Panera Bread 2015 Annual Report Download - page 4

also issued our first Responsibility Report, reaffirming our commitment to transparency and to making a positive
difference in the food supply.
Last June, we debuted our “Food as it should be” marketing campaign, launching a powerful communications
platform that captures the warmth and humanity that is core to the Panera brand and makes a clear and
unequivocal statement about what we stand for regarding food. The campaign resonated with consumers and
allowed us to unify our message across paid, earned and owned marketing channels.
Our MyPanera loyalty program continued to be a significant strategic asset in 2015. With more than 21 million
members and about 50% of company transactions occurring on MyPanera cards, MyPanera is likely the largest
loyalty program in the restaurant industry.
Our initiatives to expand growth also gained traction in 2015. Catering sales grew 14% in the fourth quarter of
2015, the best quarterly sales growth in catering that we’ve seen for several years. As well, we expanded tests of
small-order delivery into new markets, where we generated notable volumes, underscoring delivery’s potential
for significant long-term sales and earnings growth. And we grew our Panera at Home business 20% year over
year in 2015.
In addition, I’d like to note the progress we have made building our human capabilities in 2015 with the
appointments of several senior leaders, including our president Drew Madsen. Never before has Panera had so
much depth and breadth on its bench. The talent, dedication and energy now fueling Panera is already serving us
well and will continue to for years to come.
WHERE WE’RE GOING
Certainly, we’ve made a lot of progress, but we are also clear that we still have a way to go. For the next few
years we will remain focused on these objectives:
• Improving Panera’s competitive position;
• Expanding our growth opportunities;
• Building the capabilities to improve our competitive position and expand growth;
• Maintaining our credibility through results
To accomplish our long-term objectives, we will focus on these Key Initiatives in 2016:
Panera 2.0
Panera 2.0 is materially improving same-store sales, especially as converted cafes mature and teams and guests
adjust to our 2.0 systems. In addition, our execution of Panera 2.0 is improving, so new conversions have shown
improved results faster both in terms of sales and cost control, such as labor.
We plan to convert approximately 200 more company cafés to Panera 2.0 in 2016, completing constructive
conversion of our company system and reaching all company cafes except those that are not constrained or are
nearing lease expiration, relocation or remodel. All new cafes will continue to be constructed as Panera 2.0 cafes.
In addition, we expect that approximately 75% of our franchise groups will begin to convert their cafes to Panera
2.0 in 2016. We expect to complete the conversion of about 100 franchise cafes by year-end.
Operational Integrity
Operational excellence lies at the heart of our efforts to make Panera a better competitive alternative. We remain
focused on Operational Integrity, process disciplines inspired by Total Quality Management that ensure we have
the foundational capabilities in place to deliver a better guest experience in our Panera 2.0 and traditional cafes.
Our priorities include improved production capacity needed to meet peak-hour demand and manage high levels
of customization efficiently and accurately.
Innovation in Food, Marketing and Design
We are continuing to incorporate our evolved mission of craveable wellness and an elevated experience into all
menu items, marketing and store design initiatives to reinforce Panera’s positioning, excite Panera’s customers
and further strengthen our core business.
In 2016, we plan to eliminate the few remaining preservatives, sweeteners, artificial flavors and artificial colors
that remain in our food items as pledged in our Food Policy.