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Food

How to win with LTOs in today’s tough market

With current supply chain and labor shortages, along with other post-pandemic challenges, it may be time for operators to rethink the way they develop and promote limited-time offers.
Photo illustration by RB Staff

The backlog of limited-time offers clogging chain pipelines during the pandemic has since flowed onto menus, and R&D teams are back in the kitchen developing new ones. But should next year’s LTOs follow the same guidelines as last year’s model?

Not entirely, said Steve Gundrum, chairman and chief creative officer of Mattson, a food research and development firm. “Post-pandemic, consumers are looking for escapism—a low-cost thrill that captures the imagination and provides a break from the routine,” he said. “Most of all, an LTO should have hedonic value and be trip-worthy.”

But today’s labor and supply chain challenges are strongly impacting the R&D process.

During the pandemic, menu streamlining and simplification became a necessity—a move that a number of operators want to permanently adopt, according to Restaurant Business’ sister company Technomic.

In a survey of 600 operators, 36% were in favor of less labor-intensive menu item preparation and 32% were looking to buy a more limited variety of products. At the same time, only 21% of consumers are in favor of smaller menus, Technomic found.

Limited-time offers can take up some of the slack, and they increasingly have been. Technomic reports that the number of LTOs introduced by Top 500 chains has grown 9% over the last year. But today’s LTOs can’t overtax a reduced kitchen staff or add to the difficulty of sourcing products.

“Simplify processes without sacrificing excitement and leverage existing ingredients, bringing in just one or two unique SKUs,” Gundrum recommends. “Then double down on craveable items, such as bacon and cheese.”

Sonic burger

Sonic's Bacon Jam Cheeseburger; photo courtesy of Sonic Drive-In

He cited Sonic’s Bacon Jam Cheeseburger as a good example. It features the chain’s regular grilled burger, topped with American cheese and bacon strips, but is differentiated by a sweet-savory bacon jam created by Scott Uehlein, Sonic’s VP of product innovation and development, and scaled up by a supplier partner. Uehlein calls it “a magical culmination of flavors with bacon, brown sugar and caramelized onions.”

“The bacon jam is shelf stable and relatively easy to produce, but turns a cheeseburger into something trip-worthy,” said Gundrum.

Taco Bell is also good at taking a single sauce and transforming one of its core menu items into a craveworthy LTO, he said. And Wendy’s successfully went that route with the debut of Ghost Pepper Ranch dipping sauce for its chicken nuggets.

One way for operators to get past supply chain snags is to announce a launch date but add “while supply lasts” to the promotion so as not to disappoint customers or franchisees, said Gundrum. “Supply chain issues could be with us for the next three years, so it’s better to leave the date open-ended.”

While it’s now important for menu items to be delivery-friendly, every LTO doesn’t have to fit that criteria—especially if the goal is to make it trip-worthy.

“Immediacy of use is important to driving traffic,” said Gundrum. Long John Silver’s Lobster Bites, another craveable LTO, were best when eaten straight out of the fryer, he said.

Long John Silver's lobster bites

Photo courtesy of Long John Silver's

Quick-service restaurants, however, should develop items to be drive thru-friendly, Gundrum added. More chains are adding drive thrus and more customers are eating in their cars; loaded fries are not a good idea.

Mattson's newest service, ProtoThink LTO, evaluates and scores limited-time offers on six or seven factors, and social media impact is key. “Social media is a catalyst—it’s where marketing should start,” said Gundrum.

Social platforms have gained even more importance since the pandemic. Pre-COVID, food influencers were traveling the world, eating street food all over the globe, but they switched over to publicizing the drive thru, takeout and delivery, he said. Now there are drive-thru reviewers and YouTube and TikTok stars who have risen to fame just by eating an LTO.

Culver's Curderburger

Curderburger photo courtesy of Culver's

Social media is the only way to go for very limited one-day-only events, like Culver’s recent Curderburger promotion. An April Fool’s Day tweet about a fantasy burger topped with a fried cheese curd created a viral sensation and prompted Culver’s chef to create the real thing as a one-day LTO. The 825-unit chain sold 136,000 Curderburgers, with some locations running out in two hours.

“To win on social media, the item has to be truly new, irresistible and capture the imagination,” said Gundrum.

While fluctuating food costs and rising inflation make it difficult to price an LTO, it depends on how it’s positioned. Operators who are trying to upsell a burger, burrito or chicken sandwich rather than offer a deal should strive for an affordable, premium upgrade, Gundrum said.

That premium can be linked to ingredients, unique flavors or visual excitement, but “if the consumer has to pay a $1 premium, they should get a $2 craveability value,” he said.

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