News that Greggs has lifted its profits forecast for the fourth time this year highlights the success of the transformation of the Newcastle-headquartered bakery chain that has been taking place over the past five years.
“I think more people have come to realise that Greggs is more than sausage rolls,” said chief executive Roger Whiteside in remarks reported by the Financial Times.
When Whiteside took over as CEO in 2013 he took the difficult decision to “jettison our tail” – to end involvement in the home bakery market and focus instead on the eat-on-the-go market.
Trying to address both sides of the take-home and on-the-go markets while adding a coffee shop element to compete against new market entrants was going to be too complicated, he told last month’s Festival of Marketing. (For more, read WARC’s report: Why Greggs is on a (vegan) roll.)
Another change he instigated was a shake-up of the brand’s marketing, which had been subsumed within trading functions.
He hired the business’s first customer & marketing director. “The idea was that we would use word of mouth – but social media allows you to amplify word of mouth around driving brand reappraisal.”
That was going to be a balancing act that involved not losing Greggs’ reputation for the things people knew it for – core products like sausage rolls and doughnuts – while establishing a reputation alongside that for other products where demand was growing.
An important one of the new offerings was hot drinks, but coffee in particular. Despite the best efforts of Starbucks et al, it seems the UK underindexed on coffee and Greggs needed to “get serious” about the product to tap into the growth that was still in the market.
With coffee came breakfast, the fastest-growing daypart in this category. The hot food evening daypart was also up for grabs.
The most difficult area to address, however, was healthy eating, with everyone, regardless of income and socio-economic group, wanting to eat better – and the vegan sausage roll was part of that.
“Trying to gain brand reappraisal for all those things that are not bakery, but considering juxtaposition next to them – can you actually achieve that? Most people don’t think we can, but I’m saying ‘oh yes, we can!’” Whiteside stated.
His evidence for this claim? “We’re now number two in breakfast, we are number three in coffee, having just overtaken Starbucks, we’ve overtaken Tesco for sandwiches at lunch.”
And none of these gains have relied on the sausage rolls the brand is best known for.
Sourced from WARC