Bantam Bagels bought for $34M cash by Lancaster Colony
- T. Marzetti Co., a wholly owned subsidiary of Lancaster Colony Corp., acquired Bantam Bagels in a $34-million deal funded by cash on hand, the company announced in a release. The deal closed Oct. 19 and includes additional payments for the Bantam Bagels team based on future financial performance.
- New York City-based Bantam Bagels was founded in 2012 by Nick and Elyse Oleksak. The company makes frozen mini stuffed bagels, pancakes and Egg Bites, marketing them nationwide to retail, e-commerce and foodservice channels.
- After setting up shop with funding from family and friends in 2013, the Olesaks appeared on the television show "Shark Tank" in 2015 and attracted a $275,000 investment from Lori Greiner in return for a quarter of the business, NOSH reported. The company's annual net sales are now about $20 million, Lancaster Colony said in a release.
For a five-year-old company, Bantam Bagels has seen remarkable growth — going from about $200,000 in sales before the 2015 "Shark Tank" appearance to about $20 million today. With so much rapid expansion in such a short period of time, it isn't surprising it would attract the attention of a company like Lancaster Colony.
After Bantam built a customer base in the East Village, the shopping channel QVC ordered 30,000 of the stuffed bagels to sell on live TV, which forced the startup to dramatically scale up. That entire order sold out in five minutes, according to Food Navigator. Then in 2016 the brand was picked up nationwide by Starbucks, which company co-founder Elyse Oleksak told NOSH significantly boosted sales. Now Bantam products are sold in about 20,000 stores across the country, including Costco, Target, Albertsons, Kroger, Stop and Shop, Vons, Albertsons and Fresh Thyme.
It's likely Bantam Bagels will benefit from its new owner's support and expertise — but at the same time do what it can to keep its New York City roots. Following the acquisition, the Oleksaks and their six employees are remaining with the company. The co-founders will be managing daily operations and leading innovation, NOSH reported.
Other companies offer similar frozen items, including Kraft Heinz, which makes Breakfast Bagel Bites, Pizza Bagel Bites and stuffed Bagel-fuls — and last year launched Nancy's Petite Stuffed Bagels. Such products are designed to give consumers another breakfast or snack option without meal preparation or having to spend time at a restaurant or café.
Frozen products have been enjoying a resurgence in popularity in recent years due to convenience, relatively low prices and the application of quick-freeze technology. According to Nielsen data cited by Food Navigator, sales of frozen breakfast items jumped 24% between 2012 and 2017, "with smaller, handheld food items leading current and future growth."
It looks like Bantam Bagels will take advantage of that trend with more expansion in the frozen category. Elyse Oleksak told Food Navigator that Bantam Bagels plans to move beyond the frozen breakfast category and into some new areas.
"We have an innovation pipeline that crosses well beyond the breakfast section," she said. "Everything that we do in the future will focus on being mini, accessible, and feel good versions of something you would normally call a Saturday morning — or a Saturday night — treat."
Lancaster Colony, which is based in Ohio, produces and markets national and regionally branded food products for retail and foodservice markets. T. Marzetti is the company's specialty food group and includes Marzetti salad dressings and dips, New York Bakery frozen breads and Sister Schubert's homemade rolls, among other products. The acquisition would seem to mesh well with its established frozen portfolio, and Bantam Bagel's popularity could spark both some new products and new revenue for its parent.