Wendy’s places big bets on breakfast and U.K.
Wendy’s is setting itself up for a busy 2020 with increased marketing spending as it launches a national breakfast menu in the United States and prepares to return to the United Kingdom.
The No. 3 U.S. burger chain on Friday discussed the 2020 breakfast launch it announced in September. It also said it plans to open restaurants in the U.K. over the next 12 to 18 months to kickstart a broader expansion plan across Europe. Both of those initiatives will require increased marketing spending, executives said at the company’s investor day.
Both moves could mean increased business for the company’s agencies. Wendy’s works with WPP’s VMLY&R on creative and social, Publicis Groupe’s Spark Foundry for media and Omnicom Group’s Ketchum for communications.
Other plans Wendy’s executives discussed included testing black bean burgers that could launch in 2020 if they prove to be successful. It also plans to start a Wendy’s Rewards loyalty program next year. And CEO Todd Penegor said the company plans to grow on its own rather than seeking out brands to buy or looking to be acquired.
Kurt Kane, Wendy’s U.S. president and chief concept officer, said the chain is prepared for its return to national breakfast, having worked alongside franchisees to get the menu right. That means both having “craveable” items such as a Breakfast Baconator and making the breakfast business operationally simple for operators to execute.
Wendy’s plans to put more marketing dollars behind the breakfast launch, pulling funds from the royalty payments it gets from franchisees. Wendy’s faces formidable breakfast competitors, most notably McDonald’s, which along with other rivals could quickly respond with stepped-up advertising if Wendy’s comes out swinging.
“Honestly, the louder the fight gets, the better it is for our breakfast business,” said Kane.
Wendy’s expects breakfast to grow to account for 10 percent of its business.
Back to that international growth plan. Wendy’s opened its first international location in Canada in 1975, and its northern neighbor remains its largest international market by far, accounting for about 55 percent of its international sales. Wendy’s now has restaurants in 32 international markets, with 950 restaurants bringing in sales of around $1 billion. By 2024, Wendy’s aims to have more than 1,500 international restaurants generating about $2 billion in sales.
It’s a lofty goal.
Wendy’s sees itself as a challenger brand in the U.K., where other U.S. chains such as McDonald’s, Burger King and Five Guys are already slinging burgers and frying fries. Wendy’s had restaurants in the U.K. years ago but hasn’t been in business there since 2000. One reason Wendy’s thinks it can succeed in the U.K. now is that its Twitter feed is already popular there. The brand’s biggest Twitter audience outside North America is in the U.K., said Abigail Pringle, Wendy’s international president and chief development officer.
Wendy’s plans to boost international marketing spending as well, to get things rolling.
“We’re grateful that we can leverage the great partnerships with our agencies that we work with in the U.S. as we grow Wendy’s,” the company said about its international expansion plans.
Wendy's was the 129th largest U.S. advertiser in 2018, with spending down 1.9 percent to $376 million, according to the Ad Age Datacenter. Wendy’s estimated global systemwide ad spending in 2018 was approximately $421 million, according to Ad Age Datacenter’s analysis.