Panera Bread (PNRA) is taking aim at soda consumption.
The company became the first fast food chain on Friday to start posting calorie and sugar counts smack dab on its fountain machines (seen below). It's a move that could strike a blow over time to Panera supplier PepsiCo (PEP - Get Report) should people opt for the chain's newly launched lower calorie beverages or even water, coffee or iced tea. Pepsi is Panera's partner for soda and sugary drinks like Tropicana fruit punch.
"People want real options and real transparency," Panera Founder and CEO Ronald Shaich told TheStreet. "We have dear friends at Pepsi, we respect them. We aren't the food police. We are about providing choice."
If other fast food chains such as McDonald's (MCD - Get Report) and Wendy's (WEN - Get Report) follow Panera's lead by labeling fountain machines to persuade consumption of lower calorie/sugar options, their partner Coca-Cola (KO - Get Report) could also be dealt a hit.
In a statement, Panera called out "sugary, chemical-laden beverages" as contributors of "obesity, diabetes and heart disease in America."
"With up to 75 grams of sugar, just one 20-ounce soft drink contains more than the recommended daily amount of added sugar," Shaich added in the statement.
For its part, last fall PepsiCo announced a goal to ensure that at least two-thirds of its global beverage volume will have 100 calories or fewer per 12-ounce serving by 2025.
Panera's move comes amid a growing push by fast food chains to "go clean." The fast casual chain itself removed all artificial colors and flavors from its sandwiches, salads and desserts in January.
McDonald's announced on Thursday that by mid-2018 it will be serving only fresh, versus frozen, beef. Micky D's appears to be revving up its competition with Wendy's which already uses fresh beef.
Nevertheless, the soda giants have received widespread backlash in the wake of a 2013 study released by Credit Suisse and Georgetown University that reported 90% of doctors linked sugary beverages to diabetes. Last year, a Boston University study revealed that Pepsi and Coca-Cola spent millions from 2011 to 2015 to reverse health bills that would have curbed soda consumption in the U.S. and decreased obesity rates.
Meanwhile, in Philadelphia, the beverage industry has faced a new soda tax that charges an additional 18 cents to the cost of any 12-ounce drink, $1.08 to any six-pack or $1.02 to any two-liter bottle. The tax is the city's resolution to raising annual revenue for pre-K and community school expansion, reinvestment in parks and recreation centers and to boost Philadelphia's general fund.
For Pepsi, the tax is the reason it saw a 40% decline in beverage sales in the city of late, with sales of its larger packages falling as much as 80% in grocery stores. Coke's soda sales have been under pressure, too.
Related News on TheStreet:
- Panera Bread CEO on What It Takes to Change
- Chipotle Founder Steve Ells May Want to Be Quiet - He Is Getting Creamed by Panera Bread
- Massive Numbers of People Will Never Eat At Chipotle Again And That Should Terrify Investors
- Fast-Food Stocks Not Easy to Stomach
- 10 of the World's Most Exclusive Restaurants
Editor's Pick: Originally published March 31.