Brinker International Inc., parent to the Chili’s Grill & Bar and Maggiano’s Little Italy casual-dining brands, outlined its strategy of simplification at an investor day for analysts on Wednesday.
The Dallas-based company, which also owns the It’s Just Wings virtual brand, provided a glimpse during its Investor Day of what it is doing currently and plans for the next five years as it intends to ramp up growth for its 1,657 restaurants.
Kevin Hochman, Brinker CEO and president, said, “Concepts that have done this really well for a long period of time — where they have sustainable growth — they're expanding margins right, they're delighting guests and the formula it really isn't that much of a secret.”
Hochman explained that relies on differentiation, core menu offerings, and a culture that provides retention and a welcoming atmosphere.
Here are five takeaways from Brinker’s Investor Day presentation:
- Sales breakdown: Chilis is about 84% of Brinker’s business, Maggiano’s is 13% and the virtual It’s Just Wings brand is a bit over 3%, Hochman said. The company jettisoned its Maggiano’s Italian Classics virtual brand earlier this year.
- Core Four: Chili’s is looking to focus on its four core areas of the menu to provide differentiation: burgers, fajitas, chicken crispers and margaritas, Hochman said. “We're playing in the right segments,” he said, referring to the popularity. “So those four items make up about 40% of our sales. They are huge growing segments that Americans eat and drink.”
- Barbell pricing: Chili’s is focused on a “good-better-best” strategy for the Core Four, Hochman said, with low entry price points and higher-priced premium alternatives. “No matter how much money you come in with,” he explained, “you need to be able to partake in these segments.” The margarita of the month, for example, will be priced at $6 to $7; a middle version, such as a Blackberry Margarita with Patron tequila, will be $9 to $10; and a premium-spirits margarita will be $12 to $13.
- Simplification: To make job positions easier and improve retention, Chili’s has simplified operations along with its menu. It recently removed an “original” option for the breading on its chicken tenders and went solely with a newer “crispy” version. “It has made our team members job much easier,” said Doug Comings, Chili’s chief operating officer. “The simplification just makes life easier in general.” The brand has also reduced the number of stock-keeping units in the back of the house. “We removed 55 SKUs over the last year,” Comings said, “which translated to approximately $2 million annual waste savings.”
- Return to mass advertising: George Felix, Brinker’s chief marketing officer, told analysts that “we need to be a brand that is relevant, easy, and distinctive.” The marketing strategy has shifted to occasion-based segmentation. “We think this is going to give us a better understanding of the key need states on all of our three key occasions. which are dine in, off premises, and bar,” Felix said. Earlier this year, Chili’s returned to television advertising with its “3 for Me” deal as low as $10.99 that was supported by digital advertising with R&B singer Brian McKnight.
This week, Chili’s returned to digital and streaming video platforms, launching a summer campaign with real-life best friends Jenna Fischer and Angela Kinsey, actors on U.S. television's “The Office,” that featured the tagline: “It All Starts with a Marg.”
The advertising highlighted Chili’s premium margaritas and was aired on Chili’s social channels as well as major streamers like ESPN, DirecTV Stream, Hulu, MAX, Discovery+, Peacock and Roku.
The month-long campaign builds off the recent Chili’s menu launch that includes the addition of four new premium margaritas, the Casamigos ‘Rita, Skinny ‘Rita, Henny ‘Rita and Sangria ‘Rita, all available at Chili’s restaurants nationwide.
Felix called the Fischer-Kinsey streaming content as “culture pops” between larger media spends to keep the brand prominent in the consumers’ minds.
“We have a new approach now,” Felix explains, “and so this is all about having three to four [of] what we're going to call media spike tent poles throughout the year that will focus either on our Core Four or our traffic-driving value.”
Contact Ron Ruggless at [email protected]
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