At a glance
• There are 28 Auntie Anne’s in the UK, in small malls and inline kiosks
• Plans are set to grow the brand to 100 in the UK within the next five years
• The parent company is US-based Focus Brands
• Focus Brands has Schlotzsky’s, Carvel, Cinnabon and Moe’s Southwest Grill
Hollywood star Robert Pattinson – he of Harry Potter and Twilight fame – loves his covered in chocolate. Dr Phil – of Oprah fame – prefers his filled with peanut butter. And although the smaller, snack-sized version nearly choked former president George Bush in 2002, the softer version is clearly going down a storm. The object of their affection (or near demise)? Pretzels.
In the UK, the city of Gloucester also became enamoured with themin November when specialist chain Auntie Anne’s opened at the Eastgate shopping centre.
Website Thisisgloucestershire declared the city “loves” the doughy treat of German origin so embraced by Americans. It said: “The bakery’s grand opening was one of the busiest days of the year for the centre so far.”
There are now 28 Auntie Anne’s nationally in small malls and inline kiosks, and the company has plans to grow to 100 within the next five years.
In the British Isles, Auntie Anne’s is run by father and son duo Robert (who ran Thrifty Car Rentals before selling it in 2006) and Max Burton, who bought the master franchise in 2008, six years after Auntie Anne’s was launched in the UK. At the time there were only four sites.
Slow burner
While the Burtons were confident in the allure of Auntie Anne’s, which has more than 1,200 sites internationally, growing the chain here has been something of a slow burner.
“If we had £10m in the bank when we took over, we would have grown quicker, but it took us 18 months to get our supply chain working,” says Max. “We can now grow more quickly, andwe are happy where we are.”
Auntie Anne’s parent company is US-based Focus Brands. As well as the pretzel outlets, it has restaurant chain Schlotzsky’s, ice cream company Carvel, baked goods chain Cinnabon, and Moe’s Southwest Grill in 3,300 sites in the US alone; internationally, it operates in 60 countries. There arealso plans to add up to three more brands by 2020.
And now the UK should brace itself, as there is going to be something of a Focus Brands invasion in the next five years.
Heading this drive is the firm’s international president, Mike Shattuck, who says: “We learnt a lot about the markets [through Auntie Anne’s], and our restaurant brands tend to follow;that is where we are at with the UK.
“We would love to get our Moe’s brand in here – we think it is particularly suited to the market right now – and also the Schlotzsky’s brand.
“We know the market will work here – we have done enough homework on that – and we can build the supply chain, so we just have to get the right investor to work with.”
Shattuck says the Cinnabon brand – famous for its cinnamon rolls, and one of Focus Brands’ biggest – will also return to Britain after the companygot its fingers badly burnt with an unsuccessful franchisee venture.
Until 2011, Cinnabon had only one outlet, but a further three have openedin the past 18 months.
“We will get Cinnabon going here again,” says Shattuck confidently. “Cinnabon had to recover from whatI kindly call ‘a misadventure’.
“We had a disagreement with the franchise owner on how to penetratethe market. He believed that the best approach was to develop the City of London first. But that is very expensive and very risky, and he didn’t get it right. Millions were lost on that strategy.”
Although Focus Brands does have a Cinnabon concession in London’s Trocadero in Piccadilly Circus, as a rule Shattuck avoids central London with all brands until they become firmly established.
“My personal belief about brand-building in the UK is that you start in the outlying regions, not in London, where it is so expensive to do business. I would look at the likes of Birmingham and Manchester, and possibly some smaller cities. We call it a ‘reverse penetration’ strategy. We build the brand in the war chest before we takeon London.”
The UK is important to the company because it provides a base for it to move into the rest of Europe. “Our overall strategy for international expansion is based on emerging markets, with the exception of the UK, Canada and Japan,” says Shattuck. “The UK provides us with a launching pad when we are ready to move on Europe.”
Focus Brands already has some outlets in Europe, but Shattuck is wary of the Continent for two reasons – the ongoing financial crisis and what he calls “the inflexible labour markets”.
“The UK has a labour market that behaves in a similar way to the US and we understand that market, which fits better with our brand.”
Meanwhile, Europe’s economic woes have slowed the chain’s expansion. “We were ready to make that move,but we are holding back a bit now,” says Shattuck. “We are already in Greece and the Netherlands; the Netherlands is doing OK, but Greece… well, we have three locations there and we haven’t developed any since the crash hit. Risk and a sketchy performance have changed our approach.”
While the company eyes opportunities overseas, it is still expanding in the US. “We are not yet fully covered there,” says Shattuck. “We have a long way to go but, strategically, we are trying to project our brand overseas.”
This, he explains, “diversifies our base operations away from a single market, and brand recognition grows exponentially as you move into the global markets”.
“Frankly,” he adds, “we are owned by private equity [Atlanta-based Roark Capital Group] and the expectation is to have an international play in the portfolio.”
Max Burton is proud the UK is playing such a pivotal role in the company’s bid for international recognition. He says: “We are a relatively sophisticated country so that means we are an important market for Focus Brands, especially when it comes to testing a product.”
From Harry Potter stars to Oprah, surely it can only be a matter of time before Auntie Anne’s and the other Focus Brands’ facias will be sporting their own celebrity followers.
