By Michael F. Carmichael
Dec. 1, 2011
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If you hear the words “soup kitchen,” the vision you have is not one of Panera Bread Bakery-Cafes - yet they, too, have kitchens that create soup -¦ it’s delicious and they make a lot of it, in addition to bread, other bakery products and sandwiches. Three of those Panera stores, however, are not like the other nearly 1,500. They’re called Panera Cares and, if you can’t pay the normal price for that delicious soup or anything else on the menu, you pay what you can - or, if you’re able, you pay more than the suggested “donation” price.
Kate Antonacci is project manager for Panera Cares. “Since Panera was founded,” she explains, “giving was a fundamental part of our DNA.” For nearly 10 years the company has been giving back to their local communities either via cash donations to charities or with donations of bakery products at the end of the day.
“That amounts to $150-200 million worth of goods each year,” Antonacci says. Additionally, about $2 million is donated through collection boxes at each store into which customers contribute cash donations that are then augmented by Panera.
All told, it’s a relatively significant giveback to the communities served by Panera stores. So, how did they get into the pay-what-you-can-afford model? “About two years ago we were sitting around a table,” Antonacci relates. “We were giving away a huge amount of money, but we felt very disconnected from it. We weren’t interacting with the folks who were on the receiving end of our donations. By chance, Ron [Ron Shaich, co-founder of Panera and president of the Panera Foundation, which runs the Panera Cares restaurants] saw a “Making a Difference” segment on NBC Nightly News about a community cafe out in Denver that was founded on the premise that anybody could get a meal, regardless of their means.”
That was when the light went off. Panera could replicate the idea but with the support and experience of running those 1,500 profit-making stores. “It would be a much more interactive and direct form of giving,” says Antonacci. Instead of opening similar operations immediately, Panera approached the program with a startup mentality. “We didn’t want to jump into it right away. We weren’t too smart yet. We spent about nine months learning, visiting other models that exist out there. We were trying to understand all of the ways those who are in need of a meal got one. We visited soup kitchens and food pantries and that was probably the turning point in our thinking, in that it was a completely different eating experience.”
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“It was the opposite of what you would experience in a Panera,” Antonacci continues. “You went in, you were kind of embarrassed to be there, the food wasn’t all that great and nobody looked at you. You left and your stomach was full but that was about it. We wanted to have a place where anybody could eat but you also felt good about going there. We feel to this day that it’s ‘serving all with dignity’ and we really mean that.”
Thus the idea of the Panera Cares stores being just like regular Panera stores - except for the pricing structure - was developed. “It’s high quality food served by friendly, warm associates in an engaging environment,” Antonacci says. “We didn’t want to compromise any of those components. The only difference is how one pays - if one pays.”
How one pays, or not, is another Panera innovation. At some community cafes (that’s the new term for similar operations) “you pay cash at their register,” Antonacci explains. “They’ll look at you and say it’s a ‘suggested amount’ and then they’ll just stare at you until you’re forced to verbalize what you’re going to give. We felt that was a lot of pressure. We have a suggested amount that’s the same as in any Panera, but we don’t take cash at the register. We have donation bins located in various areas throughout the café. We’ll tell you what the suggested amount is and you’ll get a receipt so you’ll know, but ultimately the decision is up to you and it’s pretty anonymous.”
With decisions made on the basics, the menu, the payment system and the full-time staff, Panera decided to launch its first Panera Cares in what was an existing store location. “We chose our location pretty carefully,” Antonacci says. “We needed to go into neighborhoods that were economically diverse. We had to have people living or working in the area who could afford to leave the full amount or maybe more, in addition to those that couldn’t. So all of our stores are in pretty eclectic neighborhoods. They’re all on public transit, they’re pretty much walking communities.”
The first store was in Clayton, Mo., a suburb of St. Louis, in May 2010. This was followed by one in Dearborn, Mich., and then one in Portland, Ore.
“All three are sustaining and for us, that’s huge,” Antonacci reports. That sustainability is critical as far as Panera is concerned, since the stores are operated by the Panera Foundation. While the Foundation is a nonprofit, the stores must meet at least 80 percent of their for-profit peers in order to cover their operating costs.
As with any startup, there were hiccups along the way. Antonacci explains, “We had been studying this for so long that we certainly knew what we were doing and how everything worked. We learned very quickly that our customers had no clue what was going on. We had 3,000 to 4,000 customers a week coming into a store which we then shut down for four days and opened with a completely different model. They got a little bit confused. So, we added greeters who not only explain what’s going on but a little bit of the history of the idea.”
Another quick addition to the project was a volunteer component. Diners can work for an hour and get a receipt to pay for their meal. “We realized that the population we were helping in these cafes was not those who are struggling with extreme poverty. We couldn’t feed people three meals a day, that’s not what we’re there for,” Antonacci says. “We can be a temporary solution for people. The cities we’re in have a lot of people who were recently unemployed, who had never struggled with food insecurity before - this is the first time they’ve grappled with ‘oh my gosh, where am I going to get my next meal, or how am I going to feed my kids tonight?’ They had a problem with feeling they were getting something and feeling they were not earning it. So for a great many people there’s a great sense of fulfillment and pride when they can deposit that receipt.”
Helping their local community in ways beyond feeding its residents is another way in which Panera Cares is expanding its contribution. “We launched a job training internship,” Antonacci explains. “We have a partnership with an employment agency where people come in and train with us for two weeks.”
“We don’t have all the kinks worked out, and we’re learning as we go. We’ve only been at this for a little over a year, and we still very much view this as a test. Each store, each situation is a little different so we’re studying them through the different parts of their lifecycle. We’re working through some of the problems that arise and making the changes that we have to make in one or all of them,” Antonacci says.
The people who run the existing stores as well as those chosen for the new ones have to have a strong commitment to their community. Antonacci says an example of that commitment was when the managers of the current stores came to her independently and said that they were going to be open Thanksgiving day. “‘We have to be open Thanksgiving,’ they said. ‘People rely on us for their bread, especially on a day like this we want them to have food to share with family.’ I thought that a real statement about the quality of the people we have,” she says with obvious pride in her voice. “It also says a lot about the role we play in the community. People know that when they need something to eat they can come to us.”
Current plans call for a new Panera Cares store to be opened every four months, according to Antonacci. “We haven’t announced the locations yet but we’ve pretty much decided where they’ll be.”
What people say about Panera Cares
In Portland, Linda M. says on the social media site FourSquare: “people who need help seem to work very hard for the food, enjoy working for their own food” and later added “Asians sesame salad rocks, love it even more since I can help others.”
In Dearborn a Panera Cares associate says in an e-mail: “Yesterday evening, a family of four came in and asked about Panera Cares and how it works. Little did I know they were really down on their luck. They asked if they could come back and donate at a later time funds they wouldn’t be able to donate today. I told them I don’t see why not! I explained our volunteer program to them and they were thrilled and eager to volunteer. I went over to their table and found out that they lost their food stamps for six months and they weren’t sure where dinner was coming from before they found us. They were so excited we are here! I packed them up a bag of bread and pastries to take home and they were so grateful! It was awesome!”
A Dearborn customer notes “Wonderful place to go on a college budget! And if you can’t pay for your meal, you can work off your bill.”
