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A Netflix for coffee? Panera offers an $8.99 a month coffee subscription

The move is an effort to compete in the fast-food breakfast wars

Panera's website advertises the new unlimited coffee subscription plan.Panera

The battle lines of the fast-food breakfast wars have been drawn, and Panera Bread is hoping to disrupt the morning meal as we know it.

On Thursday, the company is unveiling a subscription plan for its most popular caffeinated drinks. For a flat rate of $8.99 a month, customers can get unlimited coffee (hot or iced) and tea at all of its stores nationwide.

The company’s chief executive, Niren Chaudhary, is calling the concept “the democratization of coffee." But it’s really Panera’s attempt to stake a claim on the growing number of Americans who are choosing to buy breakfast outside of their homes.


The current breakfast food fight is a reflection of the health of the industry. Americans’ eating habits are changing, with cereal sales slumping as more people eat breakfast on the go or opt for a mid-morning snack, said David Portalatin, a restaurant industry analyst at NPD Group.

His firm has tracked a 7.7 percent rise in fast-food breakfast visits in the last five years, and a 31 percent rise in the dollars spent on breakfast items. Meanwhile, fast-food lunch and dinner visits dipped by 1 percent over the same period. Add the fact that breakfast is a comparatively low-cost meal to prepare, and it’s clear why quick-service restaurants are clamoring to find new audiences or protect their turf.

“It’s very competitive," he said. "Everyone is looking for ways to drive more traffic and get more dollars.”

Panera sees 10 to 15 percent of its business in breakfast sales, but Chaudhary said that number is poised to rise as Panera’s 38 million app users see the value in the coffee subscription. His customers have already been primed to use the program, he added, as 37 percent of all Panera’s orders come through mobile, Web, or kiosk orders.


Users can sign up for the coffee subscription through the app starting on Thursday, and via in-store kiosks on March 2. The offer lets users get one refillable cup every two hours (so no, you can’t go in and grab coffee for your entire office) and schedule coffee pick-ups up to two weeks in advance.

“We’re going to make coffee accessible in a way they’ve never seen before," Chaudhary said. Perhaps more importantly, he added, it’s a loss leader: Once customers are in the door, they’ll gain a full appreciation for Panera’s “clean food” through its recently overhauled breakfast menu of new wraps and egg sandwiches, he said.

“We feel that providing access to coffee in this disruptive way will get lots of consumers who will be buying our products through the day,” he said.

Panera’s move comes as chains throughout the country have been sharpening their spatulas, firing up their fryers, and getting their coffee grinders into gear this week as they prepare for another front in the battle: Wendy’s will begin serving breakfast on March 2.

John Gordon, a principal at Pacific Management Consulting Group, which advises national restaurant chains, said that while few in the industry are anticipating that Wendy’s will lay waste to the competition, its entry does have people on edge. “You can tell that everyone has launched a series of defensive menus or increased their breakfast advertising," he said. “It’s all about counter-programming the competition.”

Coffee is an imperative component of the breakfast wars. Both Starbucks and Dunkin’ have been seeing a surge in coffee sales, thanks to the steady growth of mobile orders placed via smartphone apps. But coffee is only the start. Having a menu that reflects Americans’ desire for healthy, protein-rich breakfast items is now an industrywide mandate.


“We’re never more health-conscious with our food choices than we are in the morning,” Portalatin said.

Starbucks has plans to double its morning meal offerings by 2021 and announced that it would release a new plant-based breakfast sandwich in Canada this week. Dunkin’ recently rolled out an updated slate of breakfast items, like sausage scrambles and egg white bowls, alongside its plant-based sandwiches.

Meanwhile, the McMuffin, long the standard-bearer in the breakfast game, faces a legion of competition: Burger King, Taco Bell, and Shake Shack all have introduced or overhauled their breakfast selections in the past few years, adding healthier protein-centric fare and, in some cases, plant-based meats.

That has put McDonald’s on the defense. In 2017, it relaunched its coffee menu to focus on espresso, and it has recently been piloting chicken biscuit sandwiches to take on Chick-fil-A’s entree into mornings. And this week McDonald’s launched a two-for-$4 breakfast sandwich deal nationwide, which breakfast trackers saw as a deliberate effort to undercut Wendy’s attempt to debut a morning menu. The latter brand’s heavily anticipated slate of maple bacon chicken croissants and Frosty-ccinos will be unveiled next week, and Wendy’s executives believe they’ll soon account for 10 percent, or over $1 billion, of company sales.


Panera’s parent company, JAB Holding, has acquired an empire of breakfast brands in the past few years and owns Peet’s Coffee, Keurig Dr Pepper, and Krispy Kreme Doughnuts. Panera acquired Boston-based Au Bon Pain in 2017, and while the latter company had experimented with an “endless mug” of coffee for $199 a year, Panera will be the first of JAB’s brands to offer coffee subscriptions, the company said.

Gordon said he’s curious to see how Panera’s coffee experiment will play out. The average receipt is higher at Panera than at other chains, he said, and customers tend to linger rather than dash in and out. But offering a subscription could boost business by ramping up the number of visits, he said.

Customers at the Panera in Watertown were intrigued.

James Therien, 27, said he typically visits the chain at least four times a week, for lunch or for coffee, since it’s really the only game in town near his office at Bright Horizons. “I would definitely take advantage of it,” he said. “I could also see it working as far as breakfast goes, because who wants to have coffee without breakfast?”

Yet some were more hesitant. .

“I mean, if any kid is given the choice of Panera coffee over Starbucks coffee, or Panera coffee over Dunkin’, they’re going to go to the Starbucks or Dunkin’ every time,” said Virginia Mutz, 18, who was sipping a smoothie while on a lunch break from Buckingham Browne & Nichols high school on Tuesday afternoon.


“Yeah, I’ve never seen anyone with a Panera cup,” her friend Emily Plump, 17, added.

But both agreed the subscription plan had the potential to save them a lot of cash.

“I think it’s a good deal," Mutz said. "Because, kids, it’s insane how much they spend on coffee.”

Janelle Nanos can be reached at Follow her @janellenanos.