Larry Zwain is stepping down as Scott Beck, co-chairman and CEO of parent Boston Chicken, assumes control of day-to-day operations and rededicates the chain's $130 million marketing budget to backing dinner.
Mr. Zwain led the chain's aggressive promotion of its Boston Carver sandwiches, a move Mr. Beck said has stifled sales momentum in the core business.
"The issue is we've begun to see lunch-driven discounting negatively impact our dinner sales. . . . We are going to refocus the brand on what made Boston Market so successful in the first place, serving the home-meal replacement market," said Mr. Beck in a statement.
Mr. Zwain's departure follows that earlier in May of Jay Willoughby, who was chief operating officer of Boston Market. Both executives joined Boston Market in 1996 from PepsiCo's restaurant operations.
Heavy TV and direct mail behind the Carver sandwiches built lunch to a hearty 40% of sales, but cut into the chain's more profitable dinner business, said Mitchell Pinheiro, an analyst with Janney Montgomery Scott. Customers were cashing in on $2-off sandwich coupons at dinner instead of buying a full chicken dinner.
New dinner rivals have cropped up to keep Boston Market on its toes. Boston Market executives have been spotted at Eatzi's, a gourmet takeout store in Dallas run by Brinker International that's attracting national attention for the variety and quality of its meal offerings.
BOOM IN TAKEOUT
With 1,160 units in 38 states, Boston Market is well positioned to capitalize on the takeout boom. Market researcher NPD Group last week reported more meals were taken out of restaurants last year than were eaten in, an industry first.
Boston Market's lead agency, Goldberg Moser O'Neill, San Francisco, stands to gain from the renewed focus on dinner, which includes new ads targeting mothers (AA, May 19).
Observers predict the chain will promote new "ready-to-heat" meals heavily if they prove successful in test markets this fall. The test should include roughly 20 pre-made entrees like lasagna, sold from a refrigerated case, according to analyst Mr. Pinheiro.
Boston Market rolled out its Carver sandwiches at the start of 1996, adding the Extreme Carver line this January. Suissa Miller, Los Angeles, handles creative for the sandwiches, employing ESPN broadcaster Keith Oberman in humorous spots that spoof ads for Calvin Klein fragrances.