IT Baked into Panera Bread's Business Model

Wednesday, October 05, 2016
John Meister FI

Rising Tech Leader: John Meister, a 1991 electrical engineering alumnus, is senior vice president and chief information officer of Panera Bread. The national restaurant chain was named the #1 Most Innovative Company in Food by Fast Company.

Archeologists believe that humans have been baking some form of bread for at least 30,000 years. So it's understandable that when most of us think of innovation, a bakery is not the first thing that comes to mind. It may be surprising, then, to consider that in the highly competitive restaurant market, the secret ingredient may well be information technology.

Perhaps no one understands that better than alumnus John Meister, senior vice president and chief information officer of Panera Bread. Food innovation is important, but it is not the entire recipe for success.

The bakery/café chain was one of the first to introduce chicken raised without antibiotics (in 2004) on a national scale, and soon consumer demand began to drive other restaurant chains to follow suit. Pioneering the concept of providing 'clean' food and ingredient transparency, however, is not what earned Panera Bread the top slot as Fast Company's #1 Most Innovative Company in Food.

Smartphone apps, online ordering, and other digital tools are becoming ubiquitous in the restaurant industry. But Meister says Panera Bread's multifaceted Panera 2.0 initiative has differentiated it from competitors.

The 1991 electrical engineering alumnus has overseen the integration of digital technology into the customer experience at Panera Bread's nearly 2,000 locations, which span 46 states, the District of Columbia, and Ontario, Canada. The company's popularity had led to long lines and crowded dining rooms-particularly during lunch time-which frustrated customers.

"We asked ourselves, wouldn't it be better if we could build entirely new pathways for our guests to order, customize, pay, and pick up their orders that improved the experience from end-to-end?"

A Panera 2.0 platform provides multiple avenues of digital access and method of payment, encourages ordering ahead and customization, and syncs with the MyPanera loyalty program. Users can place an order up to five days in advance via mobile devices. At the appropriate time, their food is prepared and placed on a separate shelf in the restaurant, allowing them to skip the line completely.

Patrons dining in can order food from their tables, and Panera staff uses RFID technology to locate them. In-store ordering kiosks allow customers to place their orders more quickly, with greater customization.

"We knew early on that the Panera 2.0 guest experience would only be as good as our ability to deliver on its promise for each and every order," says Meister.

He adds that customer response has been positive and the company's IT investment is paying off. Sixteen percent of total Panera Company sales are now ordered, produced, and paid for digitally, and the company is projecting that more than 20 percent of the business will be digital by the year's end.