07 Jul BEMA Convention 2021: QSR Conversation

On Thursday June 24, Convention attendees received an in-depth look at how quick-service restaurants (QSRs) continue to adjust to intense and evolving changes within the industry. The panel of bakers and their customers shared how they are dealing with ongoing labor issues, transportation costs and erratic disruptions in the supply chain.

The QSR panel featured Farrellyn Wolf, CEO, Mr. Goodcents Franchise Systems, Inc., and her supplier partner, Ethan Hart, President of Custom Foods and Anthony Tsocanos, Senior Bakery Scientist, Subway and his supplier partner Hector I. Morales, SVP, Strategic Partner Development, Aspire Bakeries. The panel was moderated by Joanie Spencer, Partner/Editor-In-Chief, Avant Food Media/Commercial Baking.

After a record number of 110,000 restaurant closures in the U.S. (NRA), QSRs are posing a bold comeback in 2021. In just a few short months, QSRs are reaching pre-pandemic levels around March-April 2021 with sales projected to be 11% higher than 2020. Over the next six years, QSRs are poised to see some of the biggest growth with restaurants featuring comfortable, classic food that’s takeout and price friendly.

At the heart of the remarkably quick recovery are the partnerships between QSRs and their bakery suppliers, which continue to help navigate the daily hurdles of ingredient shortages, supply chain interruptions, transportation log-jams and evolving consumer desires.

Working with Aspire Bakeries, Subway is creating products that extend shelf life and looking for ways to navigate supply chain issues to find balance across its restaurants encountering higher vs. lower sales to strike a balance, ensuring restaurants don’t over-order. Mr. Goodcents franchisees, who were also fighting for sales, benefitted from several distribution centers and frequent, top-down communication to keep bakers and suppliers informed as much as possible.

Striving to be both reactive and proactive, bakers are seeking to predict the wave of orders driven by inventory levels. Employing planning and strategy, Subway implemented GS1 bar codes featuring lot code and expiration dates, enabling them to follow the product throughout the supply chain.

Ethan of Custom Foods shared that in addition to using technology to streamline inventory, there’s been a concerted effort to improve communication with customers to stay on top of evolving needs. Keeping a baker informed of timing for promotions is also helping the baker cover franchisee situations and help communicate impacts of supply chain issues and lead times more effectively with customers, suppliers and consumers.

Over the last 15 months, QSRs have gained back customers with the introduction of third-party delivery. While convenient, Anthony expressed concern of what could happen when you release your brand to a third-party delivery vendor. As third-party apps continue to change the way business is done, some QSRs are considering if it’s worthwhile to bring delivery in-house or leave it to a third-party.

Another consideration is changes in consumption habits and its effect on R&D. Post-pandemic, some consumers are more health conscious keeping R&D busy coming up with keto and plant friendly formulations. With so many changing variables, many bakers are embracing nimbleness, becoming more comfortable working from a gut feeling to discern the signals and employing creativity and simple solutions.