Will a New Burger Restore Old Glory?

 | Sep 21, 2011 | 11:00 AM EDT  | Comments
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Wendy's (WEN) is starting of something new. For the past three years that I've owned the name, I've been waiting for the new killer product or revitalizing advertising campaign that would finally get the fast-food player headed in the right direction.

The introduction of french fries made with sea salt was nice -- the product is actually quite good -- but that was small potatoes. The introduction of a new salad line and new flavors and varieties of Frostys was nice, but not monumental. The push to reintroduce breakfast, long thought to be the key to moving Wendy's to the next level, is in the show-me category. Selling off Arby's, which was a drag on the company ever since the merger, was a good move and frees the company to concentrate on what it does best.

That's what made Monday so interesting. Wendy's unveiled an updated version of its famous hamburger. The company has offered specialty burgers from time to time, but its flagship product has remained much the same since opening the first location in 1969. The new burger line is called "Dave's Hot 'N Juicy," a nod to Wendy's founder and longtime spokesman Dave Thomas.

Thomas had a hand in resuscitating Wendy's before, when he was coaxed out of semi-retirement in 1989, and was successful in helping to reinvigorate the brand. This time around, the company will be relying on his name and legacy as Thomas passed away in 2002. But his daughter Wendy, the company's namesake, will be appearing in TV ads touting the new burger. 

The redesigned burgers feature buttered, toasted buns, thicker beef patties and new premium toppings including red onions, thick hand-sliced tomatoes, and crinkle cut pickles. Whether this alone will be enough to eat into the market share of the top two players in fast food, McDonald's (MCD) and Burger King, remains to be seen. (But it's making me very hungry as I write this column).

If nothing else, there have been several positive moves made at the company over the past several months, from the sale of Arby's to the appointment of a new CEO, a major product rollout and new advertising campaigns. The timing seems right, too.

I expect that the casual dining space overall will have some difficulty in the near term due to more belt-tightening by consumers. The beneficiaries of should be the fast-food players such as McDonald's, Burger King, Wendy's, and Taco Bell, or others offering lower cost menus. 

This is it for Wendy's. Enough talk. It will never be McDonald's, with its near 50% market share. But there's a place for this company and no good reason that they can't steal some market share and regain some of the old glory.

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