Wendy's moves to target Millennials
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Wendy鈥檚 CEO Emil Brolick says the chain is evolving its menu and marketing to ensure it appeals across generations.聽 鈥淭he transformation of the Wendy鈥檚 brand is essential to strengthen our relevance with the boomer generation and to establish credible relevance with the Millennial generation,鈥 he told analysts during the quarterly earnings conference call.
Baby boomers (ages 50 and older) account for 33% of quick-service restaurant visits, according to NPD Group data, but Millennials (ages 24-37) now represent 25% of customers (with ages 25-34 accounting for 15%). Brolick said Wendy鈥檚 has tried to be 鈥渕indful of the importance of gaining traction with Millennials.鈥
It has done that through enhanced technology and through digital marketing channels. 鈥淪ince 2010, people have been spending more time on digital devices than TV or radio, according to eMarketer, and we continue to evolve our marketing to drive consumer awareness and connect with consumers via this medium,鈥 Brolick said.
鈥淩ed,鈥 the red-haired spokeswoman in Wendy鈥檚 TV commercials is a Millennial, Brolick said. But the chain鈥檚 goal 鈥渋s to surround consumers with 360-degree marketing messages beyond TV, and we have become leaders in social media, mobile marketing and digital promotions.鈥
Wendy鈥檚 used a Facebook promotion focused on 鈥淟ove Songs鈥 to market its Pretzel Bacon Cheeseburger. The chain also is using YouTube as an important channel, especially to reach Millennial women. The chain sponsors the 鈥溾 video series for younger Millennial women. Wendy鈥檚 Canadian operation produces a YouTube series for older Millennial women titled, 鈥淕irlfriends at Wendy鈥檚 Eating Salad & Talking About Stuff.鈥 In March Wendy鈥檚 introduced its latest salads with an exclusive聽聽at a New York City unit hosted by 鈥渁ctress and fashion icon鈥 Molly Sims.
鈥淏oomers and Millennials definitely have different lifestyles, different product needs and different media habits,鈥 said Brolick. 鈥淗owever, what we have seen is that growing our relevance with Millennials has not come at the expense of building our business with boomers.鈥
The NPD Group noted a similar shift in a recent report. 鈥淭he influence of boomers and older on eating patterns will fade as their households and populations shrink, and the impact of Generation Z (ages 0-23) and Millennials (ages 24-37), which made up over half of the U.S. population in 2013, will significantly increase,鈥 the researcher reported.
However, everyone likes a good burger, so Wendy鈥檚 will continue to balance its menu with both limited-time offers (LTOs) like the current聽Tuscan Chicken on Ciabatta聽and core-menu items. 鈥淟TOs will play an important role, but our core menu will also evolve to reflect the needs of the new QSR generation,鈥 Brolick said.
Analysts did not ask Wendy鈥檚 executives about the BBQ Pulled Pork sandwiches the chain currently is testing in several markets. In at least one market it also has tried pulled pork as a topping for a beef patty. Brolick did say that Wendy鈥檚 has built up equity wth consumers that 鈥済ives us a distinct advantage to introduce high-quality, high-end items that people have a natural gravitation toward that others may not be able to do as successfully.鈥
For Q1, ended March 31, 2014, Wendy鈥檚聽聽that same-store sales were up 1.3% at company-owned stores. At franchised stores, which make up approximately 86% of its system, same-store sales rose 0.6%. The chain said the difference is due in part to a greater number of company units that hav undergone 鈥淚mage Activation鈥 remodeling.