Panera Bread Company : Still Rising Fortunes?

The Panera Bread legacy started in 1981 as AuBon Pain Co., Inc. In May of 1999, all of the AuBon Pain Co., Inc.’s business units were sold, except for Panera Bread, thus the company was renamed Panera Bread (Panera). As of December 2015, there are 1,972 bakery-cafes in 46 states, the District of Columbia, and in Ontario Canada (Panera, n.d.). Today, Panera Bread has a market capitalization of $4.5 billion and continues to be on a journey to serve food, as it should be. They continue to strive on serving quality foods that are free of artificial ingredients and making sure customers have a great experience.

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").

As mentioned in the case study, Panera Bread Company is known to be one of the leading bakery/café that offers freshly baked pastries and French inspired entrées across various states in the US. However in the recent years, Panera Bread faced a decrease in their usual high growth rate from 9.1% and 12.0% in the year 2000 to merely 0.2% and 0.5% of comparable sales and annualized unit volumes respectively.

The company then managed a comprehensive re-staging of Saint Louis Bread Co. Between 1993 and 1997 average unit volumes increased by 75%. Ultimately the concept's name was changed to Panera Bread. By 1997, it was clear that Panera Bread had the potential to become one of the leading brands in the nation. In order for Panera Bread to reach its potential, it would require all of the company's financial and management resources. In May 1999, all of Au Bon Pain Co., Inc.'s business units were sold, with the exception of Panera Bread, and the company was renamed Panera Bread. Since those transactions were completed, the company's stock has grown thirteen-fold and over $1 billion in shareholder value has been created. Panera Bread was recognized as one of Business Week's 100 Hot Growth Companies. As reported by The Wall Street Journal's Shareholder Scorecard in 2006, Panera Bread was named as the top performer in the restaurant category for one-, five- and ten-year returns to shareholders.

Panera Bread began in 1981 as Au Bon Pain Co., a fast-casual bakery and café chain, founded by Louis Kane and Ron Shaich. Throughout the 1980s and 1990s, the chain grew along the east cost of the United States and internationally. It dominated in the bakery-café category. In 1993, Au Bon Pain Co. purchased Saint Louis Bread Company, which was founded by Kenneth Rosenthal. At this time, the Saint Louis Bread Company was in the midst of renovating its 20 bakery-cafes in the Saint Louis area. The concept’s name was ultimately changed to Panera Bread.

The focal point of this is essay is none other than Panera Bread. Louis Kane and Ron Shaich established a bread kitchen bistro called Au Bon Pain Company Inc. in 1981. The organization developed and succeeded through the 1980's and 90's. Saint Louis Bread Company was purchased in 1993 by the association the company already had 20 different locations that covered vast areas of Saint Louis in the first place. Saint Louis Bread Company was at first established by Ken Rosenthal. In May 1999 Panera Bread ventured into a national eatery, Au Bon Pain Co. sold their different chains including Au Bon Pain, which is currently claimed by Compass Group North America. Panera moved its central command to another area in Richmond, Heights Missouri in 2000.

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

Panera Bread has established itself as one of the most popular, fast growing “bakery-café” restaurants in the United States as well as in Canada. With 1,800 locations in 45 states, the franchise appears to be unstoppable. This in part is due to the superior customer service experience that keeps customers coming back time and time again. Just to give you an example, in 2012; the most recent year that data is available, Panera Bread brought in an astounding $2.13 billion in revenue, about $1 billion more than its revenue in 2008.

The sale of Au Bon Pain lead to their corporate name change to Panera Bread Company. In the early 2000’s the company grew through franchise agreements, acquisitions and expansion. In 2010 Shaich stepped down from his roll of CEO to the company’s executive chairman to focus on concept and strategy. Shaich had what he referred to as concept essence the blueprint of what he wanted to achieve. “Concept essence included a focus on artisan bread, quality products and a warm, and friendly, and comfortable environment” (Vincelette & Fogarty, 2010, p4.).

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

The generic competitive strategy that Panera best fits is broad differentiation. This is primarily because Panera sought to be the first choice for patrons looking for fresh-baked goods, a sandwich, soup, a salad or a beverage in a pleasing environment. In this platform Panera has set their eyes on people who may not necessarily be looking for an expensive meal, but might also not want cheap, fast food but instead are looking for a fresh meal that can be enjoyed in a relaxing environment. In this Panera is looking for a

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.

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.

Panera Bread is considered to be one of the U.S. most successful fast-casual restaurants. The company is one of the revolution makers in the industry of fast food, which managed to transform the traditional image and perception of to-go products that are available at an acceptable price on the market. As its initial founding company was established in 1981, Panera Bread managed to gain up to 4.5 billion USD in sales by the year of 2015, whereas the average sales per one store made up to 2.5 million USD annually (Thompson). Nevertheless, the company that once managed to upgrade bread and pastry into a trend of fast and healthy eating, today is struggling with massive competition on the fast food market. Its previous strategic strengths now became a burden that stops innovation and creativity and does not

Its current objective is to develop and increase its bakery-cafe restaurant locations by more than 2,000 before the year 2010. With this, Panera Bread Company has the opportunity to increase market share by attracting potential customers away from their competition amongst the fast-food casual restaurants.