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Supply Chain Trends Every Quick-Service Restaurant Needs to Know

Posted by Dan Barton

Sep 2, 2016 11:30:00 AM

Crates of cage-free eggs in a fast food restaurant kitchen

This blog was originally published on Supply Chain World magazine's editors blog.

Fast food has become the new battlefield for sales, the new frontier for customer-alluring innovations in edibles, and supply chain professionals have taken competition to new heights. Some QSR trends, in particular, are responsible for notching the proverbial bar ever-skyward, with smaller, upstart chains threatening to outpace larger, established competitors on niche offerings and supply chain agility alone. Ignoring these trends is no longer a viable operational option. No matter what your menu hinges on, there is always room to smoothly work in new creations, or tweak your supply chain for efficiency. As you fight to keep your brand on top in the QSR wars, there are three prominent trends that you need to be aware of.

1. Organic is only the beginning. 

It's also not solely the realm of fruits and vegetables; the ethics and practices driving the trend is slowly taking over proteins. It's not a rare occurrence to see customers asking how and where cows, pigs, chicken and more were raised prior to becoming the day's value meal. The local-sourcing movement isn't just gaining steam, it's well-established. This presents a unique challenge to procurement teams, as smaller, local providers don't often bear the same level of stringent oversight or boast the robust processing facilities as familiar nationwide distributors. Rather than simply discussing unit prices and delivery options, these local producers must be vetted carefully to ensure that a bushel of liability isn't taken on along with cases of organic, local raspberries. 

2. Small, short LTO sprints define modern QSR menus. 

The infamous McRib was the tip of the LTO iceberg — the model that demonstrated how excited customer bases could be for short-lived specialty items. The concept has spread throughout the industry, touching everything from specialty soft drink rollouts like Taco Bell's branded Starburst freezes to bracket-busting snack-meals like Burger King's unusual Mac 'n Cheetos. 

When facing a challenge like a popular, limited run, fast food brands need operations that are backed by an agile supply chain that uses the right vendors. There's a clear correlation in the customization-focused demands of the QSR consumer and what QSR procurement teams should be seeking out in supply chain providers. 

If volume discounts are balanced on individual item volume, as opposed to overall order volume, QSRs are left paying a heftier price than they need to in order to ensure a strong turnout for marketing-backed LTOs. Additionally, some distributor-level supply chain partners that still ascribe to the "old way" of doing things might be hesitant to step outside of long-term contracts.  

3. The line between mealtimes is getting blurred. 

Breakfast may be the current industry buzzword, but that doesn't mean that other, in-between times aren't also ripe for the taking. Taco Bell's successful rebranding of late night food runs as "fifth meal" is a great example of how clever QSRs can capitalize on the eroding of the traditional breakfast/lunch/dinner mealtime. McDonald’s has seen such success in their limited all-day breakfast menu that the brand is expanding their all-day offerings. These trends put pressure on your supply chain, and if you want to succeed, you need a chain with flexible and diverse suppliers and distributors. When cost and time savings are on the table, a provider that carries multi-meal items like eggs and hamburger patties is going to end up in very high demand and make an excellent partner for scalability.

These trends can look like a large serving of uncertainty for chains that are used to more traditional procurement models, but after a slight learning curve, great results — and rewards — are waiting. Each of these concepts has shown enough longevity that they've crossed the line from fads to trends, with a good head start on becoming industry standards. When business is moving at the speed of QSR, you'll want to keep pace. If you hesitate to implement this trio of popular paths, your competitive gap may eventually become too large to overcome.

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Written by: Dan Barton

Topics: Food Service, Trends, Supply Chain, QSR