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?

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French Roots, American Staples

so exciting about bread and soup? For some people, it conjures up images of bland food that soothes an upset stom-ach. Others think of the kind of simple gruel offered to jailed prisoners in movies. But for Panera Bread, a company able to successfully spot long-term trends in the food industry, arti-san-style bread served with deli sandwiches and soups is a combination proven to please the hungry masses.

Panera's roots go back to 1981, when Louis Kane and Ron Shaich founded Au Bon Pain Company Inc. "Ihe chain of French-style bakeries soon became the dominant operator in the bakery/caf category on the East Coast. In a 1993 expansion move Au Bon Pain purchased the Saint Louis Bread Company, a Missouri-based chain of about 20 bakery-cafs. It renovated the stores and renamed them Panera Bread, and their sales skyrock-eted. In 1999, Panera Bread was spun off as a separate company. Since then, its offerings have grown to include not only a variety of soups and sandwiches, but also souffls, salads, paninis, breakfast sandwiches, and a variety of pastries and sweets. Most of the menu offerings somehow pay homage to the company name and heritagebreadand Panera takes great pride that its loaves are handmade and baked fresh daily.]

Modern Tastes, Modern Trends

Panera's self perception as a purveyor of artisan bread well pre-dated the current national trend for fresh bread and the explo-sion of artisan bakeries throughout metropolitan America. Inaddition, Panera proactively responded to unease about trans fats by voluntarily removing them from its menu. "Panera recog-nized that trans fat was a growing concern to our customers and the medical community; therefore we made it a priority to elim-inate it from our menu," said Tom Gumpel, vice-president of bakery development. Panera menu items are free from trans fats, except for small amounts that occur naturally in dairy and meat products as well as in some condiments.

According to Ron Shaich, former CEO and now executive chairman of the board of Panera, "Real success never comes by simply responding to the day-to-day pressures; in fact, most of that is simply noise. The key to leading an organization is under-standing the long-term trends at play and getting the organiza-tion ready to respond."4

Stay Fresh Personality

Ron Shaich, growing up in Livingston, New Jersey, wasn't fo-cused on being a bread magnate. He wanted to be a public serv-ant, working in government on public policy. As a high school student he even interned for a congressman from his home state. His entrepreneurial spark was ignited during his sopho-more year in college at Clark University, when the owner of a lo-cal convenience store that didn't cater to students threw him and his friends out. "Ihat negative experience lit Shaich's entrepre-neurial fire. It was at that point when he had the inspiration for the student government at his collegehe was the treasurer to open a store for students, run by students. "Ihe store was a huge success at Clark. He became an impassioned advocate of student governments opening their own stores, speaking on the topic across the country.

Shaich's personal transformation from a governmentpublic service focus to a retailingmarket focus emerged from the rec-ognition that a store for the people, run by the people, could be a success. Following college, he matriculated to Harvard business school, where after graduation he went to work for the Original Cookie Company. With a desire to start his own cookie business, he was ultimately able to find a tiny retail location, opening the Cookie Jar in 1980. This first taste of entrepreneurialism ulti-mately led to a license agreement with Au Bon Pain, and to the story that has become famous with the explosion of Panera

Bread Co.5

Sticking It Out

All of Panera's attention to monitoring trends has paid off handsomely. BusinessWeek recognized Panera as one of its "100 Hot Growth Companies." And Forbes named it number 4 on its list of "Top 20 Franchises for the Buck." It consistently ranks at the top of Sandleman & Associates surveys of customer satisfaction. Under Shaich's leadership Panera has demon-strated that sticking to company ideals while staying in the lead on industry trends will please customers time and time again. But can this company continue to navigate the chang-ing dietary trends and concerns about fast food in today's unstable market?

quations:

1- Discussion How might consumers' perception of Panera's menu and atmosphere affect their dining experience and tendencies to return as customers?

2- Discussion Describe how stereotypes about the fast-food industry might positively and negatively affect Panera. Do you think of Panera as a fast-food restaurant, or has the company managed to distinguish itself from this industry segment?