Wendy's Company (the) · NASDAQ:WEN
Wendy's Company (the) — Investor Day (January 2012)
47 slides from Wendy's Company (the)'s investor day presentation, Jan 30, 2012
Slide 1: Emil Brolick, President & Chief Executive Officer
EMIL BROLICK PRESIDENT & CHIEF EXECUTIVE OFFICER
Slide 2: Reconnected, Energized, Committed & Confident
RECONNECTED, ENERGIZED, COMMITTED & CONFIDENT Reconnected with Franchise Community; Supportive and Financially Solid Clear Brand Vision – A CUT ABOVE Clear RECIPE TO WIN Building People Capability General Counsel – Scott Toop Chief Marketing Officer – Close Chief People Officer – Early
Slide 3: Reconnected, Energized, Committed & Confident
RECONNECTED, ENERGIZED, COMMITTED & CONFIDENT Understand Challenge/Opportunity Significantly Raising the Bar on Standards People – “Five-Star Athletes” Operations – Functional…to Functional & Emotional Marketing – “Real” Campaign to Evolve Food – Core & Innovation Poised to Leverage Si
Slide 4: Iconic Brand: Significant Latent Equities
ICONIC BRAND Significant Latent Equities The Wendy’s Company
Slide 5: Resetting Relationship with Investment Community
RESETTING RELATIONSHIP WITH INVESTMENT COMMUNITY The Wendy’s Company Move to deliver what we promise Move from significant adjustments and restructuring charges to a clear business and financial model for growth Move to confidence in North America business as growth driver and International as pr
Slide 6: North America: The Opportunity Today
NORTH AMERICA THE OPPORTUNITY TODAY 6,244 Restaurant Base
Slide 7: The World: The Opportunity Tomorrow
THE WORLD THE OPPORTUNITY TOMORROW 350 Restaurant Base
Slide 8: A Huge Market with Real Growth
A HUGE MARKET WITH REAL GROWTH Grocery + Foodservice = $1.2 trillion The Wendy’s Company Grocery 52% 48% Foodservice Source: USDA/Economic Research Services
Slide 9: Food at Home vs. Food Away from Home
Food at Home vs. Food Away from Home…An Opportunity The Wendy’s Company 67% 61% 57% 53% 52% 33% 39% 43% 47% 48% 1970 1980 1990 2000 2010 Food at Home Food Away from Home Source: USDA/Economic Research Services % Total Food $ Spend 1970 – 2010
Slide 10: U.S. Restaurant Supply in Decline...A Positive
U.S. Restaurant Supply in Decline…A Positive The Wendy’s Company 1.9% 0.9% 0.8% -0.3% -1.1% 1.5% 1.4% 0.2% -2.4% 0.7% 2007 2008 2009 2010 2011 Supply (Store Counts) Demand (Traffic) Source: NPD CREST and ReCount; YE March
Slide 11: The Decline of Independents
The Decline of “Independents” Continuing QSR Opportunity 2.6% 1.5% -1.5% 0.4% 1.6% 0.8% -1.3% -0.6% -1.8% 2.6% -1.1% -1.2% -3.9% -0.6% -5.0% Major QSR Chains Small QSR Chains Independent 2007 2008 2009 2010 2011 The Wendy’s Company Traffic PCYA – Year-end October Source: NPD CREST
Slide 12: Demographics...A Positive View
DEMOGRAPHICS…A POSITIVE VIEW AGE CHG ‟09-‟19 QSR $ SHR 65+ 30% 50 - 64 +34% +12% 35 - 49 -1% 26% 25 - 34 +11% 18% 18 - 24 +1% 10% 13 - 17 0 - 12 +5% +9% 16% Source: NPD CREST The Wendy’s Company
Slide 13: QSR Stealing Share
QSR STEALING SHARE Traffic Share The Wendy’s Company 76% 24% 12% QSR FSR - Midscale 11% - Quick Casual 1% - Fine Dining 78% 22% 10% 11% 1% +2 (2) (2) _ _ 2006 2011 CHG Source: NPD CREST
Slide 14: QSR Stealing Share
QSR STEALING SHARE Traffic Share The Wendy’s Company 76% 24% 12% QSR FSR - Midscale 11% - Quick Casual 1% - Fine Dining 78% 22% 10% 11% 1% +2 (2) (2) _ _ 2006 2011 CHG QSR GAINED 181,000,000 VISITS Source: NPD CREST
Slide 15: QSRs Positioned for Success
The Wendy’s Company QSRs POSITIONED FOR SUCCESS Convenience & Value – The Driving Force
Slide 16: Hamburger/Sandwich Well Positioned within QSR
Hamburger/Sandwich Well Positioned within QSR 42.4% 16.0% 10.2% 43.8% 16.8% 11.5% +1.4 +0.8 +1.3 Hamburger/Sandwich Retail Coffee/Donut/Bagel Traffic Share The Wendy’s Company 2006 2011 CHG Source: NPD CREST
Slide 17: Competitive context has changed significantly! Yes...But
The Wendy’s Company Competitive context has changed significantly! YES…BUT
Slide 18: Quick Casual and Retail Driving QSR Growth
Traffic CAGR: YE October „06 vs. October „11 Quick Casual and Retail Driving QSR Growth 6.7% 1.1% -0.4% QUICK CASUAL “NEW QSR” RETAIL ALL OTHER QSR Source: NPD CREST The Wendy’s Company
Slide 19: Quick Casual Visit Drivers
Quick Casual Visit Drivers: Food Quality, Healthy Choices & Environment Source: NPD CREST The Wendy’s Company I Like it There Quality of Food Special Taste/Craving Went for Specific Menu Item Good Variety of Foods to Choose Healthy Choices Quick Casual Traditional QSR
Slide 20: Quick Casual Visit Drivers: Traditional QSRs Win on Convenience and Price
I Like it There Quality of Food Special Taste/Craving Went for Specific Menu Item Good Variety of Foods to Choose Healthy Choices Quick Casual Visit Drivers: Food Quality, Healthy Choices & Environment Source: NPD CREST The Wendy’s Company Convenient Location Good Price Quick Casual Traditional QSR
Slide 21: Quick Casual Check Higher Average
However…Quick Casual Check Higher Average Eater Index Source: NPD CREST The Wendy’s Company 100 100 100 144 138 150 LUNCH SUPPER PM SNACK Hamburger Category Quick Casual
Slide 22: Quick Casual, Traditional QSR, QSR Retail
QUICK CASUAL “NEW QSR” TRADITIONAL QSR QSR RETAIL “C STORES”
Slide 23: Must Avoid Getting Caught in the Middle
QUICK CASUAL “NEW QSR” TRADITIONAL QSR QSR RETAIL “C STORES” MUST AVOID GETTING CAUGHT IN THE MIDDLE
Slide 24: Recipe to Win
RECIPE TO WIN The Wendy’s Company
Slide 25: A Cut Above: Foundation of Recipe to Win
A CUT ABOVE Foundation of Recipe to Win BRAND VISION 1969
Slide 26: Wendy's 2000 Positioning: Experience vs. Price
The Wendy’s Company E X P E R I E N C E P R IC E WENDY’S 2000 HIGH LOW FUNCTIONAL EMOTIONAL “X” “Y”
Slide 27: Wendy's Failed to Evolve, Grow in Relevance
The Wendy’s Company E X P E R I E N C E P R IC E Wendy‟s Failed to Evolve, Grow in Relevance HIGH LOW FUNCTIONAL EMOTIONAL “X” “Y” NEW QSRs
Slide 28: Wendy's Tomorrow
The Wendy’s Company E X P E R I E N C E P R IC E HIGH LOW FUNCTIONAL EMOTIONAL “X” “Y” NEW QSRs WENDY’S TOMORROW
Slide 29: A Cut Above: Why it will work!
A CUT ABOVE Why it will work! Reimaging the Restaurants Reimaging the People Reimaging the Experience Reimaging the Food The Wendy’s Company
Slide 30: A Cut Above: Reframing the Competition
A CUT ABOVE Why it will work! Reimaging the Restaurants Reimaging the People Reimaging the Experience Reimaging the Food The Wendy’s Company REFRAMING THE COMPETITION
Slide 31: Imagine... A Quick Casual Experience at a QSR Price!
A CUT ABOVE Imagine… A Quick Casual Experience at a QSR Price! The Wendy’s Company
Slide 32: Recipe to Win: Growth Platforms
RECIPE TO WIN 2-3% SSS Growth Reimaging Restaurant/ Experience Consumer Economic Model New Restaurant Growth Test New In-line The Wendy’s Company GROWTH PLATFORMS Growing Brand Access/ Convenience Morning Meal (Breakfast) Late Night Temporarily Raising Company Ownership Interna
Slide 33: Recipe to Win: Tools
The Wendy’s Company TOOL S P RICE P RODUCT P ROMOTION P LACE P ERFORMANCE P EOPLE RECIPE TO WIN
Slide 34: Recipe to Win: People
RECIPE TO WI N Our greatest asset… Our greatest source of difference… P EOPLE
Slide 35: Recipe to Win: People Culture
RECIPE TO WI N P EOPLE CULTURE – DAVE’S VALUES R E S U L T S HIGH LOW LOW HIGH ATHLETES The Wendy’s Company
Slide 36: Recipe to Win: Price
Same Product Lower Price Superior Product Competitive Price Only two ways to deliver superior value RECIPE TO WI N P RICE The Wendy’s Company
Slide 37: Quick Casual Stealing Premium Occasions
Quick Casual Stealing Premium Occasions Distribution of Traffic YE October 2011 Excluding AM Meal The Wendy’s Company 23 8 33 13 28 25 7 15 10 38 HAMBURGER NEW QSRs 17% 56% 53% 21% EATER AVG CHK $8.00> $7.00-7.99 $5.00-7.00 $3.00-5.00 $3.00<
Slide 38: Recipe to Win: Product...Honest Food
CORE INNOVATION RECIPE TO WI N P RODUCT…Honest Food The Wendy’s Company Hamburgers Chicken Salads Sides Beverages Protect, Grow & Build Equity Innovate & Regain Share Own It! Grow Leadership Leverage Unique Items Avoid “Me Too”
Slide 39: Step-Change Innovation
STEP-CHANGE INNOVATION RECIPE TO WI N P RODUCT…Honest Food The Wendy’s Company Growth Areas Leverage Unique Capabilities Lead the Pack Honest Food… Honest Ingredients… Honest Preparation
Slide 40: Recipe to Win: Performance
RECIPE TO WI N P ERFORMANCE The Wendy’s Company #1 THRESHOLD #2 PERFORMANCE #3 EXCITEMENT Minimize Dissatisfaction Build Brand Satisfaction Secure Brand Preference FUNCTIONAL EMOTIONAL Kano Model Mindset
Slide 41: Recipe to Win: Place
Win/win… consumer… franchisee Contemporizing Wendy’s is key to growth Makes other Ps work better RECIPE TO WI N P LACE The Wendy’s Company
Slide 42: Recipe to Win: Promotion
RECIPE TO WI N P ROMOTION Message Creative Media The Wendy’s Company
Slide 43: International: Future Growth Driver
INTERNATIONAL FUTURE GROWTH DRIVER
Slide 44: Share of World Population vs. Wendy's Restaurants Outside North America
% of World’s Population Outside of North America 95% 5% % of Wendy’s Restaurants Outside of North America The Wendy’s Company
Slide 45: Energizing the International Flywheel
Numbers reflect June 2011 potential update 350 622 546 699 1,206 4,741 >8,000 UNDER DEVELOPMENT AGREEMENTS "TARGETED" FOR CURRENT FRANCHISEES UNDER NEGOTIATION REMAINING POTENTIAL TOTAL POTENTIAL CURRENT STORE COUNT UNDER JV AGREEMENT ENERGIZING THE INTERNATIONAL FLYWHEEL The Wendy’s Company
Slide 46: Reconnected, Energized, Committed & Confident
RECONNECTED, ENERGIZED, COMMITTED & CONFIDENT Iconic brand, latent equities Clear brand vision… A CUT ABOVE Well-defined growth platforms We have the RECIPE TO WIN Franchisees prepared to invest time, people & money Building team of “Five-Star Athletes” The Wendy’s Company
Slide 47: Gerard Lewis and Steve Farrar
The Wendy’s Company Gerard Lewis Senior Vice President Culinary Innovation Steve Farrar Chief Operating Officer of North America