Most observers agree: Subway’s national breakfast sandwich program was a total no-brainer.
You have a massive, 25,000-site-strong restaurant network. You have combination ovens, introduced in 2004 and now toasting 60% of Subway sandwiches, already in the restaurants and fully capable of much more. You have a heavy a.m. focus from the quick-serve-restaurant (QSR) competition— McDonald’s, Burger King, Arby’s—making some type of response almost mandatory.
And then there’s the fact that, as of last year, 40% of Subway franchisees were already selling some form of breakfast offering.
“Subway is a perfect example of a chain that’s really not doing anything [big] in breakfast; it’s just a matter of opening the stores a few hours early,” says Shirley Mathistad, CEO of New York-based Ripe Ideas Inc., a consultant who works with food and equipment manufacturers to bring their products to market. “It’s really smart on their behalf: They’re bringing in only a couple more ingredients and utilizing a platform—a speed-cook oven—that they already have.”
But as any c-store retailer with foodservice experience can attest, even a natural menu extension can become incredibly complex to create and implement. For Subway, its main selling point—customizability—also proved to be one of its biggest challenges. Each component of the breakfast sandwiches had to exist harmoniously with the rest of the sandwich offer. Meanwhile, the resulting product had to win over not only consumers, but also the bulk of the company’s franchisee base.
While there are still a few operational hiccups to overcome, Subway believes its new breakfast sandwich line provides a foundation upon which to build even greater success.
BUILDING A SANDWICH
For Subway, the goal of the “new” breakfast program was to create an offer that all of its franchisees could embrace. According to Les Winograd, public relations coordinator for Subway Restaurants, Milford, Conn., the stores had actually been offering breakfast at some sites for years as an optional program for franchisees, but it was “not for everyone” because it meant opening earlier, adding staff and dealing with new products.
“Over the years … we’ve been tweaking the breakfast program with the hope of attracting more franchisees,” including simplifying operational demands, Winograd says. “We’ve always felt it was a good time of day to do business, and a lot of what we found was that, for many franchisees serving breakfast, it actually boosted lunch business.” To maximize this relationship, both breakfast and lunch sandwiches are now available all day.
Meanwhile, those stores that didn’t have a breakfast program already had the operational foundation for one. “There are people in the stores already, prepping [for lunch],” says Winograd. About 60% of Subway sales currently come from the lunch day-part, and 30% from dinner. “Why not just open the doors and let the customers in?”
Today’s breakfast sandwiches began the way many Subway menu items did—in the mind of Subway’s executive chef, Chris Martone. A Culinary Institute of America (CIA) graduate, Martone has experience in a variety of foodservice venues, including hotels, restaurant chains and country clubs. In his 11 years at Subway, he has overseen development of the current sauce lineup, the introduction of cucumbers to the topping bar, and sandwiches such as the Blackened Cajun Steak and new Tuscan Chicken Melt.
Subway is all about options, says Martone, and every new product has to incorporate that spirit of customizability. To this point, the national breakfast menu features five basic “builds,” all based on an egg or egg-white omelet. Customers have a choice of a low-calorie wheat English muffin, flatbread or 6-inch or footlong sub roll as the “carrier.” From here, they can add any of the sandwich bar’s various toppings: meats, vegetables and condiments. In addition to a simple sandwich of egg and American cheese, suggested combinations include the Western with Black Forest ham, green pepper, red onion and American cheese; and a Double Bacon with bacon and American cheese. Winograd says the real differentiator for the program is its customizability. Depending on the customer’s choices, the sandwich can range from healthy (a “Fresh Fit” egg-white muffin melt with about 4.5 grams of fat and 5 grams of fiber) to the indulgent (a footlong Double Bacon with extra cheese).
Despite its seemingly endless sandwich- bar combinations, Subway expects customers to opt for the more traditional ingredients; those costs have been factored into the breakfast sandwich’s price, Winograd says. English muffin melts have a recommended price of $1.75 to $2.25, while footlongs on sub rolls are priced from $4 to $6, depending on the toppings. Subway has not made the breakfast sandwiches part of its famous $5 footlong promotion.
Subway is also offering a combo deal that highlights its recent introduction of Starbucks’ Seattle’s Best Coffee brand: a choice of English muffin melt and a 16-ounce coffee for $2.50 at participating locations.
To keep customizability practical, however, each component of the sandwich bar has to have multiple applications.
“Even if I’m working on a sauce for a breakfast or lunch sandwich, it still has to go on multiple proteins,” says Martone. “We don’t bring in one product to go on one sandwich build.” This also allows Subway to keep its footprint small, especially important for its approximately 3,000 c-store locations. Most of these sites are offering the breakfast program, except for those whose lease or pre-existing agreement forbids it.
To further simplify execution, Martone has kept the build formulas for the breakfast sandwiches similar to the sub sandwiches; thus, if a 6-inch lunch sandwich has four slices of bacon on it, so does a breakfast sandwich.
EXECUTING ORDERS
Despite the footwork put into the development of the breakfast sandwiches, some operational hurdles remain, largely in on-site execution.
“We try to support [operators] with [instructional] materials, give builds on paper, show photographs, what oven settings to use,” says Martone. “Honestly, that’s some of the most difficult stuff to do.”
On a recent trip to San Diego, he observed a Subway operator not following guidelines. “It’s challenging and frustrating because we put so much time into it, and we want to make sure they’re using the right toaster settings so the product is hot,” he says. “We want customers to have a good experience, and if [operators] are not following it at the operational level, it’s very challenging.”
Subway uses combination ovens from several vendors, although most are Tornado ovens from TurboChef Technologies Inc. and Manitowoc Foodservice’s Merrychef 402 models. The ovens have allowed Subway to practically double its possible sandwich variations and have inspired new items.
Because the ovens employ microwave and dry heat, it can be a balancing act to heat the egg and toast the bread adequately for operators who stray from the recommended program settings. If you overheat the sandwich, the microwave can dry out and harden the bread. If you underheat it, the egg is cold and the bread is pale.
“We’ve heard anecdotally that people would like their muffin toasted more and have more color on it for texture,” says Martone. “We try to walk the line and make sure the egg is heated and get a little color on that, and not make it a very long toast time.” The key, of course, is for operators to follow Subway’s and the oven manufacturers’ recommended program settings. Darren Tristano, executive vice president of foodservice research firm Technomic Inc., Chicago, believes Subway’s breakfast-sandwich program is a smart move because it harnesses not only the chain’s massive footprint but also provides franchisees with a means to expand sales. However, he also sees room for better execution at the store level.
Tristano recently Tweeted about his sampling of the new breakfast sandwiches, listing a few weak spots in the experience. He attempted to purchase a breakfast sandwich and a cup of coffee on deal, but he was charged a nondeal price. The sandwich he received did not look as advertised.
“You’ve got a small urn of Seattle’s Best Coffee that’s weak, not very hot and is being made as a convenience for the [Subway employee] who’s already there in the morning to prep for lunch,” he says. “Basically, it’s a convenience to the franchisee to expand their sales, but they’re not taking it as seriously as you’d see with a McDonald’s.”
Winograd says Subway is addressing operational inconsistencies through training and audits. The chain’s online University of Subway shows store-level and regional staff how to make items according to formula. Restaurants are inspected at least once a month to ensure operators are following proper procedure. “With any new-product launches, there are always some growing pains,” he says. “It’s just a matter of time for adjustment, and then we will see everyone following the standard.”
Critics including Tristano have also pointed to the lack of drive-thrus at most Subway locations as another stumbling block to the breakfast offer; customers picking up breakfast on the way to work may not be willing to make the time commitment. But Winograd says Subway has so many locations that enjoy healthy foot traffic that the chain didn’t feel a lack of a drive-thru would curb the program’s growth.
From Subway’s point of view, the breakfast lineup is simply the start of even bigger and better things. Down the road, it may consider other healthier breakfast options that harness the combination ovens, says Winograd. It also could be an ideal all-day breakfast option for c-store operators.
“The program is unique in that it is truly something for everyone,” Winograd says. “This is really something I think is pretty unique to the industry. It’s basically an omelet sandwich but it has enough variation available that it’s hitting a lot of different consumer interests.”
BUILD IT AND THEY WILL COME
- Choose bread; light wheat English muffin, flatbread or 6-inch or footlong sub roll
- Choose omelet: egg or egg white
- Add cheese: sliced American, provolone, pepper Jack, Swiss or Cheddar; shredded Monterey Cheddar or mozzarella; or none
- Add meat: bacon, steak, Black Forest ham or other lunchmeat
- Add vegetables: green peppers, red onions, tomatoes, lettuce or other vegetable
- Add a sauce: sweet onion, chipotle Southwest, honey mustard, ranch, red wine vinaigrette or none
- Heat and serve.
CONSCIOUS OF HEALTH
For Subway, which has transformed itself into the poster child for healthy in the QSR arena, sticking to a nutritional framework is critical. While it has provided the chain with a definite marketing hook, it also makes the job of executive chef Chris Martone a bit of a balancing act.
Martone works with Subway’s chief dietitian, Lanette Kovachi, on product development at multiple touch points. He consults a chart of nutritional parameters that Kovachi has devised as he formulates a new item. “If I’m walking the line, I get it to her and talk through it with her on whether it’s attainable or not,” he says.
Fat was Subway’s first healthy point of differentiation, and one it highlights on napkins and window clings with its “7 under 6” sandwich line of seven subs with 6 grams of fat or fewer. It has since expanded this healthy highlight to subs with fewer than 9 grams of fat; those 3 extra grams give Martone some more wiggle room in development, but not much. Fortunately, many of the components on the subs—meat, bread and vegetables—are already naturally low in fat.
With the help of its vendors, Subway has developed condiments that meet the low-fat profile as well, but it’s not been easy. “Finding sauces, ingredients and condiments that still reach that goal is very challenging,” says Martone. “If you don’t have fat, typically [vendors] want to put sugar in there or corn syrup.”
Sodium is Subway’s newest hurdle to jump, and another conundrum. “Sliced luncheon meats are notoriously high in sodium,” Martone says. “With the products on our current platform, they’re just very challenging to start with. That’s going to be difficult, but it’ll be interesting to see [how] it all pans out.”
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