Panera Bread says the success of its monthly $8.99 unlimited-coffee subscription program in attracting new customers and selling more food is the chain’s incentive to expand the recurring-revenue concept to 26 beverages.
As with the unlimited-coffee program, the Unlimited Sip Club is available only to members of the My Panera loyalty program and can be used every two hours.
Unlimited Sip Club is priced at $10.99 monthly but is free until July 4 for loyalty members who sign up by May 6. It’s available on-premise and via pickup and delivery orders.
Panera is expanding its beverage offerings beyond Pepsi to include Bubly Lime and new Panera Charged Lemonades energy drinks.
Unlimited Sip Club was tested in two cities in North Carolina and one city each in Georgia, Tennessee and Wisconsin.
According to a Panera rep, unlimited coffee subscriptions—launched in February of 2020—were particularly successful during the breakfast daypart.
Last year, 30% of subscribers to the coffee program also purchased food, while 42% were new to Panera.
The rep says that tests of the Unlimited Sip Club “increased food attachment to orders” along with the velocity of transactions from lunch and dinner customers while attracting new, first-time customers.
The new program comes after a year of reduced foot traffic at Panera’s fast-casual restaurants compared to pre-pandemic 2019.
"With 75% of consumers trying new brands over the past 2-3 years as COVID upended shopping habits, it’s harder than ever for brands to find ways to deepen the loyalty of their core customer base,” says Christian Selchau-Hansen, CEO and co-founder of customer-relations firm Formation.
“Brands know they have to improve relevance and value to engage customers more effectively and earn their loyalty. Panera’s Sip Club expands on their coffee subscription to reward not only their morning customers but also afternoon and evening customers—all with the goal of expanding the share of wallet for multiple occasions during the day.”
According to R.J. Hottovy, head of analytical research at place-based data provider Placer.ai, Panera’s 2021 visitation trends mirrored its competitors—with a rebound close to 2019 levels in the summer, but dips toward year’s end.
“That said, Panera’s recovery has trailed the pace we’ve seen from other fast-casual restaurant and coffee chains, and the chain is likely looking to Unlimited Sip Club to narrow the gap with its peers,” says Hottovy.