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In 2016, then-CEO of Panera Bread, Ron Shaich (HBS MBA ’78), bought a majority stake in Tatte Bakery & Cafe.

Then priced at 7.5 billion, Panera is a multinational conglomerate company. Shaich justified the purchase as an endeavor to “upset the applecart of our apathetic dining habits by providing high-quality, soul-satisfying alternatives to fast food, in settings that feel more like Parisian patisseries than elementary school cafeterias,” according Boston Magazine's interview with the former CEO. The acquisition naturally brought up questions about Shaich’s vision for Tatte and similar restaurants in his portfolio.

Did Shaich aim to grow Tatte into a multinational corporation like Panera with millions of brick and mortar stores, potentially compromising its artisanal, local touch? Or did he instead intend to support local growth so that Tatte can better serve its communities without the forced tradeoffs that accompany rapid growth on a national scale?

After Shaich sold Panera to German conglomerate JAB for 7.5 billion in 2017, he turned his focus towards building his wellness-focused investment firm. According to Shaich, buying and purchasing Panera Bread was “Act II” of his investing plan. Starting in 2017, Shaich turned his focus to supporting wellness-inspired restaurants with his $300 million investment fund, Act III Holdings. Through Act III, Shaich bought Panera’s interest in Tatte Bakery & Cafe, as well as Cava Group, Zoë’s Kitchen, and experimental vegetarian seasonal food chain, Clover Food Labs.

With his new investments, Shaich seems deeply concerned with prioritizing customers and their restaurant experience. His past executive experience indicates his desire to scale these new ventures. It should feel “like a spa for your insides,” said Shaich in the same interview with Boston Magazine.

In other words, Shaich is interested in the cultivation of restaurant ethos — high-scale dining experiences that simultaneously provide a wholesome, artisanal experience of individualized, healthy living while at the same time scaling to regional, national, and multinational levels.

Tatte was founded in 2007 by Tzurit Or, an Israeli former producer who left a 12-year film career to start life in the US. Her main focus, according to the Tatte website, is to “grow the brand while protecting the smallest of details, maintain the highest standards, and hold fast to our shared mission: To Inspire, Care for, and Nurture life. Every Day.” Since 2007, Tatte has grown to span 12 locations in Boston and 10 locations in Washington, D.C.

Or’s resistance to trends and emphasis on restaurant culture seems to be a pivotal part of Tatte’s mission and Shaich’s own vision. In this sense, Tatte’s growth aligns with Shaich’s vision for growing his ventures: “You figure out what’s going to be sustaining and why. None of that is fad-oriented or focused on what happens to be hot this week,” he told Boston Magazine.

In this way, Shaich’s support of Tatte as part of his investment thesis stands at direct odds with activist investing — a phenomenon in publicly traded companies. An activist investor is typically a specialized hedge fund that, according to Investopedia, “buys a significant minority stake in a publicly traded company in order to change how it is run.” This investor’s goals “may be as modest as advising the company management or as ambitious as forcing the sale of the company, divestitures or restructuring, or replacing the board of directors.”

Shaich publicly opposes activist investing, instead staying laser focused on the long run. Indeed, according to The Street, his slide deck title for The Deal's annual corporate governance conference in 2018 responds directly to the modern climate of activist investors: “Building Companies of Value in a Short Term World.” Today, four years after the founding of Act III, navigating a lawsuit, and a pandemic, Shaich seems to be sticking to his investment thesis: Tatte continues to hire experienced, passionate individuals who stay true to Tatte’s artisanal vision in its growth, including Lyh-Rhen Lam, the Vice President of Concept, Creative, Brand Services, whose interest in food and design led him to work with several local businesses before joining Tatte. On the other end of the scale, many of Tatte’s executives have experience at multinational food and beverage corporations and global management consulting firms, and they bring their scale and expertise to building Tatte’s sustainable, authentic brand.

A prevalent trend, activist investing and corporate restructuring for the sake of growing fast and for profit dangerously renders investors like Shaich few and far in between. However, in his purchase of Tatte as well as Clover, Life Alive, and beyond, Shaich seems to be staying true to the mission of scaling with integrity. The firms still harbor nutritional and creative control of their menus, with input from Shaich himself, who describes his body as a “temple.” In his daily life, he tries to “eat well” and is very conscious of his diet.

As an example of this value-aligned investing, Shaich’s own vegan chef for seven years is now the current director of Life Alive. Shaich’s strategy serves as a model for scaling with integrity, preserving the values that business owners like Tzurit Or built and launched Tatte with in the first place.

Today, stepping into Tatte in Harvard Square feels different from entering a fast-food chain, even in bakery form. Amidst the atmosphere of modern, upscale wood-infused architecture, students and tourists alike converse candidly in line. Tatte, with its glass cases of freshly baked pastries and desserts, and its delicious house lattes carefully “poured with heart,” seems cozy and artisanal — a familiar family chain relative to the Starbucks down the street, whose sterile seating layout and impersonal printed menus contrast the warm, handwritten-chalk menu, worn-leather couch, and conversational aesthetic of Tatte’s interior.

So the next time you hear “Panera owns Tatte” or negative generalizing statements about acquisitions of smaller, local firms by larger ones, consider possibilities outside of activist investing. Tatte is an important case study in understanding investing relations as non-intrusive, intentional, and value-forward projects — processes where big is not necessarily better, and local firms are able to maintain and preserve their brand identities and individuality after the acquisition, and in this case, serving the Boston community to the best of their ability.