Experts weigh in on cost effective menu improvements

 
May 17, 2012 | by Alicia Kelso

Domino's Pizza has had quite a successful year as its overhauled pizza recipe continues to resonate with consumers. So, too, has its new products such as stuffed cheesy bread and parmesan bread bites.

The parmesan bread bites – introduced in February – are the brainchild of longtime franchisee Brian Edler of Findlay, Ohio. According to Tate Dillow, Domino's "Chicken Chef," the item is a perfect example of cost-effective menu innovation, as it used what was already available in Domino's stores.

Dillow was part of a panel at a National Restaurant Association Show session held last week titled "Cost Effective Menu Ideas That Keep Customers Coming Back." He was joined by moderator Harry Crane from Kraft Foods Inc., Mackenzie Gibson, product innovation manager from Sonic Drive-In, and Marshall Scarborough, R&D chef from Popeyes Louisiana Kitchen. Each discussed how their brands used cost effective approaches to menu innovation.

Marshall Scarborough, Popeyes

Scarborough said Popeyes typically spends about 18 months testing new menu items. The test involves research, ideology sessions based on feedback, operations, market tests and sometimes re-testing.

Scarborough outlined specific limited time offers that have been particularly successful for the brand, all of which were created using cost-effective methods, such as further processing in the back of the house, instead of having it done by a third party and then shipped frozen. By taking out the middleman, Popeyes was able to keep its price point low on its popular chicken and seafood items. Scarborough explained the R&D process for some of the chain's biggest LTOs.

  • The Wicked Chicken, launched in June 2010, was Popeyes' first global LTO. "We figured we would get a lot better value and quality if we took the further-processing step to the back of the house. This allowed us to keep our price point under $4, at $3.99," he said. During its creation, the Popeyes' team innovated by "taking a different look at how to cut up chicken; we did it all tangled and twisty," Scarborough said.
  • The first line extension from this was the Garlic Pepper Wicked Chicken, which launched in February. Scarborough said this launch boosted sales 15 percent to 16 percent at some units.
  • The Dip'n Chick'n, rolled out in October 2011, was inspired by Fritos Scoops. "This was just as much about the dip as it was the chicken. Again, we just figured out a new way to cut the chicken, in a medallion shape so that it would form a scoop when fried," Scarborough said. "This eclipsed the Wicked Chicken as our most successful promotion ever, and since we kept doing our further processing in the back of the house, we kept the price point at $3.99."
  • The Rip'n Chick'n was released shortly thereafter, and was inspired from a mistake the R&D team made while cutting the Wicked Chicken. Popeyes is planning on re-launching this item in June.

"We've had a great deal of success with all of these, and we did it by innovating new products using what we already had in our restaurants," Scarborough said.

Mackenzie Gibson, Sonic

Gibson explained a similar cost-effective process for Sonic using its popular beverage platform.

"It's about building upon what you're good at and for us that includes drinks. It's cost effective for us. There are 398,929 drink combinations at Sonic," she said.

Gibson also pointed out the chain's successful move from soft-serve ice cream to real ice cream. The switch took 24 months and features a more expensive product, but the benefits were realized immediately.

"We could take that new real ice cream platform and roll out a Red Velvet Cheesecake Blast, for example. The flavor is more upscale and our customers like that. This became one of our most successful promotions," Gibson said.

Finally, Gibson pointed to Sonic's successful rollout of premium beef hot dogs last year. Hot dogs, she said, are on trend because of regionality and the increased presence of food trucks. The chain already had chili cheese dogs on the menu and was able to create a full lineup from that base.

"Also, your vendors make or break your product. They need to be on deadline and make sure it's cost effective. Then marketing and operations get involved. It's about innovating what you're already good at. People already love you and your restaurant, play off of that," Gibson said.

Tate Dillow, Domino's Pizza

Dillow said innovation, for Domino's, is important because pizza is such a saturated market and it's difficult to differentiate.

His tips for creating cost-effective menu ideas include:

  • Know your customers. "Find out what's in their heads. We actually asked them and we found out our pizza wasn't good. We had a challenge we needed to fix. Once we did that, we started selling twice as many pizzas as we used to," Dillow said, referring to Domino's new recipe introduced in late 2009.
  • Innovate while staying true to the company's strengths. For example, Domino's added even more cheese to its cheesy bread because, "we found out people who order it like cheese," Dillow joked. The chain went a step further in offering variations, stuffing the cheesy bread with bacon and jalapenos or feta and spinach.
  • Listen to your operators. "We're in a test kitchen all day. They're actually out there," Dillow said. Operators also have a strong pulse on what is available – such as dough, cheese and toppings. This is how the Parmesan Bread Bites came to fruition. "Everything for the bites was already in-house, so it was a low cost rollout for us," Dillow said. "Use your current pantry – it reduces risk and waste, and your customers are already familiar with it."
  • Utilize current cooking platforms. In addition to bringing in as few SKUs as possible, create menu items that don't require additional equipment.
  • Create a destination driver. "For us, this is our Artisan pizza line – it's what separates us from our competition. People enjoy it, it excites them and they know they can't get it anywhere else," Dillow said, pointing to Outback Steakhouse's Bloomin' Onion as perhaps the biggest example of a destination driver. Analyze trends.
  • Finally, know what's going on in the industry, and walk the fine line of risk-taking. "The more you innovate the creation, the more reluctant the customer will be to try it," Dillow said. "It comes down to how much of a risk you're willing to take."

Read more about food and beverage innovations.


Topics: Business Strategy and Profitability , Cheese , Domino's Pizza , Financial Management , Food & Beverage , Marketing / Branding / Promotion , Operations Management , Pizza Sauce , Pizza Toppings , Research & Development / Innovation , Trends / Statistics


Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.
View Alicia Kelso's profile on LinkedIn

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