Tuesday, February 9, 2016

Saxby's, Swiss Farms revise growth plans

New stores around Philly and points south

Saxby's, Swiss Farms revise growth plans


A year after veteran Radnor buyout artist Robert E. Brown Jr.'s MVP Capital Partners combined the back office financial operations of the ambitious but cash-strapped Saxbys Coffee chain with Delco's homegrown Swiss Farms drive-up grocery stores, Saxbys founder and boss Nick Bayer says the Broomall-based group is taking a down-to-earth approach to growth.

Saxbys now counts 27 stores in the Philadelphia, Dallas, Cincinnati, Dayton and Dallas markets. Gone are most of the former Bucks County Coffee Co. stores, gone are plans to expand around Atlanta (where Saxbys was founded in 2005), Las Vegas, and other far-flung markets. Gone, too, are plans to immediately franchise Swiss Farms. Slowed down are plans to add six sandwiches and three salads at all Saxbys shops, though they'll continue to offer them at Haverford, Rittenhouse Square, UPenn and Haddonfield.

The group seems to intend using Swiss Farms' steady sales to fund Saxbys' future targeted expansion around Philly and toward Washington, DC and the Carolinas. The chain continues to buy coffee from former owner Joe Grasso's Coffee Shops International roaster in Conshohocken, ground to Saxbys founder Nick Bayer's proprietary specs. Bayer plans to add six or seven Center City, South Jersey and Main Line outlets this year, plus a couple in D.C., a couple in Ohio, and two in Raleigh under franchiser Frank Cariello, the former Fox TV weatherman, who had earlier considered franchising Swiss Farms. Bayer is also scouting sites at Pennsylvania colleges.

"We've pulled back a little," says Bayer, of Saxbys, which once had outlets in nine states. With fewer stores, experiments with a longer menu have been "generally successful for us, but you know the food business is significantly different than beverages. Look at Panera and Starbuck's. Starbucks is great at beverages but has a hard time getting traction in food." Panera's is the reverse, he adds. "And customers see you as either or. So, while we have a great made to order menu, we'll hold off on expanding the cafe menu moving forward."

Bayer wants Saxbys to "follow the Wawa path" to local ubiquity and popularity -- though stores will continue to be split between walkup locations like Rittenhouse and drive-ups like Haverford. And unlike move-em-through Wawa, "we're a hangout," where nibblers and sippers are welcome to stay and enjoy, Bayer adds. Brown's patient support makes all the difference: "We have equity with us now. And we've learned from past successes, and failures. Mostly the successes."

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About this blog

PhillyDeals posts interviews, drafts and updates that Joseph N. DiStefano writes alongside his Sunday and Monday columns and ongoing articles about Philadelphia-area business.

DiStefano studied economics, history and a little engineering at Penn. He taught writing and research at St. Joe’s. He has written for the Inquirer since 1989, except when he left a few times to work at Bloomberg and elsewhere. He wrote the book Comcasted, and raised six kids with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com, 215.854.5194, @PhillyJoeD. Read his blog posts at http://www.philly.com/PhillyDeals and his Inquirer columns at http://www.philly.com/philly/columnists/joseph-distefano/. Bloomberg posts his items at NH BLG_PHILLYDEAL.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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