Cinnabon president outlines growth strategy

Cinnabon Inc. president Kat Cole’s vision for the quick-service baked-goods chain goes far beyond the cinnamon rolls it is known for.

“We’re building the world’s greatest brand,” she told Nation’s Restaurant News.

Cole is taking a three-pronged approach to growth that entails opening new franchise locations, selling consumer packaged goods, and licensing Cinnabon products to other restaurants. She recently discussed the strategy with NRN.

Not many restaurant chains do foodservice licensing. Is that what Cinnabon does with Burger King?

We’re doing Cinnabon Minibons — the little 320-calorie one — with Burger King. It’s actually the second Cinnabon-branded product that Burger King has ever carried. They had a Cinnabon cheesecake many, many years ago.

If another restaurant wanted to sell your cinnamon rolls, would they have to brand them as Cinnabon?

Cinnamon rolls are obviously something that’s very close to the core, [so they’d have to be branded as Cinnabon]. But we’re not typically developing cinnamon rolls. We make doughnuts for Taco Bell. We make a churro-like product for another restaurant chain.

Would they brand it as a Cinnabon churro?

They might. That has to do with a lot of things. It has to do with whether or not we have exclusivities that sit in that space. It has to do with whether or not we want the [Cinnabon] brand in that partner’s restaurant. It has to do with whether or not they want a brand in their restaurant, or if they want to try over time to build credibility [with desserts].

So in some cases you would act as a traditional supplier.

Right now they are typically either in co-packing relationships — where there’s another manufacturer, and we bring the entire recipe, the entire intellectual property, but they do the packaging and the distribution — or licensing partnerships. In the future we may look at more [joint-venture] manufacturing type relationships.

Why do restaurants co-brand with Cinnabon?

Restaurant concepts like Burger King, like Taco Bell, they want a brand that can give them even more credibility in a segment that it would probably take them a while to build credibility in. So, for example, if Taco Bell or Burger King were to come to you and say, ‘We’re launching one of the world’s most delicious desserts,’ you would think, ‘No you’re not.’ But if they said ‘We’re partnering with Cinnabon to do that,’ now you go, ‘O.K. I get it.’

What do you make for Taco Bell?

It’s a doughnut hole with frosting inside. It’s called a Cinnabon Delight, coated in our signature Cinnabon cinnamon.

Describe your strategy for growing Cinnabon.

The strategy for becoming one of the world’s greatest food brands is a three-part strategy. [Part of it] is continuing to grow the franchise business globally and using that as the driver for [brand] equity, because that’s what people know. It’s what they love. It’s where they get their memory of the aroma.

Then there’s leveraging the brand to develop products in the packaged goods space. And we’ve got now 72 products in consumer packaged goods.

What are they?

There’s a core three or four that are the biggies. There’s the Pillsbury cinnamon rolls. Every single can of Pillsbury cinnamon rolls is made with Cinnabon cinnamon. Kellogg’s has their Kellogg’s Cinnabon cereal that we’ve had for many years. With White Wave — the company you know as International Delight — we have a Cinnabon creamer that is now our third or fourth largest partnership, and we have announced that by November we are launching Cinnabon cinnamon roll K-Cups with Green Mountain Coffee Roasters.

Branching out and looking ahead

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Will the K-Cups further establish Cinnabon as not just cinnamon rolls?

Yeah. Some people ask questions about all the licensing and co-branding, and certainly we’re not perfect; we’ve made our mistakes. But we’ve had more wins than we have losses, and one of the things we’ve learned is that as long as we pick a partner that is typically No. 1 or No. 2 in their space, and they have the demonstrated ability to deliver a quality that exceeds consumers’ expectations of their product and meets consumers’ expectations of our brand, then it’s a smart move. And not only will something like Green Mountain expand the consumers’ perception of the Cinnabon brand, but partners like Green Mountain, like Pillsbury, like Kellogg, they have more marketing resources than our franchise business could ever dream of having.

Is it challenging today to run a concept that emphasizes indulgence?

A lot of people have asked: What’s the future of indulgent brands? How do you justify a brand that’s so indulgent? And I say, look, first of all, we have to have a few agreements. One is that people are going to want to treat themselves. I think most people would agree, whether it’s with burgers and fries or cocktails or doughnuts or whatever it is. The next is that they’re going to want to do that with sweet things. And if you can agree on that, then that says that there’s a place in the market for indulgent brands — ice cream, cookies, cinnamon rolls, whatever it is. That has not changed, actually. Despite all the health trends, we have just had three of the best comp sales years we have had in a decade. Lots of people are buying cinnamon rolls, worldwide. However, what’s changed is they demand higher quality for that indulgence. And of course they want more flexibility in portion size.

So you’re not going to do a whole-grain cinnamon roll?

We have tested whole grain, and you know what? A couple of people think it’s a good idea. A couple, but not enough to make an additional whole product innovation worth it. So the encouraging thing is that people want yumminess. They want something that’s so mind-numbingly delicious, and they’re okay with calories. Look at the Cronut craze. That thing has more calories than a classic Cinnabon cinnamon roll, and no one cares because it’s so worth it. And so long as anything we innovate is so worth it, it only heightens our differentiated position of quality indulgence.

There’s no question that we’re differentiated, but if we don’t continue to push the envelope with portion size and variety we’ll become irrelevant, so that’s a lot of our innovation focus.

What new menu items are on the horizon?

Coming up is salted caramel — salted caramel chillatta, salted caramel center of the rolls. We have a few other things that we’re working on that are going to blow people’s minds. We have a product coming out that, half the people who see it are going to say we’re idiots for doing it, and the other half are going to say it’s the most brilliant thing we could have possibly done.

Is it something that John Stewart of The Daily Show will ask, ‘Why are you poisoning Americans?’

I don’t think so. If it gets talked about on television, it will be done with affection, for sure. But that’s the cool thing about the brand. We take the culinary credibility very seriously when we’re translating it into something like a mini-roll for Burger King or an indulgent coffee creamer, but we get to have a ton of fun, too.

Contact Bret Thorn at [email protected].
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