[ABrandt]

I worked at Panera (St.Louis Bread Co. actually) for three years back in high school, and this new store is literally down the street from me.

Every one of their locations already donates a huge amount of baked goods to local charities each and every day. I would say on average, my store either threw away or donated 75-100 lbs. of food from our bakery every night (and this is a low ball estimate). And that's exactly how a non-profit model actually might work for them. They're shifting the burden of all of this waste from the company, to the charitable consumer. Theoretically, pay what you want pricing will drive up demand for their food and thus eliminate the amount thrown away each day.

This certainly wouldn't work everywhere, but the Clayton neighborhood is perhaps the most affluent in St.Louis. Bread Co. customers are already accustomed to paying $3 for a muffin--the idea of sending all of that straight to charity could be phenomenally successful for everyone involved.

[wheels]

I'm not sure it works that way -- the amount baked is basically one standard deviation above expected demand on a given day so that people don't show up and the shop is out of bread. It's stabalizing demand, not driving it up, which would reduce waste and I don't see any way that this addresses that.

[ABrandt]

This is true, we did put quite a bit of effort into properly forecasting demand. At the end of each day I'd count every piece of food we had left, feed that into some software along with some variables such as weather, and try to calculate what we needed to bake that night. Turns out even with an extremely short forecasting horizon, it's damn near impossible to accurately predict how much fresh bread people want in any given day at a particular store. (I'm not sure if we did use one standard deviation, and if we did that would only account for 68.3% of variation anyways). I've literally been screamed at for not having any whole-grain bread left 10 mins. before closing time.

If I was to manage this non-profit store, I wouldn't bake according to expected demand. In this particular scenario, a reasonable amount of stock-outs would mean that you have more money left at the end of the day to donate to charity rather than covering the production costs of waste. (Of course you would want to avoid creating ill-will with too much stock-out).

But the real reason this makes sense for Panera is that they're already donating a ton of goods to charity everyday. For this store, instead of donating bread, they'll be donating cold hard cash that people fork over. Great PR and great for the community.