Deli sandwich sales are no small potatoes

by Bryan Salvage
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KANSAS CITY, Mo. – Back when I traveled extensively for business, I eventually grew tired of eating food on planes and in restaurants. It wasn’t that the food wasn’t good, it usually was, but it wasn’t very exciting or bold in flavor profiles. As the years passed, breakfast, lunch or dinner served on commercial airlines (for domestic flights and those not seated in 1st Class) was all but discontinued in most cases…so, if you are now hungry before a flight, you’d better grab something at the airport before your flight or before you arrive at the airport.

Many of the very small towns I have stayed in were in ag states that were somewhat near (anywhere from one to three hours away by car) the food packing or processing plant I had to visit early the next day. And many of those towns offered few restaurants — sit-down restaurants would usually be a country or Chinese food buffet, Pizza Hut or fast-food hamburger chain restaurant. Sometimes if a flight was really late, dinner would consist of peanut M&Ms and a Diet Coke from the vending machine at the motel because everything else in town was closed by the time I finally arrived at the motel.

During the busiest of travel times, I would sit in my motel room after a long day trying to ignore the clatter of the room’s air conditioning/heating unit while out-of-control little kids ran back and forth in the hallway outside my door. I fantasized about being home in the peace and quiet and just eating a homemade Velveeta and liver sausage sandwich on white bread with Koop’s stone ground mustard and an ice-cold, crispy Polish pickle.

Times have certainly changed for Road Warrior business travelers, especially those who are sandwich-lovers. Today, there are a wide variety of chains popping up throughout the country offering sub and other types of deli-style sandwiches in almost a seemingly infinite variety.

“We have calculated that there are more than 37 million possible varieties of sandwiches available by using items that are typically found in one of our restaurants,” boasts Les Winograd, public relations specialist for the Subway chain.

The Other Sandwich category in the Top 500 Chains/Limited Service Chains segment tracked by Chicago-based Technomic Inc. totaled $22 billion in 2012 with strong growth of 5.9 percent, says Darren Tristano, executive vice president, Technomic. Within that group, Subway set the stage with sales of $12.1 billion and growth of 6.1 percent. More importantly, Fast Casual “better sandwich” concepts like Jimmy John’s and Firehouse subs grew at 24.6 and 33.5 percent, respectively, with combined sales of over $1.6 billion, he adds.

Despite the sputtering US economy, sales have been above industry average with some share trading. Fast-casual operators have gained the benefit of new unit expansion sales at the expense of some more quick-service, lower-priced brands, Tristano says. “Overall, Subway sets the stage for sandwiches the way McDonald’s sets the stage for the burger segment,” he adds. “But in both cases, it’s the fast-casual operators who seem to be winning over customers and expanding locations through franchising.”

Tristano went on to say that consumer trends driving the segment include customization with plenty of bread, cheese, flavor and topping options; preparation interaction with operator staff who are preparing the sandwiches custom to order, which allows consumers to control the experience and step into the kitchen; and the portability of the product, which maintains integrity for travel times and easily allows a consumer to keep one hand on the sandwich and one hand on the wheel or smartphone.

Although Velveeta and liver sausage sandwiches still sound good to me after all of these years, today’s sandwich innovators are creating far more exciting offerings, such as Cosi’s Chicken Mole Sandwich, Cousins Sub’s Cubano Sandwich, Quiznos’ Honey Bourbon Chicken Sandwich, Au Bon Pain’s Black Angus Steak and Cheese sandwich and Sedona Chicken sandwich, Tristano told me — and these sandwiches are either limited-time offerings or new items that were launched in 2013.

Looking to the future, how might this industry segment further evolve — and what will drive this evolution? “Delivery, online ordering and catering have been driving off-premise sales and will continue to provide convenience to the consumer. More gourmet sandwich players will drive innovation and new flavor integration and vegetarian options will provide more healthy alternatives, with an add-meat upgrade option, of course,” Tristano predicts.

For more information on the US deli sandwich chain segment and for inside information from industry leaders including Subway, Arby’s and Quiznos, look for the special feature on deli sandwich chain trends in the August issue of Meat&Poultry magazine.

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