Burger King’s Winning Menu Formula: Give the Old Sandwiches Tiny Twists

Swap a sauce here, a topping there: Burger King’s (BKW) new approach to menu innovation is about as minimalist as it gets. Rather than creating items that need new ingredients, over the past year it’s simply rearranged foods its restaurants already have in their kitchens. (Remember that French fry burger it came out with last year?)

And while Burger King admits it’s not trying to reinvent the fast-food wheel, the company says this modest approach is working. Comparable-store sales increased 0.4 percent in the U.S. and Canada last quarter, the third consecutive quarter of growth. “This was driven by our strategy of launching fewer, more impactful products and by the continued popularity of our core offerings,” Burger King Chief Executive Officer Daniel Schwartz said on Friday’s earnings call. (The 33-year-old exec and his youthful leadership team were the subject of a recent cover story by Bloomberg Businessweek’s Devin Leonard.)

The Chicken Big KingCourtesy Burger KingThe Chicken Big King

Burger King unveiled five items last quarter—fewer than it did last spring—which collectively required just one new product to be introduced into restaurants. Consider the new sandwiches: The BBQ Bacon Whopper is, well, just a Whopper that has bacon and sauce on it; the Chicken Big King trades the beef patty in the existing Big King for chicken; the Extra Long BBQ Cheeseburger fills the long hoagie bun already used for a chicken sandwich with two beef patties, onion rings, barbecue sauce, and cheese; the Bacon Cheeseburger Deluxe is a self-explanatory sandwich that uses ingredients already on hand. These are all versions of familiar burgers with small tweaks.

It’s a departure from Burger King’s former innovation strategy, which included seasonal launches that helped draw in customers but were complicating things in the kitchens. McDonald’s (MCD) similarly has been simplifying its menu to improve speed and service in its restaurants. In the recent cover story there’s a passage in which Schwartz, newly installed as CEO, goes to work at a Burger King in Miami:

Brendan Berg, Burger King’s senior director for global learning, was Schwartz’s guide during his training. He remembers his boss struggling to keep up with orders for items from the expanded menu. “There’s nothing like standing in the back of the house, and the lunch rush is upon you, and you have complicated sandwiches,” Berg says. “We had three different barbecue sauces. Some burgers had raw onions. Some had red onions. We had sweet potato fries. We’re standing there side by side, and he’s saying, ‘Brendan, this seems like a lot here.’”

After a few of these midday scrabbles, Schwartz thought it was time to simplify the menu with new products that were easier to assemble and didn’t require a multiplicity of ingredients, such as Satisfries, which were introduced last September and have fewer calories and less fat than Burger King’s traditional fries (which are still available, of course). For customers in need of something more filling, there is the Bacon Cheddar Stuffed Burger.

The risk is that Burger King’s new products, while simplified, won’t be sufficiently different from offerings at competing chains. “We believe that these types of operationally simple products are the key to increasing franchisee margins,” Schwartz said on Friday. The chain is almost all franchised now; only 52 of Burger King’s 13,808 stores are company-owned. Alexandre Macedo, Burger King’s president for North America, said this menu strategy allows the company to be more consistent in its marketing and focus spending in a few high-impact areas.

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1 August 2014 | 4:08 pm – Source: businessweek.com

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