Panera Bread

Company Information

• Date founded: 1981
• Industry: restaurant; fast casual dining
• Corporate headquarters: Sunset Hills, Missouri
• Type: Public

Overview

Panera Bread is an American fast casual chain of restaurants. Fast casual restaurants are a mix of fast food and sit-down restaurants. They allow customers to order food quickly and offer a sit-down atmosphere but without table service. Fast casual restaurants usually offer better quality and sometimes healthier alternatives to fast-food options. They also tend to focus on a particular type of food and offer limited choices. However, these types of establishments generally charge more money than fast-food restaurants but less than regular sit-down eateries. Fast casual dining is a popular and fast-growing option for diners and one of the fastest-growing segments within the restaurant industry. While the concept dates back to the 1990s, it did not become popular until nearly a decade later. In addition to Panera Bread, other fast casual restaurants include Chipotle Mexican Grill, Five Guys, Shake Shack, Cava, and Jason's Deli.

Panera Bread is a bakery-style cafe that specializes in baked goods, freshly made sandwiches, soups, salads, and coffee drinks. The concept began as an offshoot of a Boston cookie shop, a French bakery chain called Au Bon Pain, and a St. Louis, Missouri, bread company in the 1980s. The company eventually developed a new concept of fast casual chains that became Panera Bread. By 2025, Panera Bread was worth more than 7.5 billion dollars and had over 2,200 locations throughout the United States and Canada.

Brief History

Ronald M. Shaich got an idea for starting a business when he was in college in the 1970s; he and a few friends were accused of shoplifting and thrown out of a convenience store. They decided to open their own store. By the following year, Shaich and a few other students at Clark University in Worcester, Massachusetts, were running a store. Shaich, who was treasurer of the school's student body government, began to travel and speak about his experiences. He urged students at other universities to open their own stores. After graduation, he attended Harvard Business School.

Shaich then worked for Ohio's Original Cookie Co., which later merged with Mrs. Fields cookies. He moved back to Boston with an idea to open his own cookie shop, but he could not find a space to lease. While searching for the perfect place to see his idea come to fruition, he worked as a political consultant. He finally found a place to rent and opened a small shop called the Cookie Jar in 1980. He juggled his time between his venture and political work until he tired of going back and forth and decided to put all his efforts into the cookie shop.

In addition to selling cookies, Shaich licenced breads and other baked goods from the French bakery company Au Bon Pain in late 1980. The Au Bon Pain chain, which at the time included three stores owned by Louis Kane, was failing. Shaich had an idea to acquire the brand and merge it with his cookie shop. By 1984, he and Kane were partners and had six Au Bon Pain stores. They thought about expanding the brand into offering sandwiches and other foods when their customers began to request their croissants and baguettes be cut so they could stuff meats and cheeses into them.

The concept took off, and by 1991, Au Bon Pain went public. However, by 1993, Shaich grew bored of Au Bon Pain and yearned for something new. He got in touch with Ken Rosenthal, the owner of St. Louis Bread Company, a successful bakery-style restaurant in the St. Louis area, and ended up acquiring the brand in late 1993. Shaich and Kane spent the next few years studying the restaurant industry and became interested in the concept of fast casual dining. By this time, consumers were becoming more interested in freshly made foods. Shaich and Kane built on this concept and added speciality sandwiches, soups, and salads to their restaurants. They also redesigned their restaurants to add more comfortable seating, a fireplace, and art.

They kept the St. Louis Bread Company name at the local St. Louis restaurants but decided they needed something different for new locations. They renamed their new vision Panera Bread. The word panera is roughly translated to "bread basket" in Spanish. Near the end of the 1990s, more than two hundred Panera locations opened across the United States. The brand became popular and began franchising. At this time, Panera was a division of Au Bon Pain, but Shaich had an idea to reorganize the company to make Panera the lead business.

He had a hard time letting go of his first business, Au Bon Pain, but eventually sold the division in 1999 to concentrate on Panera. The newly branded company worked to make Panera stores different from the Au Bon Pain and St. Louis brands. It remodeled the stores and expanded the fast casual idea. It worked on a new menu that put the focus on the quality of bread and other ingredients served. It continued to franchise, and numerous Panera locations opened across the United States throughout the 2010s and 2020s. Panera expanded to Canada in 2008.

In 2017, Shaich sold Panera to JAB Holding Company, a private equity firm, for $7.5 million. Shortly after, Panera purchased Au Bon Pain and Shaich stepped down as CEO. However, he remained a chairman of Panera to oversee the merge until 2018. Blaine Hurst, former president of Papa John's, replaced Shaich as CEO.

Impact

Panera Bread was one of the brands that helped to popularize the concept of fast casual dining. It helped change the way people thought about eating out. It offered fresh and healthy alternatives to fast food and offered them at lower prices than regular sit-down restaurants. As the years passed, Panera continued to offer fresher and healthier choices, removing artificial flavors, preservatives, sweeteners, and colors from their food selections. By 2014, Panera offered a "100 percent clean menu" free of any artificial additives.

The company remained involved in local communities by offering franchises to support local entrepreneurs. In addition, Panera locations give back to their communities by donating all leftover breads and baked goods each day to local food banks and agencies as part of the Day-End Dough-Nation initiative.

Panera even began a pay-what-you-can model called Panera Cares to help those struggling to pay for their food. The model asks patrons to contribute what they can or volunteer to work at the cafes in exchange for food. The first Panera Cares community cafe opened in Clayton, Missouri, in 2010, and several others opened across the country in the years to follow, including one in Boston in 2013. However, the restaurants were unsustainable and the last remaining Panera Cares location in Boston closed in 2019.

Bibliography

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Harrison, J.D. "When We Were Small: Panera Bread." Washington Post, 27 Dec. 2014, www.washingtonpost.com/business/on-small-business/when-we-were-small-panera-bread/2014/12/23/891baa5c-8ac5-11e4-9e8d-0c687bc18da4‗story.html?utm‗term=.3fc964984452. Accessed 24 Jan. 2025.

Houck, Brenna. “Panera Closes Last Pay-What-You-Can Restaurant in Boston.” Eater, 5 Feb. 2019, www.eater.com/2019/2/5/18212499/panera-cares-closing-pay-what-you-can-restaurant. Accessed 24 Jan. 2025.

Hsu, Tiffany. “Panera Bread Buys Au Bon Pain, Adding to JAB's Breakfast Empire.” The New York Times, 8 Nov. 2017, www.nytimes.com/2017/11/08/business/panera-au-bon-pain.html. Accessed 24 Jan. 2025.

Kell, John. "Panera Says Its Food Menu Is Now 100% 'Clean Eating.'" Fortune, 13 Jan. 2017, fortune.com/2017/01/13/panera-menu-completely-clean. Accessed 24 Jan. 2025.

"Our History." Panera Bread, www.panerabread.com/en-us/company/our-history.html. Accessed 24 Jan. 2025.

Shure, Marnie. “Here's How Fast Food and Fast Casual Restaurants Are Future-Proofing Their Businesses.” Food & Wine, 28 June 2024, www.foodandwine.com/restaurant-industry-trends-8670339. Accessed 24 Jan. 2025.

Sozzi, Brian. “Panera Bread Founder Ron Shaich: Trailblazing His Way through Fast Casual.” Yahoo! Finance, AOL, 11 Jan. 2024, www.aol.com/finance/panera-bread-founder-ron-shaich-214151658.html. Accessed 24 Jan. 2025.