Toque of the Town: Closing the Gap at Arby's

Arby’s Amy Alarcon complements beef sandwiches with new fresh deli items, flavorful wraps and snacks.

By Monica Rogers, Contributing Editor -- Chain Leader, 3/1/2007

The hat-shaped thought balloons floating over guests’ heads in the current "I’m thinking Arby’s" ads were designed to show that there’s plenty of grazing room in those 10-gallon dreamscapes: Room for old-school Beef ’n Cheddar sandwiches. Room for premium-priced Market Fresh Martha’s Vineyard Salads with spinach, romaine, apples, cranberries and almonds. And room for lots of full-flavored snackables in between.

Just over a year into its "something different, something better" brand-strengthening campaign, the Atlanta-based sandwich giant continues to carefully balance core products that appeal to typical 18- to 34-year-old QSR lovers with items targeting fast-food-selective moms and foodies. That’s led to Spicy Cajun Fish Sandwiches on one end of the menu board and Fajita Beef Flatbread Melts on the other.

According to Director of Product Development Amy Alarcon, guests continue to want heritage products like Arby’s roast beef sandwiches but are showing increased interest in big, more diverse flavors. "We’re consistently looking for premium, unique items not typically served in the drive-thru environment," she says.

Balancing Act

Scrupulous balance in menu initiatives is crucial at this juncture in Arby’s story. Parent company Triarc’s July 2005 acquisition of its largest franchisee, RTM, bumped Arby’s company-store totals to more than 1,000 from 233—important as the chain refines operational practices and steps up growth. "RTM had a huge number of territories—22 states—tied up for expansion," explains Michael Gallo, senior research analyst with Albany, N.Y.-based investment-management firm CL King and Associates. "Acquiring them was a natural part of Arby’s evolution."

Also in motion, Triarc is expected to spin off its Deerfield asset management companies as part of current corporate restructuring, which would make Arby’s a stand-alone restaurant company. With all that in mind, "Arby’s foremost focus right now has to be on increasing sales and making the core brand successful," says Dennis Lombardi, executive vice president and food strategist for Columbus, Ohio-based WD Partners.

That means staying squarely in the QSR sandwich game with upgraded mainstream items such as chicken and fish sandwiches, at the same time that Arby’s extends the Market Fresh premium-product line, says Gallo. Arby’s recent switch to chicken not injected with water, phosphates or fillers was important, says Gallo, because chicken was an underperforming product category for Arby’s.

Chicken, Naturally

Launched February 2006, Arby’s Chicken Naturals initiative was one of Alarcon’s first big projects after coming on board in 2005, tying in nicely to a 19-year career that’s included positions at Pollo Tropical, Church’s Chicken, Taco Cabana and Burger King. Because the protein is processed without the addition of water, seasoning or phosphates, the chicken tastes better in the finished dish, says Alarcon. The new all-breast-meat chicken is now featured more than a dozen ways—as tenders and in wraps, salads and sandwiches.

Arby’s savory Southwest Chipotle Chicken Sandwich is the latest item in the line. Tested in January 2006, the limited-time-offer sandwich "drew immediately positive consumer feedback and drove sales," says Alarcon, who will not release specific sales increases. Featured systemwide July through August 2006, the $3.99 sandwich included customers’ choice of deep-fried or grilled chicken-breast fillet topped with pepper bacon, colby-Jack cheese, red onion, lettuce, tomato and spicy chipotle mayonnaise.

The Spicy Cajun Fish Sandwich, in stores through April 8, was developed out of last year’s successful fish campaign. The company sold more than 2.5 million pounds of fish during 2006’s "2 for $4" fish sandwich promotion. Adding new news, Alarcon and team developed a spicy Cajun tartar sauce as a sandwich topping option and relaunched the fish promotion in January with choice of Classic Fish Sandwich or Spicy Cajun Fish Sandwich.

Little Bites, Big Focus

Side dishes and snacks are another important focus. Alarcon and her team developed Loaded Potato Bites, $2.79 for five pieces and $4.29 for 10 pieces, to recreate the classic loaded potato as a portable, bite-sized item. The seasoned-potato triangles are filled with bacon, chives and aged cheddar cheese, deep-fried and served with ranch-sour cream dipping sauce.

First launched in 2005 as a limited-time offer, Loaded Potato Bites sold so well that they rolled onto the core menu in January 2006. "[Loaded Potato Bites] rank high on the list alongside mozzarella sticks" on Arby’s Sidekickers menu, Alarcon says, but will not quantify sales.

Fresh Opportunities

Arby’s Market Fresh line of sandwiches, wraps and salads continues to be the fastest growing component of Arby’s menu. Something of a swing player for Arby’s, the Market Fresh products are at the top end of Arby’s price points. Sandwiches such as the $4.89 Roast Turkey and Swiss with lettuce, tomato, red onion, mayo and spicy brown mustard are priced $2 higher than the mainstream Roast Beef sandwich, $2.49.

But at Arby’s fast-casual test concept, Arby’s MarketFresh, Roast Turkey & Swiss seems pedestrian next to the Fill Your Bowl salads made by a "salad tosserrie chef" with choice of 30 ingredients, hot-pressed crostini sandwiches on rosemary-sourdough bread, or oven-toasted ciabatta subs that are also offered there. "At the Arby’s MarketFresh test stores, the deli sandwiches and wraps are offered more for guests on the run, but the menu emphasis is on the other items," says Alarcon.

While Arby’s plans to expand testing of fast-casual Arby’s MarketFresh units, its primary focus for 2007 will rest on the Market Fresh menu category within regular Arby’s units.

Thinking Outside the Box

Alarcon, who grew up in North Carolina in a family that gardened and cooked with all sorts of fresh produce, was drawn to the product-development role at Arby’s largely because of the nontraditional opportunities the Market Fresh category offered in a fast-food environment. She sees plenty of continued potential for the category. Market Fresh wraps, for example, with their portable nature, have done well since their launch in 2003, although Arby’s will not release specifics.

Newest out of the box, Flatbread Melts were developed out of the company’s experience with a limited-time offer from April to June 2006: the Market Fresh Roast Beef Gyro, $2.99. Made with layers of Arby’s roast beef seasoned with oregano, lemon, garlic, salt and pepper, topped with tomatoes, lettuce and red onion, and served on warm pita flatbread with cucumber-gyro sauce, the Market Fresh Gyro did well. "But the bread itself did even better," says Corporate Executive Chef Neville Craw. "Guests loved the bread, and we knew there were other ways to extend this with different flavor profiles," agrees Alarcon.

So the development team created two flatbread melts, each selling for $2.99, which were tested in June 2006 and launched in February. The Fajita Beef Flatbread Melt—roast beef with fajita spices, melted pepper-Jack cheese, grilled onions, peppers and jalapeño-ranch sauce—and the Philly Beef Flatbread Melt—with roast beef, melted Swiss cheese, grilled onions, peppers, Parmesan-peppercorn sauce—will be featured through April 14.

Beyond work with Market Fresh wraps, Arby’s is expanding healthful options in the category. Salads, for example, are a focus, although Arby’s can’t comment yet on which new salads it will launch this year.

And providing families with healthier kid-friendly options? Alarcon and team recently developed miniature, crustless versions of Market Fresh sandwiches that can be bundled with a fruit cup and milk or juice for Arby’s Kids Meal. "We wanted the kids meal to be healthy, but also to be something that kids would really love," Alarcon explains. Tested in 2005 and launched in February 2006, the mini-crustless options currently include turkey and cheese and ham and cheese.

Moving forward, Alarcon says Arby’s will continue to shape marketing initiatives and new product introductions toward a "broader consumer base—especially hard-to-reach young males."