Retail

Going ’Clean’ Isn’t Easy Work — Just Ask Panera

Going clean and green is just about everyone’s favorite marketing tag line these days. It seems every restaurant from fast food on up is promoting its locally sources and “clean ingredients,” while organic grocery products that would have been exotic a decade ago are now a common staple of the shelves. And for a certain high-spending segment of consumers, purity is an expectation in the good.

In that environment, Panera Bread’s corporate pledge two years ago to clean up its food act and remove manmade preservatives, sweeteners, colors and flavors from its foods wasn’t much of a surprise. Everyone in the food game sounded like they were saying something similar in 2015.

But what makes Panera really stand out is just how incredibly seriously they took the pledge — or how complete an overhaul went along with the change. Two years later,Panera has lived up in full to the promise to be rid of artificial additives and ingredients from everything they sell — from sandwiches to lattes.

During the two-year journey to make the 96-ingredient no-no list an artifact of their corporate history, Panera learned an important lesson: Cleaning up is hard to do. Because big changes to the menu aren’t just about the menu, according to Panera CEO and Chairman Ron Shaich — they’re about a whole reboot of the corporate culture that meant new training for employees, new lessons for customers about what “clean” eating really is and the rather big job of making everything taste right, even when you throw out the recipe book.

“We wanted to be part of fixing the food system. In the ’60s and ’70s all these additives were put in food for good reason — to extend the shelf life of products for distribution purposes and to drive better economics. But then you realize maybe all of these things aren’t so good,” Shaich noted.

So how did they get to better?

Rebooting The Broccoli 

Anyone who has ever eaten at Panera a cold and damp day knows what it is to be healed by the broccoli cheddar soup. It’s delicious and comforting. It also took about 60 revisions in the quest to clean up its ingredient list before the clean version tasted like the original and had the right consistency. Soup may taste simple — but even something that small requires the right balance of “of milk, cream and emulsifiers, like a Dijon mustard, to give it a creamy rich texture,” said Shaich.

The old emulsifier, and the restaurants industry’s popular favorite, is sodium phosphate — so the change meant new cheese, mustard and unpreserved vinegar.

And that’s just one soup.  Every menu item was touched in some way, meaning all in, 122 of ingredients out of 450 had to be reformulated.

And, Shaich noted, the recipe is now only half the battle, because Panera isn’t making soup for its family after a hard day — Panera is making soup for everyone’s family after a hard day at 2,000 retail locations nationwide. Restaurants that now needed to source very different ingredients in a totally new way.

“We had to break down each ingredient, and in many cases that meant questioning not only our supplier but our supplier’s supplier,” said Shaich. “You have to go back all the way to the source, sometimes as far back as the field. We had a team of 10 people working on this, some for a decade. Many new ingredients had a shorter shelf life, which meant intensifying food safety.”

Plus, Panera had to continue serving food up to customers at a rate they could afford.

Containing Costs 

When directly asked, Shaich didn’t put a number on the decade-long battle to get their menu preservative- and nitrate-free. He noted that cost is hard to calculate — because while changes always wrack up expenses in the short term, over the long term, there are savings. In some cases, preservatives were adding costs — and the quest to purge certain kinds of products pushed greater efficiency in the chain.

“Removing nitrates and nitrites from deli meat — we got more efficient, by using the whole pork belly. We use the broken pieces as bacon bits to top our salads.”

That doesn’t mean the entire upgrade has been purely zero sum — turkey is up in price — but in general Panera’s menu costs are much more tied to the rate of inflation than to the upgrades they have made.

And, of course, there is something to be said for the inestimable value of customer loyalty and confidence — which Panera’s CEO said he thinks have both been boosted by the change.

“To some people, this is a really big deal, but not to everyone. More broadly, it’s like a Good Housekeeping seal of approval. When you walk into a Panera, you can trust the food,” said Shaich.

So how do they build that trust?

According to the CEO, it’s about being clear about what they mean when they say the food is clean.

Real Clean Food 

A challenge with a big upgrade — particularly one as trendy as natural food products — is that it can be hard to stand out. But Panera holds itself to a higher standard, according to its CEO.

“We’re being very clear in what that means for us. It means zero artificial flavors, preservatives, sweeteners or colors from non-naturally occurring sources in any food in our restaurants in the U.S. Period.”

He said this is important because playing fast and loose with the term abounds in the food industry. McDonald’s was advertising Chicken Nuggets as preservative-free — and Panera’s CEO publicly called them out on it.

“I saw their commercial during the Olympics saying their McNuggets are preservative-free, but kids will dunk it in sauces laced with preservatives,“ recalled Shaich. ”That’s wrong. I have never pushed on a competitor. It isn’t part of our public relations program. But as a parent, I’m offended when people are trying to pretend to be something they’re not, so it was very much a personal statement. We aren’t on a campaign to make everyone look bad. We’re doing what we do because it’s the right thing to do and because it matters to our guests. Taking a leadership role in anything opens yourself to criticism.”

Panera’s CEO said at the end of the day, consumer experience is what counts at the counter — and cleaning up their act has allowed them to better do what they went into business to do.

“We believe guests are looking for a more personalized experience with real food options that they can trust. That means understanding where ingredients in food come from. Our 100 percent clean-food initiative was just one of many steps to meet the growing demand for greater transparency.”

We’ll keep you posted on the steps yet to come.

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