Subway’s Quest to Reclaim Customer Momentum: Leading with ‘Better for You’

 

As fast food continues to be dominated by price wars and value-driven menus, Subway finds itself on a different path, relying on its foundational “better for you” brand promise according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

For decades, Subway positioned itself as the go-to fast-food option for health-conscious diners, offering customizable, veggie-packed sandwiches and emphasizing freshness over fried. However, regaining momentum in the fast-food market while remaining profitable is no small feat, especially when competitors aggressively leverage pricing to attract legacy customers.

The Core of Subway's "Better for You" Promise

Subway's branding has long revolved around three key aspects:

1.       Customizable options, allowing healthier ingredient choices.

2.       Nutritional transparency, promoting calorie-conscious dining.

3.       Wide availability of fresh produce and lean proteins compared to fried or highly processed alternatives.

While these traits resonate with a portion of consumers, they face pressure to remain affordable in a marketplace driven increasingly by “2 for $5” and other low-price offerings. Competitors are banking on perceived value and volume rather than a niche health positioning to bolster unit sales.

The Challenges: Why Boosting Profits Without New Customers Is Tough

Subway faces a unique set of challenges in its pursuit of higher profitability:

1.       Limited Pricing Flexibility
Subway’s brand is historically tied to affordability, with its $5 Footlong campaign once becoming a cultural phenomenon. Introducing higher-priced menu items risks alienating core customers while failing to attract new ones.

2.       Customer Migration to Competitors
With a portion of consumers opting for bundled deals like McDonald’s Extra Value Meals or Taco Bell’s Cravings Box, Subway’s focus on premium options leaves it vulnerable to losing value-seekers entirely.

3.       Dependence on Loyalty Without Innovation
Without new menu innovations or unique offerings, Subway risks relying on a declining loyal customer base that increasingly demands exciting and diverse flavors.

4.       Operational Efficiency vs. Ingredient Quality
Higher ingredient costs for premium, fresh items can limit profits, particularly without streamlined operations to offset expenses.

Competitors’ Strategies: Leveraging Price to Gain Legacy Customers

Subway’s competitors, particularly McDonald's, Taco Bell, and Wendy’s, are thriving on value-driven campaigns that attract both budget-conscious diners and volume sales:

1.       Bundling and Meal Deals
Competitors frequently roll out family-sized value meals or dollar menu items, encouraging customers to buy more. For example, Wendy’s 4 for $4 has created a loyal following, building traffic in-store and online.

2.       Limited-Time Promotions
Leveraging promotions like McDonald's Famous Orders campaigns, competitors create buzz while keeping prices approachable, creating a fear-of-missing-out (FOMO) effect that drives in-store traffic.

3.       Tech-Driven Value Perception
Mobile apps offer exclusive discounts and rewards, gamifying value-driven eating in ways that Subway has yet to master fully.

4.       Breadth of Menu
Diversified offerings, such as Taco Bell’s variety of nacho boxes or McDonald's mix-and-match deals, ensure repeat visits while staying wallet-friendly.

What Subway Can Do to Stay Relevant

To compete effectively, Subway must amplify its “better for you” message while finding creative ways to appeal to value-conscious consumers without devaluing its brand. Possible strategies include:

·         Offering “Better for You Bundles” with a balanced mix of nutrient-packed sandwiches, sides, and drinks.

·         Introducing Tiered Rewards in loyalty programs to incentivize frequent purchases.

·         Doubling Down on Localized Innovations that offer regional or culturally relevant menu items, leveraging mix-and-match options.

·         Enhancing Tech Integration by personalizing deals based on ordering history, further targeting customer needs.

Subway’s challenge is one of balancing its heritage and profit margins. By evolving its model with smarter pricing, innovation, and a tech-enabled customer focus, the chain may yet regain its stride without abandoning the principles that made it a household name.

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

Embracing the Snack Evolution: The Rise of Mini-Meals as Meal Replacements

 

As the tantalizing aroma of freshly baked goods and savory snacks wafted through the halls of the Indiana Convention Center in Indianapolis during the 2024 Sweets & Snacks Expo, one thing became abundantly clear: the traditional snacks category is undergoing a revolutionary transformation. Spearheading this evolution is a growing trend towards mini-meals, or snacks, as meal replacements. As the Grocerant Guru® deeply entrenched in the pulse of consumer behavior, it's imperative to dissect this phenomenon, drawing insights from Sally Lyons Wyatt, global executive vice president and chief advisor of consumer goods and foodservice insights at Circana.

"Innovation is back," proclaimed Wyatt during her presentation on the "State of Snacking." Indeed, innovation has become the lifeblood of the snacks industry, injecting fresh vigor into a category grappling with challenges old and new. Wyatt highlighted several key trends shaping the snacking landscape, shedding light on the macroeconomic impacts and evolving consumer preferences that are steering the course of snacks consumption.

Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® insist that snacking occasions have evolved into mini-meal meals or meal replacements and that trend is not likely to fad quickly.

A significant hurdle facing consumers today is the surge in prices, outpacing wage growth by a staggering 30% since 2019. This economic imbalance poses a formidable challenge, particularly for low-income consumers striving to reconcile their desire for snacks with budget constraints. However, despite these headwinds, snacking remains ingrained in the American lifestyle, albeit with subtle shifts in behavior.

According to Circana's data, while 46% of consumers still indulge in three or more snacks a day, this figure marks a slight decline from previous years. This trend underscores a broader movement towards moderation and conscious consumption—a theme echoed in the emergence of mini-meals as viable meal replacements. Core snacks, encompassing both indulgent and better-for-you options, continue to thrive, with a $214 billion market in the United States.

The evolving snacking landscape is characterized by a delicate balance between indulgence and health consciousness. Consumers, motivated by factors ranging from convenience to emotion, are gravitating towards snacks that offer both sensory pleasure and nutritional value. This nuanced approach is evident in the resurgence of pack size preferences, with affordability emerging as a primary driver of choice.

Moreover, the shift in purchasing channels reflects evolving consumer behaviors, with growth observed in club stores, convenience stores, and quick-service restaurants. This migration underscores the dynamic nature of consumer preferences, driven by factors such as convenience, value, and product variety. As snacking transcends mere sustenance to become a lifestyle choice, occasion management emerges as a pivotal strategy for retailers.

Consumers, particularly younger demographics, view snacking as more than a mere transactional exchange—it's an experience, a solution to everyday occasions. Whether it's a quick bite on the go or a satisfying meal replacement, snacks have become ingrained in the fabric of modern living. As Wyatt aptly notes, "It shouldn't just be an aisle, it should be an occasion area in the store." This sentiment underscores the need for retailers to adopt a holistic approach to snacking, curating experiences that resonate with diverse consumer needs.

Think about this, the era of snacks as mere indulgences is giving way to a new paradigm—one where mini-meals serve as versatile meal replacements, tailored to fit the rhythm of modern lifestyles. As a grocerant guru® navigating this evolving landscape, it's essential to embrace innovation, adapt to shifting consumer preferences, and seize the opportunities presented by the snack revolution.

Don’t over reach. Are you ready for some fresh ideations? Do your food marketing ideations look more like yesterday than tomorrow? Interested in learning how Foodservice Solutions® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit us on our social media sites by clicking the following links: Facebook,  LinkedIn, or Twitter

7 Reasons Consumers want more than one Cookie from Potbelly

 

If success leaves clues and it does, Potbelly, the iconic neighborhood sandwich shop, is bundling joy in a new 6-Pack Cookie Box is a clue that they correctly picked-up on according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Let’s get into it, the reasons are:

1.       Variety: Potbelly offers a wide variety of tempting cookie flavors, making it difficult to choose just one. From classics like Chocolate Chip and Oatmeal Raisin to more unique options like Snickerdoodle and Double Chocolate Chunk, customers might crave trying multiple flavors to satisfy their diverse preferences.

2.       Sharing: Potbelly cookies are known for their generous size, making them perfect for sharing with friends, family, or colleagues. Purchasing multiple cookies allows customers to enjoy their own treat while offering some to others, fostering a sense of social connection and enjoyment.

3.       Value: While the price of a single cookie might seem reasonable, buying multiples can sometimes be more cost-effective. Potbelly may offer deals or discounts on bulk cookie purchases, incentivizing customers to buy more than one.

4.       Indulgence: Potbelly cookies are known for being delicious and satisfying. Customers seeking a full sweet treat experience might find that one cookie isn't enough to fulfill their craving, leading them to purchase multiple cookies for a more decadent experience.

5.       Planning ahead: Some customers might be purchasing cookies not just for immediate consumption, but also for later enjoyment. Buying multiple cookies allows them to stock up and satisfy their sweet tooth throughout the day or even share them with others at different times.

6.       Fear of missing out: With such a diverse and enticing selection of cookies available, customers might fear missing out on trying other flavors if they only buy one. This can lead them to purchase multiple cookies to ensure they get to experience a wider variety of tastes and textures.

Potbelly’s collection of cookies are now available for fans to choose as a 6-pack in their favorite cookie flavor or as an assortment. Launching Monday, March 4, the 6-Pack Boxes will be available for purchase through the Potbelly App, potbelly.com, third-party delivery apps and in-shop. 

The branded 6-Pack boxes will be available at shops nationwide. All Potbelly cookies are baked fresh in-shop daily, offering a range of options including classics like the Oatmeal Chocolate Chip, Chocolate Brownie, and Sugar Cookies.

David Daniels, Chief Marketing Officer of Potbelly, stated, “Our fans have an insatiable love for our cookies and now we’re making it easier for them to enjoy together with others, share as a gift or save for later, as we package them up in a convenient new 6-Pack Cookie Box,” … “It promises to serve up smiles and turn an ordinary meal together into a memorable experience.”

For exclusive offers and rewards, Potbelly encourages fans to join the Potbelly Perks program, where they can unlock special offers on the entire menu. To sign up for the Potbelly Perks reward program, visit www.potbelly.com/perks, and, for more information on Potbelly, please visit www.potbelly.com.  

Success does leave clues. One clue that time and time again continues to resurface is “the consumer is dynamic not static”.  Regular readers of this blog know that is the common refrain of Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  Our Grocerant Guru® can help your company edify your brand with relevance.  Call 253-759-7869 for more information. 

Dewey’s Bakery Excited about New Avenues of Distribution

 

There is noting quite like a fresh bakery when you first walk in the door.  The smell, sights, and sounds of people working and fresh flavor full baked treats and stapes all on display.  While we all know that it is hard to get help now days. 

That does not mean you can not expand your brands reach into new avenues of distribution according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions®. This month Dewey’s Bakery introduced the extraordinarily thin mini cookies you know and love in convenient grab and go pouches.

The pouches, are now available in bulk packs, are designed for snacking by the handful and make an ideal companion while on the go. Crafted from real-ingredients at their hometown bakery in Winston-Salem, NC, Dewey’s new Grab and Go pouches carry the same recipe in two classic flavors including Meyer Lemon and Brownie Crisp. Each cookie is made without artificial ingredients, preservatives or synthetic colors.

These pouches of thin and remarkably flavorful cookies are packaged in sets of eight per box and are available nationally online with convenience store distribution on the horizon. 

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participation, differentiation and individualization?  Email us at: Steve@FoodserviceSolutions.us or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

Great Harvest Bakery Cafés Classic Growth Model

 

Fresh baked bread is one of the best things ever according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  When you look at a traditional bakery concept the ilk of Great Harvest Bakery Café and their legacy business model for growth “Hub & Spoke” you can understand how investors and consumers can rejoice. 

In case you did not know, Great Harvest Bakery Café has reported same store sales for Q4 of 2021, they were up 14.9 percent compared to 2019.  Regular readers of this blog know that 2019 was the last “normal” year for comparison. When you look for year over year or in this case like to like sales comparison to big box competitors and other quick-service brands in the space, Great Harvest markets for that same quarter, reported cafe sales are up 17.7 percent vs 2019. That’s good.

Eric Keshin, president and CMO of Great Harvest Bread Company, stated, “Being a high-growth concept, we chose to perfect our expansion model, which aligns with the direction of the quick-service, casual dining environment that must provide investors and entrepreneurs with state-of-the-art strategies to address real estate challenges and production costs, all while serving ‘main street’ and surrounding communities efficiently,”. “We have identified 50 markets positioned for this multi-unit expansion program.”

Readers of this blog know that the Hub & Spoke system is designed in today’s world for the multi-unit operator in order to reduce cost through smaller footprint cafe locations to maximize a Hub’s production capabilities.

The Hubs are full bakery cafes with seating for 40-45 people and have all the handmade bread production on-site. Spokes operate as cafes; they have fresh bread supplied by the Hub daily and should be located within 40 minutes of a Hub. Their menu is the same as their Hub; they bake items on-site like cookies, biscuits, scones, etc., to maintain the aroma of a bakery.

So, the footprint of a Spoke should be around seventy percent (70%) of a Hub’s footprint. This significantly reduces upfront development costs as well as operating costs.

Do you want to get in on the action?  If so, the Hub & Spoke model can be purchased from existing legacy locations with active revenue stream to then expand around them, partnership with single-operators to further expand the market presence and enter brand new markets with Hub & Spoke units. Opportunities exist in the following markets: Atlanta, Chicago, Birmingham, Greenville, and Spokane and within the following states: California, Florida, Texas and Washington D.C.

Here is an example, the owners of Southlake, Texas took over an existing location and quickly added two additional spokes around the legacy store. In Elkins, WV, the owner introduced the company into the newer market first, then added the second location within his second year.

The made-from scratch bread making concept was deemed essential as bakery cafes around the U.S. continued to feed communities through food shortages and provided donated bread to local food banks.

Keshin went on to say, “We held on and grew through the pandemic as franchisees adapted to meet the needs of the consumer. From popular annual LTO’s, superior breakfast sandwiches to on-the-go convenience, our wide variety of sandwiches and specialty sweet items naturally set the company apart from big box QSR competitors,”. “Demand for authentic bread is evident.” Is your business model made for today? Yesterday? Or tomorrow?

Looking for success clues of your own? Foodservice Solutions® specializes in outsourced food marketing and business development ideations. We can help you identify, quantify and qualify additional food retail segment opportunities, technology, or a new menu product segment.  Foodservice Solutions® of Tacoma WA is the global leader in the Grocerant niche visit us at: www.GrocerantGuru.com

Goodcents Partnership with Sporting KC Drives New Electricity

The world wants  Major League Soccer back and so do Goodcents customers according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.  So, with any luck Sporting KC and Goodcents will give away 16-inch subs to 270 fans - enough to span the full 120-yard length of the Children’s Mercy Park pitch from goal to goal – ahead of Sporting’s match at 7 p.m. CT on Sunday, July 12 at the MLS is Back Tournament in Florida.

Driving new electricity into a legacy brand with a partnership is a good move and will accelerate the marketing messaging for all companies involved according to Johnson. How is your company positioning to grow your brand, the top, and bottom line?

Johnson stated “that in my minds-eye the new electricity must be very efficient for the supply chain and includes such things as fresh foods, online ordering, delivery, plant based foods, sampling, toy’s, beer, developing brands,  grocerant positioning, fresh food messaging, autonomous delivery, cashier-less retail, plates, glasses, cash-less payments, digital hand-held marketing.

All food and beverage retailers to survive the next generation of retail must embrace the artificial intelligence revolution while simultaneously embracing fresh food and beverages that are portable, fresh, with differentiation that is familiar not different.  Does your retail path forward look more like yesterday than tomorrow? Why? This new partnership does all of that.

This partnership kicked off today a commercial featuring local legend Matt Besler, and Sporting KC captain, who grew up eating Goodcents after his games. In the commercial, Besler reflects on his time playing youth soccer and the legacy he hopes to leave his own children.

“I’m thrilled to support Goodcents, a locally-owned company and my go-to spot for game day food growing up,” says Besler. “I’ve been getting subs there since it was called Mr. Goodcents and now we take our family.”

In addition, children under 12 can get a free cookie throughout the summer  by wearing Sporting gear or their own youth jersey to their local Goodcents.

“We’re so excited for the opportunity to partner with another local franchise,” says Arielle Long-Seabra. “We’re both locally-owned, committed to the Kansas City community and, given the fact that Matt grew up on our sandwiches, this felt like a natural partnership for both of us.”

Additional partnership-related events will be announced throughout the season via the Sporting KC app, online at www.goodcentssubs.com, on Facebook at /GoodcentsSubs and on Twitter @EatGoodcents.

Are you looking for a new partnership to drive sales? Are you ready for some fresh ideations? Do your food marketing tactics look more like yesterday that tomorrow?  Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may have the clue you need to propel your continued success.