There were several factors at work, including increased consumer mobility and digital gains. Yet it was breakfast that really fueled performance, as the category contributed roughly 6.5 percent to Wendy's U.S. same-store sales in the period. Average weekly take grew throughout the period.
“We came into the morning daypart as an underdog,” Loredo said. “And we launched it in the midst of COVID. And yet here we are, less than a year into it, and we’re matching competitors that have been in the market for 50 years. Literally going from a breakfast nobody to a breakfast somebody, and loving the heck out of every minute of it.”
Breakfast suddenly became Wendy’s highest-rated daypart, in terms of guest satisfaction scores. It appreciated high repeat orders as well. All the while, CEO Todd Penegor said, a “fairly large percentage” of existing customers still hadn’t tried it yet. Awareness in March was 50 percent and has held steady over the past 10 or so months. That’s no small feat. Yet the reality it hasn’t grown, either, speaks to potential. It’s why Pengor said Wendy’s would “continue to support breakfast with our incremental company advertising spending.” Wendy’s forked up $6.2 million last quarter. To that point in 2020, corporate funneled $15 million into the breakfast marketing pool, “and we plan to continue our incremental spending in 2021,” he said.
“The key unlock for this business moving forward will be mobility, as this improves, coupled with our incremental investment in marketing, we believe that this business has a ton of upside,” Penegor added.
Generally, Wendy's generates 25–30 percent awareness from a typical three- to four-week LTO. While you’d expect something like breakfast (and the investment behind it) to track higher, it got off to an alluring start nonetheless.
The “mobility” Penegor referenced, or the notion guests aren’t leaving the house as much, is something Wendy’s believes will fuel growth in its most organic form—word of mouth.
In the meantime, however, you can see COVID’s direct impact on Wendy’s messaging. “The media channels that we were impacting mattered more than ever,” Loredo said. “We really had to take a look at where we were focused on engaging in media. Certainly, there were broad-reach awareness mechanisms that we could use, but it also became very important for us to think about how did that shift in the context of world of COVID.”
Consumers started binge watching at a higher clip. Tablets and handheld devices were at the ready. Gaming became ever-present. “There were just a bunch of changes that we had to continue to think through and really consider how do we want to go engage with those consumers,” Loredo said.
Another adjustment was delivery. Wendy’s originally figured breakfast would thrive around 6:30 a.m. Just as brands like Starbucks and Dunkin’ noted, though, the early morning occasion pushed back during quarantine life. And so Wendy’s had to rethink something as straightforward as getting food to guests. “All of sudden the time period for breakfast started to shift later and later into the morning,” Loredo said.
Digital and mobile ordering spiked. Order size increased, and so did check average. It led Wendy’s to figure out how it could become rush ready at the “new breakfast” timeframe. “A lot of folks were not going out to work. They were really changing their overall habits. So as we began to ramp up delivery, we found ways we could really build into that daypart the idea of having your food delivered. Make sure that it was there for you in the morning,” Loredo said.
In March of 2020, Wendy’s had one delivery partner. Today, there are four. “You really think about everything from messaging to how we were working in the restaurants and then ultimately the ways that we were getting food to consumers, from where we were at this time a year ago, I have to admit that pretty much everything has changed,” Loredo says. “But in many ways, it’s changed for the better.”
So how did Wendy’s get the word out, all hurdles considered? Loredo said it boiled down to listening to guests and understanding where they were engaging. Because the reality was, Wendy’s couldn’t speak to people walking through the door anymore. It had to reach across the digital table.
“No big surprise for Wendy’s is our not-so-secret super power is social. So really digging in and making sure that we were understanding. Listening to the communities that we’re a part of. To give us a sense of where we wanted to pivot those conversations,” Loredo said. “This world has been rapidly changing.”
Gaming was perhaps the foremost adjustment for Wendy’s. The brand already laid the foundation with Fortnite, a game that morphed into a cultural hub for 12–to-24-year-olds through the rise of online streaming platform Twitch.
Instead of just popping up an advertisement in the middle of some action, Wendy’s made its advertising the main event. Fortnite introduced a game mode called “Food Fight,” which prompted Wendy’s to join in. It pitted “Team Burger” versus “Team Pizza.” The former stored virtual beef in freezers. So Wendy’s backed Team Pizza and made it its objective to eliminate all burger freezers.
How effective was this offbeat tactic? Wendy’s amassed more than 1.5 million minutes watched from viewers. The Twitch stream was viewed live more than 250,000 times. Mentions of Wendy’s increased by 119 percent across social platforms. Read more on the campaign here, which earned agency VMLY&R The Drum Social Buzz Awards in 2019.
“The work we had done there set us up to be successful in the world of gaming,” Loredo said.
Wendy’s shifted into Animal Crossing and Mario Kart this past year. “The different ways that we really got engaged in the gaming community. Did it in an authentic way and made sure we were able to talk about breakfast and that story as well,” Loredo said.
Another example was a December partnership with Uber Eats on a “Never Stop Gaming Menu” that connected fans with five of the biggest Twitch streamers for five days of gaming, meal combos, and prizes. It’s not unlike some of the curated digital-exclusive options Chipotle offers through celebrity favorites. Or McDonald’s link-up with Travis Scott and J Balvin.