Panera CEO: 'Hopeful' supply crunch and labor shortage will stabilize in six months

Niren Chaudhary, Panera Brands CEO, discusses his outlook on the ongoing supply chain crunch and labor shortage, as well as how climate change is impacting the restaurant industry.

Video transcript

ZACK GUZMAN: Welcome back to Yahoo Finance Live. As we've been discussing, a lot of attention being placed on corporate roles in the battle against climate change. We've seen some restaurants, some tech companies out there setting climate neutral goals. But Panera is moving one step beyond it with climate positive targets set for 2050. Of course, the company has already reduced its direct emissions by square foot by 15% since 2017. That met its 2022 target one year early.

So it's been a big focus, and now a bigger focus there at Panera. And happy to welcome in the CEO of Panera Brands, Niren Chaudhary joins us right now. And, Niren, I mean, it's a big goal. And we've seen a lot of companies coming out and making more and more progressive stances, but why is it so important for you guys there at Panera?

NIREN CHAUDHARY: Sure. You know, I really think that climate change is perhaps the single biggest challenge facing all of us together. And I passionately believe that a lot more needs to be done by all of us. Carbon neutrality by 2050 is just not good enough, given where we are and how quickly this challenge is unraveling. I believe that we all have to step up and do much more.

And therefore, I think we want to lead the way and say carbon neutrality is not enough. We have to be actually climate positive by 2050. And that is very much our long-term goal. I would also say that just having long-term goals is also not good enough. I think 2050 is a long ways away, and we have to collectively do a lot more more urgently together. And in that regard, as you mentioned, we are already on the path since 2016 taking our carbon footprint down, but we are saying, OK, how can we do more and do that more urgently?

So we have set some ambitious goals by 2025 as well-- not just 2050, but 2025. And I hope that our industry peers would also do that. Three important commitments that I want to share with you today that we want to make-- number one, by 2025, all our packaging is going to be 100% circular-- so either reusable, recyclable, or compostable. So that's the first one. I think it's a very important imperative.

Second, by 2025, at least 50% of our energy will be green, solar, or wind in company cafes. And third, by 2025, we are committing that at least 60% of our menu and our food will be climate friendly-- and we call that Cool Foods, an initiative we launched last year to measure and identify the carbon footprint of the meals that we serve. And we are committing that at least 60%, more than 60%, of our food will be climate friendly. So when consumers come to Panera, they can actually take positive action and make a difference towards climate change.

ZACK GUZMAN: I mean, it's important, obviously. And foods, because of what we eat and the impact there, obviously, been highlighted with some of the more sustainable names here too. The other big issue, though, facing, I guess, the broader economy, not just climate change, that companies are tackling here also specific to your sector has been the battle over labor and the labor impacts from COVID-19. I mean, as you guys are operating here, how sustained are some of those labor issues in bringing people back, trying to find the right workers, and maybe having to pay to get them to apply?

NIREN CHAUDHARY: So I think it's a single significant challenge facing the industry today. It's labor, labor, labor. And our focus near-term is to make sure all our cafes are staffed, all our channels are open so that we can serve our guests. I really think that underlying this is essentially a demand shock to the economy.

So demand has come back very strong, and, you know, supply side of inputs is just about catching pace. So I'm hopeful that with the passage of time six to eight months from now, it'll stabilize on supply chain and also on labor. But back to your question on labor, I think we're doing two important things. One, basically simplifying our operating platform so that our cafe general managers and associates just have one thing to focus on-- be fully staffed, fully trained, and serve our guests.

The second thing to enable that is that we're making a lot of investments behind that intent-- wage rates, more management cover, more training hours, more benefits, more incentives as a way of thanking and appreciating our workers and staff who are out there every single day and doing what needs to be done. But you know, I think this is actually going to force everybody in the industry to take a really long, hard look at our value proposition for our potential employees.

How can we be the best employer of choice? And it goes beyond just wage rates. You know, it is, how can we provide career opportunities, growth opportunities, training opportunities, and appropriate compensation and benefit structure so that our associates want to come and work at brands like Panera?

ZACK GUZMAN: And the climate change goals here are maybe increasingly a part of someone's considerations for who they're working for as well. But Niren Chaudhary, CEO over there at Panera Brands, appreciate you coming on here to chat with us today.