Papa Murphy’s Adds Pinkberry: Why Fixing the Pizza Business Should Come Before Adding Frozen Yogurt

 

If Papa Murphy’s is closing underperforming pizza restaurants, why should anyone believe adding frozen yogurt will fix the underlying problem asks Steven Johnson, Grocerant Guru®
Founder, Foodservice Solutions®, Tacoma, Washington.

That is the consumer test Papa Murphy’s and parent company MTY Food Group need to answer before celebrating their latest co-branding strategy.

Three franchise agreements to combine Papa Murphy’s Take ’n’ Bake pizza with Pinkberry frozen yogurt represent a business development announcement. They do not prove stronger consumer demand, more frequent visits, improved profitability, or a successful turnaround.

My challenge to Papa Murphy’s and MTY is simple: Prove that consumers want the combination before treating co-branding as a growth strategy.

Are consumers rejecting Papa Murphy’s because the brand is not meeting their needs? Or is management betting that adding a second brand will make the existing business more attractive?

That distinction matters.

From the perspective of the Grocerant Guru®, consumers do not organize their lives around corporate portfolios, franchise agreements, or shared real estate. They organize food purchases around eating occasions, convenience, taste, price, portability, and perceived value.

A family looking for dinner does not automatically want frozen yogurt. A consumer craving dessert does not automatically want take-and-bake pizza. Putting both brands under one roof may create operating efficiencies, but efficiencies alone do not guarantee incremental customers, repeat visits, or stronger profits.

If the combination generates new customers, more frequent visits, stronger transactions, and sustainable incremental profits, it deserves consideration. If it simply adds another operation to manage while the core pizza business struggles, this is not innovation solving a consumer problem. It is management adding complexity without yet proving the payoff.

That is the test every foodservice growth strategy should face: Does it make the brand more relevant to the consumer—or merely make the corporate portfolio look bigger?

What the Announcement Actually Says

On October 7, 2026, Papa Murphy’s announced three franchise agreements for its co-branded concept with Pinkberry. The locations are:

·       Sunriver, Oregon: Joshua and Samantha Kimzey plan to open their first location in both systems in early November 2026.

·       Santa Fe, New Mexico: Longtime Papa Murphy’s franchisee John Perea will add Pinkberry to his existing restaurant, which he has operated since 2010.

·       West Haven, Utah: Casey Kauer, who operates five Papa Murphy’s restaurants in Utah, plans to open a new co-branded location in summer 2027.

The company identifies shared real estate, labor, and operational resources as potential benefits. The concept also offers franchisees an opportunity to serve different eating occasions and develop additional revenue streams. MTY has identified other possible co-branding opportunities, including sweetFrog.

The important distinction: Three franchise agreements demonstrate interest in testing the model. They do not establish that consumers want the combination, that the economics will outperform a standalone restaurant, or that the concept can reverse Papa Murphy’s broader business challenges.

Those are separate questions, and the industry should not confuse them.

Problem No. 1: Papa Murphy’s Has a Core-Business Challenge

The facts: In July 2026, MTY said it expected to close between 45 and 50 underperforming Papa Murphy’s locations as part of a broader plan to close 68 corporate-owned restaurants across its portfolio. Industry reporting also indicated that Papa Murphy’s U.S. footprint had fallen more than 20% from its 2020 level.

MTY’s third-quarter fiscal 2026 results showed same-store sales declining 1.9% across its system, with the U.S. segment down 2.7%. Those figures cover MTY’s broader business, not Papa Murphy’s alone.

The Grocerant Guru® perspective: These figures make the consumer question more urgent. Before celebrating a new concept, management must establish whether the existing pizza business is attracting customers, retaining them, and generating attractive returns.

Adding another brand might help. It could also introduce additional inventory requirements, equipment needs, staffing demands, and marketing complexity.

The essential question is whether Pinkberry improves the economics of the pizza operation—or simply adds another business to manage.

A new revenue stream is not automatically a profitable one. Management needs to demonstrate that the combined concept produces incremental sales and profits after accounting for all associated costs.

Problem No. 2: More Menu Options Do Not Automatically Create More Demand

The facts: Papa Murphy’s and Pinkberry offer different but potentially complementary propositions. Papa Murphy’s sells take-home pizza that customers bake themselves. Pinkberry specializes in frozen yogurt and toppings.

Pizza can address a family dinner, while frozen yogurt can serve a dessert or snack occasion.

The Grocerant Guru® perspective: Complementary products do not necessarily produce complementary purchasing behavior.

A customer who buys pizza for dinner may not want frozen yogurt. Someone looking for an afternoon dessert may have no reason to visit a take-and-bake pizza store.

The concept must demonstrate that the combined offer creates incremental purchases rather than simply shifting existing Pinkberry or Papa Murphy’s transactions into a shared location.

That distinction matters because incremental sales are not the same as incremental profit.

Management should measure how many customers purchase from both brands, how many are new to each brand, how often customers return, and whether average transaction values and contribution margins improve.

Without that evidence, co-branding remains a hypothesis—not a proven growth strategy.

Problem No. 3: Operational Efficiency Is Not the Same as Customer Value

The facts: MTY promotes shared real estate, labor, and operational efficiencies as benefits of the co-branding model. In Santa Fe, franchisee John Perea has cited seasonality as one reason the combination appealed to him, including the potential to support year-round employment.

These are legitimate business considerations.

The Grocerant Guru® perspective: A lower-cost operating model does not automatically deliver a better customer experience.

Consumers continue to evaluate food quality, price, convenience, service, and whether a purchase fits the occasion. If the combined operation creates confusing ordering, slower service, inconsistent product quality, or an unconvincing value proposition, the projected efficiencies may not translate into customer loyalty.

The brands must also protect their individual identities. Papa Murphy’s must remain relevant to customers seeking a convenient take-home meal, while Pinkberry must offer a compelling frozen-dessert experience.

The winning formula is not simply two signs on one building. It is two distinct customer needs served effectively through a coordinated operation.

The Consumer Test: Five Measures That Matter

Before expanding the concept, Papa Murphy’s and MTY should evaluate five measurable outcomes.

1. Incremental customers. Are new customers entering because of the combined concept, or are existing customers simply switching locations?

2. Cross-brand purchasing. What percentage of pizza transactions also include Pinkberry, and vice versa? Are customers genuinely buying across both brands?

3. Visit frequency. Does the combination give customers a reason to visit more often throughout the week?

4. Profitability. After labor, food costs, equipment, marketing, and occupancy expenses, does the combined operation generate stronger returns than the alternatives?

5. Brand preference. When customers choose between competing pizza, take-home meal, and dessert options, does the combined offer improve the likelihood that they choose these brands?

These measures would help distinguish a promising franchise development story from a genuinely successful consumer strategy.

e Grocerant Guru® Recommendations

1. Build around eating occasions, not just co-branding.

Map the customer journey from dinner planning to dessert. Test family meal bundles, pizza-and-dessert offers, and promotions that give customers a clear reason to purchase from both brands. Measure incremental sales rather than relying on bundle redemptions alone.

2. Make value visible to the consumer.

The combined concept must deliver a compelling reason to choose it over buying pizza and dessert elsewhere. Test price points, portions, family offers, and promotional combinations. Track repeat purchases and contribution margins so discounting does not create the illusion of growth.

3. Prove the model before scaling it.

Use the three locations as a disciplined learning opportunity. Establish baseline performance, measure cross-brand purchases, compare results with appropriate standalone locations, and evaluate the findings before committing to a broader rollout.

Three Grocerant Guru® Insights

Insight No. 1: Fix the Core Before Adding Another Concept.

Co-branding is not a substitute for consumer relevance. Papa Murphy’s must demonstrate that it can attract customers, earn repeat visits, and deliver a compelling Price Value Service Equilibrium. Adding Pinkberry may create another revenue opportunity, but the real measure is whether it strengthens the underlying business.

Insight No. 2: Sell More Eating Occasions, Not Just More Menu Items.

Consumers think in terms of breakfast, lunch, dinner, snacks, and dessert—not corporate brand portfolios. Papa Murphy’s and Pinkberry must prove that their combination creates incremental purchases across those occasions. Shared real estate is an operating strategy; winning more consumer occasions is a growth strategy.

Insight No. 3: Measure Consumer Behavior Before Expanding the Footprint.

Three co-branded locations offer an opportunity to test the concept, not declare victory. Measure new customer acquisition, cross-brand purchases, repeat visits, average transaction value, and incremental profitability. If the numbers demonstrate sustained consumer demand, expand. If they do not, management should resist confusing franchise development with brand growth.

The Bottom Line: Follow the Consumer, Not the Logo

Papa Murphy’s and Pinkberry may have found a workable way to share space, labor, and customer occasions. That possibility deserves a fair test.

But Papa Murphy’s store closures and MTY’s declining U.S. same-store sales make it especially important to distinguish franchise expansion from consumer-led growth. Three signed agreements are a starting point, not a verdict.

The Grocerant Guru® perspective is straightforward: A new concept is only as good as the consumer behavior it changes.

If the combination attracts new customers, increases visit frequency, strengthens brand preference, and generates sustainable incremental profit, it deserves consideration for expansion. If it merely adds operational complexity while the core business continues to struggle, it risks becoming a distraction dressed up as innovation.

Foodservice brands do not grow simply by combining logos. They grow by earning more consumer occasions, delivering meaningful value, and giving people a reason to come back.

Prove the consumer demand first. Celebrate the expansion second.

Steven Johnson, Grocerant Guru®
Founder, Foodservice Solutions®
Tacoma, Washington

The Next Generation Wants Ramen: Why Drive-Thru Convenience, Global Flavors and Customization Could Reshape Foodservice

 

The next generation of foodservice consumers is sending a message that convenience retailers, quick-service restaurants and grocery retailers should not ignore: food needs to be fast, customizable, flavorful and worth talking about. Ramen is emerging as an intriguing way to bring those expectations together, and the next logical question is whether consumers can get the experience they want through a drive-thru according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

The University of Houston is providing a compelling example of how to turn a familiar, inexpensive food into a more engaging foodservice experience. UH Dining Services recently introduced The Ramen Library inside Cougar Village Market, allowing students to choose from more than a dozen ramen varieties, select spice levels and personalize their bowls with sauces, seasonings and toppings.

Inspired by self-service ramen stations popular in Korean convenience stores, the concept transforms packaged ramen from a basic pantry staple into a customizable meal occasion. Students select their noodles, add hot water and build a bowl that reflects their individual preferences.

That is more than a new menu item. It is an example of experience-driven food marketing.

According to UH Dining Services, Asian cuisine ranked as the leading cuisine preference in its student dining focus groups. The Ramen Library grew out of that feedback, demonstrating the value of listening to consumers rather than simply adding another conventional grab-and-go sandwich or snack.

For foodservice operators, the opportunity extends beyond college campuses. Ramen offers an accessible platform for flavor discovery, portion flexibility, customization and repeat visits. It also provides a way to introduce global flavors without requiring consumers to commit to an unfamiliar, expensive entrée.

Ramen Is More Than a Food Trend. It Is a Customization Opportunity.

The attraction of ramen is not difficult to understand. It can be affordable, portable in the right packaging, easy to personalize and adaptable to different eating occasions. Consumers can choose familiar flavors or experiment with spicy, savory, tangy and umami-rich combinations.

Brands such as Shin Ramen, Buldak and Jin Ramen give consumers recognizable starting points. A selection of toppings, sauces, proteins and vegetables creates opportunities to make each bowl feel different without requiring an entirely new kitchen operation for every menu variation.

Social media adds another dimension. Visually appealing bowls, dramatic spice levels, cheese-topped noodles, egg additions and creative flavor combinations can inspire consumers to try a product and share their own versions. When the customer participates in building the meal, the food itself becomes part of the marketing.

The Grocerant Guru® has long emphasized that consumers do not necessarily organize their eating occasions around traditional industry boundaries. They want the right food, at the right price, in the right format, at the right time. Ramen can compete for occasions that might otherwise go to a burger, sandwich, convenience-store snack or takeout meal.

Follow the Food Marketing Data, Not Just the Social Media Buzz

Several established consumer and industry indicators help explain why ramen deserves attention:

·       Convenience is a structural consumer expectation. The National Restaurant Association's 2025 State of the Restaurant Industry identifies convenience, value and digital access as important elements of the modern restaurant experience. Ramen can address these expectations when preparation, packaging and service are designed around the customer's time constraints.

·       Younger consumers help accelerate food discovery. Social platforms make unfamiliar ingredients, international dishes and spicy-food challenges easier to discover. For operators, the marketing opportunity is to turn that initial curiosity into a repeatable, affordable purchase rather than rely on a short-lived viral moment.

·       Customization creates multiple paths to purchase. A common noodle base can support different spice levels, flavor profiles and toppings. This allows operators to offer variety while managing menu complexity more carefully than a collection of unrelated entrées might permit.

·       Value is about more than the lowest price. Customers evaluate portion size, taste, convenience and the overall experience alongside price. A well-executed ramen bowl can give consumers an accessible entry price while allowing optional upgrades to increase perceived value and average transaction size.

These are established foodservice and consumer-marketing principles, not proof that every young consumer wants ramen or that demand for drive-thru ramen has already been established. The opportunity is to test the proposition, measure purchase behavior and refine the offer around local consumers.

The Drive-Thru Question: Can Ramen Travel at the Speed of Convenience?

The next opportunity is to take the ramen experience beyond the campus market and into the drive-thru.

Imagine a customer approaching a quick-service restaurant and selecting a bowl from a menu built around flavor, spice and personalization. One customer chooses a mild soy-based broth, chicken and vegetables. Another selects a spicy Korean-inspired sauce, additional protein and a higher heat level. A third chooses a simpler, lower-priced bowl.

The concept could be designed around a small number of noodle bases, signature sauces and modular toppings. Digital menu boards and mobile ordering could make the selection process easier, while clearly priced add-ons would give consumers control over their spending.

However, operators need to solve the operational details. Hot broth and noodles require spill-resistant packaging, dependable temperature control, suitable utensils and a serving format that travels well. Noodles can soften during a long hold, and excessively complicated topping choices can slow production. A successful drive-thru ramen offer must be engineered for consistency and speed, not merely transferred from a self-service station.

There is also an important distinction between ramen prepared with hot water at a self-service station and a freshly prepared, broth-based restaurant bowl. Both can serve consumers, but they have different production requirements, price points and expectations.

The best starting point may be a limited menu with two or three signature bowls, a clear entry price and a handful of optional upgrades. Operators can then evaluate service times, food costs, repeat purchases, waste and customer satisfaction before expanding.

The larger point is that the drive-thru need not be restricted to burgers, fries, chicken sandwiches and breakfast biscuits. It can become another access point for global flavors and personalized meal solutions.

Three Ways Foodservice Operators Can Turn Ramen Into a Brand-Building Opportunity

1. C-stores: Become the Neighborhood Destination for Flavor Discovery

Convenience stores already compete on speed, location and immediate consumption. A dedicated ramen station can extend that proposition by turning an ordinary packaged product into an interactive food destination.

·       Offer three price tiers: classic, loaded and premium.

·       Build a flavor library featuring Korean-inspired spicy noodles, savory soy, garlic, sesame and rotating limited-time flavors.

·       Provide optional eggs, vegetables, proteins and crunchy toppings where food-safety controls and store operations permit.

·       Use loyalty offers, digital screens and social media to promote new flavors and encourage repeat visits.

Brand-building opportunity: Make the store known for discovering the next big flavor, not just buying gasoline, beverages and snacks. A customer who comes in for ramen may also purchase a beverage, dessert or another snack, creating potential incremental basket sales.

2. Fast-Food Restaurants: Put Ramen on the Drive-Thru Menu

Quick-service restaurants can use ramen to reach consumers who want something different without sacrificing convenience. The opportunity is to create a focused, repeatable menu rather than a complicated, full-service noodle operation.

·       Introduce two or three signature bowls, such as savory chicken, spicy Korean-inspired and vegetable-forward.

·       Offer a clearly priced base bowl, with transparent upgrades for protein, eggs and premium toppings.

·       Test a limited-time flavor every four to six weeks, supported by mobile ordering, drive-thru menu boards and app-based promotions.

·       Design the packaging and preparation sequence to preserve noodle texture, maintain safe temperatures and minimize service delays.

Brand-building opportunity: Establish a recognizable point of difference from competing burger and chicken chains. Flavor rotations can create reasons to return, while customers' choices and feedback can help determine which bowls deserve permanent menu placement.

3. Grocery Delis: Turn Ramen Into a Customizable Meal Solution

Grocery retailers have an opportunity to bridge the gap between packaged noodles and fresh-prepared foods. The deli can offer ready-to-eat ramen bowls, chilled meal kits or properly managed hot-service options, depending on the store's equipment and food-safety capabilities.

·       Create a good-better-best assortment, from an affordable noodle bowl to a fresh-prepared premium meal.

·       Offer mix-and-match components, including proteins, vegetables, sauces and toppings, so shoppers can build meals suited to their preferences.

·       Merchandise complementary beverages, desserts and snacks to encourage complete meal purchases.

·       Use weekly features, sampling where permitted and digital coupons to introduce new flavors and measure demand.

Brand-building opportunity: Position the deli as a destination for convenient, globally inspired meals that can compete with restaurant takeout. The combination of a familiar price entry point and fresh-prepared upgrades gives shoppers more control over how much they spend.

Price, Flavor and Braggability: The Grocerant Equation

The opportunity for all three sectors is to balance affordability with discovery. A low entry price attracts trial; customization helps consumers find their preferred flavor; and a memorable experience can give them a reason to return.

Operators should measure more than initial sales. Track trial-to-repeat conversion, average transaction value, attachment rates for beverages and sides, preparation times, food waste and customer satisfaction. Compare performance across dayparts and consumer groups rather than assuming that a concept popular on a college campus will perform identically in every neighborhood.

Ramen also lends itself to what the Grocerant Guru® calls braggability: the customer's willingness to share an appealing food experience with friends, family or social media followers. A visually distinctive bowl, a signature sauce or a carefully managed spicy-food challenge can generate conversation. But social engagement only creates lasting value when the food delivers on taste, quality, convenience and price.

The University of Houston's Ramen Library and Nisqually Markets' Ramen Go! station demonstrate that operators can adapt this concept to different convenience-oriented environments. Nisqually Markets' expansion of its station to three locations is a useful example of an operator extending the format beyond a single store. Neither example, by itself, establishes the commercial case for drive-thru ramen; that requires direct operational and consumer testing.

The strategic lesson is straightforward: global flavors do not need to remain confined to specialty restaurants. They can be translated into accessible formats that fit the everyday routines of consumers.

Three Insights from the Grocerant Guru®

1. Convenience is the platform; flavor is the differentiator. C-stores, fast-food restaurants and grocery delis should not compete on speed alone. Give consumers a convenient way to discover global flavors, personalize their meals and return for something new.

2. Make value visible at every price point. An affordable entry-level bowl, appealing upgrades and transparent pricing allow consumers to choose their own balance of price, portion and flavor. The winning offer is not necessarily the cheapest; it is the one consumers believe delivers the most value for their money.

3. Build around the evolving consumer, not yesterday's menu. The next generation is exposed to more global food ideas than ever, but exposure is not the same as purchase intent. Test ramen in the drive-thru, the convenience store and the grocery deli. Measure repeat purchases, basket growth and brand relevance. Then invest where the results demonstrate that consumers want more.

Steven Johnson, the Grocerant Guru®, is founder of Tacoma, Washington-based Foodservice Solutions®. The company's work focuses on the intersection of retail foodservice, fresh-prepared foods, convenience and evolving consumer eating behaviors.

Starbucks Buying Chipotle? The Grocerant Guru® Asks: Is This Strategy—or Desperation?

 

Starbucks does not need another restaurant brand nearly as much as it needs to keep its own customers coming back according to Steven Johnson, Grocerant Guru® and Founder of Foodservice Solutions® based in Tacoma, Washington.

Reports that Starbucks has explored acquiring Chipotle Mexican Grill raise a fundamental question for the foodservice industry: When a company is still working to restore its own brand momentum, is buying another successful restaurant concept a smart growth strategy—or an expensive distraction from fixing the business it already owns?

From the perspective of the Grocerant Guru®, the timing deserves scrutiny. Buying growth is not the same as creating growth. And acquiring someone else's customers does not automatically make your own customers more loyal.

The reported discussions are not evidence that a deal has been agreed upon, that a formal offer has been made, or that Starbucks is acting out of desperation. But they do invite a closer examination of Starbucks' operating performance, its customer relationships, and the risks of pursuing growth through acquisition rather than execution.

Starbucks' Numbers Tell a More Complicated Story

According to Reuters reporting on October 8, 2026, Starbucks had explored a potential takeover of Chipotle. Starbucks declined to comment on the reported transaction and emphasized its ongoing turnaround strategy. Analysts have questioned the strategic fit, the potential cost, and the risk of distracting management from the company's core business.

Chipotle's appeal is understandable. It has a strong fast-casual brand, a differentiated fresh-food proposition, and substantial growth potential. Starbucks has a large global store network and international operating experience. On paper, combining those capabilities might look attractive.

But attractive on paper does not necessarily mean attractive to customers or shareholders.

The operating evidence at Starbucks deserves attention.

Starbucks reported the following for fiscal 2025:

·       Global comparable-store sales declined 1%.

·       Comparable transactions declined 2% globally.

·       U.S. and North American comparable-store sales declined 2%, with comparable transactions down 4%.

·       Average ticket increased 2% in the U.S., partially offsetting the transaction decline.

·       Full-year consolidated revenue increased 3% to $37.2 billion, while operating performance came under pressure.

These figures are reported in Starbucks' fiscal 2025 annual results. They demonstrate an important distinction: revenue can increase even when existing stores are struggling to generate more customer visits. New stores, pricing, and other revenue sources can help lift total sales without necessarily fixing the underlying customer experience. (Source: Starbucks fiscal 2025 results and annual report.)

As of October 9, 2026, more recent evidence also complicates the argument that Starbucks is simply continuing to decline. Its reported third-quarter fiscal 2026 U.S. comparable-store sales increased 7.9%, with transactions up 4.2% and average ticket up 3.6%. That is a meaningful improvement, not evidence of continuing comparable-sales deterioration.

The appropriate conclusion is therefore not that Starbucks' AUVs are definitively declining. Starbucks' reported comparable-store sales and transactions are useful indicators, but they are not the same metric as average unit volume, or AUV. AUV measures average sales per restaurant over a defined period, and the precise calculation depends on the data and store population being used.

The bigger question is whether Starbucks can sustain its recovery without taking on the cost and complexity of another enormous restaurant business.

Why a Chipotle Acquisition Could Be a Distraction

Starbucks CEO Brian Niccol previously led Chipotle. That history could make a transaction easier to evaluate strategically, but it also creates a temptation to look backward at a business model he knows rather than concentrate on the distinct challenges Starbucks faces today.

Starbucks sells more than coffee. It sells convenience, customization, routine, a place to meet, and—in the right circumstances—a sense of personal connection. Its customers make decisions based on price, wait times, order accuracy, service, location, and the experience of being in the coffeehouse.

Chipotle solves a different consumer need. Its core proposition revolves around customizable meals, fresh ingredients, substantial portions, and fast-casual convenience.

Both brands participate in consumers' food and beverage decisions. Yet they do not automatically share the same purchase occasions, spending priorities, or expectations.

A Starbucks customer seeking an affordable morning coffee is not necessarily a Chipotle customer seeking lunch. A Chipotle customer looking for a convenient dinner is not necessarily interested in buying a premium coffeehouse beverage.

There are opportunities to cross-sell, but cross-selling potential should not be confused with proven incremental demand.

A large acquisition also brings substantial financial and operational responsibilities. The October 2026 reports put Chipotle's equity value at roughly $40 billion or more, with enterprise value higher when lease obligations are included. A transaction could require significant financing, and a premium over the prevailing share price could increase the total cost further.

That is a substantial commitment for a company still working to improve its customer experience, store productivity, and profitability.

AUVs, Traffic and the Consumer Equation

For restaurant operators, average unit volume is one of the most important measures of a concept's health. It helps reveal how much revenue an average location generates, rather than allowing a growing store count to obscure weak performance at existing locations.

But AUV is only one piece of the equation.

Restaurant operators should also examine:

·       Transactions: Are more customers visiting, or are sales being supported primarily by higher prices?

·       Average check: Are customers adding items, trading up, or simply paying more for the same purchase?

·       Frequency: Are customers returning several times a week, or reducing visits?

·       Contribution margin: Are additional sales generating profit after food, labor, occupancy, and other operating costs?

·       Customer retention: Are consumers choosing the brand because they prefer it, or because it is the most convenient available option?

Starbucks' fiscal 2025 results illustrate why these measures matter. Higher average tickets partially offset lower U.S. transactions. That is a warning sign worth monitoring, even though subsequent reported results suggest a recovery may be underway.

For the Grocerant Guru®, the consumer takeaway is clear: a company cannot rely indefinitely on price increases, additional locations, or acquisitions to compensate for a weakened customer proposition.

The challenge is to make every visit worth repeating.

Three Acquisition Lessons Foodservice Executives Should Remember

Restaurant history offers several examples of companies that purchased another brand but failed to achieve the expected long-term results. These cases are not identical to a potential Starbucks-Chipotle transaction, but they demonstrate the risks of overpaying, underinvesting, and losing sight of what made an acquired brand successful.

1. Quaker Oats and Snapple: Distribution Is Not the Same as Understanding the Customer

In 1994, Quaker Oats acquired Snapple for approximately $1.7 billion. Quaker already had experience with Gatorade and expected its distribution capabilities to help build the bottled-tea and juice business.

The strategy did not work as planned. Snapple relied heavily on smaller distributors and convenience-oriented channels, while Quaker's established strengths were not a perfect match for Snapple's distribution and marketing model.

Quaker sold Snapple in 1997 for approximately $300 million, a dramatic reduction from its acquisition price. The deal became a widely cited example of a company paying a high price for a brand without fully understanding the operating and marketing conditions that made it successful.

Grocerant Guru® lesson: Distribution scale cannot substitute for channel knowledge, brand authenticity, and an understanding of where and why consumers buy. (Source: Los Angeles Times, March 28, 1997.)

2. Wendy's and Baja Fresh: A Strong Brand Can Lose Its Edge Under New Ownership

Wendy's acquired Baja Fresh in 2002 for approximately $275 million. At the time, Baja Fresh was a prominent fast-casual Mexican restaurant chain with strong average unit volumes.

By 2006, Wendy's sold the business for approximately $31 million.

Restaurant Business reported in 2024 that the brand's subsequent difficulties included inadequate marketing support, competition from Chipotle, and changes to sourcing and operating practices that reportedly damaged aspects of Baja Fresh's product quality and brand culture.

The result was a striking loss in valuation and a diminished competitive position.

Grocerant Guru® lesson: A successful food brand is not simply a collection of locations, recipes, and real estate. It is a relationship with consumers built on consistent food quality, experience, and trust. When ownership changes the things customers value, the brand can lose its reason to exist. (Source: Restaurant Business, November 20, 2024.)

3. McDonald's and Donatos: Even a Giant Must Know When to Refocus

McDonald's acquired Donatos Pizza in 1999 as part of a broader effort to learn about and participate in other restaurant categories.

By December 2003, McDonald's announced that Donatos would be sold back to its founder as the company narrowed its focus on revitalizing its core business. McDonald's also reduced its broader non-McDonald's brand activities.

This was not proof that Donatos was an inherently bad restaurant concept. Rather, it showed that a business can be worthwhile on its own and still be a poor fit for the acquiring company's immediate strategic priorities.

McDonald's explicitly connected its portfolio decisions with its objective of doing fewer things better to improve sales and operating income.

Grocerant Guru® lesson: Management attention is a finite resource. A company can own several good brands and still underperform if the portfolio distracts leadership from the core business that needs improvement. (Source: McDonald's corporate announcement, December 15, 2003.)

The Grocerant Perspective: Customers Do Not Think in Corporate Portfolios

Consumers do not organize their lives around corporate ownership charts.

They decide what to eat and drink based on the moment, the occasion, the price, the time available, and the experience they expect.

A morning coffee, a midday burrito bowl, an afternoon snack, and a ready-to-eat dinner component may come from different businesses. In the consumer's mind, these are not necessarily competing corporate brands. They are competing solutions to an immediate need.

That is the essence of the Grocerant Niche: consumers increasingly mix and match freshly prepared food, beverages, snacks, and meal components across restaurants, grocery retailers, convenience stores, and other channels.

Starbucks and Chipotle may have opportunities to complement one another. But a combined corporate structure would not automatically make their food and beverage offerings more relevant, their service faster, or their prices more attractive.

Those improvements must be earned at the point of purchase.

Starbucks' best opportunity may be to continue rebuilding the coffeehouse experience, improve order accuracy and speed, strengthen value perceptions, and create reasons for existing customers to visit more often. Chipotle's opportunity is to continue delivering the fresh, customizable meals its customers expect while pursuing its own growth strategy.

Both companies have work to do. Neither should assume that acquiring the other is the fastest way to do it.

Three Insights from the Grocerant Guru®

1. Stay focused on your evolving consumer—not someone else's customer.

An acquisition may deliver new customers on paper, but retention and repeat visits depend on relevance, experience, quality, convenience, and value. Know what your own customers need today, not just what another brand's customers appear to buy.

2. Grow customer frequency before you buy another growth story.

Monitor transactions, AUV, average ticket, food quality, labor productivity, and repeat purchase behavior. If existing customers are visiting less often, understand why and fix the underlying problem. Sustainable organic growth is often more valuable than an expensive acquisition that adds complexity.

3. Build a brand customers choose across occasions, channels, and budgets.

Consumers are mixing and matching beverages, snacks, fresh-prepared meals, and meal components across an increasingly broad range of retailers and foodservice providers. The winning brands will be those that consistently meet consumers where they are, deliver the right product at the right price, and make the next purchase easy.

The bottom line: The reported Starbucks interest in Chipotle may reflect strategic ambition rather than desperation. But if Starbucks wants a stronger future, the first priority should be to ensure that its own customers have compelling reasons to come back. Buying another brand can expand a portfolio. It cannot, by itself, repair a customer relationship.

Steven Johnson, Grocerant Guru®, founder of Foodservice Solutions®, Tacoma, Washington.