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Panera expanding its Unlimited Sip Club, raising monthly fee

By MixDex Article may include affiliate links

Panera Bread has started notifying members of its Unlimited Sip Club that it’s expanding the offering to include more self-service beverage options starting April 19, 2022 — but also raising the price.

The email notifications that began appearing in early April 2022 did not mention what additional beverages the new plan will include, noting that additional details will be announced April 19.

Panera also announced that it’s raising the price of the club, formerly known as MyPanera+ Coffee, from $8.99 to $10.99 a month.

Existing subscribers will still be charged the $8.99 rate through the end of 2022 but will start paying the higher rate for the first renewal that hits in 2023.

Unlimited Sip Club currently includes any size or flavor of coffee, iced coffee or hot tea every two hours, but with unlimited refills within the same visit.

The program’s terms currently note that it “excludes all other beverages, including without limitation, cold brew iced coffee and espresso and cappuccino beverages.” Also excluded are flavor syrups and espresso shots as well as iced teas.

Possibilities for the program expansion include adding soft drinks, iced tea and lemonades to the unlimited offering, which makes sense given the market price of most of these items are similar to coffee and tea prices and are currently self-service.

Some customers have reported that the chain’s line of “Charged Lemonades” is being advertised with in-store signage featuring the Unlimited Sip Club logo even though they are not part of the program as of now. These items, however, have a higher menu price.

Panera is heavily promoting the club with a free three-month trial membership for new subscribers.

Even with the price hike, Panera fans can easily see the value in the plan. At current rates, you’d only need to purchase three to five drinks a month to get your money’s worth — and the new price would mean only buying one to three more beverages, depending on local prices and selection.

In other words, if you get an eligible beverage on your way to work each weekday for a week you’re already close to coming out ahead.

Coffee, tea and other similar beverages are known for being some of the highest margin items in the business — often only costing the company pennies in terms of food costs (in many instances, the cup the drink comes in costs the restaurant more than the drink itself).

Think of it this way: Even if it costs a company 50 cents to provide a disposal cup, coffee, creamer and sweetener to a customer (this number is probably high), that’s still a massive markup when you consider coffee retails for between $2 and $4 per cup.

Panera could also see the program as a way to increase drive-thru and foot traffic to its locations, something that’s likely going to be key for restaurants trying to recover from the pandemic as in-person dining recovers and people adjust to new work from home arrangements.

People who come into restaurants can often be upsold to buy other items — Panera’s self-service ordering kiosks, for example, are programmed to try to upsell coffee club members on food and bakery items, often at an additional discount.