Panera Bread "Pay What You Want" Experiment Fails Because... - Granite Grok

Panera Bread “Pay What You Want” Experiment Fails Because…

Panera-Cares-Cafe BostonHave you heard of something called conscious capitalism? It “suggests that consumers will do good if given the opportunity.”

Then there’s this.

Other researchers coined the term “responsibilization”–the idea that responsibility for social issues is shifting away from the government and nonprofits and toward businesses and consumers.

You could have fooled me, but let’s go with it because of Panera Bread’s recently failed experiment with what it called Panera ‘Cares.’ It is a pay what you want proposition that is collapsing under its own weight because while the intentions appear good the execution was flawed because the motivations were not really philanthropic, and it (as is so often the case) ignored human nature.

So, were their intentions good?

In 2010, Panera’s nonprofit arm launched a new experiment: It opened a cafe in St. Louis that looked exactly like the company’s other restaurants, but customers could pay what they wanted for the items on the menu, or not pay at all. Ron Shaich, Panera’s founder and CEO at the time, had volunteered at food banks and wanted to offer a better experience for people who were struggling to eat. The new nonprofit restaurant, called Panera Cares, was designed to sustain itself by nudging middle-class consumers to pay a little extra for their meals.

Panera (or more specifically its CEO) took the idea that food banks were not swanky enough and thought his business model could fix that using product and brand recognition to feed the hungry.

But people familiar with Panera or any chain anything goes there because they have some expectation of predictability. Human nature embraces predictability, routine, tradition, an understanding of constancy. Panera Cares took Panera Bread and made it confusing and unpredictable.

Though the cafes were intended to provide dignity–people could pay as little as they could afford and weren’t supposed to be questioned about it or made to feel like lesser customers–it didn’t work that way in practice. The company asked customers to limit themselves to one discounted meal a week or to volunteer for an hour at the cafe to make up for a free meal. “We are not designed to be a permanent solution for those facing food insecurity,” the company wrote, but that could make things complicated for people who wanted to take advantage of the service.

The only permanent solution for those facing “food insecurity” (which is a term no less an act of pretentious douchebaggery than conscious capitalism or responsibilization) is getting them into a position where they can feed themselves. You do that through culture, family, public policy, or more likely a bit less public policy. You don’t invite or reward it.

Panera Cares tried to build the Panera brand and business by asking you to pay more to cover their cost of doing “good.” That’s how Progressive government thinks, and it doesn’t work when they do it either.

So, Panera Cares is nothing more than a pretty act of virtue signaling at the expense of others.

Panera could do a lot more if they dropped the idea of selling ‘Panera Bread’ as a brand and invested in the actual business of not just feeding hungry people but helping them help themselves into a world where they can secure their own food.

The best philanthropists are the ones about whom you never hear. They find ways to use their success to help communities address problems. They do it because it feels good and they don’t need anything else out of it.

What could Panera or their CEO have done?

Invest in food banks and kitchens to improve facilities or equipment. Use their distribution and logistics system to help get better/fresher food to the shelters, food banks, and soup kitchens; even their own products, generically branded. Use administrative resources to aid food back volunteers or managers with storage, preparation, logistics, and service. Provide resources in these facilities to help connect these people to other non-profits or private organizations that help with job training, placement, retention, housing, or counseling.

There are dozens of things Panera or any business could do (and some probably are already) to help, but the first step is not making it about yourself or your brand. And yeah, the customers would still be “paying” but you eliminate all that confusion. You use the success of the brand to solve problems instead of creating brand problems that might make it harder to be successful enough for you to do real good.

Panera’s experiment failed because it wanted to help but couldn’t think of a way to do it without using that act as a way to grow the profit side of their business.

That’s helping Panera, not people with “food insecurity.”

It confused real customers, many of whom might have been more willing to donate to feed hungry people by dropping a few bucks in a donation box in a regular store than be confused about the unpredictability of visiting a Panera Cares.

Here’s another way they could help.

Work to change public and political policy along the same model.

Change tax policy (related to deducting donations), environmental policy, heck, housing policy, especially in major cities that make it more difficult or more expensive to build or do anything. Regulatory burdens and rising taxes add to the cost of living.

We also live in a world where the politics of moral relativism are supported by corporatists who back politicians that think the state should use legal force and public money to make Catholic nuns pay for abortifacients (because in their minds it’s the responsible thing to do) is taking us in the wrong direction.

Using the government to create your perceived good isn’t good for anyone but government at the expense of others.

Stop doing that. Stop supporting that. It’s not helping.

You have a non-profit arm. Use it wisely.

 

The Panera Cares in Boston (Pictured above) is still operating.

H/T Susan Olsen

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