ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Thursday, January 2, 1997 TAG: 9701020011
SECTION: BUSINESS PAGE: A-6 EDITION: METRO
SOURCE: DANA CANEDY THE NEW YORK TIMES
For the bagel, a homely New Yorker with an immigrant accent, 1996 was a breakout year.
For example, what is today the Einstein/Noah Bagel Corp. started with one bagel outlet in Ogden, Utah, just 18 months ago. The chain has grown to 300 stores, with plans to open as many as 350 more by the end of next year. The stock market values the company, the majority of which is owned by the Boston Chicken restaurant chain, at more than $850 million.
Last month, Kellogg Co. paid $455 million to buy Lender's Bagels from Philip Morris' Kraft Foods unit. And Dunkin' Donuts Inc., a unit of Allied Domecq PLC, invested millions of dollars to add bagels to its menu this summer. The product introduction, so far in 1,400 stores, is the single largest in the company's history.
All together, bagel sales have grown by a factor of five in just three years, according to the American Bagel Association, whose formation last year is just one more indication of the ground that the bagel is gaining on cereal, bacon and eggs and other traditional breakfasts.
According to the NPD Group, a research firm in Port Washington, N.Y., Americans are choosing bagels for 3.5 percent of breakfasts at home, almost triple the level of a decade ago. They figure in 5.5 percent of breakfasts outside the home, a gain of 150 percent even as consumption in restaurants of eggs, toast, muffins, doughnuts and cereal was falling.
Indeed, demand for the dense, chewy rolls has so broadened that bagel bakers in Brooklyn are mixing in such yuppie ingredients as pesto and sun-dried tomatoes, while in Des Moines, bagels franchises are turning out chocolate chip bagels for dessert.
``That's what happens when it comes to Iowa,'' said Rabbi Steven Fink of Temple B'nai Jeshurun in Des Moines, who remembers that just five years ago, getting a decent bagel in Iowa required having it shipped from a Jewish deli in New York. ``This desire for good bagels has become so pronounced that we are now inundated with bagel restaurants and bakeries. We have five new bagel bakeries and restaurants in Des Moines in the last two years.''
Nationwide, bagel sales grew to $1.6 billion last year, from $429 million in 1993, according to the American Bagel Association. The trade group, based in Dayton, Ohio, estimates that the industry will reach $2.3 billion in sales this year.
The bagel has been so successful that there is talk of a shakeout from all the competition. Some analysts say Kellogg is coming very late to the game. Expanding chains are fighting for investment dollars. BAB Holdings Inc., the Chicago-based parent company of Big Apple Bagels, acknowledges it may not be able to assemble the cash for one planned acquisition.
Meantime, bagel makers are racing to grab market share. Quality Dining Inc. of Mishawaka, Ind., owner of Bruegger's Bagels, has 435 bagel shops, 225 of them opened in the last year, and expects to have 670 shops open by next October.
Big Apple Bagels has 150 shops, of which 89 opened in the last year, and another 125 planned for 1997. Manhattan Bagel Co., based in Eatontown, N.J., has grown to about 300 stores since 1987, half of them opened this year. Dunkin' Donuts plans to increase the number of its shops that sell bagels to 2,500 by April.
Bagels, in short, are just about everywhere.
While it may seem that the bagel boom happened overnight, it actually follows decades of pavement pounding by bagel makers who realized their survival hinged on expanding beyond Jewish neighborhoods into new markets where many consumers thought the ``cement doughnut'' was a paperweight.
``We had to cross over ethnic lines. We had no choice,'' said Murray Lender, who with his brother Marvin ran Lender's Bagels before selling it to Kraft in 1984. ``The vision was to really get it out of the ethnic marketplace.''
But how does one make that leap in middle American communities where sausage and biscuits or toast and jam have long been the breakfast of choice? Until about 1987, ``Dayton didn't know what a bagel was,'' recalled Ed Kazak, president of the American Bagel Association and owner of two Bagel Lovers bakeries in that city. ``Dayton was blue-collar, and if it wasn't on white bread it wasn't on anything.'' So Kazak heavily advertised and gave away bagels to convert consumers.
For Lender and a few other early players in the 1970s, the challenge was to create a bagel with a long shelf life in grocers' freezer cases - and to persuade supermarket operators, ever on the lookout for the next Wonder Bread, to stock it.
Lender's, too, had to give the product away. ``We had to educate the trades first,'' Lender said. ``I never walked into anybody's office without a toaster under one arm and a package of bagels under the other. Under the rough facade of the toughest buyer sat a consumer.''
Meanwhile, bagel makers began a marketing blitz, including advertisements that played up the bagel's health benefits and played down its ethnic origins.
``There is not the same panache associated with Jewish food as with Italian or Chinese food,'' said Warren Belasco, a professor in the American Studies department of the University of Maryland and author of ``The Appetite Change: How the Counterculture Took on the Food Industry'' (Cornell University Press, 1993).
Even today, Belasco said of bagel eaters, ``out of the New York area, they'll associate it with New York `quickness,' but they won't call it Jewish. I just don't think Jewish food is as marketable across the country. Bagels have been taken out of that context pretty well.''
The bagel's assimilation ``parallels the progress of Jews becoming mainstream,'' Rabbi Fink said. ``Going back 30 years ago, Jews were still somewhat isolated in American society. We hadn't become fully assimilated and reached positions of power within American life. Beginning in the mid-1960s, Jews became mainstream in America, so it's not surprising that popular food which Jews introduced has become mainstream.''
As the popularity of the bagel has increased, Helmer Toro, owner of H&H Bagels in New York, has found his two stores facing new competition from big corporations with the deep pockets to put shops all over the city. No matter, he says.
``When Kellogg and Boston Chicken came into the picture, it was better for me. We have the traditional bagel, none of those bagels with broccoli on it and all these things,'' Toro said, displaying a bit of bagel snobbery. ``Let them spend all of the money on marketing.''
True, savvy marketing that played up the low-fat, high-carbohydrate nature of bagels - minus the fad flavors like cheddar cheese and the cream cheese ``shmeer'' - struck a chord in a society obsessed with fat grams and cholesterol levels. But there are already signs that there will be gastronomic casualties, nonetheless.
Some analysts say the biggest threat is to frozen bagels, as more Americans have access to the fresh-baked variety. And even the bakeries' expansion may be hard to sustain. After announcing this summer that it was acquiring Chesapeake Bagel Bakery, BAB Holdings now says it has not secured financing for the deal, which would create the nation's second-largest chain.
To customers like Richard Nielsen, a salesman for Automatic Tool & Connector Co. in Union, N.J., all this industry activity simply means that the best bagel bakers are vying for his dollar, making it more convenient for him to pop into a shop.
``What better thing to do in between sales calls than to have a bagel?'' Nielsen asked while chewing one at a Bruegger's Bagels in midtown Manhattan. ``They taste great, and they are quick when you're on the run. It's the yuppie food of the '90s.''
LENGTH: Long : 142 lines ILLUSTRATION: PHOTO: STEPHANIE KLEIN-DAVIS Staff. 1. Hal Stern, co-owner ofby CNBFive-Boro Bagels with his wife, Joanne, boils miniature bagels
(left) at the downtown restaurant on the Roanoke City Market 2. and
pulls freshly baked miniature bagels (below) from the oven. The
plain bagels are the biggest seller. 3. Joanne Stern (from left,
above), Deborah Whorley, Sarah Wood, Zahra Sadjadi and Greg
Broderick peek through the baskets of assorted bagels at Five-Boro
Bagel on the market. 4. People line up (below) for morning bagels.
5. Chris Hancock (foreground) and Jerry Brown put the freshly made
bagels on racks before they go in the ovens for baking at Five-Boro
Bagels on the Roanoke City Market Tuesday. color.