TABLE OF CONTENTS
Letter from the President
LETTER FROM THE
I liken where we are in our journey of transformation to running the Boston Marathon. It’s long and it’s hard. Taking that metaphor further, I’d suggest we are now on Heartbreak Hill, the ultimate test of endurance. We are feeling good because we are running ahead of the race plan we set at the beginning of the journey. Yet we remain on guard as we are cognizant that potential challenges can still emerge along the way. Most importantly, we are fueled by the knowledge that our efforts will ultimately be worth it. Indeed, we know that as we continue to change the sales trajectory of our business and our investments crest, we are moving closer and closer to our objective – sustained earnings expansion. As ever, I want to thank our investors for their support as we execute our long-term strategic vision; our board of directors for their wise counsel along the way; our franchise partners for their continued confidence in us; and our operators and support team members for powering us through an ambitious transformation effort. Each of you should know that I speak for the entire leadership team when I tell you we will honor your commitment by doing all in our power to create a future for Panera that leaves us all proud. Sincerely,
Ron Shaich Founder, Chairman and Chief Executive Officer
The Panera Bread® legacy began in 1981 as Au Bon Pain Co., Inc. Founded by Louis Kane and Ron Shaich, the company prospered along the east coast of the United States and internationally throughout the 1980s and 1990s and became the dominant operator within the bakery-cafe category. In 1993, Au Bon Pain Co., Inc. purchased Saint Louis Bread Company®, a chain of 20 bakery-cafes located in the St. Louis area. The company then managed a comprehensive re-staging of Saint Louis Bread Co. Between 1993 and 1997 average unit volumes increased by 75%. Ultimately the concept's name was changed to Panera Bread. By 1997, it was clear that Panera Bread had the potential to become one of the leading brands in the nation. In order for Panera Bread to reach its potential, it would require all of the company's financial and management resources. In May 2010, Ron Shaich transitioned to the role of Executive Chairman of the Board and Bill Moreton, who had previously served as the company's Executive Vice President and Co-Chief Operating Officer, was named Chief Executive Officer and President and to the Board of Directors. In March 2012, to signify their partnership and shared commitment to Panera, the company announced that Ron Shaich and Bill Moreton would share the title of CEO. In August 2013, Moreton was named Executive Vice Chairman to help oversee Panera’s business operations; he serves as a member of the Board of Directors. Shaich continues to serve as Chairman of the Board and CEO. As of September 27, 2016, there are 2,024 bakery-cafes in 46 states, the District of Columbia, and in Ontario Canada operating under the Panera Bread®, Saint Louis Bread Co.® and Paradise Bakery & Café® names, delivering fresh, authentic artisan bread served in a warm environment by engaging associates.
THE MENU Our menu is designed to provide a variety of food products our customers crave, along with transparency to empower them to choose how they want to eat. Panera was the first national restaurant company to voluntarily add calories to its menu boards in 2010 and currently includes this information on menu boards at all of our Company-owned bakerycafes. We feature a menu which includes proprietary items prepared with highquality, fresh ingredients, including our fresh-from-the-field romaine lettuce and tomatoes and our chicken raised without antibiotics, as well as unique recipes and toppings designed to provide appealing, flavorful products. Our menu embodies a comprehensive set of commitments formally articulated in our Food Policy and consistent with our long held values. The Food Policy outlines our advocacy for a commitment to clean ingredients and a positive impact on the food system.
business depends upon our
ability to continue to grow and evolve through various important strategic initiatives. There can be no assurance that we will be able to implement these important strategic initiatives or that these strategic initiatives will deliver on their intended results, which could in turn adversely affect our business.
initiatives include: •introducing new menu items and improving existing items consistent with customer tastes and expectations and our commitment to food that customers can trust through our food policy initiatives; •generating increased sales through catering and small order delivery, including through our Panera Catering and Panera to You initiatives; •balancing unit growth while meeting target returns on invested capital for locations; •generating additional revenue and corresponding profits through the retail sale of consumer packaged goods through alternative channels of distribution; •identifying alternative formats for our bakery-cafes to enable us to open locations in more diverse locations; •investing in technology and systems designed to enable our managers to focus their energy on improving the customer experience in our bakery-cafes; •increasing brand awareness through greater investment in marketing and advertising, including increased national television advertising and digital advertising and continued leveraging of our MyPanera loyalty program; •investing in labor and the related management tools to meet the demands necessary to maximize throughput and capacity in our bakery-cafes; •simplifying our operating procedures to facilitate the operation of high volume bakery-cafes; •investing in technology designed to drive demand and increase transaction counts and frequency in our bakery-cafes.
37 5 1
Panera Bread Locations in the
United States 12
4 4 9 63
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