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In late 2021, Panera Brands announced its intention to file an IPO through a merger with a special purpose acquisition company led by Danny Meyer.

Panera Brands is going public (again) soon: Here’s what that could mean

The Panera Brands group formed in 2021 and is now switching up leadership as it prepares to file an IPO after a failed attempt last year

Panera Brands — The JAB Holding group comprised of Panera Bread, Einstein Bros. Coffee and Caribou Coffee — is preparing to go public again after a previous failed attempt in 2022, following the dissolution of a partnership with New York City restaurateur Danny Meyer.

In late 2021, Panera Brands announced its intention to file an IPO through a merger with a special purpose acquisition company led by Meyer, who would have invested financially in the bakery-café chain and become lead independent director of the Panera Brands board once the company was public. However, seven months later in June 2022, the relationship with Meyer was dissolved and all talks of Panera going public ended until now.

As Panera prepares to file an IPO again after the company was traded publicly for 25 years until being taken private by JAB Holding in 2017, the company is making a leadership change from CEO Niren Chaudhary to current Einstein Bros. Bagels CEO José Alberto Dueñas. Now might be an even better opportunity for Panera to file for an IPO than in 2021, when the market was hot and at least seven restaurant companies either went public or made plans to do so, including Krispy Kreme, Dutch Bros. and Portillo’s.

Now the IPO field is much less crowded, and the restaurant industry seems to be in a more stable place post-COVID, with improved labor turnover rates, cooling inflation, and more resilient consumers, despite inflationary pressures. The National Restaurant Association reported in February that more than half of operators are seeing better consumer traffic. Consumer spending habits have been mixed due to the current inflationary environment, but customers are still spending more than they had during peak COVID-19 years due to pent-up demand.

Overall, the future of the restaurant industry looks less uncertain than it had in 2021, which could clear the way for Panera to have a higher-valued IPO than they would have last year. Plus, there will be less competition for initial investor attention, as the only other restaurant IPO filed so far in 2023 was Cava, which officially filed registration statements for an initial public offering earlier this month, though the company is not yet profitable.

Besides the expected boost from improving macroeconomic circumstances, Panera Bread itself has seen major sales momentum over the past year. The company is inching its way into the top 10 chains in the U.S. and is right behind Domino’s, which slipped from the number nine spot to number 10, according to the 2022 Top 500 data provided by Datassential in partnership with NRN. Panera saw 12.3% sales growth in 2022 and is firmly the number one brand in the bakery-café category. The number two spot in the struggling bakery-café category is Panera’s sister brand, Einstein Bros., while no other bakery-café companies has even cracked the top 100 U.S. restaurants, according to Datassential.  

The Saint Louis-based company has solidified its place as a leader and innovator within the limited-service segment. Over the past few years, Panera has become a tech leader and was one of the first foodservice brands to introduce geofencing technology in 2020 to make mobile order pickups easier for customers. Then this year, Panera became the first foodservice company to debut contactless palm payments in partnership with Amazon.

Outside of technology innovation, Panera has been making headlines with the expansion of its Unlimited Sip Club subscription program in 2022 to include all beverages. After introducing the original coffee subscription program right before the pandemic in 2020, Panera has bounced back from the unfortunate timing of its initial foray into subscriptions. Fast-forward to this year, and now one-quarter of all Panera purchases come from Unlimited Sip club members. Again, the company has proven itself a leader in the foodservice industry as very few large restaurant chains have introduced subscription programs beyond limited-time offers and beta testing.

The subscription program also gives Panera’s beverage category a boost, as it would otherwise be difficult to keep up with the fiercely competitive coffee category, led by Starbucks and Dunkin.

When Panera Brands does eventually file its initial public offering, the company will have better access to capital and likely more opportunities to allow its omnichannel technology and subscription program to continue to flourish. Of course, with shareholders’ needs in mind, a publicly traded Panera might not take as many risks like the Unlimited Sip Club in order to maintain reliable long-term performance. Potential shareholders could also take the opposite approach, and use their vote of confidence to encourage further category-leading innovation from Panera moving forward.

Panera declined to give more information on the timing of and plans behind its initial public offering.

Contact Joanna at [email protected]


TAGS: Finance
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