Founders Nick and Elyse Oleksak of Bantam Bagels turned their ‘fifteen minutes of fame’ on Shark Tank in 2015 into a multi-billion dollar opportunity. While the couple described their appearance on the popular TV programme as “the scariest moment in Bantam history” – especially as its online sales platform crashed from a traffic surge after the episode aired – it led to a $34m sale to T. Marzetti Co., a subsidiary of Lancaster, in 2018.
At the time, Lancaster’s president and CEO David Ciesinski described the New York City-based Bantam – which was posting around $20m in annual sales – as “a fast-emerging company that provides us with an entry into the large and growing frozen breakfast category.”
Founded in 2013 as a retail shop, Bantam Bagels Bantam Bagels is best known for its frozen bite-sized stuffed bagels and mini stuffed pancakes, garnering praise from celebs like Oprah and actor Steve Harvey.
The company had also cemented a relationship with Starbucks (listed in more than 9,000 stores across the US), another positive that Ciesinski believed positioned it for future expansion.
Result of COVID
Four years later, however, in a statement accompanying its fiscal year third-quarter financial results, Lancaster said Bantam has underperformed and has no foreseeable path to profitability.
The Ohio-based food producer partly attributed a hammered third quarter bottom line to a noncash restructuring and impairment charge of $22.7m for the Bantam Bagels business.
For the third quarter ended 31 March, Lancaster sustained a loss of -$4.48m, compared to +$28.9m (equal to $1.05 per share) in the same period a year ago. For the nine months ended 31 December, Lancaster’s net income was $60.54m ($2.20 per share), down 45% from $110.61m ($4.02 per share).