Bloomberg News

‘Hippie’ Grains Thrive as Panera Looks Past Whole Wheat: Retail

March 10, 2014

Pedestrians Pass a Panera Bread Co. Location in New York

Pedestrians pass in front of a Panera Bread Co. location in New York. As U.S. restaurant chains face mounting competition and sluggish consumer spending, creating new and healthier menu items is a way to attract diners and boost sales. Photographer: Scott Eells/Bloomberg

Are Americans ready for sprouted-spelt bagels?

Panera Bread Co. (PNRA:US) thinks so. After a successful test, the St. Louis-based chain will introduce a sprouted-grain bagel made with rye, spelt and oat groats to its U.S. cafes in May.

The move is part of a broader push by national restaurant chains to seek alternatives to white flour -- and even wheat -- which aren’t seen as healthy enough by some diners. Panera, Au Bon Pain and Olive Garden (DRI:US) are testing a range of grains and traditional-carbohydrate substitutes. The challenge is getting the flavor right and attracting the nutrition-conscious without scaring away customers with new ingredients and lingo.

“With sprouted grain, anybody who is 45 or older is going to raise an eyebrow and say, ‘Hey, you’re going hippie on us,’” Tom Gumpel, the head baker at Panera, said in a phone interview.

To help educate customers, employees will be taught about sprouted grains and the bagels will be marketed as a “power” breakfast to highlight their protein content. Still, many customers won’t need the lesson. Consumer interest in more esoteric grains has been growing -- something that comes as a relief to bakers like Gumpel.

“This is very much a dream come true not to deal with white flour all the time,” he said.

Seeking Growth

As U.S. restaurant chains face mounting competition and sluggish consumer spending, creating new and healthier menu items is a way to attract diners and boost sales. Panera’s same-store sales growth slowed to 1.1 percent in the quarter ended Dec. 31, compared with 1.3 percent and 3.7 percent in the previous two quarters. Olive Garden, owned by Darden Restaurants Inc., is struggling to lure the younger crowd and turn around three straight quarters of slumping comparable-store sales.

While the terms “multigrain” and “whole grain” have been around for years and are used by McDonald’s Corp. (MCD:US) and Burger King Worldwide Inc. (BKW:US), different types of grains may be the future of carb-heavy fare like buns, bagels and pasta.

“It’s a good direction for chains,” said Barb Katz, president of St. Petersburg, Florida-based HealthFocus International, which studies consumer eating trends and advises restaurants. “Grains have a very positive halo to consumers.”

Still, restaurants will have to explain the ingredients to diners who “may not really understand the ins and outs of what’s better for them and why,” Katz said.

Getting new flavors right also can be a gamble. When Panera’s whole-grain bread was being developed and tested, some customers complained about the loaves having a fish flavor. Gumpel had to redo the recipe to include ground flax instead of whole seeds, whose fatty acids can taste a bit like fish.

Failed Items

Au Bon Pain introduced a three-bean and Swiss-chard soup last year that didn’t meet sales expectations because the flavor was bland. The company is reworking the recipe and may replace it with another item.

Sprouted grains generally refer to seeds of grain, such as barley or spelt, that are soaked in water and allowed to germinate, or begin to sprout. Once a root appears, the grain can be frozen, dried or mashed and cooked into baked goods. Sprouted grains are usually higher in protein and other nutrients, and lower in calories and carbohydrates, than other whole grains.

The health benefits can vary, though, said Niyati Parekh, professor of nutrition and public health at New York University.

“In general, sprouted grains are healthier because the sprouts have other vitamins and such with it,” Parekh said. Still, there can be variations with the nutrition content based on how the grain is sprouted, stored and baked, she said.

Panera’s new 240-calorie spouted-grain bagel flats are smaller in size than the chain’s plain version -- yet they still have more fiber and an equal amount of protein, the company says. A plain, regular bagel has 290 calories.

Quinoa’s Rise

Consumer eating trends are changing fast. No one could pronounce quinoa 10 years ago, and now it’s a darling of the restaurant scene, said Amy Myrdal Miller, director of programs and culinary nutrition at the Culinary Institute of America, which works with the Healthy Menus R&D Collaborative. That group consists of chefs and executives from about 25 restaurant, including Panera, who meet twice a year to test recipes and come up with healthier menu items.

Quinoa and barley are increasingly appearing on restaurant menus. Last year, 3.6 percent of U.S. restaurant menus contained the word “quinoa,” compared with just 0.7 percent five years ago, data from menu research firm Datassential show.

Limited Run

Au Bon Pain will introduce nine-grain cranberry ciabatta bread and a salad made with wheat berries this year. The 214-cafe chain also recently offered a sandwich on a sprouted-grain roll made with red wheat berries, quinoa, oat groats and barley. While the 230-calorie roll was just available for a limited time, it’s an item they’ll try to sell again, Maria Feicht, the company’s chief brand officer, said in a phone interview.

“More people are looking for more options,” Feicht said. “People are much more in tune to what they need for themselves and also the role of ingredients.”

Even Olive Garden, known for its giant portions of carb-rich pasta and breadsticks, is getting healthier and experimenting with grains. In February, the chain revamped its menu with more than 20 new items. That includes gluten-free rotini, made with corn and rice flour and imported from Italy, and a penne pasta that’s made with dried spinach and tomato concentrate -- cutting down on the amount of wheat.

The 830-store eatery is developing other pastas made with grains and wheat alternatives, Olive Garden executive chef Jim Nuetzi said in a phone interview. After early success selling the gluten-free and vegetable-based varieties, Nuetzi ordered samples of grain-based pastas, including those made with faro and dried lentils, for more testing. Customers are saying they need more than just whole wheat, he said.

Even with the health kick, balancing the menu with indulgent fare remains important, Au Bon Pain’s Feicht said.

“We’re not just going to be a healthy concept,” she said. “People still want a cupcake every now and then.”

To contact the reporter on this story: Leslie Patton in Chicago at lpatton5@bloomberg.net

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net Kevin Orland


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Companies Mentioned

  • PNRA
    (Panera Bread Co)
    • $151.73 USD
    • -0.63
    • -0.42%
  • DRI
    (Darden Restaurants Inc)
    • $47.61 USD
    • 0.06
    • 0.13%
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