What is in this article?:
- Long John Silver's CEO details brand turnaround
- A history with two 'lost decades'
Mike Kern says company looking forward to menu, restaurant upgrades after “two lost decades”
Mike Kern, Long John Silver's chief executive
Long John Silver’s chief executive Mike Kern says brandwide optimism for menu upgrades and eventual unit redesigns could spawn accelerated growth in the years ahead after what he describes as “two lost decades” for the 1,300-unit quick-service seafood chain.
Kern, who previously served as chief marketing officer of the chain and also remains a franchisee of several units in the Southeast, said Louisville, Ky.-based Long John Silver’s has made several strides as a standalone company following its September 2011 divestiture from Yum! Brands Inc. In its first year on its own, Long John Silver’s posted a same-store sales increase of 5 percent for the 2012 fiscal year.
The new parent company that acquired the brand from Yum was a franchisee consortium led by Kern and LJS Partners. The group was formed to leverage more input from the franchisee community, he said. That more collaborative process has filled Long John Silver’s pipeline with new ideas about menu items, marketing and restaurant design meant to capitalize on the brand’s momentum that never materialized as a Yum-owned concept.
“We’ve lived through the ups and downs of the Yum era and their co-branding strategy, which initially was just gangbusters,” Kern said. “Ultimately, not just with Long John’s, but also with any of the pairings they had, it really began to wane. Operationally, it was very complicated, so the P&Ls didn’t look great, and the consumer was confused.”
Hatching a turnaround
When Long John Silver’s was spun off from Yum in 2011, year one was about rebuilding its fundamentals and training structure, as well as reconnecting with franchisees to begin leveraging more input from them, Kern said. It also began a new branding campaign, “That’s What I Like,” in October 2012.
The efforts produced a 5-percent increase in same-store sales and a 50-percent increase in average franchisee cash flow.
“There was a lot of harmony coming out of 2012 between us and franchisees with respect to the vision, direction, culture and results,” Kern said. “2013 has been more choppy. We had that tough start in winter, with the fiscal cliff and payroll tax hike and delayed tax returns, and overall confidence was rocky.”
Long John Silver’s recovered in this year’s second quarter, returning to flat-to-slightly-positive same-store sales despite more difficult comparisons to a year earlier.
“We have yet to fire some of our really big initiatives meant to catch up and make the brand more relevant and contemporary in today’s marketplace,” Kern added. “We’re now entering that phase in the plan.”
Those moves include the brand’s first menu revamp in several years, launched this January. It featured not only new entrees like Asian Red Pepper Cod, but also upgraded sauces and side dishes. In May, Marie Zhang joined the company as its first chief food innovation officer.
All market testing of new menu items now happens with Long John Silver’s core consumers in their test markets, rather than through third-party focus groups, chief marketing officer Charles St. Clair said. The biggest trend that emerged in those meetings was the need for more menu variety, which the brand will address with increased focus and resources in culinary research and development.
Zhang said her four focuses for Long John Silver’s menu innovation would be promoting different fish varieties, cooking preparations, flavors, and platforms like sandwiches, tacos, salads or soups. The next big menu introduction for the brand would be a Ciabatta Fish Sandwich coming in early September.
“We’ve made a lot of progress across these four categories in the past 18 months,” Zhang said. “A year or two from today, you’ll see a totally different Long John Silver’s that can delight our core user and our light users.”
The brand also will build a new prototype unit in Louisville in the near future, Kern added.
The goal of all the growth initiatives is to “take the seafood leadership role” and move consumers’ perceptions of the brand and of quick-service seafood past only a fried fish-and-chips kind of offering, he said.
“We think the next decade is going to be the decade of seafood,” Kern said, “from a protein, megatrend standpoint. The winds are at seafood’s back, and we’re poised better than anybody to capitalize on that from a restaurant brand standpoint.”