A&W’s comeback was built on a “quality initiative.” Namely, return root beer to the house-made and unshakable lever it was for decades. A&W sells root beer 3:1 against other soft drinks.
In the Yum! era, root beer was going to bag in the box, brought into stores, put into mix machines, and dispensed just like other options, alongside other options. About 70 percent of the system got there.
Under new ownership, 100 percent of stores went back to making root beer by the venue, daily, from the original recipe.
Perhaps not as outward yet still a significant trigger, A&W introduced hand-breaded chicken tenders in 2013 in favor of a freezer-fryer product. Within a three-year span, that business grew more than 60 percent on a per-store basis. A&W introduced chicken sliders last year on potato rolls and dedicated more menu real estate to the offerings.
The point being, Bazner says, A&W did the heavy lifting needed to endure COVID from a long-term view—a crisis when brand value was worth its weight in gold. Although pizza dominated initial headlines, the phase that held steadiest, Bazner says, was consumers’ stock in restaurants they trusted. To feel normal or safe, they returned to restaurants with equity. And A&W has more than a century of it.
All that said, the drive-thru element can’t be understated.
One thing that doesn’t get talked about enough, especially in lockdown stretches, is how drive-thru blares as a “WE’RE OPEN” signal to guests. It’s the herd counter to quarantine life. Is it safe to eat at a restaurant? Well, 10 cars are lined up outside A&W.
In this past year, freestanding A&Ws with drive-thrus saw AUVs hike nearly 14 percent. As of December 31, this group reported average net sales of $1,100,600, according to a recent FDD. The first quartile was $1.575 million. C&G restaurants with drive-thrus, or those essentially attached to C-stores, gas stations, and travel centers, posted an average of $651,195 and up to $953,425 in the top 25 percent.
Important to note, A&W does not provide data in its FDD for freestanding restaurants without drive-thrus, of which there are 39; C&G units without drive-thrus (there are 28 of these); and 309 co-branded restaurants.
The reason being none of them will be offered to operators any longer. A&W’s growth resides solely in the drive-thru lane.
During COVID, A&W did more than simply turn the menuboard on, however. The chain worked to create second makeshift drive-thru ordering points. Some operators put extra staff outside with tablets to log-in orders, a la Chick-fil-A and In-N-Out Burger.
Certain restaurants added a second menuboard to handle elevated traffic. A Kansas location even created “bubbles” for employees to wear and guard themselves from the virus and the elements. They had a tablet underneath the plastic, and could talk to guests.
To encourage operators to follow suit in terms of drive-thru focus, A&W is currently working to finalize a program to allow all of its restaurant to make investments in—and even direct some local store marketing funds toward—the consumer drive-thru experience.
This could include re-striping parking lots and updating signage and menuboards outside the restaurant. Bazner calls it a “very cost-effective remodel” that doesn’t touch the inside of the restaurant.
All new A&W locations, for now, will be freestanding with a drive-thru, with a view toward at least having an option to make a second drive-thru lane permanent.
Yet the second order point is something existing stores can retrofit without tearing anything down. That’s where tablets and makeshift lanes, which can be turned off and on by the season, come into play.
“The key is the better you can push people through the drive thru, the better you’re going to do. Certainty in our category,” Bazner says. “And I think that’s true across the industry. That’s no secret. All of the stuff about off-premises and delivery and online ordering— all of that is good. But the ones that are doing best there have no choice. They have no drive thru.”
This reality shows a bit differently at A&W than some category peers. The brand plants roots in rural, smaller markets. For perspective, a third of the company’s core business is located in communities not serviced by a national delivery provider. Uber Eats, DoorDash, Postmates, etc.—they can’t even travel to 33 percent of A&W’s stronghold.
And in those trade areas, even when a local aggregator is available, chances are it’s not a customer group seeking delivery anyway, Bazner says. At the least, they’re not a segment willing to pay a steep convenience trade-off in fees
“Those customers are coming to the restaurant,” Bazner says.
A&W is just fine with this. Its food, by and large, wasn’t meant to travel. The same reason ghost kitchens concern Bazner—the experience casualty—is true of trying to ship root beer to somebody.
“What do we do when we go through a drive thru?” he says. “Reach in the bag. We grab hot French fries. I can’t deliver that experience.”
Delivery has a place, however. It’s simply location specific for A&W on a large scale. It’s market-by-market more than it can ever be a blanket brand initiative.
That’s reserved for drive thru and drive-ins.
Before COVID, drive-thru mixed in the 45–55 percent range of sales for A&W. The drive-in concepts were a different beast, welcoming basically all of their business outside the literal four walls. It jumped into the 90s during the crisis.
“It’s full circle for us,” Bazner says, referencing drive-in. “That’s where we started. We started as a drive-in and bringing food to peoples’ cars. That’s the genesis of this brand.”
There were drive-in locations that stood up multiple stalls with menus on them. Eight, 10, 15 of them.