Panera Bread Wants to Be Everywhere. Panera’s move into dinner could attract new customers. Recently, Panera Bread has announced several new initiatives targeted at expanding its reach-efforts which will continue to unfold as Panera works to get involved with more locations and serve more customers at more occasions.
“This brand has an incredibly high emotional relationship with 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 wish to have 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 possibilities to further ingrain the manufacturer into customers’ daily lives.
Much of the brand’s recent evolution has occurred since JAB Holding Company acquired Panera in 2017 for $7.5 billion. Since that time, the fast-casual giant makes big news: In April, it rolled out a new slate of breakfast menu items aimed at winning share from competitors who frequently offer frozen, microwaved food items throughout the breakfast daypart. That effort included a revamped coffee program that mirrors the standard and technology offered by big coffee houses. In June, the manufacturer launched an evaluation of the dinner menu that includes artisan flatbreads, bowls and hearty side stuff like sweet potato mash. And just at the end of August, closest Panera Bread turned more heads because it finally embraced third-party delivery partners after years of adhering to its in-house delivery program.
So, what do the collective moves inform us about where Panera is certainly going?
“The strategic thread that holds all of the things together is this: this brand includes a very unique opportunity in our minds in the food and restaurant space to possess broad relevance to your fairly broad group of target customers,” Wegiel says. “It’s one of the 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 has 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 can be found in using a playbook and say here’s ways to create value or say here’s the portfolio and here’s where we are able to 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 been able to lean on the expertise of sister brands under the JAB umbrella-and vice versa. The business owns several coffee concepts, including Peet’s Coffee and Caribou Coffee. That was useful when researching approaches to revamps Panera’s coffee offerings, Wegiel says. However, 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 particular end, the company will expand traditional and nontraditional stores. Wegiel wouldn’t share specific store growth projections but says there is “ample room” to incorporate both international and domestic units. Likewise, Panera goes deeper on its lines of consumer packaged goods. Customers can currently find salad dressings, soups, breads, and coffee in grocery store aisles. Nevertheless the brand thinks it can expand both the amount of products and the number of distribution points.
“CPG in our minds can be a significant lever of the latest growth,” he says. “I think we’re just scratching the top.”
Panera is definitely a holdout with regards to the 3rd-party delivery services which have transformed most of the restaurant space. The business has offered in-house delivery for many 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 roughly stores. The manufacturer believes adopting those services may help recruit new business.
“We’ve been in delivery for the better element of 5 years,” Weigel says. “We realized and heard through the aggregators that there was a whole segment of consumers that wanted Panera, however primary source or delivery was the aggregators so 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 brand, many of which is very 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 not going to be overpowering. Once these brand identities are established and known, it simply 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 company intends to stick to its core brand identity that targets clean ingredients and wellness, while holding onto its more indulgent bakery and menu items.
“Wellness is not only about eating healthy. It plays a part … Somebody who is wanting to eat well is generally trying to balance things,” Wegiel says. “We offer optionality because wellness is about completeness within the balance of fulfillment.”
A number 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 ought to be doing that,” he says.
He views Panera’s flirtation with dinner, though, as being a bolder move. He recalled the brand’s 2006 introduction from the Crispani, a handmade pizza product available only inside the evenings. That offering was meant to push the company further in to the dinner daypart but low sales caused Panera to tug the pizzas in 2008.
“It’s just tough because Panera was known and still is actually a soup, salad, sandwich and breakfast place,” Gordon says. “Dinner is actually a substantial daypart for them, although 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 remain intact.
“While they could possibly get some incremental business at dinner time, it’s never going to be overpowering,” he says. “Once these brand identities are established and known, it just takes forever to maneuver the needle.”
Just like all privately owned 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 with a widespread appeal. And Panera enjoys white ypbonx to develop its footprint domestically and internationally.
“They have solidified their position in america within the last a decade undoubtedly,” he says. “I have lots of respect for Panera as an operator. In several restaurant brand surveys, Panera turns up extremely high and it has a very strong company operation and franchisee operation.”