Panera Bread Case Study

Panera Bread is a symbol of warmth and welcome and they believe that food should be so good that you should feel good about eating it. Thirty years ago Louis Kane and Ron Shaich began a simple commitment: to bake fresh bread from fresh dough in their bakery-cafes, taking no short cuts, just bakers with simple ingredients and hot ovens (Panera Bread, Media, n.d.).

The formation of Panera Bread began in 1978 when Louis Kane bought Au Bon Pain, a retail producer of baked goods. Kane changed it to a wholesale business by opening two cafes and staffing them with bakers and employees, but high production costs made it impossible to cover his overhead. In 1981 Kane decided to remain responsible for site selection and financing, but he chose Robert Shaich to help turn the company around as President of internal operations ("Au Bon Pain History").

Panera Bread Bakery and Café boast of its quality of food and market it as freshly baked breads prepared everyday. But with this kind of strategy involves a lot of spoilage, contributing to the high cost that the company is incurring. In the statement provided in the case, despite the increasing operating profit since 2001, the profit margin remains to be low.

Panera Bread started in 1981 as Au Bon Pain Co., Inc. Founded by Louis Kane and Ron Shaich; the company prospered along the east coast of the United States and internationally throughout the 1980s and 1990s and became the dominant operator within the bakery-cafe category. In 1993, Au Bon Pain Co., Inc. purchased Saint Louis Bread Company, a chain of 20 bakery-cafes located in the St. Louis area.

By emphasizing nutritional value and quality, such as antibiotic free chicken and whole grain bread, this restaurant chain distinguishes its products from fast food restaurants such as McDonalds, Wendy’s, and Burger King. Panera also distinguishes itself from these other fast food chains by providing a longer dining experience, with more welcoming furnishings and free Internet access. As opposed to the concept of “fast food”, Panera is associated with the concept of “fast casual”. This is a combination of fast food with a casual dining experience.

Panera Bread's mark item is new prepared artisan bread made with restricted fixings and no additives or chemicals. The menu gatherings were new prepared products, made-to-request sandwiches and plates of mixed greens, soups, light dishes, and bistro drinks. They also effectively competed in five submarkets of the nourishment far from home industry. Panera Bread uses its particular menu, signature bistro configuration, welcoming atmosphere, working frameworks, and unit area system to contend effectively. The submarkets that Panera contends in are breakfast, lunch, daytime, light night admission for take-out or eat in, and bring home bread. Panera's objective was to build feasting at different supper times: breakfast, lunch, daytime, and supper. Panera also improved their menu by keeping in mind their end goal to end up distinctly a broadly perceived brand name and to be the predominant eatery as well as a claim to fame while being a specialty bread shop. The menu improvements concentrated on pulling in clients amid the night feast hours and client

Expanding the target market of Panera Bread is a good growth opportunity for them. This can be achieved by product line (menu options) extension or by entering international market outside the American continent so as to increase their geographical coverage. In addition, Panera has an opportunity to get additional market and growth by adapting rapidly to changing market and customer preferences. They need to advertise and market themselves as a healthy option for eating out. Health oriented food or food that are low in calories, sugar, cholesterol, etc. is getting very important as people started becoming very health conscious and selective. Their effort to roll out new products with fresher ingredients such as antibiotic-free chicken needs to be further expanded. Recognizing the health risks associated with transfat, Panera had completely removed all transfat from its menu by 2006. Organic food, non GMO, etc. They could increase number of their franchises. A number of markets were still available for franchise development. The have opportunity in front of them to open more outlets, both company-owned and franchises. They could open within North America and mainly in areas where they are not present now, and those areas where the growth potential is good, like some of the suburban markets. Many good locations for fast casual dining options are available in many of the untapped areas. Panera has a good market opportunity outside the small urban niche where greater growth

The driving concept behind Panera Bread is to provide a premium specialty bakery and café experience to urban workers and suburban dwellers. Panera can compete at a high level in the quick food industry because of what they offer customers better than their

“A loaf of bread in every arm” is the mission statement of Panera Bread Company (Vincelette & Fogarty, 2010, p.1). Panera started as a small bakery under the name Au Bon Pain and grew to one of the largest fast food service companies in the U.S. In 2008 they had the 5th overall rating in the restaurant industry. “Panera Bread is widely recognized for driving the nationwide trend for specialty breads” (Panera Bread, 2011).

The Panera Bread Company is starting 2007 with unfinished goals and missed targets previously set and a review of their strategy is in order to continue their ongoing success. The company has grown substantially since its inception in the competitive restaurant industry; however, an aggressive target of 2,000 Panera Bread bakery-cafes will require a focused strategic plan. The company has a strong base with loyal customers who appreciate Panera’s unique dining atmosphere with a focus on quality products at a reasonable price. Panera will need to continue its market research and focus on environmental issues, which are an important core value. The opportunity for

Panera’s strategy was called Concept Essence. In simple terms they wanted to be, “better than the guys across the street.” This included offering an appealing selection of breads, bagels and other handcrafted pastry products that were baked fresh daily at each location. They only serve high-quality foods at what they believe was a good value. They developed a menu that was offered diverse selections in an effort to draw customers from breakfast through dinner. Provide above quality customer service and to make sure their patrons enjoy a satisfying dining experience. Panera also sought to ensure that all of their locations were aesthetically soothing and inviting to potential patrons.

Being a nationally recognized brand and a dominant in restaurant operations in the specialty bakery café segment and to expand broadly in the regional market is Panera’s strategy. And by giving high quality product Panera is following their strategy.

Panera Bread Company got its start when in 1980 Louis Kane and Ronald combined Au Bon Pain and the Cookie Jar bakery to form one company. By combining their individual strengths they were able to work as a team and expand the business, decrease company’s debt and centralize facilities for dough production (Wheelen, Hunger, Hoffman & Bamford, 2015). In 1993 the company acquired the Saint Louis Bread Company. With the three companies now working as one the company eventually became the Panera Bread Company with 1464 bakery cafes in 2010 including one in Ontario, Canada. Today Panera Bread has a board of directors that consists of six members divided into three classes of membership.

Among the crowded field of casual, quick-service restaurants in America, the distinctive blend of genuine artisan bread and a warm, comfortable atmosphere has given Panera Bread Company a golden opportunity to capture market share and reward shareholders through well-planned growth. With the objective of opening approximately 1,000 more bakery-cafes in the next three years, Panera Bread Company must make prudent strategy decisions about new store locations, supply-chain management and expanded offerings, all the while continuing its above-average earnings per share growth of at least 25 percent per year.

This approach has been one of the main competitive advantages of the company that maintained its stores and cafes in a friendly and ambient atmosphere in various locations. The company did not start as a traditional fast food restaurant, but rather as a network of places where people could fulfill their natural instincts with healthy and freshly cooked food with a little higher than average price range. Panera Bread was one of the trend makers of casual-food restaurants, whose vision was entirely different from the typical model of public facilities. All of the locations shared a common design and menu that created a unique environment of the franchise. Moreover, in order to enable high-quality service, the executive team of the company decided to equip all of the bakery’s completely to be capable of making their own products directly to the spots. This fact allowed to reach a certain level of autonomy and reliability of the brand that always managed to deliver and provide the freshest and natural