Will unlimited free drinks pay off for Panera?
For $10.99 a month, visitors to Panera can now get all the self-serve beverages they can drink.
Panera’s Unlimited Sip Club is the newly launched revamp of the QSR chain’s coffee/tea subscription club that allows customers to get unlimited amounts, not just of coffee and tea, but of self-serve fountain beverages. (Customers can serve themselves one beverage every two hours with unlimited refills of the same cup.) The subscription’s launch coincides with the introduction of Panera’s line of “Charged Lemonades,” caffeinated, fruit-flavored beverages.
The MyPanera+ Coffee program, launched in March 2020, allowed customers to get unlimited coffee and tea for $8.99 per month. Subscribers in test markets prior to launch went from visiting Panera four times a month to 10, and spent 70 percent more on food.
While the Unlimited Sip Club may be the first all-you-can-drink subscription program, others have launched similar programs, both in QSR and convenience. In both spaces, there have been successes and failures.
In January, Taco Bell rolled out a subscription club, Taco Lover’s Pass, offering a taco a day for $10 monthly. The program has a 21 percent renewal rate. Tracee Larocca, Taco Bell’s head of brand creative, told The Wall Street Journal, “Consumers are showing us that they are interested in subscription models, as it eases decision-making.”
In May 2021, convenience chain Circle K introduced its Sip & Save subscription program offering one tea, coffee, slushy or fountain soda every day for $5.99 per month.
In a mid-March quarterly call, Brian Hannasch, CEO at Alimentation Couche-Tard, Circle K’s parent, said the program has 400,000 active subscribers. He said, “We have very strong positive feedback from our customers and we continue to look for opportunities to make it even easier for our customers to benefit from this program. While it’s certainly in the short term, probably impacts our sales in the expense category, we think the on-going loyalty and increase in traffic that we’re seeing is a good move for us over the long term.”
On the other hand, Burger King’s $5 monthly coffee subscription program, which launched in 2019, was quickly discontinued.
- Panera Is the First National Restaurant Company to Offer an Unlimited Self-serve Beverage Subscription: Introducing Unlimited Sip Club – PR Newswire
- Panera Bread is launching a coffee subscription for $8.99 a month – CNBC
- Circle K launches beverage subscription program for $5.99 per month – CNBC
- Airlines, Restaurant Chains Join the Subscription Bandwagon – The Wall Street Journal
- Alimentation Couche-Tard Inc. (ANCUF) CEO Brian Hannasch on Q3 2022 Results – Earnings Call Transcript
- Burger King Launches $5 a Month BK Café Coffee Subscription – Subscription Insider
DISCUSSION QUESTIONS: Will adding an all-you-can-drink element and “Charged Lemonades” increase the effectiveness of Panera’s subscription program, even at a higher price? Do you see more pros than cons in subscription schemes at QSR chains and expect more in the future?