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Quality bagels have always been a tough business — too labor-intensive and too hard to scale. But private equity firms like Stripes and Invus are pouring millions into bagel chains anyway, convinced that new baking technology and social media hype have finally cracked the code. Stripes invested $35 million in PopUp Bagels, which exploded from one Manhattan shop in 2023 to 29 locations nationwide.
Bagels have been around forever, so why now? Americans are drinking more coffee and eating breakfast on the go, making portable foods one of the fastest-growing segments in the $350 billion quick-service industry. Also, new ovens can bake bagels to order throughout the day, eliminating the need for massive production facilities. And the real money isn’t in bagels with schmear— it’s in $15 bacon, egg and cheese sandwiches.
Not everyone’s convinced the quality will survive scaling up. But with chains opening in Tampa, Charlotte and Atlanta, private equity is betting the bagel boom is an ace in the hole.