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Unlimited Use of Limited-Time Offers

Filed under LTO, Marketing

The restaurant industry is slowly recovering from the recession. The National Restaurant Association forecasts real sales growth this year of just 0.2% for full-service restaurants and 0.4% for limited-service restaurants. That growth pace only intensifies the battle for customer dollars, and limited-time menu specials, often with branded ingredients, are an increasingly popular marketing tool in that fight.

Data compiled for by researcher Mintel finds that quick-service restaurants (QSRs) introduced 301 items (food and beverages) labeled “limited-time offer” during the 12 months ended in May 2012. That is a 48% increase from the 204 LTO items introduced by QSRs during the 12 months ended in May 2011.

McDonald’s last year changed its thinking on short-term menu items, switching to national promotions (such as the first national McRib LTO) rather than regional specials, the Associated Press reported. “Obviously customers are out there, and they’re frequenting different places,” Wendy Cook, McDonald’s VP-U.S. marketing told the AP. “They’re starved for variety.” Clearly, other QSRs have gotten the same message.

Source: Mintel Menu Insights

But it’s not just QSRs that are increasing use of LTOs to generate some excitement and news in a very competitive marketplace. The Mintel data finds that LTOs by casual-dining chains increased by 42% to 176 during the 12 months ended May 2012. And fast-casual LTOs nearly doubled, jumping from 64 during the 12 months ended May 2011 to 125 for the 12 months ended May 2012.

And often those LTOs include branded ingredients. The limited-time Summer Menu that Sonic introduced this week includes a Chili Cheese Fritos® Coney, a hot dog topped with chili cheese Fritos corn chips among other items. This follows Burger King’s new seasonal menu, which includes a Carolina Whopper with branded Bull’s-Eye Carolina Style BBQ sauce, a Texas BBQ Whopper with Bull’s-Eye Texas Style BBQ sauce and a Memphis Pulled Pork BBQ Sandwich with Sweet Baby Ray’s® Sweet ‘n Spicy BBQ sauce.

One of the most successful “brand crossover” items has been the Taco Bell’s Doritos Locos Tacos, with taco shells made of Doritos tortilla chips, launched this year.

Using branded ingredients isn’t new, of course. McDonald’s has offered Newman’s Own salad dressings for years. Red Robin and others have burgers with A.1. steak sauce as an ingredient; Carl’s Jr./Hardee’s Hand-Breaded Buffalo Chicken Tenders have Frank’s Red Hot sauce. But the flood of LTOs makes the need to stand out in the marketplace and create “buzz” around new products makes the use of familiar brands even more important.

Branded items offer access to the equity of a (ideally) popular item such as Fritos. They can make a parity item like a hot dog distinctive and desirable. Even better, the borrowed brand may chip in toward the cost of the new menu item. All that could help explain why there might be an increase in use of branded ingredients: With the pace of limited-time-only menu introductions quickening, every advantage counts.