How does Wendy’s plan to win the breakfast wars?

From the C-Suite newsletter: The QSR gives us the skinny on how it plans to disrupt the category.

A Wendy's Co. Restaurant Ahead Of Earnings Figures

You’re reading a story from Strategy C-Suite, a weekly briefing on how Canada’s brand leaders are responding to market challenges and acting on new opportunities. Sign-up here to receive the latest stories.

By Will Novosedlik

Wendy’s recently announced that it’s ready to enter, and disrupt, the Canadian QSR breakfast category.

“Disrupt” is a strong word. When it first appeared in late middle English about 400 years ago it meant to destroy the structure of something. More recently, Silicon Valley has adapted it to mean radical change in an industry or market by means of innovation. Think AirBnB, Uber or Facebook.

So when Wendy’s says it believes the breakfast category is ripe for disruption, we expect radical changes. We imagine paradigm-busting innovation. We anticipate bold new offerings, like meta muffins, or digital bacon.

Regarding the latter, when it comes to the bacon on your typical breakfast sandwich, it’s generally so thin and transparent that it might as well be digital. But Wendy’s is hoping to change that, Liz Geraghty, CMO, International tells strategy.

“We are going to challenge what is currently available to Canadians. We’re inviting them to say goodbye to the dry English muffin and the see-through bacon that’s heated up in a microwave.” That means fresh-cooked bacon, square sausages (“because we don’t cut corners”), and fresh-cracked eggs.

While that sounds like an improvement to the standard breakfast offering, we’re still not convinced it can be described as disruption. When pressed harder on Wendy’s use of the term, Geraghty redoubles her defense: “The key thing about our use of the word is that it refers to our status as a challenger brand. We are going to insert ourselves into the conversation and challenge the choices Canadians have to make today because there is nothing else available. That’s how we interpret disruption.”

This opens up another line of inquiry. Challenger brand? Wendy’s has been round for 53 years. That hardly makes it a challenger. Geraghty explains, “Wendy started in 1969 as a challenger to the category. What we’re offering is a higher-quality menu that brings to life our vision of ‘fast food done, right.’ That’s why we’ve gone to the extra trouble of having fresh cooked bacon, square sausage, fresh eggs, and our signature Frosty-ccino. At every point in the menu design process, we’ve baked quality into our offering.”

At the core of its new breakfast menu (which debuts in Canada on May 2) stands the Breakfast Baconator, a meat-eater’s mash-up of smoky bacon strips, a hearty sausage patty, melted American cheese and a freshly cooked egg topped with a dollop of Hollandaise sauce, all held together with a toasted brioche bun. That certainly sounds like it will tower over anything we’ve seen from the highly competitive and uber saturated QSR category.

The Canada-specific menu is built on the back of two years’ worth of research. “We spent two years studying consumer behaviour, competitive offers and doing sensory work in Canada to validate our offering,” says Geraghty. “We’ve talked to almost 4,000 Canadian consumers across multiple research studies. We did a combination of qualitative and quantitative research that included everything from testing the concepts of Wendy’s breakfast offering to having people place a virtual order. Physical sensory testing was done with over 15 menu items. We also extensively tested our coffee, which was a really important element for us.”

Turns out that Americans and Canadians have very different coffee preferences. Wendy’s learned that Canada prefers a smoother, richer taste profile while Americans like it bolder. But then, as Geraghty points out, a lot of Americans also drink cola for breakfast, a habit that is unheard of north of the border.

Aside from investing in the menu, Wendy’s has also made significant inroads in digital and delivery. It has invested in its partnerships with UberEats and SkiptheDishes, collaborating with them for greater efficiency and speed. Another focus has been on the development of Wendy’s mobile app. As of last quarter, 15% of orders were made online.

Wendy’s has also enjoyed a positive growth trajectory in Canada, adding new stores at the rate of about 50 each year to reach a total of 400 locations across the country, moving the brand from fourth to third place in terms of QSR traffic share.

To promote its entry into the breakfast space, the chain launched a teaser campaign on April 11 asking Canadians “Where’s the bacon?”  designed to call into question the “see-through” bacon that is offered by its competitors and to talk about Wendy’s bacon. Tomorrow, on April 20, there will be a closed-door tasting event for influencers and the media. This will be followed by an integrated campaign across both conventional and digital channels.

Wendy’s worked with McCann Canada to develop the campaign, Ketchum led PR and influencer communications, while Initiative led the media buy.