What is up with Panera Bread?
When CEO José Alberto Dueñas announced earlier this month his plans to step down after two years at the helm of parent company Panera Brands, it marked another event in what has been two years of tumultuous change for the iconic fast-casual chain, which is owned by Luxembourg-based conglomerate JAB Holdings.
CEO José Alberto Dueñas has stepped down.
Over the past couple years, there have been multiple board reshufflings amid preparations for an initial public offering, and top management shifts (that are ongoing). At the same time, the chain embarked on a comprehensive menu overhaul that streamlined its focus on new and upgraded sandwiches, soups and salads, and brought dishes like bacon-topped mac and cheese and breakfast sandwiches made with cinnamon rolls.
There have also been layoffs at support centers. Five dough-making facilities were shuttered last year. The chain faced lawsuits alleging deaths and injury from the brand’s caffeinated Charged Lemonades (now off the menu), as well as litigation tied to a data breach in which team members argued the company failed to protect their personal information.
It has been, as Dueñas said in his outgoing statement, a “transformative period” for Panera.
So where to from here?
Panera Brands CFO Paul Carbone was named interim CEO, and he retains his CFO duties while the company looks for a new leader—a search that will include both internal and external candidates. Dueñas also remains as an advisor through March, saying in a statement, “I’m totally confident the best is yet to come for Panera Brands.”
But, regardless of who enters the picture to lead the brand, Brooke Buchanan, Panera’s newly hired chief corporate affairs officer, said the trajectory for long-term growth will continue and the existing strategy will not change.
“I think there’s been a lot of hard work that has been done over the last couple of years, whether it was listening to our guests or team members, or our franchisees,” she said. “Panera’s in a great place. We have the right leadership in place. We’ve got the right strategy. And we are looking forward to that long-term success.”
A return to public markets?
Indeed, at Dueñas’ announced departure, Panera Brands’ board chairman Patrick Grismer said he expects the company to stay the course on execution.
Patrick Grismer is chairman of the board for Panera Brands.
JAB acquired Panera Bread for $7.5 billion in 2017, in what was then an eye-popping deal, taking the chain private. The chain had been built by industry mastermind Ron Shaich from a 400-square-foot cookie store in Boston to a more than 2,000-unit publicly traded company with more than $5 billion in sales.
Before the pandemic, JAB had picked up the bagel concepts under Einstein Bros. and the coffeehouse chain Caribou Coffee. In 2021, those two brands were corralled together with Panera Bread under one umbrella, a move that was seen at the time as preparation for a spinoff. Together, the three brands had about 3,800 units.
JAB’s first attempt at taking Panera public again was in 2021 with a special purpose acquisition company, or SPAC, led by New York restaurateur Danny Meyer. But that deal ended up being called off a year later after a downturn in the markets.
Still, JAB continued down the IPO path, filing confidentially in late 2023.
That year, a restructuring of the leadership team was announced as preparation for that IPO. Then-Panera CEO Niren Chaudhary, who had led the brand through the difficult pandemic years, moved to the role of chairman of Panera Brands. That’s when Dueñas, the former Einstein Bros. CEO, took the CEO seat.
Niren Chaudhary is the former chair of Panera Brand's board.
In early 2024, former Krispy Kreme CEO Mike Tattersfield—who had worked previously with all three brands and led the donut chain through its spinoff by JAB—joined Panera Brands’ board and was named chairman. And Carbone, the former CFO of Dunkin’ who was on that team when it went public, was named Panera Brands’ CFO.
But, after Panera’s turbulent 2024, there were more board shifts. Tattersfield left the board. Grismer moved into the chair seat. And a new member was added: Former Bloomin’ Brands CEO Dave Deno.
Whether JAB is still planning to take Panera Brands public remains unclear. Last year, Reuters reported that JAB was considering a sale of Caribou and Einstein Bros.
Buchanan said she couldn’t offer an update on the IPO plan or comment on the reports of a potential sale.
A new era
Meanwhile, Panera spent much of last year reworking its menu, which has been dubbed a New Era for Panera.
It began in April with nine new dishes and updates to 12 classics, with rolling additions throughout the year. The effort was designed to streamline and simplify operations, but also to focus on the things guests loved best: sandwiches, soups, salads and mac and cheese. Some categories, like flatbreads, were cut altogether.
Former Bloomin' Brands CEO David Deno is the latest addition to Panera's board.
Buchanan said the chain is happy with the response so far.
One of the biggest hits has been a limited-time offer of Ciabatta Dippers, melty sandwiches designed to be dipped in soup, like the French Dipper with marinated steak, melted provolone and asiago cheese, which is paired with Bistro French Onion Soup.
Buchanan said the LTO was scheduled to end in December, but has been extended into January. And, there was so much enthusiasm, she said the Ciabatta Dippers may reappear next year.
Some dishes that had been cut have also been brought back because of guest demand, like the Asian Sesame Chicken Salad, and some mocha beverages. “It’s important they understand we are listening to our guests and team members,” she said.
More innovations with core items are coming this year, as well as some new bread items, she noted.
Panera'a Ciabatta Dippers have been the biggest hit on the new menu. | Photo courtesy of Panera.
The core essence
Panera is also looking at shifts in operations, including a potential change to Panera’s most central offering: freshly baked bread.
Traditionally, Panera’s bread is mixed and shaped into dough balls in dough-making facilities, and shipped to cafes where loaves are then proofed and baked each morning. Last year, Panera began testing the use of third-party bakeries to par-bake and freeze bread that can be finished with a final bake in the chain’s cafes. That's the way fast food chains, like Subway, offer house-baked bread.
The idea is that par-baking would allow cafes to bake loaves throughout the day, potentially making the bread fresher, and maybe even warm, for the afternoon visitor. The “on-demand baking model” is also designed to prevent cafes from running out of fresh bread, which guests have complained about. Frozen par-baked bread can be at the ready to bake on an as-needed basis. It’s also about consistency, said Buchanan, so the café experience is the same in Los Angeles as it is in Detroit.
Mac and cheese is one of Panera's specialties that it will continue to focus on. | Photo courtesy of Panera.
Whether Panera will go fully to par-baked bread is a decision that will take time to evaluate, she said.
Buchanan insists the quality of bread has not, and will not, change.
“Our bread is part of our baking heritage,” she said. “It’s not all about efficiency. It’s about making sure that we use our core heritage product, and making sure it’s available to our guests.”
Outside observers, however, fear Panera is losing its focus on food quality. A key signal of that quality is the artisan-style bread.
“Par-baked is not consistent with artisan. Period. End of sentence,” said Rick Vanzura, former co-COO of Panera, who was with the chain between 2007 and 2011, and is now founder of consulting firm Nourish V2.
“Bread is our passion, soul and expertise” was literally the first line in Panera’s “concept essence” brand statement, he noted.
“People took a lot of pride in that,” he said. “When you start to chip away at that commitment to bread, it has the secondary message that we’re not committed to craft.”
Last year, reports also indicated that Panera had loosened its standards for some ingredients and backed away from its commitment to certain “clean ingredients.” Team members were reportedly directed to remove signs promising “No Antibiotics Ever,” or “Vegetarian Fed,” for example.
The reports cited internal documents that proposed easing restrictions on antibiotic use in some meats, like chicken, in a move that would make the supply chain more flexible.
Buchanan said those reports were incorrect. Panera has not changed its commitment to ingredients like chicken raised without antibiotics or cage-free eggs, she said.
The removal of signage was a simple act of shifting marketing materials, she said. “Our core beliefs are the same.”
Salads are another area of focus on the new menu. | Photo courtesy of Panera.
Fresh ideas
How those core beliefs are communicated may change this year.
Panera recently announced it has hired the Los Angeles-based agency 72andSunny, which has a long track record of working with restaurants, including Wingstop, Taco Bell and Carl’s Jr./Hardee’s. (Remember that Paris Hilton ad? That was them.)
Panera Bread has also brought in a number of new executives in the past few months, including CMO Mark Shambura; Robin Seward as senior vice president, brand and integrated marketing; Scott Uehlein as vice president, culinary—and Buchanan, who previously led the crisis and risk team at PR firm Edelman.
Mark Shambura joined Panera as CMO last year.
Two more executives, yet to be announced, will be joining the IT and development teams, she said.
And, of course, a new CEO.
Despite his concerns about Panera's going "off the rails," Vanzura said it remains an iconic brand, and it won’t be that much of a challenge to make the concept great again, especially if the next leader returns to a “basic belief in the artisan, craft experience that made Panera great in its heyday.”
Robin Seward recently joined Panera as senior vice president, brand and integrated marketing.
It seems JAB is looking to exit, he said. There could be a private sale, “but at what price?”
But, given a few more years, there might be a $2 billion to $3 billion enhancement opportunity that could make a sale worthwhile.
“I don’t think it’s that hard to get it where it needs to be, if you bring in the right people, and if JAB is willing to accept some period of time where the focus is on customer and operational execution, as opposed to financial metrics,” said Vanzura.
“There are still plenty of people who eat soup, salads and sandwiches to make for a wildly successful concept—if you focus on concept differentiation, which Ron [Shaich] was so obsessed about, and if you really understand who your customer is.”