The Ledger
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Shaich: Public markets force CEOs into short-term cost-cutting over transformative bets
“There's a pervasive sense of short-termism that has invaded our markets. The reality is, when you have such short-term pressure on our CEOs, they react. And what that ends up meaning is cost-cutting. And they avoid the kind of transformative events that drove …”
Shaich: Au Bon Pain was the first example of fast casual dining
“And for people who were working in white collar jobs increasingly in urban settings, this was the first example of what we later came to call fast casual. This was an attempt to do something that was better But in a quick service mode.”
Shaich: Public market short-termism forces CEOs into cost-cutting over transformative bets
“There's a pervasive sense of short-termism that has invaded our markets. The reality is, when you have such short-term pressure on our CEOs, they react. And what that ends up meaning is cost-cutting. And they avoid the kind of transformative events that drove …”
Shaich won a board battle with two votes against VCs' three
“It was a huge boardroom struggle, because I had two votes, our venture capitalists had three, and all of them had invested in Au Bon Pain.”
Shaich: Panera tripled its stock price during the Great Recession
“We said this is the time to build competitive advantage, and ultimately we tripled the stock through the recession.”
Shaich: Au Bon Pain pioneered the fast-casual restaurant category
“What the bakery cafe was an alternative between down and dirty fast food. And fine dining. And for people who were working in white collar jobs increasingly in urban settings, this was the first example of what we later came to call fast casual.”
Shaich: 1990s fast food became commoditized 'gasoline stations' for humans
“Post-World War II, fast food was special. You fast forward it to 1990 with 60,000 drive-throughs in America. Fast food had become self-service gasoline stations for the human body, and the reality of it was, That there were many consumers that were holding the…”
Shaich: Panera stock surged 100x after selling off Au Bon Pain
“The stock has been up a hundredfold since then.”
Panera Bread ultimately sold to JAB Holding for $315 per share
“And ended up selling for 315 a share.”
Shaich: Panera tripled its stock price through the Great Recession
“We said this is the time to build competitive advantage, and ultimately we tripled the stock through the recession.”
Shaich: Business is a political campaign that never ends
“But in so many ways, running a business is no different than a campaign. In fact, a campaign is a business that, that essentially has one day in which it ends. A business is a campaign that goes on and never ends.”
Shaich: Took 60% equity to merge Cookie Jar into Au Bon Pain
“I came to them and said, look it, I think I can fix this. You give me 60% of the company. You and your investors keep 40%. I'll put my cookie store, which was making money, in with your three Obonpens, and we'll create a new company.”
Shaich: 1990s fast food became like gasoline stations for the body
“Post-World War II, fast food was special. You fast forward it to the 1990 with 60,000 drive-throughs in America. Fast food had become self-service gasoline stations for the human body, and the reality of it was, That there were many consumers that were holding…”
Shaich: VCs controlled 3 of 5 board votes during Au Bon Pain divestment fight
“It was a huge boardroom struggle, because I had two votes, our venture capitalists had three, and all of them had invested in Au Bon Pain.”
Shaich took 60 percent equity in the merger with Au Bon Pain
“You give me 60% of the company. You and your investors keep 40%. I'll put my cookie store, which was making money, in with your three Obonpens, and we'll create a new company.”
Corporate giants Pepsi and Sara Lee launched failed rival bakery-cafes
“Pepsi came after us. They decided this was going to be the third leg of Pepsi food service, and they created something called La Petite Boulangerie. Sarah Lee came after us. They bought a chain called Michelle's Baguette, and they were going to open 400 stores…”
Au Bon Pain bought 19 St. Louis Bread stores for $23 million
“So, in November of 1993, we bought the St. Louis Bread Company, those 19 stores, for twenty-three million dollars.”
Shaich: St. Louis Bread matched Au Bon Pain volume at half cost
“St. Louis Bread Company was generating volumes nearly as high as Au Bon Pain, but doing so in real estate that cost half as much.”
Shaich owned six times more stock than co-founder Louis Kane
“I owned, you know, six times more stock than him, but most of the community at that point undoubtedly thought the company was Lou's.”
Shaich: Pepsi and Sara Lee launched major bakery chains to compete with Au Bon Pain
“Pepsi came after us. They decided this was going to be the third leg of Pepsi food service, and they created something called La Petite Boulangerette. Sarah Lee came after us. They bought a chain called Michelle's Baguette, and they were going to open 400 stor…”
Au Bon Pain acquired St. Louis Bread Company for $23M in 1993
“So in November of 1993, we bought the St. Louis Bread Company, those 19 stores, for twenty-three million dollars.”
St. Louis Bread matched Au Bon Pain volumes at half real estate cost
“St. Louis Bread Company was generating volumes nearly as high as Au Bon Pain, But doing so in real estate that cost half as much.”
Shaich: Panera Bread ultimately sold for $315 per share
“No, and it ended up selling for 315 a share.”
Shaich controlled 17% of Panera Bread's voting stock
“No, I, you know what, the truth is, I probably could, because I voted 17% of the stock, and I had this reputation, this credibility.”
Shaich funded his first Boston cookie store with $100,000 initial equity
“I had about 25,000 dollars. My dad essentially lent me, gave me 75,000 dollars, and that 100,000 dollars became the grub steak, the equity, that allowed us to build that first 400 square foot cookie store. In downtown Boston.”
Early Au Bon Pain dried spinach in clothes dryers until one exploded
“But we put defrosted spinach in clothes dryers letting it run off the water was a great idea until one day we blew the top off the dryer and ended up with spinach in In all 3000 square feet of the production space.”
Shaich: Au Bon Pain dried spinach in clothes dryers until one exploded
“We put defrosted spinach in clothes dryers letting it run off the water was a great idea until one day we blew the top off the dryer and ended up with spinach in, in all 3000 square feet of the production space.”
Shaich: Au Bon Pain relied on an auto mechanic for equipment repairs
“We didn't even have the ability to maintain our equipment, and I would use my auto mechanic to help fix the equipment. I didn't know what else to call, and we had a dough divider that was essentially being held together with bailing wire and paper clips.”