The encyclopedia · Marketing & Brand · Marketing decision · 2010–2019
Panera opened pay-what-you-can cafés to fight food insecurity
Panera Cares (2010) ran nonprofit cafés with suggested prices and donation bins; most closed, but the experiment revealed how PWYW fails.
Panera Bread
The solution
Panera's co-founder Ron Shaich wanted to use the company's restaurant skills to fight food insecurity. In 2010 the chain opened Panera Cares, a nonprofit café in Clayton, Mo. — a normal Panera menu, but no cash registers: prices were suggestions, customers dropped what they could into donation bins, and those who couldn't pay could volunteer an hour for a meal.
A second café opened in Dearborn, Mich., in November 2010. Early data from Clayton showed the mechanism at work: 20% of patrons gave more than the suggested donation, 60% gave about the same, and 20% left less. The suggested price acted as a strong anchor, and the café recovered a meaningful share of costs through generosity.
But the model never reached breakeven. Almost nine years in, every Panera Cares café had closed except Boston's, which still covered only about 85% of its costs. Academic research on the experiment found why: consumers felt discomfort being asked to price morality, and the food-insecure customers the café was meant to help felt demoralized dining alongside paying guests.
Why it worked
- Donation bins removed the cash-register barrier for the poor
- Suggested prices anchored most payments near the list price
- The volunteer-for-meal option preserved dignity and labor
- Consumers resisted being made responsible for food insecurity at the till
What can be applied
Pure pay-what-you-want fails when it feels like a handout: the suggested price anchors payments, and customers and the food-insecure feel discomfort — design the gift frame, not the price.
Aftermath
The Boston Panera Cares café kept running at a loss, and Shaich called the experiment a success despite the closures — it had tested whether conscious pricing could work at scale. The case became a standard example in pay-what-you-want research of how social framing, not just price, determines whether the mechanism works.
Sources
- Panera Opens Second 'Pay What You Can' Shop
- What Happened When Panera Launched A 'Pay What You Can' Experiment
- The Consumer Experience of Responsibilization: The Case of Panera Cares
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