When company executives at Penn Station East Coast Subs wanted a new menu offering, they turned to an easy-to-execute solution that minimally impacted their bottom line: tortillas.
About 30 restaurants are soft-testing Penn Station sandwich-wrap products, with a hard launch, including a supplemental advertising campaign, expected this fall.
The menu item was easy to implement and has a great portability factor, said Penn Station president Craig Dunaway.
"We already have everything at the restaurant," Dunaway said. "It's just putting the sandwich in the wrap instead of on the bread."
Penn Station uses a jalepeno cheese tortilla as its wrap of choice, although other tortilla options
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— such as sun dried tomato and spinach — are available from a variety of suppliers.
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"We experimented for a long time before we felt like we got what we wanted," Dunaway said. "We're not big on menu additions. We believe each time you add an item you're cannibalizing your menu."
Sandwich wraps are becoming a popular staple across all restaurant segments (even McDonald's offers several snack wrap options).
According to the Mintel report, Sandwiches, Subs and Wraps, that market has grown 70 percent since 1999, from sales of $9.9 billion in 1999 to $16.8 billion in 2004. According to the report, growth has stemmed from chains such as Panera Bread, Quiznos and Subway, and consumers' focus on healthful menu alternatives.
Dunaway said consumer popularity did not push Penn Stations sandwich-wrap rollout, the company does monitor consumer trends.
"Some franchisees thought we needed to add it quicker," he said.
Although consumer acceptance has been slow, Dunaway and other Penn Station franchisees are looking at its long-term sustainability with a 'wait-and-see' approach.
"Personally, and from what I hear so far from our customers, it's a great addition," said franchisee Don Robinson. Robinson, along with his partner, operates 14 Penn Station locations — 12 in and around Louisville, Ky., and another two in Raleigh, N.C.
Some of Robinson's locations were the first to test the sandwich-wrap products, initially served inside a cold tortilla. He said the addition hardly impacted operating and make-line procedures, and is now grilled to bring out more flavor.
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"It wasn't a great menu item as far as its percentage of sales, but I'm anxious to see what it does with some marketing behind it," Robinson said. "What our hopes are is it will bring in that customer that comes in once a week to more times a week."
Company executives also hope the new menu item will bring in customers looking for healthier menu options or on-the-go alternatives.
According to the 2005 Fast Casual article, Casual Faster: Investigating the market potential for take-out, the growth of take-out offerings from fast-casual restaurants was expected to reach double digits in 2006. And recent industry studies have supported that continued growth pattern.
Dunaway said the menu addition should speak to both health-conscious and busy consumers, while providing an increase in sales, much like their salad offerings have.
"In a couple of years, from a percentage standpoint, I think (sales from wraps) will be two, three or four percent of our sales," he said. "Even if it doesn't take off right away we'll still leave it on the menu for the next year or two."
