ST. LOUIS Panera Bread Co. plans to bolster its breakfast program with the introduction in January of two new coffee blends and a parfait made with fresh strawberries and a proprietary granola, executives told investors Wednesday.
The officials also divulged plans to shoot for a higher profit margin on the chain’s soups by replacing the current 8-ounce serving with a 12-ounce standard portion. The November changeover should add as much as an additional 1 percent of sales to gross profits, said Ronald Shaich, Panera's chief executive. He did not reveal how the price of the 12-ounce bowl of soup would vary from the charge for the cup-size portion.
The 8-ounce serving will be offered solely as part of the bakery-cafe chain’s You Pick Two offering, which allows patrons to build a meal by selecting two items from a roster of soups, salads and sandwiches, Shaich said. He noted that sales from the You Pick Two menu for the third quarter ended Sept. 25 were running about 15 percent above the tally for the year-ago quarter.
Shaich acknowledged that some patrons may forgo a You Pick Two order to have a 12-ounce bowl of soup, but he predicted that the switch to the less-profitable item would be offset by the trade-up to the larger soup serving.
“There’s significantly greater gain relative to the single cup of soup and so this will be a net positive,” he said during Panera’s conference call with analysts.
Shaich cited the expansion of Panera’s breakfast menu as a key example of how the brand is attempting to reverse a slide in transactions. Panera has seen its transactions drop off by about 3 percent, “while others in our industry are seeing 5-percent to 10-percent transaction fall-off,” he said.
The new products will share the morning menu with Panera’s line of grilled breakfast sandwiches. Shaich described the chain’s planned yogurt parfait as “the perfect health breakfast offering,” and commented that he eats one every day.
The new coffees consist of a light and dark roast that have been under development for more than two years, Shaich said. He noted that the chain also would adopt “a strict one-hour kill time,” meaning coffee brewed more than an hour previously would be dumped.
For the quarter, Panera posted a 15-percent year-over-year increase in net income, to $13.7 million, or 45 cents per share, on a 15-percent climb in revenues, to $315.2 million.
The company operates or franchises 1,294 bakery-cafes.