Foodservice manufacturers and suppliers are reaching out to operators facing tight budgets by promoting value-priced products, zero-percent financing, and cash-back incentives.
Mark Ragland, president of Lakeside Brands Inc., an Irvine, California–based strategic consulting and business development firm specializing in foodservice and packaged goods, says such programs are not completely altruistic. They represent an attempt to grab market share from competing suppliers, and we are likely to see more incentives like these appear.
Such offers come at a time when restaurants of all types face budget cutting and menu price increases to offset the cost of commodities and other foodstuffs.
“As trends in the restaurant industry become more challenging, more vendors and operators will look for creative approaches to stimulate business,” Ragland says.
In August, Tyson Food Service rolled out its new Value Chicken line. The line includes 100 percent breast meat tenders and patties; Right Size Filets, half-breast portions for all dayparts and applications; and Magnum Wings for shareable appetizers and entrées.
“Value Chicken is targeted toward quick-serve menus with $1 to $3 price points,” says Gary Baxter, Tyson’s director of foodservice marketing. “The Right Size Filets are premium, whole muscle portions of four or five ounces for consumers who want a good meal experience, but not a large sandwich, with a high-quality chicken breast. The Magnum Wings allow an operator to put out a large basket of wings, which has high perceived value without having a high menu cost.”
In addition to the Value Chicken launch, Tyson is tackling the cost issue by providing operators with online resources, including product information, consumer insights, recipes, and downloadable merchandising information.
Visitors to the site can also register to receive Tyson’s “At the Heart of Value” newsletter series. The six-part series, featuring topics ranging from dollar-menu concepts to premium values, is designed to help operators navigate the challenging economic terrain. Series titles include: “The Buck Stops Here,” “Luxury Meets Value,” “Share Fare,” “Small Wins Big,” “Curbing Appetites,” and “Make Bundles,” the last of which discusses how quick-serves can offer a three-course, or bundled-meals with appetizers, entrées, and desserts.
“The idea is to not compromise the menu or negate it,” Baxter says. “Instead, offer something new and give [patrons] options instead of making something cheaper.”
Uncle Ben’s Brand products, a division of MARS Foodservices (Rancho Domingo, California), unveiled its 2008 fall operator incentive promotion, Flavorfest. Under the promotion’s terms, operators can earn up to $6 per case in cash rewards, kitchen gear, and merchandise by adding new Uncle Ben’s products, such as Sun Dried Tomato Pilaf with Whole Grains or Whole Grain Brown Rice. The promotion, which continues until November 7, also includes up to $1,000 in savings per location.
Economic relief is also being offered on big-ticket equipment items.
Prompted by the “initial success” of a June 2008 launch, Manitowoc Foodservice, a Manitowoc, Wisconsin–based manufacturer of ice machines, ice/beverage dispensers, and commercial refrigeration equipment, announced in September that it will extended its zero percent financing program through the end of 2008 and is also offering a “Buy Now, Pay Later” alternative. The payment plan involves a 24-month finance contract at a 4.99 percent rate with no payments due for the first three months.
Larry Hagman, Manitowoc’s marketing communications manager, says the credit crisis has not only affected homeowners and Wall Street; it is also having major impact on the restaurant industry, where new concepts and start-ups mean higher credit risks.
“As operators find it more difficult to finance, our program makes credit available at very favorable terms,” Hagman says. “That’s a huge benefit to the end user that has broad-reaching positive affect across all of our channels of distribution by bringing hesitant buyers back in to the market.”
Qualifying brands include Manitowoc Ice, Kolpak walk-ins, McCall Refrigeration, Servend beverage dispensers, Multiplex high volume beverage dispensers, and RDI refrigeration systems.