Reinvention Turns Panera Into a Fast Casual Phenom
Remember when Panera was just the place you and your friends got together for a latte? Where you could kill a couple hours working on a laptop and sipping hazelnut coffee? Well, those things are all still possible, but that’s not how Panera is defining itself these days.
After a complete menu makeover, where some staple menu items were kept, but many, especially on the lunch menu, were jettisoned, Panera has clearly positioned itself to compete in the fast casual diner category, rather than the breakfast and business meeting outside the office category.
Perfect timing. Market leader Chipotle continues to post difficult returns. Sure, the stock has stopped plummeting, but asking anyone about the brand and soon you’ll be talking about food poisoning. That sort of thing is just hard to shake, even among dedicated fans. That reality is reflected in the expected first-quarter projections. Not abysmal, but not growing at anywhere near the pace that may have been expected before the E. coli scare hit the news.
Meanwhile, Panera is taking advantage of the market shift. Stock is soaring, reaching an all time high not long ago, with no ceiling in sight. Just how fast is the stock growing? It’s up 30 percent over the past year.
Two factors here: good timing and quick moves. When Chipotle stumbled many industry insiders wondered who might challenge for the top spot. Panera didn’t wait, they pounced, flipping the menu and rebranding as a fast casual diner without even putting out a campaign letting people know. They just showed up and – boom – new menu meant to directly challenge Chipotle’s healthy-ish selections.
That’s not to say the menus are the same. Far from it, actually. It’s the perception that mirrors. Consumers look at Chipotle and think: healthier than typical fast food. Now many are thinking the same about Panera. It’s a master stroke pulled off without too terribly much effort.
Both brands made their name and staked their claim on better, healthier ingredients. But, now, only one brand comes without the dreaded aftertaste of possible food poisoning. Sure, Chipotle has cleaned up its act, but perception is reality, and it appears consumers need a bit more time to get over their burrito jitters. In the meantime, they seem to have decided soup and salad make a fine replacement.