If you're pulling into a White Castle to grab a sack of sliders, chances are you aren't expecting to find a healthy meal staring back at you in their cardboard carriers. After all, the company ranks last in Consumer Reports latest survey that asks what consumers think of when considering restaurants with healthful meal options.
But that list contains some surprising results.
For starters, Chipotle Mexican Grill (NYSE:CMG) doesn't even make the top ten. Despite its effort to go GMO-free and antibiotic-free in its meats and serve higher-quality fresh ingredients at reasonable prices, consumers ranked it 13th on a list of 65 restaurants.
Not even fast-casual rival Panera Bread (NASDAQ:PNRA) topped the charts, instead coming in third place.
So what eatery garners the most mindshare for offering healthy options?
None other than Subway! A whopping 96% of the consumers surveyed said the sub shop offers healthier options than any other food establishment on the list.
So what are the business implications of these results?
Let's not forget taste
Well, the survey indicates that only 20% of respondents thought about whether the food was healthy when making their dining decisions. Unsurprisingly, taste remains a top consideration.
Subway ranked near the bottom of good-tasting subs and sandwiches. (Where Schlotzsky's scored an 8.2 out of 10 on taste, putting it third on the list of sub and sandwich shops, and Panera got a 7.8 to notch seventh place, Subway only managed to eke out a 7.2 rating that put it 14th on the 15 outlets.)
So how is the chain so successful?
Subway's success likely draws from its ability to expand at an exponential rate because it can open small non-traditional sites. Subway operates 43,075 stores in 108 countries generating sales of $18.8 billion annually, making it one of the biggest, most far-flung restaurants in the world. It's bigger than McDonald's (NYSE:MCD), which has over 35,000 restaurants in 100 countries, and bigger than all of the restaurants from Yum! Brands (NYSE:YUM) three chains -- KFC, Pizza Hut, and Taco Bell -- combined (which amount to 40,600 restaurants).
It's opened Subways in hospitals, churches, laundromats, and even on a riverboat. Perhaps the humor site The Onion will suggest, as it did for Starbucks, that we'll see the opening of a Subway in the bathroom of a Subway.
A Dagwood-sized opportunity
Although its subs apparently don't taste so great, Subway has been able to overcome that divide because it gives consumers a healthy choice and is building out the chain at a break-neck pace. This has implications for rival restaurant chains that are making changes to address the healthful eating, fast-casual dining fad, including McDonald's, Wendy's (NASDAQ:WEN), and Pizza Hut.
McDonald's is quickly rolling out a kiosk ordering system highlighting fresher ingredient choices to help stem the loss of customers, while Wendy's Image Activation remodeling program aims to reimagine the burger chain as a fast-casual restaurant. And I'll still argue the new Pizza Hut menu that gives customers a bewildering 2 billion combinations to choose from is overkill.
But maybe Subway's success means there's hope for these rivals. After all, McDonald's burgers ranked dead last on taste. But if it can convince consumers the new ingredients are actually healthier, perhaps it can regain lost ground.
Taste should obviously be a key emphasis as well. Perhaps a better example is Chipotle whose burritos tasted better than any other from competing Mexican food chains. Coupled with a respectable view that its menu is healthy, it continues to pump out ever-higher sales.
Nevertheless, if you want healthier food choice, avoid the hamburger joints and head to your local deli sandwich maker. You'll find you have the most options for quelling those hunger pangs.
Follow Rich Duprey's coverage of all the restaurant industry's most important news and developments. He has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill, McDonald's, Panera Bread, and Starbucks. The Motley Fool owns shares of Chipotle Mexican Grill, Panera Bread, and Starbucks. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.