top of page
Search

The Importance of LTO's in Foodservice Strategy


This month's blog covers the importance of LTOs for suppliers looking to develop new relationships with major national and regional accounts. As an added bit of fun, I had the AI tool Chat GPT help write this blog by listening to a video we created for a course. I asked chat GPT to listen to the video, and create a blog post on LTOs that was a certain length, in the style of yours truly. Here is what came out (with minor edits)

 

Limited Time Offers (LTOs) have become increasingly popular in the restaurant industry over the past many years. If you're not familiar, an LTO is a product that comes in and out of the restaurant, available for a limited time. This could be for a month, two months, or even up to three months before it's removed from the menu. The purpose of an LTO is to drive traffic to the restaurant, enticing customers to try something new or unique. As a restaurant owner, you're always looking for ways to drive traffic and increase ticket size (the amount of money a customer spends at your restaurant), and LTOs can be an effective tool to accomplish both. One of the most iconic LTOs of all time is the McRib from McDonald's. The McRib has been coming back once a year for decades, and customers eagerly await its return. Another example of a successful LTO is the Pumpkin Spice Latte, which has become a staple of fall menus in recent years. These products create excitement and bring in customers who may not have visited the restaurant otherwise.


Many restaurant chains offer new LTOs every month, like Dunkin or Sonic', which has marketing windows where new products are launched every single month. LTOs typically last between 30-90 days, depending on the restaurant's strategy. They can be seasonal, holiday-driven, or simply something unique and exciting for customers to try. They're generally promoted for the first portion of that window, and then there's a tail as inventory is run down over the remaining 60-90 days.

But why bother with all this effort if it's only for a limited time? As a supplier, you might think that having your products available 365 days a year is the goal. However, creating successful LTOs can be a great way to break into a chain you're not currently working with. It's an opportunity to prove your worth and showcase your products. Additionally, if you do a great job with your LTO, it could earn a permanent spot on the menu, becoming a menu staple. This is a great way to show your value as a supplier and earn the chance to bid on producing products that are part of the core menu.

It's important to note that different restaurant chains may have different strategies when it comes to LTOs. For example, at Dunkin', they mainly promote breakfast sandwiches and coffee beverages, as they see the greatest business gains when they focus on these products. That's not to say they won't promote other items like donuts or iced tea, but they're not the primary focus. Understanding a chain's LTO strategy is critical when trying to get your products into those promotions. You need to pay attention to what they're promoting, why they're promoting it, and how your products can fit in.

In conclusion, LTOs are an essential tool for driving traffic and increasing ticket size in the restaurant industry. They provide excitement, variety, and an opportunity to showcase new products. As a supplier, creating successful LTOs can open doors and lead to more business opportunities with a particular chain. So, when evaluating a chain's menu and strategy, don't overlook the power of LTOs and how they can help you break into a new market.

 

Not too bad of a job Chat GPT! (although it did have a pretty solid script to start from) Like many things in the restaurant world the quality of the output starts with the quality of the inputs! If you know a company that could use some help with their foodservice strategy or market entry plan, please have them reach out to us!



Comments


bottom of page