This food company is making a major change that Kraft and Nestle have failed to do

Panera is cutting artificial flavors, sweeteners, preservatives, and colors from all packaged foods — beating many of the biggest names in the industry.

On Wednesday, the company announced a plan to cut all artificial ingredients from its Panera at Home line by the end of 2016 — the deadline for the chain to reach its goal of cutting all artificial preservatives, sweeteners, colors, and flavors from the menu in restaurants.

"We're really trying to accomplish two things," CEO Ron Shaich told Business Insider of the decision to cut artificial ingredients from packaged food. "One, let our customers know that if you're dealing with Panera, it's comprehensive, it's all inclusive, and you can count on it. And, I think we're also trying to challenge the world a little bit."

Shaich prides himself and Panera f0r being ahead of the industry when it comes to "clean" food. With the plan to cut artificial ingredients from Panera at Home, he hopes that the company can help increase pressure to cut artificial ingredients from packaged goods.

"Look at the restaurant industry — there are a lot of people claiming some sort of clean, but nobody has been as comprehensive as we are, nobody has taken on as many categories as we have," says Shaich. "We think in the supermarkets, it's even worse. It'll name names: Kraft, Campbell's, Nestle, General Mills — they've all done some form of it, but they'll do the flavor but not the colors, some lines but not other lines."

There is already significant pressure in the packaged food business to move in the direction of natural food.

Kraft quietly cut synthetic colors and preservatives from its mac-and-cheese, but still has artificial ingredients in items such as Kool-Aid. Nestle is removing artificial flavors and colors from chocolate, but struggling to do the same in gummy and sour candies such as SweeTARTS and Nerds.

Campbell doesn't use artificial ingredients in soups made in the US and has pledged to cut all artificial colors and flavors by 2018, but does use ingredients (like sodium phosphate) on Panera's "no no" list. General Mills similarly has plans to cut artificial flavors and colors from cereal by the end of 2016, but still sells otherproducts that contain artificial ingredients.

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Cutting artificial ingredients from packaged foods has a different set of difficulties than making the change at a restaurant chain. Preservatives are key to expanding shelf lives, and working with the retailers adds a layer of complication that isn't there when rolling out changes at Panera locations.

However, since Panera's packaged food is a growing part of the company's business, making the change in groceries stores as well as in Panera cafes was key for the company. Panera at Home is now a $150 million retail business, encompassing nearly 50 products, from salad dressings to refrigerated soup.

"I don't think there's another manufacturer outside of some of the startups where you have a crystal-clear policy about the way that things are being prepared," says Shaich. "That's the key here. We take the Panera brand and stand for something today."

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