Panera Bread Wants to Be Everywhere. Panera’s move into dinner could attract new business. Recently, Panera Bread has announced several new initiatives geared towards expanding its reach-efforts that will continue to unfold as Panera works to get involved with more locations and serve more customers at more occasions.
“This brand posseses an incredibly high emotional exposure to our target customers,” says Dan Wegiel, the company’s EVP and chief growth and strategy officer. “That’s something which is a massive asset for people and we would like to keep these.”
With a wide appeal among consumers and deep relevance among loyal fans, Panera executives see a lot of runway for future expansion and an abundance of possibilities to further ingrain the brand into customers’ lives.
Much of the brand’s recent evolution has occurred since JAB Holding Company acquired Panera in 2017 for $7.5 billion. Ever since then, rapid-casual giant has created big news: In April, it rolled out a whole new slate of breakfast menu items aimed at winning share from competitors who frequently offer frozen, microwaved food items during the breakfast daypart. That effort included a revamped coffee program that mirrors the product quality and technology offered at big coffee houses. In June, the company launched an evaluation of any dinner menu that also includes artisan flatbreads, bowls and hearty side things like sweet potato mash. And simply in late August, where is the nearest Panera Bread turned more heads since it finally embraced third-party delivery partners after years of sticking with its in-house delivery program.
So, exactly what do the collective moves tell us about where Panera goes?
“The strategic thread that holds all of the things together is this: this brand includes a very unique opportunity inside our minds in the food and restaurant space to possess broad relevance to your fairly broad list of target customers,” Wegiel says. “It’s one of many few brands that operates across all dayparts, all week parts and multiple channels of access.”
While those changes came after JAB’s acquisition, he says, the European conglomerate empowered those efforts, not mandated them.
“JAB includes a very explicit and clear philosophy they believe individual companies and brands really should shape their destiny and destination,” he says. “Unlike some other investment firms they don’t come in using a playbook and say here’s the best way to create value or say here’s the portfolio and here’s where we can create synergies …That’s very much the antithesis of methods they operate.”
Panera and third-party delivery? It fits rapid casual’s goal to meet customers everywhere.
Still, Panera has experienced had the opportunity to lean on the expertise of sister brands beneath the JAB umbrella-and vice versa. The company owns several coffee concepts, including Peet’s Coffee and Caribou Coffee. That was useful when researching ways to revamps Panera’s coffee offerings, Wegiel says. However, JAB urged Panera to boost its self-branded coffees, not adopt the banner of another JAB brand.
Advancing, Panera would like to create more access points into the brand. To that end, the organization will expand traditional and nontraditional stores. Wegiel wouldn’t share specific store growth projections but says there is certainly “ample room” to add both international and domestic units. Likewise, Panera should go deeper on its lines of consumer packaged goods. Customers can currently find salad dressings, soups, breads, and coffee in food store aisles. Nevertheless the brand thinks it could expand both the number of products and the number of distribution points.
“CPG in our minds can be quite a significant lever of the latest growth,” he says. “I think we’re just scratching the surface.”
Panera has long been a holdout with regards to the next-party delivery services which have transformed much of the restaurant space. The company has offered in-house delivery for years. However in late August, the chain announced new partnerships with DoorDash, Grubhub and Uber Eats that expanded delivery choices across 1,600 of its 2,300 or so stores. The manufacturer believes adopting those services may help recruit new business.
“We’ve experienced delivery for the better part of five years,” Weigel says. “We realized and heard from the aggregators there was an entire segment of customers that wanted Panera, however their primary source or delivery was the aggregators and that we weren’t there.”
Whether in delivery, a reimagined breakfast menu or CPG options, Panera is working to reach customers across multiple dayparts and occasions.
“We know there’s tremendous demand for the manufacturer, many of which is extremely pent up,” Weigel says. “There are areas consumers want us where we’re not.”
“While they could possibly have some incremental business at dinner time, it’s never going to be overpowering. Once these brand identities are established and known, it just takes forever to maneuver the needle.” – John Gordon, principal and founder of Pacific Management Consulting Group.
While Panera accelerates change, don’t expect any wholesale transformation. The business wants to stay with its core brand identity that targets clean ingredients and wellness, while also keeping its more indulgent bakery and menu items.
“Wellness is not only about maintaining a healthy diet. It plays a part … Somebody that is wanting to enjoy well is normally seeking to balance things,” Wegiel says. “We offer optionality because wellness is about completeness inside the balance of fulfillment.”
A number of Panera’s moves-like the reimagined breakfast and coffee program-look more routine than transformational to John Gordon, principal and founder of Pacific Management Consulting Group.
“Every good operator ought to be doing that,” he says.
He views Panera’s flirtation with dinner, though, being a bolder move. He recalled the brand’s 2006 introduction from the Crispani, a handmade pizza product available only within the evenings. That offering was intended to push the manufacturer further in to the dinner daypart but low sales caused Panera to drag the pizzas in 2008.
“It’s just tough because Panera was known yet still is actually a soup, salad, sandwich and breakfast place,” Gordon says. “Dinner is a substantial daypart to them, but not the top of mind daypart.”
To ramp up evening sales, he believes Panera must launch a flagship dinner product. But he thinks the brand’s bakery-cafe identity will stay intact.
“While they could possibly have some incremental business at dinner time, it’s never going to be overpowering,” he says. “Once these brand identities are established and known, it merely takes forever to move the needle.”
Like all privately owned concepts, Panera’s financial performance is difficult to find out since its purchase by JAB. But Gordon says the company still looks strong. It’s a successful operator with a widespread appeal. And Panera enjoys white ypbonx to develop its footprint domestically and internationally.
“They have solidified their position in america in the last ten years without a doubt,” he says. “I have lots of respect for Panera as an operator. In several restaurant brand surveys, Panera appears very high and contains a very strong company operation and franchisee operation.”