Panera Is Bringing Tech-Driven Bakery Cafes To Chicago, New York And Other City Centers

Fast casual restaurateur, Panera BreadPNRA
, has opened an urban store unit in New York, in the Hearst Tower near Columbus Circle, one of two formats that the company will use to expand quickly into densely populated city centers, plus hospitals and universities.

The pandemic has had a silver lining for Panera Bread, pushing its digital orders to around half of company sales, the equivalent of three million transactions a week from the web, in-store kiosks and the brand’s app. The trend to online ordering and delivery—a market that has more than doubled in size in the United States during the COVID-19 pandemic according to McKinsey—prompted traditional physical retailers to respond.

Panera’s new store formats are just that; they cater to digitally-savvy and off-premise guests who want freshly-prepared food who can pick it up in a store, or have it delivered. The company also sticks to the promise of ‘clean’ ingredients: food that does not contain artificial preservatives, sweeteners, flavors, and colors from artificial sources. The core manu consists of soups, salads and sandwiches.

St. Louis-based Panera Bread first opened in 1987 as a community bakery and now has over 2,000 bakery cafes, either company-owned or franchised, in 48 states and in Ontario, Canada. Chief brand and concept officer Eduardo Luz, told Forbes.com: “We appeal to a very broad demographic and the brand is very well known in the suburbs. Now, with these new flexible formats, we can open in urban neighborhoods, for example in Manhattan and the heart of Chicago.”

Small footprints “a new avenue” to growth

Asked how many new units are planned, he commented: “We feel very bullish about these new formats especially as we can execute on 1,000 to 2,000 square feet. This opens a whole new avenue for us in urban locations. We see a pipeline of hundreds, if not thousands, of new units in the next few years.” That pipeline includes Americas biggest 15 metro areas which encompass cities like Boston, Houston, Los Angeles, Miami and San Francisco.

The new urban format has a 40% smaller footprint than traditional suburban bakery cafes which are about 4,000 square feet with plenty of seating. A fully digitized menu, ordering kiosks, tracking screens and to-go shelves take customers through a rapid pick-up process. Only limited counter seating is available in the urban units. The New York debut cafe is also the first in the country to fully showcase Panera’s new design featuring artwork, updated olive-color palettes and bold prints.

Even smaller will be the Panera To Go format which is around 1,000 square feet, a quarter the size of a standard venue. Following a successful test earlier this year in Chicago, the first New York unit opens next month in Union Square, Manhattan, close to the NYU campus. Different from the urban design, Panera To Go offers no dine-in seating, just pick-up shelves for both guests and delivery drivers.

More tech to come

Future iterations of the new formats will test new tap-and-go technology for an even faster experience for Panera’s Unlimited Sip Club (USC) members. The company—part of Panera Brands, whose restaurants include Caribou Coffee and Einstein Bros Bagels—is testing AI tech across several areas of its bakery cafe operation. Earlier this year, it trialed startup Miso Robotics’ automated coffee brewing system, as it rolled out the USC subscription program.

More recently Panera began testing OpenCity’s proprietary voice AI ordering technology, called Tori for drive-thru orders. David Damato, CEO of High Noon Restaurant Group which operates 78 restaurants in southern Louisiana and has also tested it, said: “Tori has been a real success for us. Our guests are having fun (with it) and I was shocked at how quickly it learned the Louisiana accent.”

Panera’s enthusiasm for tech comes at a time when staff shortages are crippling service industries like restaurants, so maximizing efficiency using AI and robotics to free up associates and improve the guest experience makes sense.