MenuMasters 2011: SubwayMenuMasters 2011: Subway

For Subway’s menu development team, big opportunity lies in small changes.

The chain’s breakfast line, for example, which introduced six new signature sandwiches and helped the chain capitalize on a new daypart in more than 25,000 restaurants, was the result of adding just two new ingredients to its menu: an egg-white omelet and a multigrain English muffin.

Those ingredients created the foundation of the Milford, Conn.-based chain’s “Build Your Better Breakfast” sandwich line, which debuted in all North American stores in April 2010.

The breakfast menu features six signature sandwiches that can each be served with eggs or egg whites on the new English muffins, flatbread or the chain’s 6-inch or foot-long rolls. Each can also be customized with vegetables and sauces.

“We basically introduced only two new ingredients — egg white and English muffin,” said Suzanne Greco, Subway’s vice president of research and development.

Name: “Build Your Better Breakfast”
Company: Subway Restaurants
Headquarters: Milford, Conn.
No. of units: 34,500
Description of items: egg and egg white sandwiches on rolls, flatbread or English muffins, with choice of meats, vegetables and condiments
Date of rollout: April 2010
Price: $2.50 for English muffin sandwich and a 16-ounce coffee. Other sandwiches range from $1.75-$6 depending on bread choice and market.
Developers: Suzanne Greco, vice president of research and development; Chris Martone, executive chef; Larry Varvella, R&D project leader; Mark Christiano, baking specialist; Lanette Kovachi, corporate dietitian; Dave Zambory, R&D project leader; Megan Sheehan, senior food scientist; Frank Buffone, manager - equipment and decor

“Everything else already existed in [most] stores. One of the things we try to do is make [rollouts] as profitable as we can for our franchisees. One of the ways to do that is to minimize product waste. We try to see if [ingredients] can be used in more than one daypart or if they have cross-usage
between hot and cold products.”

Before the April 2010 breakfast rollout across North America, about 65 percent of domestic stores and all Canadian locations served some egg dishes and coffee, but the breakfast program was not consistent across the system. Since then, all participating stores open at 7 a.m. and offer the Western Egg & Cheese; Black Forest Ham, Egg & Cheese; Double Bacon, Egg & Cheese; Breakfast B.M.T.; Sunrise Subway Melt; and Steak, Egg & Cheese sandwiches. The rollout also included adding Seattle’s Best coffee to North American stores that didn’t already offer it.

Prices range from $1.75 to $2.25 for English muffin melts, $2 to $3.50 for 6-inch sandwiches and flatbread sandwiches, and $4 to $6 for foot-longs. Any English muffin sandwich can be paired with a 16-ounce cup of coffee for a $2.50 combo meal.

“Breakfast had been an optional program for years, [but] the start time was optional, and we couldn’t really advertise to consumers,” Greco said.

With a uniform platform in place, Subway was poised to aggressively pursue a growing daypart, one that is fiercely competitive.

Total breakfast sales in 2011 are projected to increase 4.1 percent, according to a February 2011 report from Chicago-based research firm Mintel, and numerous quick-service and fast-casual chains are fighting for a piece of the pie. McDonald’s has long led the pack, but Burger King, Wendy’s, Starbucks, Dunkin’ Donuts and Taco Bell have all pursued breakfast in recent years.

“Just like we had burger wars in the ’80s and ’90s, now we have breakfast wars,” said Dennis Lombardi, executive vice president of foodservice strategies for Columbus, Ohio-based consulting firm WD Partners. “Breakfast not only survived the recession, it kind of grew. So there’s [an] understanding that ... breakfast is a great place to try to grab some share.”

Breakfast now makes up 9 percent of total sales for Subway, up from 7 percent at the time of the April 2010 breakfast rollout.

Healthful dishes in particular are projected to build breakfast sales. Mintel said in its February report that 66 percent of survey respondents said they are interested in healthful breakfast options, and about 40 percent of those who eat breakfast outside the home said healthfulness is the most
important factor in selecting a restaurant.

“Healthful quick-service breakfast sandwiches are hard to find,” executive chef Chris Martone said. “We knew we could fill that void.”

Subway’s breakfast follows in the footsteps of earlier healthful initiatives, including the “Fresh Fit” menu of subs with fewer than 6 grams of fat. To build on that reputation, the chain sought a bread choice that was sturdy enough to stand up to a variety of toppings yet light enough for its healthful image.

“We were looking for something that wasn’t the 6-inch size, something smaller,” Greco said. “We tested several different types [of English muffin], and the one customers liked best was the light wheat. It was the right balance — more nutrition, but the right taste profile.”

The multigrain English muffin has 100 calories and 5 grams of fiber.

Lombardi called the choice to offer egg whites, “a smart move, especially for boomers, who are starting to think about cholesterol numbers.”

Still, some choices are more decadent, such as the Breakfast B.M.T., which has ham, salami, pepperoni and cheese.

“We do speak out of both sides of our mouths a little, but it’s successful,” said Larry Varvella, research and development project leader for Subway. “It’s a marketer’s dream, that combination of healthful and indulgent items.”

The response from franchisees has been good, Greco said. The fully franchised chain has 34,500 restaurants worldwide.

“Basically, they’re happy, first of all, that they’re profitable in the morning,” she said. “If you can make more use out of all of that capital and investment that you have and bring in more dollars, that’s a pretty easy way to help build your sales.”

Greco and Varvella would not reveal the cost per franchisee of the breakfast launch, but called the figure “minimal.”

WD Partners’ Lombardi echoed the sentiment, saying a strength of Subway’s breakfast is its operational efficiency.

“The actual cost of getting into [breakfast] isn’t that much in terms of capital or complexity,” Lombardi said. “You’ve just got a little bit of labor, the food costs, the franchise fee and the royalty fee. So maybe 30 or 40 percent of [a given] sale is profit,on an incremental sale like that.”

Lombardi said customization can help Subway stand out from its competitors. The chain highlights customization in its marketing, with the “Build Your Better Breakfast” tagline and by featuring its sandwiches with a variety of breads and toppings in its advertising and on menu boards. And guests still manage to make the sandwiches their own.

“There aren’t too many that come out exactly like the picture,” Varvella said. “They want more of this, just a little of that. They start to do it their way, and they’re happy with that.”

Contact Christi Ravneberg at [email protected].