A&W: Growing again by returning to its 'roots' and root beer
If there was ever a top 10 list for QSR CEOs who embody their brands, A&W's Kevin Bazner would certainly be on it. The guy walks, talks and breathes the brand. In fact, just ask him a question about the 98-year-old root beer-centric chain and Bazner seems to light from within.
Based in the heart of the Bluegrass state in the rolling blue-green hills of Lexington, Kentucky, A&W is about as American as you get. From its trademark frothy drink, which Native Americans were making a version of long before Europeans set foot here, to its roots in small town America in large part, this
|A&W President and CEO Kevin Bazner.|
ultra-orange brand is pure Americana.
But like the nation itself, A&W has had some pretty tumultuous ups-and-downs, including near constant changes of ownership since the 1970s, along with huge sales declines and store shutdowns. Until, of course, a consortium of franchisees and others bought the once-faltering brand back from Yum after a nine-year brand management disaster there and quickly put Bazner at the helm.
Clearly, those new veteran-franchisee owners knew exactly what they were doing because, like the frothy head on chain's iconic drink, the brand itself expanded for the first time last year in a long time. In fact, about 20 more stores were opened in the U.S. in 2017, and about 40 more in Europe, where some may not know the chain has quite a following.
Country roads take A&W home
Today the brand's growth plan here in the states is all about the rural landscape - a far less popular approach to franchise growth than what is commonly found among many other QSR brands who prefer to play on the more populous urban marketplace.
And while it may seem like an offbeat approach, the early signs are mostly positive. He said in an interview at the Lexington brand headquarters with this site that the chain does well in and around population bases of 7,000 - 10,000 people.
Granted that's not a lot of people, but perhaps being a big fish in the small town isn't so bad when you consider some of the advantages. For instance, real estate costs are far lower in these areas and the chain has an established and strong share of voice there -- something that's difficult to get in the crowded urban QSR marketplace.
Likewise, labor is far more available in rural settings where opportunities are often few and far between. Plus the type of franchisee the chain engages in these settings is quite unlike those who typically engage with more urban brands.
|A&W stores are often the center of the community in rural America. Photo provided.|
"Like in Delphos, Ohio, our franchisee is doing a deal with us to build eight more stores in the state's northwest region," Bazner said by way of example. "This is a true entrepreneurial type of small business that people get into because they want what their parents had.
"We have second and third generation operators. When we ask: 'What made you do this too?' they say that they grew up in their parent's store and they want to do this because they know and love the brand. That is extraordinary in and of itself.
"These millennials are stepping in as their parents are aging out and want to travel and do other things. The restaurant is something that can be given to the next generation that is part of the A&W family. We are doing so well today because that's the roots of the brand."
Rural America, in fact, holds additional assets as well that larger chains bypass in the industry's lust for locations in areas with the greatest overall population density. For instance, gaining voice among the local media is a whole lot easier in a small town where the local paper and radio station really do show up for a restaurant media events - something unlikely in all but few cases in areas like Chicago or even Lexington itself.
Likewise, Bazner said in rural areas where the chain locates, it tends to become like one of the town's family members. High schoolers hang out there. Millennial parents take the kids there, while their Baby Boomer parents who grew up there just keep going back to meet friends, relive past memories or pass it on to their grandkids.
Staying fresh, while staying true to your 'roots'
|A&W first took shape in 1919 in California. Photo provided,|
But, particularly in our super-connected world today, the rural customer still needs to be wooed every bit as heavily as his or her urban counterpart. And in that territory, Bazner's A&W is speaking the language of true down-home U.S.A.
Just take a look at some of the initiatives and menu items he's thrown the brand's weight behind since rejoining it in 2011. For Bazner, step No. 1 was getting that menu to talk to millennials. He said that after some very thoughtful consideration of the research on that popular age group, it was clear the way to speak most loudly to them was to talk "chicken."
"We found that with the chicken category, consumers have a desire for more real food at a higher quality," he said. "We also learned that millennials are more adventurous with their food and flavor profiles.
"Therefore, one of the first initiatives we undertook in 2013 was launching hand-breaded chicken tenders that we promoted regularly on social media. We also began to offer a variety of dipping sauces in 2014. Since then, our chicken business has grown more than 60 percent. That's amazing!"
The chain also has introduced a very American product in the dairy realm in the form of cheese curds. These mild-mannered clumps of newborn cheese also simultaneously address the increasing demand for vegetarian offerings in the QSR space since customers can easily order the curds served on a sandwich or other menu offering.
Then, there was the brand's literal return to its "roots," when this year the chain reinstituted the original, preservative-free, real can sugar secret recipe root beer that got the whole show started in the early 20th century.
The original recipe elixir is made fresh now, rather than before when it was compiled with pre-made syrups with artificial additives or ingredients. And this very genuine root beer is now on tap, allowing customers that old-time-ish thrill of pouring their own.
"In everything that we're doing, we're going for quality," Bazner said. "Those price or value guys, like McDonald's, they've already got that market. Rather than compete with that, our whole value proposition is quality."
A true 'family' of franchisees
In Bazner's view though all of the good this brand is currently churning out goes back to the franchisees that form A&W's stakeholders group. Bazner sees himself as the guy whose there to accommodate their needs and desires, including everything from an international investors' feng shui concerns around new store designs and locations, to the opening of a new corporate training facility to train the trainers and keep employees and franchisees all on the same page.
So make no mistake about it, those franchisees - you know the people that largely came together and "rescued" the brand from its fire sale by Yum six years ago - are the heart and soul of this brand. More than anything, Bazner recognized that early on in the faces of second and third-generation franchisee families who have marked time by A&W store changes and menu additions.
It's a collective "we've all got a stake in this mentality" that is clearly working for this All-American fast food concept. And all you have to do is look at the face of Kevin Bazner as he "effuses" about this brand, to know that for this veteran QSR leader, "family" extends all the way around the world and never gets together without somebody buying a round of frosty-mugged root beer.
"Our shareholders are our franchise partners," Bazner said. "There's no exit strategy. Private equity guys, they don't understand that concept. Our owners today are in it for the long term, not just for the next quarter.
"We are targeting the small business owner-operator and we work with them very closely from start-up on everything from design and décor to menu and marketing. And it's all to make our restaurants in those communities known as much by the operator's last name as they're known for anything else.
"We would rather open one restaurant this year that's in business 50 years than open 50 that are open for a year. I love that. How many McDonald's operators can say, 'Oh it's been 50 years since we bought that (store)?"
Feature photo: iStock
Award-winning veteran print and broadcast journalist, Shelly Whitehead, has spent most of the last 30 years reporting for TV and newspapers, including the former Kentucky and Cincinnati Post and a number of network news affiliates nationally. She brings her cumulative experience as a multimedia storyteller and video producer to the web-based pages of Pizzamarketplace.com and QSRweb.com after a lifelong “love affair” with reporting the stories behind the businesses that make our world go ‘round. Ms. Whitehead is driven to find and share news of the many professional passions people take to work with them every day in the pizza and quick-service restaurant industry. She is particularly interested in the growing role of sustainable agriculture and nutrition in food service worldwide and is always ready to move on great story ideas and news tips.