St. Louis Bread Co. founder Ken Rosenthal invested $150,000 and took out an SBA loan for another $150,000 to open his first bakery-café in Kirkwood, Missouri, in 1987. He has since sold the company, now known as Panera Bread Co., and become one of its largest franchisees, with 76 locations in Ohio and Colorado. But few, including Rosenthal, could have predicted Panera’s growth to more than 1,300 restaurants across the country and annual corporate revenue of $1.3 billion.

That success made Panera the best-performing stock of the past decade among St. Louis-headquartered public companies. Its share price has risen 1,654 percent, from $3.88 a share on December 31, 1999, to $67.95 a share on December 28, 2009. Along the way, Panera has largely led the evolution of what has become known as the fast-casual restaurant category.

Panera’s story began in the mid-1980s when Rosenthal took a fateful trip to the San Francisco Bay Area. During his visit, he noticed a number of eateries and coffeehouses that appealed to him in different ways. Some offered fresh crusty breads and sandwiches or soups and salads. Others specialized in coffee and espresso drinks. Others provided comfortable seating areas and created an inviting atmosphere.

Rosenthal began blending the most attractive components to create a concept that became the St. Louis Bread Co. Although he had a retail background and no restaurant experience to speak of, Rosenthal decided at the age of 44 to give it a go.

“We tried to make the environment as warm and comfortable as we could,” Rosenthal said. “We displayed our bread differently and offered more of a hard-crusted European-style bread than the Wonder Bread people were used to at the grocery store. The concept was very old but presented in a much more current, upscale way. There was the healthful aspect, ordering food was quick, and there was no tipping. A lot of those things seemed to appeal.”

Rosenthal opened the doors of his first cafe October 19, 1987, the day of a global stock-market crash known as “Black Monday.” Despite that bad omen, the business grew to 19 cafes over the next six years, financed primarily with bank loans and cash flow from operations. Friend Doron Berger joined Rosenthal as a partner in 1989 to help run the company, followed two years later by another friend, Myron Klevens. Jeff Rains came onboard in 1992 as chief operating officer.

“None of us had any restaurant experience, but that was probably a positive thing because we didn’t have predetermined mind-sets that certain things wouldn’t work,” Rosenthal said. “Every once in a while we hit a bump in the road, but most of the time it worked. We thought if it was something we would enjoy, our customers would probably enjoy it.”

They did. But Rosenthal and his team soon reached a crossroads. More expansive growth required significant additional resources. So when Rosenthal met Ron Shaich, then co-chief executive and co-chairman of the publicly traded Au Bon Pain café chain, he saw an opportunity. Rosenthal sold St. Louis Bread Co. in 1993 for $24 million. Five years later, Shaich divested the Au Bon Pain division to focus on the Bread Co. and renamed the company Panera.

Rosenthal, who stayed on with Panera for two years after the sale to oversee the opening of another 33 stores and spent a third year as a consultant, could have walked away. But he didn’t want to retire. In 1997, he and Rains formed Breads of the World LLC, a Brentwood-headquartered Panera franchisee. Berger joined them shortly afterward, and this month they will open their 76th café. They have 19 stores in Columbus, Ohio, another 31 split between Cincinnati and Dayton, and 26 in and around Denver and Colorado Springs.