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Qdoba Buyer Secures Additional $1B to Forge Farm-to-Table Supply Chain

As many major restaurant brands focus on optimizing their back-of-house operations or providing customers with the most frictionless ordering experience, one is taking a wider view.

Food-centric private equity company Butterfly, which has a hand in everything from agriculture to restaurants, announced Monday (Aug. 15) the raise of an additional $1 billion in funding, bringing the assets under its management to nearly $4 billion. The news comes days after the firm announced last Tuesday (Aug. 9) that it has bought San Diego, California-based fast-casual brand Qdoba, which has nearly 750 locations in the U.S. and Canada.

The fast-casual brand is joining the company’s existing restaurant group, Modern Restaurant Concepts, which prior to the close of this acquisition had fewer than 50 locations across its two brands, Modern Market Eatery and Lemonade.

This fundraise suggests that investors are turning their focus to restaurant companies that not only focus on optimizing front- and back-of-house operations but that also seek to own the entire supply chain. In addition to the restaurant brands, Butterfly also has companies that focus on agriculture and aquafarming, packaged foods, distribution and more.

“When we launched Butterfly, we knew the opportunity for a specialized focus in the food sector across the seed to fork spectrum was significant, but it has far surpassed what we expected in many ways, and this is just the beginning,” Adam Waglay, co-founder and co-CEO of Butterfly, said in a statement. “Through these uncertain times, the food sector has emerged as one of the most important sectors for investing and we are humbled to be at the edge of this new frontier as a partner of choice working with such incredible food industry leaders, innovators and disruptors to drive transformational change and growth where it matters the most.”

The announcement comes amid ongoing supply chain difficulties in the industry, with many restaurants having to deal with delays and shortages and to reexamine their relationships with suppliers.

“When COVID hit, the spacing requirements required these manufacturing plants to have an immediate drop in capacity from which they still really haven’t recovered,” Jim Murabito, executive vice president of supply chain at Madison Heights, Michigan-based restaurant chain Hungry Howie’s Pizza, which has more than 550 locations across 22 states, explained to PYMNTS in an April interview. “Two years sounds like a long time, but when you’re talking about capital to build a processing plant, they can’t get it done that fast. So, we’ve been dealing with this situation where in years past, suppliers were competing for our business. Now we’re competing for their business.”

Related: Restaurant Supply Chain Power Balance Shifts From Buyers to Suppliers

Research from PYMNTS’ study earlier this year, “Main Street Economic Health Survey: Navigating Economic Uncertainty,” created in collaboration with Melio, which drew from a survey of more than 500 business owners on Main Street U.S.A., found that that 22% of those businesses saw the inability to purchase from suppliers as a relevant challenge.

Read more: New Survey Shows Main Street Businesses Fighting Economic Uncertainty With 3 Key Investments

Certainly, the prospect of handling the process from food production until it arrives on the plate or in the hands of consumers is an attractive one in contrast to many restaurant operators’ struggles.



About: The findings in PYMNTS’ new study, “The Super App Shift: How Consumers Want To Save, Shop And Spend In The Connected Economy,” a collaboration with PayPal, analyzed the responses from 9,904 consumers in Australia, Germany, the U.K. and the U.S. and showed strong demand for a single multifunctional super apps rather than using dozens of individuals ones.


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