Strong & Growing
Growth and success have gone hand-in-hand for Vermont-based Bruegger's Enterprises, Inc., the quick-casual chain most famous for its variety of authentic water boiled bagels. Since its inception in 1983, Bruegger's has expanded from a single location to 248 neighborhood bakeries in 19 states, 149 of them company-owned and 99 franchised. With 100 new bakeries planned by the end of 2008, the bagel company is poised for another era of expansion. Hospitality Technology caught up with Jim Greco, chief executive officer, who has played the lead role in taking Bruegger's on the road to fame.
Bruegger's has a long and proud history of adapting to changing consumer tastes and demands," praises CEO Jim Greco. As such, when consumer preference research indicated a need for a revamped menu and design renovations, the company was quick to respond in a move that has helped fuel the eatery's recent growth and success.
Fresh taste with a new face
"Customers told us they were looking for more choice and variety, specifically the availability of healthy alternatives, together with a comfortable dining experience," Greco informs.
When Greco joined Bruegger's in August 2003, the company was struggling with declining sales. He realized that product offerings hadn't been updated in several years and the bakeries had an outdated look. "We felt that if we could address these issues, we would turn around the sales numbers." Greco set out to devise a renovation plan for all units.
Initially, his plans were met with skepticism on the part of the franchisees and even some within the company. "People wondered whether what we had envisioned was going to do the trick," Greco recollects. "After the first 90 days, when we were able to introduce five renovated locations, several new products and draw customer attention Ã.‚¬" which resulted in large increases in sales Ã.‚¬" everyone realized that this plan was just what we needed."
The five bakery prototypes, located in Minneapolis, Pittsburgh, Cincinnati, Avon in Connecticut, and Auburndale in Massachusetts, experienced double-digit sales increases. Following the successful launch of its new store design and expanded menu featuring new salads, sandwiches and soups, Bruegger's then rolled out its new look and taste system-wide to nearly 250 bakery cafes in 19 states. All the units continue to trend well above sales figures since then, apprises Greco.
Renovation of the units began in mid-November 2003 and is now complete for all of its 149 company-owned bakery-cafes and most franchised locations. In less than two years, the chain updated its dining environment to reflect its broader menu and provide guests with a more comfortable dining experience. Overall sales have increased substantially at renovated bakeries. According to Greco the past two years have seen significant investment and substantial change for the organization. "With our new bakery design, we're providing our guests with a more comfortable dining environment. Completing renovations of our company-owned bakeries was a top priority and our guests have responded favorably, as our financial results show," he says.
Experiences are made
Bruegger's has also rolled out a new guest experience program. "We always say that dining is a multi-sensory experience," feels Greco. "The first sense is what you see and then what you smell and hear. It's not until later that your sense of taste is impacted. "
Greco notes that the renovations have enhanced the overall dining experience, further complimenting the revamped menu and making the bakeries more inviting, comfortable and friendly. "We've made sure the sounds are good and the smells are great. That is what the guest program is designed to impact Ã.‚¬" the guest experience. It encourages our team members to follow certain procedures to ensure that every guest feels welcomed."
Reflecting on his contributions to the company's growth, Greco reminisces, "When I came on board this was a company with great brand equity, great product, great people, and a terrific reputation for quality. What we needed was a strategy and timely execution. That is what I have brought here. We gave the strategy the capital structure it needed to support all of this activity."
His vast experience in brand repositioning and renovations engineering, Greco admits, has helped him convert his plan into action. "I think that as a result of my background experience, little of what I encounter in these situations is new. Having done this for a lot of years I have learned how to confront issues, fashion a solution and then implement it without hesitation."
Like any successful restaurant or hotel chain, technology has played a pivotal role in this growth process. The technology focus at Bruegger's has been instrumental in making it stay ahead of the curve. "We make very good use of technology here. There is little that we don't capture and therefore can't dissect in many ways. We take advantage of that and as a result we feel that the information technology we have gives us a competitive advantage. It allows us to see trends and capitalize on sales opportunities faster," says Greco.
Bruegger's installed POS systems from Radiant Systems (radiantsystems.com) in most of its bakeries and will have them implemented at all its locations by early 2007. The back-office system is also provided by Radiant. The chain also boasts of a Wi-Fi from Value Link in more than 100 of its locations and plans to make most of its locations wireless. All area administrators at Bruegger's have been provided with Palm Treo PDA Smart phones (palm.com) that enable them to keep in touch with voice or e-mail wherever they are. The communications platform is provided by Verizon (verizon.com). Also, Oracle (oracle.com) software is being used for dough distribution at the bakeries.
The restaurant chain also invested in a gift card program two years ago. Gift cards are honored and sold throughout the system between locations. "We manage the disbursement of money between franchisees," says Greco. "If a gift card is bought at one location and used at another, we make sure the money is credited back and forth." The POS systems allow credit cards and gift cards, which are sold in the bakeries or online. "The program is working very well. Our sales have grown substantially since then," notes Greco.
IT has also played a role in Brueggers' data manipulation and decision-making processes. A computer model helps the company forecast sales for new sites, while the software used for front- and back-of-house operations allows the company to capture sales by item, hour, weight, etc. "We do a lot of testing and we capture that data and compare it. We don't lack in our ability to capture any aspect of our business or to project or plan our business going forward. A lot of the information we capture and the way we use it is better than what our competitors do," Greco explains.
According to him, the influence of information technology has been tremendously positive. "There is an old saying that knowledge is power and I think that IT, when used effectively, is the way to gain the knowledge that can be very powerful in running one's business."
To successfully run a business of this size, and maintain steady growth at the same time, has been Bruegger's greatest achievement. One of the keys to that growth has been the development of close relationships with its franchise partners. "We make sure that our franchisees get off on the right start. We help them get started from the beginning with market tours, inputs on site selection, design and construction. We also provide training of the crews and we help them plan grand opening events. Then we do regular follow up with visits and audits," explains Greco.
Bruegger's has a national advertising counsel that many franchisees sit on and they provide feedback and input into products and marketing programs for the company. The company also has conference calls twice annually with all franchisees to talk about major initiatives for the coming year. "Getting the feedback and involvement of the franchisees has really made our initiatives much better."
The signing of new franchise organizations signifies continued growth in Bruegger's franchising program and Greco attributes a big part of the company's success to the franchisees. "We have a unique relationship with our franchisees," he insists. "We know them and interact with them at multiple levels. There are many of us here who spend a lot of time speaking with or visiting franchisees. We have some great people. They are the reason behind our success."
Not surprisingly, Bruegger's Enterprises' second quarter revenue for comparable sales has grown 5.8 percent at company locations and 3.9 percent system wide for the second quarter ending this year. Its gross sales for the second quarter totaled $22.4 million, up 12.6 percent from $19.9 million in 2005. This is the ninth consecutive quarter of comparable restaurant sales growth for Bruegger's, marking a company record of consistent sales growth.
"We are pleased to see the positive momentum into the second quarter as we continue to gain growth in both our corporate and franchise markets. Solid first half results are good indicators that Bruegger's is on trend for another strong year of positive sales," highlights Greco. Going forward, Bruegger's expects to open 100 new bakeries by 2008 Ã.‚¬" 35 corporate owned and 65 franchised. The growth over the next few years will be in areas where there are gaps between markets such as the Southeast.
"We plan to continuously improve our products Ã.‚¬" both the offerings and ingredients Ã.‚¬" so we are constantly raising the bar. Also, we plan to focus more on our Guest Experience program in the coming years. Our goal is to improve and modify our programs and products based on what we have learned and experienced so that we are continuously raising the bar," he concludes.