Panera non-profit aims to reach out to feed the poor
CLAYTON, Mo. -- As the first crowd of customers filed into Panera Co.'s nonprofit restaurant here, only the honor system kept them from taking all the food they wanted for free.
Watching people line up, company Chairman Ronald Shaich admitted he has no idea if his experiment will work.
The goal for Panera's first non-profit restaurant is to offer an eatery where people pay what they can. The richer can pay full price or extra. The poorer can get a cheap -- or even a free --meal.
A month later, the verdict is in: Customers are basically honest.
Panera, which operates 1,400 franchised and corporate-owned bakery-cafes nationwide, plans to expand the nonprofit model around the nation. The company will open two more locations within months.
"I guess I would say it's performing better than we even might have hoped in our cynical moments -- and it's living up to our best sense of humanity," Shaich said in an interview.
Cashiers inform customers about their orders' "suggested" price, based on the menu. About 60 to 70 percent pay in full; about 15 percent leave a little more; and another 15 percent pay less -- or nothing at all, Shaich said.
Shaich said the restaurant took in $100,000 in revenue its first month. He declined to say what kind of margin between total costs and revenue, but he predicts the restaurant will be able to cover its costs within months -- and eventually generate extra cash for charitable programs.
Panera's nonprofit plan is the largest example yet of a concept called community kitchens, in which businesses operate partly as charities. Customers who need a discount, or even free food, can get it with no questions asked.
The Clayton store operates under Panera's St. Louis Bread Co. banner by a nonprofit organization called Panera Cares, which the corporate company supports.
Panera spokeswoman Kate Antonacci said the nonprofit is considering more locations -- upscale but accessible to lower-income customers. For the Clayton store, St. Louis County offices and courthouse are nearby.
The Clayton Panera hardly has turned into a soup kitchen.
Its longtime business clientele kept the lunch hour busy last week. Well-dressed professionals clustered around laptops and talked on cell phones.
There are new customers as well, drawn to the bargains.
Anna and Bennie Ward heard about the pay-what-you-wish model on the news. Anna thought it was too good to be true, so she researched it on the Internet before driving over for lunch with Bennie their two kids -- a rare dining-out opportunity.
Bennie is laid off, and Anna's only income is from disability checks. The family ordered sandwiches, iced-coffee drinks and bread to go.
"Near the end of the month is difficult for us. If it was not for help from friends and community, I don't know where we would get our last meal," Anna said. "To be able to go there and eat an actual meal and feel full is such a blessing."
