How Panera Bread navigated Covid, the job market, inflation and more (published in 2022)

While Panera Bread is often located in malls alongside other fast-casual restaurants, the company has long been a pioneer in using quality ingredients and promoting healthy choices. It was one of the first companies to add calorie counts to its menus, and it maintains a “No No List” of more than 150 substances — such as high fructose corn syrup and aspartame — that it won’t use in its recipes.

Niren Chaudhary, the company’s CEO since 2019, did not make his career at companies with the same focus. He spent 23 years at Yum Brands, building fast food chains like KFC in his native India, then spent six years as a senior executive at Krispy Kreme before joining Panera, which also includes Caribou Coffee and Einstein Bagels.

However, since taking the helm, Mr Chaudhary has embraced the mission and pushed Panera to find ways to help fight climate change. The company has conducted an analysis to understand which ingredients have the most impact on the climate and is working to use more sustainable products. It purchases more renewable energy for business operations. It has committed to becoming carbon negative by 2050. And it’s started revealing just how carbon-intensive every item on the menu is.

“Twenty-five to 30 percent of greenhouse gas emissions come from food,” said Mr Chaudhary. “We as an industry contribute a lot to the problem, so that’s why we as a food industry have to do something about it.”

This interview has been shortened and edited for clarity.

How has your childhood in India influenced your career over the years?

India is a spiritual country, and it has shaped me and my core. My philosophy is that the best way to practice spirituality is to just be a good person, and being a good person is the best form of religion. That means you focus on your actions and are not so obsessed with the results. The right result will happen if there is a sincere purpose. That really shaped me growing up.

How has your relationship with food changed during your time in the restaurant business?

Food is such an emotional expression and experience of life. It becomes a catalyst for bringing people together and creating great memories.

I’ve been in the restaurant business for 30 years and have always been drawn to quality brands that are leaders in their own category and focus on doing the hard stuff to pursue their core values. What matters to me is that they are the best expression of what they can do in their respective industries.

Do you believe that the international spread of the American diet has had a detrimental effect on overall global health?

In emerging markets and a country like India, where organized food retailing does not yet exist, there is a huge opportunity to create high quality, consistent food experiences that are accessible to the masses. That just doesn’t exist. And it has the other multiplier effects of improving the back end of the supply chain, creating more jobs and more educational opportunities for the youth. So I think it has a very distinctive and definitive role to play.

Of course, brands need to be responsible, have an impact agenda, serve the communities, be accountable, take the lead on nutrition and the environment, and so on. If you don’t move in that direction, you have a limited shelf life.

And do you think the advent of restaurant chains has been a good thing for health and diet and cuisine and culture in India in particular?

I would say yes without hesitation. It depends on how these global brands emerge, but the ones that arrive with great respect for the local communities, local culture and bridge the local host country will be successful because you are meeting a consumer need. And there are some other significant multiplier effects in a country like India for the economy as a whole. So I would say absolutely.

Panera doesn’t fit neatly into the fast casual or fast food category. How do you explain how the company is different from other restaurant chains?

We want to make this world happier and healthier because of the quality of our ingredients. The way we deliver it is with food that is good and good for you, and that you eat well.

Many Paneras are located outside major urban centers. Do you think what you just described – food that’s good for you and fresh ingredients – is something that really appeals to a national audience now?

Doubtless. It’s becoming a core expectation of dining out consumers, especially now that the pandemic is over. Consumers are becoming increasingly aware of what they put into their bodies, as well as the impact their food has on the environment around us and on the planet.

Ten years ago, we were the first brand to make the calorific value of our food transparent, and then everyone followed suit. We recently became the first brand to make our food’s carbon footprint transparent, and we hope others will follow suit.

How are you going to make food that people crave and that is actually still healthy and contains good ingredients? Those two priorities were often at odds with each other.

We have a very deep and steadfast commitment to the quality of the ingredients we use, and we will never deviate from that in the future. So everything we do has to be clean, has to be real, has to be responsible, has to be transparent, has to match the values ​​of the highest quality ingredients. That will never change.

This is not easy to do. But we believe we can, and that’s where we resonate, because that’s a big idea. People no longer have to compromise. No false compromises.

What’s behind the carbon footprint labeling of menu items? I can’t imagine many customers asking for that.

I really think climate change is the biggest threat we all face. And I believe that we cannot expect governments and people around us to solve the problem. And I think it’s about time all business leaders and companies embrace that mindset, and many are. This is how we begin to make meaningful progress. Not by expecting someone else to come wave a magic wand and somehow make it better.

We all know that we support the aims of the Paris Agreement. We are running out of time and it is such a huge challenge. That’s why we think it would be wrong for a company like us not to take the lead in this.

Have you seen the effects of climate change on the business yet?

That is clearly a headwind and a risk. It’s something that we pay very close attention to on the supply chain side because we have such high quality ingredients. So I think the impact of climate change on crops and harvests is definitely a threat just around the corner. This will unfold in ways one cannot imagine.

How is the company adapting to the tight labor market?

The war for talent will be a significant headwind and challenge for the industry. But I think there’s a structural element to it as you go along, especially in the restaurant space. It will become increasingly difficult to recruit high-quality leaders for the restaurant business given other options people are looking at, such as the gig economy or becoming an entrepreneur. People reevaluate and ask, “How do I want to spend my life and how do I want to appear?”

We have invested heavily in capacity building and training and retention and recognition. But the longer-term bigger challenge is how do you attract more people into the restaurant industry? And how does Panera become the number 1 employer of choice within that?

Have supply chain disruptions impacted the business?

There is certainly a huge disruption on the supply side. There’s no doubt about it. And that leads to inflation and everything else. We have a lot of strategic suppliers working for us, and the long-term nature of our contracts has allowed us to navigate the supply chain shortages during the pandemic remarkably well, with the exception of items like packaging, which are very, very erratic. Also, our sourcing is assumed to be entirely within the US, so there’s less volatility in terms of global disruptions. So I’m pretty confident that as the supply chain gets back to normal, we’ll see the inflation component ease up a bit.

What about regular pay? Some starting salaries for your entry-level employees are still close to minimum wage.

For our frontline workers, our philosophy is to be above the local competition. So whatever the local competitive environment, we want to be better than what’s out there and compete on that basis. But we will differentiate with our culture, our growth opportunities and our education. Because it is not limited to a financial transaction. It’s more than that. It’s about how you are treated, how you are respected, how you grow, what the brand stands for, things like the impact agenda. People want to work for companies that stand for something and have meaning.