How Panera Bread navigated Covid, the labor market, inflation and more

We all know that we are behind on the objectives of the Paris agreement. We’re running out of time and that’s a big challenge. That’s why we think it would be wrong for a company like ours not to lead the way on this.

Have you ever seen the effects of climate change on business?

This is clearly a headwind and a risk. This is something that we watch very closely on the supply chain side, because we have such quality ingredients. So I think the impact of climate change on crops and harvests is definitely an imminent threat. It will unfold in ways that one cannot imagine.

How is the company adapting to the tight labor market?

The talent war is going to be a significant headwind and challenge for the industry. But I think there’s a structural element as you go, especially in the restaurant space. It will be increasingly difficult to recruit quality leaders in the restaurant industry, given the other options people are considering, such as the gig economy or becoming an entrepreneur. People reevaluate and ask, “How do I want to spend my life, and how do I want to show myself?”

We have invested heavily in capacity building, training, retention and recognition. But the biggest longer-term challenge is how do you get more people into the restaurant business? And in this context, how does Panera become the employer of choice n°1?

Have supply chain disruptions affected the business?

There is definitely a massive disruption on the supply side. there is no doubt. And that, in turn, leads to inflation and everything else. We have many strategic suppliers working for us, and thanks to the long-term nature of our contracts, we have been able to manage supply chain shortages remarkably well during the pandemic, with the exception of items like packaging, which were very, very erratic. Additionally, our sourcing is supposed to be entirely within the United States, so there is less volatility in terms of global disruptions. So I’m pretty confident that as the supply chain gets back to normal, we’ll see some loosening of the inflation component.

What about just salaries? Some of your entry-level workers’ starting salaries are still close to minimum wage.

For our frontline workers, our philosophy is that we want to be higher than the local competition. So whatever the local competitive environment, we want to be better than what’s out there and compete on that basis. But we will differentiate ourselves through our culture, our growth opportunities and our training. Because it is not limited to a financial transaction. It’s more than that. It’s how you’re treated, how you’re respected, how you grow, what the brand stands for, things like the impact program. People want to work for companies that stand for something and make sense.

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