Parent Company of Arby's and Buffalo Wild Wings to Buy Sonic for $2.3 Billion

Last November, Roark Capital, which owns Arby’s® Restaurants Group and has significant stakes in Auntie Anne's, Carvel and Jimmy John's, expanded its empire by announcing that it would be acquiring Buffalo Wild Wings for $2.9 million.

Learn more about how the firm purchased Buffalo Wild Wings just in time for the Super Bowl in the video below.

This year, this company has announced yet another large deal.

Roark will also be acquiring the burger fast food chain Sonic for $2.3 billion.

Sonic, which originally opened as a root beer stand back in 1953, has more than 3,600 stores across the U.S, over 3,000 of which are franchised.

"Sonic shareholders will receive $43.50 per share in cash, which is a 19 percent premium to Sonic's Monday close.The company's stock rose more than 18 percent Tuesday, hitting an all-time high of $44.87 per share," writes "CNBC."

Sonic Drive-in Exterior shot

Sonic, like most staple fast food chains, has struggled to compete in the saturated food market in the last few years. Same-store sales have declined over the last year, but the company did say on an earnings call this month, that the brand expects a 2.5 percent lift in traffic and a 2.6 percent spike in sales at stores that have been open for at least a year.

Roark which formed Inspire Brands in February sees potential in the drive-in restaurant known for its diverse menu, carhops on roller skates, and comedic commercials often set in cars.

"Sonic is a highly differentiated brand and is an ideal fit for the Inspire family," said Paul Brown, CEO of Inspire Brands in a statement.“We have tremendous respect for Sonic’s exceptional team of employees and franchise owners, who have built one of the industry’s most distinctive restaurant brands.”

With this acquisition, the private equity firm Roark will have over 8,000 restaurants in its portfolio with a combined sales of more than $12 billion.

Read more about Arby's parent company buying Sonic at "CNBC."

Meal-Kit Companies Are Gearing Up for Competition or Getting Out

On this episode of The Barron Report, Paul Barron interviews Brittain Ladd, a Supply Chain Management expert and Logistics Consultant for the world of meal kits.  

When the meal kit first came into existence, customers lined up to try this new and innovative system that fulfilled the desire for a high-quality meal without the restaurant price tag. Once the idea gained popularity, meal kit companies began popping up, claiming to have the best meal kit on the market. Slowly but surely, these companies starting shutting down as the market became oversaturated.

“The meal-kit industry is still the wild west. The industry is going through a lot of growing pains...,” says Brittain Ladd.

He believes one of the main reason these companies are unable to stay afloat is they just don’t have enough capital to keep going. One of the biggest challenges for the meal kit is the delivery model and its cost. Known in the restaurant industry as  “the last mile,” these start-ups are struggling to find a location that puts them close enough to a customer in order to keep costs down.

Bigger, established companies like Starbucks or Subway have the most distribution potential with access to resources, real estate, and capital.

Meal kits are a great product–unfortunately, they’re not enough to start a business. Brittain found that many founders of these companies did not have enough business expertise to evolve the idea into a full-fledged business. Consequently, companies faced the harsh reality of high cost-low retention. And although acquisitions may seem like the only light at the end of the tunnel, Brittain sees other opportunities for success.  

“If they’re not going to be acquired, they absolutely should be reaching out to restaurants chains and offering them a branded product or ask them to sell their meal kit exclusively in their store…,” says Ladd. Meal kit companies need to brainstorm a way to close the gap between the product and the consumer.

Listen to this episode of The Barron Report for more insights on the meal kit industry and his recommendations to founders in order to stay afloat!

SHOW NOTES

  • 12:33 Top 5 Companies To Watch

  • 15:34 Restaurants Co-utilizing Space and Meal-kit Delivery System

  • 18:10 Chef’d Biggest Flaw

  • 21:25 Misconceptions Of Success

  • 24:00 Fast Casual New Delivery Systems

  • 30:00 The Future of Meal Kits

  • 33:52 Deliver as Close to the Customer as Possible

  • 00:18 Introductions

  • 01:57 The Demise of Chef'd

  • 02:06 Current Status of the Meal Kit Industry

  • 04:23 Ready-to-eat Meal-Kit Development Ideas

  • 08:08 The Problem with the Meal-kit Industry as a Whole

  • 11:03 Convenience Stores as Distribution Points

 
 

Puerto Rico is Leading the Way in Adoption of the Independent Craft Brewer Seal

Puerto Rico is Leading the Way in Adoption of the Independent Craft Brewer Seal
  • What will it take for the remaining craft breweries to adopt the seal?

  • Will these efforts and technicalities benefit or hinder the growth in the craft beer segment?

It looks like the Brewers Association (BA) has been able to convince many small and independent craft breweries to adopt the Independent Craft Brewer Seal.

This many to be exact— 3,524.

This effort, of course, emerged as big beer companies, like Anheuser-Busch InBev (AB InBev), had been slowly but steadily acquiring more and more craft breweries to expand their portfolio and better capitalize on the small-batch beer consumer trend.

Foodable took interest on the subject last year and decided to compare three previously craft beer brands that were acquired by big beer companies to compare consumer sentiment before and after their buyouts. The result? The two brands that were acquired by a bigger beverage company actually had higher sentiment scores after the acquisition. This could be due to many different factors, including more resources for equipment, quality lab testing, and even marketing.

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Alternative Foods Hit the Mainstream, Providing Better-for-You Options

Alternative Foods Hit the Mainstream, Providing Better-for-You Options

Consumers today are making a notable shift towards eating cleaner. It’s led to the success of a number of small, artisanal companies with lofty values, and now, a wave of large brand names are also getting into the game, often by acquiring these smaller, innovative companies.

Carmel Hagan, Founder of Supernatural New York City explains how once trendy lifestyle changes like organic, plant-based, and vegan are now being adopted by larger shares of the market.

“The idea that we need to be taking care of ourselves through food is becoming more and more mainstream and that’s something that I think, at a baseline, is probably the number one thing that most people can do in their lives to have autonomy over their health,” she says.

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Monsanto-Backed Start-Up Will Soon Produce First Gene-Edited Fruit

Monsanto-Backed Start-Up Will Soon Produce First Gene-Edited Fruit

Agriculture giant Monsanto has just invested $125 million into gene-editing startup Pairwise.

The alliance may allow for Monsanto to introduce the first produce made with the blockbuster gene-editing tool, CRISPR. The CRISPR tool allows scientists to target specific problem areas within the genome of a living thing and tweak the DNA to adjust the taste, shelf life, and other attributes of the product.

Monsanto has long been criticized for its role in popularizing genetically modified organisms and for being one of a handful of companies that produced "Agent Orange," a carcinogenic herbicide.

However, most scientists agree that GMOs are safe to eat and that they have played a significant role in helping farmers grow more food on less land. Scientists are already using CRISPR to edit the genes of plants and animals to make them healthier and more resistant to heat and disease.

Monsanto and Pairwise aim to get some of the first fruits and vegetables made with CRISPR on grocery-store shelves within 5 to 10 years.

"Crispr is far and away technically more efficient and more effective at doing the kinds of things we want," Bob Reiter, Monsanto's global vice president of research and development strategy, told Business Insider.

It is partially due to CRISPR's accuracy that the US Department of Agriculture has chosen not to regulate close to a dozen crops edited with CRISPR as GMOs. Instead, the crops have essentially been given a green light, meaning companies can move forward with development.

Read more about this story at “Business Insider.

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