Article

Auntie Anne’s SVP: Brands have to adapt to compete in marketplace

The pretzel brand is set to significantly expand internationally, as well as in non-mall locations domestically, with its new store prototype.

June 18, 2014 by Alicia Kelso — Editor, QSRWeb.com

Auntie Anne’s is undergoing some big changes this year, including a store makeover and a bigger focus on its international and “alternative” footprints. Doug Martin, Auntie Anne’s SVP of Development, said these changes are necessary in today’s competitive environment.

“If we want to be in this marketplace, we have to be adaptable,” he said.

Development

The pretzel brand’s development initiative includes an aggressive international strategy. The company recently signed a deal to enter Canada and hopes to have 40 stores in the country by 2023. The first of these shops will open in early 2015.

Veteran multiunit owners Philip Patinkin, Matthew Patinkin, John Desjardins, Mike Simon and Adam Levy are behind the Canadian agreement. Together, they currently own and operate 77 Auntie Anne’s locations in 12 states.

Matthew Patinkin said the team is identifying both inline and kiosk locations from 300 to 800 square feet in major markets throughout Canada.

Martin said Canada is a logical place for Auntie Anne’s because “there is a lot of familiarity with the brand.”

The company is also eyeing entry into South Africa, Chile, Laos, Myanmar, China and Cambodia, and recently entered Brazil. It now has a presence in 48 states and 30 countries, with Thailand representing its largest international market.

“We still have a lot of untapped space to go,” Martin said.

Auntie Anne’s is also on pace for domestic growth, particularly in “alternative locations,” which means non-shopping mall locations for the brand. These include airports, colleges, military bases and hospitals. The plan is to open about 100 new nontraditional sites this year alone.

“We’re driven by where people are,” Martin said. “There is a fierce competition for space, but we believe we have a proven track record to be a good food-on-the-go choice that translates well in these types of areas.”

Although shopping mall traffic has dwindled since the Great Recession – which some claim led to the bankruptcy of Sbarro – Auntie Anne’s will continue to pay homage to its traditional spaces as well, with plans to open 30 to 40 mall units this year.

“Malls are still a huge part of Auntie Anne’s world,” Martin said. “But we wouldn’t be doing our brand a service if we weren’t looking at alternatives.”

New store design

All of Auntie Anne’s new locations will integrate the new store design. Franchisees that are re-upping their leases will also begin integrating the core elements of the design.

Martin describes the new store prototype as being modeled after a home kitchen; for example, replacing the modern blue tile elements for warmer wood. The pretzel warmer is also more prominent and simpler.

“They include attributes we’ve had for years, but we’re reminding people that we’re doing this – baking our products – from scratch. The oven is more prominent so people can see us baking the pretzels. The warmer and what is in there is what sells our brand. People eat with their eyes, so we had to make sure our products were displayed well in a light, clean bakery case. We’re really highlighting that fresh-baked piece of the brand,” he said.

The Auntie Anne’s team spent a year working on the new design and testing it with both consumers and franchisees. Franchisees in different locations were intentionally selected during the process, to ensure the look could translate across the system.

And, although the brand is going for homey over modern, digital menu boards are incorporated into the new prototype. They’re not mandated, but Martin said the company does relay their benefits to franchisees.

“One challenge with digital boards is the cost. It has to make sense. I think long term, they will be a key element,” he said. “At some point (digital) will be relevant. And to stay relevant, we have to invest in pieces that are meant to last.”

The initial feedback has been “very positive,” Martin said, especially from the franchising partners.

“We wanted to make sure it was functional and cost effective and we believe we’ve done that,” he said.

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