Will coffee subscriptions raise some dough for Panera?
Panera Bread is looking to push the envelope in the fast-casual/QSR space with the introduction of a new subscription program that offers unlimited coffee for $8.99 a month.
The subscription covers the purchase of hot drip coffee, iced coffee and hot tea every two hours, any time of the day, and runs across all cup sizes. Cold brew iced coffee and espresso and cappuccino beverages are excluded.
Subscribers have to first join or be an existing member of the chain’s free loyalty program, MyPanera, which already has 38 million members.
The rollout follows a three-month test in four markets — Nashville, Raleigh, Cleveland and Columbus — that delivered a 200 percent increase in the frequency of visits, a 70 percent increase food purchases made with the coffee, and a 90 to 95 percent renewal rate.
In a statement, Panera said more than 160 million adults in the U.S. drink coffee every day, and the average American spends $1,100 on coffee a year. Studies show nearly half are “conflicted” over the money they spend.
Panera says its program is designed to make quality coffee “accessible to all.” The $8.99 charge is less than the average price of five cups at Panera. One cup daily in a 30-day month averages 30 cents each.
Niren Chaudhary, Panera’s CEO, said in a statement, “Coffee is an important daily ritual for so many — it can give you a dose of optimism — it lifts you up. We kept asking ourselves, why can’t it be more accessible, more affordable? Moreover, could unlimited coffee translate to unlimited optimism?’”
The launch follows the sandwich chain’s move last April to upgrade its coffee offerings and introduce sandwich wraps to join the highly competitive breakfast war. Today, perhaps not coincidentally, McDonald’s is offering free Egg McMuffins on its first “National Egg McMuffin Day,” the same day Wendy’s launches its breakfast menu across the country.
No major chain offers a similar subscription. Burger King in March 2019 offered a program that charged $5 a month for one small, hot coffee per day, but discontinued the offer a few months after. Some local coffee shops offer unlimited monthly programs that are significantly more expensive.
- Your Cup Is Always Full: Panera Disrupts The Industry With Unlimited Coffee Subscription – Panera Bread
- MyPanera+ Coffee – Panera Bread
- Panera Bread’s new coffee subscription program offers unlimited coffee for $8.99 a month – USA Today
- Now & Panera’s Deal Is Unbelievable – Refinery 29
- Panera Is Rolling Out An Unlimited Coffee Program So Prepare To Add It To Your Morning Routine – Delish
- Burger King launches $5-a-month coffee subscription service – RetailWire
- BURGER KING Restaurants Launches BK Café Subscription for Only $5 a Month – Burger King
- Wendy’s Begins Its Big Breakfast Push And Rivals Are Ready – Advertising Age
- Panera Bread enters the breakfast wars with new strategy – CNBC
DISCUSSION QUESTIONS: Does a coffee subscription program make sense for Panera Bread, and should other fast-casual chains or QSRs come up with their own programs? What metrics should define the success of such a program for Panera?