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Say goodbye to high fructose corn syrup and hydrogenated starch. Panera Bread is ditching all artificial flavors, sweeteners, preservatives and colors from its grocery store products.
The company, which has already removed antibiotics and nonnaturally occurring trans fats from its food products, hopes to be free of additives by the end of this year.
"It's very much an extension of our food policy commitment two years ago and our no-no list expansion last year," Sara Burnett, director of food policy and wellness at Panera, told CNBC. "It's a natural extension for us."
The decision to eliminate artificial ingredients from the grocery store products did not have large cost implications for the brand, according to Burnett. The biggest investment for Panera was time and research, as the company needed to determine how to replace artificial preservatives.
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"For us, the answer was often simple," Burnett said. "For instance, we decided early on to use refrigeration to help extend shelf life for products like our soups and salad dressings. Where necessary, we've relied on natural preservatives — such as rosemary extract — to do the job."
Panera at Home, the company's grocery store extension, follows the ready-to-eat trend that many consumers have adopted in recent years. Currently, the company has more than 35 percent of the market share in the refrigerated soup category.
"Panera at Home is currently a $150 million business at retail, with a 50 percent compound annual growth rate over the last three years and with sales growth of more than 20 percent in the past year," Panera CEO Ron Shaich said.
More than 40 percent of the people in the United States purchase prepared foods from grocery stores, according to NPD Group.
Since 2008, the in-store dining and prepared foods category has grown nearly 30 percent in grocery stores, accounting for 2.4 billion food service visits and $10 billion in consumer spending last year, NPD said.
"Our at-home business is just one of multiple channels, and our focus for each one of those channels is basically solving a problem for our guests," Burnett said.