After news broke that Panera Bread is shutting down another of its fresh dough manufacturing facilities in Chandler, Ariz. (as first reported by the St. Louis Business Journal), Nation’s Restaurant News learned that the JAB Holding-owned bakery-café chain has shut down at least two more of its fresh dough manufacturing facilities in Denver and Seattle, bringing the total to four closures. In areas where FDFs are shutting down, the company is switching to a par-baked operations model, where bakery items are partially pre-made off-premises, frozen, and then finished in the oven at a Panera café.
The fresh dough manufacturing facilities have historically been staffed by bakers who would produce all the fresh bread, bagel, and roll dough for the brand, and transport the fresh dough to surrounding Panera bakery-cafes every day, where they are baked from scratch on premises. NRN previously reported on the beginnings of this shift earlier this year, though now the FDFs appear to be shuttering at a more rapid rate.
Sources close to the matter confirmed with Nation’s Restaurant News that the Denver, Seattle, and Arizona FDFs (along with the Houston facility earlier this year), are shutting down due to underperformance. Representatives for Panera declined to clarify how performance at these facilities is measured. Current and former employees have explained that the Panera fresh dough facilities operate as separate entities from the cafes they serve, with their own profit margins, losses, etc. Last year, Panera Bread as a company recorded 2.6% sales growth and 2.2% unit growth, according to the latest data from Technomic.
Panera employees posting on Reddit claim that the Denver and Seattle manufacturing facilities closed last week, followed by the announcement of the Arizona facility closure, which will result in a loss of 64 employees when the facility permanently ceases operations on Aug. 15. Panera is offering severance packages, outplacement services, and hosted a job fair for all displaced workers.
Other current and former employees on Reddit are speculating that other fresh dough manufacturing facilities are next on the chopping block, including Stockton, Calif. and Atlanta. One Panera employee currently working as a baker in the Atlanta area said that they were told by their direct supervisor that the Atlanta-area bakery-cafes will likely make the shift to the par-baked model in October.
Another current bakery employee from a different region showed Nation’s Restaurant News a letter that their bakery market manager sent to employees in April explaining that Panera’s “Bakery of the Future” plan is coming, and cafes “will be transitioning to frozen dough,” though the timeline of when this will happen is unclear.
“The timeline we currently have that this may be happening to us is, at the earliest, end of next year-- It may even take as long as four years to come to us,” the letter, from which names and identifying geographic information have been redacted, reads. “When this transition is made, all of you will be offered positions within the cafes as baker-associates. My understanding is your pay and full-time status/benefits we remain intact.”
A source close to the matter clarified that the Stockton, Calif. facility is not closing but declined to comment on the other rumored closures, stating that the fresh dough facilities are closing due underperformance, and not a shift away from the company’s history of freshly baked goods. Representatives for Panera Bread declined to comment on the record regarding FDF closures, or rumors of the company transitioning to a par-baked operations model.
These changes are coming at a time of transition for Panera. In March, NRN reported that amid news of the bakery-café chain’s “biggest menu transformation in history,” Panera has also been removing many items from the menu, including flatbreads, Mediterranean bowls, and more.
The company has also been quietly rolling back some of its “clean food guidelines,” which have previously been touted as brand differentiators. New store guidelines released earlier this year required employees to remove all signage and mentions of “no antibiotics ever, vegetarian-fed, grass pasture-raised, animal welfare and hormones,” allowing for more “flexibility” in feeding and sourcing standards, an internal memo circulating several months ago said.
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