SugarCreek: Brandworthy Food Solutions

The growing significance of sustainability and quality fast food sourcing were the key takeaways at the recent NRA show in Chicago as consumers continue to seek out better food options for themselves and their families, even in a fast food setting. What caused sustainability to be such a great concern to the mainstream buying public, and how can a business benefit from opting for transparent, sustainable food sourcing and packaging methods? A look at the history of the business of food and the shift of consumer perception over time reveals some surprising insights.

The plate — or box and bag, for to-go customers — used to be the final say in consumer satisfaction. Consumers bought a fast food meal because the taste and quality of the food made the grade — or didn't patronize a chain because their food didn’t make the cut. While that's still true, the scope of discerning customers has pulled back to widen the frame, centering on the journey to that box, bag or plate as well.

Fast food sourcing is in a unique position of having to "untrain" itself out of decades of price-centered pursuit and start paying attention to the story of their supply chain as well. Make no mistake, pricing is still important — customers still demand great value for their QSR dollar, after all — but simply moving ingredients from origin to destination won't cut it in terms of competition. Customers are, by virtue of their wallet-votes, beginning to demand more from their chain experiences, and that means that smart QSR brands are paying attention and planning accordingly.

The speed with which the food sustainability movement captured the attention of consumers surely took many in the fast food industry by surprise and left not a few supply chain managers scrambling.

As Tove Danovich aptly wrote in Eater, “Not too long ago, people who identified as ‘vegetarian’ in the United States were often met with cockeyed stares and questions like, ‘but you can eat chicken, right?’ Animal welfare was a term applied to dogs and cats — not farm animals.”

Formerly niche food categories — all organic, cruelty-free, sustainably raised, non-GMO, gluten-free — quickly rose to the forefront of American consumer consciousness. Some of that may be attributable to Millennials’ coming of age, but is all of it?

Most likely not.

Local-sourcing. Organic. Free-from. Sustainable sourcing comes with a lot of buzzwords. And when it takes a significant investment of time and capital for a fast food brand to shift suppliers or alter sourcing practices, it’s critical that a brand knows a particular trend has staying power before launching any sustainability initiatives.

When the media first began covering sustainability with regularity, the fast food industry was one of many that was slow to react. Perhaps corporate executives thought that consumer interest in the idea was a passing fad, and that it would soon be forgotten. Sustainability has, of course, worked its way both into the mainstream consciousness and into the mission statements of many corporations as it becomes increasingly obvious that it is a concept that is not going anywhere. Indeed, it looks to become even more important in the decision making process of consumers as time goes on.

With all of this in mind, it would be wise for the fast food industry to try to keep up with the trend and provide the sustainability that consumers seek. To do this, fast food supply chain managers need to check their fast food supply chain sources to make sure they provide the sustainable solutions they need.

In the last decade, food trends and consumer spending habits have gone hand-in-hand. Movements like low-carb, paleo and clean eating influenced not only the menus of existing QSR chains, but inspired the creation of new, niche QSR brands as well. The latest shift in consumer demand has proven a little more challenging for the fast food supply chain, however, forcing procurement teams to go beyond finding an exotic new ingredient or recipe and subverting the very concept of the supply chain as it stood.

While price remains, necessarily, a large deciding factor, it is no longer the sole motivator behind provider selection. That honor increasingly rests with sourcing. Can the demands of a supply chain in the fast food industry outpace the looming sustainability issues from largely untested specialty suppliers?

We hear a lot about farm-to-table eating. But what has been its impact on the fast food industry?

Adapting to the farm-to-table trend can be a tricky challenge for QSR chains. While value is still driving many fast food decisions for Americans, brands must make an effort to begin offering options that cater to diners’ more ethically driven and health-conscious decisions.

Today, let’s take a look at some of the challenges fast food chains face and at some of the practical ways that QSR supply chain managers and chefs are meeting them.

What is it that hinders innovation in the fast food industry? We’ve seen many QSR companies publically state that they recognize the need to change in order to compete in tight market, but are they making the right changes?

They’re starting to.

Results haven’t been that great of late for some of the venerated names in QSR. McDonald’s, for example, saw two consecutive years of declining sales heading into the last quarter of 2015. Restaurant Brands International (parent company of Burger King and Tim Horton’s), Wendy’s and Yum! (parent company of Taco Bell, Pizza Hut and Long John Silvers) all also experienced sluggish sales in 2014 and early 2015. Now there are signs that they’re all starting to turn things around.

McDonald’s reported global sales were up 5 percent in Q4, which the brand attributed to the launch of its all-day breakfast menu and a new Buttermilk Chicken Sandwich.

Meanwhile, Burger King’s sales were up 4.4 percent in the first quarter of 2016 — a result Restaurant Brands International told its investors was likely due to its new “four pillar” strategy, addressing “menu, marketing, image and great operations.” And Wendy’s reported same-store North American sales were up more than 3 percent in Q1.

Cost per unit, consumer satisfaction, shelf life of ingredients: for a busy QSR chain, the idea of supply chain sustainability can easily be eclipsed by more immediate concerns. The desire to cross a nagging line off the to-do list can make the idea of a one-and-done solution understandably attractive. In all other aspects of the business, a firm price tag or goal drives the method, not the other way around. Sustainability isn't "checked off" quite so easily, however. It's much more of a moving target than a finished line to be crossed. 

We’ve heard a lot about fast food chains sourcing cage-free eggs, organic ingredients, non-GMO foods and sustainably raised meat. But another growing trend in the industry has been a move toward serving only antibiotic-free meat.

Late last year, for example, the deli sub chain Subway announced that it would begin transitioning to serve antibiotic-free poultry by the end of 2016, with a complete switch to antibiotic-free beef and pork by 2025. In doing so, Subway joined Chipotle, Chik-Fil-A and even McDonald’s (which has promised to source antibiotic-free poultry) in making a commitment to make such a switch.

Why the trend? Much of it has to do with consumers’ demands.