on prepared food, saying it has agreed to buy Pret A Manger Ltd., the British sandwich chain that has been rapidly expanding in the U.S."
Pret A Manger is French for 'ready to eat.' Have you eaten at a Pret A Manger location? There are more than 90 in the U.S. My first Pret meal was lunch, in London, about 20 years ago. That visit made me a fan.
Maybe you're unfamiliar with JAB Holding as the owner of restaurant brands. They also own Einstein Noah and Au Bon Pain.
It is highly likely that you're aware of other companies they own. In 2015 they added Keurig Green Mountain to their brand line-up. Perhaps you know that JAB acquired Dr Pepper Snapple Group earlier this year.
Another Wall Street Journal article "The Secretive Company That Pours America's Coffee" detailed JAB acquisitions in the coffee business. Some are U.S.-based and others are in Europe. Here is a partial list of their coffee companies and brands: • Peet's Coffee & Tea • Caribou Coffee • Jacobs Douwe Egberts (D.E. Master Blenders) • Stumptown • Intelligentsia • Baresso Coffee • Tassimo • Gevalia
The JAB portfolio of brands has a profile we should understand. It manufactures and sells packaged beverages – to be consumed hot or cold. Their restaurants sell sandwiches, soups, salads, desserts – pastries, donuts and more. What we see from JAB is an apparent focus on immediate consumption (IC) product categories. That is exactly what we do.
Operators see JAB (and its various brands) as a supplier and as a competitor as well. They are also selling into the grocery channel – with products in the aisles at supermarkets, mass merchandisers and club stores.
Other manufacturers supplying our industry (both big and small) are probably trying to figure out what JAB plans to do next. In the second Wall Street Journal article noted above, you can read comments from JAB leadership and top executives from the big brands they compete with.
In that article Bart Becht, the chairman of JAB, was quoted about their direction: "both in terms of beverage and location. We're simply going to where the consumer is or wants to be." He went on "If you go back in the U.S. 20 or 30 years ago, people would have their hot coffee in the morning and drink their Coke in the afternoon. That has changed today." Becht added that "Millennials…have entered the workforce en masse and are the best coffee drinkers ever."
LESSONS TO BE LEARNED
1. Pay careful attention to the words "best coffee drinkers ever." You must be relentlessly focused on how to improve your coffee business. Bottled or canned cold coffee should a part of beverage menu. You cannot afford to miss out on cold coffee. Is there an ice machine at your key locations? Is it conveniently situated for your coffee drinkers? 2. Don't sweat the fact that JAB is both a supplier and a competitor. If you look closely at the brand owners among your best sellers, you might be concerned about the brand relationships. Everyone is competing with everyone else for every sale. You've bought a meal or a snack at competitive companies. It is situational. "You're out of your office at lunch time. You'll need to stop somewhere." 3. Our own industry has seen an almost endless stream of operator acquisitions. In so many lines of business, it has become easier (and less expensive) to acquire growth versus generating (organic) growth internally.
Let me quote from Mr. Becht again "(go) to where the consumer is or wants to be." That is a great strategy to sell more stuff.
» Paul Schlossberg is president of D/FW Consulting, working with clients to merchandise and market products in impulse-intense selling environments, such as vending, onsite foodservice and convenience stores. Based in the Austin, TX, area, he can be reached at Paul@DFWConsulting.net or (972) 877-2972 or www.DFWConsulting.net.