A&W cooks up nostalgia

The QSR has successfully leveraged baby boomers' fond memories of carhops and root beer, resulting in 29 consecutive quarters of same-store sales growth.

A&W’s secret sauce is its ability to serve baby boomer patrons a healthy side of the warm and fuzzies with their root beer, burgers and onion rings. Now they’re spicing things up with urban outlets serving chipotle.
Ever since it set its sights on boomers, a generation that grew up frequenting drive-in joints where car hops would skate over to your window, things have been looking up for the Vancouver-based QSR chain, especially in the last seven years.  Currently the second largest burger chain in Canada by both sales and locations, A&W has experienced 29 consecutive quarters of same-store sales growth.
Wholly Canadian-owned by A&W Food Services of Canada, the burger joint originated in 1919 in Lodi, California as part of the American chain. It was sold to and operated separately by Unilever in 1972, until it was bought out by the existing senior management at Unilever and outside investors in 1995. A&W’s first Canadian location, a drive-in situated in Winnipeg, opened in 1956. It’s the boomers’ emotional connection to that childhood memory that A&W’s been able to effectively leverage over the last few years to foster its success.
System sales – total sales of all the brand’s outlets – increased from $559 million in 2005 to $757 million in 2009, an increase of over 35% in four years, double the rate of growth of the restaurant industry in Canada, which, according to Statistics Canada, was 17% over the same period.
A testament to how truly well things have been going for A&W is its uptake in new restaurant expansion, especially in Ontario. The plan is to open 13 or 14 new locations in the province alone by the end of this year, which will bring the total to 100 new restaurants across the country since 2006.
Included in this year’s expansion efforts is a new urban concept restaurant that A&W opened in Vancouver in August, with plans to open more in Vancouver, Montreal and Toronto (one of which will be downtown on Yonge Street) in the next few months. Catering to 25- to 40-year-olds, they are bringing the A&W brand to a new group of city-dwelling customers.
“Looking at consumers in a downtown urban setting, it really feels like they’re underserved when it comes to burgers,” says David Waterfall, director of marketing, A&W Food Services of Canada.
The goal, he says, is serving up a quality burger with the convenience urbanites need when they want to grab a quick bite.
Working with Cincinnati-based design firm FRCH, the 1,600- to 2,000-square-foot concept locations still give a nod to the brand’s heritage, but have a more contemporary feel. They feature free WiFi and include self-order kiosks – a first for Canadian QSR chains – located at the front of each restaurant.
The new restaurants also moved the menu from its traditional spot on the back wall to vertical columns situated on the counter and updated it with photos to cater to multilingual customers who may be unfamiliar with the brand. The menu also features some new items specific to the concept locations that A&W feels will appeal to its new urban customer, including a selection of salads and new chicken sandwiches, such as a spicy chipotle.
As part of A&W’s growing commitment to green initiatives over the last few years, a response to customer feedback says Waterfall, the urban locations also take measures to reduce their solid waste in restaurants by 90% versus a takeout order – smaller food wrappers are used, china plates and stainless steel cutlery are used in lieu of paper and plastic, french fry and onion ring baskets are reusable, and, like in other A&W restaurants, root beer is served in a glass mug. Advanced exhaust equipment will reduce gas and power consumption by 30% and A&W has also implemented high-efficiency fryers that further decrease their energy costs by 40% to 50%.
“We’re targeting baby boomers today, not the way they were in the ’50s and ’60s,” says Waterfall. “We’re trying to meet their needs for speed, convenience, price, and our real focus is on making sure we’re continuing to give them that warm, wonderful feeling they had when they grew up with A&W.”    
The brand’s long-standing “Allen’s A&W” ad campaign has done much to develop that emotional connection. “A sense of warmth and belonging is important for our customers because it distinguishes the brand,” says Waterfall.
Developed by Rethink in Vancouver, the campaign’s TV ads feature fictional restaurant manager Allen and, recently, his hapless, ill-fated employee Ryan, who whimsically convey brand aspects boomers can relate to, and rekindle fond memories of A&W.
Waterfall isn’t surprised that A&W began experiencing its spate of same-store sales growth around the same time the campaign first launched seven years ago. Working with Vizeum Canada’s Vancouver office, the brand has increased its media presence over that time, a result of a spend that’s grown proportionately with its sales.
One key brand aspect, explains Waterfall, is good food. So, product innovations often take centre stage in its ads, aside from Allen, that is. “Rather than what’s exciting this month, we’ve been continuing to build our brand for the long term, specifically through the core of our menu, which is burgers, onion rings and root beer,” he says. “We continue to innovate around higher quality premium burgers and have made really good progress.”
To further engage its customers, A&W has recently begun using social media to grow its online presence.  At the end of 2009 it ran a contest and promotion around coupons for free Uncle Burgers. A&W incited chatter amongst web denizens by spreading news of the coupons through blogs and discussion boards like Redflagdeals.com. It drove them to a microsite where they could print off the coupon, as well as enter a contest to win a trip by submitting their best story about an uncle. The site racked up 50,000 visits, the contest brought in 41,000 entries and over 8,000 coupons for free burgers were sent out, with the entire coupon stockpile eaten up after only four hours of the site being launched. 
“Using social media has allowed us to create stronger relationships and evolve the brand’s personality to show a younger side,” says Glen Chalcraft, senior account manager, Rethink.
Yet, nostalgia still plays a big part in the branding game plan and that’s why every year, at locations across the country, the brand holds its Cruisin’ the Dub events, which transport baby boomers across the country back to the days of the drive-in.  The program, launched nationally about four years ago, has A&W working with car clubs and shows across the country to fill lots with classic cars from the ’50s, ’60s and ’70s. It’s grown to boast over 5,000 events held at A&W restaurants in 2010, up from 1,000 four years ago.
In response to the requests of franchisees, who often hold events to benefit their communities and wanted to have an impact on a national scale, A&W applied a CSR aspect to Cruisin’ the Dub, working with them to create its annual Cruisin’ for a Cause charity.
This year, its second, the brand again decided to take a bite out of MS. One dollar from every Teen Burger sold across the country on Aug. 26 went to the Multiple Sclerosis Society of Canada. Promoted with the help of its PR agency, Vancouver-based James Hoggan and Associates, and with more than 700 A&W locations participating, the event, which featured classic car gatherings, retro music, carhop service, hula hoop contests and even visits from the great A&W Root Bear, brought in more than $700,000, eclipsing last year’s total of $400,000.
The brand also used the event to broaden its foray into social media, donating 50 cents for every person who referenced the event on Twitter, and every RSVP they received in response to a Facebook event invite, to a maximum of $20,000 (though A&W ultimately ended up donating more).  On the day of the event, Cruisin’ for a Cause was the number two trending topic on Twitter in Canada.
A&W has also been working to add a social responsibility component to the workings of its restaurants, furthering its green agenda. The burger chain already has two zero-waste restaurants, located in food courts, where everything coming out of the restaurant is recycled, reused, or reclaimed in some way. The program is still in its infancy, but the brand has plans to open a third zero-waste test location in B.C.’s lower mainland sometime soon.
“We want to be able to prove this is workable for all of our restaurants and work with our franchisees to expand that,” says Waterfall.
Going forward, Waterfall says that given all the success over the last few years, one question he’s asked quite a bit is, for obvious reasons, how long can the brand stay with their baby boomer target? His answer is that if one looks at demographics, they still have a long run with that group. So, expect more of the same. Though he adds, when it comes to memories, A&W’s going to make some new ones, not just for the boomers but also for a new generation.

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