Panera's Over Time: Leader In The American Food Industry

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.

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 lock click open and the smell of bread takes over my senses. Walking though the bakery the lights are turned off and you can see the shadows of our Panera logos and the comfortable seats. The oasis, the home away from home, can be seen with the layout of the fireplace to the red recliners surrounding it. Walking to the back, you see the setup of line and the bakery. Taking it all in, you switch the lights on and make Panera come to life.

Panera Bread Company has a fairly detailed and colorful history. The roots of the company were formed in 1981 when it was founded by two entrepreneurs, Ron Shaich and Louis Kane. However, the initial organization was named Au Bon Pain Co. Inc. It originally began as a primarily east coast based operation that was eventually able to cultivate a few international locations. It enjoyed steady progress and growth through the duration of the 1980's, and soon became one of the best know café bakeries in the country.

Panera has strong financial condition and profitability. It has grown in its assets and its debt to equity ratio is has been reduced from 38% in 2006 from the preceding year. While its return on equity reduced in 2006 from 2005 its earnings per share increased from 1.69 to 1.88 over the same period. Its gross revenues continue to increase although its net profit rate and gross margin rates have gone down. The reduction in gross margin is perhaps due to a lower pricing scheme which was compensated by increase in volume.

The U.S. Senate is exacerbating labor problems in Kalamazoo. The delay prompted more than 50 people to wave picket signs and protest outside of Panera Bread. Many members also protested the firing of the 24-year-old Kyle Schilling, Who claims he lost his job from the Panera Bread on false pretenses because of his involvement and support for the local union. Kyle Schilling stated that he was being accused of insubordination and for not signing a policy which should have been discussed on the bargaining table about a non-slip-shoe policy that dictates the type of footwear employees must use.

As with most restaurants, Panera depends on their customers to come in and spend money. If those customers stop or slow down on their spending habits because unemployment, increased gas prices, or an increase to their overall home expenses, it could affect the Panera’s income greatly. According to the National Restaurant Association, “household income registered a solid increase in 2015” (HowDoesHousehold) giving a benefit to restaurants across America. This increase allowed Panera to continue their expansion of Panera 2.0 café’s even if it wasn’t to the rate at which they had initially hoped for.

Panera is said to be the benchmark of a relatively newfangled restaurant segment titled fast casual. Nevertheless, the effective origin of this unbeatable amalgamation of organizations and concepts humbly embarked on the scene way back in the mid 1970’s, as an oven manufacturing firm’s demonstration bakery (Wheelen 16-2). The French-based brand-name of Panera’s elder: Au Bon Pain, translates to ‘where good bread is;’ and as it turned out, this tucked away industrial R&D implement was just too good to keep a secret. Hence, throughout the next few years, the fledgling concept-eatery tried its luck with a multitude of Boston area locations; and then in 1981, a young Ronald Shaich, owner of Boston’s new Cookie Jar Bakery got together with Au Bon Pain’s, Louis Kane, and merged the two companies together as the Au Bon Pain Co. Shaich and Kane ran the enterprise, together, until Kane’s retirement in 1996 (Wheelen 16-2).

Summary: CEO of Panera Bread, Ron Shaich, made a vow to his customers two years ago that he would clean Panera’s food from preservatives, sweeteners, colors, and artificial flavors. Just recently, he finally fulfilled that promise in all of his 2,000 stores. It took two years because his team had to break down each ingredient of every menu item, change recipes, and still maintain that unique flavor of each. This long process also involved retraining employees, educating customers, changing suppliers, and abiding by government health standards. Shaich emphasizes that he wanted Panera to be part of fixing the food system.

Summary statement of the problem: The Panera Bread Company has made a name for itself by offering quality, nutritious meals to its customers. You can eat at Panera Bread without worrying if you are getting a healthy, nutritious meal. With today’s health conscious society this has served the company well. With the rise in other health food type restaurants, the question arises is Panera Bread’s current strategy enough to keep them on top? In order to continue to succeed, Panera Bread needs to branch out into the foreign markets, add some key

As of 2006, Panera Bread was operating nationwide with 1000 locations in 38 states. The freshly-baked bread leader officially established by Au Bon Pain in 1999 has managed to succeed achieving high sales and operating profits, and a 17% increase in the number of outlets. The company’s commitment to serve its customers a delightful meal, in a very amiable environment has led them to the possibility of restructuring their business strategies. This report provides a profound analysis and evaluation of Panera Bread Co. in respects to the company’s business model and efficient business operations. The methods of analysis utilized include: breakdown of several financial statements such as: income statements, balance sheets, pro-forma statements, as well as, short-term and long-term solvency ratios.

It seems that Panera’s biggest solution to its problem is simply maintaining the momentum they have established in the business market. Panera Bread Company has not overextended itself and can be found on every street corner (Wharton, 2010). Following the Concept Essence that Panera set for itself eighteen years ago may not be the most efficient way to self-improve. The requirements that are needed now in order to provide quality products and services may very well be different than what was needed eighteen years ago. The Concept Essence may need to be reviewed and fixed in an effort to be more compliant with the standards of 2012 and the needs of the customer in slower economy. Revising the Concept Essence could provide Panera with a more concrete goal to aim for. However, revising the Concept Essence may interfere with the fundamental

Panera bread’s growth strategy was to capitalize on Panera’s market potential by opening both company-owned and franchised Panera Bread locations as fast as was prudent (A. A. Thompson). Panera Bread work closely with franchised branches in order for the company to broaden its market penetration (A. A. Thompson). Panera Bread has taken the appropriate measures to gain a competitive advantage to make franchising a successful market for the company to enter. Considering Panera Bread Company keeps interaction with the franchised branches to ensure success gives them the upper hand to ensure continued success.

Panera Bread’s intention is “to make Panera Bread a nationally recognized brand name and to be the dominant restaurant operator in the specialty bakery-café segment.” Panera experienced competition from many numerous sources in its trade areas. Their competition was with specialty food, casual dining and quick service cafes, bakeries, and restaurant retailers, including national, regional, and locally owned. The competitive factors included location, environment, customer service, price, and quality of products. Panera learned from its competitors, none of its competitors had yet

One of the most intrinsic things about Panera was its ability to maintain quality among its branches. The ingredient used in one bakery was used in all the other bakeries. To maintain the production idea all the dough used was made from the 23 facilities which then distributed to the other branches