Panera Offers Unlimited Coffee Subscription for Under $9 Per Month
Over half of all Americans drink coffee every day, a stat that helps to explain why there’s a Starbucks on every corner. It also explains why brands want to compete in the coffee space—whether it’s Dunkin’ upping its espresso game or McDonald’s beating other brands to the pumpkin spice latte punch: 160 million people is a lot of potential customers to woo. And now, Panera Bread is unleashing an unorthodox plan to lure coffee drinkers in the door and keep them coming back: an inexpensive unlimited coffee subscription plan for regular customers.
For just $8.99 (plus tax) per month, Panera customers can order one cup of drip hot coffee, hot tea, or iced coffee (including refills of the same drink) every two hours at participating U.S. locations at no additional cost. Light roast, dark roast, hazelnut, and decaf coffee are all included in the deal. Meanwhile, cold brew (as opposed to iced coffee), espresso drinks, iced tea, and other beverages are not included. Subscribers can also cancel at any time. Of course, there are few new ideas under the sun and Panera isn't the first chain to try a subsciption model, with Burger King rolling out a more limited $5 per month program last year.
Panera explains that this new MyPanera Coffee subscription pays for itself after just four cups per month; and if you stop by once a day, you’re paying just 30 cents per visit. The brand also cities a stat from the Acorns 2017 Money Matters Report suggesting that your average coffee drinker could save about $1,000 per year by subscribing to Panera for all of their coffee needs.
“Today, we’re changing the game for coffee drinkers across the country with our no compromises, unlimited subscription service—great coffee at an amazing value,” Panera CEO Niren Chaudhary said in the announcement. “Panera has a history of industry-leading innovation that creates value for and adds to the guest experience. Panera is a challenger brand and with unlimited coffee we are disrupting the coffee business. We are challenging the status quo because we believe everyone deserves a full cup, literally and figuratively.”
Panera’s underlying motivation here seems pretty clear: Once a customer is locked into a subscription, they’re more likely to use that service, so paying for unlimited coffee should theoretically keep customers coming back. However, in this case, Panera also risks cutting into its coffee profits. Is the tradeoff worth it? The company says they began by testing the subscription service for three months in about 150 locations in Raleigh-Durham, Cleveland, Columbus, and Nashville, and was happy enough with the results to take the program nationwide. “Our subscribers are more frequent customers. We see them every other day, an increase of 200 percent,” Sara Burnett, Panera’s VP of wellness and food policy, told me via email. “Their food attachment increases significantly as well.”
The whole thing is certainly an interesting gambit. And if Panera crunched the numbers right, you have to wonder if monthly plans could become the coffee shop industry’s next big trend. Coffee is as much a part of your life as your cellphone and Netflix: Why not pay for everything by the month?