Dive Brief:
- Panera is expanding its coffee subscription program to offer 26 self-service drinks, including iced coffee, lemonade and soft drinks, the company wrote in an email to Restaurant Dive. To mark the new offering, Panera is debuting a line of caffeinated lemonades that contain as much caffeine as a 20-ounce dark roast coffee, Sara Burnett, Panera's VP of food belief, sustainability and PR, said.
- Ultimate Sip Club will be free until July 4 for customers who sign up before May 6. After July 4, customers will pay $10.99 per month. Existing coffee program members will access Unlimited Sip Club for the coffee club's current price, $8.99 a month, until the end of the year, Burnett said.
- Panera's initial coffee program, which garnered more than 600,000 members, has driven an increase in visits and yearly spending by members, Burnett said. About one-third of the time program members collected a free drink, they added a food item to their order.
Dive Insight:
Subscribers of Panera's coffee program, which debuted just before the start of the COVID-19 pandemic, spend much more at the restaurant in a given year than other customers, Burnett said.
"They have a value of approximately 11 times that of a non-member," she said. Panera wanted to expand its subscription offerings to beverages popular in dayparts beyond breakfast — which got a boost from the coffee program — to draw in more customers and keep them coming back.
The Ultimate Sip Club, Burnett said, is the product of that desire. The new offering was tested in Raleigh and Charlotte, North Carolina; Memphis, Tennessee; Madison, Wisconsin; and Atlanta. The program excludes espresso drinks, bottled drinks and smoothies.
"So you're able to use this subscription and have that value actually extend across the whole day to every single channel," Burnett said.
Panera's beverage program is one of several recent restaurant subscription launches as chains look to collect diner data, drive loyalty and improve their value propositions to customers. Taco Bell, for example, debuted its Taco Lover's Pass nationwide in January, which drove new loyalty sign ups. Sweetgreen piloted a subscriber discount in January, offering $3 off a meal every day for a $10 monthly fee. In September 2021, Pret A Manger also launched a coffee subscription program, based in Washington, D.C., and New York, which included a more expensive premium tier that granted customers access to espresso drinks.
Some of Panera's recent moves have focused on improving beverage offerings, with the company testing Miso Robotic's CookRight Coffee system to monitor the freshness of its brewed coffee. In February, the fast casual brand added contactless dine-in ordering to reduce friction in the dining room.
Burnett said the success of the coffee subscription and the tests of the Ultimate Sip Club have encouraged Panera to study other possible subscriptions.
"We need to have something that's worth coming across the street for ... and it has to provide disruptive value," Burnett said. "Subscription is an incredibly valuable proposition for both our business, but also for the guests."
