Panera Bread Wants to Be Everywhere. Panera’s move into dinner could attract new customers. Recently, Panera Bread has announced several new initiatives geared towards 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 exposure to 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 wish to have them.”
With a wide appeal among consumers and deep relevance among loyal fans, Panera executives see a lot of runway for future expansion and a great deal of chances to further ingrain the brand 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, rapid-casual giant makes big news: In April, it presented a brand new slate of breakfast menu items geared towards 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 company launched an evaluation of any dinner menu which includes artisan flatbreads, bowls and hearty side stuff 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 many years of adhering to its in-house delivery program.
So, what exactly do the collective moves tell us about where Panera goes?
“The strategic thread that holds those things together is it: this brand has a very unique opportunity in our minds in the food and restaurant space to get broad relevance to some 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 includes a very explicit and clear philosophy they believe individual companies and brands should really shape their destiny and destination,” he says. “Unlike a few other investment firms they don’t can be found in with a playbook and say here’s how you can create value or say here’s the portfolio and here’s where we are able to create synergies …That’s significantly 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 already established been able to lean on the expertise of sister brands underneath the JAB umbrella-and vice versa. The organization 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 strengthen its self-branded coffees, not adopt the banner of some other JAB brand.
Moving forward, Panera desires to create more access points to 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 exists “ample room” to add 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. But the brand thinks it can expand both the number of products and the quantity of distribution points.
“CPG in our minds can be a significant lever of new growth,” he says. “I think we’re just scratching the top.”
Panera has long been a holdout with regards to the next-party delivery services that have transformed a lot 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 approximately stores. The manufacturer believes adopting those services may help recruit new business.
“We’ve experienced delivery for the better element of five-years,” Weigel says. “We realized and heard from your aggregators there was an entire segment of consumers that wanted Panera, however their primary source or delivery was the aggregators so we weren’t there.”
Whether in delivery, a reimagined breakfast menu or CPG options, Panera is attempting to reach customers across multiple dayparts and occasions.
“We know there’s tremendous interest in the manufacturer, many of which is quite pent up,” Weigel says. “There are areas consumers want us where we’re not.”
“While they might be able to possess some incremental business at dinner time, it’s not going to be overpowering. Once these brand identities are established and known, it just takes forever to move the needle.” – John Gordon, principal and founding father of Pacific Management Consulting Group.
While Panera accelerates change, don’t expect any wholesale transformation. The business wants to stick to its core brand identity that targets clean ingredients and wellness, while keeping its more indulgent bakery and menu items.
“Wellness is not just about eating healthy. It plays a part … Someone who is trying to enjoy well is usually seeking to balance things,” Wegiel says. “We offer optionality because wellness is about completeness inside the balance of fulfillment.”
Some of Panera’s moves-just 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, being a bolder move. He recalled the brand’s 2006 introduction from the Crispani, a handmade pizza product available only in the evenings. That offering was intended to push the brand 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 but still is regarded as a soup, salad, sandwich and breakfast place,” Gordon says. “Dinner is really a substantial daypart on their behalf, 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 remain 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 just takes forever to go 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 company still looks strong. It’s a successful operator using a widespread appeal. And Panera enjoys white ypbonx to develop its footprint domestically and internationally.
“They have solidified their position in the United States during the last 10 years certainly,” he says. “I have a lot of respect for Panera being an operator. In several restaurant brand surveys, Panera shows up high and it has a really strong company operation and franchisee operation.”