One would imagine that many things change in the course of five decades in the restaurant business. And in terms of the limited-service landscape, consumer habits, and technology, they certainly have.
But when it comes to the Arby’s brand, things have largely stayed the same in its 50-year history. In fact, the concept has stuck so closely to its identity as the limited-service industry’s roast beef leader that it’s failed to do the evolving necessary to keep it fresh and competitive in the market, says Arby’s brand president and CMO Rob Lynch, who oversees both marketing and product development and innovation at the quick-service chain.
“Less than 1 percent of all [quick-service] occasions are roast beef, so if we want to carve out a stake and continue to grow, we need to stand for something more than just great roast beef sandwiches in the hearts and minds of our customers and potential future customers,” he says.
Add to this the struggles the brand has faced over the last several years—which include flagging sales and being sold by parent company Wendy’s in 2011—and the situation for Arby’s was looking bleak just a short while ago.
Enter Roark Capital, a private equity firm that has a proven track record for turning around struggling concepts. Purchasing the brand in 2011 for $430 million, Arby’s new ownership has given the 3,400-unit-plus chain a fresh lease on life, encouraging Arby’s to inject new blood into the executive team—with additions like Lynch, CEO Paul Brown, and president and COO George Condos—and launch a revitalization effort that Lynch calls not just a brand evolution, but a brand revolution.
The launching point for Arby’s rebranding: a new prototype. Taking inspiration from “the great delis of the world,” Brown says, the brand remodel revolves around a forward-looking design that creates an organic and warm environment for the Atlanta-based chain’s customers. The result is a clean, crisp, uncluttered design that Brown says is higher scale than what most quick-service customers are used to seeing at Arby’s or in the broader limited-service segment at large.
Thanks to new elements like wood tones, warm tiles, communal tables, WiFi, white countertops, and a cooler case behind the counter that displays meats before they’re sliced, Brown says, the new prototype is one that invites guests to stick around and stay a while.
But it doesn’t stop at the store’s interior. Exterior enhancements include a new awning that circles the restaurant, illuminated signage, wood and white-brick materials, enhanced lighting, and an upgraded landscaping package.
Arby’s unit renovation was much needed, says David Kincheloe, president of National Restaurant Consultants, as the five-decade-old brand was beginning to look and feel a little tired to consumers. “Most restaurants reinvent themselves every five to seven years just to keep themselves relevant,” he says. “As the demographics change, they need to focus in on the ambience in the restaurant in addition to their menu.”
Arby’s began testing its new prototype in 2013, starting with the remodel of 14 units in Greensboro, North Carolina, and
Erie, Pennsylvania. “We assessed what worked well and where improvements were needed, and while we were very pleased with the sales improvements and the return on investment, we believed we had to work further on the building modification—the design of the building—to better align with our brand positioning and also to more aggressively take costs out of the building itself,” Condos says. After tweaking the prototype, Arby’s has been able to reduce the cost of a remodel by about $75,000, targeting the low $300,000s for a typical renovation, he adds.
With an estimated 30 corporate restaurant remodels completed this year—with plans to renovate between 80 and 100 company units in 2015—the redesign will begin rolling out to franchisees, Condos says, with the goal of remodeling more than 100 franchised stores next year.
Arby’s franchisees are already excited about the changes going on at Arby’s and are eager to bring the revitalization efforts into their own units, Lynch says. They likely crave a slice of the results that company-owned remodeled units have experienced—results that include an average 20 percent sales increase for renovated units. “There will be some restaurants that do a little better and some that may not quite reach that same target,” Condos says. “But on average, we’re looking for performance very close to 20 percent.”
Though a new look and feel play a big part in these sales increases, growth may also be a result of the efforts Arby’s has put into training its team members. In fact, emphasizing the brand’s focus on customer service was key to its revitalization efforts—just one reason Arby’s decided to work a “Brand Camp” initiative into the remodel program. “We are doing a lot of major changes to the brand, and we wanted to make sure the team members were in the position to deliver that experience consistently,” Brown says. “The best way to do this is kind of reboot the brand and service experience from scratch.”
That’s why, at all company-operated restaurants—as well as franchised units in the near future—each employee participates in a half-day, off-site session to discuss topics like what a brand is, what “quality” means, Arby’s specific brand values, and its service promise to “make it right every time.” More than 19,000 team members have been through training to date, finishing their Brand Camp experience with a goal-setting session and, on some occasions, a community service project.
This idea of giving back to the community has been close to Arby’s heart from the start, so much so that it created the Arby’s Foundation in 1986. Founded with the goal of serving the communities it operates in around the globe, the organization has donated more than $60 million over a span of two decades to youth-related causes around the country.
Over the last three years in particular, the brand has made a major commitment to the Share Our Strength organization to help the nonprofit end childhood hunger in the U.S.
“We have a unique opportunity to give back and help our system give back in all of their local communities, while also gathering up to a larger overall objective of ending childhood hunger in America,” says Lynch, who serves as chairman of the Arby’s Foundation.
In partnership with Share Our Strength, the Arby’s team visits more than 45 markets throughout the summer, going into local communities alongside franchisees and employees to raise awareness of the fact that one in five children in the U.S. struggles with hunger. To date, the brand has raised more than $11 million for Share Our Strength, $3 million of which has been raised just this year. “It’s really something we take a lot of pride in,” Lynch says. “We don’t make a lot of noise about it; it’s not something we put in our commercials. It’s something we do because we feel like it’s the right thing to do.”
Unit design, employee training, and a renewed emphasis on charitable giving aside, Arby’s brand revitalization extends to all areas of the business, menu development included. Despite the fact that Arby’s has long menued items other than the classic roast beef sandwich, Lynch says, consumers continue to view the brand as a roast-beef-only offering.
Because consumers have moved beyond food as cheap, fast fuel and instead expect a higher quality and better experience, Lynch says, the product innovation bar has been set higher than ever at Arby’s. One product that’s allowed the brand to deliver on this expectation is the Smokehouse Brisket Sandwich, which launched last October and features smoked brisket, smoked Gouda cheese, a smoky barbecue sauce, and a smoky mayonnaise. Using a high-quality protein sourced from a small family-run supplier in Texas—a brisket that’s smoked for 13 hours, shipped to restaurants, and sliced fresh in each unit—Lynch says the product is a strong building block for the culinary team.
“We’ve just had so much success with that, and one [reason] is the quality of the meat,” Lynch says. “Second is that it fits within the Arby’s brand story. It’s not the traditional roast beef, but it’s a great-quality protein that we can make a great sandwich out of.”
Approaching the menu development process protein-first is a new method Lynch says makes the most sense for the meat-focused concept. “We found that the way people think about food and the way they think about what they want to eat almost always starts with the protein,” he says. “We have high-quality meats, we have a lot of variety of meats, and we want to be the place people go for great meat sandwiches.”
Offerings like the Smokehouse Brisket Sandwich are just the first in a string of quality protein–focused items the Arby’s team is pushing through the product innovation pipeline. In August, for example, the brand rolled out the Mega Meat Stacks, a trio of LTO sandwiches that serve up large portions of roast beef, roast turkey, ham, corned beef, and bacon. This month, the brand also introduced limited-time gyros, offering guests a choice of roast beef or turkey topped with lettuce, tomato, and a creamy cucumber gyro sauce and folded in a warm pita.
This focus on better proteins also helps to push customers’ perception of the brand beyond that of the typical quick-service concept.
“We’re trying to position the brand in a space between [quick service] and fast casual,” Lynch says. “We truly believe that our model can deliver fast casual–quality sandwiches with the convenience and value traditionally associated with [quick service].”
But no matter how premium and innovative Arby’s new product pipeline is, consumers will remain oblivious to the brand’s quality and variety without a marketing campaign that spells it all out for them. Speaking directly to quality meat–loving customers, Lynch says, the message driving the brand’s proteins and product innovation will be front and center in its newest marketing campaign. “Our food’s going to be the hero, and we’re going to talk about it in a way that’s passionate and hopefully gives our customers goose bumps because they’re so excited about what we’re showing them and what we’re talking about,” he says.
Brown says the purpose of the new campaign isn’t just to promote the brand’s protein offerings, but to change the perception surrounding Arby’s entirely. “Even for those that do know Arby’s, they do not know all of the great things here,” which include premium meats in addition to roast beef, he says. “We have great corned beef, we have great Angus steak, we have great brisket, we have great turkey, great chicken. So you’ll hear a lot of conversations around the quality, the variety, and, in some cases, the quantity, because if you look at how much protein you get with our sandwiches for the dollar, it is far beyond what is available to you through our competitors.”
New marketing efforts also include building an active and engaged social presence that allows the Arby’s team to have their finger on the pulse of conversations going on in real time throughout the industry and the wider world, Lynch says—an effort that National Restaurant Consultants’ Kincheloe says has allowed the brand to cultivate genuine relationships with current and future customers.
The brand built a social listening room, a glass-walled space dubbed the “Fish Bowl,” that allows executives to monitor what’s going on in social. “It was more than just a capability,” Lynch says. “It was a statement that said to our leadership, to our employees, and to our franchisees that this is a new, important part of the marketing model.”
The Fish Bowl, which was constructed last December, also set the stage for a pleasantly surprising marketing campaign surrounding recording artist Pharrell Williams and his infamous hat at the 2014 Grammy Awards. After several fans noticed and commented on the fact that Williams’ hat looked undeniably similar to Arby’s signature logo, Arby’s hopped into the conversation, calling out the singer on Twitter and asking for its hat back. Fast-forward several hours, and Arby’s had raked in more than 85,000 retweets and a reply from Williams himself, who joked about starting “a roast beef” with the brand. “It’s kind of a marketer’s dream,” Lynch says. “I like to think that we have a good marketing team here, but we could not have planned that.”
Add to this the fact that Arby’s was able to purchase the buzz-worthy hat when Williams later put it up for auction to benefit charity, and the brand was able to cash in on both its ability to give back to the community and to generate further attention surrounding the entire experience. “All of a sudden, Arby’s was a player again. All of a sudden, Arby’s is back in the conversation,” Lynch says. “Our franchisees came into the office and they kind of walked around with a little bit more pride than maybe they had a few months before.”
This shift in perception gave Arby’s the extra push it needed to launch and reinforce its rebranding and growth efforts. That’s just one reason the company is turning its attention to ramping up unit growth in the U.S., as well as in select international markets, Brown says. “We want to grow with the traditional look and feel of an Arby’s, but also work on new formats that will allow us to go into parts of the country … that the Arby’s brand hasn’t been able to go before,” he adds.
He also wants to continue to break the mold for the brand and raise the bar around the industry when it comes to expectations for what can be accomplished by Arby’s—and any other brand, for that matter.
“If you look at what Arby’s did in the first part of its 50-year history, it actually broke the mold and broke out,” Brown says. “It went from zero to 2,000 units at a very quick pace. It raised the game, I believe, for the rest of the industry around the quality of food you actually could provide in a fast-serve environment.
“Our intent,” he adds, “is to break the mold and to do things with this brand and this system that people aren’t even contemplating today.”