MARCO ISLAND, FL — When it comes to success in quick service restaurants (QSR), flexibility and communication are the names of the game. That’s what members of the QSR Business Panel, hosted by Commercial Baking’s editor-in-chief Joanie Spencer, preached as they answered questions at the BEMA Convention today.
The panel involved two pairs of QSR and bakery partners: Hector Morales of Aspire Bakeries and Anthony Tsocanos of Subway, and Ethan Hart of Custom Foods and Farrellynn Wolf of Goodcents. They discussed the hard-hitting days of the pandemic, how to move forward efficiently and changes they’re seeing as in-person life resumes while an online presence still remains strong.
Companies in the QSR space had to be creative and resilient throughout the pandemic. It was hit hard, with nearly 110,000 temporary and permanent restaurant closures over the course of 2020. But sales rebounded to pre-COVID levels in March through April of 2021, signaling a promising future for the years ahead. Factors such as limited seating; being takeout-friendly and price-friendly; and offering comforting, classic food led to the resurgence in growth.
When asked about overcoming challenges with rapid growth and managing inventory across multiple locations, Tsocanos said that Subway’s strong partnership with its supply chain was essential. Understanding how to place orders and make sure stocks are at a good level through good communication has been huge for Subway and Aspire together.
“As we’re starting to see recovery and guests coming into restaurants, the last thing we want to see is customers walk out the door because we don’t have sandwiches,” Tsocanos said. “It’s been a huge exercise in flexibility that we couldn’t have pulled off without an open line of communication through the whole supply chain.”
Wolf echoed Tsocanos on how critical this communication and collaboration has been with both suppliers and distribution centers.
“We are really working with our distribution centers across the country to get products to our franchises and making sure we can communicate effectively, and reboot supplies weekly,” Wolf said.
“As we’re starting to see recovery and guests coming into restaurants, the last thing we want to see is customers walk out the door because we don’t have sandwiches,” Tsocanos said. “It’s been a huge exercise in flexibility that we couldn’t have pulled off without an open line of communication through the whole supply chain.”
When discussing technology coming into play to streamline the ordering process, Morales said that Aspire Bakeries is considering it from both the storefront and the back end. They need to be proactive and reactive simultaneously.
“Even before the pandemic we realized that we had to be more nimble,” Morales said. “Being able to predict waves of orders triggered by inventory levels, for example, that all comes from communication and information exchange.”
Aspire is also focusing on making products with a longer shelf-life for a storefront solution as well as implementing GS1 technology into their product labels. This allows them to track their products as they travel through the supply chain until they are sold in store.
Hart said there haven’t been any huge technology changes on Custom Foods’ end, but that change in communication channels has been big for them as well. An open line helps prevent disruptions for their customers.
“We made a concerted effort to make sure we are providing solutions for these customers,” Hart said. “We’re taking their word of mouth as to what their needs are.”
The panel also moved into e-commerce and how that affects operations at the store and supplier level. Online ordering and third-party deliveries have been a saving grace for restaurants when people were staying home, but now it presents uncharted waters when it comes to inventory tracking and quality control.
“With things like curbside pickup and online ordering that came upon us really quick, we had to act fact because we had to compensate for those last 18 months,” Wolf said. “With that is better sales, but also more product needs. We want to make sure we are sufficiently covered, and that’s the most important thing for me.”
Tsocanos said Subway is also grateful for e-commerce, but is faced with a challenge when it comes to building an online tool that gives consumers that authentic experience of a brand. Throw in the lack of quality control once the product leaves the store in the hands of an unknown delivery driver, and it can be pretty scary.
“Subway was built on customization and seeing it in front of you,” Tsocanos said. “If you’re an olive guy, you want those olives and want to see a lot of them going on there — online tools are fantastic, but how do you build a robust tool that gets customers what they want? How do you handle that third party delivery better from a quality perspective?”
Although Tsocanos didn’t have all the answers, he said packaging innovations and product innovations, even down to ingredient formulas, will be big factors in figuring it out.
“I don’t think it’s going away, and there’s always going to be a question on if it makes more sense to invest in your own delivery process,” Tsocanos said. “I don’t know if Subway will end up doing that, but the control from a quality perspective is everything.”
