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3 Ways to Cut Menu Costs

3 Ways to Cut Menu Costs

Industry heavyweights offer road-tested strategies behind cost-cutting menu innovation.

Finding cost effective menu solutions is half the battle. Turning them into top-selling and signature items? That takes both culinary creativity and sound strategy. The panel assembled for the 2012 National Restaurant Association's well-attended educational session, "Cost Effective Menu Ideas That Keep Customers Coming Back," shared their tried-and-true strategies. Harry Crane, executive chef, Kraft Foods Group and past president of the Research Chefs Association (RCA), moderated. The audience took furious notes and asked great questions. We captured the bottom-line highlights for you here.

2012 National Restaurant Association Panel
Harry Crane

Harry Crane
Panel Moderator
Executive Chef, Kraft Foods Group and past President of the Research Chefs Association

Marshall Scarborough

Marshall Scarborough
Research and Development Chef with Popeyes® Louisiana Kitchen

Mackenzie Gibson

Mackenzie Gibson
Sr. Product Innovation Manager, SONIC, America's Drive-In

Tate Dillow

Tate Dillow
Program Leader, Domino's Pizza

#1 Innovate with Proteins

The boneless, skinless chicken breast doesn't usually inspire. But it can—and it did—at Popeyes Louisiana Kitchen, a chain with more than 2,000 restaurants in 27 countries. Innovation with processing led to a few of the brand's most successful promotions. Seeking cost effective menu ideas, this chicken-centric quick-serve looked at moving the step of further processing to back-of-house operations. It also looked at the chicken breast with an eye toward menu distinction and cost effectiveness. This two-pronged strategy resulted in two of the brand's most successful promotions:

Wicked Chicken, an LTO that launched in June 2010

In the test kitchen, Scarborough cut the breasts into thin strips, marinated them in Louisiana seasoning and dressed them with Popeyes' proprietary crispy coating. "When it fried up, it would be all gnarly, twisted and mangled," he says. To further its wickedness, he served it with a mini bottle of TABASCO® Pepper Sauce and buttermilk ranch dipping sauce. He bundled the chicken with Cajun-spiced fries and a buttermilk biscuit, selling it at Popeyes' sweet spot of $3.99. "We sold the product at a great value to manage our franchisees' food costs so they can hit their margins, driving traffic and bringing customers back," says Scarborough. It also won the 2011 Nation's Restaurant News Menu Masters Award for Best Limited-Time-Offer.

Dip'n Chick'n, an LTO that launched in October 2011

Again, looking to the chicken breast for menu innovation, Popeyes rolled out another huge hit, Dip'n Chick'n. Here, the breasts were cut into thin medallions. When battered and fried, they formed perfect scoops, ideal vehicles for Popeyes' blackened buttermilk ranch dipping sauce. "This was just as much about the dip as it was the chicken," says Scarborough. In fact, customers got a 2 oz. portion of dipping sauce. "It eclipsed Wicked Chicken as our most successful promotion ever, and since we kept the marination, batter and breading in the back of house, we kept the price point at $3.99."

#2 Use Existing SKUs in Craveable, Signature Applications

Domino's Pizza has strict operational limitations not typical of most independents, yet the pizza giant still managed to innovate recently with a cost effective product. "You have to know what your challenges are in order to ever start innovating," says Tate Dillow. "We're Domino's Pizza…but we can't just sell pizza. The industry is saturated and we're all fighting for market share, so I'm going to give you another reason to come to Domino's to buy something besides just pizza."

Parmesan Bread Bites, added to menu in February 2012

Using what was already available in Domino's stores, Parmesan Bread Bites answered a call. "Pizza, typically, is a sharing occasion," says Dillow. "What does everyone hate about breadsticks? The double dipper. How about a small bite, where one dip is plenty?" That was the thought starter. The next question, which most operators understand, was: "What else can we do to that?" Domino's added Parmesan and Asiago to the dough and served it with a marinara dipping cup. "Using our dough that we make at our supply chain centers. No new SKUs, and then we have a product that is low cost for our operators," says Dillow. "It was another really good success story for Domino's."

Stuffed Cheesy Bread, added to menu in November 2011

Using existing SKUs, Domino's reinvented its cheese bread and rolled out three flavors: Cheese; Bacon and Jalapeno; and Spinach and Feta. "We asked, how do we get more cheese on dough?" says Dillow. "We put it inside…we also put toppings on the inside. So we did toppings that were reaching out into the niche." This has been doing extremely well for Domino's, but he points out that had it failed, it wouldn't have made a huge impact. "We would have just quit airing it. We had nothing else invested in it," he says. "We already had the dough. We already had the cheese. We already had the toppings. Very cost effective."

Take the products you love further. Here, we house build-out charts that show how to move base products into signature dressings, dips and sauces. Developed by the chefs at the Kraft Culinary Centre.

#3 Get People Who Love You to Come Back

It costs more for marketers to get new people through your doors than it does to entice regular customers to come back more often, says SONIC Drive-In's Mackenzie Gibson. "How? Outstanding experience, great tasting food. Give them the total package at a price point that's reasonable," she says. "Build upon what they like from your operation." If you build it, as the saying goes, they will come—because they already like you. Her advice is to give them more reasons to like you. "We have a lot of repeat customers because we're building upon what they like from SONIC," says Gibson.

Regional all-beef hot dogs, introduced in March 2011

The foundation for this successful line of regional hot dogs was already on the menu. SONIC, with more than 3,500 drive-ins nationwide, built upon its existing foot-long Chili Cheese Dog with a roll out of four premium six-inch all-beef hot dogs: New York Dog, Chicago Dog, All-American Dog and the Chili Cheese Coney Dog. The Chicago Dog runs for $2.29 and the other three are $1.99. Winning the 2012 Menu Masters Award for Best New Product, Gibson points out a value/cost win: "Two hot dogs go down pretty darn easy." Bringing together the food-truck trend and the high-end hot dog trend, and then placing it skillfully in SONIC's brand universe, she says this menu innovation "builds on something that we're good at and builds upon something that our customers know us for. The bottom line is that you have to make money with these products. Align with your vendors. Create a vision for your customers and make it come alive."

Soft serve upgraded to real ice cream, introduced in April 2010

Looking to provide better value to its customers and attract repeat business, SONIC revamped its soft serve, using real ice cream and adding premium flavor builds. "We knew they liked our soft serve," says Gibson. "If we made it real ice cream, more luscious and rich, they might come back more often to get it, and that's exactly what we've seen." SONIC's most successful ice cream promotion in 2012? Red Velvet Cheesecake Blast. Inspired by a company dine-around in New York, it was the brand's way of taking a premium experience of red velvet cheesecake and melding it into a familiar, affordable product. "Coming to SONIC, you get the best of both worlds," she says.

A fun combination of the hot dog and loaded fries trend - Chicago Dog Fries Need more cost effective strategies? Read the great takeaways from the 2011 panel discussion.
3 Ways to Innovate & Save