Cinnabon: The Omnichannel Approach to Indulgence - [Business Breakdowns, EP. 05]

Apr 21, 2021

Explore Cinnabon's journey from a Seattle startup in 1985 to a global indulgence powerhouse. Dive into their unique omnichannel ecosystem that balances franchisee relationships and strategic partnerships, like their collaboration with Burger King. Discover the importance of brand relevance and differentiation in maintaining Cinnabon's market position. Learn about the challenges faced during economic downturns and how they've adapted their strategies to revive their brand. Valuable insights into franchising and brand evolution make this discussion truly delicious!

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ANECDOTE

Humble Beginnings

Cinnabon's founders, Rich and Greg Komen, initially tried licensing another cinnamon roll chain but were rejected.
This led them to create their own brand, focusing on a unique, high-quality product and strategic mall locations.

INSIGHT

Early Operational Decisions

Cinnabon's early operational decisions, like using Makara cinnamon and a specific baking process, were key to its differentiation.
The aroma, a result of front-placed ovens, became a significant driver of impulse purchases.

INSIGHT

Relevance and Differentiation

Brands need both relevance and differentiation to thrive.
Cinnabon maintained high differentiation but suffered from low relevance during the recession due to its location and dated image.

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Today we will be diving into Cinnabon. Founded in Seattle in 1985, Cinnabon is the market leader among cinnamon roll bakeries and is owned by parent Company Focus Brands. Cinnabon currently operates in almost 50 countries with over 1,500 franchised locations, primarily in high-traffic venues such as shopping malls and airports.

In this breakdown, we start with Cinnabon's scale and an overview of the franchise's fascinating history. We then dive into what really makes Cinnabon special - its omnichannel ecosystem and how it balances franchisees, licensing deals, and distribution through other retails while maintaining its differentiated and relevant brand.

To help me break down Cinnabon, I'm joined by Kat Cole, the former COO and President of North America for Focus Brands. Before that role, she was the president of Cinnabon. Kat's operating and investing experience in this space and her deep understanding of the brand make her the perfect guest to break down Cinnabon. Please enjoy this Business Breakdown.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Show Notes

[00:03:04] - [First question] - The operational scale and complexity of Cinnabon

[00:05:48] - Origins and humble beginnings of Cinnabon

[00:10:07] - Diversified stakeholders involved in franchised businesses

[00:14:44] - A focus on brand relevance and differentiation

[00:19:38] - Building brick and mortar traffic during a recession and partnering with Pillsbury

[00:23:21] - Cinnabon’s ability to thrive and support an omnichannel brand ecosystem

[00:26:57] - Partnering with Burger King and fast-food market exposure

[00:32:55] - Building successfully collaborative equity buckets

[00:36:52] - Focus Brands and advantages of being part of a bigger ecosystem

[00:41:52] - Balancing licensing opportunities while maintaining core channel partners

[00:45:37] - Lessons for operators and investors we can take away from Cinnabon