Restaurants, suppliers ditch ‘silent’ partnershipRestaurants, suppliers ditch ‘silent’ partnership

A growing number of restaurant operators are looking to duplicate the success of Taco Bell’s Doritos Locos Tacos through amped up supplier partnerships that shout out their R&D and marketing unions.

Since the first variety of Doritos Locos Taco launched in March 2012, the platform, created with Frito-Lay, has surpassed $1 billion in sales, said Chris Brandt, chief marketing officer of the Irvine, Calif.-based quick-service chain. While it was not Taco Bell’s first menu item to be made in collaboration with a supplier, it did reveal the potential benefits of a more symbiotic supplier-operator partnership, he said.

More recently, Subway has unveiled its Fritos Chicken Enchilada sandwich, and Buffalo Wild Wings will soon introduce a branded Ruffles potato chip for grocery stores and marketing opportunities with the National Football League as a result of its new supplier agreement with PepsiCo.

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“I don’t know who wrote, ‘Imitation is the sincerest form of flattery,’ but they might be a better person than me,” Brandt said. “I guess it happens. If other restaurant brands try to borrow other equities from their partners, if it just makes sense to the consumer, that’s when the whole is greater than the sum of the parts [for those brands]. That keeps it challenging for us.”

By working more closely with their suppliers, operators are seeking to boost their menus’ perceptions of quality, lure fans of the newly featured ingredient that might not have been regular customers of the restaurant and capitalize on the synergistic marketing.

“People are looking for ways to make their brands relevant and borrow equities from their partners,” he said. “If the companies’ profiles and attitudes are aligned really well, then there are natural synergies. The best partnerships are ones where people say, ‘Well, of course.’”

CKE's Brad Haley notes that the company has partnered with brands such as Pop-Tarts and Jim Beam.

Getting noticed

By working together, Taco Bell and Frito-Lay developed something that neither of those companies nor their competitors had ever attempted before, Brandt said.

“From an innovation standpoint, we’re looking for ideas wherever they might come from,” he said. “There’s a distinction between being a vendor and a partner. We ask them what they’re doing that Taco Bell could do first, what’s risky or on the bleeding edge. We really like to be first — we think that’s what ‘Live Más’ is all about. … Our R&D team has done a terrific job of making our suppliers our true partners.”

Such partnerships are hardly rare, noted Brad Haley, chief marketing officer of Carpinteria, Calif.-based CKE Restaurants Inc.

“Collaborative relationships and idea sharing with vendor partners has always been the case in the industry,” he wrote in an email to Nation’s Restaurant News. “The public is just noticing it more because there have been a number of high-profile and particularly successful co-branded menu introductions over the last few years.”

He cited Taco Bell’s Dorito-based taco shell as one example, but pointed to products from his company’s Carl’s Jr. and Hardee’s chains, including the Hand-Scooped Strawberry Pop-Tart Ice Cream Sandwich and the Jim Beam Bourbon Burger.

CKE also has touted Hillshire Farm breakfast sausages on its breakfast sandwiches and Oreo cookie crusts on its first iteration of its ice cream sandwich dessert. Manufacturers of popular cookies and candies have been the basis for new items or major marketing campaigns for other chains, such as Oreo and the Girl Scouts getting top billing in Dairy Queen Blizzard commercials or Reese’s Peanut Butter Cups supporting Culver’s recent “Share the Love” social-media campaign.

Successfully marketing a supplier’s brand name is not necessarily a new expectation for restaurant marketing executives, who ultimately are evaluated on their own chains’ sales and profitability, Haley noted.

“However, co-branded products can make that job easier because the branded ingredients bring with them instant awareness, a consumer following of their own, a known taste expectation and an assurance of quality versus unbranded alternatives,” he wrote.

In return, the supplier partners get increased awareness of their products. With Carl’s Jr.’s systemwide promotion featuring the Pop-Tart Ice Cream Sandwich last year, Haley noted, the restaurant even spread a new idea for enjoying Pop-Tarts among the pastry’s fans, leading one media reviewer to write, “Thanks to Carl’s Jr. for showing us how we should have been eating Pop-Tarts all along.”

Cross-promotion is key

Carl's Jr.'s and Hardee's Jim Beam Bourbon Burger

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Branded products can be a tactical way for suppliers to use their media dollars, getting an efficient use of the culinary R&D budget and marketing-support rebates they often give to restaurant partners, Haley wrote.

But it is just as important for restaurants to insist on cross-promotional marketing support from supplier partners, and brands are likely to get that from manufacturers with the most scale, he added.

“Co-branded ingredients must offer a significant quality halo for a menu item, or it’s usually not worth the premium price they typically carry versus an unbranded alternative,” he wrote. “You really need to partner with leading brands in their respective segments. … If the co-brand has a sizeable social-media footprint of its own, it’s a good idea to request that your vendor partner let you tap that audience to promote your co-branded menu item.”

Cousins Subs, a Menomonee Falls, Wis.-based chain of 130 restaurants, hopes to partner with fellow Wisconsin-based companies that can be highlighted in Cousins’ trade dress, such as the Miller or Leinenkugel breweries, Harley Davidson, or any number of sausage and cheese suppliers, said vice president of marketing Justin McCoy.

“We hang our hat on quality and freshness and would look at this with brands that fall in that same category,” McCoy said. “Do I feel pressured to [co-brand or co-create]? No, but if I release a new limited-time offer and have a strong brand partnering with me, it’ll naturally give us opportunities with fans of the other product who might not be aware of Cousins.”

He also noted that cross-promotional support would need to go beyond just affixing another logo to a product.

“While it would be great to just use Supplier X’s name, ‘featured on Cousins’ newest sub’ in my stores, I would also negotiate that they do some email blasts and social-media posts about their fans being able to find their products in Cousins now,” he said.

Happy to be a third wheel

More restaurant brands also are seeking marketing synergies that connect the brand to new promotional partners. Such connections are particularly helpful for regional chains with fewer marketing dollars and less visibility.

Last year, Cousins tied into giant concert promoter Live Nation in a promotion set up through the restaurant’s beverage supplier, Coca-Cola. The “Rock Your Thirst” sweepstakes was mutually beneficial to all parties, McCoy said, by driving more sales of high-margin soft drinks and combos at Cousins, more volume for Coke and more exposure for Live Nation at Cousins’ 130 stores across four states.

This year, Cousins will run a similar promotion with Coca-Cola and another of the beverage supplier’s partners, NASCAR. Participating in another Coke-brokered promotion will help Cousins get involved with the auto racing league without having to put up onerous amounts of money to sponsor a driver or a race, McCoy said.

“NASCAR indexes extremely high in the Midwest, so it was a natural fit for us,” he said. “It’s another partner that can assist us with beverage and combo sales, and we’ll help create more exposure for their drivers.”

Similarly, officials for Minneapolis-based Buffalo Wild Wings said they would look for pass-through marketing opportunities with the NFL and several entertainers under contract with Pepsi.

“We have a partnership with the NCAA as well as our partnership with Pepsi, which allows us to take advantage of some of the things that the NFL offers,” chief financial officer Mary Twinem said during the chain’s fourth-quarter earnings call. “We’re always open to looking at things, whether it would be some sort of online sports platform, and these partnerships will help us provide some of that proprietary content within our restaurants … giving guests just another reason to come into Buffalo Wild Wings.”

Just as Buffalo Wild Wings did not partner with the NFL until aligning with its beverage supplier, “I couldn’t reach NASCAR or Live Nation until I went through Coke,” McCoy said.

“Instead of just rebates coming to me, they leveraged their partnership to where I got my foot in the door without being an overall NASCAR sponsor,” he said. “There’s always something positive in any brand getting to those larger, national-scale opportunities.”

Knowing when to say no

Taco Bell's Doritos Locos Tacos has been a standout success.

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Rob Lynch, chief marketing officer for Atlanta-based Arby’s, knows as well as any marketer the benefits of working in tandem with suppliers for menu or marketing development. Before moving to the 3,400-unit sandwich chain, Lynch worked at Taco Bell with Brandt as vice president of brand marketing and helped develop Doritos Locos Tacos.

Now at Arby’s he manages such co-branded products as the King’s Hawaiian Roast Beef sandwich and the Mint Chocolate Swirl Shake, which is made with Andes chocolate.

“We appreciate that we’re both benefiting from the partnership, so it’s not as if they’re trying to derive value from our customer base without giving the same amount back,” Lynch said.

He noted that the bun King’s Hawaiian developed for Arby’s was a unique bun differentiated for a foodservice operation. In the case of the milk shake, Arby’s does not put the Andes name in the product’s title, but the chain does make sure customers know the shake is made with a known name for mint and chocolate.

However, it is just as important to be selective with every opportunity a manufacturer might present to a restaurant brand for collaborative menu development or marketing, he said.

“There are so many brands in the QSR space now, so finding the right partnerships is more important than finding more partnerships,” Lynch said. “There is no shortage of brands out there looking to tap into the national footprint that Arby’s has to offer, but it’s not right for everybody. If it doesn’t move us closer to where our brand communications need to point, we would say no, even if it’s a big opportunity in scale or the partner’s desire to invest.”

Arby’s tries not to risk turning its menu “into a branding exposé” that would dilute what the brand stands for, Lynch added. He also noted that the chain likely would not co-brand against a signature product like roast beef, “where our inherent equity is.”

His former colleague, Taco Bell’s Brandt, joked that “a menu getting too big with [successful] co-branded products is a problem I’d love to have,” but acknowledged that operators have to decide what number of co-created items and partnerships is sustainable.

“We’ll continue to look at our Doritos platform and leverage it, but maybe with fewer permanent offerings and more LTO flavors,” he said. “It brings news to the entire platform.”

Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN