Panera Bread debuted a monthly coffee subscription program chainwide Thursday that showed significant promise in boosting guest frequency and check averages during its testing phase, CEO Niren Chaudhary said.
The $8.99-per-month subscription, available through the fast-casual bakery-cafe chain’s app and website today, offers customers unlimited hot coffee, iced coffee or hot tea in any sized cup. Coffee is available in light or dark roast, with no upcharge for almond milk.
Starting Monday, customers can purchase subscriptions at in-store kiosks.
The subscription program was tested for about three months in roughly 150 Panera locations in Cleveland; Columbus, Ohio; and Raleigh, N.C. It performed so well during the trial that the company sped up its rollout, chain executives said.
Guest frequency growth was “staggering,” Chaudhary told Restaurant Business, jumping by more than 200% during the test. Coffee subscribers visited Panera almost every other day, about three times as often as average customers.
Food attachment to coffee orders grew by 70%, he said.
“Consumers are increasingly getting used to and liking the idea of subscriptions,” he said. “You just pay for it once and you don’t have to think about it.”
The test also showed that about 75% of the redemptions were for off-premise coffee consumption, including drive-thru orders and delivery, he said.
Plus, retention in the subscription program from month to month was about 90%.
“It just shows how much of a driver this is for convenience,” Chaudhary said.
Panera is offering incentives for employees to encourage subscription signups, he said.
Last fall, the chain introduced new brewing and bean-grinding equipment to ensure it would be able to keep up with coffee demand.
Some stores had already started a soft launch of the subscription program, Chaudhary said.
“One of our franchisees said they’d already enrolled 200 people before we’d gotten off to the races,” he said.
Panera’s loyalty rewards program currently has about 38 million members, with about half of the chain's transactions coming from the loyalty program, he said.
Last March, Burger King launched its own app-based coffee subscription. The $5-per-month program entitles users to one small hot brewed coffee per day. The burger chain’s other coffee offerings are not included in the subscription.
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