Editor’s note: How does a major restaurant chain approach new product and menu development? Prepared Foods addresses that topic with Len Van Popering, senior vice president of Product Development & Innovation, Arby’s Restaurant Group Inc. Van Popering joined Hala Moddelmog, Arby’s president, and Neville Craw, Arby’s corporate executive chef, in a new product talk at David Michael & Co.’s annual Innovation Roadshow. Prepared Foods contacted Van Popering shortly after the event.
Prepared Foods: How would you describe the business climate for multi-unit chain restaurants?
Len Van Popering: Even with tough economic conditions, I’d describe the current climate as an exciting one. The industry is certainly as competitive as it’s ever been, with a thin line between gaining and losing market share.
Contributing to this intensification, consumers are looking for both value-oriented offerings, as well as indulgent options. Their expectations for service have never been higher, and -- thanks to the proliferation of food-oriented television programming -- consumers are looking for a wider variety of ingredients and flavors. Despite all the changes, one consumer demand remains constant: great-tasting, freshly prepared food, which is something we all take seriously at Arby’s.
PF: What are Arby’s core strengths? What makes it unique?
LVP: Arby’s is an international, iconic brand with more than 3,400 units and annual system-wide sales of approximately $3 billion.
Arby’s is well known for slow-roasted and freshly sliced roast beef and premium turkey sandwiches, and for our famous Market Fresh deli-style sandwiches, wraps and salads, made with wholesome ingredients. We’re a modern-day sandwich shop, and we’re also able to serve our guests with the speed and convenience of a drive-thru. That’s something that sets us apart.
Another key differentiator of Arby’s is that we freshly slice our meats in-house and prepare our sandwiches when they’re ordered. We know our guests value this attention to detail, our fresh preparation, and “craveable” tastes they can only get at Arby’s.
PF: What are the attributes of a “winning” new product for Arby’s?
LVP: An ideal new product is first and foremost a menu item that tastes great and appeals on many levels to our most loyal guests. Of course, I’m also looking for options that help us achieve business objectives on a number of fronts -- including the ability to drive top- and bottom-line financial performance; increased visit frequency; ease of operations; and delivery of key brand goals.
Most of the time, we’re aiming to introduce sandwiches, sides and beverages that immediately resonate with our target audience. We deploy a rigorous testing process that helps us understand whether the idea of a new menu item resonates with our guests before we begin formal product development. So far, this approach has enabled us to dramatically improve our “hit rate” and has contributed in a significant way to Arby’s achievement of 10 consecutive quarters of positive comp same-store sales.
Often, the most impactful innovations are fundamentally simple ideas -- ones that seem so obvious, once the idea takes form. A great example of this is Arby’s new King’s Hawaiian Roast Beef sandwich, a limited-time offer we promoted this May. We paired our classic Roast Beef with a soft, irresistibly delicious King’s Hawaiian bun. The idea was simple, but the resulting product -- a fantastic marriage of sweet and savory -- hit the spot with our guests in a way that even caught us a little off-guard.
PF: What are a few of your favorite new products?
LVP: With so many options, it’s hard to know where to start! In 2012, Arby’s launched a number of new hot turkey sandwiches. The Grand Turkey Club, in particular, has been widely popular among our guests. The sandwich is served hot on a toasted harvest wheat bun with sliced roast turkey, melted Swiss cheese, pepper bacon, leaf lettuce, tomato and mayo. It’s really delicious!
Another personal favorite, King’s Hawaiian Roast Beef sandwiches, first debuted as a limited-time offer, and they were a huge hit. Our guests love King’s Hawaiian bread and they crave Arby’s roast beef, so the combination creates the ultimate sandwich. We also offered a version with Swiss cheese, pickles and a creamy Dijon spread.
Guests at Arby’s also have embraced our new slider-style snack items, called Mighty Minis: value-priced roast beef sandwiches in a variety of flavors on a soft duo-bun. Earlier in 2012, we also introduced one of our most popular desserts ever: Arby’s Molten Lava Cake.
PF: Let’s shift from desserts to health. How do you address nutrition concerns?
LVP: Our guests, like many consumers, are looking for ways to make healthy food choices without sacrificing great taste and satisfying dining experiences. A cornerstone of our philosophy is offering options.
For example, we recently changed our Kids Meal to include more nutritious choices, including apple slices as the side item (instead of fries); a Junior Turkey and Cheese Sandwich option; and a choice of low-fat white milk, Capri Sun 100% fruit juice or bottled water. We also added the option for our guests to select a freshly prepared side salad, instead of fries, with any combo meal at no additional charge.
PF: Do you give a food processor supplier of the year award? If so, who won it in 2012… and why? If not… but if you were to give one… how could/would a food processor truly stand out as a preferred supplier for you?
LVP: Arby’s supply-chain cooperative, ARCOP Inc., offers supplier of the year awards every two years at Arby’s Worldwide Franchise Convention. The awards are called Arby’s Red Hat Supplier Achievement Awards, and they spotlight suppliers who have provided superior levels of service and support to the Arby’s system.
Arby’s 2012 food processor winners included High Liner Foods, a seafood processor; Beef International, a beef supplier; Cargill, a food products producer; Highland Baking Company, a bread supplier; and McLane Company, a supply chain partner.
PF: We see more food processors and ingredient suppliers building R&D innovation centers. Have you noticed? Are these investments helping facilitate more/better/faster product development?
LVP: Yes, we have noticed this trend and have visited several of these facilities, particularly over the past 18 months or so. They can be excellent resources in helping to develop a product from start-to-finish. Partnering with key suppliers, many of whom have made similar investments in their R&D capabilities, has contributed to Arby’s success in quadrupling the number of new products we develop annually vs. historic trends.
PF: If you walked the National Restaurant Association’s annual exhibition, what would catch your eye? Why?
LVP: We look for ingredients, products, services and equipment that could help us deliver innovative and craveable menu solutions on a national or global scale.
An exhibit or booth would get our attention by quickly conveying what makes that supplier or processor different from the folks exhibiting on both sides of them.
The more a potential supplier demonstrates to me that they understand the kinds of challenges I face -- the market trends I’m trying to interpret and the goals I have for growing our business -- the more likely a new relationship can be formed.
