Giving Fast Food A Run For Its Money

Ronald M. Shaich, CEO of Panera Bread Co. (PNRA ), has spent most of his career trying to upgrade the concept of quick-serve food. Back in the 1980s, fast-food chains had turned into what Shaich now refers to with disdain as "self-serve gasoline stations for the body." So shortly after he earned his MBA from Harvard Business School in 1978, he took a bet that consumers would embrace healthy, premium-priced sandwiches. First he scored big by building up bakery Au Bon Pain into a chain with 265 locations in eight countries. Then, in 1993, he acquired Panera and began preaching its virtues as he opened branches across the country. "It's food you crave, food you trust," says Shaich, between bites of the new Asian sesame chicken salad at the chain's flagship restaurant in Chicago's Loop. "People sense it."

Actually, people are gobbling it up. In 2005, Panera ranked 37th on BusinessWeek's Hot Growth ranking of small companies. Over the past five years, the chain's net income has surged at an average annual rate of 50%, while sales have risen at a 33% rate. Panera earned $81.1 million in profits in 2005, on sales of $640.3 million. Add in results from franchised units, and sales rose to $2 billion. In the meantime its share price, adjusted for a stock split, has more than quintupled, to $73.56.