Panera Bread, a brand built around the promise of freshly baked loaves, is testing the use of third-party bakeries to par-bake and freeze bread that can be finished in the chain’s cafés.
So said Panera’s Executive Vice President and Chief Operating Officer Debbie Roberts in an exclusive interview with Restaurant Business on Monday. Roberts addressed a number of issues that have brought Panera into headlines over the past year—from a data breach, to the company’s plans for a proposed initial public offering.
Mostly Roberts focused on the chain’s comprehensive New Era menu overhaul that began in April and is ongoing. She described the transformation as “executed flawlessly” and said so far it is performing better than expected.
Both salad and mac and cheese category sales are, respectively, up 16%, and the new menu has shown certain items to be “wildly successful,” like the new Chicken Bacon Rancher (grilled chicken, bacon, white cheddar and ranch on black pepper focaccia), which has surpassed expectations by 90%, and the Southwest Chicken Ranch Salad, which is up 80% over projections, she said.
After conducting extensive research and listening to both guests and team members, the New Era menu focuses on the core categories of sandwiches, salads, soups and mac and cheese. Last month the chain’s breakfast offerings were tweaked with new sandwiches made with cinnamon rolls in the place of bread, for example, and a protein-heavy Steak & Wake LTO with thin-sliced steak on ciabatta, and there’s more coming in the fall, Roberts said.
Overall, the new menu was designed for simpler operations. And that is working, Roberts said.
Retail team members are saying the menu is easier to execute and easier to train. “They’re thanking us for the work we’ve done,” she said.
Guest metrics also show improvements in terms of speedier service and improved order accuracy, she noted.
“So far, so good,” she said. “I feel like we’ve landed in a pretty solid place.”
Debbie Roberts. | Photo courtesy of Panera Bread
Behind the scenes, however, there has been more change for the 2,182-unit chain, which is about 50% franchised.
At least two fresh dough manufacturing facilities have closed or will be closed so far this year, in Houston and Arizona, for example, and reports indicate there may be more. These are facilities where Panera’s signature breads are mixed and prepared as dough balls that get shipped to restaurants, where loaves are then proofed and baked.
Roberts said the closures have focused on underperforming dough facilities, and that efforts are being made to retain as many workers as possible. And, though she did not say whether more closures are likely beyond Houston and Arizona, she said, “We’re constantly looking at our business model and our footprint and identifying better ways to run our business.”
Meanwhile, the company is also testing a new model for supplying bread to units.
Roberts said the company has been working with a third-party artisanal bakery that is preparing bread according to Panera’s recipes—even using the brand’s 35-year-old sourdough starter—to shape, proof, par-bake and freeze loaves that are then distributed to units, where baking is finished. It has the potential to take a lot of complexity out of cafés, and it allows for bread to be baked throughout the day, rather than one big batch in the morning.
It’s not clear how many units may be involved with the test, which is being evaluated in the Houston market. But it’s an operational process that will take some time to evaluate, she said.
So far, the test indicates the par-baking process is easier on team members, and units are more likely to keep bread in stock, she said.
“Bread is absolutely part of our heritage. It’s part of everything we do,” said Roberts. “The test on quality is so extensive that this process of change will take a very long time, probably years, because we want to make sure we’ve gotten it right.”
Meanwhile, the New Era menu has brought other behind-the-scenes shifts.
Because consumers have been very pressed financially in the current economy, Roberts said, the chain has been looking for ways to offer more entry points under $10.
That has meant looking for ways to cut costs across the menu. One effort focused on re-evaluating the brand's signature “No-No List,” which sets standards for the menu in terms of ingredient quality, like avoiding artificial preservatives, colors or sweeteners, she said.
“It’s our personal standards for how we operate in this industry,” she said. “It’s kind of a moral compass for our brand to make sure we bring highest quality products to our guests.”
But that No-No List also needed to evolve with the times, she added.
Earlier this year, reports indicated that Panera has removed signs and advertising promising meat that had been raised without any antibiotics. Now Roberts said the chain does not necessarily take a No Antibiotics Ever stance, instead allowing “judicious use” of antibiotics by meat suppliers, like if the animal is sick, for example.
It’s a move other companies have made, including Chick-fil-A, which earlier this year shifted from a “no antibiotics ever” stance to “no antibiotics important to human medicine.”
Roberts said definitions of what is “clean” food are not black and white, but has “a lot of gray,” and what is important to consumers has evolved. But, she said, “I don’t believe we’ve changed what we believe in.”
Also, in the pursuit of offering better value, Panera this week is launching a promotion offering a free half sandwich or half salad with the minimum purchase of at least $5.
Panera has long offered bundled “duets” and family meals, but this promotion is a “more aggressive” offering to compete in this summer’s value wars, with chains like McDonald’s, Burger King, Wendy’s and others attempting to lure in inflation-weary diners with single-digit deals.
Roberts addressed some other challenges for Panera over the past year, like a data breach in March.
Panera’s digital channels were knocked down for several days, and the company has confirmed a “security incident” occurred that gave the attackers unauthorized access to some employees’ private data. There has been speculation that it was a ransomware attack, but Roberts did not comment on the nature of the incident.
She said a cybersecurity firm was engaged and law enforcement was brought in as soon as the company was aware of the breach. Since then, sensitive data has been secured, and she emphasized that no guest data was impacted.
But Roberts could not address further questions about the breach because of pending litigation. At least 11 current and former workers have filed lawsuits seeking class-action status, saying Panera did not do enough to protect their private information, and that the company did not notify them of the breach until months later.
Panera is facing legal issues on another front. There are also lawsuits involving Panera’s Charged Lemonades, energy drinks with high caffeine levels that have been phased off the menu with the New Era transition.
Now guests are asking for low-sugar and low-caffeine offerings, Roberts said, and the new menu includes a Blueberry Lavender Lemonade, Pomegranate Hibiscus Tea and Citrus Punch, for example.
For years, parent company JAB Holding Co. has been talking about preparing the brand for a possible IPO. JAB bought Panera in 2017 for an eye-popping $7.5 billion from founder Ron Shaich, later pulling the bakery-café chain under one umbrella with sister brands Einstein Bros. and Caribou Coffee, a move that seemed to be preparation for a potential spinoff.
In 2023, Panera’s domestic sales reached nearly $6.5 billion, an increase of 2.6% over the prior year, according to Restaurant Business sister brand Technomic.
It’s not clear whether that IPO is still under consideration, and Roberts said there is no update.
“My time and energy is not focused on an IPO, and our leadership team is not focused on that,” she said. “We’re focused on the largest and biggest menu transformation in the history of the brand. And we’re seeing great results from that.”