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Panera Bread Eliminates Additives from its U.S. Food Menu

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Panera Bread Company has finally fulfilled its pledge of making its menu 100% clean by prohibiting an extensive list of additives from the same.

The company recently announced that its entire U.S. food menu and lineup of Panera at Home (which focuses on selling Panera-branded products to other retailers) products are now made without the use of artificial preservatives, flavors, sweeteners and colors from artificial sources. These are barred by the company's so-called "No No List", inclusive of 96 separate ingredients and additive classes.

We note that Panera revealed its plan of eradicating all artificial ingredients from its menu in May 2015. In Aug 2016, the company announced that it expects to remove all artificial ingredients, from food items across its 2000 bakeries/cafes by 2016 end.

By keeping its promise, Panera now becomes the first national chain to make and meet such an extensive commitment.

Efforts Undertaken to Clean Food

In order to achieve the clean food milestone, Panera reviewed over 450 ingredients that it sells in stores by digging several levels into the supply chain and reformulated 122 of them, leading to changes in several Panera’s bakery-cafe recipes. It also partnered with more than 300 food vendors to innovate solutions, ranging from ingredient alternatives to reflecting on how foods are prepared.

However, eliminating the additives from the menu, while maintaining the same taste or improving it was not at all an easy task for the company. Particularly, deli meats, bacon and select bakery items were some of the trickiest items to clean, given the extent of additives in these categories.

Adapting to Changing Consumer Preference

At a time when the restaurant industry is facing a slowdown, food companies are adapting to changing consumer preference, bringing more transparency in their operations and trying to appeal to more health-conscious eaters by altering their practices and food lineup.

McDonald's Corp. (MCD - Free Report) recently replaced margarine with butter in its breakfast sandwiches and cut artificial ingredients from its McNuggets.

Papa John's International Inc. (PZZA - Free Report) removed artificial flavors and synthetic colors from the entire food menu in Jan 2016. The items included pizza ingredients, pizza toppings, dessert items and sauces. Also, from Jul 2016, the company stopped serving grilled chicken pizza toppings and poppers raised with human or animal antibiotics.

Additionally, Yum! Brands, Inc.’s (YUM - Free Report) Pizza Hut and Taco Bell brand had earlier committed to remove artificial preservatives from most of their ingredients and menu items.

Bottom Line

However, Panera has stolen much of the spotlight from its competitors and is leading the race of offering fresh and additive-free foods. With such transparency in ingredients in practice, the company is trying to provide its consumers with quick and healthy meal ideas that are less dependent on synthetic preservatives.

By becoming the first national chain to commit 100% clean ingredients, Panera has once again thrown a challenge for its peers to match up to the same. In fact, the company stated that many of the additives removed, such as federally approved artificial colors, sodium benzoate, sodium nitrite and sodium phosphate, are prevalent in the industry.

Meanwhile, Panera’s shares have outperformed the broader Zacks categorized Retail–Restaurants industry over the past one year. While the stock gained 13.2%, the broader industry witnessed a gain of mere 0.8% in the same time period.



We believe the latest move should further entice customers looking for less-processed alternatives and aid in maintaining Panera’s popularity among health-conscious customers. It should also enhance its competitive position against other restaurateurs.

Panera currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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