Panera Bread Is Trying a New Recipe: Will it Work?

Three quarters into 2025, and yet another business is changing the same business model that previously set them apart, led them to success, and kept the competition at bay.  

The latest to announce a change is Panera Bread, as they move toward a new model whereby contract bakeries will handle production while the storefronts devolve into delivery vehicles. In short, Panera stores will handle the final prep only. The new model will be known as par-baked or on-demand production, per a Panera Bread spokesman.  

For those not familiar with Panera Bread, the current model calls for fresh bread baked daily in-store. If you’ve ever been a patron, you know part of the experience is the allure of the fresh bread aroma. So why the change? 

First, it allows for demand alignment and re-alignment through the day. Second, it offers better logistics, resulting in more potential storefront locations. The decision also involves hundreds of layoffs (read: cost-savings for the company).   

Given their unique selling proposition, I’m not sure I agree with this shift, as the differentiator of “fresh baked” has set them apart from the competition in the past, all the while building a loyal customer base. Generally speaking, I would have focused this decision around meeting customers’ wants and values around the Panera Bread experience versus risking a lower value proposition with the fresh bread approach. Time will tell, but historically speaking (especially this year), the odds are not in Panera’s favor.  

While the verdict is out, the lessons here are simple and time tested. Short-term gains at the expense of your consumer are not sustainable. I believe many consider short-term gains as the gold standard, but I’m here to say they’re wrong! Understand (and listen to) your consumer and solve their pain points. Try to “STUN” them (Satisfy Their Unmet Need) and you will win. 

These lessons are the basis for a solid business model, but they must be continuously practiced and nurtured. Failure to do so will keep you reactionary and too focused on the competition. Instead, go your own way. 

BSM Partners can guide you through the murky waters of business strategy. Our Branding, Strategy & Marketing (BSM2) practice can help you craft a strategy that connects with consumers, positions brands for long-term success, and unlocks growth across all channels. Whether you’re launching a new product, redefining your brand, or expanding into new markets, we provide the insights and tools to drive results. 

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About the Author

Eric Rittenhouse works at BSM Partners as Business Development Manager. His areas of expertise include business development, sales and trade marketing while helping brand companies uncover and execute on opportunities to strategically dominate their niche in the consumer product space. He has completed the Blue Ocean Practical Introduction certificate by the Blue Ocean Academy and is Action Selling Master Certified by Action Selling and The Sales Board.