Home Markets Inside Panera Bread's plan to dominate the 'Zoom lunch' as the pandemic...

Inside Panera Bread's plan to dominate the 'Zoom lunch' as the pandemic continues to decimate the $60 billion catering industry

8
investorsdiurnal business news magazine

This post was originally published on this site

catering image Panera Panera catering promo

  • Roughly, 49% of restaurant operators say catering sales have decreased during the pandemic, according to market research firm Technomic.
  • Panera Bread is leveraging its much-envied tech stack to create a Virtual Catering program for remote workers. The voucher system rolls out next week. 
  • “It provides this sense of community that when you’re having the meeting that everyone is sharing this meal,” Panera Breach executive Chris Correnti told Insider in an exclusive interview.
  • Visit Business Insider’s homepage for more stories.

Catering is a $60 billion business – an important foodservice revenue channel that cratered during a prolonged pandemic that has forced offices to host remote meetings and discouraged social gatherings like birthday celebrations. 

For Panera Bread, the pandemic has impacted its robust catering program, which normally represents 10% of sales. To revive this important revenue segment, Panera Bread is rolling out next week two new off-premise ordering programs.

The company is unveiling Virtual Catering after testing the program in December with about 50 customers, ranging from pharmaceutical representatives to medical facilities. The new catering program is geared for remote workers.

Read More: The largest franchise operator in the US, Greg Flynn, shares his playbook for success and reveals why his latest $550 million bet on Pizza Hut and Wendy’s is key to growing his empire

It allows companies or individuals to buy digital vouchers and send them to remote workers or clients ahead of a meeting or networking event. The vouchers can be used to buy a sandwich, salad, or flatbread pizza from a local Panera Bread that can be eaten during a video conferencing meeting. 

“It provides this sense of community that when you’re having the meeting that everyone is sharing this meal,” Chris Correnti, senior vice president of off-premise channels at Panera Bread, told Insider in an exclusive interview. “So regardless, if you’re 10 miles away from each other, or 1,000 miles away from each other, we can make this a reality.”

Since the pandemic swept the nation last March, Panera Bread has been leveraging its much-envied tech stack to find new revenue channels to accommodate the growing demand for off-premise orders.  Years before consumers were forced to shelter at home, Panera Bread’s more than 2,000 locations were offering guests new ways to order from kiosks to rapid pick up through its app. 

The company was also one of the first fast-casual brands to add fast-food style drive-thrus lanes to boost off-premise sales. 

 Besides Virtual Catering, the company plans to also roll out Panera To You, geared for batching group orders into one delivery.

C121 FlatbreadFamily_OOH Panera Flatbread Flatbreads from Panera Bread

On Wednesday, Panera Bread also announced plans to add two more flatbread pizzas to its menu after selling 5 million since the delivery-centric food item rolled out nationwide in late October.   

“It’s been extremely well received, and we’re excited about this new platform,” Correnti said.

With the addition of the two new flavors, Panera Bread plans to add them as an option to the chain’s Family Feast program. 

Like other chains creating meal kits during the pandemic crisis, Panera’s program bundles menu items geared for families looking for value-oriented take-home orders. The new bundles offer two flatbread pizzas and two salads for $23 or three flatbread pizzas and three salads for $29. 

“Those [family meals] offer both value and convenience with products that are really highly desirable and travel really well and deliver really well,” Sara Burnett, vice president of food values, sustainability and public affairs at Panera Bread, told Insider.

Panera’s latest moves are aimed at capturing consumers whose “off-premise” buying habits have been amplified during the pandemic. At Panera Bread, off-premise sales, which includes delivery, carryout, catering, and drive-thru sales, went from 40% of sales to 85%. 

But catering has been the one off-premise segment that has challenged the industry during the pandemic. 

Before the pandemic, off-premise catering represented more than $60 billion in annual sales for restaurants, retail, and independent caterers, according to market research firm Technomic.

While the market research firm hasn’t calculated the economic impact the pandemic has had on catering, a recent survey suggests it’s been a sore point for restaurant owners. Roughly 49% of operators said catering sales have decreased, according to Technomic.

“As a general standard, the catering industry has been almost cut in half based on market research that has been shared with us. And you know, we’ve seen our sales also be impacted by that,” Correnti said.

That’s why Panera Bread knew it had to recapture catering in a new way. 

Unlike a gift card program, Panera Bread said companies or sales workers looking to meet with clients or remote workers over Zoom can buy 10 vouchers for $20 each, as an example. 

Some third-party delivery operators such as DoorDash and Grubhub have implemented similar programs to help corporate America give remote workers access to free meal delivery.  DoorDash for Work, for example, allows businesses to buy gift cards in bulk as a reward for remote workers.

At Panera Bread, the perk works differently. 

The digital voucher is timestamped so it is only valid for the day of the meeting. Instead of giving a gift card, Virtual Catering is meant to bring meeting attendees together by sharing the same meal, Correnti said. 

This way, the voucher does not act like a gift card, which can be problematic for some professionals who are precluded from accepting a gift, Correnti said. 

Also debuting soon after testing last month is Panera To You. This will be aimed at workers who are back in the office or educational institutions who might want to bundle the delivery of meals on a certain day of the week.

Each employee can order their food, but Panera will bundle those orders and charge one delivery fee. 

Correnti said these new off-premise services are permanent, not temporary pandemic-fueled solutions.  According to a Harvard Business School study, at least 16 percent of employees will remain at-home workers long after COVID-19 recedes. 

In a post-vaccinated world, Correnti said he doesn’t see off-premise gains made during the pandemic subsiding substantially.  

“Off-premise through all of these digital enhancements is here to stay,” he said. “It’s reasonable to think there’s going to be some channel shifting as offices open back up.”

For Panera, there’s been an ‘incredible surge” of new customers discovering new ways to order food during the pandemic – whether it’s through curbside pick up or using one of 850 Panera Bread restaurants equipped with drive-thru. 

“It’s very likely that the progress off-premise has made from a buying journey will all be retained,” Correnti said.