Menu innovation available at Burger King and Popeyes
By utilizing its product innovation and important lessons learned from its chicken sandwich, Popeyes Louisiana Kitchen is expanding its menu to include a supplementary item. A new platform for chicken nuggets was introduced by the Restaurant Brands International, Inc. (RBI) subsidiary at the end of July.
During a July 30 call with analysts to report second-quarter earnings, RBI CEO Jose E. Cil stated, “Nuggets are already proving to be incremental in our market tests.” “They have drawn customers in a target market that is appealing—children and families; in the afternoon, a time of day that is underutilized; and in a niche market that has never been explored—snacking.”
The company wants to capitalize on the popularity of Popeyes’ chicken sandwich, which has been a major factor in the brand’s expansion. In the second quarter that concluded on June 30, Popeyes sold $1.37 billion, up 10% from $1.25 billion the previous year and 40% from $1.01 billion in 2019. This was made possible by the well-liked menu item.
“We’re not standing still and are focused on what’s next,” Mr. Cil stated, “even though a lot of our success over the past 18 months can be attributed to the overwhelming guest response to our chicken sandwich, a core product in a core category that we took our time to innovate.”
The Toronto-based RBI saw a 57% increase in net income in the second quarter to $358 million, or 77¢ per share on common stock, from $154 million, or 33¢ per share, in the same period the previous year. Net income increased 8% during a two-year period. With $1.44 billion in total sales, it was up 27% from $1.05 billion in the previous year and 3% from $1.4 billion in the previous two.
Sales across the board were $8.9 billion, up 4% from 2019 and 32% from the previous year. During the quarter, digital sales increased by 60%; at Tim Hortons, they nearly doubled, and at Burger King and Popeyes, they grew by about 20%.
Burger King’s sales reached $5.88 billion, up 3% from $5.72 billion in 2019 and 30% from $4.13 billion in the previous year. Burger King’s growth against pre-COVID levels was aided by recent innovations such as the Impossible Whopper, a new dollar menu, and cleaner ingredients, but Mr. Cil stated that the chain’s potential has been constrained by a lack of focus.
He declared, “We’re not performing at the level that we aspire to or expect from ourselves.” “Our top priorities are expanding daypart and category extensions that will become essential to our full-time menu and fostering innovation in our core menu.”
He used the new hand-breaded chicken sandwich from Burger King as an illustration. The product attracted new customers with greater incomes and more purchasing power, broadening the brand’s demographic and delivering healthy volumes across the US.
Although we are happy with our recent advancements in menu innovation… There are still plenty of options in important categories and dayparts, such breakfast, according to Mr. Cil. “In the upcoming months, we’ll be working much more intently to develop highly incremental parts of our menu offering,”
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Even though the majority of Canadian consumers were subject to stringent lockdown measures for the duration of the quarter, Tim Hortons saw an increase in traffic and revenue. Tim Hortons recorded $1.72 billion in sales, a 36% increase over the previous year but a 5% decrease from 2019.
The restaurant chain’s growth in breakfast sales was sustained after a first-quarter menu revamp. Recent beverage releases, such as new cold brew coffee, also helped it.
“Despite ongoing mobility limitations, we saw a recovery in our morning daypart and gained share in breakfast sandwiches and the morning daypart overall,” Mr. Cil stated. “We increased our iced coffee market share and drove additional traffic and sales with our cold brew launch.”