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Study: Customers still singing 'ode to the sandwich'

June 24, 2016

The popularity of the sandwich isn't slowing down, according to Technavio analysts, who recently predicted the global sandwich market will exceed $9 billion by 2020. A Technavio research study discusses the present scenario and growth prospects of the global sandwiches market for 2016-2020, and cites fresh sandwiches and pre-packaged sandwiches as the two major product segments.

Analysts said the four factors contributing to market growth included:

• Premiumization of sandwiches.
• Innovations in sandwiches.
• Growing mergers and acquisitions.
• Increased marketing and advertising campaigns.

Premiumization of sandwiches

A major market driver is the premiumization of sandwiches by vendors, said Arushi Thakur, an industry expert at Technavio,  in a company press release.

"Vendors are introducing premium sandwiches, which they claim to be made from high-quality ingredients," he said.

With the resurgence of most of the economies from the global recession of 2008-2009, the per capita disposable income of consumers has increased, which has led to the demand for premium products. In March 2016, Sonic launched a new sandwich, ultimate chicken club sandwich, to its line of premium sandwiches. In January 2016, Ginsters launched two limited edition sandwiches, including chicken balti and ham hock and piccalilli sandwiches.

The demand for artisan and handcrafted sandwiches is also increasing in countries such as the U.K. and the U.S. In October 2015, Tim Hortons Cafe & Bake Shop introduced a premium line of handcrafted sandwiches featuring freshly baked bread, real cheeses and crisp vegetables.

Innovations in sandwiches

Innovation in sandwiches is another factor driving the global market. Restaurateurs are bringing about innovations in every aspect of sandwiches, from the toppings to the bread. Instead of the simple toppings like ketchup, vendors are introducing products that contain toppings such as mayonnaise and ketchup together. Also, vegetables such as roasted broccoli and asparagus are being used instead of lettuce in sandwiches. Sandwiches with seafood ingredients such as crab, lobster, and whitefish are also becoming popular among consumers. Traditional white bread is replaced by other varieties such as pretzel, brioche, Hawaiian rolls, and homemade bread, according to the report.

Growing mergers and acquisitions

Another factor responsible for the growth is the increasing number of mergers and acquisitions in the market, Arushi said

“Larger companies are acquiring smaller ones to gain the market share and also to offer new and innovative products," he said.

In February 2016, Panera Bread acquired 50.1 percent stake in Boston-based Tatte Bakery and Cafe. In January 2016, AdvancePierre, a supplier of value-added, center-of-plate protein and sandwich products to foodservice, retail, and convenience channels, acquired Landshire.

Similarly, in December 2015, Togo's Eateries, which operates about 251 restaurants in different states in the U.S., was acquired by Nimes Capital.

Increased marketing and advertising campaigns

Retailers which use marketing and advertising campaigns to communicate about their products to customers also use these campaigns to reinforce their position, to acquire new customers and retain existing ones. Effective marketing helps a company grow in the market, and it also helps in increasing sales, profits, and brand loyalty of consumers, according to the study.

For example, in December 2015, Subway launched a new advertisement campaign that focused on the chain's 50-year history and its pioneering freshness.