Article

Premium bread takes the sandwich to new heights

If anyone needs proof the Atkins scourge on bread is long gone, take a peek at the menu mix in most fast-casual concepts. You'll see that sandwiches rule.

April 2, 2006

If anyone needs proof the Atkins scourge on bread is long gone, take a peek at the menu mix in most fast-casual concepts. You'll see that sandwiches rule.

No, not roast beef on rye or turkey on wheat toast. We're talking roast pork loin on thick-sliced sourdough, grilled vegetables and shrimp swaddled in pita, and fresh mozzarella, tomatoes and basil hot-pressed between slices of ciabatta. Baguette and focaccia, formerly found only in fine-dining restaurants, are now bookends for flame-grilled chicken and seared tuna sandwiches in fast-casual restaurants.

"The real hot-shot artisan bread is what people are wanting," said Jerry Couvaras, chief executive and president of 170-unit Atlanta Bread Company. "People are going for the more exotic breads like baguette, sourdough, ciabatta and focaccia. The sandwich has gone a long way away from run-of-the-mill white breads."

The real hot-shot artisan bread is what people are wanting

-- Jerry Couvaras, chief executive and president of Atlanta Bread Company

Not to mention run-of-the-mill fillings, condiments and prices. The standards of yore are still available, but they come with a twist. Hams are wood-smoked or imported from Italy; roast turkey comes rubbed with Cajun spices; and chicken is marinated in soy and garlic. Mayonnaise is spiked with fiery wasabi and citrus blends, and hummus steps up as a hearty spread for whole-grain breads.

All of this comes at a cost, of course. The fare for a premium sandwich, without a side item or beverage, ranges between $4 and $8. The great news is the core premium-sandwich customers, generally ages 25-55, don't balk at the cost and they've got the disposable income. That equates to some serious sales, according to Technomic researcher Joe Pawlak.

"The segment is growing pretty aggressively," said Pawlak, a vice president with the Chicago-based firm. "In 2004, it grew 18 to 20 percent."

In the sandwich segment, premium bread attracts consumers looking for more upscaled menu items. (Penn Station)

Variety is driving that growth as well, said Alex Rechichi, president of Extreme Pita, a 180-unit chain based in Toronto.

"It's becoming common that people want more interesting offerings and they're willing to pay more for something unique and quality-oriented," Rechichi said. "People are very interested in anything that's different because today's palate is much more mature than it was even 10 years ago."

Customers also like the "show" that's all but standard now in the segment. Craig Dunaway, president of Cincinnati-based Penn Station East Coast Subs, said that as the minutes pass while his customers wait for their orders, he wants them to take in a visual feast through the wide-open kitchen.

"I want them to see the product at all times, whether it's through our display cooking or the fresh products in the deli case," Dunaway said. "I want them to see the name brands we use so they know we're using high-quality products—that we're slicing those meats, not some private label brand they don't recognize."

Pawlak said display cooking and assembly has become a line of demarcation between ordinary sandwich shops and fast-casual restaurants serving high-end sandwiches. Quite simply, customers like seeing their food prepared. "And even though, from a service standpoint, that may take longer than in a fast-food restaurant, they feel it's worth the wait," Pawlak said.

For the 'health' of it?

Consumers enjoy premium breads and variety. Extreme Pita keeps customers happy with their grilled wraps, Pita Pizzas and salads. (Extreme Pita)

Leveraging the attributes of "fresh, made-to-order" offerings has created a debatably undeserved image of healthfulness for fast-casual sandwich restaurants. While it's true that scratch-made food is better for the body than heavily processed foods, many premium sandwiches wouldn't wind up on a Weight Watchers top-10 list of low-calorie loves.

"I believe that some time ago, Technomic called it 'better for you' food," said Phil Friedman, chairman, president and chief executive of McAlister's Deli in Ridgeland, Miss. "So, no, these sandwiches aren't nutrition driven in a secular sense. But since they're fresh, there's a sense they're healthier."

Many customers—especially older ones watching their diets—are conditioned to view fast-food dining negatively, Pawlak said. And those who choose premium sandwiches often assume they're healthful because the restaurants are devoid of common fast-food fixtures such as closed kitchens, fryers, heat lamps, microwave ovens and drive-thru windows.

And while that perception isn't entirely justified, perception is reality.

"What (fast-casual) restaurants are putting out, from a fat and calorie perspective, is pretty comparable to fast-food," Pawlak said. "But they're using fresh meats and fresh vegetables, which the customer sees as 'better for me' than having a fast-food hamburger."

Extreme Pita's slogan is "Fast, fresh and healthy," and Rechichi said promoting nutritious offerings is both deliberate and truthful.

"Pita is perceived as a healthy bread because it has no cholesterol, no salt and no trans-fats. Combined with the toppings we offer, that makes our products very healthful," he said. "The truth is also in the taste. Too often people don't associate tasty and delicious with healthy food."

Building permit

Fast-casual sandwich operators disagree somewhat on the number of menu options necessary to keep customers interested and returning for more. Penn Station's Dunaway views a streamlined menu as crucial to operational simplicity and reflective of customers' real desires. Though the chain offers just one bread choice, he said he rarely hears complaints about a lack of options.

"I just don't think the customer's going to come in more often because they have a second bread choice," he said.

Atlanta Bread Co.'s Courvaras believes otherwise, so his company serves up 17 breads.

"If they're in a sandwich environment, they like to see 20 sandwiches whether they try them or not," he said. "I do like to think customers venture out a little, though they go to their favorites more often than not."

McAllister's Friedman said the company's 100-item menu can even be overwhelming to new customers, but he said research shows they find it enticing enough to experiment on return visits.

"I would say that seven out of 10 times, they'll choose their standard items," he said. "But what customers want is the ability to manage your menu. They want the right to say, 'I want that, but not that,' because they like to customize their choices."

Consumers like to watch their sandwich being made. (Extreme Pita)

Rechichi sees the chance to choose food options as liberating for customers. "For the last 40 years they've lined up, picked what they wanted to eat off the menu, and that's what they ate. But today, customers are more sophisticated, and those concepts that are on cusp of new flavor trends will allow customers to customize their food and be adventurous in their flavor selections."

Mark Roden agreed and said if operators make a flavor claim about a sandwich, customers expect it to live up to their expectations.

"When you say something you're selling is spicy, it better have something spicy in it," said Roden, a 50-unit Subway franchisee in Phoenix. "If you tell them it's a Buffalo chicken sandwich, it should taste like Buffalo chicken wings."

While hot sandwiches are nothing new, they've never been more popular. The availability of panino, the Italian hot-pressed sandwich, is soaring in the U.S., and the success of oven-toasted sandwiches in fast casual even led quick-service chains like Subway to add them to the menu in 2004.

"Our Italian BMP (salami, pepperoni, ham, cheese and vegetables) is a whole different sandwich when it's toasted, and people who've eaten that for a long time say they like it better that way," said Roden. Toasted sandwiches also boosted dinner sales at the chain.

Still, Roden said toasting a Subway sandwich and commanding a higher price for it doesn't make it a sandwich truly comparable to higher-end fast-casual offerings. The customer who craves a toasted Subway BMT isn't always the same who wants a panino.

"There's a limit to what a Subway customer will pay," he said. "Value to him does include quality, but it also has to do with portion size. He thinks of both when he considers the price."