Subway has partnered with Halo Top Creamery to test hand-spun Halo Top milkshakes, marking the first restaurant brand to serve Halo Top’s ice cream in a milkshake platform. For a limited time only, July 22 through September 4, three flavors (vanilla bean, chocolate, strawberry) will be sold at nearly 1,000 participating Subway restaurants in the U.S.
According to Len Van Popering, Subway’s chief brand and innovation officer, the sandwich giant approached Halo Top over a year ago about collaborating and agreed to form an exclusive strategic partnership after realizing the two companies shared similar values.
“Bringing this first-to-the-world innovation was enabled by months of close collaboration between the Subway and Halo Top teams,” Van Popering said. “This is the first time we are investing in a frozen beverage program with an eye toward national roll out, and the only time any brand will offer this exclusive partnership with Halo Top.”
Each Halo Top milkshake has 350 calories or less, at least 20 grams of protein and 30% of the recommended daily value of calcium. It is these types of attributes that have put Halo Top on the map. The company was founded in 2012 by CEO Justin Woolverton, who “just wanted to eat an entire pint of ice cream and not hate himself for it.”
Clearly, many of us feel the same–the low-calorie ice cream company, which launched in 2012, registered 2,500% annual growth in revenues in 2016 alone. The company’s sales in 2016 were $44.3 million. In 2017, they were $350.6 million, according to CNBC.
In 2017, Halo Top became the best-selling pint of ice cream in America, surpassing ice cream giants like Ben & Jerry’s and Haagen-Dazs. For context, the ice cream market in the U.S. was $6.7 billion in 2018.
“Halo Top disrupted the ice cream category by offering delicious ice cream with just 280 to 360 calories and 20 grams of protein per pint,” Van Popering said. “Our alliance with them represents a perfect fit between the two brands.”
The hand-spun Halo Top milkshakes will be available exclusively at Subway in six test markets: Colorado Springs, Colorado; Hartford, Connecticut; Longview and Tyler, Texas; Salt Lake City, Utah; Toledo, Ohio; and West Palm Beach, Florida. To support the test, franchisees in those markets have added a drink mixer and counter-top mixer. Investment specifics of the added equipment and product have not been disclosed.
With this launch, Subway could make a major play into the growing afternoon snack daypart alongside giants like Starbucks and Dunkin’, which generate more than 40% of consumer business during non-traditional hours.
An analysis by Coca-Cola, using its own data from market research firm NPD Group’s CREST information service, finds that snacks account for 19% of total food service occasions. Further, 81% of consumers surveyed have purchased a snack at a QSR, more than any other away-from-home category.
Because of these trends, Van Popering is confident in the product and said the company will decide how to proceed with the platform once the initial test ends in September.
“Many additional markets are eager to begin offering our hand-spun Halo Top milkshakes and I anticipate guests across the country will encourage us to expand,” he said.
Notably, this creation fits neatly into Subway’s sharpened focus on menu innovation. In March 2018, Subway announced an $80 million refresh that includes store remodels, digital transformations and a bigger culinary and innovation team.
According to Van Popering, that team tests hundreds of new menu items a month and brings the most successful products to market more quickly. Within the past few months alone, these offerings have included the ultimate cheesy garlic bread, an expanded signature wraps platform and 8-inch King’s Hawaiian sub rolls. Last week, Subway introduced its new Ciabatta Collection and Hubert’s Lemonade sold exclusively at the chain.
Culinary innovations are also part of the brand’s restaurant design, which includes “flavor stations”–giving customers the option to add spices, oils, seasonings and spreads to their sandwiches–and new beverage stations with unique options like passion fruit agua fresca. Nearly half of U.S. restaurants will be in the new design by the end of 2020, Van Popering said.
Subway’s headlines haven’t been all that favorable of late. In 2018, the company closed more than 1,000 stores, which brought its footprint down to its lowest level since 2011. With this reduction came a sales decline as the chain has navigated a confluence of challenges from oversaturation to the arrest of spokesman Jared Fogle to swiftly intensifying competition in the sandwich category.
According to Technomic, the number of fast casual sandwich chains with more than $50 million in annual sales increased 70% to more than 7,500 in the past five years. These burgeoning sandwich players have brought exciting, new creations to the market, making Subway’s signature menu seem a bit dated to some. Obviously, however, the chain is working fast to change that perception. So, while it may take some time to rectify its other issues, Subway is at least starting to fire up its innovation cylinders, and a very popular ice cream brand could add some much-needed heat.