Web Exclusive | May 2012 | By Jordan Melnick

Burger King Aims to Reclaim Throne

Embattled burger chain investing a lot of money in its future to get past its recent troubled past.

With Burger King’s announcement of a $750 million, one-year investment in everything from menu to marketing, the burger chain is making a significant push to leave its recent troubles behind.

Supporting the company’s new slogan, “Exciting things are happening at Burger King,” the investment will focus on four priorities: a menu expansion designed to broaden Burger King’s appeal beyond its core of young males, a marketing campaign featuring various celebrities, store renovations, and operations improvements.

“We are focused on creating long-term value and increasing consumer consideration for the Burger King brand,” says Michelle Miguelez, director of global communications at Burger King Corp. “In order for this investment and this plan to work, all four of these areas are priority. One cannot outweigh another.”

New menu items such as mango and strawberry-banana smoothies, Garden Fresh salads, chicken wraps, and crispy chicken strips suggest Burger King is taking cues from industry leader McDonald’s, which rolled out similar menu items over the last decade to broaden its appeal with health-conscious consumers. Burger King’s roll out of mocha and caramel frappes also takes a page out of McDonald’s playbook, not to mention that of Starbucks.

Burger King “recognizes that most of the menu items we have rolled out are not category innovations,” Miguelez says, but “they are new to [Burger King].”

The Miami-based chain’s goal with its menu expansion is to attract new customers while retaining the young males that frequent Burger King for its heartier offerings, like the Whopper.

“As a quick-service restaurant, Burger King wants to appeal to everyone,” Miguelez says, “but we are also expanding our menu to appeal to a broader demographic, offering items that provide options for the whole family.”

The chain’s new star-studded marketing campaign features Salma Hayek, Jay Leno, David Beckham, Steven Tyler, Mary J. Blige, and Sofia Vergara. (Hayek stars in both English- and Spanish-language ads; Vergara’s ad is only in Spanish.) All of the ads strike a humorous tone—Jay Leno, a collector of classic cars, drives up to the counter to place his order—and lead off with Burger King’s new “exciting things” tag line.

As part of the investment, Burger King is also promising an improved restaurant experience with enhancements at every location. These include digital menuboards to replace the traditional slat-and-slide boards, new employee uniforms, and new packaging.

As a whole, the investment represents a spirited attempt to kick-start a brand that has fallen behind other quick serves in the race for second place to McDonald’s, which, according to Advertising Age, was 101 percent ahead of Burger King in average domestic revenue per unit in 2010, more than double its lead from 10 years earlier.

McDonald's was 101 percent ahead of Burger King in average domestic revenue per unit in 2010, more than double its lead from 10 years earlier.

The investment comes just in time, says Darren Tristano, executive vice president at Technomic, a Chicago-based consulting firm for the foodservice industry.

“It has less to do with following McDonald’s and trying to compete, and more to do with, ‘If we don’t do it, we’re not going to be around in five years,’” Tristano says.

Burger King’s downslide started in the early 2000s, when major franchisees publicly aired grievances with the company. Since then, the chain has passed into different ownership several times and jumped on and off the public markets every few years. (The company recently announced plans to list its shares on the New York Stock Exchange through a merger with a London-based investment company.)

Burger King has made “significant strides in repairing relations with [its] franchise community,” Miguelez says. “Burger King Corp.’s new senior management team has spent the past year evaluating the business and collaborating with franchisees on ways to create efficiencies and ultimately drive increasing sales and profits across the system.”

While repairing its franchisee relationships is crucial, Burger King’s menu expansion may be the most important aspect of its investment, especially since the majority of its business comes through the drive thru.

“The menu ultimately will be what gets more customers in the doors,” Tristano says. “[Burger King has] perhaps even a better tasting product than McDonald’s has. So you can make the argument that if your product is better, then why aren’t you doing better?”

Considering Burger King’s arguable leg-up on the field in food quality, some analysts question whether the chain should be doubling down on its flame-grilled offerings rather than expanding its menu to mirror McDonald’s or any other chain’s.

“They should be focusing on themselves,” says Jeff Davis, president of Sandelman & Associates, a foodservice consumer research firm. “People don’t need another McDonald’s.”

For its part, Burger King says it has no intention of losing sight of what made it one of the industry’s top chains in the first place.

“Burger King is and will always be the home of the Whopper,” Miguelez says.