You might not notice it, however lots of your favourite meals and restaurant chains are owned by large funding companies. Take Jersey Mike’s, for instance. What began as a small New Jersey sub store in 1956 is now backed by Blackstone, one of many largest personal fairness companies on the earth. And subs aren’t the one factor on Blackstone’s plate. In 2024, it additionally picked up Tropical Smoothie Cafe.
Opened in 1993 on Florida’s panhandle, this fast-casual restaurant franchise serves up scrumptious smoothies, wraps, flatbreads, acai bowls, and extra. Prospects rave about their icy, thick, and refreshing blends. This contains favorites just like the fruity Bahama Mama with coconut and white chocolate and the tangy and tropical Blimey Limey.
Tropical Smoothie Cafe can also be identified for its contemporary and wholesome grab-and-go meals that cowl breakfast and lunch. Fan favorites embrace the Rooster Pesto Flatbread, the Chipotle Rooster Membership, and the PB Banana Crunch Flatbread. That buzz has fueled explosive development, with greater than 1,500 places within the U.S. and extra on the way in which by way of its partnership with Blackstone.
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Again in 2007, Blackstone made large strikes by buying Pinnacle Meals Group Inc. They produced a bunch of manufacturers, together with Duncan Hines, Hungry Man, Vlasic, and Mrs. Buttersworth’s. In 2013, Blackstone took Pinnacle public and progressively exited its stake. Just a few years later, in 2018, Conagra purchased Pinnacle outright. At present, Blackstone holds a controlling stake in Trilliant Meals & Vitamin, which produces espresso and tea merchandise. In 2024, Blackstone appeared into promoting Trilliant, however no deal went by way of.
Blackstone is not the one main participant investing in restaurant chains and meals manufacturers. Roark Capital owns Encourage Manufacturers, the mum or dad of Arby’s, Dunkin’, and Sonic. JAB Holding Firm owns Panera Bread, Krispy Kreme, and Peet’s Espresso. It seems, meals, particularly fast-casual eating places which have room for enlargement, is a well-liked funding. However not everybody’s comfortable about these modifications. Many level to what occurred to Pink Lobster as a cautionary story of how an enormous funding can go too far. Critics argue that traders taken care of their very own pockets as a substitute of the model. Golden Gate Capital stripped its property by promoting off actual property and saddling the chain with heavy debt and lease prices. This pressured Pink Lobster to go bankrupt.
The Kraft Heinz cut up is one other instance, displaying how aggressive cost-cutting can backfire. In the long run, it is usually the client who feels the results by way of value hikes, smaller menus, or decrease high quality. Whether or not Blackstone’s meals bets will repay for traders, or the manufacturers themselves, stays to be seen.
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