Panera Bread isn’t just hungry for attention

September 20, 2013

(© 1999-2013 Panera, LLC. All rights reserved)

The same week the House of Representatives voted to pass a bill slashing $39 billion in funding for food stamps--and the same week the U.S. Census Bureau reported that while poverty rates had leveled off in 2012, they were still higher than pre-recession levels--one CEO went hungry for a week.

Ron Shaich, the CEO of Panera Bread, took what's known as the SNAP Challenge, an effort to live off the average benefit amount--$133.44 a month, or $4.50 a day--shelled out by the Supplemental Nutrition Assistance Program, formerly known as the food stamp program.

Yes, the SNAP Challenge, which has been undertaken by a number of politicians, including Newark mayor and U.S. Senate hopeful Cory Booker, has been criticized as being misleading, as it is intended to supplement, rather than replace, a person's food intake. But the general concept remains: To draw attention to the issue of hunger in the United States and the high cost of putting food on the table each week.

And on that measure, Shaich has had plenty of success. He's generated coverage everywhere from USA Today to the Los Angeles Times about both the issue of hunger and, in the process, Panera. Shaich says his efforts to eat chickpea soup and generic Cheerios for a week wasn't about him or his company, however. "I don’t view this as being about me," Shaich tells me in an interview. "I'm using the position and authority that I have to bring awareness to an issue."

That might sound like nothing more than P.R. speak, but this is not the first time Shaich or his company has gotten involved in the issue. In addition to food donation programs, Shaich has taken the unusual step in recent years of opening Panera locations geared toward feeding people who can't afford $7 sandwiches. Shaich calls them "shared responsibility" cafes (or officially, Panera Cares cafes), but they essentially follow a pay-as-you-can formula, providing customers with a suggested donation rather than a price for its standard menu items.

The five cafes, located in economically diverse areas in St. Louis, Detroit, Chicago, Boston and Portland, Ore., look and feel like a regular Panera. The primary differences are additional signage and more "ambassadors" who greet customers to explain how the cafes work. "The attempt was to see if communities would take care of themselves," Shaich says.

The Panera Cares cafes are part of a 501(c)3, and Shaich won't say whether the cafes make enough profit to cover their costs. "Each one is different," he says, noting that some do a little better than others. "But Panera is there to support it. We’ve never closed one." He says roughly 20 percent of customers pay more than requested, 60 percent pay the suggested donation, and 20 percent pay less--often much less.

But the pay-as-you-can model doesn't work everywhere, Shaich has discovered. Earlier this year, he began placing a "suggested value" rather than a price on one menu item, the turkey chili bread bowl, in 48 of the company's regular locations. While he says the move helped to create awareness with more employees and customers about the issue of hunger, he's ended the pilot and decided it won't work as a permanent fixture.

It took too great an "amount of effort and energy to explain what it was relative to the number of people we were able to serve" in existing locations' more affluent areas, Shaich says. He does hope to bring it back next year as a promotional effort, saying a temporary approach will allow Panera to commit the necessary communication resources.

Is Panera getting lots of attention for Shaich's food stamp challenge and his pay-as-you-can cafes? Sure. Might all that publicity pay off in profits from customers who like the idea of frequenting a socially conscious business? Of course. And does he realize that a week-long test by a CEO who makes $4.4 million a year and doesn't often do his own grocery shopping might be a poor replica of what months, or even years, of food insecurity is really like? He says he does: "I know it’s a simulation, and I worry very much about trivializing a very real experience."

Corporate charitable giving and business philanthropy are tricky things. Make it too gimmicky or too much about one person or one company, and it can come off as insincere. But I think Shaich has avoided that pitfall because his personal challenge is backed up by his company's clever efforts to address hunger that go beyond standard charitable giving. "This is a really serious problem in this country but it's also a really fascinating question for this country to ask itself," he says. "I'm a business person. But what are we going to do as a society?"

Jena McGregor is a columnist for On Leadership.

Read also:

Panera's pay-as-you-go experiment

Starbucks treads lightly on gun issue in its coffee shops

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Jena McGregor writes a daily column analyzing leadership in the news for the Washington Post’s On Leadership section.
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Tom Fox | September 20, 2013