In a world where all we have to do to access a seemingly endless library of media is click a button, it's hard to imagine there was a time when we actually got off the couch and went to Blockbuster Video to rent a movie.
Ever since Amazon (AMZN) and Netflix (NFLX) played an integral part in the way we consume movies and TV shows starting in 2006, other businesses have looked at the success of the subscription model and found ways to adapt it for themselves.
Spotify (SPOT) did the same for music in 2011, also triggering a wave of competitors. Slowly, people sold or gave away their physical collections. And by the time the pandemic was in full swing, a record one billion people were using streaming services.
This trend has been making its way into the food industry as well. Olive Garden tried it out in 2019 with its Never Ending Pasta Pass. And Yum Brands' (YUM) Taco Bell launched its Taco Lovers Pass in January 2022, which costs $10 a month and grants its customers access to one free taco a day.
Several other chains have tried the model with a focus on coffee, including Dunkin (DNKN), Panera (PNRA) , and Burger King (RBI) . And while not all of them have lasted, some are finding ways to evolve the idea even further.
What Panera's New Subscription is About
Panera Bread
Panera's Unlimited Sip Club once offered coffee and tea for $8.99 a month. But as of April 19, the subscription is being expanded to include Charged Lemonades, a Panera original drink made with guarana and green coffee extract.
The new flavors include Strawberry Lemon Mint, Mango Yuzu Citrus, and Fuji Apple Cranberry. And since they're also caffeinated, these drinks definitely pose competition for Starbucks (SBUX), which serves the comparable Starbucks Refreshers.
But while Refreshers typically contain smaller amounts of caffeine, Charged Lemonades contain up to 389 milligrams, enough to electrify you for the entire day if you desire.
The Unlimited Sip Club will cost $10.99 per month starting July 18 and is free through July 4 for those who sign up between now and May 6. Current members of the Coffee Club subscription will not pay the extra cost until 2023.
How Subscriptions Are Changing the Food Industry
Panera's strategy is paying off, potentially paving the way for more leaders in the space to follow suit.
By the end of 2021, Panera had some 600,000 Coffee Club subscribers, with 43% new to Panera. Subscribers also showed up an average of eight times more per month than non-subscribers, and 30% also bought a food item while they were picking up their drinks.
Those data were what led the chain to the idea of deepening the subscription and offering exclusive items.
"Our whole desire is to make good eating accessible to everyone," Panera Chief Executive Niren Chaudhary told TheStreet in an interview. "We're constantly pursuing innovation. And our vision on beverages is to make them exciting and massively accessible."
Chaudhary also says the subscription expansion makes "tremendous sense" for guests and shareholders alike, calling it "destructively accessible."
'We are the only brand making this move. We will be able to bring in more customers," he says. "And it cuts across different industries beyond that."
Customers are welcome to bring their own cups if they desire, saving on plastic use and helping Panera move toward its 2025 goal of converting to circular packaging.
