Wendy's moves to target Millennials

Wendy’s CEO Emil Brolick says the chain is evolving its menu and marketing to ensure it appeals across generations.  “The transformation of the Wendy’s brand is essential to strengthen our relevance with the boomer generation and to establish credible relevance with the Millennial generation,” he told analysts during the quarterly earnings conference call.

Baby boomers (ages 50 and older) account for 33% of quick-service restaurant visits, according to NPD Group data, but Millennials (ages 24-37) now represent 25% of customers (with ages 25-34 accounting for 15%). Brolick said Wendy’s has tried to be “mindful of the importance of gaining traction with Millennials.”

It has done that through enhanced technology and through digital marketing channels. “Since 2010, people have been spending more time on digital devices than TV or radio, according to eMarketer, and we continue to evolve our marketing to drive consumer awareness and connect with consumers via this medium,” Brolick said.

“Red,” the red-haired spokeswoman in Wendy’s TV commercials is a Millennial, Brolick said. But the chain’s goal “is to surround consumers with 360-degree marketing messages beyond TV, and we have become leaders in social media, mobile marketing and digital promotions.”

Wendy’s used a Facebook promotion focused on “Love Songs” to market its Pretzel Bacon Cheeseburger. The chain also is using YouTube as an important channel, especially to reach Millennial women. The chain sponsors the “Hollywire: Wendy’s Fresh Trend Showdown” video series for younger Millennial women. Wendy’s Canadian operation produces a YouTube series for older Millennial women titled, “Girlfriends at Wendy’s Eating Salad & Talking About Stuff.” In March Wendy’s introduced its latest salads with an exclusive fashion event at a New York City unit hosted by “actress and fashion icon” Molly Sims.

“Boomers and Millennials definitely have different lifestyles, different product needs and different media habits,” said Brolick. “However, what we have seen is that growing our relevance with Millennials has not come at the expense of building our business with boomers.”

The NPD Group noted a similar shift in a recent report. “The influence of boomers and older on eating patterns will fade as their households and populations shrink, and the impact of Generation Z (ages 0-23) and Millennials (ages 24-37), which made up over half of the U.S. population in 2013, will significantly increase,” the researcher reported.

However, everyone likes a good burger, so Wendy’s will continue to balance its menu with both limited-time offers (LTOs) like the current Tuscan Chicken on Ciabatta and core-menu items. “LTOs will play an important role, but our core menu will also evolve to reflect the needs of the new QSR generation,” Brolick said.

Analysts did not ask Wendy’s executives about the BBQ Pulled Pork sandwiches the chain currently is testing in several markets. In at least one market it also has tried pulled pork as a topping for a beef patty. Brolick did say that Wendy’s has built up equity wth consumers that “gives us a distinct advantage to introduce high-quality, high-end items that people have a natural gravitation toward that others may not be able to do as successfully.”

For Q1, ended March 31, 2014, Wendy’s reported that same-store sales were up 1.3% at company-owned stores. At franchised stores, which make up approximately 86% of its system, same-store sales rose 0.6%. The chain said the difference is due in part to a greater number of company units that hav undergone “Image Activation” remodeling.