To Add Variety and Control Cost, Fast Foods Go Small

BusinessWeek
Pizza Hut Sliders
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Pizza Hut Sliders

If the idea of inhaling a whole pepperoni pizza or scarfing a Big Mac triggers your guilt, perhaps you’d feel better consuming these items in a series of dainty, smaller bites instead. Pizza Hut (YUM) is now the latest chain to offer sized-down products. On Feb. 4, it added mini pizzas, called Big Pizza Sliders, to its menu—an odd moniker since they are neither big, nor are they sliders in the traditional sense of being small sandwiches. Each pizza measures 3.5 inches across and weighs slightly less than a slice of a large pie.

Pizza Hut isn’t entirely focused on helping diners eat less—sure, you can get a modest order of three, but the sliders also come in boxes of nine. Sizing down does help the chain control costs amid rising commodities prices. “The cost of sale for this product is better than a large pizza,” says spokesman Doug Terfehr. The sliders, which were tested in 2012, retail for $10 for nine or $5 for three.

Terfehr says, however, that the main consideration behind the sliders is not cost but providing more customization, as customers can choose up to three different combos with up to three toppings each per order (a pie can have different toppings only on each half).

Other chains are offering new mini items. McDonald’s (MCD) this month launched Fish McBites for a limited time, which will also be available in Happy Meals. A regular-size (5.2 oz.) order of Fish McBites costs $3.69, slightly less than a 5-oz. Filet-O-Fish sandwich at $3.99. Burger King (BKW) recently offered molten fudge bites for $1.69. Last July, 7-Eleven (3382) started selling mini tacos at four for $1, driven by “the ‘snacking’ trend,” according to company spokesman Scott Drake.

As for the era of supersize foods? “There is still room for that, but we’re seeing more growth in this area,” says Terfehr. The “big” market may be exhausted for the moment-—how many people want to drink more than 50 oz. of soda?

Indeed, various mini items have been on menus over the decades—Burger King had 1-ounce “Burger Bundles” in the 1980s, for instance. Chicken McNuggets, a classic bite-size food, made its debut nationally in 1983, and such chains as White Castle and Krystal specialize in small burgers.

Yet restaurants are now under a few unique pressures, says Jonathan Marek, senior vice president at data analytics firm APT. First, calorie-conscious consumers want a greater range of options. Second, as commodities prices rise, sizing down helps companies hit target price points, says Marek. By dividing a pizza into sliders, Pizza Hut can launch a new item for $10, the same price as a dinner box (a one-topping pizza, five breadsticks, and 10 cinnamon sticks) or a large pizza (eight slices).

One restaurant chain that hasn’t been marketing mini: Chipotle (CMG). In 2011, I submitted a comment and suggested adding smaller items. Customer service recommended ordering single tacos (not listed on the menu) and added, “we do have kids meals available, which may help you out.” Not a bad idea, but I do prefer a drink with my meal that isn’t chocolate milk.

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