A panade is a paste of milk and bread that is typically used to help foods like meatballs and meatloaf hold their shape and moisture. While it may sound odd to use a panade in a sauce, America’s Test Kitchen science editor explained why it works: Starches from the bread absorb liquid from the milk to form a gel that coats and lubricates the protein molecules in the meat in the same way that fat does, keeping them moist and preventing them from linking together to form a tough matrix. Mixing the beef and panade in a food processor helps to ensure that the starch is well dispersed and all the meat reaps the benefits.
However, the gel does not begin to form until the meat-bread-milk mixture is heated. Under heat, the coating of gel on the pieces of protein prevents them from chemically reacting with each other and resulting in toughness.