The Power of Two

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Acquisitions and mergers continue to make headlines in the foodservice industry. Among the latest crop is Druxy Inc.’s acquisition of Williams Fresh Cafe earlier this year, which combined the power of the two Ontario-based, regional chains.

In the decades since launching its Druxy’s Famous Deli brand, the Druxerman family has established a strong presence in the Greater Toronto Area (GTA) — boasting a total of 44 units in Ontario, which reported $16 million in sales for 2015.

Acquisitions are new territory for the family-run company, but the opportunity to expand the brand to new markets sparked the team’s initial interest. “Druxy’s has been based in the GTA for 40 years, where there’s lots of competition for good locations,” says Peter Druxerman, VP of Marketing for Druxy’s. “We felt the possibility of growth through acquisition was a better route than continually trying to find new locations”

The company’s original intention was to convert the 26 exiting Williams units to Druxy’s locations, effectively bringing the brand’s unit count to 70 while simultaneously establishing the deli chain’s presence outside of the GTA. However, the game plan quickly changed as Druxerman and his brothers familiarized themselves with the Williams brand.

“We didn’t know much about Williams. We started looking at the business and discovered what was, in our eyes, a very successful chain,” explains Druxerman. “We quickly decided we weren’t changing this brand.”

Not only did they discover the coffee chain had a strong and loyal customer base (posting sales of $23 million for 2015), but the Druxy’s team also found Williams boasted many of the same qualities the company was interested in exploring with its own brand, while sharing the deli chain’s philosophy of serving high-quality products.

Druxy’s will continue to operate the two chains as separate brands, but is actively exploring opportunities to capitalize on the strengths each has to offer. The company has already started testing Williams coffee in select Druxy’s locations and Druxerman says there are plans to begin testing Druxy’s sandwiches at Williams locations later this year, noting that corned and roast-beef items will be among the first. “In Williams, franchisees and customers are looking for beef,” he explains.

While the company continues to examine crossover opportunities, Druxerman expects both restaurants to benefit from a more visible brand name and greater purchasing power. “My first task is combining the supply [chain] for the two,” he says. “We are trying to improve the financial situation of our franchisees by lowering their purchase price for various products by having a larger base [from which] to purchase.”

Looking ahead, Druxerman says the Druxy’s team will continue to expand its understanding of the Williams brand and what the two brands have to offer one another. The company also plans to grow each brand by five to six units in Ontario over the next 12 months.

Volume 49, Number 4

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