Free Lunch at Panera's, If You Can Afford It

Panera Bread Co., the national restaurant franchise, has established a non-profit Panera Bread store in the affluent City of Clayton, Missouri. The new store is like any other Panera, except there are no food prices. Instead, patrons pay what they want as a donation for the items they receive.

The idea of a pay what you can restaurant is not new, other non-profits have tried the model before, some to reasonable success and sustainability. However, this move is notable because it is a social entrepreneurial effort spearheaded by a corporation that on face seems to risk cannibalizing its for-profit's core business.

In the social enterprise space, most corporate initiatives have been focused on corporate social responsibility (CSR), which I view as corporations minimizing harm in pursuit of profits. I do not mean to slight CSR with this definition. Indeed imbuing a sense of social responsibility in business is essential, especially in the aftermath of the collapse of the financial sector at the hands of unscrupulous profit pirates. But Panera's efforts go beyond simple corporate social responsibility. What Panera is doing is proactive, creating a a full on social enterprise.

While the pro-action is impressive, the question becomes, like with many social enterprises, what is the point? It is significant that Panera is conducing their experiment in an affluent community. On the one hand, this makes a lot of sense, the model is predicated on the idea of consumers not only being able to but feeling social pressure to pay for the food they eat. But social enterprises should be rooted in achieving social outcomes. What is the social mission of this venture?

Even if the non-profit Panera is able to generate the revenue it needs to sustain itself, the social value of this venture is less clear than it might seem on face.

Is hunger a significant problem in the community Panera is targeting? And if it is, is a free Panera the best way to combat food insecurity? Probably not. Social enterprises need to be more than self sustaining, they must be designed to produce social value. The City of Clayton, where Panera is piloting its experiment, is a small city of 16,000 people, 85% of whom are white with a median family income of $107,356 per year (487% of the poverty line for a family of four). This hardly sounds like a distressed community.

While Panera's experiment might function in a community that doesn't necessarily need the service, I have serious doubts about whether it wold work in a low-income area where food insecurity is a significant issue. So while the non-profit Panera sounds like an interesting idea, especially for someone like myself who frequents Paneras, the target demographic for this new venture are people who don't need a free lunch, which is exactly the point.

Photo credit: Tobyotter