Panera Bread Is Trying To Offload Caribou Coffee & Einstein Bros. Bagels. Here’s Why

Panera Bread is exploring its options for selling its stake in Caribou Coffee and Einstein Bros. Bagels, according to sources familiar with the move. The sources further claim that private equity firms are looking into the possibility of purchasing them from the casual dining chain. Let’s take a look at what else we know about the potential sales.

Panera Bread Contacted Bank of America About the Sale Possibility

According to people familiar with the situation, Panera Brands is considering selling Caribou Coffee, Einstein Bros. Bagels, and its other bagel brands as part of a transaction that could secure more than $1.5 billion for the casual dining chain.

Sources close to the situation told Reuters that Bank of America has been chosen by the St. Louis-based parent company Panera Brands, which is supported by the private equity group JAB Holding, to oversee the selling process for the brands. They added that private equity groups and other restaurant owners are also interested in bidding for the businesses.

The sources, who asked to remain anonymous since the talks are private, said that Panera Bread is considering selling Manhattan Bagel, Bruegger’s Bagels, and Noah’s New York Bagels in addition to Einstein Bros.

Bank of America, JAB, and Panera Brands all declined to comment. The Luxembourg-based company JAB, which in 2021 merged Panera Bread, Caribou Coffee, and the bagel trademarks into the Panera trademarks business, has reversed course with its most recent action.

According to the sources, Panera Bread wants to demand a valuation for the combined coffee and bagels operations that is greater than 10 times their projected earnings before interest, taxes, depreciation, and amortization in 2024 — roughly $150 million. Caribou Coffee, a Minneapolis-based company, has more than 800 stores throughout 11 nations. There are around 1,000 locations combined for the bagel brands in the United States.

According to one of the insiders, JAB has been preparing Panera Brands for an IPO throughout the past year, which explains the recent interest in divestiture. If the discussions to sell the coffee and bagel chains go well, the company may also look into listing the remaining Panera Bread segment. For the most part, Panera Bread is the group’s revenue generator.

Readjusted Menu To Boost Sales

In April, Panera Bread adjusted its menu to include more price-friendly fare. The move was the company’s latest attempt to boost sales in the midst of growing inflation concerns.

Senior VP of product strategy and insights at Panera, Alicia Mowder, described these adjustments as a return to the company’s basic values, with a focus on client happiness.

“We are getting back to Panera at its best with these menu updates that are centered completely on our guests and what they love about us,” stated Mowder in a statement. “We’ve listened to thousands of guests on our path to unveiling more than 20 new or enhanced menu items and are thrilled to bring these products to Panera bakery-cafes nationwide.”

This menu revamp differs from the trial run that occurred the previous year, when a sizable number of menu items were eliminated. But Panera will still serve well-liked staples like the kids’ menu and kitchen sink cookie.

The “Toasted Italiano,” “Chicken Bacon Rancher,” and an inexpensive mac and cheese with bacon on top are some of the recent additions. Even time-honored favorites like the “Bravo Club” sandwich have been updated.