Popeyes’ Game Changer: 393 Million Reasons to Innovate
The launch of Popeyes' classic chicken sandwich in 2019 helped drive traffic.
When Popeyes chicken sandwich launched, it was clearly a phenomenon and shows yet again that when brands innovate around core offerings, good things happen.
“Popeyes launched an iconic chicken sandwich that has proven to be a game changer for the brand in every way,” said Restaurant Brands International CEO Jose Cil in a prepared statement around company earnings.
The industry got a full look at what the relatively simple chicken sandwich did for earnings when Restaurant Brands International (NYSE: QSR) unveiled fourth quarter and full-year earnings. Popeyes showed some incredible growth. In the fourth quarter, sales rose $393 million, a 42 percent surge that sent sales to more than $1.3 billion. That’s more than an additional $100,000 for every one of the 3,316 locations.
What it did to traffic was incredible. According to Cuebiq data, traffic on August 20, 2019, shot up to about 100,000 and continued to rise through the week to the high water mark just shy of 140,000. The sandwich launched on August 12, but a viral tweet from August 19 brought a lot of attention to the brand.
"Never seen the kind of guest response for a single product launch like the one we had for the chicken sandwich," said Cil during the earnings call.
In all, the sandwich helped the company achieve an incredible same-store sales growth of 34.4 percent. It also drove sales across the menu.
"For the vast majority of our guests purchasing the sandwich, we saw that they actually spent more on other products," said Cil. "The traffic driven by the demand of the Popeyes chicken sandwich helped drive growth in our entire menu."
When put in context, that same-store sales growth looks even more impressive, especially in a mostly flat restaurant traffic world.
But it’s just a chicken sandwich
While the sandwich took two years to develop and now serves as an additional platform for company innovation—there’s already a spicy variation—it’s not all that complicated. It’s a soft bun, a slightly crispy breading, a couple pickles and some mayonnaise. What’s the big deal, right?
It’s clear RBI figured out an important fact: people who live in cities also like chicken sandwiches. Chick-fil-A does pretty darn well with a simple chicken sandwich, too, reaching more than $4 million in average unit volumes compared to what Popeyes reports as a $1.4 million franchisee AUV in its FDD. But Chick-fil-A is mostly in the suburbs, whereas Popeyes has a much stronger urban footprint.
In Chicago, for example, there are just four Chick-fil-A locations in the urban core. In the same area, there are 21 Popeyes locations. It’s a similar ratio in Minneapolis, with four Popeyes locations and one Chick-fil-A, which is hidden inside the student union of the University of Minnesota. In Manhattan, there are eight Chick-fil-As and 15 Popeyes. That’s the real trick to the company’s innovation, finding that sweet spot of pent up demand for a good chicken sandwich at a $5 price point in the brand’s strongest trade areas.
RBI could use a little chicken sandwich magic at Tim Hortons, where brand sales sank 2.9 percent and same-store sales fell 4.3 percent. Burger King landed in the gulf between Tim’s and Popeyes, with 8.4 percent sales growth and 5.9 percent same-store sales growth.