Dive Brief:
- HMSHost has signed a multi-year, multi-unit development agreement with Panera to expand the fast casual brand in U.S. airports and travel plazas.
- According to a press release, the first airport locations under the partnership will open in Charlotte, North Carolina, and Salt Lake City, in 2020, with additional locations planned for 2020 and beyond. Panera currently has two restaurants in the Sky Harbor International Airport in Phoenix.
- The airport locations will feature Panera's standard menu, as well as grab-and-go versions of its offerings. They will also include a digital kiosk ordering system, mobile app and Rapid Pick-Up feature.
Dive Insight:
Panera has been pushing the gas pedal on a number of initiatives lately, expanding breakfast delivery, revamping its breakfast offerings and launching a dinner menu test among them. Now, with this agreement, the chain is also expanding its presence into airports.
Operating an airport location provides a captive and consistent customer base all day long and plenty of brand exposure to potentially new customers, but it also comes with unique challenges. For starters, competition is stiff. The Salt Lake City airport alone has 30 dining options listed on its website. There are also bigger, more logistical issues that come with running inside a terminal. Per TSA rules, for example, knives have to be tethered.
Speed of service is also critical for travelers in a rush, but Panera is navigating this hurdle by offering its mobile and kiosk ordering channels, as well as a grab-and-go menu. The fast casual chain may be at an advantage here with its menu, which features sandwiches and wraps that can easily translate into grab-and-go offerings. Its kitchen also doesn’t include certain equipment, like fryers, that may require more space or regulations. That Panera is honing its focus on breakfast and dinner could also help in an airport setting that never slows down.
Panera is working with a seasoned nontraditional-location operator in HMSHost, which runs 4,000 stores, including in more than 120 airports globally and 80 travel plazas in North America. Paired with HMSHost's experience, the transition is likely to be more seamless.
As traditional real estate locations become sparse, more chains are stretching their legs into atypical spaces. Both airports and travel plazas could become more competitive as a consequence. Godiva, Shake Shack, Wetzel’s Pretzels and Pret A Manger are a few examples of brands that have announced airport expansion plans recently. Even delivery companies are taking advantage of the opportunity. Uber Eats recently partnered with Canada’s Toronto Pearson airport and HMSHost to provide food delivery at Terminal 3 of its International and Domestic Departures section. The pilot program allows passengers to access the Uber Eats app and order a variety of QSR and fast casual options.
The competition to feed hungry travelers shouldn’t slow anytime soon. A recent forecast projects that U.S. airports will see over 25% growth in the next 10 years, handling over 1.1 billion enplanements, up by almost 225 million from 2017.
