April 22, 2022
For $10.99 per month, Panera visitors can now get all the self-serve beverages they can drink.
Panera’s Unlimited Sip Club is the newly launched revamped QSR chain’s coffee/tea subscription club that allows customers to get unlimited amounts of not only coffee and tea, but also self-serve fountain drinks. (Customers can serve themselves one drink every two hours with unlimited refills of the same cup.) The subscription launch coincides with the introduction of Panera’s line of “Charged Lemonades”, fruit-flavored caffeinated drinks.
the MyPanera+ Coffee programlaunched in March 2020, allowed customers to get unlimited coffee and tea for $8.99 per month. Subscribers in pre-launch test markets increased from four monthly visits to Panera to 10, and spent 70% more on food.
While the Unlimited Sip Club may be the first all-you-can-eat subscription program, others have launched similar programs, both in terms of QSR and convenience. In both spaces, there have been successes and failures.
In January, Taco Bell launched a membership club, Taco Lover’s Pass, offering a taco a day for $10 a month. The program has a renewal rate of 21%. Tracee Larocca, Head of Brand Creation at Taco Bell, said The Wall Street Journal“Consumers are showing us they’re interested in subscription models because it makes decision-making easier.”
In May 2021, the Circle K convenience chain introduced its Sip & Save subscription program offering a daily tea, coffee, slushy or fountain soda for $5.99 per month.
In mid-March quarterly callBrian Hannasch, CEO of Food Couche-Tard, Circle K’s parent, said the program has 400,000 active subscribers. He said, “We have had very positive feedback from our customers and we continue to look for opportunities to make it even easier for our customers to benefit from this program. While it’s certainly short-term, it’s likely impacting our sales in the expense category, we think the continued loyalty and increased traffic we’re seeing is a good move for us in the long-term.
On the other hand, Burger King’s $5 monthly coffee subscription programlaunched in 2019, was quickly abandoned.
DISCUSSION QUESTIONS: Will adding an all-you-can-eat element and “paid lemonades” increase the effectiveness of Panera’s subscription program, even at a higher price? Do you see more advantages than disadvantages in subscription programs in QSR channels and expect more in the future?
“The subscription is a fancy way of saying ‘you pre-pay for your own discounts,’ but for some that value proposition is worth it.”