Chapter 12 Case Study:

Panera BreadA Company with Personality

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. How did a start-up food company grow so fast and so successfully? To answer this question, you have to study founder Ron Shaich and appreciate his personality.

Bread and Soup?

What's so exciting about bread and soup? A lot, as it turns out. At Panera Bread, artisan-style bread served with deli sandwiches and soups is a combination proven to please. The company's roots go back to 1981, when Louis Kane and Ron Shaich founded Au Bon Pain Company Inc. 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. Sales skyrocketed. In 1999, Panera Bread was spun off as a separate company that takes great pride in its handmade loaves that are baked fresh daily.

What's more, today, after 10 years of hard work the bakery chain has eliminated a total of 96 ingredients falling into the artificial additives category from its menu. This caps efforts to convert the menu of the 2,000-unit bakery chain to a clean menu, from its line of coffee beverages to its salad dressings.

Can Do Personality

According to Ron Shaich, founder, chairman, and CEO 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 understanding the long-term trends at play and getting the organization ready to respond.

Growing up in Livingston, NJ, Shaich wasn't set on being a bread magnate. He wanted to be a public servant, working in government on public policy. As a high school student, he even interned for a congressman from his home state.

Shaich's entrepreneurial spark was ignited during his sophomore year at Clark University, when the owner of a local convenience store that didn't cater to students threw him and his friends out. This experience gave him the inspiration for the student government at his collegehe was the treasurerto open a store for students, run by students. The store was a huge success at Clark. Shaich went on to become an impassioned advocate of student governments opening their own stores, speaking on the topic across the country.

Belief in People

Shaich's personal transformation from a government-public service focus to a retailing-market focus emerged from the recognition that a store for the people, run by the people, could be a success. Following college, he matriculated to Harvard's 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 ultimately led to a license agreement with Au Bon Pain and to the story that has become famous with the explosion of Panera Bread Co.

Changing Times

Under Shaich's leadership, Panera has demonstrated 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 changing dietary trends and concerns about fast food in today's unstable market? Panera is also working to stay current with quickly changing technological trends in the restaurant business. With Panera 2.0, the bakery chain has initiated a tech-focused process to incorporate tablets into its restaurants to increase ordering efficiency and speed, as well as to expand mobile ordering options.

Case Analysis Questions

1. 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? (5 Points)

2. PROBLEM SOLVING

You are a leadership succession consultant called in to assist in hiring a new CEO. What personality characteristics of Panera's founder Ron Shaich contributed to his success and that of the company? How good of a fit are these characteristics with Panera at its postentrepreneurial stage of operations? What would you identify as the three or four most important of Shaich's personal qualities that should be sought after in the next CEO, and why? (10 Points)

3. FURTHER RESEARCH

Find data reporting on Panera's recent sales and product initiatives. Find out more about Shaich and how his values and personality affect the company, its mission, and its strategies. Is Panera on the leading edge of its industry, or are other competitorsespecially new entrantsstarting to nip away at its traditional customers and markets? Does Panera seem to have what it takes to deal with the shifting customer values and perceptions of the fast-food industry? (10 Points)