Burger King in August got back into the snack game with the introduction of a line of three Royal Crispy Wraps, priced at $2.99 apiece.
The product has been a hit, at least according to the chain’s largest franchisee, Carrols Restaurant Group. The wraps “significantly outperformed expectations,” Carrols CEO Deborah Derby told analysts last week.
For Carrols, the result of the Royal Crispy Wraps proved fruitful. The chain generated 8.1% same-store sales growth last quarter. And its traffic growth was positive earlier than the company expected. All this was done while the chain improved its service scores, meaning its operations improved.
This could prove to be a key victory for Burger King, one that symbolizes the chain’s new-look management and its comeback from one of the ugliest periods in its history.
The product features an aggressive price and fills a market largely abandoned by its biggest rival, McDonald’s. But it has one key element that hasn’t always been there for the Miami-based chain: It is relatively simple to make.
New products have become important marketing tools for restaurants, which face a consumer who is generally more skeptical about eating out after two years of historic inflation.
Brands cannot get aggressive on price, given profitability challenges. But they also face traffic problems and an uncertain future. That has many brands turning to menu development and other strategies to get customers in the door.
But such products risk a brand’s operations, because they can bog down crew members burdened with something else they have to remember how to make. And it’s not always evident that such products bring in more customers than a brand would otherwise get.
All of which puts some pressure on companies to make sure these new menu items work.
That pressure is even greater for Burger King. The brand has frequently relied on price-point marketing and value offers to get customers in the door. But in a year in which three of its biggest operators found themselves in Chapter 11 and hundreds of shuttered locations, it can ill afford to be that aggressive. On top of that, the failure of the chain’s Ch’King sandwich in 2021 remains fresh in many operators’ memories.
The challenges included Carrols, which appeared to be teetering on the edge of bankruptcy 18 months ago, but which is thriving behind improving sales and operations. The introduction of the Royal Crispy Wraps is indicative of that improvement.
Wraps in the restaurant industry have had a moment this year. KFC in February introduced the Kentucky Fried Chicken wrap and then Burger King entered the fray. Both are filling a market that has apparently been wanting since McDonald’s ended its line of Snack Wraps in 2016.
The wraps apparently generate sales at new dayparts, as consumers look for a cheap bite during the mid-afternoon or late night. The wraps “have amplified Burger King’s relevance across demographic groups, including the younger consumer, which is generally more tech savvy,” Derby said.
The risk with such low-priced wraps is that consumers opt for one of them at a lower price point over something more expensive, such as a Whopper. But if consumers add one to their order, given their price, or they come in during a daypart they otherwise would not, then that item can be a winner.
But the key element for operators is its operations. The knock on McDonald’s Snack Wrap line was their complexity. Yet Derby said the product is relatively simple.
“They were taking a sandwich that already exists, [the Royal Crispy Chicken Sandwich] and we’re basically chopping it up and putting it into a wrap,” Derby said. “The beauty of that is, you’re using something you already have and putting it into a new format. From an operational standpoint, that was a significant help.”
Contrast that wrap with the Ch’King, Burger King’s 2021 entrant into the market for higher-end chicken sandwiches. The product was handbreaded and more complicated to make than a typical Burger King item. If the restaurant ran out of ready-made chicken filets, then it would take 15 minutes for workers to make, which often turned off customers.
Operations is one of the least sexy parts of the restaurant business. But it’s important, and a key element in Burger King’s comeback. “We continue to believe that guest satisfaction is a key driver of repeat visits and incremental traffic growth,” Derby said.
Introducing new products in an era in which a brand is trying to improve speed and service is not easy. But it appears Burger King has threaded that needle.