Bread Winners

April 1, 2002

On a lot of restaurant and pizzeria menus, sandwiches are relegated to a sort of "other" category where operators never put core-concept products.

But it appears that such disrespect for this humble but wholesome fair is changing faster than you can say hold the mayo.

Whole chains like Panera Bread Co. are raking in the cash selling what are commonly called "premium sandwiches" in restaurant nomenclature. No Wonder Bread or Oscar Meyer bologna here. These creations are constructed from fresh breads, high-quality meats and veggies, and increasingly served with condiments beyond the mayo and mustard realm.

Arby's was so impressed with the premium sandwich trend that the fast-food veteran developed its own "Market Fresh" line last year. Since then, the chain's "Five for $5" roast beef commercials have given way to slick TV spots showcasing smoked turkey sandwiches topped with bean sprouts and surrounded by thick slices of multi-grain breads. At $4 to $5 a pop, the sandwiches cost 50 percent more than the chain's namesake roast beef offering.

McDonald's also acknowledged the super-sandwich trend by spending an undisclosed sum for a 33 percent stake in Pret A Manger. The British chain serves sandwiches with grandiose monikers like Coronation Chicken (with curry dressing, mango chutney and between slices of malted-grain bread), and sells them for $5.25.

Nothing New

In reality, sandwiches aren't newcomers to a lot of pizzeria menus. Some might even argue that pizzerias led the premium sandwich trend by serving subs, heroes, strombolis and endless versions "a la Parmigiana" for generations.

Hungry Howie's Pizza has a long track record selling sandwiches alongside its pizzas at its 438 United States outlets. The Madison Heights, Mich.-based company also serves them on bread made from its pizza dough.

Included on the sandwich menu are steak, cheese and mushrooms; ham and cheese, pizza sub and pizza sub deluxe, turkey and turkey club, and even a vegetarian option. A number of Hungry Howie's also offer gyro and meatball sandwiches.

"Sandwiches are a substantial part of our business," said Jeff Rinke, Hungry Howie's vice president of marketing and product development. About 15 percent of the company's food sales come from sandwiches, which sell the best in its southern markets. "They're necessary to have for those customers who want more than pizza. By offering sandwiches, we're able to meet their needs."

Referring to the Pizza Hut P'Zone, rolled out nationwide this year, Rinke said Hungry Howie's calzone-style sandwiches sell very well, are "very similar to the P'Zone -- and they've been around a lot longer. It's a calzone-like sandwich, where the dough is folded over, but not sealed. The ingredients are baked inside the pizza dough."

To help minimize inventory, Rinke said the chain's sandwiches are built from ingredients already used for pizzas.

Small pizza outlets like A. Papanos Pizza of Beulah, Mich., are also into sandwiches -- but not because co-owner Andrew Miller wants to be.

"I really wanted to do just pizza, but unless you're a big operation, it's very tough not to sell sandwiches, as part of your menu. The big pizza chains are so dominant they've forced us into sandwiches."

Gus Verginakis
Gus's Pizza, Edgewood, Md.

"I'd rather sell pizza. Our returns are better," said Miller, whose 9-year-old company sells six different sandwiches at its six locations (two of which are in Germany). Sandwiches are a bit of hassle, he said, due to multi-step assembly and the need to carry additional inventory. "It was too difficult for a company our size to stock everything we needed in order to offer more."

Despite that, Miller said sandwich sales account for 23 percent of his business, and that he'll soon add gyros. "I believe they'll be good for us. No one else in our area sells them."

Sandwich sales make up 40 percent of the sales mix at Gus's Pizza, in Edgewood, Md. Owner Gus Verginakis said that figure nearly equals his pizza sales.

But like Miller, Verginakis wishes he didn't have to sell sandwiches. The additional food prep time and equipment needs strain present resources, he said.

"We tried to get away from it, but found we couldn't," said Verginakis. "I really wanted to do just pizza, but unless you're a big operation, it's very tough not to sell sandwiches, as part of your menu. The big pizza chains are so dominant they've forced us into sandwiches."

The P'Zone's performance at Pizza Hut backs Verginakis' claim that chain players have forced independents to compete with unique options. (Pizza Hut spokesperson Patty Sullivan insists the P'Zone isn't even a sandwich, rather, as the company advertises, it's "the pizza you eat like a sandwich.") Though the Pizza Hut was "looking for new ways to introduce pizza to the market," Sullivan said, it found its customers wanted "the convenience of a sandwich," and thus, the P'Zone was born.

Look at the Competition

While it's clear that Subway, Blimpie, Schlotzsky's, Panera Bread Co. and other sandwich chains don't compete directly with pizzerias, the fact remains that those companies are grabbing a larger share of stomach.

According to The Wall Street Journal, Panera notched $529 million in sales in 2001, while Schlotzsky's Web site reported $423 million for the same period.

Chicago-based food trend watcher Technomic also reports that sales of custom-made sandwiches are rising 15 percent annually -- much faster than the 3 percent growth rate for hamburgers.

The question then becomes: Why the growth?

In addition to premium ingredients and breads (even Subway now fresh-bakes a half-dozen different breads, including some multi-grain options that exceed the quality of its standard sub rolls), some industry observers claim that sandwich chains have targeted the 25 to 45 year-old demographic that wants wholesome and healthful offerings.

Dennis Lombardi, Technomic's executive vice president, leans toward simpler explanations as to why sandwiches in and of themselves are so darn popular.

"There's a tremendous variety available and they're available in all prices ranges, from very low to very upscale," he said. "Sandwiches are perceived to be fresh and are often made to order ... they're hand held, so they're very portable and travel well."

Topics: Dough , Independent Operation

Sponsored Links:

Related Content

Latest Content

comments powered by Disqus