This Restaurant Chain Doesn’t Mind Giving Away Its Food

Panera hopes its ‘pay-what-you-can’ café model causes a chain reaction for good among other big brands.

At lunchtime on a recent Friday, guests pay what they can afford for their meals at the newest Panera Cares Community Café in Boston. (Photo: Steve Holt/TakePart.com)

Steve Holt is a regular contributor to TakePart. He writes about food for Edible Boston, Boston Magazine, The Boston Globe, and other publications.

As the lunchtime crowd files through the door at one of downtown Boston’s newest and busiest sandwich shops, a bespectacled young man with a nice smile greets every person in line personally.

“Have you been to a Panera Cares Community Café before?” he asks.

For those who haven’t, he explains how this is different from a traditional Panera: Here customers are given the option of dropping whatever amount they can afford into a donation box to pay for their cup of coffee, sandwich, or bowl of soup. He reminds people in line that anything they give over the final bill will help someone less fortunate get a meal today. Smiles spread across a number of faces, either reflecting their happiness in giving back on their lunch break or relief over being able to afford a nourishing meal. 

It’s impossible to discern who’s paying what at Panera Cares, but that’s the point: Food insecurity touches one in six American adults, many of whom are college educated, own homes, and have jobs. For the “hidden hungry” among us—and even for those who may appear more down on their luck—Panera Cares Community Café offers a bit of relief while maintaining each diner’s dignity.

RELATED: Complete Coverage of America's Hidden Hunger Crisis

“This is not going to cure poverty; it’s not going to stop hunger. What this is about is two things: One, it’s been very effective in giving voice to and raising issues of food insecurity,” says Panera’s founder and co-CEO Ron Shaich, who says he’s sobered by the reality that statistically, five or 10 percent of the company’s own employees are food insecure. “Secondly, it’s a way for us to give voice to the fact that we as public companies are about something more than just extracting from the community.”

Several years ago, at the height of the Great Recession, Shaich was looking for ways Panera could “make deposits” into communities when he saw a news segment about a pay-what-you-want café in Denver, which fed everyone who came in regardless of their ability to pay.

“I thought, we open a new restaurant every 72 hours. We had 70,000 employees. We’ve got equipment you couldn’t imagine,” Shaich recalls. “I said, ‘Hey, this is something we can do.’ ”

Linking up with Kate Antonacci, now project manager of Panera Cares, Shaich began to research the issue of hunger, leaning heavily on Feeding America, which the Panera Bread Foundation has supported for years. But it was traveling the country for six to nine months, visiting community cafés, soup kitchens, and food pantries, that provided the clearest window into the lives of food-insecure people.

“We were trying to put ourselves in the seat of someone who is struggling with hunger–where do I go?” Antonacci says. “We were standing side by side with someone in a line trying to get into a soup kitchen, trying to think about how they feel in that situation. We asked, ‘How can we create an experience that actually uplifts them?’ ”

Despite criticism from some economists and business analysts over the viability of the business model, data provided by the company suggest it’s working just as it was designed.

Most of the nonprofit restaurants bring in 70 to 75 percent of the retail value of the food served, Antonacci says. That number has been upwards of 90 percent at the Boston location—which opened Jan. 23—says manager Jarah Turner.

Perhaps most surprising, though, is the breakdown of what patrons pay:

  • 60 percent give the suggested donation (the full price charged for food at other Paneras)
  • Another 20 percent leave less or nothing at all
  • And around 20 percent offer more money.

A study by the Harvard Business Review found that in the case of a donations-based eatery in Vienna, Austria, 99 percent of patrons donated something in exchange for a meal.

Panera is not the first with this idea, of course. Aside from the Colorado restaurant that initially grabbed Shaich’s attention, similar experiments have popped up in Vancouver and New York City in recent years. The One World Everybody Eats Foundation, whose genesis was a single Salt Lake City café started in 2003, has since helped launch more than 30 “pay-what-you-can” cafés around the world.

From the perspective of addressing food insecurity, the project shows great promise, says Ellen Schwier, a spokesperson for hunger-relief organization Project Bread. Project Bread regularly interviews hundreds of low-income people in Massachusetts as part of a statewide inquiry into hunger and its solutions, and she says they hear time and time again that low-income people want “a hand-up, not a handout.” Panera Cares’ market-based pay model, which also allows patrons to volunteer in the store in return for food, fits nicely with this feedback.

“Think about it: Wouldn’t you want to walk into a commercial establishment and provide some work to earn your meal? You leave with your head held high,” she says. “It eliminates the stigma of asking for a handout, and it puts people in need into community with the mainstream.”

Turner, the manager at Boston’s location, has seen this first-hand, recalling an attorney who struck up a casual conversation over lunch with a homeless man.

“At lunch time, you will see everybody here, from all walks of life,” he says. “It’s awesome.”

With locations now in St. Louis, Dearborn, MI, Portland, OR, Chicago, and Boston, clearly Panera Cares thinks it has a winning formula for giving those struggling with food insecurity a “hand-up.” But will other big chains follow suit? Shaich hopes so, but he wants public companies everywhere to begin to view corporate responsibility as something broader than returning value to their shareholders.

“Imagine a world in which Nordstrom’s or Gap are running the thrift shops. Or Home Depot is doing distribution in the context of natural calamities. A world in which our energy companies are as focused on prevention as remediation,” he says. “I don’t know how we have a business 50 years from now if we’re not taking care of the communities in which we live.”

More on America's Hidden Hunger Crisis:

Who’s Paying the Price for Hunger in America? You.

Farmers Fighting Hunger in America

One in Four U.S. Kids Don’t Know Where Their Next Meal Is Coming From

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