Under president and chief executive Sally Smith, Buffalo Wild Wings has grown exponentially and routinely outperformed its casual-dining peers. The Minneapolis-based chain has skyrocketed from 35 restaurants to nearly 1,000 in the past 20 years, 18 of which Smith has been CEO, while also finding ways to buck debilitating economic trends by being opportunistic and proactive in the face of challenges.
Consider the volatile inflation in the commodity markets, including that of chicken wings, in the past several years. Rather than continue to absorb compressed profit margins or pass along equally severe menu price increases to customers, Buffalo Wild Wings introduced a new pricing system last July to sell wings by weighted portion, somewhat mitigating food cost inflation’s effect on the bottom line.
In addition, Smith has coached her team to seize opportunities in casual dining. Last summer, Buffalo Wild Wings capitalized on the booming popularity of craft beer by rolling out Game Changer, an exclusive ale developed with Redhook Brewery to pair with wings. Smith hinted publicly that similar collaboration in menu development could result from a new partnership with PepsiCo.
Smith struck an even more significant partnership last year with PizzaRev, a Los Angeles-based startup in the fast-casual pizza niche. By committing Buffalo Wild Wings’ free cash flow to its minority investment in PizzaRev, Smith is placing a large bet on a brand that could win the horse race to define fast-casual pizza and become a growth vehicle for the company as it approaches maturity in the United States. Two PizzaRev units are slated to open in Buffalo Wild Wings’ home base in the first quarter.
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Smith has indicated the company will take similar risks on other growth concepts when the right opportunities comes along. Buffalo Wild Wings also plans to fuel earnings growth with international expansion, with openings scheduled for Mexico, Saudi Arabia, the United Arab Emirates and the Philippines in 2014.
Still, Smith oversees a flagship brand with runway ahead. Buffalo Wild Wings is only slightly behind its schedule of reaching 1,000 locations by its 10th anniversary as a public company, which it reached in November 2013. Smith said the company could reach 1,700 restaurants in the United States and Canada within another 10 years. And since the brand’s initial public offering at $17 per share in 2003, its stock price has soared, closing at more than $151 per share Jan. 8.
Smith has extended her leadership beyond Buffalo Wild Wings, serving as chair of the National Restaurant Association and as a trustee of the NRA’s Educational Foundation.
Contact Mark Brandau at [email protected].
Follow him on Twitter: @Mark_from_NRN
