Say Goodbye to Homemade, Hello to On-Demand: Panera's Game-Changing Move Under New CEO
Iconic restaurant chain Panera Bread discontinues its popular, cherished feature. Speculating on potential forthcoming changes.
Wrinkling its nose at tradition, Panera Bread is taking a giant leap forward, ditching its old ways of homemade bread production and embracing an on-demand model.
Under the guidance of its new CEO, Paul Carbone, Panera is bidding adieu to its remaining fresh dough facilities (FDFS) across the States, dumping the timeworn off-site dough production model for good. A move that's been on the cards for a while, and more than just a subtle hint of what's in store.
In days gone by, cubs of Panera bread were baked using dough whipped up at distant FDFS. These dough-balls were delivered, dainty as can be, to the cafes - each morning, a daily ritual. Cafes would then shape them into fresh loaves, rising and baking them the old-fashioned way, to uphold that signature Panera aroma. However, this home-baked approach sometimes resulted in a narrow window of bread availability, leaving cafes empty-handed by the afternoon.
Moving Forward
So, why rock the boat? Panera's new game plan is to go full steam ahead with an "on-demand" model, out-sourcing bread production to third-party partners who'll bake using Panera's recipes. These suppliers deliver par-baked and frozen dough, ready and raring to go. Allowing the cafe crew to finish the baking throughout the day, guaranteeing plentiful loaves for its patrons.
As Brooke Buchanan, Chief Corporate Affairs Officer, revealed to Restaurant Business, "we didn't make this decision lightly". She continued, "moving forward, this model ensures operational efficiency, consistency, and sustains the high quality we hold dear, plus aceing our team members' needs."
But as much fun as it is stirring up change, the process comes with its own set of consequences: layoffs. Yep, ladies and gentlemen, as the FDFs are shuttering, hundreds of folks find themselves out of work. However, Panera assures the unemployed that they'll host job fairs and provide bridge benefits to show support during these tough times.
The Next Act
The show's far from over for Panera. They've already started revamping the menu, introducing new offerings like the Croque Monsieur Croissant Toast. Last year, they overhauled core items such as soups, salads, sandwiches, and mac and cheese.
Despite these efforts, 2024 wasn't Panera's best year. Sales took a nose dive, plummeting more than 5% to $6.1 billion, the first time they've faced decline since the pandemic. While competitors such as Jersey Mike's and Charley's Cheesesteaks raked in double-digit gains[1], Panera struggles to keep up.
Yet, there's a glimmer of hope. "We saw encouraging sales improvements in the first quarter," Buchanan noted, although she declined to disclose figures[2].
Owned by Luxembourg-based JAB Holding since 2017, Panera's going through some major changes, with a possible IPO on the horizon. Buchanan said, "We're in the midst of a turnaround, taking a long, hard look at our standing and where we want to be three years down the line."
[1] Technomic data[2] Restaurant Business[3] Marketing Dive[4] QSR Magazine
- The international business landscape is witnessing a significant shift as Panera Bread, under the leadership of new CEO Paul Carbone, is overhauling its business model.
- Instead of homemade bread production, Panera is adopting an on-demand model, outsourcing bread production to third-party partners who will bake using Panera's recipes.
- This new approach in the food-and-drink industry, reminiscent of the business community, involves the layoff of hundreds of employees as the old facilities are shut down.
- In an effort to support the unemployed, Panera plans to host job fairs and provide bridge benefits during this transition period.
- Panera, backed by Luxembourg-based JAB Holding, is not just focusing on revamping its food production but also its lifestyle offerings, recently introducing new menu items like the Croque Monsieur Croissant Toast.
- Despite facing tough competition and a decline in sales in 2024, Panera is looking to the future, with the possibility of an IPO and a goal to considerably improve its standing in the international business of food and drink within the next three years.
