Ron Shaich, Panera Bread – Hero of Conscious Capitalism
When Ron Shaich declares that Panera is a force for good “that brings out the best in all of us,” he means it. Rated one of “The World’s Most Admired Companies” for five years running by Fortune Magazine, Panera has been at the forefront of conscious capitalism, with Shaich as the driving force. By any measure, Panera has been one of the most successful restaurant companies in history, growing from one 400-square-foot cookie store to a system with over 2,000 units, approximately $5 billion in sales, and over 100,000 associates. What’s more, Panera was the best-performing restaurant stock in the past 20 years, delivering a total shareholder return up 86-fold from July 18, 1997, to July 18, 2017, when Panera became a private company. That compared to a less than two-fold increase for the S&P 500 during the same period.
According to Shaich, Panera’s success comes from the ability to undertake long-term transformations that deliver for all stakeholders, including guests, team members, suppliers and the communities in which Panera operates. These transformations result from Shaich’s unrelenting focus on innovation that builds competitive advantage. During his tenure as CEO, he has hosted annual “think sessions” during which he and his team “sit down every year and try to figure out where we want to be in five years.” Among the questions, Shaich asks are, “How do we stay competitive? What do we have to do to ensure we remain a better competitive alternative? And then we literally draft on paper what we want to achieve in the next 12 months.”
These annual “think sessions” have yielded a powerful strategic plan whose primary themes – digital, clean food, loyalty, delivery, and new formats for growth – are shaping the restaurant industry today. Panera is a leader in digital, with more than 27% of sales now digital and more than $1 billion in digital sales on an annualized basis. Panera is the first and only national restaurant chain with a 100% clean menu. Its loyalty program is the largest in the industry at 27 million members, with more than half of all transactions through the program. And Panera’s omni-channel approach leads the industry, with delivery now available in more than 50% of the system and catering sales growing 16% each year.
Shaich has also focused on Panera’s corporate responsibility, with the goal of increasing the positive impact Panera has on its guests, team members and the world. For instance, in an effort to improve animal welfare, 100% of the poultry on Panera’s sandwiches and salads is now raised without antibiotics; 100% of the bacon, breakfast sausage and ham on Panera’s sandwiches and salads is now raised without antibiotics and is gestation crate free; 95% of Panera’s beef is now grass fed and free range; and 16% of all eggs systemwide are now cage free. Shaich has also reduced the company’s carbon footprint and water usage while increasing its recycling.
In addition, Panera has taken a lead in addressing food insecurity through programs such as its “Day-End Dough-Nation,™” in which all remaining unsold food at the end of each day is given to local nonprofits and homeless shelters. These donations total over $100 million annually and help people at more than 3,500 local organizations. Panera also has programs to provide free meals to families during the holidays and free food and school supplies to needy students. Community members can also hold events at local Panera bakery-cafes and direct 20% of all sales to a nonprofit of their choice. Other philanthropic efforts include selling Pink Ribbon bagels each October. In the past 16 years, Panera has sold over 16 million bagels and donated more than $2.6 million to breast cancer organizations across the country.
Shaich is also President of the Panera Cares Foundation, which operates a small number of nonprofit community cafes. These stores “have no prices. Instead, guests are encouraged to pay what they can for their meals, allowing everyone who visits to enjoy delicious and nutritious food in a dignified manner.”
Finally, Panera takes care of its own, providing full health care options as well as childcare, tuition discounts, a retirement account, and an emergency fund for employees called Friends in Knead. Given how well everyone is treated and how they work together for a common end, it is no wonder that Panera has had such success – and others have noticed. In fact, Shaich was recently named the Second Most Influential Leader in the Restaurant Industry on Nation’s Restaurant News’ 2017 Power List.