Chipotle Challenger Qdoba Taps Pereira & O'Dell as Lead Agency

Chain Posted 14% Sales Increase in Most Recent Quarter

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Chipotle challenger Qdoba has named Pereira & O'Dell its new lead agency after a review.

The San Francisco-based shop will handle all strategy and creative, while Horizon Media will continue to handle media. The process was overseen by Select Resources. Qdoba has worked with shops like Denver-based Fear Not (formerly Goodness Works), which picked up the business in 2012.

"Pereira & O'Dell shares our vision to fearlessly craft a brand narrative that will give consumers no choice but to take notice," said David Craven, VP-brand communications at Qdoba, in a statement. "Plus, we think they're pretty great at what they do."

Qdoba, owned by Jack in the Box Inc., has been posting impressive same-store sales lately. In the 16 weeks ending Jan. 18, the chain posted system same-store sales up 14% from a year ago, compared to an increase of 2% for the prior year period.

The chain credited much of that increase to a simplified menu-pricing structure implemented in the fall, which was part of an effort to revitalize the brand. Instead of charging for extras like guacamole, the chain moved to allow customers to pay one price for entrees with as many extras as they'd like. In the two-tier pricing structure, based on choice of proteins, customers pay a set price for chicken, vegetables or ground beef and another set price for shredded beef, pork and steak. The company also said that sales reflected a bump in traffic, less discounting and growth in catering sales.

"Qdoba is tastefully challenging the status quo with seasonal flavors and inclusive pricing. We're thrilled to partner with such an experienced brand and support their momentum," said Andrew O'Dell, CEO, Pereira & O'Dell, in a statement.

Qdoba at the end of 2013 had about 600 locations in the U.S., according to Technomic, while Chipotle had about 1,550. Chipotle's systemwide sales of $3.17 billion in 2013, according to Technomic, dwarfs Qdoba's $608 million. Qdoba is the fourth-largest Mexican chain in the U.S. with 2013 market share of 3.4%. It trails Taco Bell, which has 43.4% share; Chipotle, which has 17.6% share; and is on the heels of Del Taco, which has 3.5% share.

Compared to Jack in the Box, which spent spent $70.8 million on U.S. measured media in 2013, Qdoba is a small spender. In the first 10 months of 2014, Qdoba spent about $6 million on U.S. measured media, according to Kantar. In 2013, it spent $6.46 million and in 2012 it spent $5.8 million.

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