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Why Panera's CEO Is Going Hungry

By Alyce Lomax - Sep 18, 2013 at 4:33PM

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Ron Shaich’s low-budget diet isn’t about management failure; he’s making a point we should heed.

"I'm starving."

I'm pretty sure we've all occasionally aired this complaint between regular meals. But the thing is, some Americans really are starving as we speak. And in an effort to bring attention to their plight, one major corporate CEO has been going hungry this week, and his demonstration makes an important point.

Many consumers aren't aware of it, but Panera (PNRA) has for years been taking this social problem head-on, raising hunger awareness and even helping out. CEO Ron Shaich has put together plenty of bold initiatives, such as five "pay what you want" nonprofit cafes scattered around America. (A recent experiment to serve a pay-what-you-want chili dish in 48 regular restaurants has been discontinued, as many consumers didn't understand that it was part of an antihunger initiative. It's being rethought in order to boost effectiveness.)

Right now, though, Shaich is making an extreme move that few would expect from a CEO: He's walking a week in the shoes of the hungry.

Trading places
Shaich is on a voluntary, week-long challenge to eat on a shockingly small amount of money. His self-imposed rule: to feed himself on $4.50 a day.

This is not just a trendy fast or a bizarre experiment in self-denial. It happens to be Hunger Action Month, and $4.50 per day is the amount Americans receive under the Supplemental Nutrition Assistance Program, more commonly known as the food stamp program. Shaich's timing coincides with the House of Representatives' consideration of a $39 billion cut to SNAP funding, which the House approved yesterday. The funding reductions would take place over a 10-year period and make 4 million Americans ineligible for food stamps. [EDITOR'S NOTE: This paragraph has been updated to reflect the House of Representatives' approval yesterday of an overhaul of the Supplemental Nutrition Assistance Program.]

Shaich's grocery budget for the entire week is $31.50. While shopping for food, he experienced some of the problems low-income Americans face on a regular basis. For example, as much as he tried to choose healthful foods for his week-long diet, his groceries ended up being high in carbohydrates and devoid of more nutritious and costly items like fresh fruits, vegetables, and meat. Shaich has also been expressing concerns about making such a small amount of food last him through the week.

Food deserts
In some areas of the country, poor Americans lack options. Wonderful do-it-yourself initiatives like community gardens are cropping up, and mom-and-pop markets do exist in low-income areas, but many people can only afford cheap, low-nutrition meals such as fast food and the sorts of grocery store items that basically amount to carbs and sodium in colorful packaging.

Although many people believe companies shouldn't concern themselves with such societal issues, some help out anyway, knowing their profits don't have to come at the expense of people and communities. Whole Foods Market (WFM) is entering some areas with limited choices for fresh, natural, and organic foods, and it appears to be embracing communities that many big grocery rivals likely wouldn't take a chance on. So far, it has opened a store in Detroit, and it plans to open one in New Orleans.

These stores will be fashioned for different demographics, and they can also help their communities in other ways. For example, Whole Foods carries items from local businesses. The company has always had philanthropy and community support built into its business. It regularly donates extra food to food banks and shelters (Panera has been known to donate some of its daily bread, too), and several times a year 5% of all Whole Foods sales go to local nonprofits and educational initiatives.

Whole Foods' reputation for philanthropy is almost unmatched, but there's a more under-the-radar company doing its part to combat food shortages: Sealed Air (SEE 1.97%), the manufacturer of iconic Bubble Wrap.

What you may not know about Bubble Wrap
Sealed Air also makes wraps for food to reduce spoilage, which is part of the hunger issue as well. Although much of Sealed Air's campaign against food waste relates to environmental needs, the company's SmartLife initiative takes a holistic approach.

Food waste hurts communities. According to Sealed Air, "The food we waste translates into lost profits for farmers and producers plus higher prices for consumers and reduces food security for those who cannot afford enough to eat."

To take on this problem, Sealed Air is moving toward serious sustainability. Take its Restore Mushroom Packaging, which utilizes the inedible and otherwise unusable parts of agricultural waste to make biodegradable and compostable protective packaging.

(Full disclosure: The shares of each company mentioned in this piece have been purchased for and held in the socially responsible, investing-spirited Prosocial Portfolio I manage for Fool.com.)

Some hope to make it, some try to take it
Shaich's personal quest to gain a deeper understanding of what it's like to squeeze a dollar until it screams shows us that at least one CEO isn't hanging out in an ivory tower.

So many Americans -- including investors -- argue about which government programs help or hinder the U.S. economy, but I suspect many don't acknowledge the human side of what it's like to be hungry and struggling. Dining for $4.50 per day puts things into perspective.

Meanwhile, given the looming SNAP decision, let's remember corporate welfare for a moment. In the grand scheme of things, we know that loopholes, subsidies, and other gimmes for favored companies and industries eventually trickle up -- rather, gush up -- to giant paychecks for many CEOs. I doubt many of them know what it's like to eat on a weekly allowance of $31.50.

Shaich's challenge is impressive; the best way to understand the plight of others is to walk in their shoes. There are ways all of us can help, and it's good to know some business leaders and responsible corporate citizens advocate philanthropy -- and an improved economy for Americans at every point on the socioeconomic spectrum.

Check back at Fool.com for more of Alyce Lomax's columns on environmental, social, and governance issues.

Alyce Lomax owns shares of Whole Foods Market. The Motley Fool recommends Panera Bread and Whole Foods Market. The Motley Fool owns shares of Panera Bread, Sealed Air, and Whole Foods Market. 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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