Panera CEO says bird flu could hit chicken sales

CHICAGO (Reuters) - Panera Bread Co. (PNRA.O: Quote, Profile, Research, Stock Buzz) Chief Executive Ron Shaich on Monday said sales of its chicken items would likely drop if the deadly bird flu were to occur in the United States but the company has non-poultry products it will market if an outbreak occurs.

"We would expect if there is an outbreak of avian flu, that sales of chicken-based products will diminish -- in the low single digits," Shaich said during a presentation at the Reuters Food Summit in Chicago.

Currently about 10 percent of Panera's sales are poultry products, he said.

The H5N1 strain of avian influenza, or bird flu, has spread through Asia and Europe and has killed 95 people and infected 175 since 2003. The strain has never been found in the United States but government and food industry leaders are worried that it will occur here.

In Europe, fears about the flu have hurt chicken consumption even though cooking kills the virus.

The virus is spread from birds to people, but scientists are worried that the strain could evolve to where it would move from people to people. If that happens, scientists claim millions of people would be at risk.

Also, in the event of an outbreak, Shaich said his firm would likely be part of a larger commercial effort to convince consumers that cooked chicken "has no risk whatsoever."

"Clearly, we have to be aware of the avian flu," he said. "As a responsible entity we have to have a disaster plan."

In recent months, sales at Panera restaurants open at least 18 months have soared thanks to strong demand for its Via Panera catering program, new all-natural chicken products and breakfast items.

The strong performance prompted the company to raise its 2006 earnings outlook last month.

Fast-growing Panera operates nearly 900 bakery-cafes in the United States and expects to add between 150 and 160 outlets in 2006. The chain, which has a target of posting same-store sales increases of 4 percent to 6 percent this year, is known for baking its own artisan bread in each of its cafes.