Chains up bid to compete on qualityChains up bid to compete on quality

The need for speed in new product rollouts has given way to a push toward premium as operators look to cut through the competitive clutter of countless limited-time offers and menu additions.

From guacamole at Subway and flatbread sandwiches at Wendy’s to pork chops at Krystal and brioche French toast at IHOP, operators are incorporating ingredients of higher quality to lift new selections from the small print of menu news to the headlines and to appeal to the increasingly sophisticated consumer palate.

“This is a major trend,” said Nancy Kruse, president of The Kruse Co. in Atlanta and a contributing editor for Nation’s Restaurant News. “I would suggest that it would be difficult for a restaurant to actually be competitive without some level of premiumization attached to the menu.”

But the growing use of fresher and sometimes more exotic ingredients is not without its operational challenges. From sourcing to training to making sure that a value message remains front and center, operators need to attend to a growing checklist of criteria in the product-launch race.

“It’s important that you offer flavorful plates,” said Becky Johnson, senior vice president of marketing and culinary for Applebee’s. “But they also must present great value.”

Great expectations

The trend toward premium products with a value orientation is not exclusive to the restaurant industry, observed Kruse, who credits large retailers as being early initiators of the movement.

“The notion of consumers getting high-end products at mass-market prices can be traced to retailers like Target,” she said. “Customers see a housewares line that is moderately priced, and those retail initiatives lead restaurant diners to expect the same treatment.”

But other transformational forces are playing into the evolving trend, as well, experts said.

“Guests today have a lot more knowledge about food than they previously had,” Applebee’s Johnson said. “Look at the popularity of the Food Network. They’ve just come to expect more.”

The emergence of the fast-casual sector — with its central emphasis on fresh and premium ingredients — also has had a far-reaching impact on restaurant chains, particularly those in the quick-service segment.

“What has driven the [premiumization] trend in QSR is fast-casual competition,” said Dennis Lombardi, executive vice president, foodservice strategies for WD Partners, a consultancy in Dublin, Ohio. “QSR players are now trying to minimize traffic loss to fast-casual operators by offering quality product lines.”

Others are, as well. Applebee’s Fresh Flavors of Summer was an admittedly ambitious introduction for the Overland Park, Kan.-based casual-dining chain, Johnson said, adding, “But nothing spells fresh more than the seasons.”

Containing both new lunch and dinner items like the Turkey Bacon Avocado Sandwich, Blackened Sirloin & Garlicky Green Beans, Margarita Queso Chicken & Shrimp, Green Goddess Wedge salad and Green Bean Crispers, the recently launched seasonally inspired LTOs were based on high-quality ingredients, affordably priced, she said. Lunch combo prices start at $6.99, while Fresh Flavors of Summer items start at $9.99.

Because the rollout added 11 new items to the cooking line, “We tried to remove as many old SKUs as possible to keep the complexity down,” said Steve Layt, senior vice president of operations.

New training also was required to support the rollout to Applebee’s nearly 2,000 units. Restaurants were notified one month prior to the early-May product launch, triggering a countdown calendar for management and restaurant teams. At least two weeks out, Applebee’s began a “slow rollout,” allowing the back- and front-of-the-house staff members to familiarize themselves with the new products. In the first week the new sandwiches were added to the menu, and the second week the entrées and salads were offered.

“So by the time the items had been officially rolled out, staffers already had experience with them,” Johnson said.

Meaty solutions

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Square burger specialist Krystal stepped out of its beef-and-chicken wheelhouse a little with its current Pork Chop Krystal LTO. The Chattanooga, Tenn.-based quick-service chain is offering a 2.5-ounce boneless pork chop served on a steamed Krystal bun for an à la carte price of $2.19. By comparison, a single Krystal burger costs about 70 cents.

The pork chop also is available at breakfast on a biscuit or a bun with apple butter, or on a platter with eggs, a biscuit and gravy. Although a new and unique product for Krystal, the pork chop generally fits into the 350-unit chain’s culinary comfort zone in that it has a Southern feel and is small and portable, said Stan Dorsey, the chain’s vice president of menu strategy.

“Pork chops are a mainstay in the South,” he said.

The new item does not tax kitchen operations, either, he said. Produced by a single supplier, the item is a thick-cut Smithfield premium pork chop that is precooked, frozen and then reheated in the restaurant. Available with apple butter or barbecue sauce, it is mainly served with mayonnaise.

Because it’s served much the same way as Krystal’s small burgers or chicken sandwiches, the pork chop has not presented any particular operational challenges, Dorsey said.

“It’s roughly the same holding process, the same assembly process. And there’s no new equipment,” he said.

Finding flair

Focusing on an individual protein is not the only way to draw attention to the menu, experts noted. Building an LTO around a particular fruit or vegetable also can be a smart marketing tactic. For example, Qdoba Mexican Grill has logged strong results with its annual Mango Salad LTO, said Ted Stoner, the Denver-based chain’s director of strategic product development.

Beginning around Mexico’s Cinco de Mayo celebration in May and running through much of the summer, Qdoba offers its Mango Salad, which includes mango salsa and cucumbers — both added specially for the promotion — and red bell peppers, served on romaine lettuce and topped with cilantro-lime vinaigrette dressing. The salad is available as a vegetarian item or with adobo-marinated grilled chicken. It is priced at $7.09. Mango salsa can also be added to burrito, taco and nachos orders.

The 650-unit fast-casual chain contracts for its supply of mangos from vendors in Mexico, where they are peeled, tested for sugar content, diced and frozen, for better control and consistency in the restaurants. The fruit is delivered to each store about twice a week.

“When we started offering the item, there were not a lot of produce houses handling fresh mangos — or even a consistent product,” Stoner said. Over time, though, the chain has been able to establish a good supply pipeline.

The Mango Salad is promoted heavily by Qdoba, both through point-of-purchase merchandising and through e-mail to “a few thousand huge fans,” Stoner said. Much of the emphasis is on the fact that it is available “only while supplies last.”

Qdoba rejected the idea of offering the item year-round because of supply challenges and also because showcasing it seasonally “makes it extra special,” Stoner said.

“If we added it to the core menu, it would take away some of the magic,” he added.

Some items, like IHOP’s new Brioche French Toast, are initially conceived as an LTO but are transitioned to the core-menu track when they reveal unexpected potential during the developmental stage.

IHOP’s Brioche French Toast started out as a limited-time offer but was tracked for the core menu during the development phase.

“The Brioche French Toast was very well-received during the testing,” said John Merkin, vice president of operations for the 1,585-unit Glendale, Calif.-based family-dining chain.

Available in three flavors — Bananas Foster, Berry-Berry, and Peaches and Cream — the Brioche French Toast was the end result of an 18-month process that tapped into the expertise of the chain’s culinary team, its purchasing co-op — Centralized Supply Chain Services — and franchise community.

“It’s a very collaborative process,” Merkin said. “There’s a lot of communication. Also, if you’re going to have an item presented consistently by thousands of team members, you have to spend a lot of time with the internal training department.”

The product, which is cooked to order, requires a specially developed round brioche bread that is able to absorb a proprietary vanilla-flavored batter and other flavorings.

“With a labor-intensive item like this, you have to understand what its impact will be on the [kitchen],” he said. “You have to ask yourself, ‘How do we take some of the labor out of it but still have a high-quality product?’”

Merkin said the brioche “holds the batter differently than other types of French toast, so it has to be dipped quickly to prevent  sogginess. Then it takes three minutes on the griddle, is trimmed, and the toppings are added. The brioche is a pretty stable item, but once it’s prepped, it has a limited life.”

IHOP declined to provide prices for the Brioche French Toast, saying it varies from region to region and based on how it is served. The item will be installed on IHOP’s permanent menu in June, along with the new Griddle Melt line, introduced in February.

Contact Paul Frumkin at [email protected].
Follow him on Twitter: @NRNPaul.