When too many coffee shops pop up in the neighborhood, you have to figure out a way to lock your customers.
Panera Bread is the second one in the coffee biz to offer a subscription program. Burger King was first (but they discontinued).
This subscription gives you unlimited access to hot drip coffee, iced coffee or hot tea for any size cup. But, it doesn’t include the premium – cold brew iced coffee, espresso or cappuccino.
That makes sense, or the unit economics wouldn’t work out.
Still, you’re getting unlimited coffee for the price of about 4 cups. That’s under 30 cents a day.
Why is Panera ready to take a hit on its coffee margins?
Coffee is a morning ritual for many. With this deal, it’s irrational to pay 2 bucks for a cup every day.
This program will pave way for Panera to get people to walk into it’s restaurants and check the app everyday.
That’s where upselling begins.
Prashant Bagga 