Oxstones Investment Club™The cafes of the Au Bon Pain chain normally can be found in a number of American cities in or near busy areas: financial districts, railway stations, hospitals, college campuses, retail clusters, or at least heavy trafficked intersections. Most of the time, customers keep these cafes busy. The quiet hour means often means just somewhat lesser flows of customers, not their absence. Some points of sales do not even have much of a quiet time at all. Au Bon Pain clearly seems to keep the place among the success stories in the saturated and competitive world of the food industry. This article identifies and describes several major steps and solutions that contributed to the development of this chain.
Earlier this year, Au Bon Pain came up as the winner in the Grellin list among 100 food chains in USA for the healthiest available food (FactCasual.com, 2015). This accomplishment hints a special significance owing to the advanced attention to the health-related benefits in ingredients in any food. The naturalness of any meal became a major criterion of demand from consumers and correctly so. In order to comply with the demand, many companies in the food industry allocate significant investments in improvement of meals and then in the marketing campaigns that emphasize such efforts. As for communicating the data about the ingredients, the “nutrition information is voluntarily made available through in-store kiosks by […] Au Bon Pain” (Levings and Gunn, 2014). Furthermore, Jennifer DiNallo et al suggest that “fewer calories were purchased at McDonald’s, Au Bon Pain, and KFC after menu labeling [indicating the information about the calories] went into effect” (2012, 11).
Au Bon Pain started with the focus on fresh French baked goods in 1978 in Boston, Massachusetts (Au Bon Pain, 2015a). First of all, there was a space in the market for a brand new food chain focused on the French cuisine. Ethnic foods already attained popularity in USA in the 1970s. In this particular case, the country-of-origin effect (COE) acted in favor of increased interest to cakes and croissants in relation to France. Indeed, the French cuisine and the innovative recipes developed by highly skilled French chefs have served among the positive attractive criteria for the tourists, who made a choice to visit France. Au Bon Pain brought the distribution of such food to a greater scale. The city of Boston, a major center with the historically strong European ties and further increasing international exposure, definitely served as a successfully selected starting point.
Outside of the Au Bon Pain system, individual owned-operated cafes and restaurants, focused significantly or exclusively on the French cuisine, still can be found in American cities, towns, and suburbs. These French food providers may remain in profitable operation often with their own unique style and menus. Au Bon Pain added some characteristics to its business that clearly differentiated the chain from other participants in the market.
The selection of the name excelled from the very beginning. In translation from French Au Bon Pain means “a place with a good bread” and such a name corresponds with the focus on quality (Cannon, 2005). Moreover, this name encompasses uniqueness, easiness for memorization, and a clear connection to the French origin.
People are a crucial part of any business, especially when the interaction will consumers plays an integral role. The high turnover of employees traditionally presents a major challenge in the food industry. In order to address this challenge, Au Bon Pain understood the necessity of involved and proactive teams in the points of sales. Leonard Schlesinger and James Heskett note the positive impact from the implementation of the Partner-Manager program in the 1980s at Au Bon Pain (1991). The Partner-Manager program established outstanding incentives for the managers and led to the significant increases in sales (ibid).
More results derive from the carefully planned mode of ownership. Au Bon Pain balances complete ownership in some points of sales and franchisees in others (PR Newswire, 2008). Sales in some geographic locations transpire only via the franchisee mode. The combination of forms of ownership allows the chain to keep direct control over the fully-owned cafes and to outsource some expenses and functions for the franchised cafes.
Au Bon Pain prefers facilities that provide enough space. The customers enjoy freedom of movement when they are walking around a cafe and making their selections. Due to the availability of space, Au Bon Pain can accommodate diverse target audiences: participants of business meetings, individuals that work on their laptops from a cafe, visiting families, socializing retirees, lunch-takers, and so on.
The chain regularly updates the menus. When salads became more popular, Au Bon Pain made a demand-driven decision and included various salads as well as wraps. The newest menu just got introduced specifically for fall 2015 (Mitchell, 2015). The evolvement of menus captures several goals. The chain signals its attention to offered products. Then, if needed, a change allows a good exit strategy for an individual product. If some product does not attain popularity, it would be natural to make a replacement. On the other hand, a likeable product can be brought back. Au Bon Pain usually inserts announcements about the menu updates in the advertisements.
As of June 2015, Au Bon Pain operates 310 points of sales worldwide (Taylor, 2015). Their cafes open to doors to the customers in various countries including USA, Great Britain, France, India, Thailand, and Taiwan. Many cafes proudly exhibit the following vertical center-aligned list on the windows: Atlanta, Boston, Bangkok, Chicago, Cleveland, London, Miami, New York, Philadelphia, Pittsburgh, Taipei, and Washington. Furthermore, the sales take place even in a greater number of locations, especially in the franchisee form.
Au Bon Pain was acquired by LNK Partners, an equity firm headquartered in White Plaines, New York, in 2008 (Pfeiffer, 2008; PR Newswire, 2008). At the exact time of this acquisition on March 4, 2008, Au Bon Pain owned 226 cafes (PR Newswire, 2008). The total worldwide revenue for the same period increased from “almost $300 million” (ibid) in 2007 to $365 million in 2014 (Au Bon Pain, 2015b). During the time of acquisition, the plans for expansion were announced (Pfeiffer, 2008). Now it seems possible to conclude that these plans succeeded even in the conditions of the Great Recession. Additionally, Au Bon Pain provided major redesign of the points of sales in Boston and New York in 2011 (Miller, 2011). The predominant yellow color of premises helps to differentiate Au Bon Pain from outside and to keep an active mood inside.
Over the course of its history, Au Bon Pain went through several changes of ownership (Stewart, 2007; Pfeiffer, 2008; PR Newswire, 2008). The chain acted as a separate company in some time periods and as a major business unit of a larger entity in other times. There happened to be a challenging period in the early 1980s (Stewart, 2007). Nevertheless, Au Bon Pain always remained a separate chain, so no dilution of a brand occurred. Au Bon Pain maintained its development as a separate unit regardless from the ownership. It appears that all takeovers were friendly, planned takeovers. Certainly, this aspect helped. But prevention of hostile takeovers works as an important part of the effective management. Therefore, this part of the chain’s record also adds to the list of accomplishments of the managing teams even when these teams were changing in the decades of Au Bon Pain’s existence.
Au Bon Pain strives to keep effectiveness in all locations. For instance, during the expansion in Thailand, Au Bon Pain successful adjusted to the national traditions in Thailand and also implemented sensory marketing, a marketing methodology focused on utilization of “the five human senses in order to create a total experience that the customer remembers” (Hinestroza and James, 2014), in the interactions with the clients (ibid). By the same token, Lyn Dowling in her description of a visit to an Au Bon Pain cafe in a hospital in Florida emphasizes development and improvement at Au Bon Pain over the years as well as a strong dedication of the personnel to hospitality (2015).
Therefore, Au Bon Pain combines proactive and reactive behavior in relation to the business opportunities. Such actions as redesign of the premises, innovative menus, and even sale of the chain to the financially powerful owner can be mentioned as examples of proactive behavior. The decrease of calories serves as a demand-driven reaction. But in the reactive mode, Au Bon Pain knows how to proceed very quickly and to include all relevant aspects in the applicable business solutions.
Bibliography
Au Bon Pain (2015a). Our history. How did it all start? (http://aubonpain.com/about-us/our-history). Accessed on August 29, 2015.
Au Bon Pain (2015b). Geared for growth. (http://aubonpain.com/geared-growth). Accessed on September 1, 2015.
Cannon, Leeann (2005). Au Bon Pain: bakery-cafe weighs in on diet fads, offers more healthful fare to concerned customers. Nation’s Restaurant News, Volume 39, Issue 5, 28.
DiNallo, Jennifer M., Darcy E. Gungor, and Daniel F. Perkins (2012). Healthy Foodservice Benchmarking and Leading Practices. Pennsylvania State University State College Social Science Research Institute.
Dowling, Lyn (2015). Au Bon Pain at Holmes gives hospital food a good name. Florida Today. (http://www.floridatoday.com/story/entertainment/2015/08/24/au-bon-pain-holmes-gives-hospital-food-good-name/32261725/). Published on August 25, 2015. Accessed on August 29, 2015.
FactCasual.com (2015). Au Bon Pain named healthiest chain restaurant by Grellin. FactCasual.com. (http://www.fastcasual.com/news/au-bon-pain-named-healthiest-chain-restaurant-by-grellin/). Published on January 6, 2015. Accessed on August 29, 2015.
Hinestroza, Natalia Buitrago, and Paul TJ James (2014). The effects of sensory marketing on the implementation of fast-food marketing campaigns. Journal of Management & Marketing Research, Volume 14, Issue 1.
Levings, Jessica Lee, and Janelle Peralez Gunn (2014). From menu to mouth: Opportunities for sodium reduction in restaurants. Preventing Chronic Decease, Volume 11.
Miller, Mark J. (2011). Taking the pain out of Au Bon Pain. Brand Channel. (http://brandchannel.com/2011/06/09/taking-the-pain-out-of-au-bon-pain/). Published on June 9, 2011. Accessed on August 30, 2015.
Mitchell, Jasmine (2015). Au Bon Pain introduces fresh fall menu items. PRWeb. (http://www.prweb.com/releases/2015/09/prweb12932978.htm). Published on September 1, 2015. Accessed on September 1, 2015.
Pfeiffer, Sacha (2008). Growth is on the menu at Au Bon Pain. Boston Globe. (http://www.boston.com/business/articles/2008/01/17/growth_is_on_the_menu_at_au_bon_pain/). Published on January 17, 2008. Accessed on August 30, 2015.
PN Newswire (2008). Au Bon Pain acquisition by LNK Partners and Management closes. PN Newswire. (http://www.prnewswire.com/news-releases/au-bon-pain-acquisition-by-lnk-partners-and-management-closes-56788782.html). Published on March 4, 2008. Accessed on August 30, 2015.
Schlesinger, Leonard A., and James L. Heskett (1991). Breaking the cycle of failure in services. MIT Sloan Management Review, Volume 32, Issue 3.
Stewart, Brandi (2007). Pastry parlay: From Au Bon Pain to Panera. CNN Money. (http://money.cnn.com/2007/12/06/smbusiness/panerabread.fsb/index.htm). Published on December 7, 2007. Accessed on September 1, 2015.
Taylor, Katherine (2015). How Au Bon Pain’s executive chef puts her line cook experience to good use. Entrepreneur. (http://www.entrepreneur.com/article/246880). Published on June 3, 2015. Accessed on August 27, 2015.
Tags: Au Bon Pain, b2c, country of origin effect, demand, Food, food chain, food industry, incentives to managers, interaction with clients, international business, international business expansion, management, marketing, mergers and acquisitions, nutrition, Partner-Manager program, points of sales, strategy