Panera has certainly set high standards, but it's consistency across its operations that remains the real challenge.
— Jason Clampet
Panera Bread Co. has a plan to ignite growth during the morning hours: egg sandwiches cooked to order with runny yolks, and possibly a boost from the federal government.
The cafe chain, which does most of its business at lunch, is touting a new breakfast sandwich made with an over-easy egg and served on a brioche bun with bacon. Panera, owned by European investment firm JAB Holding Co., hopes the new product will help fuel sales during the morning hours, when demand has been relatively flat in recent years.
The move is an attempt to challenge McDonald’s dominance in breakfast. But Panera also is attacking industry rivals, including Starbucks and Taco Bell, for serving eggs prepared with artificial additives. The company, which in 2016 completed a multiyear effort to rid is menu of artificial ingredients, is emphasizing that its new breakfast sandwiches are made with freshly cracked eggs.
Part of the problem, in Panera’s eyes, is the U.S. government doesn’t have an official definition of what constitutes an egg, and the company has filed a petition with the Food and Drug Administration to change that.
“If you ask for an egg, you should get an egg,” Blaine Hurst, who took over as chief executive officer this month, said in an interview.
Fast-food chains have increasingly focused on breakfast in recent years, particularly in response to McDonald’s decision in 2015 to offer Egg McMuffins and other items throughout the day. By cooking eggs over-easy — not the easiest task for a chain with more than 2,000 locations — Panera hopes to signal that it’s “serious about breakfast,” according to Hurst.
Ron Shaich, the outspoken founder and former CEO of the chain, has been a frequent critic of his fast-food rivals. Panera, which was sold to JAB last year for $7.2 billion, spent 2016 working to rid its menu of artificial sweeteners, flavors, colors and preservatives. The chain has also cleaned up its kids’ menu, claiming superiority over chains such as McDonald’s.
But McDonald’s has been improving its food as well. That includes a high-profile move to remove artificial preservatives from its Chicken McNuggets and a switch to cage-free eggs. With the popular Egg McMuffin, the world’s largest restaurant chain now uses real butter and freshly cracked eggs — meaning the product would comply if the FDA were to adopt Panera’s proposed change. Still, Panera doesn’t think too highly of that sandwich.
“The rest of the ingredients would not meet our clean-menu standard,” said Sara Burnett, the company’s director of food policy.
©2018 Bloomberg L.P.