DATA DRIVES LTO SUCCESS
August 14, 2019
Limited time offers remain a popular addition to menus, with a 64% increase in the past 5 years at Top 500 chain restaurants and retail operations.1 Operators choose to incorporate LTOs into their menu for myriad reasons – to increase buzz, drive traffic, or trial new flavors and formats. At chain restaurants, a successful LTO can trigger repeat purchases for almost half of their patrons.2 However, LTOs pose significant challenges for operators, especially those implementing a data-driven and exhaustive planning and execution process. While trending flavors or exceptional value will drive sales, the profitability of those sales is determined by commodity pricing, forecasting and supply chain data. When manufacturers pair this data with consumer trends to guide LTO ideation, they offer their operator customers a clear path forward.
When developing an LTO, one of the key challenges for operators is understanding product availability.1 Because LTOs are planned for months in advance, fluctuations in commodity pricing and supply could render an LTO impossible to execute. However, foodservice manufacturers can provide valuable counsel to operators regarding market conditions and potential price spikes. Using this data to inform LTO development ensures that the item is rolled out at the correct time, and that the manufacturer can affordably deliver the necessary elements.
Manufacturers also have commodity and risk management experts as well as third-party supply chain experts to further assist in smarter contracting – leading to lower risk and improved margins. While this is useful for the design of any LTO, it is especially pertinent for price- or value-driven offerings. Sixty-eight percent of operators find launching these types of LTO a challenge1 because it is difficult for them to anticipate commodity and ingredients costs. Without this forward-looking data, operators are unable to calculate bottom-line profitability.
Partnering with operator customers by sharing in-depth data can lead to more prudent planning that helps to ensure a successful LTO. Acting as a strategic partner – as well as a reliable and cost-effective source of products – fosters long-term relationships with a manufacturer’s operator customer. To collaborate on combining supply chain data with today’s trending tastes for thoughtful culinary development, please contact us.
1 Foodservice Planning Program, Technomic, 2019
2 SNAP, Datassential, 2018
