NEW YORK (AP) — When Wendy’s decided to remake its
42-year-old hamburger, the chain agonized over every detail. A pickle
chemist was consulted. Customers were quizzed on their lettuce
knowledge. And executives went on a cross-country burger-eating tour.
The
result? Dave’s Hot ‘N Juicy, named after late Wendy’s founder Dave
Thomas. The burger — with extra cheese, a thicker beef patty, a buttered
bun, and hold the mustard, among other changes — will be served in
restaurants starting Monday.
"Our food was already good," said
Denny Lynch, a Wendy’s spokesman. "We wanted it to be better. Isn’t that
what long-term brands do? They reinvent themselves."
For Wendy’s
Co., based in Dublin, Ohio, reinvention is critical. That’s why
executives at the 6,600-restaurant chain spent the past two and a half
years going over burger minutiae during an undertaking they call Project
Gold Hamburger. That included deciding whether to switch from white
onions on its burgers to red (they did), to change the fat/lean ratio of
the meat (they didn’t), or to go with plain or crinkled pickles (they
picked crinkled.)
Wendy’s is trying to boost lackluster sales and
fight growing competition from much bigger rival McDonald’s on one end
and expanding fast-casual chains like Five Guys on the other. Part of
the problem is that Americans, who are being squeezed by the tight
economy, are being pickier about how they spend their dining-out
dollars. But the biggest issue is that Wendy’s, which hadn’t changed its
burger since the chain began in 1969, let its food offerings get stale
over the years while its competitors continued to update their menus.
Still,
it can be risky to tweak an old and familiar product. In fact, the past
is littered with examples of this, including New Coke and Clear Pepsi,
which were eventually pulled from store shelves because customers didn’t
like the new versions. Wendy’s itself stumbled a few years ago when it
tried to introduce breakfast foods. The company now says it made a
mistake by offering omelets and pancakes, which aren’t conducive to
eating on the go.
"We have a lot of catching up to do in some
areas," said Gerard Lewis, Wendy’s head of new product development. "But
after we launch this hamburger there will be folks who need to catch up
to us."
How it all began
Project Gold Hamburger started
around early 2009, shortly after hedge fund magnate Nelson Peltz bought
Wendy’s and combined it with Arby’s. The marriage ultimately failed,
with Peltz selling Arby’s to a private-equity firm this summer.
It
was clear Wendy’s had lost its way. In six of the past 11 quarters, the
company has reported lower or flat revenue at restaurants open at least
a year, a key measure of a company’s growth. And after Thomas died in
2002, Wendy’s fell flat on finding a new face for its advertising, at
one point running bizarre commercials featuring a man wearing a red
pigtailed wig.
Also looming over Wendy’s is strong competition
from McDonald’s, which has grown even larger in the past couple of years
by remaking itself into a hip, healthy place to eat, with smoothies,
Wi-Fi and high-margin coffee drinks. Last year, McDonald’s had 49.5
percent of the fast-food burger market in the U.S, up from 41.6 percent
in 2002, according to research firm Technomic. In the same period,
Wendy’s share fell to 12.8 percent from 14 percent. Burger King’s fell
to 13.3 percent from 17 percent.
Anxious to gain market share,
Wendy’s polled more than 10,000 people about their likes and dislikes in
hamburgers. It found that people like the food at Wendy’s but thought
the brand hadn’t kept up with the times. So, executives were shipped off
to eat at burger joints around the country and measured each sandwich
on characteristics like fatty flavor, salty flavor and whether the bun
fell apart.
"I’ve traveled more with this burger than I have in my
entire life," said Shelly Thobe, Wendy’s director of hamburgers and new
platforms.
Then, it was time for Wendy’s researchers to consider
the chain’s own burger, ingredient by ingredient. Each time they made a
change, they asked for feedback, visiting research firms around the
country to watch through two-way mirrors as people tried each variation.
Wendy’s
chefs also tested new products at the headquarters in Dublin, just
outside Columbus. From the test kitchens, they slipped new burger
incarnations through little windows into a "Sensory Test Area," a
white-walled room with 16 cubicles where tasting volunteers, or
sometimes employees, ranked each burger.
Many suggestions sounded
good but didn’t ring true with tasters. They tried green-leaf lettuce,
but people preferred to keep iceberg for its crunchiness. They thought
about making the tomato slices thicker but decided they didn’t want to
ask franchisees to buy new slicing equipment. They even tested a round
burger, a trial that was practically anathema to a company that’s made
its name on square burgers. (Wendy’s ultimately did not go with the
round shape, but changed the patty to a "natural square," with wavy
edges, because tasters said the straight edges looked processed.)
Amid
all the changes that were proposed that didn’t make it, there were some
golden nuggets. Tasters said they wanted a thicker burger, so Wendy’s
started packing the meat more loosely, trained grill cooks to press down
on the patties two times instead of eight, and printed "Handle Like
Eggs" on the boxes that the hamburger patties were shipped in so they
wouldn’t get smashed. And Wendy’s researchers knew that customers wanted
warmer and crunchier buns, so they decided that buttering them and then
putting them through a toaster was the way to go.
In the end,
Wendy’s researchers changed everything but the ketchup. They switched to
whole-fat mayonnaise, nixed the mustard, and cut down on the pickles
and onions, all to emphasize the flavor of the beef. They also started
storing the cheese at higher temperatures so it would melt better, a
change that required federal approval.
"It’s not about getting
real exotic," said Lori Estrada, Wendy’s senior vice president of menu
innovation and packaging. "It’s about making everything work."
Change is good — but hard
But Wendy’s acknowledges that remaking a burger that’s been around for more than four decades isn’t easy.

The
company in July sued a group of franchisees who refused to install the
toasters needed to make the buns for the new burger. Each restaurant was
asked to install two toasters, at a cost of $5,000 to $6,000 per
restaurant. Locations with older grills had to replace those too, at a
cost of about $15,000.
But the franchisees, who own or have stakes
in more than 300 of the 5,200 franchise locations, say that Wendy’s
hasn’t addressed their concerns about the safety of the toasters. The
suit’s two lead franchisees, whose pictures hang on a "Hall of Fame" in
the headquarters’ front lobby, say that employees could burn or cut
themselves while using the toasters. The suit is still pending.
Wendy’s
also faces the reality that some customers may not like the new burger —
or its price. At a time when Americans are cutting back in the down
economy, Wendy’s says prices for the burgers will probably increase,
maybe by 10 or 20 cents, because of the higher-quality ingredients.
Franchisees set their own prices, though. A Wendy’s down the road from
the Dublin headquarters, which was already selling the new sandwiches
last week, was charging $3.49 for the quarter-pound burger, $4.69 for
the half-pound, and $5.79 for the three-quarters pound.
Wendy’s
officials say complaints about the new burger are inevitable. After all,
the company was bombarded with complaints for three or four weeks last
year when it made changes to the fries, including flavoring them with
sea salt. But Lynch said fry sales eventually went up and "exceeded
expectations," although he declined to give figures. He also said the
new burger "speaks for itself."
Analysts, meanwhile, are mixed on
their views of the potential effect of the new burger. "It probably
would have been a bigger deal if it had happened a lot sooner," said Bob
Goldin, an executive vice president at Technomic. "It’s still a big
chain but it’s got so much catching up (to do)."
Jeff Davis, at
research firm Sandelman & Associates, said Wendy’s still has a
long-term reputation for quality and credibility that it can harvest.
"If they can hit those buttons, it’s going to work for them," he said.
For
its part, Wendy’s is hoping the burger will be one of many successful
changes at the chain. Wendy’s, which just got a new CEO last week, wants
to expand overseas and on the West Coast, relaunch a breakfast line
that’s easier for on-the-go eating, and sell more high-margin snacks and
beverages.
And early next year, it will introduce new chicken sandwiches.
The new undertaking has been code-named Project Gold Chicken.
Copyright 2011 The Associated Press.