An interesting lever in El Pollo Loco’s sales run is its departure from discounting.
“That's kind of the opposite of what you hear a lot of our competitors doing or saying. And I think that is testament to the strength of our brand and our ability to command and have pricing power in the market,” he said. “… we have become better storytellers in really explaining what the quality difference is in our products and explaining to the world the hard work that we do each and every day in terms of everything that is handcrafted, made from scratch, et cetera, that our competitor simply don't do.”
This notion circles El Pollo Loco’s brand refresh, being led by new CMO Hector Munoz. The former Popeyes and Church’s Chicken executive joined El Pollo Loco in November, replacing Ed Valle, who stepped down in June.
His top target will be to continue some of the audience development and employee initiatives Acoca championed since arriving at El Pollo Loco.
The brand went through an extensive brand segmentation last fall to identity its core customer and reaffirm key brand differentiators. The result was a “brand book” that serves as a strategic filter for El Pollo Loco’s decision-making moving forward, Acoca said.
“Feed the Flame,” for example, highlights its fire-burning grill, a “source of competitive advantage for us,” Acoca said.
“It also points [out] the aspirational passions for life our employees and customers share,” he said.
Part of the relaunch includes building a product line centered on what El Pollo Loco is calling “L.A. Mex.” It’s the “juxtaposition of better-for-you food that is the hallmark of a quintessentially L.A. lifestyle and Mexican-inspired cuisine,” Acoca said.
“We have coined this phrase to indicate not only where our brand originated and how Los Angeles has shaped and influenced us, but also to encapsulate what we've been doing in our kitchens for years,” he added.
Essentially, El Pollo Loco wants to lean on its grilling platform as a better-for-you positioning that caters to health-conscious diners.
While El Pollo strips discounting in favor of more targeted traffic, its value add-ons are being designed to support family meals. In the second half of last year, El Pollo Loco made a concerted effort to go after families, Acoca said. “One of the ways that we're figuring out how to do that is to really ensure that moms have an opportunity to provide her family with everything that they want,” he said.
One iteration is chicken on the bone that appeals to older family members. Parents can add that upsell option to meals to go along with whatever their kids might order, which provides value and helps El Pollo Loco increase overall ticket, Acoca said. Average check rose 3.7 percent at company restaurants in Q4 and 2.7 percent at franchises.
On the audience development front, El Pollo Loco is trying to develop products that equally appeal to its majority guests—Hispanic customers—as well as general-market consumers. Some examples are the chicken tamales launched in Q4, as well as fire-grilled chicken nachos and hand-rolled stone-ground enchiladas unveiled more recently. “All of these product offerings were designed to have broad-based acceptance and have been well received by our guests across multiple demographic lines,” Acoca said.
What El Pollo Loco did in 2018 was take its media spend, less than 8 percent when Acoca joined the company, and bring it over 20 percent to put more of a focus on the Hispanic customer, which makes up 50 percent of the brand’s daily customer visits.
So now 80 percent of its media is spent in the general market, giving El Pollo Loco a steady run for both groups. It doubles down on the Hispanic segment, while also paying more attention to a general-market strategy.
