Dive Brief:

• To make up for lost catering sales during the pandemic, Panera has launched a Virtual Catering program for remote workers, Business Insider reports. The rollout follows a test conducted in December with roughly 50 corporate customers.
• As part of the program, companies or individual consumers can buy digital vouchers to send to remote employees or clients prior to a virtual meeting or event. Those vouchers are timestamped so that they’re only valid during the time of the meeting, which differentiates the voucher from a gift card.
• With an abrupt shift to remote work and widespread event cancelations since the beginning of the pandemic, Chris Correnti, Panera’s SVP of off-premise channels, told BI the catering industry has been nearly cut in half. For Panera, the channel typically represents 10% of its sales.

Dive Insight:

Prior to the pandemic, catering was on a steep growth trajectory, expanding 50% more than the entire restaurant industry in 2018 and making up more than $60 billion of the $600 billion segment. According to Technomic, about two-thirds of operators have suspended their catering programs entirely because of pandemic disruption.

Panera’s Virtual Catering program was created as a way to scrape back lost business, as well as to bring back the sense of community of sharing a meal during a meeting or event, Correnti told BI. Both DoorDash and Uber Eats have thrown operators a lifeline with similar programs. Uber expanded its corporate offerings with Vouchers for Eats in June, which includes the ability to offer vouchers to employees for remote meetings, among other features. DoorDash launched a product called DoorDash for Work in October, which allows businesses to offer employees meals whether they’re remote or in-office.

A DoorDash survey found that 90% of American employees miss at least one food-related benefit of being in the office, and Google employees have expressed similar sentiments, so Panera could be tapping a lucrative new revenue stream. The chain also intends to keep the program after the pandemic has ended. This will bode well for the at least 16% of workers who plan to work remotely after the pandemic, as well as for companies that plan to implement a hybrid work model.

Such a program also adds another feather in Panera’s cap on the digital front. The company hit $1 billion in digital sales in 2017 and was generating nearly 40% of its sales through e-commerce channels prior to the pandemic. Since the COVID-19 outbreak, Panera’s loyalty program has grown to 40 million members, while its off-premise business has grown exponentially, Eduardo Luz, Panera's chief brand and concept officer, recently told Forbes.

Panera also plans to debut its Panera To You program, which is geared toward workers who have returned to the office and may want to bundle individual delivery meals for one delivery fee on certain days of the week. The program was also tested in December. Delivery is up triple digits for the brand, and that number may remain high with this program's attractive one-fee model.