They are the gifts that keep on giving.
Like its autumn counterpart the Starbucks Pumpkin Spice Latte, the Shamrock Shake is a seasonal dessert beverage. But if your analysis ends there, you are overlooking its true power. Both beverages are “limited time offers” (LTOs) that garner significant attention when they are in stock. Not every foodservice brand will have an LTO so big that major news outlets and average Twitter users cover its release, but LTOs can still play an important strategic role across all segments of food service.
K-12 Food Service Operators: Test New Products
LTOs can be a good opportunity to test new products or flavor profiles before fully incorporating them into your menu. This can be especially useful for foodservice operators that focus on particularly discerning customers, such as children.
By collaborating with manufacturers to provide products in school cafeterias for a limited time, school nutrition directors can get valuable feedback from their students before fully incorporating those items into their regular rotation. If manufacturers collaborate with multiple school systems at once, they can reach the minimum volume necessary to be profitable while taking risks and gaining valuable end consumer data.
Fast Food: Take Advantage of Seasonal Demand
Consumers’ diets change throughout the year. Only the most ardent fans want a Pumpkin Spice Latte on the Fourth of July. LTOs let you strike while the iron is hot, and then discontinue the product when (most of) the demand has subsided.
A great example of seasonal demand is Lent. Adherents to various Christian traditions eliminate certain foods from their diets between Ash Wednesday and Easter. Many Catholics, for example, refrain from eating meat on Lenten Fridays. In response, a McDonald’s franchise owner developed the Filet-O-Fish to cater to this seasonal need.
As the Filet-O-Fish became more popular, McDonald’s scaled it to year-round production. As it turned out, while demand was highest at Lent, people like fish sandwiches all year. Other fast food chains are taking notice. While the “Chicken Sandwich Wars” got all the hype, there was a low-key fish war during Lent 2021.
Convenience Stores: Leverage Customization Options
Sometimes, LTOs do not have to include new or seasonal products. Instead, you can use them to encourage regular customers to try products they may have overlooked previously. Convenience stores frequently leverage their diverse offerings to sell additional products. For example, convenience stores may offer a month-long LTO during which customers who purchase a Pepsi product can get a Frito-Lay product for $1.
This diverse beverage and snack set can also help convenience stores expand to sandwiches, wraps, and salads. Offering limited time “meal deals” (i.e., any chips and beverage) as a side for new entrees can encourage more customers to see convenience stores as an alternative to fast food and fast casual establishments. If the entree quality is on par with those competitors, the diverse offering of beverages and sides could lure customers away long-term.
The Bottom Line
The COVID-19 pandemic caused changes in customer behavior. It will be a while before we understand whether these changes represent a permanent shift or if customers will return to old habits. LTOs can help foodservice operators test new products, profit from seasonal tastes, and leverage existing products to understand shifting preferences during a tumultuous time.
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