Latest / The Weekly Run / Everyone's Opening a Bagel Shop | #35
Transcript
- Jeff Perera: Welcome to the weekly run. I'm Jeff. Aaron: I'm Aaron. Jeff Perera: And today we're talking about what's hot at Jeff's Bagel Run. And Aaron, this week it feels like everyone's opening the bagel shop. Aaron: And they should. That's just the right answer. I I don't Jeff Perera: But there's no way yet. Aaron: fault them. I don't fault them for this. Whoever the proverbial them is, I I think it's the right it's the right decision. Yeah, whoever the they is. All the they. I love the they. Jeff Perera: Whoever the they who the whoever the they is, yeah. Everyone everyone's opening a bagel shop. You know, there was a recent cover article on a trade publication. We'll just leave it vague so we don't have to Aaron: And today's sponsor. Jeff Perera: Yeah. Yeah. unless they want to sponsor the pod, you can email me at jeff at jeffsbagelrun dot com. That'd be great. But Aaron: Ha ha ha Jeff Perera: yeah, so you know, recent trade publication published a cover story about just this kind of the ongoing bagel boom and you we've discussed this before and but it seems like everyone's doing it now and there are a lot of competitors in the space, but I feel like some of them are just getting started man, it feels like I don't know. We're three three Aaron: It Jeff Perera: years in. It sounds like I'm a veteran. But like I've got enough wounds at this point to know. Aaron: Well let me ask you this as a qualifying question, 'cause I agree. It seems like it's everywhere right now and and it it's definitely food trends are interesting. We've talked about this in the past, but food trends are really interesting 'cause it's it does it does happen everywhere, right? And you know, I remember I remember the cupcake wave And everybody was doing cupcake places and it was so huge that they had TV shows and like it was everywhere. And then cupcakes died, and then Gourmet Cookies sort of took off and replaced them and then you get you know all the cookie brands and I felt like four or five years ago was you know cookie peak, it's sort of leading into today. but I'm curious How do you does it feel like a fad like that See, I for me I think it's a little more of the latter. Bagels have always been around. It's not really not that cookies I guess haven't been, but like I feel like bagels have always been popular. I think people just are paying attention a little bit more than they used to. Jeff Perera: think you're absolutely correct. The the biggest bagel brand in the world is Einstein. And they have something like seven hundred units plus units worldwide. They actually have a few different brands under their umbrella. And you know, they announced that their plan is to grow three hundred stores over the next, you know, three to four years. So they're Aaron: Which is huge for an established brand. Jeff Perera: incredible. Like I mean For us to say we want to get to three hundred stores is like, okay, yeah, great, go ahead, good luck upstart. Go get get after that, you know? But here's a you know, Aaron: We'll do this fine. Jeff Perera: here's an established brand who's trying to grow and I think it's an interesting place because part of it is that bagels are so familiar. And they are Aaron: Yeah. Jeff Perera: just a everyday staple. I think we talk about it in our Discovery Day that something like two thirds of Americans eat a bagel a week. If you think about that, that's like Aaron: I believe that. Jeff Perera: That's like two hundred and fifty million people a week are eating a bagel. So there's a plenty of Aaron: Especially when you yeah, when you factor in, just people eat at home, like, you know, again, throw throw a package of bagels in the in the fridge versus, eating out versus people that, get at restaurants or whatnot. I g it's I I believe that. Jeff Perera: So it's a lot of bagels every week being consumed Aaron: Yeah. Jeff Perera: and and there's just a a huge void in in the market space for a fresh baked, scratch made quality bagel. So I think we're definitely filling that gap. I mean we only have forty stores at this point right now. we'll definitely be towards fifty as we get closer to the end of the year, but you know, nowhere near the seven hundred that our competitor has, Aaron: Yeah. Jeff Perera: and certainly nowhere near the just total quantity of bagel shops in the country. You know, we're We're just a part of this puzzle at this point. But it does feel like there's a bit of a moment happening where people are paying a little more attention. I don't know. I just I got ho I got stuck on this hook that everyone's opening a bagel shop, and I just thought it was so funny because it just feels like everybody wants a bagel shop. Aaron: But I think you've I I think the reason, is i it's familiar because everybody's used to bagels, but I think what's booming is actually craft. What's booming is that people are interested in a higher end product than they're used to. And I think that's what sort of fueled the cupcake, cookie, you know, some of some of these dessert booms was this interest in an elevated product. But I think there's a big difference between some of the between desserts honestly and then staple meals, like a breakfast or like a lunch. And I think that's where bagels will be a little different. A bagel is breakfast. It's not a treat. It's not a yeah, I I'm into this and I'm I'm not into this anymore. I mean it's people I've I've been eating bagels my whole life. I don't intend to like get tired of bagels. And I work for bagel place so Jeff Perera: Ha ha ha Aaron: if I haven't gotten tired of then then you know nobody will. But Jeff Perera: Yeah. Aaron: I I think that's what's gonna be different about this one versus some previous ones. I I think people are enjoying an elevated experience and and are looking for more options for that. Jeff Perera: So I just listened to Nation Restaurant News this week in restaurants, and they were discussing how independent restaurants this year have grown sales, on average four percent, as reported four percent, and chain restaurants have only grown at one percent. And so they speak to this delta as being people trying to find something that is more connected to the experience because a lot of chain restaurants are looking for optimization and how do you pump more people through an AI drive through versus having like someone actually take the order or whatever. And turns out people don't want that. And I s the people being the Aaron: Yeah. Jeff Perera: consumer, the guest, they want a real experience. And we were talking to a potential franchisee today at a Discovery Day and He asked, he said, how many people mobile order compared to coming in the store? And I said, Well, it really depends by store, but on average it's like fifty-fifty. Like half of our guests still come into a store to have an experience, to walk in and talk to someone and take in the smells and the sights and the sounds and the whole experience. And so when I'm listening to this like real life experience I'm having with a potential franchisee who's curious to understand what the guests want to experience, and then data saying the idea of optimization and taking away that experience is hurting or negatively impacting sales resonates with me. Aaron: Yeah. And it tracks to our data as well because i if if we for example, if we look at our repeat customers and then we break down those repeat customers by channel mobile versus in store. And you even if you sit in store you can see us anecdotally. So many of our loyalty customers will scan their loyalty card in our app at their register. And I'll say there is For the at the sake of not being humble, like our our app is not hard to order from. Like you literally could do it as you're walking to the front door. So it's not like there's any real reason to go to the register unless you actually want it. There's not like, well I didn't have time to order the mobile app. No, you literally could do it before you get to the register. So so really people are just choosing it because they have the app, they have loyalty, they scan at the at the at the front counter. So they're fully equipped, but they're choosing the experience. And we see that in our data as well, where again, there's just a high percentage of people that want that register experience. Jeff Perera: Little humble brag for Aaron too. I mean this isn't a small sample set. There's well over a hundred thousand users in our in our app. Aaron: It's true. Jeff Perera: this isn't like twelve people have signed up and, you know, six are choosing to come to the register and six are just exclusively mobile ordering. There's a a large group of Aaron: Mm. Jeff Perera: people that have downloaded this and, are scanning it at the register to your point because they're ready to have like an in an in person real life experience. And I think there's something special there. We we talk about it a lot on this. I think it's one of our differentiation points as a brand, and I think what's gonna make it special for our guests as we continue to grow. while everyone might be an opening a bagel shop, not everybody's doing what we're doing, and I think a scratch-made product delivered to you by somebody who actually cares makes an incredible impact. Aaron: I'm curious your thoughts though why Why would somebody want to open a bagel shop? Why do we keep seeing new entrants? Jeff Perera: Well, I think competition is actually good for what we're doing right now. I think it continues to put focus Aaron: I'd agree. Jeff Perera: on the category which will just what's the saying, like high tide raises all ships or something like Yeah, Aaron: All ships rises, yeah. Jeff Perera: yeah, yeah. So I think that the more we talk about bagels and the more there is a bagel sphere to talk about, I think that helps Jeff's Bagel Run you know, why would someone want to do this right now? Well, I think it's a one, it's financially it's a really It's a good business. You know, on paper, it's Aaron: Yeah. Jeff Perera: a good business. So I think if you're a prospective franchisee and you're interested in a a business that is a single day part, right? It's a morning component as compared to maybe if you're a franchisee that's running you know, lunchtime evening operation, it's nice to have an opposite day part. It does balance out the portfolio from a prospective candidate that might be doing other types of service businesses that are, you know, consumer service businesses, but maybe not food service businesses. You know, food is a nice place to kind of be able to layer in your systems from an operations perspective or, you know, HR management back ahead you know, back end type stuff. It all plays really nicely together. But you know, it's also something that's extremely, extremely like nostalgic and emotional. Like I don't know, I think there's like something about food that like pulls people in and bagels in particular have a connection point with with people that's that's different. Aaron: Well, you talk to a lot of franchisees, obviously a big part of franchise sales and and you know, that process for new perspectives. Why do you think franchisees are drawn to bagels right now. Jeff Perera: I think there's there's something special about what a bagel, what a breakfast spot does, and even just restaurants in general, I think I also think there's probably some exhaustion in the space around a a co the number of coffee shop s you know, chain kind of concepts that are out there, whether it's drive through, sit down, slow coffee, fast coffee, I don't care. There's so many. I I could I couldn't Aaron: That's another booming space. Jeff Perera: even like imagine getting started in the chicken space right now. Like there's just so much chicken out there. Like pizza, Aaron: Yeah, it's true. Jeff Perera: pizza? F I mean, forget it. Like these are there's just I feel like bagels are in the same like place emotionally that peop when people eat them and think about food as, you know, chicken strips, pizza. It's kind of in that same place. Aaron: Yeah. The the question isn't whether or not it's not it's not polarizing like like another cuisine, I feel like pizza bagels coffee, pretty universal, pretty much applies to everybody. So then it's just how do you set yourself apart and so as so take your Jeff's hat off. What is the what is the current sort of stratification in in the bagel world right now what are those sort of like large buckets right now? If I'm looking at like bagel shops, how do they how do they group? Jeff Perera: Okay, so there's Let's call it like four groupings, right? You've got a mom and pop, which is its own bucket, and this is something that is happening all over the place. Doesn't matter what part of the country you're in. I think primarily people envision this like mom and pop bagel shop plan of the Northeast, but but Aaron: That's what I grew up with. Jeff Perera: they're happening everywhere. and they they often come with like a quirkiness and a uniqueness that is very much the owner, the family of that business, the town they live in, type of Vibe. Aaron: But those tend to be restaurants, really, because sometimes they're a deli, sometimes they're a lunch spot, some like the Jeff Perera: Yeah. Aaron: bagels become like a piece of what they do, but I but Jeff Perera: Yes. Aaron: very ragu rarely are they like a bagel shop. They're a place Jeff Perera: Very Aaron: that has really good bagels, i it can happen, but they're not they're not a bagel shop in in most cases. Yeah. Jeff Perera: Yeah, it's like few and far between. Yeah, yeah, there's like there's there's very few and far between that are just like exclusively for bagels because they usually develop all these other product line categories and they do other things Aaron: Yeah. Jeff Perera: and but I think that mom and pop is really unique and special compared to the next category, which I think of is like a bagel deli. This is more of like a place that Aaron: Okay. Very New York. Jeff Perera: it feels like a it's like that little section of the bodega that you like where they make the food for you, where they like cook that sandwich, right? Aaron: Yes, yes. Jeff Perera: They've just said, like, let's just build a whole business around just that section of the bodega. I don't need all Aaron: Yeah. Jeff Perera: the other stuff that comes. I don't need the lottery tickets, I don't need the cigarettes, I don't need the beer, I need just the stuff. Just that little I want that little backcounter. And so Aaron: Just a back counter. Yeah. Jeff Perera: I think you see a whole category of businesses doing this. Einstein's one of those. Einstein's sort of like that. I think the other competitor in the space right now that's really pushing that is H and H. And they're a really famous, Aaron: Okay. Jeff Perera: well known brand in the northeast, specifically out of New York, I think they run a Seinfeld episode. But, you know, again, they were really it's a big name with like, I don't know, I they got thirteen shops right now. So they're not like aggressive in their expansion there but they are getting out there. So that like Bagel Deli. I think the third yeah, third one, yeah, Mom and Pop Bagel Deli. The third one that you end up with is that like breakfast place that has bagels. Aaron: Okay. Jeff Perera: And so maybe it's like a breakfast spot that's known for its bagels. And I think of this I think of this as my time in like South Florida. There's one that's like famous down there, it's called Flakeowitz. And we would get bagels from them when we live down there, but we would also go and sit down and have like a full blown breakfast. Like they're making pancakes Aaron: Yeah. Jeff Perera: and eggs and There's a couple other places that are growing chain wise that are doing this and one of them is called Bagelmook. They are a full Aaron: Mm. Jeff Perera: blown like you can get a omelet or you can get a bagel. So it's kind of like a very unique niche of a of a concept. So it's kinda restaurant, but the bagel is sort of the like the hook to get you in. Aaron: It's really more breakfast spot is sort of the category. Jeff Perera: Yeah, full b yeah, definitely. More of a breakfast spot. Not a bagel spot, a breakfast spot. That just Aaron: Yeah. Jeff Perera: happens to have bagels. And then and I think there's the the fourth category is kinda like what we're doing, which is a newer emerging category that's Aaron: Yeah. Jeff Perera: kind of an old category, but it's like where we just do the bagels. Like we are delivering the bagels to spread. We have an elevated coffee experience because we think our guests don't want to make two stops. So we want to make sure that we deliver on that. I think that's where there's another category that's emerging in this bagel. verse and it's where the bagel is the star of the show and you're focused in on that that one in that one item is the whole reason that you come. Aaron: So that's kinda interesting when you compare that to what you were saying earlier about like other food movement booms or whatever you want to call w like chicken. Chicken sort of breaks down like that in the same sort of way where hey, I've got restaurants that are really well known for chicken, or maybe I've got a menu item that is, you know, tenders that that are just great and I'm known for even though it's I'm still a restaurant, going all the way to kind of where we are today with like Humagoos and and canes and these like you know these brands that are crushing it, Dave's Jeff Perera: Mm-hmm. Aaron: hot chicken, and they're just tenders. They're just the tenders. And fries, kinda Jeff Perera: Just the tenders. Yeah. Aaron: like we are with coffee, they have fries because it just makes sense. You don't want to get just tenders and like figure out Jeff Perera: Yeah. Aaron: what you do. But really it's just about the tenders and the and the sauce and the fries are just because you have to have because it completes the meal, I guess. But but they're wholly focused on sort of that primary product. And I and it feels like it's a very similar thing between sort of what's been happening in chicken and then now what's emerging in bagels, that same sort of levels. Jeff Perera: Yeah, I I like that kind of comparison because you're right. I mean, if you were to think about chicken places kind of more classic chicken places, you're like KFC's the first one that kinda comes to mind and it was Aaron: Yeah. Jeff Perera: full blown fried chicken, bucket, right? Like the bucket was like the thing. Aaron: Yeah. But it was meant to be a meal. So kinda like you were saying before, where it's Jeff Perera: Yes. Aaron: like it's it's you know, the sort of the breakfast spot that does really awesome bagels and has a hook of a bagel. That's Jeff Perera: Yeah. Aaron: kinda what chicken was ten years ago. It was like, okay, I could go to a you know, a place, you know, whether it's a K fast, you know, KSE, you know, Popeye's or some other brands that had really good chicken on Jeff Perera: Mm-hmm. Aaron: the menu, but it's a restaurant. At the end of the it was a full restaurant, they did a lot of other stuff. Nobody was out there just with a counter and and tenders. Jeff Perera: No, but it it is it does really make you think about what the evolution of the business could look like or what the I mean, whether it's the bagel shop, I mean we can keep talking chicken, but I love chicken. But the the evolution of the business is an interesting it's an interesting thought exercise because are bagels, cream cheese and coffee enough to continue to like prop up a a growing brand. Aaron: Yeah. Well, we're at an interesting place in sort of inflection where, you know, there's starting and there's growing. And it's easy to think that they're the same because, you know, don't you need to grow once you start? I mean, yes, but I think until you actually try to build a business like this and be a part of again a startup brand You realize that starting is is a much more survival driven mode. Like let's starting just is from zero to one Jeff Perera: Yeah. Aaron: and trying to make sure that that you live to see the next day and you know, solve the problems as fast as you can. And it's it's crazy and it's hectic and it's fun and we could have a whole series of conversations about that alone. But but that's a lot different than being established and growing. And it has different challenges and it has different needs. So to your point, like, okay, we've nailed 40 stores. Are the next 40 the same? Is going purely, truly national? Is that the same or does it have to look different to get over that next hump? I mean a lot of brands have struggled Jeff Perera: Mm-hmm. Aaron: with that and or been through that journey and have had to make all kinds of decisions. Jeff Perera: It's a fun yeah, and it's a fun place to be as a brand because, you know, to your point, six years ago when it was Danielle and I with one store, it truly was survival, right? Like we Aaron: Yeah. Jeff Perera: were in the shop grinding every day and now our our lives are noticeably different in the way we work. I think the way we live is the same. We're still trying to make it to Disney on the weekends and hang out with the family. But you know, but like the the way we work is very different. there's a lot less four AM bakes for me. There's a lot less, Danielle running expo on a Saturday in the shop to make sure the orders are getting out. There's a lot more of okay, we're at store forty. What is store eighty look like? And Aaron: Yeah. Jeff Perera: it's gonna be here in nine months. So we need to figure out what it looks like today, because if we don't know what it looks like, It's fun to zoom out of that, you know, day-to-day operation or wow, I just made a great bagel. Like, okay, that was step one. We're on step like Aaron: Yeah. Jeff Perera: two hundred and sixty-three now. And it it's a neat exercise. And it's been fun to do that as we kinda I say come to the end of the year. Which it's you know, Aaron: In August. Jeff Perera: it's you know, we're at the end of August, beginning of September now. But, we're looking deep into twenty seven already for LTO planning and LTO planning at forty stores is different than LTO planning at eighty. And as much as people don't wanna believe that, it it just is. You know, I think it's it's Aaron: yeah. Jeff Perera: a lot harder to deliver, to eighty stores than it is to forty, Aaron: And it also changed the the goalpost move too. And I think we look at we look at these early days and it's about opening stores. And then you sort of get that into a good rhythm and you still care about opening stores, but you've that's a system now. And so Jeff Perera: Yeah. Aaron: we keep doing it. But you don't need to build that anymore. You need to run it. And it's kind of the difference between building and running. And as you sort of, you know, progress through the journey of the business, it's like, okay, you're trying to set all these things up so they run and they execute, and then you move on to the next thing. And I think that's as we get to this next phase, that's where you start asking questions: like, okay, you know, is what we're doing. what more can we do? Like you go from opening stores to okay, how do we grow the revenues of these stores? What does that mean? What does it mean to keep and then you think about the food scene as a whole, what does it mean to keep this bagel thing going, right? we like to change our minds as consumers. Jeff Perera: Yeah, it and again, this is the fun part. This is something that Aaron: Yes. Jeff Perera: I love I just I love this part. And I think it's super like interesting and I'm glad we take to talk about it a little bit. And I I see this as you know, you said you just said it. You were like, What do we need to do? And then, you know, my brain is like, Well, do we need to do anything? And so you get to have this like back and forth approach to whether Growth for the sake of growth is necessary. Is doing something just because it's like, you have to do it. Like, you know, we spent the last couple of weeks talking about pumpkins. Like, do you have to do pumpkins? The pumpkin industrial complex led us to this. Obviously. But it doesn't necessarily no, I Aaron: Yes, obviously. Yes. I hope we didn't leave that questioning. If we should. Okay, great. Jeff Perera: don't I don't think so. I think everybody knew where we stood. Aaron: Excellent. Jeff Perera: but that's that's part of the journey. Right? That's where we are today. And I think as a you know, that a peek behind the curtain, like if you wanna know what, you know, Jeff and Aaron and the leadership team and, you know, Danielle and everybody are talking about, we're we're like in this point where like, wow, okay. This is what's got us to forty. To your point, we sort of just lived in survival mode a little bit of like we were in we were opening stores because opening stores was just what we did and you know, now the stores they open themselves to some degree, you know, but T there's a system, Aaron: Comparatively. Jeff Perera: there's a system, there's a process in place, there's routines, there's things that now allow us to free up mind share for like, okay, well, from forty to eighty, what does that look like? And then beyond eighty, 'cause you know, we can conceptualize that, you know, when we look at long term planning and financial models, it's like, wow, okay, what do we do? How does it feel different? What do we need to do? How do we continue to see and deliver on financials that franchisees have, you know, bought into this business for, right? Because I think that's ultimately you and I can talk about our end consumer, but as a franchise or I have one end consumer and that's my franchisee. The franchisee then has to deliver Jeff's Bagel run brand to their guests and their store every day. And so how do they show up for them and what are those guests asking for and what do they want? Aaron: It's I I think about that often, just Jeff Perera: Yeah. Aaron: just about food trends, because it's such a fascinating it's such a fascinating space because we as a consuming public will go from not even hearing about something like not really thinking about it, and then we will make it the hottest thing in the world and we'll sustain it for a year, a couple of years, maybe a decade and then the bottom will just fall out. We'll just be like, nope, we don't care about that anymore. Or another generation will come along and maybe we still care about it, but we don't matter anymore 'cause we're getting old and we don't eat we don't you know what I mean? I Jeff Perera: Yeah, yeah. We're the old we're the old guys in the room. Yeah. Aaron: kind of think about you know the you know the alcohol industry is having a real r reckoning with that Jeff Perera: yeah. Aaron: and and simply because of consumer changes, you know, it's the Yeah. And so Jeff Perera: Gen Z is not drinking as much alcohol as Gen X. Aaron: And if something is stable over the last, you know, several I mean how many hundreds of years has has alcohol been a decent bet? And then what Jeff Perera: Well let's give it let's just say let's say a hundred, 'cause you know, prohibition wasn't exactly stable. Aaron: sure. It's a blip. It's a blip. But you know, you look at you know, at least the last they've had a solid hundred year run of like nothing Jeff Perera: Yeah. Aaron: but steady growth and then with no warning, I mean there was nothing to say that this generation was gonna do this, but just whatever, you know, cataclysm of events, you know, led to them being like, Nope, not interested. And then the industry is scrambling to figure out what to do. And that's honestly a much longer time frame, but I always think about that in food and just How do we as a business be aware of that, be intelligent to that? How do we protect our business from sort of macro changes and tastes? And as you said, I think that's what becomes fun. And that's when you know you've moved on from let's get these doors open, let's make sure that they're healthy, let's make sure that we've started this business. And now we get to move on and be like, all right, we're stable, we're we're we're good. How do we grow? How do we protect? Jeff Perera: Yeah. It feels it feels like we've yes, we've moved from the starting phase into the growth phase. And I think that part Aaron: Yeah. Jeff Perera: is it is easy to see them as one, but they are two very different things. And Aaron: No, they're different modes. Jeff Perera: yeah. And I think we're more in that growth mode now. And it feels it feels like a new business and it's exciting. And yeah, I think it's gonna offer some challenges over the next eighteen to twenty four months that we get to answer and we get to answer alongside of, you know, other business owners now. 'Cause as a as a franchise or with, you know, twenty something franchisees opening stores all over the country and you know, they're a part of this process too now, which is really exciting because I think once you start to bring in smart people doing cool things from a you know, with different perspectives, suddenly your your mind can open up to just ideas that you didn't see possible. So it's pretty great. I'm hyped for it. Aaron: So over the next five years, what do you think differentiates? What do you think as as what we're currently cause right now just everybody's into bagels and I love it and it's the right time and I'm so grateful to be here doing this at this moment, 'cause I certainly didn't predict it. I don't think anybody did, but we're here. You know, which of those four categories grows or shrinks? What do you think? How do you think it plays out over five years? Jeff Perera: What I think over the course of the neck five years for so long. Just let's just say that out loud one time because five years ago I was, you know, one guy scooping bagels in a kitchen in Okoe. Yeah. Five years just takes Aaron: But look how far you've been in five like look how far come Jeff Perera: you a long way. I think that the but the consumer ultimately decides, you know, but I think that we'll see a a convergence. of kind of the extremes. I just we will come to the middle. I think that law of averages is gonna put us in a situation Aaron: Mm. Just normalizes. Jeff Perera: where we normalize. Yeah. And so us making a scratch made product fresh bagels made every day in every store, I don't see that changing. That's just like the principle of how we've built our business. I think it's a differentiator for our flavor profile and our taste. And so we'll continue to do that. But You know, I mean, one day down the road someone might want like white fish salad in the store. We're gonna have to figure out how to get white fish salad because it's I just you know, we've got locks in a box, we have smoked salmon, we've we've evolved our cream cheese offerings, we elevate our coffee program. We're we're doing things already today that say we're trying to move more towards the middle to where the consumer is. And so what the consumer says, you know, if we can find a way to make it work and it it make it works for the franchisees, then we're probably gonna take a look at it. So I think there'll be more of a move to the middle. Aaron: That's an in it's an interesting thought too, but I I think it it highlights something probably pretty important about the way that we see this business and the way that that we run this business across the board is it's really about the customer. And and that feels sort of cliche to say, and of course we all anybody in business is gonna say it, so I don't know that there's anything profound about that. But But the difference I think with us is that we want to give our customers a great bagel experience. And I think we have to acknowledge that that's gonna evolve over time. And As long as we stay grounded and giving them a great bagel experience, I think that gives us some latitude. Whereas if we're like, no, this is what we are and it can never change, and you know, these parameters, and and like I said, we don't serve that customer as they move as their tastes and as their their needs move around, if we don't pay attention to that and and evolve with them in that, that's where you sort of get caught in that that boom and bust cycle because customers don't go anywhere. They just they don't leave the the market, they just move. And so you Jeff Perera: Yeah. Aaron: either know them and move with them or you don't. And it's just it's an interesting challenge for a business that plans to be around for, you know, 10, 15, 20 years. You gotta think about those things. Jeff Perera: You do, and I think the the amount of information that's available us today in twenty twenty six is different than the amount of information that was available to like people in the nineties when bagels were booming the last time, right? There's just Aaron: Yeah. Jeff Perera: the the level of access to information is so much higher. You know, I I just I'm looking at like what Starbucks has done over the last three quarters and I see a business that had all the market share, had so much what are they what's it called like market power. And then they lost a bunch. And then they had declining quarters, losing sales, customers upset, employees upset, because they sort of lost, I think, the way of what the customer Aaron: Mm-hmm. Jeff Perera: wanted. And their customer wanted a place to go that was still a third spot. And Aaron: I think COVID COVID really showed Starbucks what I think they I think COVID highlighted what Starbucks had and it was different than what they thought they had Jeff Perera: Yeah. Aaron: because COVID took it away. Toba COVID took away the Starbucks third third third space. Jeff Perera: Yeah. Yeah. Aaron: And I don't think Starbucks really thought of themselves as a third space first experience. And yes. Jeff Perera: Well, they did originally and then they stopped that. They stopped thinking that way. But the guest never did. The guest always thought as a place Aaron: Correct. Jeff Perera: to go meet a prospective interviewee. The guest always thought, Okay, this is a great place to meet somebody for a meeting or let me meet my friend here and then we can get about our day, right? Like I think Aaron: Pre COVID, I used to work out of a Starbucks for I did I was remote for about a year freelancing and I worked out of a Starbucks and I could it was everybody. It was interviews for nannies, it was long lost friends, it was business Jeff Perera: Yes. Aaron: transactions, it was other telecommuters like me. It it literally like it was insane just the demographic spread that they pulled. And it was full, always. Jeff Perera: And then and then they saw market share erosion and like any and they're publicly traded companies, so it's different. I think they have like a lot more shareholders, a lot of people they have to answer to. There's some some differences in the way they can move their business from a nim nimbleness, is that a word that is makeup a word? Yeah, you it's just they can it can't they can't Aaron: Yeah, you Jeff Perera: move quite the same way that a you know, a a thirty nine store chain can move, you know, but like I think they they started turning in the direction that their customer wanted them to be and their customer wanted them to be a third space again and a place to go and spend time. And it took five years after COVID to do that. It took time Aaron: But there's an interesting but there's an interesting sort of lesson in there too, because all the people, all the new brands that are beating them, not a single one of them is a third space. Jeff Perera: Correct. Aaron: Which is again why you just have to really make sure that you're paying attention to your customer and new generations of customers and trying to understand what they want because it's if I'm Starbucks Mike, what do you guys want? Right? Like you want you all left us because we're no longer s third space and you chose kiosks as as your alternative. It's very confusing, but it's it's because everybody offers something a little different and you gotta Jeff Perera: Yes. Aaron: be s sort of true to your brand, know who you're serving, but again, pay attention. Jeff Perera: And it doesn't mean you can change you you can't change the product offering, right? You know, I mean Starbucks I Aaron: Yeah. Jeff Perera: think just got so far off of the plot when it came to what their core guests wanted, which was a place to go, Aaron: Yeah. Jeff Perera: that when they started to compete with the drive thru places and highly optimizing, even chang closing locations and relocating them to places that they could put a drive thru, people I mean, did it help them? No. I mean, well, I mean maybe some locations, but like overall the company didn't see a ton of growth in that period and they started closing stores again. And so I think there's just like a there's a ton of value in understanding and knowing who you are and like what your place in the market is and who your guest is. And I think today as a brand that's in this growth phase, we're looking at that, we're understanding that and trying to figure out what that guest is saying they want from us so they stay with us. And that's the honestly that's the best that we can do today to to continue to make sure that, you know, we're not frozen yogurt or cupcakes. Aaron: Well and frozen yogurt, man, that's another great story. I mean it's the same it's the same it's the same movie over and over again. But there's what's what I what I love about them when I think about about these stories, when I think about it often is that even for those truly, you know, boom and bust cycles and there's brands that come in hot and then disappear, there's always brands that stay. There's always brands Jeff Perera: Uh-huh. Aaron: that that were part of it and then last after Jeff Perera: Yeah. Aaron: everything calms back down. And then because again, food, people love food, and people don't love frozen yogurt any more than you know, maybe it's less of a craze, but like people still like it and want to get it. And Jeff Perera: Uh-huh. Aaron: so I always think about that when I think about our our business and our brand. I'm like, okay, how do we how do we become that? How do we become that version where Jeff Perera: Yeah. Aaron: even when bagels settle down and go back to normal? How how are we still the spot after that? I think it's a great challenge. Jeff Perera: It it is. And it's fun to think about it today at forty stores and how we're growing to eighty and what it looks like in twenty twenty eight at a hundred and forty stores. You know, like it's it's it's a it's a fun problem to try and solve. And, you know, I think we have a really good handle on it. We have a great product already today that consumers are craving and coming out for. so it's a it's fun to think about the future and where it's gonna go. Aaron: You just have to predict the future, Jeff. That's it. It's easy. Jeff Perera: Let me get my crystal ball. Aaron: Ha ha ha. Jeff Perera: Tarot cards, I don't know. Maybe I need to go see an astrologer. Aaron: If you get that working, I you to pick me some lottery tickets too. Jeff Perera: It's like Virgo in rising or something, or how does that work? I don't know. Anyway, talk about losing the plot. Now we've done that, Aaron. I think that's it for the for this week. Thanks for Aaron: It's fine. Jeff Perera: the this one a good conversation, super fun. bake fresh, bring joy, build community, bye.