El Pollo Loco Holdings Inc., which in November opened in its first restaurant in the new market of Denver, Colo., headed into 2023 with a limited-time offer of Loco Burrito Grillers that bucked the diet-austerity trend and dipped into indulgence.
The Costa Mesa, Calif.-based quick-service brand is offering the Sonoran-inspired burritos, in both beef and chicken, with a version of the consommé that accompanied the popular Shredded Beef Birria LTO that fueled a 7.8% sales spike in the first quarter, a boost amplified by social-platform TikTok influencers. Executives said birria was the most successful new product launch the brand had ever implemented.
Along with Burrito Grillers, which debuted in late December and will be offered through Feb. 22, El Pollo Loco amped up its packaging with a new carrier box designed by Mexico City designer Raúl Urias.
“You see a lot of a Sonoran-type of influence in the box itself,” said Andrew Rebhun, El Pollo Loco’s chief marketing officer, in a presentation this week. “It photographs beautifully. The color pops on it and it really allows us to have some Instagram-able and TikTok content that really allows this product to have some legs. I think you'll see some more boxes from us — hint, hint — throughout the 2023 calendar year.”
While some states and universities have recently barred TikTok from their smartphone devices over fears of foreign data harvesting, Rebhun said El Pollo Loco is taking a wait-and-see posture.
“We’ll monitor to see what the federal government has to say about TikTok,” he said. “I think we're going to just continue to lean in with authenticity on that platform. We have a number of folks who just post generic reviews about the brand that we really like to showcase. We have a really strong influencer group that we work with on a regular basis, so I would state that we're going to continue to monitor the situation and lean in or pull back as necessary.”
Digital marketing and the use of TikTok will be part of El Pollo Loco’s rollout of a new loyalty program, expected to launch within eight weeks, Rebhun added.
“It has so many redesigned elements,” he said of the loyalty platform. “It's going to compete with the likes of Chick-fil-A, Starbucks and some of the top competitors in loyalty.”
Heather Gardea, El Pollo Loco’s vice president of culinary research and development, said the Loco Burrito Grillers feature a tortilla a formulation new to the brand.
“It is very flexible,” Gardea explained. “It's stretched very thin. … It eats very different. It eats much more flavorful … just a little bit more indulgent than a regular tortilla.”
Pricing varies by market, but two Burrito Grillers are $7.49 to $8.49 for the chicken and $7.99 to $9.99 for the beef. The burritos can also be mixed with one of each, Rebhun said, and they all come with the dipping sauce, which is similar to the birria consommé but with the addition of a creamy dairy-cheese element.
“What we really loved about the birria was that interaction that you get that kind of and playfulness of getting to dip it,” Gardea said.
The Burrito Grillers are filled with meat, jack cheese, cilantro and onion and grilled. The executives said the grillers are performing well in the Texas markets and the sales tend to be 60% beef and 40% chicken.
“There's a lot of other exciting LTO's that we have in this upcoming year,” Rebhun said. “You can expect us to lean in heavily on shredded beef.”
While the brand’s name translates as "crazy chicken," its beef offerings are likely see continued innovation, he added.
“Heather and her team have done just a fantastic job making sure that there's continuous innovation on the beef front,” he said. “We really feel like it's popular in the category, and it's certainly something that we feel like our customers have high receptivity to.”
The birria introduction in March 2022 provides a roadmap, he said, which with point-of-purchase and TikTok marketing shifted to 8% of sales mix.
“It was the best LTO performance in the company’s 42-year history,” Rebhun said.
With expansion into the Texas and Kansas City markets, Rebhun added that “in order to be a player in the Mexican space, we really feel like beef has got to be a compliment to a lot of the menu items.”
The company expects to launch expansion into southern Oregon as well within the next two years, he noted.
“We are planning to expand more in Denver and Colorado,” he added. “We have franchise agreements signed in Fort Collins [and] Boulder. The city of Denver itself is going to continue to expand as well. I think at least two or three planning to be opened in 2023 in Denver.”
The company, when it was owned by private equity and before going public in 2014, had units in Atlanta, Boston, Chicago and New York, Rebhun said.
“That did not work out,” he said. “One of the things that we learned as an organization was that you know we need to be able to replicate the quality that we have in some of our best-performing markets like L.A .and Las Vegas. We're doing things very differently this time. As we expand, we really want to make sure that we have a good hold of the brand and make sure that we can replicate everything that we do so well here in in California and Nevada and some of our other surrounding markets.”
For the third quarter ended Sept. 30, El Pollo Loco reported income of $5 million, or 14 cents a share, compared to $10.2 million, or 28 cents a share, in the prior-year period. Revenue increased to $119.9 million compared to $115.7 million in the same quarter of 2021. Same-store sales rose 3.8% in the quarter.
Larry Roberts, El Pollo Loco CEO, said in a statement at the time: “Our franchisee recruiting program continues to gain traction with a new development agreement signed for northern California and southern Oregon, and an expanding list of candidates interested in developing in new markets.”
El Pollo Loco has 489 company-owned and franchised restaurants in Arizona, California, Colorado, Louisiana, Nevada, Texas and Utah.
Contact Ron Ruggless at [email protected]
Follow him on Twitter: @RonRuggless
