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 which will continue to unfold as Panera works to gain access to more locations and serve more customers at more occasions.
“This brand has 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 all of us and we wish to keep them.”
Having a wide appeal among consumers and deep relevance among loyal fans, Panera executives see plenty of runway for future expansion and an abundance of opportunities to further ingrain the brand into customers’ lives.
Most of the brand’s recent evolution has occurred since JAB Holding Company acquired Panera in 2017 for $7.5 billion. Ever since then, the fast-casual giant has made big news: In April, it rolled out a brand 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 standard and technology offered at big coffee houses. In June, the brand launched a test of a dinner menu which includes artisan flatbreads, bowls and hearty side items like sweet potato mash. And merely in late August, where is the nearest Panera Bread turned more heads since it finally embraced third-party delivery partners after years of staying with its in-house delivery program.
So, exactly what do the collective moves inform us about where Panera is going?
“The strategic thread that holds those 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 that they believe individual companies and brands should really shape their destiny and destination,” he says. “Unlike a few other investment firms they don’t are available in with a playbook and say here’s ways to create value or say here’s the portfolio and here’s where we can create synergies …That’s greatly the antithesis of methods they operate.”
Panera and third-party delivery? It fits the fast casual’s goal to fulfill customers everywhere.
Still, Panera has experienced had the opportunity to lean on the expertise of sister brands beneath the JAB umbrella-and the other way round. 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. Nevertheless, JAB urged Panera to bolster its self-branded coffees, not adopt the banner of another JAB brand.
Advancing, Panera wants to create more access points into the brand. To that end, the company will expand traditional and nontraditional stores. Wegiel wouldn’t share specific store growth projections but says there is certainly “ample room” to include both international and domestic units. Likewise, Panera will go deeper on its lines of consumer packaged goods. Customers can currently find salad dressings, soups, breads, and coffee in food store aisles. However the brand thinks it may expand both the quantity of products and the amount of distribution points.
“CPG in our minds can be quite a significant lever of new growth,” he says. “I think we’re just scratching the surface.”
Panera has always been a holdout when it comes to the 3rd-party delivery services which have transformed a lot of the restaurant space. The company has offered in-house delivery for years. But 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 approximately stores. The company believes adopting those services will help recruit new customers.
“We’ve experienced delivery for your better a part of five years,” Weigel says. “We realized and heard from your aggregators that there was an entire segment of consumers 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 company, many of which is very pent up,” Weigel says. “There are areas consumers want us where we’re not.”
“While they could possibly get 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 go the needle.” – John Gordon, principal and founding father of Pacific Management Consulting Group.
While Panera accelerates change, don’t expect any wholesale transformation. The organization plans to stick to its core brand identity that focuses on clean ingredients and wellness, while holding onto its more indulgent bakery and menu items.
“Wellness is not just about eating healthy. It plays a role … Somebody that is trying to consume well is usually trying to balance things,” Wegiel says. “We offer optionality because wellness is approximately completeness within the balance of fulfillment.”
Some of Panera’s moves-such as 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 needs 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 of the Crispani, a handmade pizza product available only within the evenings. That offering was intended to push the brand further into the dinner daypart but low sales caused Panera to tug the pizzas in 2008.
“It’s just tough because Panera was known yet still is known as a soup, salad, sandwich and breakfast place,” Gordon says. “Dinner is a substantial daypart for them, but not the top of the 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 remain intact.
“While they might be able to 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 simply takes forever to move the needle.”
Like several privately held concepts, Panera’s financial performance is tough to find out since its purchase by JAB. But Gordon says the brand still looks strong. It’s an established operator using a widespread appeal. And Panera enjoys white ypbonx to cultivate its footprint domestically and internationally.
“They have solidified their position in america in the last a decade certainly,” he says. “I have lots of respect for Panera as an operator. In many different restaurant brand surveys, Panera appears very high and it has an extremely strong company operation and franchisee operation.”