Sandwich E&S

A growing consumer emphasis on freshly prepared, customized foods continues to be the engine that drives this foodservice segment at a faster growth rate than its peers.

By Amelia Levin, Senior Associate Editor -- Foodservice Equipment and Supplies, 1/1/2008

It's the perfect spot for that fresher, healthier, non-greasy meal. It's fast and convenient. It's made-for-you. It's the sandwich shop.

There's a reason consumers still order all kinds of non-burger sandwiches by the dozen, having put the brief low-carb craze behind them. "The flexibility within this category makes sandwiches increasingly appealing," says Darren Tristano, executive vice president of Technomic Information Services, a Chicago-based research firm. Customization of bread types, flavor, toppings and ingredients coupled with fresh, steamed and toasted preparations provide combinations that appeal to almost all consumers."

According to Technomic, sales in the sandwich category increased 8.6 percent in 2006, the last year for which data is available at the time this article was written. "We expect the sandwich segment to outperform the industry in 2007 and 2008 by achieving growth rates of between 8 percent to 10 percent per year," Tristano says.

Plus, subs, deli sandwiches and wraps tend to be healthier than their fast-food fried and grilled siblings, an added plus as more consumers look to maintain a healthier lifestyle. "Subway's success has been based on a 'healthier' sandwich and it could be said that sandwich appeal is a major driving force behind the success of the fast-casual segment," Tristano says.

Last year among major players in the sandwich segment, Subway posted the highest sales gains ($7.7 million), followed by Arby's ($3.3 million) and Quiznos ($1.6 million), according to Technomic. Emerging chains with impressive sales growth last year, as compared to the previous year, were Potbelly, Jimmy John's, Jason's Deli and McAllister's Deli.

Healthy Fresh
Ed Gleich, senior vice president of concept development, attributes Arby's growth in the last several years to the introduction of its Market FreshT line in 2000. This aspect of Arby's menu appeals to the consumer who wants healthier options through such menu items as sandwiches and wraps made with deli meats sliced in-house and piled atop honey wheat bread and salads. In 2007 Arby's updated its menu to include a variety of toasted subs, such as a turkey bacon club, and limited time offerings like hot meatball subs, Gleich says.

While these latest products aren't necessarily the lowest fat or lowest calorie items on the menu, per se, they're preferred by the consumer because they're made with fresher, more wholesome and natural products, rather than frozen ingredients that have been reheated or fried. "It depends on how consumers define healthy, but we've seen that our customers tend to want whatever is green and fresh, like leaf lettuce, fresh tomatoes and other more wholesome ingredients," Gleich says. "They're less interested in strictly low-fat."

Gleich's comments point to a rapidly growing trend, or movement toward more natural, fresh foods, spanning all foodservice segments, not just sandwich chains. The same preferences for these types of foods also apply to customers at Fresh City, an 18-unit, fast-casual, New England area sandwich chain that's expanded into New Jersey and Washington, D.C.

Bruce Reinstein, who founded the concept along with his brother Larry Reinstein in 1998, says Fresh City has always demonstrated a commitment to serving made-to-order, fresh sandwiches, wraps, smoothies and even stir-fry dishes. "We sought to create basically a lifestyle concept where customers can customize their products all the time, and really alter their food choices based upon nutritional and flavor profile needs," Reinstein says.

Flavor Flave
Beyond an item's fresh and healthy aspects, today's consumers look for more sophisticated flavor profiles, with the occasional indulgence. This is the case at McAllister's Deli, a Jackson, Miss.-based chain with roughly 250 units spread throughout the 20 states in the Southeast, Midwest and West.

"We're certainly perceived to be healthy because of the freshness of the food and because you can order sandwiches however you want them," says Patrick Walls, chief franchise officer. "On one hand customers can get a fresh turkey sandwich with a fruit salad or baked chips, but on the other hand guests realize if they want to indulge a little they can order the Reuben, for example, or put some of our signature honey mustard dressing on their sandwiches."

The popularity of the toasted sub also points to consumers' increasingly sensitive taste buds. At Arby's the toasted subs prove wildly popular and offer customers that premium level of taste they seek. "Our customers want a high-quality product that delivers on taste, but is also affordable at the same time," Gleich says. One way in which Arby's differs from its toasted sub competition, such as Potbelly or Quiznos, is through its lower price point as well as through its drive-thru service.

Generally, lunch proves to be the most popular daypart for sandwich chains, however, many have taken strides to enhance sales outside of that peak time. Fresh City relies on its specialty espresso and smoothie programs to draw customers for breakfast. While there, customers can also select from fresh-baked pastries and breads as well as madeto- order breakfast sandwiches.

In contrast, McAllister's focuses on expanding its dinner daypart because, Walls says, the company "is adamant about not entering the breakfast category. Breakfast is a very difficult daypart because you usually need to add another manager, and by opening at 5 a.m. every day in addition to serving dinner, you almost have to operate like a 24-hour operation."

Instead, McAllister's has expanded its menu to offer guests more options later in the day. "Forty percent of our sales are at dinner time, but we wanted to give guests more of a choice if they didn't want a sandwich or 'spud,'" Walls says.

Last year, McAllister's introduced some dinner-specific items, with plans to increase offerings during the next five years. They include chicken cordon bleu, grilled salmon, rotisserie chicken, and meatloaf. Some new side offerings accompany these entrées, including mashed potatoes with gravy, mixed vegetables and macaroni and cheese, according to Walls.

With no heavy "cooking" going on at McAllister's to begin with, one might be curious as to how the staff prepare these more complex dinner entrées. The chain features a limited cooking platform consisting mainly of steamers for the hot sandwiches and potatoes, and a conveyor toaster for sandwich breads. To overcome this limitation, dinner entrées are precooked and portioned at an off-site commissary, and then rethermalized in low-temperature steamers, Walls says.

Side dishes, such as macaroni and cheese and vegetables, come in as a cook-chill product, are reheated in the steamer and held at temperature on steam tables. In addition, staff prepare coleslaw fresh daily, and they receive potato salad shipments from a proprietor.

From Slicers to Tables
As one might expect, slicers represent an important piece of equipment for many sandwich chains. Staff at McAllister's, Arby's and Fresh City slice meats and cheeses daily, so durable, heavy-duty slicers remain an absolute necessity. And, as one might also imagine, refrigerated prep tables prove important for these chains.

At Fresh City, staff also use food processors, in addition to slicers, to prepare items that make their way out to the line. Convection ovens in the back finish par-baked breads and also roast meats and vegetables. At Fresh City's front counter where customers come to place their order, all the equipment remains visible to them. The line resembles a traditional sandwich-assembly station, starting with the refrigerated prep tables holding the various sandwich fillings for the "All- American Turkey," "Monterey Chicken Salad," and "Bourbon Street Muffalata" sandwich with smoked ham and Genoa salami, to name a few. The menu also features cold salads and salad wrap sandwiches, such as "The Great Caesar," that are prepared at the same station. A hot section sits next to that area, where steam tables keep foods at serving temperatures and warm tortillas.

Next to that is a stir-fry station with woks where staff prepare grilled chicken, Alaskan salmon, Peking duck and other proteins for some of the wraps and the stir-fry dishes on the menu.

"Our goal with equipment is to make things faster and save space," Reinstein says. "Anytime we can make things more compact, we're being more efficient." At Arby's, the conveyor toaster represents an important piece of equipment. When the chain introduced its line of toasted subs last year, the toaster needed to fit easily into the existing sandwich prep line. This is why Arby's designers arranged the kitchen to accommodate this need for flexibility, knowing that the chain's menu changes frequently. "We were able to integrate the toaster into our basic sandwich station because the kitchen's design is flexible enough to prepare the roast beef sandwiches, chicken sandwiches, and now toasted sub sandwiches," Gleich says. "We were able to make the adjustment fairly quickly."

Arby's focuses on overall operational efficiency in addition to efficiency of the line setup. For the roast beef sandwiches, the meat is cooked inhouse in a convection oven in the back and then hand-sliced and held to temperature during peak times in a holding cabinet on the front line so staff can easily access the meat for assembly.

In order to maintain good flow in the kitchen, "the operation services team is constantly in the field working with the employees and with the equipment, and in many cases refining the setup," Gleich says. For example, when Arby's introduced the conveyor toaster, the team found lots of heat coming off the front of the equipment, so they worked with the equipment manufacturer to make and install a heat shield.

It's also important for Arby's to invest wisely in equipment, Gleich says. "We're a large system with a lot of stakeholders so we need to be able to get a return on investment for each piece of equipment."

Sit-Down vs. Takeout
McAllister's stands apart from typical quick-serve sandwich chains in that it has a fully staffed dining room. While customers still place their order and pay at the front counter, staff members bring their food to their tables and also provide free refills and dessert service, according to Walls. As a result, the chain caters to families looking for a casual and convenient dining experience at lower costs than at a full-service restaurant. Whereas Arby's capitalizes on its drive-thru program, McAllister's does the same with its to-go setup, which accounts for roughly 35 percent of all orders. Thanks to a completely separate to-go area, most customers call ahead or fax in their order and then head to the cash register to pay and pick up their food.

McAllister's also runs a catering operation, accounting for about 10 percent of overall sales. "The system works out really well because we get our catering orders done in the morning before the restaurant opens," Walls says. "Staff members arrive around 8 a.m. and the food is prepared and delivered by 11 a.m."

Fresh City has a similar setup in terms of catering. "The beauty of corporate catering is that you're able to set it up between breakfast and lunch and put together platters of food to deliver before the lunch rush," Reinstein says.

Although Fresh City has seats for about 80 to 100 people in its typical store, takeout still accounts for 40 percent of overall sales. A quick-serve operation, customers place, pay, and pick up their order at the front counter.

Leafy Green
Not just the lettuce is green at some of these sandwich and wrap chains. Fresh City makes this point clear by its commitment not only to offering organic products where possible, but also to maintaining socially responsible business practices. The chain uses recycled materials for its packaging and disposables, and eventually plans to use the materials for its catered lunch boxes.

"People want to do the right thing, but they don't always go and do it," Reinstein says, noting that going "green," or at least somewhat green, isn't as hard as many companies make it out to be. But that could also be due to consumer preferences. "People prefer to walk around with the fancy cup and the bag," he says, adding that recycled packaging tends to be "brown and not as beautiful."

Still, "to me using recycled paper is simple, and no more work is involved," Reinstein says. "Honestly, the cost is not going to break the bank, and you're doing the right thing." Sandwich chains in particular grapple with this issue due to the excessive amount of disposables and packaging they go through.

Fresh City has also made strides to use more energy-efficient and water-saving equipment and systems. The chain has replaced traditional spray hoses and light bulbs with energy-efficient ones, and it's looking at bigger pieces of equipment, too. "You pay a little more for the bulk of the items but they actually save a lot of money in the long run."

While sandwich chains generally don't rely on a lot of heavy-duty cooking equipment, they tend to have complex refrigeration systems to keep deli meats, cheese, salad fixings and other products cold. McAllister's, Arby's and Fresh City are no different from other operators in that they each have walk-in coolers and freezers, but the size of them sways toward the larger end given the amount of fresh product they go through each day