Chief Executive Officer of Panera Bread
Born Ronald Mark Shaich, December 30, 1953, in Boston, MA; son of Joseph (a certified public accountant) and Pearl R. Shaich; married Nancy Antonacci (an education specialist), May 10, 1998; children: two. Education: Clark University, B.A., 1976; Harvard University, M.B.A., 1978.
Office—Panera Bread Co., 6710 Clayton Rd., Richmond Heights, MO 63117.
Worked as assistant to the president at Store 24 Inc., and assistant to the vice president of marketing at CVS Stores, late 1970s; served as Eastern regional manager for Original Cookie Company, Boston, MA, 1978–81; launched Cookie Jar bakery in Boston, c. 1980; Au Bon Pain Company, co–founder, 1981, co–chair until 1994, chief executive officer, 1994–99; purchased St. Louis Bread Co., 1993; renamed company Panera Bread, 1999; chair and chief executive officer, Panera Bread, 1999—.
Ron Shaich heads Panera Bread Company, the immensely successful chain of bakery–cafes emerging as a dominant new food purveyor on the suburban American landscape. With its artisan breads baked on site and an array of soups, salads, and sandwiches, Panera is poised to become the trend–setting leader in the growing "quick–casual" segment of the restaurant industry. "We were all eating Wonder Bread and then these artisan bread bakers came along," Shaich told Chain Leader journalist Margaret Littman about the success of his company. "We began to understand this drive for specialness that consumers had for specialty foodservice."
Shaich has spent much of his career in the food business. Born in December of 1953, he is the son of a certified public accountant, and earned an undergraduate degree in government and psychology from Clark University in Worcester, Massachusetts, in 1976. He began his first business on Clark's campus, running a successful convenience store for students. After earning a graduate business degree from Harvard University in 1978, he worked as an assistant to the president of Store 24, Inc. and then as an assistant to the vice president of marketing at CVS Stores.
Shaich eventually landed a job as the Eastern regional manager for the Original Cookie Company, and also opened his own Cookie Jar bakery shops in the Boston area. But as he told Harvard Business School Bulletin writer Susan Young about his own venture, "every morning I watched thousands of people walk by; no one bought cookies before noon. So I added fresh croissants and baguettes, two items that were not in the mainstream back then." The breads came from another Boston outfit called Au Bon Pain, a company that was started in 1976 by a French oven manufacturer whose name roughly translated as "where the good bread is." There were three Au Bon Pains in the city, but business was flagging and the investor group that owned it was ready to sell. Shaich teamed with one of the investors, a commercial real–estate veteran named Louis I. Kane, and revamped the Au Bon Pain concept, using what he learned from watching his baguette customers. "You didn't need a Harvard degree to see the opportunity," Shaich recalled in an interview with Wall Street Journal writer Carol Hymowitz. "Customers were coming into the store to buy a baguette and asking me to cut it from top to bottom. Then they'd take luncheon meat they'd just bought from the grocery store next door and make a sandwich."
Au Bon Pain grew quickly during the 1980s, thanks to a business plan that squeezed its outlets into busy urban locales serving the office–lunch crowd. Impressive sales–per–square–foot revenues were the result, and an initial public offering in 1991 provided an influx of cash for further expansion. By 1993, the company had grown to 250 stores, but soon began losing ground to new competitors. That same year, Shaich, who was responsible for Au Bon Pain's strategic planning and operations, made an acquisition that would herald a future direction for both himself and the food–service industry in general: Au Bon Pain bought the 19–store St. Louis Bread Company, which baked its own breads on–site and sold sandwiches made from them. Shaich told his fellow Au Bon Pain executives that they needed to unload the struggling Au Bon Pain division and concentrate on the St. Louis Bread concept, but his fellow board members balked. "I came very close to losing my job," he told Hymowitz in the Wall Street Journal. "The board said 'the stock is flat and maybe you are washed up.'"
In the end, Shaich convinced the others his vision had potential, and Au Bon Pain was sold to a private–equity group in 1999 for $73 million. Within weeks, St. Louis Bread—later renamed Panera Bread—was launched with several new stores that sold specialty sandwiches on an array of fresh–baked breads like ciabatta and tomato–basil. Restaurant–industry watchers and the Wall Street firms that analyze the food–service market were initially wary, believing it was merely the old Au Bon Pain with a new name. Shaich was adamant, however, that Panera's more inviting ambiance and emphasis on artisan breads like focaccia and sourdough was a new entry into the quick–casual dining sector. He also claimed he learned from his Au Bon Pain mistakes, especially the need to stay on top of food trends.
Unlike Au Bon Pain, Panera—which translates from the Spanish language as "bread basket"—settled into prime suburban locations, where business could be expected during much of the day, into the evening, and even more so on the weekends. Stores were either company–owned or franchised, and franchisees had to demonstrate a serious track record; many of those who signed on already operated successful McDonald's or Pizza Hut restaurants. The dough was delivered daily, and baked in–store. "It would be very easy to do frozen bread," Shaich told David Farkas in a Chain Leader article. "But we believe fresh dough is different in taste and in shelf life. As much as anything, the consumer is at the core of this decision—and they know the difference."
In its first five years in business, Shaich's Panera exceeded expectations. It posted profits of $21.7 million in 2002, and reached the $1–billion sales mark in 2003. Its stock, which was trading in 1999 for just $6 per share, was trading at $40 in early 2004. Meanwhile, the traditional fast–food chains were struggling financially. "We've been considered the poster child for the collapse of McDonald's," Shaich admitted in an interview with St. Louis Post–Dispatch journalist Thomas Lee. "It's so ludicrous. McDonald's problems were created 10, 15 years ago.… They focused too much on convenience and not on the food people want."
Shaich is married to Nancy Antonacci, an educational specialist, with whom he has two children. Some industry analysts wondered if Panera might stumble with the low–carbohydrate diet craze, which sent sales of breads and pastas plummeting, but the company was already planning to introduce low–carb breads and new salad choices on the menu for mid–2004. "Worried? No," Shaich told Young in the Harvard Business School Bulletin interview when asked about the so–called Atkins Diet revolution, which had sent bread sales plunging. "Aware of it? Yes. We have a history of being respectful of our customers' evolving preferences."
Chain Leader, May 2000, p. 103; January 2003, p. 42.
Forbes, November 13, 2000, p. 290.
Harvard Business School Bulletin, March 2004.
Inc., May 1988, p. 14; May 1990, p. 78S.
Investor's Business Daily, March 3, 2004, p. A6.
Nation's Restaurant News, July 11, 1994, p. 2; September 19, 1994, p. 172.
New York Times, May 10, 1998.
St. Louis Post–Dispatch, June 22, 2003, p. E1.
Wall Street Journal, June 10, 2003.