Ahead of a planned IPO for its previously delisted brand, Panera Bread Company is quietly moving backward on some of its food quality standards — particularly those related to clean and humane ingredients.
A recent Reuters report notes stealthy changes. Among them: Stores removing signs with messaging around the chain’s formerly no-antibiotic, grass-fed animal products policy.
Cuts to Panera’s Food Quality
The sandwich and soup chain also appears to have removed three of 76 ingredients from a list of “No-no” items: Phosphates, ascorbic acid, and maltodextrin.
One of the strangest moves, however, concerns the restaurant chain’s bacon sourcing. Panera goes through 3,000,000 pounds of bacon annually. Internal documents acquired by Reuters say that the company wouldn’t be able to maintain its commitment to non-antibiotic pork.
The problem is that anti-biotic free pork only comprises 5% of total market supply. Executives have stressed that adhering to Panera’s food quality standards would cause shortages and limit the chain from adding new sandwiches with bacon on the menu.
The same source also suggests that maintaining Panera’s food quality standards for animal welfare would lead to ‘potential legislation.’ It’s not clear what kind of legislation that would be.
The Reuters’s report also cites an executive presentation illustrating using less stringently regulated pork products could save the company $21 million a year.
A Shrinking Market
Citing “brand positioning risk” and a less competitive practice, the company resisted making sweeping changes to its food quality standards. Many chain restaurants have been facing declining sales after never fully recovering from the pandemic.
Related: McDonald’s Tests $5 Meal Deal After Pricing Out Core Audience
However, the re-introduction of some antibiotics to Tyson Foods farms may have played a role. Tyson is a Panera supplier, a relationship that might end up giving the brand some heartburn.
The internal documents suggest that Panera didn’t go as far as they could have in relaxing standards. However, whether customers paying attention to these surreptitious changes will take their business elsewhere remains to be seen.
To some consumers, animal welfare is an important value proposition. Panera has led with their ethical sourcing as a core brand message since its inception.
“We have long believed in humane treatment of animals,” the company’s site reads. “That’s why we transitioned to cage free eggs for our breakfast sandwiches like our Bacon, Egg & Cheese on Brioche, and use chicken raised without antibiotics on our salads and sandwiches like the Chipotle Chicken Avocado Melt.”
As with greenwashing, the deceptive use of animal welfare standards could come back to haunt the company. If the practices don’t measure up to the words, that could be a problem for Panera.
Related: Rumors of Crisis as Subway Closures Mount, Same-Store Sales Decline
Panera’s Upcoming, Second IPO
As for the IPO, there’s no solid date on the move. It will be the company’s second debut on the stock market after the company was taken private in 2017 by JAB Holdings for a price of $7.5 billion.
