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Panera Bread Experiments with “Pay What You Want” Model

Instead of kneading the bread, Panera is pushing the envelope – replacing a for-profit operation with a non-profit operation.  On Sunday, May 16, quietly, without any press releases or ribbon cutting, Panera Bread reopened the operation of a Clayton, Missouri store as a non-profit.  The model is “take what you need, leave your fair share.”

The St. Louis Bread Company Cares Café looks like a traditional Panera Bread restaurant.  It has the same menu.  Cashiers still take your order.  But they won’t hand you a bill, instead you receive a “suggested” bill representing the price of your order at any other Panera Bread location.  You can then make the payment, any amount you choose, above or below the suggested amount, in one of five donation boxes located within the store.  If you cannot pay in dollars, you can pay by volunteering your time.

The store’s expenses, including rent, salaries, and food costs will be paid for by the Panera Foundation.  If the pilot store can cover its food costs, this experiment will expand into two more cities within the next six-months.  From there, the executive chairman and former CEO, Ron Shaich, wants to expand the non-profit cafes into every area with a Panera Bread restaurant.

But first, the Cares Café has to support itself.  According to USA Today, this is the first time a national chain has adopted the “pay-what-you-want” model.  However it is not the first time it has been tried.  The One World Everybody Eats Café in Salt Lake City has been successfully operating since 2003.  Denise Cerreta has been running her café in the mixed for-profit/non-profit mode since 2003.  Since then she has helped open six other community cafes.  She has even published “Spirit in Business – A Guide For Starting a Community Cafe.” It was the One World Café that inspired Shaich.  After seeing a newscast mentioning One World Café, Shaich met with Cerreta.    Less than two months later the Company Cares Café was opened.

Will it work on a national level?  Only time will tell.  It will be fascinating to watch the experiment.  If Shaich’s passion and enthusiasm have anything to do with success, we’ll be seeing Company Cares Cafes in our own neighborhoods very soon.


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  • Lulie

    Well written and very infomative article. Panera deserves credit for sharing while times are tough for so many in our country right now. Hopefully, they can hang in there until next year when our free markets can have a chance to kick in and start the economic recovery. Until then…I love their food and the atmosphere, and their system of food service. Thanks, Jennifer, for telling us about it.

  • http://externalize.wordpress.com Simon Dunne

    I love this! Radiohead did something similar with their InRainbows album. They posted it on their website as a FREE download with the option of leaving a donation. From what I heard they made more money on that album than any previous one, thanks to the high volume of downloads. People who never would have gone to the record store to buy the album ended up downloading it and leaving a couple bucks donation. I hope something similar happens for Panera!

  • http://externalize.wordpress.com Simon Dunne

    I love this! Radiohead did something similar with their InRainbows album. They posted it on their website as a FREE download with the option of leaving a donation. From what I heard they made more money on that album than any previous one, thanks to the high volume of downloads. People who never would have gone to the record store to buy the album ended up downloading it and leaving a couple bucks donation. I hope something similar happens for Panera!

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  • Armanee

    I think this is taking it to the extreme. A business model of selling a fine product for a reasonable price will sure be a success while it will help the less fortunate.
    I, personally, may not shop at this community cafe very frequently. Because I feel inappropriate to just pay for what I buy. In other words I feel obligated to contribute and since I am not in a position to contribute much, then I feel I should not return.

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  • http://www.roominatemarketing.com/ Charlie Scala

    Radiohead employed the same strategy for the digital release of In Rainbows. They sold 3 million copies and concert tickets sales skyrocketed.

    Your blog post inspired me to think about the best tactics for a name your price strategy.

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  • Jerry Atlansky

    The Panera Bread Company will receive the most important rewards for becoming the first corporate leader to assist WE THE PEOPLE, during the extended “Great Recession” as planned and launched by their co-founder, executive chairman and former C.E.O. Ron Shaich. BRAVO!

    Hundreds of families and many single people
    will go many miles out of their way to Panera
    Cafe’s too more than pay for their foods as all great deeds are returned ten-fold.

    If your interested in learning how this has been tried and proven for over 90 years just
    request this data by contacting me.

    Only LOVE shall prevail,

    Jerry Atlansky
    jmatlansky@gmail.com 24/365

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