Shaich, CEO and Chairman of Panera Bread Company, combined the ingredients and cultivated the leavennign agent that catalyzed the companys phenomenal growth. ** Under Saich’s guidance, Paneras total systemwde revenues rose from 350.8 Million in 2000 to 1353.5 million in 2009, consisting of 1,153.3 million from company-owned bakery-café sales, 78.4 million from franchise roylalties and fees, and 121.9 million from fresh dough sales to ffranchisees. Panera’s shares have outperformed every major restaurant stock over the last 10 years. Panera’s share price has risen over 1,600% from 3.88 a share on December 31, 1999, to 67.95 a share on Deember 28, 2009. Panera largerly led the evolution of what became kniown as the “fast casual” restaurant category. History
Panera Bread grew out of the company that could be considered the grandfather of the fast casual concept: Au Bon Pain. 1976, French oven manufacturer Pavaille opened the first Au Bon Pain in Boston’s Faneuil Hall as a demonstration bakery. ** Struck by its growth potential, Louses Kane, a veteran venture capitalist, purchased the business in 1978. Between 78-81, Au Bon Pain opened 13, and subsequently closed 10, stores in the Boston area and piled up $3 million in debt. In 1980, after opening the cookie jar bakery in Massachusetts, Saich, a recently Harverd Business graduate, befriended Louis Kane. Shaich was interested in adding bread and croissants to his menu to stimulate morning sales. He recalled that “50k ppl a dayt were going past my store, and I had nothing to sell them in the morning.” 1981 => the two merged the Au Bon Pain bakeries and the cookie store to form one business, Au Bon Pain Co. In. 1985 => the partners added sandwiches to bolster daytime sales as they noticed a pattern in customer behavior. ** Differentiated from other fast-food competitors by its commitment to fresh, quality sandwiches, bread, and coffee, Au Bon Pain attradcted customers who were happy to pay more money ($5 pe sandwhich) han they would have paid for fast food. ** 91, Kane and Shaich took the company public.
** 94, the company had 200 stores and 183 million in sales, but that growth masked a problem. The comoany was build on a limited growth concept, Saich referred to, “high density urban feeding”. The main customers of the company were office workers in locationslike New York, Boston, and Washington DC. The real estate in such areas was expensive and hard to come by,. This stgrategic factor limited expansion possibilities. 93 Au Bon Poain ac1quired the Saint Louis Bread Company in 83 for $24 Million. Shaich saw this as the company’s “gateway into the suburban marketplace.”
Acq1uired company, consistested of 19-store bakery-café chain located in Saint Louis, Missouri. The maamanegemnt team understood that a growing number of customers wanted a unique expression of tastes and styles, and were tired of the commodization of fast-food service.
Shaich had aniother “eu reka” moment in 95. When he recognized the capacitiy of the neighbothood bakery concept was greater than that of tAu Bon Pain;s urban store concept.
The Bakery-concept capitalized on a confluence of current trends: the welcoming atmosjpbere of a coffees ships, tgbeh food of sandwhich shops, and the quick service of fast food.
While Au Bon Pain was focusing om making Saint Louis Bread a viable national brand, the company’s namesake unit was faltering. Rapid expansion of its urban outlets had resulted in operational problems, bad real estate deals, debt over $65 million, and declining operating margins.
** Stiff competition form bagel shops and coffee chains such as Starbucks compounded operational difficulties. ** Au Bon Pain’s fast-food ambiance was not appealing to customers who wanted to sit and enjoy a meal or a cup or dcoffffee. At the same time, the carfe style atmosphere of Saint Louis Bread, known as Panera outside the Saint Louis area, was proving to be successful. 96 => comparable sales at...
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