Panera's CEO Says The Best Decision He Ever Made Resulted In 'The Most Horrible Years Of My Life'
Ron Shaich, the founder and CEO of restaurant chain Panera Bread Co., experienced several of these junctures along the way, but one stands out among the rest.
You see, Panera didn't start out as Panera. When Shaich cofounded the company in 1981 with Louis Kane, it was called the Au Bon Pain Co. The chain of French cafes expanded steadily over the years, went public in 1991, and acquired other divisions, including the Saint Louis Bread Co. in 1993, which was later renamed Panera.
It was clear from the outset that Panera had potential. Between 1993 and 1997, average unit volumes grew by 75%, according to the company.
That was about the time that Shaich had an epiphany. "I was sitting on the beach in 1999 and thought, Wow, for every 100 guys who talk about having a dominant brand, one makes it," he tells Business Insider. "Maybe one out of 1,000. It's so hard."
"Somebody said to me," Shaich continues, "'What would you do if Panera owned Au Bon Pain and not the other way around?'"
"I said, 'This thing is a gem. If I had any guts, I'd take myself and the very best people we had, and I'd let it fulfill its destiny.' So I did it."
That year, Shaich sold all Au Bon Pain units except for Panera cafes and renamed the company Panera Bread. Since then, the company's stock has grown 13-fold, and today it has a market capitalization of $4.5 billion.
It was a bold move, but it wasn't easy. "The next few years of selling everything else off but Panera were the most horrible years of my life," Shaich recalls. "Au Bon Pain was my first child."
"It's only in retrospect that these decisions feel OK," he says. "When you're going through them, if you're honest, they're horrible and difficult. Bottom line, I did it. We made the bet on Panera."
Moral of the story? Risk may be necessary to achieve massive growth, but that doesn't mean it isn't painful.