What every grocery manager can learn from Panera Bread

It’s lunchtime on a Friday, and the Panera Bread in the Toronto suburb of Markham is packed. Inside, a diverse mix of young and old take comfort in the warmth of the store.

In this day of gluten-free everything, Panera is proof that bread is not dead. The St. Louis–based chain opened its first Canadian bakery-cafe, in Richmond Hill, Ont., in 2008. Today it operates 12 stores throughout Canada, plus more than 1,700 in the U.S.

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Grocers could learn from Panera’s rise to the top of the fast-casual restaurant business. Its baked goodies are not your typical store-bought loaves. Instead, Panera has made a name selling premium, handcrafted breads.

At the Markham store’s entrance, customers are greeted with a message: “Start with bread.” That’s telling, because it’s the simple, pure smell of freshly baked bread that seems to get customers excited.

When people walk into this bakery, it’s not uncommon to hear them say, “It smells good” or, “It smells so delicious in here.” But that smell isn’t accidental.

Panera’s alluring aroma is part of the company’s strategy, and it’s a smart move, believes Darren Tristano, executive vice-president of Technomic, a research firm that studies the food industry. After all, he says, the more patrons smell bread, the more likely they are to buy some to take home.

And yet, as powerful as smell is, the strategy of aroma is often overlooked at grocery stores. The result? “The products available at in-store bakeries may be very close to quick-service restaurant chains with the word ‘bread’ in their names, but I think many people see restaurants as having fresher products,” says Alan Hiebert, senior education co-ordinator at the International Dairy- Deli-Bakery Association.

So, how can grocers do a better job of marketing their baked goods? At Panera, patrons aren’t just able to smell fresh bread, they can see it being made thanks to a store design that allows customers a glimpse into the kitchen.

“Customers are looking for that restaurant ‘theatre’ that combines the visual with interaction,” says Tristano. “It’s an important part of Panera’s offer.”

READ: George Weston looks to fresh and gluten-free products for growth

Some grocers are getting better at opening up the kitchen and letting consumers in on the action. Take both the Loblaws Maple Leaf Gardens and Longo’s Leaside stores in Toronto, where baking is a public spectacle.

Another way grocers can sell more bread is to tell the story behind their loaves. Here again, Panera excels.

At the Markham store, I noticed a cinnamon-raisin-swirl loaf on display. It caught my attention because the sign mentioned that the ingredients included cinnamon from Vietnam and Indonesia. There was also a large sign over the breads section with a quote from chief baker Tom Gumpel: “Great bread is for everybody.”

“Knowing the story about what they put into their bread, and a level of expertise that bread makers have within the store, is part of the story that consumers, especially millennials, want to connect with,” says Tristano.

That’s exactly what Freson Bros. in Stony Plain, Alta., is doing with its Mountain Park Bread. The bread is named after the hardworking people of the mining town with the same name, which also happens to be the hometown of Freson Bros.’ founder, Frank Lovsin. The story behind the bread is featured in signs around the store and in flyers.

Another way to connect consumers to grocery bakeries is through professional-looking uniforms.

Tristano suggests grocers create a more “chef inspired” uniform for bakery staff so there’s no question that the person in back is an expert baker.

“It’s about culinary credibility, not just keeping clothing clean,” says Tristano.

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The good news for grocers: paying more attention to bread will likely increase sales store-wide. Take HMR sandwiches for instance. It’s a category where quick-service restaurants such as Panera really excel, says Hiebert.

If grocers can better promote their in-store breads, this, combined with their in-house coffee and improved dining areas, will see them raking in the dough in no time.

Nancy Kwon is Canadian Grocer's managing editor