Too Many Fields of Dreams

Nov 27

By 1998, CEO Ron Shaich had decided to focus all of Au Bon Pain’s efforts on one thing: Panera Bread. He felt Panera Bread was the opportunity of a lifetime, and his four businesses, including 250 Au Bon Pan stores, were a distraction. Each division demanded his resources, energy, and attention. Shaich had too many “fields of dreams.” Everyone talks about focus, but choosing one thing is hard, as Jerry Seinfeld says…

For some reason, when a man is driving down that freeway of love, the woman he’s with is like an exit. But he doesn’t want to get off there. He wants to keep driving. And the woman is like, “Look, gas, food, lodging, that’s our exit, that’s everything we need to be happy. Get off here, now!” But the man is focusing on the sign underneath that says, “Next exit 27 miles,” and he thinks, “I can make it.” Sometimes he can, sometimes he can’t. Sometimes, the car ends up on the side of the road, hood up and smoke pouring out of the engine. He’s sitting on the curb all alone, “I guess I didn’t realize how many miles I was racking up.”

Jerry Seinfeld

Shaich went to his board and told them he wanted to sell Au Bon Pain and two other businesses to focus on one thing: Panera Bread. A struggle ensured. The board had all invested in Au Bon Pain, not Panera Bread. On How I Build This, Guy Roz asked Shaich: “When you sold Au Bon Pain, you had 250 stores and Panera Only had 180. But you thought you needed to downsize to grow, right?

Shaich replied: “I wasn't downsizing, I was focusing. I could see the potential of Panera. In retrospect, it looks brilliant. The stock has been up a hundredfold since then, but going through it was horrible. I mean, those businesses were like my first child. I birthed it. I grew it. I lived it. I loved it. But sometimes you just have to march forward. You have to know what matters and Panera was what mattered. And so we lived through the sale of all three other businesses over the years. We changed the name of the public company from Au Bon Pain to Panera, and off we ran. Back then, you could have bought our stock for $4 a share.”

Before getting acquired on July 2017, Panera was the best-performing restaurant stock of the past 20 years, delivering an 86-fold investor return over a decade, compared to a less than 2X increase for the S&P 500 during the same period.

After carefully choosing Panera Bread, Shaich made the decisive choice to commit to one “Field of Dreams.”