Wendy’s Looks for Healthy Advantage
By George Anderson
It has already cut trans fats from its salad dressing and begun offering choices such as a side salad or baked potato in place of French fries.
Now, Wendy’s is looking to further promote itself as the better-for-you fast food option with the announcement that it is switching from its current trans hydrogenated cooking oil to a corn and soy oil blend that has zero grams of trans fats.
The nation’s number-three burger chain will begin using the new oil at its 6,300 North American restaurants beginning in August. According to the company, the switch will eliminate 95 percent of the trans fat contained in its breaded chicken items and fries.
Lori Estrada, senior vice president for research and development at Wendy’s, told The Associated Press, “The trend is for a bit healthier. We wanted to look at our products and improve our nutritional profile.”
Ms. Estrada said restaurant employees would have to be trained to use the new oil, which has a shorter shelf life than the current one being used. She said products with the new blend taste exactly like those presently being made in the company’s outlets.
The chain has tested the new oil blend for two years at 370 of its restaurants in Florida, North Carolina, Ontario and West Virginia.
The nation’s number-one burger chain, McDonald’s, pledged four years ago to come up with a substitution for its hydrogenated oil that would cut its trans fat content in half. Earlier this year, CEO Jim Skinner said the company was still in the testing phase.
Moderator’s Comment: What will Wendy’s change to a new oil blend mean for the sales of those products most directly
affected such as breaded chicken and French fries? How will the change impact consumer perception and shopping behavior relative to Wendy’s and alternative fast food options?
– George Anderson – Moderator
Eating healthy is in an “evolutionary,” certainly not “revolutionary” process, as much of the hyperbole in the industry would suggest. Having conducted consumer research in the food industry over the past twenty years, the “reality gap” between stated intent to eat healthy and the actual consumption behavior, has been significant. With respect to Wendy’s, those that covet a healthier menu at fast food venues is a segment of a segment and likely not to represent a significant incremental sales opportunity, no matter what the research might tell them.
I hope I’m wrong!
Wendy’s move is in response to films like Super Size Me and the growing health concerns of the American Public. Hooray Wendy’s! This will definitely parlay into more money to the bottom line for Wendy’s and we will definitely see other fast food operators following suit. There has been an increasing sensitivity to what we eat, and this is a long overdue step. Although it appears as a small one, it really demonstrates how sensitive chains like Wendy’s are to the growing information coming from their audience that healthier is better. We will see Wendy’s competitors following suit and new changes happening as well very soon.
What I would like to see, a year or so from now, is a study from Wendy’s comparing any increase in revenue, especially on the relevant products, with the marketing spend telling people about it. Call me cynical (again) but somehow I don’t think the former will exceed the latter. This is not really an issue that those eating fast food care about. The people who care are the ones who don’t eat it.
My only question is, When Darryl Hannah backs her greasemobile up to a Wendy’s used oil container for a fill-up, can she expect the same mileage as with high trans fat oils? (For the uninitiated, Darryl drives a car fueled by used cooking oil from restaurants. Supposedly its exhaust smells like French fries.)
This change by Wendy’s will register far less on the fast food Richter scale than a new menu item.
The key phrase here is “a bit healthier.” One of these days, we’re going to figure out that people eating fried chicken and french fries in a fast food restaurant aren’t the core market for health food. And, given every other fast food retailer’s experience, I doubt if the fries really will taste the same.
Far too often the grocery industry has been inward looking when it comes to competition, forgetting that foodservice is also a huge rival for share of stomach. Wendy’s move makes fast food more attractive, slightly diminishing the fresh, healthy attributes of grocery. Wendy’s decision raises the bar: it should propel grocery to beat its health drum louder.
The answer will all depend on how the new oil used will impact the taste. If the taste is good, then there can be a great marketing campaign. If the taste declines significantly, no matter how much marketing, the sales will not be impacted positively. Time will tell.
Wendy’s is a very mature business, so every 1% comp sales increase is a great challenge with a nice stock price reward. Even though most fast food customers won’t change their dining habits, Wendy’s only needs a small minority to get that 1% comp sales increase. Woe to them if the taste changes, though.