The Wendy’s Company announced that in March 2013 a new version of its logo will be introduced on packaging, advertising, crew uniforms, restaurant signage, menuboards and websites. The iconic Wendy character (modeled on founder Dave Thomas’s daughter) remains but with an updated look. This is part of a larger brand transformation being directed by Craig Bahner, who joined Wendy’s in April as chief marketing officer. BurgerBusiness.com spoke with Bahner—who previously had overseen Procter & Gamble’s $2.2 billion retail hair-product business in North America–about Wendy’s new logo, the transformation of the 99¢ value meal, coffee, and more.
During a conference call in June, you suggested that the Wendy’s brand had “lost relevance” in the past. How well do you feel that relevance is being reestablished?
Clearly, you don’t lose relevance overnight and you don’t gain it back overnight, but I’m very excited with the progress we’re making. I think this transformation program is indicative of how we’re working on multiple levels to re-engage consumers.
We’re not where we want to be but I’m excited that sales have grown for five consecutive quarters and with Zagat rating us No. 1 in our category and our ranking No. 1 in drive-thru service [in QSR magazine’s study]. These are all indications that we’re starting to rebuild that relevance. We’ve got good momentum and there are a lot of things going on that we think will continue it.
Tell me what relevance means to you in this context. What do your customers want from your brand?
One of the things that consumers count on from any QSR, but particularly Wendy’s, given the position we hold, is reliable and predictable service. They expect us to be a cut above everyone else. Wendy Thomas, our namesake, is on air talking about the quality and care and craftsmanship we put into our products, so were setting the bar high. And they expect us to deliver on it each and every day. And they expect an inviting, comfortable atmosphere, which is why our remodeling program is so critical. They expect to have leading-edge menu products with great taste and great value, and that’s where our innovation program comes in.
And does the new logo fit in with that as well?
Yes. We want to signal to consumers that Wendy’s is on-track and that it’s a different experience than maybe they’ve had in the past few years.
You mentioned the dual advertising campaigns with “Wendy’s Way” from Wendy Thomas and the “Red” character’s “Now that’s better.” Do you continue to feel that works well without confusing consumers?
We are. I’ve seen a lot of qualitative research results and I know that consumers get that Wendy Thomas is talking about the brand’s values, which were her father’s values in founding Wendy’s, and that still are what we live by today. And they get that Red has a different message, which is “Hey, here’s a new sandwich that you’ve got to come in and try.” Those are different, complementary messages.
Consumers say they work well together. In fact, our ad awareness is up 8 points over the past few months. It’s at levels comparable to brands that spend many times more what we spend on media.
Let me ask about pricing, because it’s something you’ve addressed and [CEO] Emil Brolick has spoken to this year. He’s talked about the need to balance the menu between premium-price and value-price menu items. He’s suggested the chain got out of balance on pricing. Are you where you need to be now?
There’s a very clear need to have a price-value level. We recognize that and we’re working on both the premium and the value end of the price spectrum. On the premium end we’re growing market share in premium burgers and chicken sandwiches and in our salads line. We’re No. 1 in salads, in fact, ahead of Panera and McDonald’s. So we feel we’ve made excellent progress at the premium end.
And then when we look at the price-value segment, there are a couple of sub-segments there. One is a price consumer for whom 99¢ is the key price point, and we’re trying to hit that. We’re working on a program that gets our system aligned on a number of items at 99¢ so the consumer can have a meal at that price point. Put three 99¢ items together and still have that consistent, quality meal. Then there’s a segment focused on price-value and it’s about what I pay as well as about what I get. We have some ideas in that space as well.
So it’s not going to be doing one thing that will fix it. It’s going to be a series of moves, but we’re very close to executing on the first step of that process.
Are you saying you’re looking at establishing a mid-price tier between 99¢ and premium?
I wouldn’t necessarily say it that way. We’re looking to win in the price-value segment as well as in the premium segment.
You’ve also said that one necessity for rebuilding the brand is bolder menu innovations and moving into segments you haven’t been in before. Your current LTO, the Bacon Portabella Melt, doesn’t seem like a new category for you. Are you still committed to pushing the envelope on menu?
Absolutely. We have to innovate in several ways. We have to keep our core menu relevant and fresh. Those are things like the restaging of Dave’s Hot ‘Juicy Cheeseburgers, the sea-salt fries, etc. We’re constantly looking at our core to make sure it’s relevant and that the price and quality are right. Then you have items like Bacon Portabella Melt that for us fall into the category of promotional products. Those are important because they leverage the existing asset base but bring topspin through new, high-quality ingredients. You don’t see Portobello mushrooms every day in QSRs; you don’t see açai berries [in Wendy’s Berry Almond chicken Salad] or other things we’re doing.
The third area is the one you reference of “step change.” That is clearly on our radar screen but it’s not something you’ll see every day and not something I can get into in detail. But it definitely will be an important part of our mix as we move forward.
You’ve tested a Grilled Chicken Flatbread line, which would take you into a new category. Is that something you’re still considering?
I can’t comment on what we’ll do there. But we did test it and we did learn a lot from the experience. I can say we’re interested in bread and bread carriers as ways to better serve consumers with balanced options.
Coffee is such an important, competitive marketplace for QSRs. Can you give an update on your Redhead Roasters coffee program. Is that something we won’t see until the breakfast program in test gets rolled out?
Redhead Roasters is in test some of the current breakfast test markets as well as in a few markets where we are not testing breakfast. We haven’t made a final decision, but I would say the rollout of Redhead Roasters is not necessarily dependent on breakfast. Coffee is a product that consumers buy at all dayparts, including iced coffees and flavored coffees.
You came to Wendy’s from the packaged-goods arena and Procter & Gamble. What have you carried over and on what have you had to readjust your thinking with the restaurant business?
Clearly it’s a different business, and that’s where my learning curve has been. But I look at the similarities. It’s a consumer-centric business, and, in fact, restaurants may be even more consumer-centric because you don’t have the retailers in the middle. You take your case directly to the consumer and it’s up to us to serve our consumers every day. I think I also brought some of the disciplines from consumer packaged goods and we’re applying those. We’re doing a lot of robust work around innovation and we’re working to get projects through the system more reliably.
And in terms of brand management, we too have product lines, and those lines have unique positions in the marketplace and key customer appeal. We need to have a plan to win and a holistic strategy for each product line. Those are all things that we’ll continue to use to help us continue our brand transformation.