Why Is Panera So Expensive? (11 Reasons Why)

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Maisie Hughes

Maisie Hughes is a 20-year veteran of the culinary world. She has worked as a chef in some of the most prestigious restaurants in the country, and she currently volunteers her time at local food banks.

Panera is one of the premier providers of breakfast sandwiches, wraps, pastries, and salads in America. In fact, Panera’s products are so delicious that it has amassed a huge following.

If you frequent Panera, you may have noticed that Panera products tend to be more expensive than its competitors’. Why is that? I looked into it and here is what I found!

Why Is Panera So Expensive?

Panera is so expensive because Panera is a hybrid between a sit-down restaurant and a fast-food chain. Moreover, Panera values healthy eating and offers healthy food made of fresh ingredients that are often produced in-house. Likewise, Panera developed their own to deliver their food and grocery product to the growing population of health-conscious consumers.

In case you are interested to learn more about the products, following, branding, and marketing efforts that make Panera so expensive, keep on reading!

1. Panera Promotes Healthy Eating

Panera’s brand revolves around healthy and delicious food. Compared to junk food, healthy food is more costly to produce.

Moreover, genuinely healthy and fresh ingredients must be sourced directly from farms, most of which cultivate only organic goods.

Establishing a network of reliable suppliers, procuring these supplies, and turning them into healthy dishes that people can savor are the reasons Panera is expensive.

2. Panera Stores Fresh Produce On-Site

One of the ways Panera ensures the freshness of their products is by storing their ingredients on-site.

Doing so cuts back on excessive transportation costs and enables Panera to have better control over the quality of their ingredients.

However, on-site storage is an expensive endeavor. Apart from securing the land and warehouse for storage, Panera also has to invest in equipment like coolers.

Sustaining this on-site storage scheme increases Panera’s overhead expenses and, therefore, the prices of Panera’s products.

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3. Panera Has An Ever-Changing Menu

Unlike most food establishments that stick to tried-and-tested dishes, Panera has a habit of regularly changing up their menu.

Generally, Panera does this to cater to the evolving needs of health-conscious consumers and offer food that will also benefit the environment.

Nevertheless, introducing new items on the menu is an expensive choice because these new items have to be tested and approved several times.

Consequently, Panera’s decisions to provide seasonal dishes and continually improve their offerings make Panera’s products expensive.

4. Panera Sells Grocery Products

Panera is not just a place for getting healthy food on the go. You can also rely on Panera to provide a wide variety of in-house grocery products.

There are two main reasons why Panera’s grocery products make everything else in Panera expensive. First, Panera’s grocery products have high-value ingredients.

Second, introducing grocery products requires a huge investment and results in plenty of initial losses. To cover these costs, Panera has to maintain expensive rates.

5. Panera Is Not Exactly A Fast Food Chain

5. Panera Is Not Exactly A Fast Food Chain

Panera’s branding sets it up to be above the status of fast-food chain and something more akin to a sit-down casual dining establishment.

Alongside Panera’s mission to create a more sophisticated status comes a need for Panera to increase their prices.

After all, Panera will not be considered high-class if Panera sells their products at the same rate as fast-food chains. As such, Panera sees  it as a must to be expensive.

6. Panera Has An In-House Delivery Team

Panera had the option of partnering with third-party organizations to handle their food and grocery deliveries, but instead Panera developed their own delivery team.

Doing so required Panera to create their own app, invest in brand new equipment, and hire managers, additional workers, and drivers.

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While this decision allows Panera to have better control of their prices and branding, this also increases Panera’s operations expenses, and therefore the cost of Panera’s products.

7. Panera Invests On Clever Marketing

Panera invests on continuous TV, print, and digital marketing not to introduce their already-popular brand, but to keep enticing consumers to buy from them.

While Panera’s advertisements are effective in driving up their ROI, this does not mean Panera can get away with their annual $100 million marketing budget unscathed.

To compensate for previous marketing expenses and secure enough funding for future campaigns Panera still has to keep their products and services pricey.

8. Panera Uses High Rates To Ensure Quality

Consumers typically determine the quality of the product based on its price. Generally, the more expensive the product, the more satisfying it should be.

However, research shows that most of the satisfaction derived from procuring expensive products is psychological.

While Panera’s offerings are no doubt high-quality, there is reason to believe that placing a hefty price tag on them gives consumers better satisfaction.

Panera uses this fact to their advantage, which would explain the priciness of Panera’s products.

9. Panera Treats Its Employees Well

Panera pays their employees a higher hourly rate compared to fast-food chains like McDonald’s. Likewise, Panera employees enjoy better benefits.

Generally, this has to do with Panera lifting its brand from the fast-food chain category to be recognized as a higher-class establishment.

Alongside the other overhead costs, the better wages and benefits Panera gives its employees contributes to the high price of Panera’s products.

10. Panera Deals With A Lot Of Losses

Panera is mainly a bakery known for producing some of the best sourdough breads in the country. Just like other bakeries, Panera is not immune to generating tons of waste.

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Worst, this waste is typically food items like bread, because Panera has to bake them in huge batches to save time.

However, when the bread does not get sold within the bread’s shelf life, it gets thrown away.

This waste is a huge loss for Panera, and to cover their losses, Panera has to keep their products expensive.

11. Panera Caters To The Growing Community Of Health-Conscious People

With COVID-19 introducing a new normal around the world, more and more people are rethinking their food choices and leaning towards healthier options.

Two years after the pandemic, the community of health-conscious people are still growing, and establishments like Panera are benefitting from it.

With the higher demand for Panera’s products and a massive target market to cater to, Panera is confident that consumers will patronize them regardless of their prices.

As such, Panera continues to be expensive.

To learn more, you can also read our posts on why Whole Foods is so expensive, why Hellofresh is so expensive, and why Goldbelly is so expensive.

Conclusion

Panera is a fast-casual restaurant in America that offers consumers healthier food and grocery options, but at a high price.

This high cost can be attributed mainly to Panera’s branding, marketing efforts, and overhead costs. After all, healthy foods are naturally more expensive to produce.

Additionally, Panera’s products and services are in high demand today due to the growing number of health-conscious people in America, and this makes Panera expensive.

Author

  • Maisie Hughes is a 20-year veteran of the culinary world. She has worked as a chef in some of the most prestigious restaurants in the country, and she currently volunteers her time at local food banks.

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