Arby's Looks Indoors and Outdoors for Sports Tie-Ins

Along With E-Gaming Sponsorship, Meat-Focused Brand Considers Hunting and Fishing Partnerships

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Credit: Arby's

Arby's Restaurant Group Inc. is looking into partnerships and other tie-ins as it tries to connect with passionate fans such as gamers and keep up its strong sales growth.

Along with sponsoring a new Eleague video game competition, Arby's may soon target the outdoor lifestyle market, its top marketer said in an interview Tuesday.

"We're trying to tap into these groups of people that have a very strong affinity for some type of content or some type of lifestyle, frankly, that other people really aren't speaking to because maybe they thought it might be a little too risky or maybe they thought it might be not big enough," said Rob Lynch, brand president and chief marketing officer, Arby's Restaurant Group Inc.

For Arby's, which has about one-tenth the marketing budget of some of the biggest fast-food chains, seeking out smaller spaces to play in also makes economical sense. The chain is looking into partnering with brands or outlets in the outdoor lifestyle space -- think an affinity for hunting and fishing -- where marketing work could begin before the fall hunting season.

"We feel like that's a community that's very passionate about what they do. It may not be this huge, broad-reaching activity that everyone in America participates in, but the people that do are passionate about it and given what our brand stands for, we're all about meat, we feel like there's a connection there," Mr. Lynch said.

The outdoor lifestyle plans may include the brand's first magazine spending since Mr. Lynch joined Arby's in 2013, he said.

Arby's is the official quick-service restaurant partner for Eleague, Turner and WME | IMG's video game competition. Eleague's first season, including a showcase, kicks off this week on TBS. Well ahead of the partnership announcement, Arby's social media team was sending out messages on outlets such as Twitter with video game references.

Nearly three years into his tenure, which has included the Pharrell Grammys hat tweet and a send-off to brand anti-fan Jon Stewart, Mr. Lynch continues to have a positive tone when he talks about the industry and the company. He shrugs off larger competitors' value plays, such as McDonald's McPick 2 or Wendy's 4 for $4 meals. Overall, Arby's is seeing "no dent" from the various value plays at other chains, he said. While Arby's is not focused on price plays, it does offer some items including its successful sliders for $1 during certain hours.

Those sliders -- 130 million have been sold since their introduction last year -- have helped Arby's begin to close its gap against competitors in the 2 p.m. to 5 p.m. snacking period. Arby's had a "pretty significant gap" versus the industry average on volume of business done during that slot, and has closed that by about 50% in the last eight months, Mr. Lynch said. He wants that gap to narrow even further over the next few months.

The company recently posted its 22nd consecutive quarter of U.S. same-store sales growth, a first-quarter gain of 5.8%, or 6.6% including Leap Day. Mr. Lynch did not disclose specific figures for the current second quarter, but said "April and May have been a little tough for the industry, and we're very happy with our performance. It's a great start to 2016."

Mr. Lynch dismissed industry talk of whether the company, acquired by an affiliate of Roark Capital Group in 2011, could soon go public. "No news there," he said. "We like being a nice little private company."

In 2015, Arby's was the 20th largest restaurant chain in the country, with U.S. systemwide sales up 8.6% to $3.45 billion, according to Technomic. Its growth rate outpaced growth at larger chains including McDonald's, Burger King, Wendy's and Sonic, according to Technomic data.

Arby's uses limited-time offers to draw in new customers and to get existing patrons to visit more often. Now through June it has added a buffalo chicken slider, and in July it will bring back last year's brown sugar bacon BLT and roast beef, along with a new brown sugar bacon turkey sandwich. The brown sugar bacon BLT actually scored lower in testing than most of the product launches Arby's had done, but it went ahead and introduced it anyway, based in large part on intuition. "It did amazing when we put it in the market," Mr. Lynch said.

The company is also working on improving the quality of core items, including redeveloping the recipe for its chicken sandwiches with updated breading and flavors, which will be out in September, Mr. Lynch said.

Arby's is working on remodeling older locations and opening new ones. On Tuesday, it announced an international franchise development agreement with Al-Kharafi Global for General Trading & Contracting Company-WLL, or Kharafi Global, to bring 25 restaurants to Kuwait and Saudi Arabia over the next seven years. Still, the bulk of Arby's new openings will be in the United States. Its U.S. plans include a second location in Manhattan, this time near Madison Square Park, a spot that will put Arby's right near the location of the original Shake Shack.

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