Subway is an international brand. They have franchise locations throughout the U.S. and Europe. Subway is known for their sandwiches, but they also sell cookies, chips, drinks, and other add-on items to support their profits. Previously, all of their cookies were produced in the U.S. and shipped to franchises around the world. However, Subway decided to strengthen their supply chain by moving some cookie production to Germany.
A bakery in Gerolzhofen, Germany, will now supply more than 4,500 Subway stores in Europe with cookies. There is a 600 square-foot facility at the existing Aryzta’s bakery that is dedicated to Subway cookie production. It took one year to construct the factory and expansion plans are already in the works. More workers are being added as the need arises.
The main reason why Subway decided to move some cookie production to Europe was to speed up the delivery rate to their franchise locations in Europe. Customers want fresh cookies — something that is difficult to achieve when shipping thousands of miles across the world. Subway was already using local suppliers in Europe for their meats and veggies, so cookies were the next step. The move with save them thousands of dollars each year in shipping costs.
Subway uses an independent organization, the European Independent Purchasing Company (EUIP), to help with distribution. Purchasing Director at EUIP Mike Atwood said, “The new bakery will be a huge asset to our supply chain, with faster response rates and reduced distribution times, enabling us to better serve the franchisees.” Testing has already been completed and delivery has started.
Other food franchises can learn from Subway. Moving cookie production has brought many benefits to the company — quality cookies at a cheaper cost. Distribution is always easier when you are manufacturing goods near the locations where they will end up.