In the last decade, investment firms like Blackstone and Bain Capital have acquired stakes in many of America’s favourite foods. They vacuumed up big chunks of the fast-food business, taking control of chains like Dunkin’, Popeyes and Burger King and funding growth for regional brands like Jersey Mike’s and Prince Street Pizza.
High-quality bagels, with their finicky baking process, have always been notoriously unprofitable and unscalable. But recent developments in bakery and coffee technology, along with changes in social media, consumer tracking, capital funding and delivery platforms, have changed that.
And now, big money is coming for our bagels.
“Money has been chasing bagels for years,” said Mr Ben Coley, editor of QSR, a magazine that covers the US$350 billion (S$445 billion) quick-service food industry.
With trend-obsessed young consumers posting on social media about Courage Bagels in Los Angeles; Boichik Bagels in Berkeley, California; and Apollo and PopUp Bagels in New York, the demand for hand-rolled, kettle-boiled bagels has suddenly exploded.
And new chains are growing rapidly to meet it, especially in the South and the Sun Belt, where cities are expanding faster than food businesses can open, and the shortage of handmade bagels is chronic. Not all the offerings are strictly traditional, but the tangy interiors, chewy-crisp crusts and plentiful toppings are a major improvement on the puffy, pale bagels that have long ruled American strip malls.
The first sign of private equity’s interest in bagels came in 2023, when food-focused fund Stripes invested US$8 million in PopUp Bagels, just three months after its founder Adam Goldberg opened the first brick-and-mortar shop in New York City.
In 2025, Stripes became majority owner of the company with an additional US$27 million investment. PopUp Bagels just opened its 29th shop, in Washington, generating a line so long that the local NBC News affiliate showed up.
Making bagels the traditional way demands investment in time and space. After the dough is mixed and proofed overnight, it must be rolled and shaped by hand, risen again, then boiled and finally baked. So what would persuade investment managers to get their hands into something as sticky as the bagel business?
Americans are also drinking ever more coffee, making breakfast one of the fastest-growing segments in quick service, which includes not only traditional fast food but also convenience stores and petrol stations, smoothie shops and salad chains. Fewer and fewer people sit down for breakfast, bolstering growth in portable foods like doughnuts, cinnamon rolls and bagels.
Longstanding bagel chains like Einstein Bros, Bruegger’s and Noah’s, all owned by Panera Brands, are still operating, but growth has long been stagnant. Panera is focused on its signature Asiago cheese bagel, which has ruled the category since it was introduced in the 1990s.
Those mass brands have never seriously claimed to match the quality of a freshly baked slow-risen, hand-rolled bagel. Many of the new start-ups promise to do just that. Whether they can maintain quality while scaling up at breathtaking rates is an open question.
“No one could figure out how to not have all that labour and equipment and square footage,” said Mr Jay Rushin, who bought New York City legacy brand H&H Bagels in 2014. He solved the problem with a 20,000 sq ft production facility in the Queens borough of New York City, where all the chain’s bagels are made, quick-frozen and shipped to 18 locations, from Santa Monica, California, to Moynihan Train Hall in Manhattan.
Before the acquisition, Mr Rushin had no particular interest in bagels; he was a Wall Street veteran looking to buy a business with a lot of “white space”, or room to grow. H&H already had a large wholesale operation and had long been shipping frozen bagels to Asia, where blueberry was the most popular flavour.
Stateside, however, the most popular and profitable item in every store is the same: the bacon, egg and cheese sandwich.
“You can’t stay afloat selling plain buttered bagels for US$2, US$3,” said Mr Andres Samper, the founder of Manhattan Bagel Equity Fund, a bagel-specific investment fund that is “focused on acquiring, rebranding and scaling high-performing bagel shops across the United States”.
“You need to sell sandwiches that are US$15 or US$16, or it’s impossible to keep the lights on,” he said.
But at today’s “bagel cafes”, there are no limits. Bagels are made at all hours and in all flavours, topped with Buffalo or birthday cake flavoured cream cheese, sandwiched with trendy condiments like Mike’s Hot Honey or stuffed with red sauce and mozzarella at a new contender, Moonrise Bagels.
Fans of craft foods like hand-rolled bagels are often suspicious that private investment will flatten the quality, or extract the profit and drive the business into the ground.
Last month, Ms Rayna Richardson, a bagel-loving nurse in Atlanta, attended the opening of the city’s first PopUp after her shift. “When you see that ripping and dipping on social media, of course you want to try it,” she said. At 7am, she said, the line was already half a mile long.
She noted that PopUp had opened just 45m away from Emerald City Bagels, a popular producer in the area. “That doesn’t seem fair,” she said, especially because PopUp is better funded, but she did not think it would affect local business in the long term. “Once you’ve tried it, that’s it,” she said. “I’m not going to change over.” NYTIMES
Source : https://www.straitstimes.com/business/invest/investors-are-betting-big-on-bagels
