1. How might consumers' perception of Panera's menu and atmosphere affect their dining experience?

2. Describe how fast food industry stereotypes might positively and negatively impact Panera.

3. What are Panera's competitive advantages? Can any of them be deemed "sustainable"?

4. Further research - See if you can find data reporting on how Panera's sales were affected by the recent economic downturn in the U.S. economy and if the effects were different in various regions of the country. Does this company have special strengths that help it deal better than others with challenges such as those posed by a declining economy?

Panera Bread is in the business of satisfying customers. With fresh-baked breads, gourmet soups, and efficient service, the franchise has surpassed all expectations for success. But how did a startup food company get so big, so fast? By watching and carefully timing market trends.

French Roots, American Tastes What’s so exciting about bread and soup? For some people, it conjures up images of bland food that soothes an upset stomach. Others think of the kind of simple gruel off ered to jailed prisoners in movies. But for Panera Bread, a company able to successfully spot long-term trends in the food industry, artisan-style bread served with deli sandwiches and soups is a combination proven to please the hungry masses. Despite its abundance of restaurants, Panera Bread is a relatively new company, known by that name only since 1997. Its roots go back to 1981, when Louis Kane and Ron Shaich founded Au Bon Pain Company Inc., which merged Kane’s three existing Au Bon Pain stores with Shaich’s Cookie Jar store. Th e chain of French-style bakeries offered baguettes, coffee, and sandwiches served on either French bread or croissants. It soon became the dominant operator in the bakerycafé category on the East Coast. To expand its domestic presence, Au Bon Pain purchased the Saint Louis Bread Company, a Missouribased chain of about 20 bakery-cafés, in 1993. It renovated the Saint Louis Bread Company stores, renamed them Panera Bread, and their sales skyrocketed.

Executives at Au Bon Pain invested heavily toward building the new brand. In 1999, Panera Bread was spun off as a separate company. Since then, the fi rm has sought to distinguish itself in the soup-and-sandwich restaurant category. Its off erings have grown to include not only a variety of soups and sandwiches, but also souffl és, salads, panini, breakfast sandwiches, and a variety of pastries and sweets. Most of the menu off erings somehow pay homage to the company name and heritage—bread. Panera takes great pride in noting that its loaves are handmade and baked fresh daily. To conserve valuable real estate in the retail outlets, as well as to reduce the necessary training for new employees, many bread doughs are manufactured off -site at one of the company’s 17 manufacturing plants. Th e dough is then delivered daily by trucks—driving as many as 9.7 million miles per year—to the stores for shaping and baking. At this point, there are more than 1,450 Panera Bread bakerycafés in 40 states and Canada. Franchise stores outnumber company-owned outlets by approximately one-third. ………………