Burger King cuts to the core

Burger King is significantly adapting its product and advertising strategies, according to parent company Restaurant Brands International (RBI)’s latest results.

Why it matters

Burger King’s award to effectiveness gap has been problematic for the ad industry that has learned a lot from campaigns that looked like excellence but came at a time in which its closest rival overtook its market share. There are lessons to be taken from this return to the nuts and bolts of marketing theory.

Results in brief

RBI, whose brands include Burger King, Popeyes, and Canadian coffeeshop stalwart Tim Hortons, announced strong results.

• Revenues topped analyst and investor expectations.
• Digital sales have grown their share of total revenues, up from $6 billion in 2020 to $10 billion in 2021: 30% of all sales are now digital, per reporting from CNBC.

It also announced some deep operational changes, especially in marketing.

What’s happening in marketing

Burger King is something of an industry sweetheart, with top gongs at major shows for its smart, irreverent take on quick-service restaurant (QSR) marketing.

However, in late 2021, it was revealed that it was lagging not only behind the market leader McDonalds but also Wendy’s, which had moved into second place in the US (the Burger King brand is present in many more markets globally, however). The fault, it appeared, was with marketing.

Wall Street, and the company’s leadership agreed. “We saw a continued gap relative to our peers”, RBI chief executive told investors in late 2021. “We’re keenly aware of this gap”.

What they’re doing about it

This quarter’s results set out what changes the brand intended to make to close that gap, as explained by Tom Curtis - president, Burger King, U.S. & Canada, speaking to investors.

• A strengthened analytics division will bring “additional rigour”.
• Simplified messaging around key initiatives such as delivery and digital sales.
• “Better testing protocols to ensure our advertising and our initiatives are well chosen and more impactful.”
• Systems image and restaurant modernisation: just under a third of sites have the latest technology, meaning lots of headroom to improve into.
• Simplifying product offer by reducing range – this should make messaging more direct and help to smooth operations.
• Using existing sub brands better. “Core to our growth is leaning into our strongest brand equity, The WHOPPER. The WHOPPER is a multibillion-dollar brand, and we need to treat it as such.”
• Targeting the value segment to drive incremental traffic.

Sourced from CNBC, WARC, Reuters, Seeking Alpha. [Image: Ogilvy]