Panera Bread Wants to Be Everywhere. Panera’s move into dinner could attract new clients. Recently, Panera Bread has announced several new initiatives aimed at expanding its reach-efforts which will continue to unfold as Panera works to get into more locations and serve more customers at more occasions.
“This brand comes with an incredibly high emotional connection with our target customers,” says Dan Wegiel, the company’s EVP and chief growth and strategy officer. “That’s something that is a massive asset for people and we want 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 brand into customers’ daily lives.
Most 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 has created big news: In April, it presented a whole new slate of breakfast menu items targeted at winning share from competitors who frequently offer frozen, microwaved food items through the breakfast daypart. That effort included a revamped coffee program that mirrors the quality and technology offered at big coffee houses. In June, the company launched an evaluation of a dinner menu that includes artisan flatbreads, bowls and hearty side things like sweet potato mash. And just in late August, nearest Panera Bread turned more heads as it finally embraced third-party delivery partners after years of staying with its in-house delivery program.
So, what do the collective moves tell us about where Panera is certainly going?
“The strategic thread that holds those things together is that this: this brand has a very unique opportunity within 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 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 has a very explicit and clear philosophy which they believe individual companies and brands should certainly shape their destiny and destination,” he says. “Unlike some other investment firms they don’t are available in having a playbook and say here’s ways to create value or say here’s the portfolio and here’s where we could create synergies …That’s very much the antithesis of how they operate.”
Panera and third-party delivery? It fits rapid casual’s goal to meet customers everywhere.
Still, Panera has experienced been able to lean on the expertise of sister brands underneath the JAB umbrella-and the other way around. The company owns several coffee concepts, including Peet’s Coffee and Caribou Coffee. Which was useful when researching ways to revamps Panera’s coffee offerings, Wegiel says. Even so, JAB urged Panera to bolster its self-branded coffees, not adopt the banner of some other JAB brand.
Advancing, Panera would like to create more access points to 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 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 can expand both the amount of products and the amount of distribution points.
“CPG inside our minds can be quite a significant lever of brand new growth,” he says. “I think we’re just scratching the top.”
Panera is definitely a holdout in terms of the third-party delivery services that have transformed much of the restaurant space. The company has offered in-house delivery for a long time. Nevertheless 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 can help recruit new business.
“We’ve experienced delivery for the 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 trying to reach customers across multiple dayparts and occasions.
“We know there’s tremendous need for the brand, many of which is very pent up,” Weigel says. “There are areas consumers want us where we’re not.”
“While they might be able to have some incremental business at dinner time, it’s not going to be overpowering. Once these brand identities are established and known, it merely 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, as well as keeping its more indulgent bakery and menu items.
“Wellness is not just about maintaining a healthy diet. It plays a role … Somebody that is trying to consume well is usually attempting to balance things,” Wegiel says. “We offer optionality because wellness is approximately completeness within the balance of fulfillment.”
A few of Panera’s moves-like the reimagined breakfast and coffee program-look more routine than transformational to John Gordon, principal and founding father of Pacific Management Consulting Group.
“Every good operator ought to be doing that,” he says.
He views Panera’s flirtation with dinner, though, as 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 company further to the dinner daypart but low sales caused Panera to drag the pizzas in 2008.
“It’s just tough because Panera was known and still is regarded as a soup, salad, sandwich and breakfast place,” Gordon says. “Dinner is actually a substantial daypart to them, however, 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 stay intact.
“While they could possibly possess 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.”
Just like all privately owned concepts, Panera’s financial performance is tough to ascertain 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 the United States in the last ten years certainly,” he says. “I have lots of respect for Panera as an operator. In many different restaurant brand surveys, Panera shows up extremely high and features a very strong company operation and franchisee operation.”