Watch the Spot

Panera Launches First Major TV Campaign

Effort Pushes Fast-Casual Chain as a Place With Soul

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While many restaurant chains are spending their marketing dollars pushing products, often ones on a dollar or value menu, Panera is launching a TV campaign focused on its brand.

In its biggest TV push to date -- airing in 30 markets -- Panera positions itself as a place where people enjoy being. The TV ad is part of a campaign called "Make today better," breaking this week, in which Panera founder Ron Shaich touts the restaurant as a place with soul that uses professional bakers for its bread and gives customers real silverware. The spot was created by Interpublic Group of Cos.' Mullen, and WPP's Maxus is responsible for media buying.

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Panera: A Belief in Better

Panera over the last couple years has steadily increased its marketing budget, in no small part to Senior VP-Chief Marketing Officer Michael Simon, who joined the company in October 2009 and was previously at Campbell Soup Co. working on brands such as Pepperidge Farm and Godiva.

"One of the cores of our business is transactions, and one of the critical drivers in transactions is an investment in advertising and marketing," Mr. Simon said. He added that he hopes the TV spot continues to drive awareness about the chain's positioning -- that Panera is different because it has fresher bread and produce, and has a more comfortable environment than other restaurants of its ilk. He added that the campaign "is moving beyond food to create the notion of making today better."

Panera is not the first chain to use brand messaging with a fresh angle. Papa John's has long been advertising with the line "Better ingredients. Better pizza." Its competitor Domino's, as a continuation of its lauded "Pizza Turnaround" campaign, began touting fresh cheese and tomatoes, complete with the backdrop of a farm for its commercials. Chipotle also positions itself with fresh-ingredient and responsibly raised-meat messaging, relying heavily on word of mouth, billboards and other non-TV avenues.

Steve West, restaurant analyst at Stifel Nicolaus, describes Panera as a pioneer in the fast-casual category and also the largest player in the segment. The chain, founded in 1981, does a "great job differentiating with quality at a decent price and a good experience," he said.

In Technomic's bakery cafe category, Panera is the leader by a wide margin, commanding 59.6% U.S. market share in 2010. No. 2 in that category is Einstein Bros. Bagels, with 8.2% share, followed by Au Bon Pain with 6.2% share. It is the 18th largest chain in 2010 U.S. systemwide sales, according to the 2011 Technomic Top 500 Chain restaurant Report.

Panera's same-store sales throughout the recession have fared well. The company in 2010 posted same-store sales up 7.9%, and up 4.2% in 2009, according to annual reports.

Mr. Simon said Panera increased its advertising throughout the recession because it has a "differentiating concept that people are willing to pay a little more for," and it was able "to take advantage in a recession while the competition was pulling back."

The company in 2010 spent just under $36 million in advertising in 2010, up from $23.6 million in 2009, according to Kantar media. It has in the past tested TV spots in various markets, but much of the budget had been dedicated to billboards and radio. This campaign will also include radio, billboards, digital marketing, social media and the use of its loyalty program, MyPanera, all of which will help promote seasonal products-in this case, salad for the summer.

Mr. West said that Panera stands to grow even more. Although these tough economic times are still hurting some consumers, others are starting to feel better about the economy. So Panera benefits, as consumers who are feeling better are starting to spend a little more on restaurants, and those still concerned about the economy may be trading down from full-service dining to chains like Panera. "They get the consumers going both ways," said Mr. West.

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