SugarCreek: Brandworthy Food Solutions

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.

With the rise of ethical consumerism over the past decade, many QSR companies have been scrambling to build sustainability and transparency into their supply chains. Panera Bread, which boasts an operation that is ranked among the best in the market today, offers an example of what could be done. Why is that? For one, they’ve been steadily improving their food safety practices for years. For another, they have upped their game on the consumer-facing side to promote new sales channels and same-store sales.

Here's how Panera is setting an example that other quick service restaurants are quickly starting to follow.

One of the biggest problems fast food supply chain managers and procurement directors have historically faced has been a lack of transparency within the supply chain. In a consumer environment in which we are seeing more demand by the day for increased transparency, the lack of knowledge about what is going on upstream is a real dilemma.

No one wants to be in the position of being caught in the middle of a social media-fired bad PR frenzy because of a supplier’s missteps or misdeeds. Companies, like Chipotle, have so far been able to stay ahead of them; other companies — Adidas, Nike and Apple for example — have found themselves in some cases behind the curve.

So how can procurement directors and supply chain managers keep better tabs on their suppliers and logistics vendors? For that matter, how can they find cheaper, more efficient and more ethical vendors? Technology offers us many capabilities that can be leveraged to do just that.

From greater visibility to better vendors, technology plays a critical role in ensuring sustainability in the fast food supply chain. Crowdsourcing software, data analysis tools and tracking technologies offer managers better top-to-bottom visibility over a fast food company’s entire supply chain.

Achieving true sustainability in a fast food supply chain takes careful planning and forethought, smart investments and ongoing attention to detail. But it doesn’t necessarily have to be an all or nothing affair.

What are the reasons that sustainability has now become a necessary investment for QSR? For one, younger consumers — Gen Xers, Millennials and Digital Natives in particular — demand it. Second, it’s more profitable over the long-term. And third, because ethical business practices are also best business practices.

That all adds up to mean that any steps taken toward making a QSR business more sustainable are positive steps. You don’t need to become carbon-neutral, zero waste and completely green in the next year. But you do need to show that you’re willing and able to make changes.

The fast food industry is, for the most part, present-focused. Brands gain a competitive advantage by being the first to adopt the latest trends, to work with the fastest producers. It’s all about who’s bigger, better and faster.  Sustainability, which champions a "low and slow" approach, seems better suited to the artisan pulled pork sandwiches of fast casual than the bacon double cheeseburgers of the drive-thru window. For the fast food industry, expediency will always remain a core goal in supply chain performance, but that is — almost ironically — exactly why sustainability is so important.

For many consumers on the go, mealtimes no longer offer a regular break in the daily schedule — they’re necessities that need to be wedged into compressed time spaces between other activities. The astounding growth we’ve seen in the fast-and-fresh sector and in ready-to-eat food sales at groceries proves that.

A significant portion of modern consumers lack either the time or the desire (or both) to fit food prep into their days. And that means that they’re placing the onus on the food industry to meet their needs and taste preferences. Much of that demand is now met by QSR concerns.

But where there is great opportunity, there is also risk. Today’s consumers don’t want to wait and they don’t want to be told “we’re out.” So, the keys to profitability and success in a fast food operation inevitably come down to this: how agile is your supply chain?

At the store level, the many metrics that determine a QSR's success or failure are predicated on the movement of the supply chain. Most business decisions are made with the assumption that product cost and supply chain speed will remain a constant, barring any unforeseen supply or distribution issues. This stability — something of a rarity in an industry that seems to change from moment to moment — is a benefit that C-suite decision-makers are understandably reluctant to tinker with. Innovation, however, must be incorporated into any supply chain design that hopes to stay competitive. Imagine that generations past had failed to innovate. Meats and produce might still be arriving by horse-drawn carriage in sawdust-packed glacier chunks. But if change doesn’t come from within, where can the fast food supply chain — essentially unmatched in terms of speed and varietal demands — look for inspiration?

Operating a successful quick service restaurant is all about ensuring the right systems are in place: the right people, at the right time, with the right tools. While there may not be fryers and grills on the fast food supply chain — unless they're being shipped, of course — the same principles apply to locking in success. The right supply chain management, much like store-level management, should be adept at not only putting initial decisions into play, but making course corrections when they're needed. To truly "own" their own supply chains and leverage all the positive benefits they have to offer, the QSR and QSR-Plus industries need to carefully weigh three aspects of smart supply chain operation.

The competition between QSR businesses was cutthroat well before QSR-Plus entered the picture. Today, with QSR and fast casual duking it out for the same market share, keeping your fast food supply chain aligned with emerging trends is the best way to stay ahead of the pack. Using tools that are tuned into the rich rewards of big data streams help by adding accuracy and efficiency. If these four must-have tools aren't influencing your supply chain yet, it's time to get on board and start listening to what they have to say.