Wendy' (WEN) used classic marketing tactics when it launched its breakfast menu. It targeted the leader in the space and built its marketing around saying that it had a better offering.
The company took out billboards in New York's Time Square making fun of McDonald's (MCD) breakfast offering while also running television ads that painted its rival as having a tired, outdated menu that wasn't fresh or inspired. The company made it very clear that it was trying to take down the leader with comments Chief Marketing Officer Carl Loredo made, which TheDrum.com reported.
"To date, some others in the category have let breakfast consumers down by offering breakfast sandwiches with frozen, folded eggs and pre-cooked bacon. Today, all that changes," he said. "We are known for our high-quality food and breakfast is no different. Try any of our craveable items – we believe this menu will become your favorite."
That's not subtle. Wendy's called out McDonald's and laid down a challenge. It was a bold effort to get attention at the expense of an established rival.
It both worked and it didn't.
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McDonald's Answered the Breakfast Challenge
The McMuffin, McGriddle, and the well-loved Big Breakfast commit all the sins Wendy's called out in its ads. Consumers, however, don't seem to care. McDonald's may use pre-cooked, less-than-fresh ingredients, but they do so in a familiar way that people love.
Wendy's thought it was trolling its rival over the perceived problems with its breakfast menu but it actually did sort of the opposite. The chain's ads did succeed in letting consumers know it offers breakfast, but they also reminded them that McDonald's does as well.
McDonald's CEO Christopher Kempczinski did not name his company's rival, but he made it very clear in a late-2021 earnings call that Wendy's efforts to take down the market leader had failed.
"Our breakfast business is performing well," he said, "In Q4, our breakfast business grew. We saw strong performance out of the bakery line. So, our expectation is going forward that breakfast, the daypart, we've been pleased with how we weathered through 2020 on that even with the introduction of one of our competitors, didn't have a significant impact on our breakfast business."
Wendy's tried to take on the champion and Kempczinski made it clear that those efforts had not worked. Not taking down the leader, however, is not the same as not succeeding.
Wendy's Becomes a Breakfast Leader
Fast-food breakfast may seem like a winner takes all game, but it's not. This isn't sports where one team wins and another loses. McDonald's may have defended its crown, but Wendy's has become a worthy contender as well.
"We continue to be extremely pleased with our breakfast business, which saw strong growth in the fourth quarter, peaking at more than 8.5% of sales in The U.S. and averaging approximately 8% during the quarter," said Wendy's CEO Todd Penegor during his chain's fourth-quarter earnings call. "This growth was primarily driven by successful promotions, which not only drove significant trial of our breakfast daypart, as evidenced by a meaningful increase in buyer penetration in the quarter but also increased overall breakfast awareness to record levels."
The CEO made it clear that Wendy's has established a foothold in the morning which it expects to continue to grow.
"As we look back at the full year, we have made significant progress growing breakfast sales by approximately 25%," he said. "We achieved this through several successful trial-driving campaigns, continued increases in customer repeat, two additional months of the daypart, and the support of our $25 million incremental investment in breakfast advertising."
Wendy's has built on that in 2022 and has plans to expand those efforts over the rest of the year.
"In 2022, we will add to our playbook to build the breakfast business as we support growth through menu innovation, such as our new craveable Hot Honey Chicken Biscuit alongside compelling trial driving offers to further ingrain the habit," Penegor added. "We believe our breakfast business in the U.S. will accelerate in 2022 by approximately 10% to 20%, taking average weekly U.S. breakfast sales to approximately $3,000 to $3,500 per restaurant by year-end."
The Breakfast Baconator has not taken down the McMuffin, but Wendy's has established itself as a player in the morning.
