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Big Fish Being Eaten by Bigger Fish

Panera_Bread

Touch the Soil News #676 (feature photo – CCA SA 4.0 International)

The Food Chain is always an interesting place to learn about money, economics and the world we live in.

 

The Big Fish: Popeyes Louisiana Kitchen was founded in 1972. The company grew and grew until it had over 2,600 restaurants in 40 states and over 30 countries. It was a big employer too, with around 130,000 employees before a bigger fish swallowed it for $1.8 billion.

The Bigger Fish: Restaurant Brands International (RBI) bought Popeyes for $1.8 billion. RBI owns Burger King and Tim Hortons in Canada- which together had over 20,300 restaurants. The new company is estimated to have over 450,000 employees.

 

 

The Big Fish: Cheddar’s Scratch Kitchen was found in 1970. The company grew until it had over 164 restaurant locations in 23 states. The restaurant branded itself as being one of those places where food was made from scratch.

The Bigger Fish: Darden Restaurants, Inc. just swallowed Cheddars for a cool $780 million. Dardens is in the business of owning restaurant chains and already owns Olive Garden, Longhorn Steakhouse, Bahama Breeze, Seasons 52, the Capital Grille, Eddie V’s and Yard House. Prior to swallowing Cheddars, Darden had over 1,5000 restaurant locations and over 200,000 employees.

 

 

The Big Fish: Panera Bread was founded in 1987. Panera went through its previous life by being eaten and eating others. Today, Panera Bread has over 2,000 locations until today. Panera also owns Paradise Bakery and Café which has over 60 stores in 9 states.

The Bigger Fish: JAB Holding Company, headquartered in Luxembourg (Europe) is a large investment company that is privately owned, but can write billion dollar checks at a moment’s notice. JAB just purchased Panera Bread for $7.5 billion. Last year, JAB purchased the Keurig (Green Mountain) company for $13.9 billion and also purchased Krispy Kreme for $1.35 billion.

JAB is also known to suddenly buy a majority share of a company. For example, JAB has a majority stake in Peet’s Coffee & Tea, Einstein Brothers Bagels, Caribou Coffee, Mighty Leaf Tea, Intelligentsia Coffee and Tea and Stumptown Coffee.

 

 

 

The Moral of the Story for Employees

The three fish stories we’ve highlighted above all have one thing in common – they were purchased at a premium price. The bigger fish that pay the premium price are going to look to employees to make good on their investment – which was larger than the original owners’ investment.

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