Welcome to the latest installment of QSR magazine's Best Practices e-newsletter! This time we'll look at how a Midwest restaurant chain grew its milk sales by 60 percent in one year.
The restaurant: Runza Restaurants might not be a national name, but it is an institution in Nebraska, with 50-plus years of history and 66 of its 70 units located in that state. The concept was founded on the runza sandwich, which is a mixture of ground beef, cabbage, and spices stuffed inside a small loaf of bread. To say these sandwiches are popular with the locals is an understatement --- for instance, Runza sells about 10,000 of them on football Saturdays at the University of Nebraska. Runza also offers more typical fare such as burgers and chicken sandwiches, as well as house-made onion rings.
The opportunity: According to Becky Richter, marketing manager at Runza, the company prides itself on the quality of its products. They were planning to add healthier options to their kids menu and were well aware that some larger quick-serve chains had started something of a "milk trend" with good sales results. As Richter points out, Runza might be too small to start a trend, but they could certainly capitalize on it.
Runza already had milk on the menu, in the form of cafeteria-style single-serve cartons. But there were issues: the milk didn't get really cold, the packaging was dull, and moving product before it expired was challenging enough that they dropped chocolate milk and offered only white.
The solution: Runza partnered with Shamrock Farms, an Arizona-based dairy that was founded in 1922 and is the largest dairy in the Southwest. Among its product offerings for the foodservice trade is a single-serve plastic bottle with colorful graphics and an extended shelf life. Runza chose this product --- both chocolate and white --- for its menu.
After a successful trial run in the Lincoln market, Runza rolled out the product system-wide. Initial promotion was subdued, with just a counter card and a half panel on the drive-thru menuboard. Some operators also got clever and emptied a couple bottles and displayed them on the counter. Even with this minimal promotional effort, Runza saw a big increase in milk sales: 60 percent from Q1 2005 to Q1 2006.
The final verdict: "Runza Restaurants have high food quality and great customer service," says Richter, "and the single-serve milk matches that better than the cartons did. The Shamrock Farms product had great shelf life, it was fun for the kids, and it was an easy sell for parents. It just made sense on all levels."
On the web: Find Runza Restaurants at www.runza.com and Shamrock Farms at www.shamrockesl.com.
