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Good morning! It's Tuesday, November 21st. Today, we are looking at entrepreneur Ron Shaich, the mastermind behind the $7.5B Panera Bread and the $4.8B Cava!

THE FEATURE

The Man Behind the Billion-Dollar Chains Panera and Cava

When Ron Shaich launched Panera Bread in 1993, it was an intentional attempt to revolutionize the fast-food space. 

Panera Bread was one of the first fast-casual restaurants and was most recently valued at $7.5B!

Ron Shaich’s Businesses

Shaich is the founder and former CEO of Panera Bread and Au Bon Pain and the chairman and lead investor in Cava, Tatte, Life Alive, and Level99. 

Tatte and Life Alive are cafés centered around organic and Mediterranean foods, while Level99 is an immersive entertainment complex. Each of these businesses generates tens of millions in revenue each year, but they can’t compare to Panera Bread, Au Bon Pain, and Cava. 

Au Bon Pain

In 1981, Shaich owned the Cookie Jar in downtown Boston. Foot traffic wasn’t terrible, but he realized consumers weren’t interested in purchasing cookies before noon. 

Shaich solved this issue by purchasing a 60% stake in Au Bon Pain, a local bakery with three locations on the verge of bankruptcy. With the combination of Cookie Jar and Au Bon Pain, he had a steady stream of customers from the early morning to late afternoon. 

By 1991, he grew Au Bon Pain into a chain of 125 cafés, but the company began stagnating when Shaich turned his focus to Panera Bread.

• Valuation– $60M

• Annual Revenue– $41M (estimate)

Panera Bread

Originally, Panera was a 19-store chain called St. Louis Bread Co. that Shaich purchased for $23M. In the 1990s, consumers had limited eating options– low-quality fast-food joints or fine dining. His vision was to create a middle ground with fast-casual dining. 

Panera has since expanded across over 2,000 locations in North America and is the restaurant chain Shaich is best known for.  

• Valuation– $7.5B

• Annual Revenue– $4.8B

Cava 

Shaich invested in Cava when it had only a few stores and helped negotiate its $300M acquisition of Zoe’s Kitchen. The acquisition converted Zoe’s restaurants into Cava locations, hyper-scaling Cava from 50 to 250 locations. There are now ~300 Cava restaurants in the US. 

What drew Shaich to Cava is that it is another innovator in the fast-casual dining space, offering fresh and healthy Mediterranean food with an order system similar to Chipotle's. 

• Valuation: $3.9B

• Annual Revenue: $681M

How He Wins

Ron Shaich’s entrepreneurial journey started when he was a student at Clark University. When shopping at the local Store 24, he was kicked out for a false shoplifting accusation.

He wasn’t the only student frustrated with Store 24, so as the student body treasurer, he created a non-profit convenience store that catered specifically to Clark University students. 

After running the store and outcompeting Store 24, he realized that it was the “most creative thing” he’d ever done, causing him to put aside his political science ambitions and go directly into the business world. 

In addition to learning that revenge can be a great fuel for success, he learned the most important rule for entrepreneurs– find an unmet consumer desire. At Clark University, that was for a student-friendly convenience store. With Panera and Cava, it was the consumer desire for high-quality food without fine dining prices.

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