DEEP-FRIED AND TRUE
Popeyes’ formula for success
Unlike fast-food rivals McDonald’s and KFC, deep-fried chicken chain Popeyes Louisiana Kitchen Inc. is not trying to lighten up its menu by offering customers a selection of so-called healthier for you fare.
Indeed, Popeyes’ unwavering commitment to Deep-South style fried food has been a cornerstone of its success in Canada, where the restaurant chain has tripled in size in the past eight years and recently opened its 100th outlet.
“We have tried things that are not deep-fried,” chief executive Cheryl Bachelder said in an interview Thursday. In the past, she explained, the company’s team of chefs experimented with dry rubs on chicken, “and other interesting things,” as part of an ongoing program of limited-time food offerings Popeyes regularly introduces to complement a core menu of items such as fried chicken tenders and fried popcorn shrimp.
But the non-fried dishes did not come anywhere close to the success of Popeyes’ in-house creations like the deep-fried Rip’n Chick’n, a flattened chicken breast cut to resemble a hand, allowing patrons to rip it apart easily and dip it into one of Popeyes’ signature dipping sauces.
“People are eating a lot of baked and broiled chicken at home,” Bachelder said. “No one makes this kind of food at home anymore. I like to say we eat boring, healthy food at home, and we eat things like Popeyes when we go out to enjoy a special evening.”
Founded in 1972 in New Orleans, Popeyes opened its first international location in Toronto in 1984, and has grown to 2,443 restaurants in the U.S. and 27 countries. It’s the second-largest fast-food chicken chain in units behind KFC, which has more than 18,000 franchised restaurants globally.
But unlike KFC in recent years, Popeyes’ Canadian performance has been strong, growing its samestore sales at seven per cent to 10 per cent per year for the past seven years. Its Canadian revenue is roughly $1 million per store; at its present growth rate, annual revenue will top $100 million by the time the latest location has been in the market for a year.
“Our sales are good in Canada so it’s profitable for the (franchise) owners,” Bachelder said, noting Canada is in the top three of Popeyes’ markets internationally. “The next 100 (restaurants in Canada) could come much faster, because we are having this success.”
While health and wellness is an ongoing trend in fast food, innovation and new flavours — ethnic seasonings, a range of spices — are a key priority for Popeyes’ Canadian customers, said Robert Carter, executive director at market research firm NPD Group Canada.
“Millennials make up 28 per cent of the food service market and they are motivated by different types of flavours and spices,” he said. “The majority of Popeyes’ customer base is millennial — you are not getting a 50-year-old couple to go in there to have fried chicken.”
Carter noted the fried chicken category is virtually uncontested in Canada outside of KFC and Popeyes, making it easier for a strong player to thrive.
The much bigger KFC has seen its sales and market share slide in Canada as it tries to find ways to stay relevant to consumers. Last year, the company opened two KFC Fresh restaurants, offering alternatives such as rice bowls, wraps and salads in addition to its fried chicken offerings, but the bulk of its restaurants showcase only its longtime staples, such as buckets of chicken and coleslaw.
In 2014, KFC had sales of $624.2 million at its 646 Canadian restaurants, according to estimates from the industry publication Foodservice and Hospitality, down from $649-million in 2012, when it had 674 locations.
“Popeyes has put a lot of emphasis on the perception of quality and innovation, and to me that is where KFC has truly dropped the ball,” Carter said.