The Bageling Of America
For the bagel, a homely New Yorker with an immigrant accent, 1996 has been a breakout year.
What is today the Einstein/Noah Bagel Corp. started with one bagel outlet in Ogden, Utah, just 18 months ago. The chain has grown to 300 stores, with plans to open as many as 350 more by the end of next year. The stock market values the company, which is majority owned by Boston Chicken, at more than $850 million.
Last month, Kellogg Co. paid $455 million to buy Lender’s Bagels from Philip Morris’ Kraft Foods unit. And Dunkin’ Donuts Inc., a unit of Allied Domecq PLC, invested millions of dollars to add bagels to its menu this summer. The product introduction, so far in 1,400 stores, is the single largest in the company’s history.
All together, bagel sales have grown by a factor of five in just three years, according to the American Bagel Association, whose formation last year is just one more indication of the ground that the bagel is gaining on cereal, bacon and eggs and other traditional breakfasts.
According to the NPD Group, a research firm in Port Washington, N.Y., Americans are choosing bagels for 3.5 percent of breakfasts at home, almost triple the level of a decade ago. They figure in 5.5 percent of breakfasts outside the home, a gain of 150 percent.
Indeed, demand for the dense, chewy rolls has so broadened that third-generation bagel bakers in Brooklyn are mixing in such yuppie ingredients as pesto and sun-dried tomatoes, while in Des Moines, bagels franchisees are turning out chocolate chip bagels for dessert.
“That’s what happens when it comes to Iowa,” said Rabbi Steven M. Fink of Temple B’nai Jeshurun in Des Moines, who remembers that just five years ago, getting a decent bagel in Iowa required having it shipped from a Jewish deli in New York. “This desire for good bagels has become so pronounced that we are now inundated with bagel restaurants and bakeries. We have five new bagel bakeries and restaurants in Des Moines in the last two years.”
Nationwide, bagel sales grew to $1.6 billion last year, from $429 million in 1993, according to the American Bagel Association. The trade group, based in Dayton, Ohio, estimates that the industry will reach $2.3 billion in sales this year.
The bagel has been so successful that there is talk of a shakeout from all the competition. Some analysts say Kellogg is coming very late to the game. Expanding chains are fighting for investment dollars. BAB Holdings Inc., the parent company of Big Apple Bagels, acknowledges it may not be able to assemble the cash for one planned acquisition.
Meantime, bagel makers are racing to grab market share. Quality Dining Inc. of Mishawaka, Ind., owner of Bruegger’s Bagels, has 435 bagel shops, 225 of them opened in the last year, and expects to have 670 shops open by next October.
Big Apple Bagels has 150 shops, of which 89 opened in the last year, and another 125 planned for 1997. Manhattan Bagel Co., based in Eatontown, N.J., has grown to about 300 stores since 1987, half of them opened this year. Dunkin’ Donuts plans to increase the number of its shops that sell bagels to 2,500 by April. Bagels, in short, are just about everywhere.
“I can’t remember the last time we had doughnuts,” said Juanita Cowen, a police services assistant with the Montgomery County Police Department in Bethesda, Md., for 19 years. “We always have bags of bagels.” While it may seem that the bagel boom happened overnight, it actually follows decades of pavement pounding by bagel makers who realized their survival hinged on expanding beyond Jewish neighborhoods into new markets where many consumers thought the “cement doughnut” was a paperweight.
“We had to cross over ethnic lines. We had no choice,” said Murray Lender, who with his brother Marvin ran Lender’s Bagels before selling it to Kraft in 1984. “The vision was to really get it out of the ethnic marketplace.”
The bagel’s assimilation “parallels the progress of Jews becoming mainstream,” Rabbi Fink said. “Going back 30 years ago, Jews were still somewhat isolated in American society. We hadn’t become fully assimilated and reached positions of power within American life. Beginning in the mid-1960s, Jews became mainstream in America, so it’s not surprising that popular food which Jews introduced has become mainstream.”