Panera is stepping up its breakfast game. The fast casual giant is making the biggest changes in several years to its morning menu, and is bolstering its tech to support a growing customer base for the daypart: diners on the go.
"Breakfast delivery has grown over 250% for us," Panera's chief growth and strategy officer Dan Wegiel told Restaurant Dive. "Delivery is our largest growth driver and within delivery, breakfast delivery is our largest growth driver."
Delivery didn't always hold this much potential for the restaurant. When Panera first tested its in-house delivery program in Louisville five years ago, the company almost shelved the service after dealing with logistical complexities and a shortage of drivers. In May 2018, the company expanded delivery nationwide and in November, it tested breakfast delivery in 231 cities.
It has since rolled out breakfast delivery to more than 600 cafes, he said.
This daypart has also attracted a lot of attention in the industry, and competition has grown fierce, but that hasn't necessarily meant a lot of high quality options for consumers, especially for those on the go. McDonald’s, which partners with Uber Eats for delivery including breakfast, has been navigating through slower breakfast traffic after its all-day breakfast menu led to consumers eating their breakfast favorites later in the day. It’s also been pushing several promotional deals for the menu.
But unlike many QSR brands that have weighed heavily on promotions to try and generate breakfast traffic, Panera will not.
"We’re honing in on a set of customers and really understanding their needs to try and carve out options that we can win without having to resort to those tactics," Wegiel said.
New tech may help breakfast boom
Panera is increasing its focus on breakfast for a reason. Although 78% of breakfasts are prepared or eaten at home, in-home breakfasts declined by eight meals per capita from 2015 to 2018, according to NPD Group. Two breakfast meals per capita shifted to foodservice during that time.
The morning daypart represented 21% of restaurant traffic in 2018, compared to 19% in 2013, according to the National Restaurant Association’s 2019 State of the Industry report.
"Breakfast has been one of the few areas in the restaurant space that has been organically growing," Wegiel said.
To leverage this growing interest in breakfast, Panera has also added a rapid reorder option to its app and website that lets customers reorder their favorite options for pick-up or delivery by just clicking a button. Wegiel said this option is four times faster than the traditional online ordering method.
"It’s ideal for this kind of habitual daily order of breakfast," he said.
The feature could be a tremendous growth opportunity for Panera. While rapid order pickup makes up 10% of the company’s sales today, more than 70% of breakfast daypart sales comes from off-premise, he said. To capture more customers on the go, it’s also testing Panera Tap in May, which Wegiel said is like Amazon Go for restaurants. Customers use the Panera app on their phones and tap an NFC smart poster to purchase grab-and-go coffee, according to a press release emailed to Restaurant Dive.
The technology is going to be piloted in Raleigh-Durham, North Carolina, but as soon as the company gets confirmation of its effectiveness, it will expand this technology across the chain and look into other applications, Wegiel said.
"We think this technology can go in a lot of directions for us," he said.
A more portable menu option
Focusing on-the-go breakfast diner also means offering menu items that are more portable. Panera has already rolled out 10 new bakery items ranging from almond and chocolate croissants to a vanilla cinnamon roll, Panera's vice president of food policy and wellness Sara Burnett told Restaurant Dive. The new breakfast menu also includes three breakfast wraps to create a more portable experience.
The new wraps will come in three varieties: a maple bacon scrambled egg and cheese wrap, chipotle chicken scrambled egg and avocado wrap and a Mediterranean egg white wrap, Burnett said.
The wraps were launched because the company realized that its new breakfast brioche sandwich, which launched last year, was better suited for the dine-in experience, Burnett said. Wraps also were the largest single product offering that the cafe didn’t offer, Wegiel said.
But the restaurant hasn’t done away with its breakfast sandwiches, since that still meets the needs of dine-in customers, Burnett said.
Panera is also revamping its coffee program to round out its updated breakfast offerings. This will include rolling out new coffee equipment and grinders in addition to its new hot and cold brew offerings. The new coffee menu will include a traditional flavor and two Madagascar flavors (Vanilla Cream and Vanilla Almond made with almond milk) as well as a relaunch of light and dark roast hot coffee, Burnett said. The hot coffee will be available nationwide by late summer.
By upping its coffee offering, customers won’t need to go to an alternative restaurant for their caffeine needs and can get their beverages and drinks from Panera instead, Wegiel said.
Unlike Starbucks, which has been trying to increase food sales, Panera has always been food focused, and pairing high quality coffee with its food menu items made sense for the company.
All of the new food and beverages meet the chain’s commitment to clean food, which means that its food has no artificial preservatives, sweeteners, or artificial colors or flavors, Burnett said. This is another differentiator among its quick-service breakfast rivals, she said.
"This is just what the guest is looking for right now: high quality food that is portable," Burnett said.