1. Starting out
In the '80s, Shaich and business partner Louis Kane checked out a cookie store/croissant shop in New England and saw the potential for a new sort of restaurant option. They would soon introduce the industry to the bakery-cafe concept with a brand they called Au Bon Pain.
2. A mindset shift
During the next decade, Shaich and the team at Au Bon Pain detected a change in consumer behavior. “People wanted more than just a lot of cheap food—they wanted food they could feel good about,” he recalls. “That was in ’94, and that was the genesis of fast casual.”
3. Growing season
Au Bon Pain prospered and grew. But a new opportunity presented itself. Shaich had been asked by entrepreneur Ken Rosenthal to help him franchise his Midwestern bakery-cafe, St. Louis Bread. Shaich was so impressed that Au Bon Pain invested in the brand, which would become Panera Bread. He saw the potential for Panera Bread to become a national concept, while Au Bon Pain functioned best in urban settings. The company sold its namesake brand and several smaller assets and concentrated on developing Panera.
4. Bucking the trend
The first decade of the new millennium was business as usual for most restaurant chains. Panera decided to break from the pack and focus intently on controlling costs. “We harbored our balance sheet and harbored our growth rate,” Shaich says. When the Great Recession hit in 2008, triggering a cost-cutting spree across the business world, Panera was in a position to invest in upgrading stores and service, Shaich recalls. Same-store sales grew in the middle single digits, even at the depths of the downturn. “We were contrarian,” he says. “Our stock price tripled.”
5. Panera 2.0
During Shaich’s first retirement, when he relinquished day-to-day management responsibilities to Bill Moreton, the Boston native drafted a memo that spelled out how he would compete with Panera if he weren’t part of it. That exercise sparked conversations about embracing digital and omnichannel ordering, clean menus, delivery, catering—the initiatives that would become Panera 2.0. When Moreton shifted his duties because of an inability to travel, Shaich resumed the CEO’s duties and put the strategy into action.