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Panera Bread was one of the first restaurant chains to try out a subscription model with the launch of a monthly unlimited tea and coffee subscription for MyPanera rewards members in Feb. 2020.

Are subscription programs the next big restaurant loyalty trend?

Panera Bread just rolled out an annual membership for its unlimited beverages subscription service as similar programs gain traction in foodservice

The era of subscription mania has made its way over into restaurants, and while they may not quite as ubiquitous as media streaming platforms, big-name foodservice brands like Taco Bell, Subway and P.F. Chang’s have started experimenting with offering subscription programs for their most loyal customers.

The perks are obvious: instead of getting revenue from a one-time customer that purchases a singular item, you can guarantee a steady stream of microtransactions from the same person by charging monthly fees for unlimited access to food and beverages. We also named digital subscription programs as one of our top predictions for the restaurant industry in 2023.

Panera Bread was one of the first restaurant chains to try out a subscription model with the launch of a monthly unlimited tea and coffee subscription for MyPanera rewards members in Feb. 2020. Panera was quiet about its new program for a while due to the COVID-19 pandemic, but last August announced an expansion of the program to include all beverages. The Unlimited Sip club now costs $11 a month instead of the original $9 a month and was extended to 26 beverages, including iced green tea, soft drinks, lemonades and the brand’s new caffeinated Lemonade Chargers. Customers can get a free beverage up to every two hours at a Panera during operating hours.

Now, Panera has announced an expansion of its Unlimited Sip Club, which will now offer a $120 annual membership (for the price of 10 months), which comes with other perks like $0 delivery fee on all Panera online orders and “Sip Club Saturday” deals just for members, along with VIP challenges and prizes.

“We have seen incredible response to the Unlimited Sip Club since we launched nationally last year, both for our guests and for our business,” Eduardo Luz, chief brand and concept officer at Panera said in a statement. “We’re excited to offer even more disruptive value with the annual membership […] the program is helping to drive transaction growth despite a highly inflationary environment, and to bring in new guests to experience everything Panera has to offer.”

According to Luz, 25% of Panera purchases now comes from Unlimited Sip members, who are much more likely to add food attach to their beverage orders.The success of Panera’s subscription program is reminiscent of the evolution of loyalty programs, many of which have also introduced VIP perks to their members, like the recently revamped Jimmy John’s Freaky Fast rewards program, which offers like swag like beanbag chairs to rewards members who accomplish certain sandwich-related tasks.

Wow Bao’s new NFT membership program is even more comparable to Panera’s Unlimited Sip club, since it is also a monthly membership club—albeit tied to NFTs and digital rewards instead of unlimited beverages — and introduces VIP perks to the brand’s most loyal fanbase.

Although Panera is not the only restaurant brand to offer a subscription program, very few are offering long-term programs instead of trying out subscriptions here and there as marketing perks for loyalty and rewards members. For example, Subway began experimenting with a one-month-only Footlong pass for discounted subs last summer and Taco Bell took its one-month-long Taco Lovers’ Pass national in early 2022. Other companies that have tried out subscription programs — either as temporary marketing ploys or as semi-permanent perks for loyal fans include Sweetgreen, PF Chang’s, Crumbl, and Denny’s.

Although we continue to predict that subscription programs will become more popular as restaurants explore new ways to ensure brand loyalty, companies should remember that customers only have a finite amount of money to spend every month on subscriptions. In fact, with almost every cable channel creating its own plus streaming service, and even car companies charging monthly fees for car seat warmers, we have already reached critical mass for this revenue model as consumers complain of “subscription fatigue.”

The restaurant subscription programs that come out on top will likely resemble this new crop of loyalty programs: focused on unexpected perks and experiences rather than just another $10 monthly fee.   

 Contact Joanna at [email protected]

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