News

Marco's says new commodity price tool is 'game-changer'

February 22, 2017

Leaders at Marco's Pizza say a new tool they're using is a "game-changer" for the rapidly growing chain because it gives them solid predictive information about how much they're spending on commodities, as well as how much those products are expected to change in value in the year ahead.

Marco's and the food commodity economics company, the American Restaurant Association or ARA, recently worked together to create the tool which they said tracks all the chain's main menu ingredients on a cost analysis from now into the near future, based on monthly market forecasts for the year ahead.

"With this tool, we are able to forecast store food costs in a way that no one else in the industry has been able to up to this point," Marco's Vice President Don Vlcek said after spearheading the project with the ARA, according to a news release. "It’s a game changer for our brand, and will revolutionize the way our industry operates. The ability to provide our stores with far-advanced notice of when they should market certain food items, and the price points at which they market them, gives us a competitive advantage, while still offering customers periodic special deals on the products that they love."

In pizza restaurant operation, ARA relays that approximately 30 percent of restaurant revenue goes to pay for food commodities like cheese and wheat, which both are monitored on this site each Mondayin our weekly commodities report. Marco's sees the predictive technology at the center of this technology as a competitive asset capable of giving restaurateurs an edge in an ultra-competitive and populous restaurant sector.

That key value was one that ARA and Marco's discovered together after the ARA already had the technology in place for long-term commodity market value prediction. After connecting with Marco's leadership, it became clear that early access to such market information could be invaluable for the chain. After all, with an accurate, scientifically created source of such information, franchise operators could get the inside track on marketing and menu promotions that took greatest advantage of the best commodity values at any given moment. 

"It’s a game changer for our brand, and will revolutionize the way our industry operates. 

Marco's said in a news release about the relationship that franchisee, like Angelo Ialacci, expect the tool will greatly support efficient operations at his eight stores in southeast Michigan this year, since the ARA tool relays solid information in ample time for his team to create and promote deals that give the businesses the best bang for their buck. But one of those involved in creating the tool at American Restaurant Association, Inc., David Maloni, said when they started working on the technology they thought it would ultimately be most useful for national supply chain evaluation.

"Marco's Pizza was able to take the technology we had created and transform it in a way that can positively impact their franchisees' bottom line," he explained. 

Marco's is performing exceptionally well according to recent reports. In fact, ,the chain has doubled in size in just five years and now leadership sees this latest tool as a step toward even greater growth and success in the years ahead.

"One of our company tenets is 'we accelerate innovation,' " Marco’s Pizza President Bryon Stephens said. "We were a co-creator of a forecasting tool that will not only benefit Marco’s but potentially the industry. It’s exciting to be a part of something much larger than ourselves."