Popeyes' executives outline path to continued success

Sept. 19, 2012 | by Alicia Kelso

Popeyes Louisiana Kitchen has experienced a marked turnaround since its current leadership team, led by CEO Cheryl Bachelder, jumped on board beginning in 2008.

For example, in 2008, global same-store sales were at negative 1.7 percent. They are now at 7.5 percent. Domestically, Popeyes is at 8.4 percent year-to-date, versus 4.9 percent for the overall QSR segment, and 3.9 percent for the chicken QSR subsegment.

Popeyes made up less than 15 percent of the chicken QSR market share in 2008. It is now at 19 percent.

The company has had two opportunities in the past two weeks to share its success story – with a presentation at CL King's 10th annual Best Ideas Conference on Sept. 12, and at its Analyst Day Sept. 18.

"It's an exciting time for Popeyes, especially as we're turning 40 this year," Bachelder said at the Best Ideas Conference. "In 2008, we put into place a strategic roadmap to get results, including the pillars of what we think it takes to be successful. It's not rocket science, but it's hard to be consistent."

Those pillars include building a distinctive brand; running great restaurants; growing restaurant profits; and accelerating quality restaurant openings. The company added a fifth pillar this year, developing servant leaders.

Brand spokesperson and restaurant remodel

At both events, executives touted the chain's distinctive cuisine/flavors and its complementing marketing plan, led by spokesperson Annie. Annie was introduced in 2009 and her campaign has since gone national.

"One of the most powerful and enduring ways to get your message across is through a spokesperson and we have Annie," said Dick Lynch, chief global brand officer. "We use her to tell our culinary story, to be competitive, to tell the Louisiana story, and the price story to drive traffic. We are blessed and lucky to find this campaign. She is a big source of everything that's driven this brand and we expect to use her indefinitely."

Since 2008, Popeyes has more than tripled its media weight – growing from less than 2,000 target rating points to 6,000 today. This has been a major factor in fueling the brand's success, Lynch said.

Also, as part of the first pillar, Popeyes is currently undergoing a "Louisiana Kitchen Plus Image" makeover. Elements of the contemporary design include flatscreen TVs, pendant lighting and a jar of Louisiana spices that anchors the middle of the restaurant.

"We're not shying away from our culinary roots, we're leaning right into them," Lynch said.

U.S. division president Ralph Bower said the remodel averages less than $100,000 for franchisees, which is "significantly" below QSR average for makeovers. Thus far, about 14 percent of the system is in the new image, with one-third of domestic restaurants expected to be done by the end of the year; two-thirds by the end of 2013; and 87 percent done by the end of 2015.

"If the environment is bad, the food won't taste as good. If the service is bad, the food won't taste as good. Our goal is to have an image that is so good it makes our food taste better; an image that reflects Louisiana heritage and our culinary roots," Bower said.

Product pipeline

Also as part of the "You Ain't Seen Nothing" Analyst Day theme, Lynch discussed the brand's successful menu mix, including an LTO focus on seafood.

"We are a chicken and biscuits concept and three out of five of our top performing promotions have been seafood. We expect to grow seafood promotions. There are a lot of legs there," he said.

Popeyes is also confident in its staple LTO offerings such as Rip'n Chick'n, Dip'n Chick'n, Wicked Chicken, Crawfish Festival and Shrimp Tackle Box. LTOS have driven lunch traffic and have also increased the company's box and bundle business.

"We've had a lot of success with LTOs and recycling them in and out. Seafood has been the most successful. We do tests to see which of those could stay permanently, but we want to make sure our core menu stays fairly simple," Lynch said.

As for breakfast, he said there has been a lot of debate about how to approach the fast growing daypart, and it is offered in some markets such as airports, but there are no immediate plans to add a morning menu.

Measuring restaurant performance

Another effort that has paid off for Popeyes in the past four years has been the metrics put into place by the executive team. Specifically, four area are measured by the company on a regular basis, through its metric moving scorecard; guest experience monitor; speed of service training program; and restaurant data collection.

The metric moving scorecard is used for every period, every restaurant, every franchisee and every field person. Restaurants are ranked in five key areas, including guests, people, operations, sales and profits.

"I couldn't be more proud of where this has taken us. Since we instituted the scorecard and speed of service measures, we've grown in the number of guests delighted from 66 percent in the second quarter of 2009 to 77 percent in the fourth quarter of 2011," Bower said.

Additionally, when the company began measuring speed of service, 25 percent of the system had average service times of 180 seconds or less. Now, that number is close to 80 percent.

International footprint, people development

Andrew Skehan, COO International, discussed Popeyes' expansion potential during Analyst Day, saying the chain hasn't even begun to scratch the surface of what's attainable. Currently, there are 412 units in 25 countries.

"If you compare us to KFC or McDonald's, the sky's the limit right now. We truly were born to travel," he said. Benefitting the brand for a global presence, he added, is its menu mix – chicken and seafood are the most consumed global proteins and rice is the most consumed starch. Additionally, spicy is a popular flavor profile in many global markets.

"Our relevant heritage ideally positions us. We were born of seven nations with a Mardi Gras, carnival, festival atmostphere," Skehan said. "And you can't overestimate how important our U.S. success is to grow internationally. It gives us confidence, it gives our partners confidence and it gives us a roadmap that we can apply moving forward."

Finally, Lynne Zaponne, Popeyes' chief talent officer, discussed the company's newest pillar during Analyst Day, underscoring its contribution in sustaining the brand's positive results over time.

Strengthening the brand's culture, she said, starts with three key strategies: developing servant leaders; articulating and delivering on employee value propositions; and defining and delivering a branded guest experience.

"If there is anything underestimated in financial performances, it is human capital," Bachelder added. "We are very intentional about making this a competitive advantage for us."

Read more about operations management.

Topics: Business Strategy and Profitability , Chicken , Customer Service / Experience , Food & Beverage , Franchising & Growth , International , Marketing / Branding / Promotion , Operations Management , Restaurant Design / Layout , Staffing & Training

Alicia Kelso / Alicia has been a professional journalist for 15 years. Her work with FastCasual.com, QSRweb.com and PizzaMarketplace.com has been featured in publications around the world, including NPR, Good Morning America, Voice of Russia radio, Consumerist.com and Franchise Asia magazine.
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