Panera Bread’s New Clean-Food Policy Still Doesn't Make It a Chipotle

Can Panera Bread's new clean-food policy build the same loyalty with its customers that Chipotle has with its customers?

Jun 30, 2014 at 6:35PM

Panera Bread (NASDAQ:PNRA) is the latest restaurant chain to emphasize fresh ingredients on its menu. Panera Bread's new food policy is focused on offering customers clean ingredients and a transparent menu, and it is designed to have a positive impact on the company's food system. Panera Bread bakes its bread fresh every day and none of its menu items have artificial trans-fats. The chickens Panera Bread uses are all raised without antibiotics. By year-end 2016, Panera Bread hopes to have removed all artificial colors, flavors, sweeteners, and preservatives from its bakery-cafe menus.

Paneralogo

Source: Panera Bread 

While I applaud the notion and think it's a noble effort, the problem I see is that Panera Bread's menu is not that healthy. Many of its menu items have more calories than a McDonald's Big Mac. Unfortunately, the effort is not going to turn Panera Bread into a Chipotle Mexican Grill (NYSE:CMG). No matter how how hard Panera Bread tries, its menu consists of bread, pastas, paninis, pastries, and sweets. These items are not the first things people think of when they want to eat clean.

A closer look at Panera Bread's menu
The problem is that many of Panera Bread's menu items are loaded with calories. Here is how many of Panera Bread's menu items stack up against sandwiches from other restaurant chains:

Menu Item Calories
Panera Fontina Grilled Cheese 850
McDonald's Big Mac 550
Panera Italian Combo Sandwich 990
Subway 6" Spicy Italian 480
Panera Tuna Salad Sandwich 510
Starbucks Chicken BLT Sandwich 470


Source: Panera, McDonald's, Subway, Starbucks

For those who go to Panera Bread for breakfast, its Breakfast Power Sandwich has the least amount of calories at 340 calories. On the other hand, you can go to McDonald's and get an Egg McMuffin for 290 calories. Even Panera's Strawberry Granola Parfait has more calories than an Egg McMuffin at 310 calories.

Mcdonalds Egg Mcmuffin

Source: McDonald's

If you're looking to watch calories, you're pretty much stuck with soup, salad, or one of Panera Bread's flatbreads. Pastas are definitely out of the question. The lowest calorie pasta item is Chicken Sorrentina Pasta, which has 780 calories. Mac & Cheese is definitely not an option, as it has 980 calories.

Panera Bread

Source: Panera Bread 

The worst part, though, is its freshly baked breads. A loaf of Three-Cheese Bread contains 3,510 calories. Its Artisan French Bread and Country Loaf each have 3,300 calories. The best option is a loaf of Whole Grain, which has 1,230 calories.

Why can Chipotle pull it off?
Chipotle Mexican Grill was started with the belief that fast food could be good for you. All of its food is made with fresh, high-quality raw ingredients. From the very beginning, Chipotle Mexican Grill has followed a vision of "food with integrity."

Images

Source: Chipotle Mexican Grill

Chipotle Mexican Grill is now taking things a step further. This year, the company plans to purchase 20 million pounds of locally grown produce. This is up from its 2013 goal of 15 million pounds. Chipotle Mexican Grill has been steadily increasing its locally sourced supply chain since 2008.

Chipotle

Source: Wikimedia Commons

Chipotle also serves more "responsibly raised" meat than any other restaurant company in the U.S. These animals are raised humanely and are never given any antibiotics or added hormones. The cheese and sour cream that Chipotle uses come from cows that were never given the synthetic hormone rBGH. Most of the dairy products are made from the milk of pasture-based cows.

How do the two chains compare?
Where Chipotle beats Panera is in terms of same-store sales growth. In its most recent quarter, Chipotle grew same-store sales 13.4%; Panera saw its company-owned same-store sales rise only 0.1%. Chipotle also has an operating margin that is 400 basis points higher than Panera's. This explains why Panera's shares are down almost 19% in the past year, while Chipotle shares are up 64% in the past year.

Foolish final thoughts
While I applaud Panera Bread's efforts, if the chain really wants to become more health conscious, it should drop bread from its name and become Panera Soup & Salad. For this Fool, I felt better eating at Panera Bread before I knew how many calories its menu items had. In trying to eat healthy at Panera Bread, my options are limited and the calorie counts are much higher than I would like.

While the move makes for good public relations, Panera Bread does not offer a menu like Chipotle Mexican Grill. With Chipotle Mexican Grill, all the ingredients are in front of you, and you watch your food being made. Plus, Chipotle Mexican Grill goes out of its way to source not only its vegetables but its meat as well. Panera Bread is trying to borrow another page from Chipotle Mexican Grill's playbook, but unfortunately adopting a clean-food policy does not make Panera Bread a Chipotle Mexican Grill.

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Mark Yagalla has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill and Panera Bread. The Motley Fool owns shares of Chipotle Mexican Grill and Panera Bread. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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