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Will Panera’s New Subscription Coffee Program Rise to the Top?

When you need to grab breakfast on the go, what’s your go-to destination?

McDonald’s? Dunkin’ Donuts? Starbucks?

What about Panera?

Usually thought of more as a lunch destination for soups and sandwiches, how can Panera break into the breakfast scene and increase its number of loyal customers in a market that is already crowded?

Panera’s New Monthly Coffee Subscription Could Really Get the Bread

Today Panera Bread Co. launched an $8.99 per month unlimited coffee subscription to help increase its breakfast traffic and loyalty program membership.

After more than three months of highly successful testing, Panera officials believe this monthly coffee subscription offer will be a game-changer within the industry and serve as a catalyst to spark membership in its MyPanera loyalty program.

“We are disrupting the industry,” Panera CEO Niren Chaudhary said. “We don’t think this has been done by anybody in this fashion ever before.”

Panera officials have worked hard to make competitive inroads in the breakfast category. They have overhauled breakfast, adding wraps and souffles and has boosted coffee quality.

The MyPanera loyalty program currently has 38 million members and Chaudhary thinks that figure can rise to 50 million in the future.

Customers must first join the loyalty program to sign up for the monthly coffee subscription plan and, so far, it’s working.

 

Why Panera’s Coffee Subscription Program Gets It Right

Consumers want instant gratification from a brand’s loyalty program, and they get that with Panera’s new coffee subscription.

Panera tested the coffee subscription for more than three months at 150 cafes in Cleveland, Columbus, Raleigh, and Nashville.

Consider these impressive stats from the test period:

  • The frequency of visits increased by more than 200 percent
  • Almost 70% of orders also included food items
  • The subscription renewal rate was 90% to 95%
  • About 25% of coffee subscriptions in tests were for new rewards program members

The subscription covers hot coffee, iced coffee, and hot tea drinks.

These numbers from Panera’s test period certainly show that consumers are willing to pay for instant benefits that provide value.

Panera’s monthly coffee subscription launch hits on some key elements tied to a successful loyalty program.

The biggest thing is that it shows customers are not only willing to sign up for a better experience/benefits, but they are also willing to pay for it.

Read more about why your loyalty program needs to be a differentiator.

 

Can Panera Improve the New Coffee Subscription Program?

This is a great start for Panera as it seeks to compete in the breakfast category. But what about beyond breakfast?

There are opportunities for Panera to take a page from the premium loyalty playbook and enhance the subscription program even more.

Perhaps rewarding members who have the program with extra perks who sign up for subscription?

Or expanding this to its core offerings, including its grain bowls and capitalize on the healthy eating initiative?

What about giving premium loyalty members 10 percent off every purchase or one free catering box once per year would build loyalty even more.

Brands that tie utility-based features and experiences to rewards membership often receive greater program lift.

What do you think of Panera’s new subscription offering and how do you think the company can further enhance its loyalty program?

Jim Tierney

Jim is our Loyalty Content Specialist, working closely with the B2B Marketing team. Aside from cranking out loyalty-related content, he is the proud father of two beautiful daughters, an avid runner and an old movie fanatic who calls Alfred Hitchcock his favorite director and Claude Rains his favorite actor.

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