Panera is now a threat to Starbucks

Posted on: 2017-04-06 2:00 PM

After JAB Holdings added Panera to its rapidly growing food and coffee brand portfolio today, Starbucks Corporation is now under intense pressure to improve its food offerings. 

As Bloomberg reports, Starbucks could soon find itself losing serious ground to Panera if it doesn’t act quickly:
 
"While Starbucks has been trying to improve its fare for years, it has yet to establish itself as a legitimate dining spot. Panera, meanwhile, has been fueling growth with a menu of chicken-tortilla bowls, flatbread sandwiches, and Fuji apple salads. As it prepares to team up with JAB and that company’s roster of coffee brands, Starbucks’ food expansion suddenly faces more resistance."
 
While Panera’s coffee isn’t viewed as anything special, JAB could easily leverage its plethora of existing coffee holdings — which include Keurig Green Mountain, Caribou, and others — to improve that portion of Panera’s business. What could follow is a restaurant/cafe chain that has way better food than SBUX and comparable coffee.
 
That prospect should be more than enough to scare Starbucks into action.
 
The Seattle-based coffee giant currently offers a small array of breakfast and lunch items, none of which could be considered a hit with consumers. It purchased tiny bakery La Boulange in 2012 and used its recipes for its own pastries before shuttering the store soon thereafter. But those pastries haven’t been able to change its image as a coffee specialist.
 
In contrast, consumers visit Panera mostly for their food offerings. And if their coffee improves dramatically, as many believe it now will, Starbucks could suddenly have a powerful new competitor on two major fronts.