Nesting Dolls: JAB Holdings Buys Panera

Kate Brattin
May 9, 2017

At the beginning of April, the world’s largest coffee conglomerate, JAB Holdings, bought Panera Bread and its 2,000 cafés across the U.S. You may not know JAB by name, but the Luxembourg-based holding company has been the biggest player in the industry since 2015. It already owns majority stakes in Caribou Coffee Company, Keurig Green Mountain, and Peet’s Coffee and Tea. Peet’s, in turn, owns the smaller high-end coffee chains Intelligentsia and Stumptown.

This nesting dolls effect – a brand being swallowed up by bigger and bigger companies, distorting what was once familiar – isn’t just a trend in coffee. It’s happening all over in the food industry as established natural foods companies with devoted customers are purchased by large corporations. And yet increasingly people care about where their food comes from and who grew it. The demand for Fair Trade and organic has never been higher – that’s what makes these companies so attractive to conglomerates like JAB Holdings. But when the big guys take over, standards change.

What bothers me most about consolidation is this lack of transparency for customers. Keurig Green Mountain was never one hundred percent Fair Trade like Equal Exchange is. Yet the company took steps in that direction by sourcing some of its coffee from small-scale farmers – including the members of PRODECOOP in Nicaragua. Equal Exchange also partners with PRODECOOP. In years past, the co-op sold 20-30 percent of its harvest to Green Mountain. But, the farmers tell us, when JAB Holdings acquired the company, this ended. How would the average coffee lover know? Green Mountain Coffee still has its own website that touts its commitment to Fair Trade and sustainability. If you don’t read the business pages, you might not guess that anything is different, but underlying principles are being eroded.

People who are willing to pay a bit more for a cup of coffee usually do so for a reason. That’s definitely true of our customers. Like us, you care about the health of the land and the well-being of the workers. You prize high quality and flavor in every brew. The dilemma – one I share, whether I’m in the grocery aisle or buying a cup of coffee on the go – is that it’s hard to research every purchase. Too often, I rely on shortcuts, assuming that because something is sold in a natural foods store, because it has a certain seal, because it’s a brand I think I know, it must meet my standards. Sadly, that’s not always the case. JAB Holdings’ acquisition of Panera is one move, symbolic of a larger trend.

Equal Exchange is still independent. Thanks to our farmer partners, our worker-owners and our loyal customers, we’re thriving. Still, when competitors in the gourmet coffee world get bought up, that’s cause for concern. How do we keep control of our food system? At Equal Exchange, we believe in pooling knowledge and energy. That’s the purpose the Equal Exchange Action Forum is meant to serve. It’s a space to teach each other and to build together the food system as we believe it should be. If we pay attention, we can take apart the nesting dolls. We can see what’s really inside – and change it.