In 2012, a little-known European investment firm—at least it was little known in the restaurant business—known as Joh. A Benckiser bought Peet’s Coffee for nearly $1 billion. It set a standard for valuations and signaled the entrance into the restaurant market of what would become known as JAB Holdings.
Over the next few years, JAB would gobble up numerous restaurant chains, often paying top value for the right to buy them. The biggest came in 2017, when the firm took private Panera Bread for $7.5 billion.
Many of these restaurant chains were pseudo-competitors, often vying for the same group of customers, particularly in the morning. It didn’t really phase JAB, which had no problem owning multiple coffee concepts, bagel brands or other bakery/café chains.
Its track record has been mixed. Some of the company’s chains have done well. One of them went public. Others have stagnated. Here’s a look at how the investment firm’s acquisitions have done since they were acquired, using the help of data from Restaurant Business sister company Technomic.
Panera Bread
JAB acquired Panera for a multiple of 19.5 times EBITDA, or earnings before interest, taxes, depreciation and amortization. It was a take-private deal and the latest indication that JAB would pay what it takes to get a company it had its eyes on.
Panera is a fast-casual pioneer and for a long time held the mantle of the country’s largest such concept, with strong unit economics. Yet the company has underperformed Chipotle Mexican Grill, another fast-casual pioneer.
System sales from 2018 to 2023 increased 13% at Panera, after increasing 34% the five years before then. By contrast, Chipotle Mexican Grill’s growth accelerated during that period—having doubled since 2018. The burrito chain, not Panera, is now the largest fast-casual chain in the U.S.
Things have been tough on Panera this year. The company shuffled its board twice and laid off workers in multiple states. The company was combined four years ago with other JAB brands Einstein Bros. and Caribou but now appears to be looking to sell them. And then its CEO stepped down on Tuesday after less than two years on the job. All this appears to be keeping the company from its longtime goal of going public again.
Peet’s
When what is now JAB bought Peet’s it was purchased at a 20x multiple. But the company hasn’t quite lived up to the billing.
A year later, 88 Caribou locations were converted to Peet’s. Those conversions at one point gave the chain more than 400 shops. It peaked at 414 locations in 2018. But it has closed more than 150 locations since then. System sales, meanwhile, are up just 8% since 2012.
Many of the locations that have been shuttered domestically were owned by franchisees, who closed about two-thirds of the 167 shops they operated in 2018.
Still, JAB got its exit. Peet’s in 2019 was merged with the European coffee brand Jacobs Douwe Egberts, another JAB company, and went public the next year as JDE Peet’s.
Caribou
The Minneapolis-based coffee shop chain has generally outperformed Peet’s, particularly when you consider international markets.
JAB bought Caribou in 2012, the same year it bought Peet’s. It then oddly opted to pull back on Caribou, closing 80 locations of that brand while converting another 88 shops to Peet’s.
Caribou has yet to recover the lost units in the U.S. It finished 2023 with 480 coffee shops, down from the 507 it operated in 2012. But it has taken off internationally, with more than 300 locations having opened outside the U.S.
All that said, Peet’s is still taking over part of Caribou’s business. Last year, JDE Peet’s took over Caribou’s coffee roasting operations.
Krispy Kreme
JAB’s second-biggest deal—in the restaurant space, that is—was its 2016 acquisition of Krispy Kreme for $1.35 billion. It’s also arguably the investment firm’s most successful deal.
Krispy Kreme went public in 2021, providing JAB with the exit it wanted. JAB still owns a major stake in the company, but it has generally thrived since the deal. System sales domestically have nearly doubled since 2016, according to Technomic.
The company has successfully deployed a strategy focused on delivering doughnuts daily to grocers, convenience stores and restaurants like McDonald’s. The deal with the fast-food giant was enough to pave the way for Krispy Kreme to return to markets like Minneapolis that were shut down 20 years ago when the chain crashed.
The bagel brands
Maybe the strangest deals that JAB or its respective brands pulled off involved bagels. JAB bought Einstein Noah Restaurant Group in 2014. System sales for Einstein Bros. Bagels are up 11% since that year, but the company recovered more recently after sales fell amid early struggles. The brand has also opened about 80 locations, a 20% increase.
But Einstein, through Caribou, acquired rival Bruegger’s Bagels in 2017. Since then, Bruegger’s closed 17% of its locations. System sales declined 1%.