Meeting the Demand for Fresh Foods

Donna Sitka knows her way around convenience store foodservice. She is the foodservice manager for the 13 Tiger Tote Food Stores that have foodservice.

Until recently that foodservice consisted of a successful fried chicken operation branded Mama’s Kitchen Fried Chicken and a failed Mexican food venture. The Gonzales, Texas chain of 23 stores, operated by Johnson Oil Co., recently added a made-to-order sandwich component.

It’s no mystery why retailers choose sandwiches as a foodservice offer. A May 2010 report by Chicago-based NPD Group showed that sandwiches and burgers were the only subcategories to grow servings at both quick-serve and full-service restaurants in 2009. Amidst a year in which restaurants suffered consecutive quarterly losses in traffic, consumers ate 22 billion sandwiches, burgers and wraps.

“The reason this segment continues to grow is because it’s one of the few categories that has mass appeal,” said Bonnie Riggs, NPD’s lead restaurant industry analyst and author of the report. “Sandwiches, burgers and wraps are accessible, customizable, affordable, portable, and can be dressed up gourmet-style, or dressed down.”

According to NPD, the gains came from all dayparts, led by lunch, with 48% of the increase. Sixty percent of sandwiches and burgers are sold at QSRs.

“Moving forward, we’re likely to see more operators and chains jump on the sandwich, burger and wraps bandwagon, capitalizing on the growth of this category,” Riggs said. “Considering how well-established the category is, it’s amazing to me to see that there is still room for more growth.”

Quality and Consistency
Sitka said the objective of Tiger Tote’s sandwich program is simple: “To use quality products and offer a great-tasting sandwich at a competitive price.”

But how does Tiger Tote go about meeting that objective? How does any retailer develop a proprietary sandwich offer that features an effective menu without sacrificing quality?

Sitka said she is shooting for gross profit margins around 55%. To that end, Tiger Tote spends a bit more on pre-sliced meats and par-baked breads. Ideally, the extra cost will be balanced by savings in labor (slicing and dough preparation) and lower spoilage.

“Our first decision was to use pre-sliced meats,” Sitka said. “Quality, taste and price were our three main areas of concern. We found the majority of our meats through Tyson Foods. We know that it would be cheaper to slice our own, but labor savings, employee injuries from the slicer and portion control were the determining factors to buy pre-sliced.”

Through its foodservice supplier, Sysco, Tiger Tote found seven breads, a number that’s important for consumers who are used to not only customization, but also a wealth of exotic choices. They live in a world of sandwiches made with two kinds of tortillas, wraps, dough, rice cakes, bao buns and cornmeal arepas. Tiger Tote’s breads are wheat and white subs, foccacia, ciabatta, wheat berry, sourdough and marble rye.

When it came to developing the menu, Sitka again decided to keep it simple with an emphasis on traditional favorites and quality, without saturating the offering. The 14 she settled on include chicken salad, roast beef and a chicken bacon ranch club sandwich. For kids there are peanut butter and jelly sandwiches and a grilled cheese.

Customization is Key
Customers can build their own sandwich from the lists of breads, meats, spreads, vegetables and cheeses. Tiger Tote toasts sandwiches and also grills paninis, which have emerged as the most popular menu item. Panini prices range from a manageable $3.99 to $4.99.

The two final ingredients for a solid sandwich program are also perhaps the most overlooked. “Get the order right, and have a friendly person behind the counter to make those sandwiches,” Sitka said. “Even the best sandwich program in the world will have a difficult time being successful with poor execution. Your employees have to believe in what they are doing and really sell the quality to the customers.”

Another way to get customization with sandwiches is to partner with a local commissary, co-brand with a franchisor or allot counter space for a prepackaged program.

According to Technomic’s 2010 Sandwich Consumer Trend Report, the more than 1,500 U.S. consumers surveyed on sandwich preferences, attitudes and purchasing behavior stressed that variety is their No. 1 desire when it comes to making repeated sandwich purchases.

In fact, only 52% of the respondents said they were happy with the choices at delis and sub shops, while just 42% were satisfied with their full-service restaurant options. The hardest group to please was the 18-to-24 year-olds, who registered 44% and 40% satisfaction, respectively.

These numbers show retailers how much opportunity and even freedom there is for development of new tastes and combinations or approaches. Over 80% cited quality and taste as the most important factor in choosing where to buy a sandwich for lunch and dinner, with value and price being the next two most crucial.

Freshness of meats, ingredients and breads ranked high in the perception of a ‘good’ sandwich, while more than three-quarters rated customization and quantity of ingredients highly.

“Due to the high versatility and saturation of the sandwich market, it is important for operators to stay abreast of current trends and evolving consumer needs,” said Darren Tristano, executive vice president at Technomic. “To improve in the area of variety, operators and suppliers may want to consider offering a wider range of sandwich ingredients, developing signature sandwich offerings, and allowing guests to customize their sandwiches.”

Among the examples of innovation cited in the report: multiple pricing tiers, mobile sandwich trucks with upscale offerings, ethnic sandwiches, gourmet cheeses and breads, and customer control over pricing and sizing.

The challenges of innovation and marketing appear to be worth the trouble given the ongoing popularity of sandwiches. The Technomic report showed that 81% of the respondents bought a sandwich away from home in the previous 60 days; of those, 93% said they eat at least one sandwich per week and 59% indicate they eat three per week. More than half (57%) said they chose deli sandwiches in the past 60 days, while 47% said they chose a sub sandwich. CSD


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