Panera Bread’s Ron Shaich: The father of fast-casual dining
Fast-casual restaurants like Chipotle (CMG) and Sweetgreen (SG) are commonplace today, and are set to become even more ubiquitous, with their market share expected to reach $337.8 billion by 2032, according to Allied Market Research. But fast-casual dining, emphasis on the sit-down-dining part, wasn’t always a thing – at least until Panera Bread founder and former CEO Ron Shaich came along.
Shaich has earned the moniker ‘father of fast-casual’ and for a good reason. Surveying a landscape that included fast food on one side and sit-down fine dining on the other, Shaich vision was to create something in the middle. His success has continued post-Panera, with the launch of Act III Holdings in 2018. The company has investments in a handful of businesses, including the popular Mediterranean chain, CAVA (CAVA).
Yahoo Finance Executive Editor Brian Sozzi caught up with Shaich in Cambridge, MA to check out a few of the businesses he invests in, including CAVA, Life Alive, and Tatte, and to hear more from Shaich about what it’s like to be the founder of a household brand-name restaurant chain. One tip: leaning into fear.
“It's constantly living with the materiality of what you're dealing with,” said Shaich. “If you don't take that leap, you're not gonna go anywhere.”
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To hear more from Shaich on what it takes to succeed, click here. For more on our Lead This Way Series, click here, and tune in to Yahoo Finance every Thursday at 3 p.m. ET.
Video Transcript
RON SHAICH: I tell people the truth. In every company, the key is to stay ahead of the curve. Are you kidding me? I still--
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BRIAN SOZZI: In the hypercompetitive restaurant industry where an average of 50,000 businesses in the US close each year, success requires exceptional leadership. Enter Ron Shaich, the pioneer behind Panera Bread, whose fast casual concept ushered in a whole new way of eating in America. Now, the trend setter is looking to build on his stellar track record with a next generation of restaurants. His biggest leadership secrets as he looks to change the restaurant game yet again, lead with empathy, authenticity, and don't be scared to lean into fear.
RON SHAICH: You know, I always grew up trying to understand and listen. I would argue the most important leadership trait, certainly in the kind of businesses I'm in is empathy, the ability to feel other people, to be able to stay present trying to learn and figure things out, not jumping to the conclusion. You know, I'm often given credit for being one of the originators, the first people to do fast casual. And it was really the process of staying present and listening to consumers that got there.
BRIAN SOZZI: With Panera, Shaich proved the fast casual model works. The chain grew under his leadership from just 19 locations in 1993 to more than 2,000 by 2017. He's now using the same principles but as an investor in new ventures such as the organic, plant-based cafe Life Alive. How have you led people to drive this success?
RON SHAICH: I tell people the truth. I talk about the 800 pound gorillas. I don't talk with fluff. I talk in a way I hope that comes from my heart and is authentic. And I think people respond to that. I have always put a lot of time into trying to figure out not what I want to say as much as how are people going to hear it, how are people going to read it? And how do I use a metaphor, how do I use language, how do I use focus to help them understand what matters?
BRIAN SOZZI: What was your biggest fear as a leader? And how did you overcome it?
RON SHAICH: Well, my biggest fear is the leader, having run a public company for 37 years, was that I would let down the people that believed in me. I would let down the people in our organization. I would let down the investors who invested with me. I would let down my responsibility to our society. As a leader, I actually think that the way to run a company, and the larger it gets, the more so, is to come at it with an element of anxiety, to understand-- again, discover today what can hurt you tomorrow and prophylactically deal with it.
BRIAN SOZZI: It sounds like constant living in fear.
RON SHAICH: I think it's constantly living with the materiality of what you're dealing with. The reality is that whenever you go down the road in anything in life, whether it be in a relationship, in a business, in a career, what's so fundamental is taking that leap and knowing you don't quite know where it's going to take you.
- [INAUDIBLE] salad?
BRIAN SOZZI: That's me. As someone who founded businesses, there has to be personal setbacks along the way, things you as a leader, as a human being have to give up. How have you dealt with that and those challenges through the years?
RON SHAICH: Well, Brian, it's a simple statement. There is no such thing as balance in life. There is only trade-offs. And so one goes into it prepared to make trade-offs. But my kids knew when I was a CEO that this was so important to me, it was the third child. I make the appropriate trade-offs.
My life has been essentially about the organizations that I've led, my family, my kids, and trying to exercise. You know, I didn't play golf on weekends. There wasn't balance. There was commitment and a recognition that everything has its price. And I knew that if I was going to serve as the leader, I owed it to the people that were believing in me. I owed them to give them everything I could.
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BRIAN SOZZI: Ron, we're standing outside one of the hottest IPOs really in the past couple of years. But certainly, this year it is Cava. And oh, yeah, it is another company you invested in.
RON SHAICH: I hope you'd say it's one of the greatest companies in this industry. I think the team that's running it, Brett Schulman, our CEO and our team has done an amazing job. Thank you so much. I appreciate it. What did you see in this chain that made you want to put your hard earned dollars behind it?
RON SHAICH: I first saw a powerful niche in Mediterranean. I thought this had the potential to be one of the most powerful niches in the restaurant industry. Second, I saw in Cava the potential to be a dominant brand in that niche or in that category.
BRIAN SOZZI: What leadership advice do you give the CEO of Cava, given you're a battle-tested veteran? And what do you tell someone like him?
RON SHAICH: I keep helping Brett think about what is going to happen in a year and two and three. And how do we prepare for those today? Because the reality is, in every company, the key is to stay ahead of the curve. Come on. While it doesn't have the same Wall Street excitement around it like Cava, one of Ron's most beloved investments is the 30-location restaurant, Tatte, which features baked goods, coffee, and a Mediterranean American menu. What's your hope for your portfolio?
RON SHAICH: My dream is that we're part of building a half dozen or more extraordinary businesses. I have this great sensation. I walk out on the street, and I walk into Tatte. And next door is Life Alive. And down the street is a Cava. And around the corner is a Level 99. It's an amazing feeling to walk down these streets that I built so many restaurants in and see restaurants that are touching people, that are engaging people.
BRIAN SOZZI: Do you see yourself as a visionary? Does that mean anything to you?
RON SHAICH: Yeah, I absolutely do. I think that the thing I feel the best about that I think is my blessing and my gift is to really do what it takes and having the ability to really determine today what's going to matter tomorrow. And to understand that, and really reach that conclusion before other people. And if there's anything I do, that's what I do.
BRIAN SOZZI: Do you think what you've done in the restaurant industry has flown under the radar? Do you think you've got the credit you deserve?
RON SHAICH: I feel like ultimately what matters is your own self-respect. And so I guess the answer to your question very specifically is I know what I've been a part of, I know what I've done, and I feel very much blessed to have had a chance to be a part of that, to have done it, and to have lived the life I have lived and I hopefully will live for many, many more years.
