Subway Plans For New Kitchen Innovation as Part of 'Eat Fresh Refresh' Promise

Subway plans for a new kitchen addition

Subway is on a roll. After the menu revamp, the multi-national fast food chain is now bringing in another innovation. As per news reports, the company is planning to set up automatic meat slicers at all of its 22,000 locations over the course of a year. The company decided to completely overhaul its menu after a top-to-bottom re-examination. The revamp brought in new bread such as Artisan Italian and Hearty Multigrain, toppings like fresh mozzarella and smashed avocado, and deli meats including steak, Black Forest ham, and rotisserie-style chicken. The move proved beneficial to the company, as the company witnessed an increase in sales for months after the upgrade. The decision to add automatic meat slicers is a step to keep the momentum going even as the Eat Fresh Refresh menu is seeing new additions.

Current scenario at Subway

The Eat Fresh Refresh menu overhaul, launched in 2021, is an ongoing initiative as the company has been adding new items in an effort to reshape the brand. The effort is paying off as the revamp has garnered industry-wide recognition and praise. In an interview, Trevor Haynes, president of Subway North America, called the revamp the natural next step in the evolution of the United States business and operations. The decision to add automatic meat slicers to the kitchens is the latest in the effort to lower food costs and also give customers more choice of meat. Right now, the meat used by Subway is sliced at an off-site processing facility and shipped to the stores. According to news reports, fast food chain serves more than 5,300 sandwiches every 60 seconds and the number is growing.

The latest kitchen upgrade

The decision to add automatic meat slicers was taken to stop the use of precut meat, lower food costs and also provide a greater variety of meat. Haynes has called the decision a "win-win" as it allows us to work with other vendors. He said that inflation has reduced the savings in food costs, but there will be benefits even without an increase in labor costs. The new automatic slicers are made by Bizerba, a German company. All the staff has to do is put the meat inside and press a button. The testing of the automatic slicers has gone smoothly at pilot locations so far. The meat will be sliced at a location in the morning and afternoon as per demand, and any unused meat can be used the next day. Though there hasn't been an official comment from Subway employees, it is being said that most aren't thrilled.
"Even customers will be able to see how the automatic slicers work as the slicers will be placed in front of the house, and they can see how turkey, ham, salami, and pepperoni are sliced, and staff will see what they can learn. Subway will bring in a gradual rollout of the automatic slicers and one of the reasons is manufacturing limitations," said Haynes, adding that nobody has 22,000 slicers.

Reason for the new upgrade

The decision to opt for automatic meat slicers was driven by two factors- the soaring cost of meat in the first half of 2022, which was higher than expected; and the continuing labor shortage. Haynes explained that the automatic slicers won't need more labor inside the restaurants. As per the results of the pilot testing in many locations, there has been no need for more staff as the employees slice the meat in the morning while preparing food. There are concerns that the new slicers require staff to spend time slicing meat instead of using precut meat, and staff can feel overburdened at a time when labor still remains in short supply. But Haynes reassured that the pilot testing has shown no adverse effects. He said that using the automatic slicers has been very "smooth and positive."
Another benefit of opting for in-house meat slicing is the bid to improve the reputation for the use of fresh ingredients and Healthy Eating with the addition of meat being freshly sliced in-house as per requirement.
All the recent upgrades are part of Subway's plan for the past two years to improve its reputation for quality in a bid to bring back customers. The system sales in the US went down from a peak of $12.3 billion in 2013 to $8.3 billion in 2020, as per business reports. There has been some improvement in 2021, with sales of $9.3 billion. The chain also closed down around 5,000 locations due to low unit volumes.

Going up against competitors

In recent years, competitors such as Jersey Mike's, Firehouse Subs, and Jimmy John's in the United States have been steadily eating into Subway's share of the market, with Jersey Mike's even seeing a 70% rise in sales over the past two years. In an effort to stave off competition, Subway decided on a complete overhaul.
Apart from a menu overhaul that saw the introduction of 12 new subs under the Subway Series, the campaign also brought stars like NFL quarterback Tom Brady and NBA superstar Steph Curry to market the improvements. The newly revamped menu and efforts to revitalize the brand led to a 7.5% increase in same-store sales in 2021, as per company reports.
There are also talks about bringing back some old favorites, and Haynes has teased that old favorites like the Chicken Teriyaki, BMT, and Tuna subs may make a comeback.

Ongoing process

The Eat Fresh Refresh overhaul helped Subway achieve its highest annual system average unit volume since 2014 and led to significant growth across digital channels. The brand also generated its strongest average unit volume in 2021. The well-received revamp has surpassed the company's expectations, said Haynes.
The revamp and overhaul is not a recent move; it has been in the making since 2019. The decision to bring in the automatic meat slicers to ensure better business practices and Food Safety is also a part of the revamp. The company has seen a decline in sales and had to shut down hundreds of locations to focus on only the most profitable locations. The company has also brought in new in-store designs at locations to refresh the half-a-century-old image.
The brand has been investing heavily in research and development in an effort to transform the menu for years to come. The brand's recent launches, such as the new cheesy garlic bread product and pilot testing for pit-smoked meat sandwiches, are a preview of the new foods being developed. Don Fertman, Subway's chief development officer, said that they are moving in a positive direction and building a brand that will be stronger.
The brand has also been building a stronger relationship with its franchisees, as many were frustrated by the thin profit margins for some promotions. The brand has also partnered with Tastemade, a brand known for its social media prowess, for insights on consumer interactions. One result of the partnership was the Green Goddess Tuna Melt, which combined the classic tuna sub with green goddess dressing.

Future plans and focus

The company now wants to focus on transitioning from a development-focused to an experience-focused organization. The company will focus on improving the brand's footprint for better future growth with plans to invest in the modernization of locations and increase the scope of Subway's franchisee profile.
Steve Rafferty, senior vice president of development, said they are now focusing on quality rather than quantity and have plans to give franchises to multi-unit owners who can deliver a high-quality experience.
Subway is now placing an emphasis on restaurants being in the right format and locations to deliver on accessibility, convenience, and value. It is also remodeling 9,000 US locations under the "Fresh Forward" design. As per Rafferty, the steps are part of a long-term campaign to remain competitive for years to come.

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