Ron Shaich, founder and then-CEO of Panera Bread, in December 2017.
Scott Mlyn | CNBC
Panera Bread founder Ron Shaich makes use of his new book, “Know What Matters,” to impart classes discovered from his a long time within the restaurant enterprise — and reveals some juicy particulars within the course of.
Shaich’s book charts his entrepreneurial journey, beginning with the final retailer at Clark University he based as a pupil and ending together with his determination to sell Panera for $7.5 billion in 2017.
Along the best way, Shaich turned Au Bon Pain from an almost bankrupt bakery into a series of bakery cafes, reworked the St. Louis Bread Company into fast-casual big Panera, offered off Au Bon Pain and then turned Panera right into a digital powerhouse that launched free Wi-Fi, cell and kiosk ordering and supply years forward of its rivals.
But that is not all. Here are six of probably the most fascinating reveals from Shaich’s book, which hits cabinets Tuesday:
1. McDonald’s tried to buy Panera
McDonald’s expressed curiosity in shopping for Panera within the early 2000s, Shaich writes. He and his then-chief monetary officer, Bill Moreton, met with McDonald’s executives to hear about their proposal. The Panera workforce wasn’t significantly excited by promoting Panera on the time, as they’d simply divested Au Bon Pain to give attention to the rising fast-casual chain.
The assembly did not change Shaich’s thoughts, both. He writes that he wasn’t impressed when one of many executives in contrast Panera with Donatos — a pizza chain that McDonald’s in the end ended up shopping for, together with Chipotle Mexican Grill and Boston Market. (McDonald’s offered off these other chains a number of years later to give attention to its core enterprise.)
2. Shaich thinks of Howard Schultz as his ‘frenemy’
Howard Schultz, then-CEO of Starbucks, in 2015.
David Ryder | Reuters
Starbucks and Howard Schultz, the person who turned the small espresso chain into a worldwide big, are recurring characters in Shaich’s book.
While their menus overlap little, Shaich views Starbucks as Panera’s closest competitor. He recounts a few of Panera’s strategic wins over Starbucks, similar to providing free Wi-Fi whereas Starbucks nonetheless made its clients pay for entry.
“I considered Schultz as my oldest ‘frenemy’ — the man whose proverbial rear finish I’d been chasing for 3 a long time, ever since we met when Au Bon Pain was a handful of cafés in Boston and he had seven espresso outlets in Seattle,” Shaich wrote.
Shaich additionally names Chipotle founder Steve Ells as one other restaurant entrepreneur who noticed the way forward for the trade and helped create the fast-casual section. Ells, nevertheless, is spared the “frenemy” label.
3. Panera and Starbucks nearly merged
The McDonald’s settlement by no means got here collectively. But one other deal for Panera nearly made it to the end line. Shaich and Schultz started engaged on a merger between Panera and Starbucks in 2016, he mentioned.
More than a decade after assembly with McDonald’s, Shaich began severely contemplating promoting Panera as he ready to step down from the enterprise. He had beforehand retired, in 2010, however the determination did not stick. Shaich writes within the book that he by no means actually left, staying lively as govt chair of the corporate, earlier than he rejoined as a co-CEO in 2012. (Schultz has additionally had problem leaving Starbucks behind, twice returning to take the reins as chief govt once more.)
A Starbucks worker organizes salads and sandwiches.
Jerry Cleveland | The Denver Post | Getty Images
Schultz first proposed a partnership between Panera and Starbucks. Panera would make soup, salad and sandwiches for Starbucks cafes, whereas the espresso big would provide Panera’s bakery-cafes with espresso. But Shaich discovered the concept too sophisticated and as an alternative proposed a merger.
Ultimately, although, the deal fell by means of. Panera’s inventory was rising on the time, making the settlement too costly, Shaich writes. He additionally says he thinks that Schultz’s determination to step down as CEO in early 2017 in all probability performed an enormous function within the determination.
4. The Obama administration provided Shaich a job
Before changing into an entrepreneur, Shaich thought his profession could be in politics. His political ambitions fell by the wayside as he turned Au Bon Pain and then Panera Bread into nationwide chains.
But these aspirations did not disappear solely. In 2009, the Obama White House referred to as Shaich a few job within the administration. Coincidentally, Shaich acquired the decision when he was preparing to make his ultimate speech at Panera’s companywide assembly, referred to as the Family Reunion. Shaich writes that he knew on the time that he would retire, however he hadn’t but introduced it.
However, Shaich in the end did not find yourself within the Obama administration.
“The White House job hadn’t panned out — they wanted to press ahead earlier than I used to be free …” he wrote.
Instead, Shaich helped create No Labels, a political group meant to help centrism and bipartisanship. The group has floated mounting a third-party problem for the presidential election subsequent yr.
5. Panera’s patent to assessment order accuracy by video
Panera’s yearslong transformation to put together for the digital age did not simply embrace putting in self-order kiosks and making a cell app. The technique envisioned by Shaich additionally concerned reconstructing its kitchen operations so workers might deal with the swell of recent orders shortly and precisely. Panera redesigned its kitchen layouts and processes a number of instances to ensure that it labored.
One change that got here to kitchens was cameras. Shaich writes that Panera acquired a patent to use video to assessment the accuracy of sandwich orders.
“At one level, I used to joke that Panera’s manufacturing traces had been among the many most-watched TV, midnight to 8 a.m., in India,” Shaich wrote.
Today, cameras in kitchens aren’t as novel. For instance, startup Agot AI installs overhead cameras in restaurant kitchens and makes use of laptop imaginative and prescient to scrutinize whether or not staff are making ready orders appropriately.
6. Panera’s enemy become Shaich’s companion
Today, Shaich leads Act III Holdings, which was an early investor in Mediterranean chain Cava. The agency’s chief monetary officer and companion is Noah Elbogen.
Shaich reveals in his book that Elbogen was as soon as an antagonist. In 2015, as Panera was in the course of its digital transformation, an activist funding agency referred to as Luxor nominated two administrators to Panera’s board with no discover and a protracted checklist of calls for. One of the nominees was Elbogen, who spoke at a gathering with 300 Panera leaders.
Shaich writes that after Elbogen left the room, he then fired up the viewers and decried “predatory traders.”
“I obtained the group so riled up with the concern of working for Noah that by the top they had been chanting in unison, ‘F___ you, Noah. F___ you, Noah,'” Shaich wrote.
But Shaich says he got here to like and respect Elbogen, regardless that Luxor was nonetheless thought-about the enemy. Roughly two years later, Luxor offered its stake. Panera’s inventory was climbing as its digital technique took maintain and bore fruit.
“I used to be a bit of sorry to say goodbye to Noah when Luxor cashed out, although I could not admit it on the time,” Shaich wrote.
Years later, when Shaich began Act III, he requested Noah to be a part of.
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