Panera says it will stop using artificial flavors, sweeteners, preservatives and colors in its packaged grocery store foods, such as its refrigerated soups, dressings and frozen breads, in the Panera at Home line by the end of the year. The restaurant chain side of the business has also given itself the same deadline to reach its goal of eliminating all artificial preservatives, sweeteners, colors and flavors from its restaurant menu.
"We're really trying to accomplish two things," says CEO Ron Shaich. "One, let our customers know that if you're dealing with Panera, it's comprehensive, it's all-inclusive and you can count on it. And, I think we're also trying to challenge the world a little bit."
The company has already removed antibiotics and non-naturally occurring trans fats from its food products. "It's very much an extension of our food policy commitment two years ago and our no-no list expansion last year," Panera's Sara Burnett, director of food policy and wellness, told CNBC. "It's a natural extension for us."
With the additional plan of cutting artificial ingredients from Panera at Home, Shaich says he hopes the company can put more pressure on the industry to use fewer artificial ingredients in packaged goods.
The move to eliminate artificial ingredients from the grocery store products didn't pose sizable costs for the brand, according to Burnett. The biggest investment was time and research, as the company needed to determine how to replace artificial preservatives.
Burnett says early on, the company decided to use refrigeration to help extend shelf life for products like the soups and salad dressings. "Where necessary, we've relied on natural preservatives, such as rosemary extract, to do the job."
Cutting artificial ingredients from packaged foods is quite different from doing so in the restaurants, because preservatives play a big role in extending shelf life and facilitating long-distance shipments. Working with retailers is another part of the equation. But the retail packaged food business is growing, Shaich says, and contributed a reported $150 million to the company.