Panera Bread - Free Essay Example

Panera Bread began in 1981 as Au Bon Pain Co. , a fast-casual bakery and cafe 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-cafe 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. By 1997, it became clear that Panera Bread had the potential to become one of the leading brands in the nation. In May 1999, to expand Panera Bread into a national restaurant, all of Au Bon Pain Co’s business units were sold, with the exception of Panera Bread. The company was then renamed Panera Bread. The company was operating 1,362 bakery-cafes in 40 states and 17 facilities that delivered fresh dough to the cafes daily . Panera Bread still operates under the name St. Louis Bread Company, with its headquarters in St. Louis. The St. Louis area has over 50 locations. In 2005, Panera Bread was recognized as one of Business Week’s â€Å"100 Hot Growth Companies†, earning $38. 6 million with a 42. 9% increase in profits. In 2006, Panera Bread was recognized as the top performer in the restaurant category for one, five, and ten year returns to shareholders, reported by The Wall Street Journal. In 2007, Panera Bread purchased a majority stake in Paradise Bakery Cafe, a Phoenix-based concept with over 70 locations in 10 states, the balance to be purchased in June of 2009. In 2008, Health magazine judged Panera Bread as the healthiest fast food restaurant. Also in 2008, Panera Bread began expanding into Canada, with Richmond Hill and Mississauga, both in the Toronto area. As of 2009, the restaurant was named most popular for eating on the go by the restaurant review service Zagat. They w ere also rated #1 for best salad, best healthy option, and best facilities among restaurants with less than 5,000 locations. Panera Bread now has 1,380 bakery cafes in 40 states and Canada, delivering fresh artisan breads, bagels, muffins, scones, sandwiches, as well as soups, salads, and specialty coffee drinks. 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 â€Å"fast food†, Panera is associated with the concept of â€Å"fast casual†. This is a combination of fast food with a casual dining experience. Panera targets consumers who seek meals of higher quality than they would find at the tradi tional fast food chain, but don’t have the time to dine in or have a sit-down meal at a restaurant. Though there are many other restaurants who offer this same combination, they tend to be local and do not benefit from a national brand name with a large advertising budget. A key aspect of Panera Bread’s business that protects the company from direct competition in the fast food industry is their product niche, artisan fast food. Fast food chains are often criticized for offering unhealthy foods. But, Panera Bread focuses on a higher nutritional value in their products. Dine in restaurants are very susceptible to drops in consumer spending, so Panera Bread’s cheaper items, while still being healthier than your typical fast food chain, make it an attractive alternative to traditional eateries. All the same, the product niche allows Panera flexibility in raising menu prices because consumers recognize the products as high quality, especially in comparison to the traditional fast food chains. The company’s marketing strategies focus on product merchandising, such as the promotion of new menu items, as opposed to product prices. The company also sponsors charitable events as a marketing tool. Since the founding of Panera Bread, the company has made efforts in giving back to local communities. Panera runs the Community Breadbox program, where they match cash donations from customers and distribute them to local non-profit organizations. Through the Day-End Dough-Nation program Panera Bread runs, unsold bakery products are packaged and collected at the end of each day and donated to local food banks and charities. The company also participates in the Scrip fundraising program, which invites non-profit organizations to pre-purchase $10 Panera Bread gift cards at a 9% discounted rate and resell them at full price to raise money.