Sonic Drive-In Blasts into the Future

Restaurants are an emotional experience. They invoke a range of feelings from customers, whether it’s pleasure in eating delicious foods, joy in celebrating big milestones, or nostalgia in reliving the smells and tastes of simpler times.

Sonic Drive-In has built its entire concept on this premise. Not only does the Oklahoma City–based chain stick to a core menu of indulgent goods like burgers, coneys, and slushes, but it also preserves the bygone experience of its 1950s origins via drive-in stalls and carhops (many of whom still coast on roller skates). It’s fun, flavor, and nostalgia all wrapped into one, a dose of Americana for the retrospective customer.

Eighteen months ago, one might have looked at Sonic as a sort of industry outlier, a nice experience more rooted in the past than the present. Now, however, the brand looks positively prophetic. Its model is naturally off-premises and contactless, and it facilitates a dining experience in the car that has become more common in pandemic times. Other major chains recognized the potential in drive-ins for our contact-wary, on-the-go future, and rushed to introduce their own models.

Sonic, meanwhile, leaned into its 67 years of expertise. “There was a strong sense that we can do this like no other brand, and we can do it in a way that is seamless and true to form,” says Sonic president Claudia San Pedro.

In a year when restaurant-industry sales plunged nearly 24 percent, according to the National Restaurant Association, Sonic and its 3,500-plus locations skated to record sales gains. The system’s average unit volume was up from $1.3 million in 2019 to $1.6 million in 2020; nearly a quarter of drive-ins, San Pedro says, cleared $2 million in AUV last year.

Now, what’s old might be new again. Sonic has sped ahead of the competition—and it’s not letting off the accelerator.

The modern and wonderful drive-in

While 2020 was a year of massive change for the restaurant industry, Sonic was already well underway on a transformation before COVID-19 showed up.

“We were in the midst of relaunching our brand positioning with a new logo [and] new creative that was meant to celebrate all that was modern and wonderful about the drive-in model,” San Pedro says. The company had identified three filters through which it was updating the brand: Craving (menu), Oasis (restaurants), and Delight (experience). Key to the transformation, she says, was Sonic’s menu variety and its mobile ordering app, which rolled out in 2018. “As we think about today’s busy modern lifestyle, how do we create a great guest experience leveraging our drive-in format and that variety on our menu?”

Lori Abou Habib was responsible for communicating that transformation to the guest. As Sonic’s chief marketing officer, she spent 2019 working to overhaul the brand’s creative, which included one very key transition: pulling back from the brand’s famed “Two Guys” campaign, a series of conversations between comedians T.J. Jagodowski and Peter Grosz that originally launched in 2002. Market research suggested Sonic’s loyal guests didn’t want to lose the Two Guys, but they did want to see more of the brand’s food. So Sonic tip-toed away from that campaign, incorporating more ads centered around food, as well as a series with actresses Jane Krakowski and Ellie Kemper that fit within the Two Guys construct.

Eventually, research suggested Sonic customers were ready for the break from the Two Guys. And together with agency Mother Los Angeles, Sonic developed “This Is How We Sonic,” a campaign that initially highlighted four families—real customers—and how they uniquely experienced Sonic. Abou Habib says the transition was “going from telling people how to do it to celebrating all of the ways that people are already doing it, whether those are kind of mundane and everyday or maybe a little wacky.”

Sonic’s new branding, with a fresh logo boasting blue trim, debuted in January 2020, and “This Is How We Sonic” arrived right on its heels. And in March, the world changed.

Built for this

Like every restaurant in America, Sonic suffered from a sales drop in the latter half of March 2020, as uncertainty reigned in the early days of the pandemic. But San Pedro says it was only a “small blip,” with sales rebounding in April.

The company spent those early days focused primarily on three things, says COO Eddie Saroch: being over-the-top friendly to guests, highlighting cleanliness and sanitation, and incorporating masks as part of the uniform policy. While speed and accuracy were heavy focuses pre-pandemic, he says, the company backed off emphasizing speed so much because guests suddenly weren’t in as much of a hurry to get to work or activities. Besides, right out of the gates the team recognized that Sonic could offer something that its competitors couldn’t.

“Quickly we identified that Sonic may have the formula here, because guess what? You can come to Sonic and you can be in your car with your family,” he says. “It’s a safe place, and you can make your order however you want and use mobile order-ahead and check in at Sonic and come in contact with nobody."

“To be honest with you, and direct,” Saroch adds, “we were built for this.”

Even the new marketing strategy was tailored for the moment. Abou Habib says “This Is How We Sonic” perfectly highlighted the brand as a safe place to dine, while also being based around moments of indulgence—moments that “really resonated,” she says, with customers who were suddenly forced to distance themselves from loved ones.

Sonic Drive-In

Sonic President Claudia San Pedro believes the car has become an important tool for families to have experiences during the pandemic.

Indeed, the pandemic became an opportunity to showcase the Sonic experience, San Pedro says, particularly to new guests. No longer needed for commutes or shuttling to activities, cars came to represent cherished moments away from the home, whether with a blanket in the back for the family or maybe for a parent in need of a moment of quiet. Perhaps more than any other restaurant concept, Sonic was prepared to capitalize on that, especially because its mobile app satisfied a variety of needs, both in how guests received service—whether drive-in, drive thru, curbside, or delivery—and in what they chose to order, without making them feel rushed.

“You can order the food you want, how you want it, and get some great rewards by using the app, but still have that connection to the carhop and the friendliness in your car,” San Pedro says. “Whether you want to bring a blanket or whether you want to bring your dog, your slippers, whatever you want to wear, you create that dining environment and that experience.”

In the first five months of the pandemic, Sonic received more than 10,000 compliments from guests about its personalized service and how important it was in a time when everyone felt disconnected. And in response to a flood of guest requests, Sonic added a tipping function to its mobile app so customers could show their appreciation to carhops in a contactless way. About 1,000 locations are up and running with tipping, and San Pedro says the goal is for the whole system to be on board by the beginning of Q3.

A nonlinear approach

With a quick rebound and a business model well positioned to meet the new service realities of the pandemic, Sonic had the luxury of playing more offense than defense through the course of 2020. Luckily for the company, it had spent the previous few years “building the plumbing,” Saroch says, to accommodate a more efficient operation, particularly one with mobile ordering functionality. That included making the third-party delivery process more seamless for operators, rolling out a new POS system-wide, and working with franchisees on a variety of back-end needs that could allow for the mobile-order-ahead experience.

Mobile ordering has been a game-changer for Sonic. San Pedro says the order-ahead app now accounts for about 11 percent of sales—exceeding $530 million in 2020—and that Sonic recently added web ordering to widen the scope of customers ordering digitally. The app allows Sonic to be “nonlinear” in its structure, she says, meaning guests don’t have to wait in line for their food, thereby reducing service times.

“When somebody comes in mobile-order-ahead, they are like Sonic Prime,” Saroch says, referencing Amazon’s platform. “They move to the front of the line. When they come in and check in at Sonic, it rings inside the drive-in and their order moves to the top of the line, and therefore we are able to make it and get it out to the customer much faster.”

This ability affects Sonic’s approach to growth, as San Pedro says the brand plans to continue to invest in innovation around the footprint, specifically considering consumer occasions and need states. And a big piece to that puzzle is the new Delight prototype, which Sonic revealed last summer. The prototype, which San Pedro says represents the modernization of the drive-in and offers a “sense of summertime,” accomplishes Sonic’s “Oasis” mentality by creating a space with multiple service points and bright, bold colors. There are pops of red, blue, and yellow, and there’s a blue glass tower with a brightly lit cherry on top in a nod to the company’s signature Cherry Limeade. There’s a drive thru, 18 drive-in docks that are wider than older models, a walk-up window, and a covered outdoor patio with string lights and lawn games that invites guests to stay and enjoy themselves if they wish.

“People want choices. If I’m in a hurry and I don’t have a lot of time, I may want to go through the stall, but I may also want to go through the drive thru, and I may sometimes want to take my time and hang out with my kids in the car after I get my food,” San Pedro says. “We’ve really been homing in on what’s the right number of stalls that allows for optimum throughput without over-investment.”

Sonic’s update to its drive-in format isn’t just to keep things fresh and fun; it’s also to keep ahead of the crush of competitors looking to jump into the drive-in game. Brand after brand shuffled the deck on their forward progress once they realized the digitally powered, off-premises experience that became de rigeur in the wake of COVID-19 was here to stay, and everyone from Shake Shack and Taco Bell to Burger King and Sweetgreen revealed new store renderings that included drive-in as a component of their restaurants of the future.

Neither San Pedro nor Saroch are concerned that the newfound attention in drive-in will steal away Sonic’s primary point of differentiation. They both point out that adding a drive-in isn’t as simple as sticking a menu and speaker box in front of a parking spot.

“It took years for us to build this,” Saroch says. “There are a lot of points inside a drive-in, if you go inside, that are critical to being able to execute on a consistent basis. And I think for anybody trying to change their model, it’s going to take time and effort.”

Sonic Drive-In

“Our AUVs are much higher, profitability is much stronger. Our willingness to invest is much greater, and this has been a concept that has continued to reinvest,” COO Eddie Saroch says. “That’s one of the things we’ve always been able to work with our franchisees and operators on, is re-investing back in the business. They’ve been always supportive of that.”

The right products for the right moments

While Sonic’s operational strategy provides a key competitive advantage, so too does its menu, which errs on the side of comfort indulgences. The brand’s lineup of burgers, coneys, slushes, sides, and treats proved the perfect comforting mix for an American populace that dealt with one crisis after another in 2020. San Pedro points to the fact that Sonic’s ice cream sales were consistently strong throughout last year as proof that the brand provided an indulging getaway for many guests.

But while Sonic’s product mix remained consistent through the pandemic, the timing of the customer experience did not. The brand normally focuses on five significant dayparts—breakfast, lunch, afternoon, dinner, and evening, affectionately known to the company as BLADE—but because of COVID-19, consumer behavior started to shift, and Abou Habib says Sonic adjusted its marketing in response.

“People aren’t driving to work in the morning and they’re not out doing activities in the evening, so we saw a lot of our business start to coalesce around lunch, afternoon, and dinner and really wanting to take more advantage of that comfort food,” she says. “So for us, it was about tapping into our new product pipeline, looking for the right products that answer those consumer needs states.”

Those products in 2020 particularly centered around the treats portion of Sonic’s menu, with new items like Espresso Shakes, a Toasted S’mores Shake, and a Triple-Layered Lemonberry Slush Float. It wasn’t the full suite of products Sonic had originally prepared for 2020; the company opted to simplify its promotional calendar in an effort to remove some complexity for its operators. The backed-up pipeline, San Pedro says, means more innovations in 2021, which has so far included Extra-Long Ultimate Cheesesteaks layered with tots and the return of the Frito Chili Cheese Wraps, with a Hard Seltzer beverage, produced in partnership with COOP Ale Works, coming soon.

Simplification has been top of mind as it relates to the customer experience, as well. While the vast menu offers a little something for everybody, San Pedro says it can also be overwhelming; that’s why, in the two years prior to COVID-19, Sonic had cut about a quarter of its menu items. With the mobile app, she says, the goal is to be “as seamless as possible to allow the guest to explore all of the flavor combinations, but do so in a user-friendly format that is not cluttered or overwhelming.”

The potential in mobile ordering extends far beyond creating a seamless customer transaction. Sonic’s leaders acknowledge that mobile represents a massive opportunity to not only acquire new customers, but also to learn more about its loyal customers and to curate an experience around their wants and needs. San Pedro points out that the app can highlight new flavors to encourage guests to be more adventurous in their purchases, or it could also help Sonic tailor marketing messages around guests’ ordering behaviors. It can also provide critical guest feedback that the company can act on, as it did with its tipping platform and when it updated the app to include regional menu specialties and even an option to order the brand’s signature ice.

Saroch says Sonic’s POPS units—the digital boards within its drive-in stalls—hold incredible value when the brand knows exactly who is sitting in front of them and what their purchase habits are. “When you come in, you’re able to see on our screen the things that we would like for you to see, that we would like for you to buy,” he says, “and we’re able to talk about those great offerings that we’re able to market to you while you’re sitting in your car.”

Raising the bar

For many restaurant companies, looking back on the pandemic will reveal very clear “before” and “after” images, ample evidence of how the crisis changed the business forever. For Sonic, maybe not so much. Rather than make any sharp left turns, Sonic merely raced ahead on the course it had already charted for itself. If anything, COVID-19 supercharged it for the future.

“Our AUVs are much higher, profitability is much stronger. Our willingness to invest is much greater, and this has been a concept that has continued to reinvest,” Saroch says. “That’s one of the things we’ve always been able to work with our franchisees and operators on, is re-investing back in the business. They’ve been always supportive of that.”

Now, Saroch adds, is the time for Sonic to “raise the bar” on its game, which it’s in the process of doing. Continued innovation will be key to its plan moving forward, and Sonic is especially set up for that as part of the Inspire Brands portfolio, which it’s been a member of for nearly three years. Inspire, leaders say, gives Sonic a leg up with access to talent, real estate, data, and other resources.

Abou Habib says the brand plans to “open the aperture” on its “This Is How We Sonic” platform and show a broader variety of customers in their cars. For a company that employed the same two men for nearly two decades’ worth of advertisements, it’s a startling commitment to change—or staying nimble, as Sonic’s leaders are quick to say—that’s been validated during the worst crisis in modern restaurant history.

“Really pressure-test the things that you hold true,” she says, referring to how the pandemic has evolved her approach to the business. “With that nimbleness, are there new opportunities to experiment or challenge what you’ve always done the same way? Is this the time to think about making a break to leverage new consumer behaviors in different ways and maybe walk away from some of the things that aren’t working?”