Wendy's Revamps Salad Line

Zacks

In a bid to adapt to the changing customer preferences, The Wendy's Company (WEN) announced plans to introduce two new salads on its menu with additional fresh vegetables — Asian cashew chicken and BBQ ranch chicken salads. Additionally, the Ohio-based fast-food chain is modernizing its Garden Side Salad.

Both the salad options include a lettuce blend and grilled chicken. While the Asian salad mainly includes freshly-sliced cucumbers, red peppers and fire-roasted edamame (a preparation of immature soybeans in the pod), the barbecue chicken salad includes fire-roasted corn and freshly-chopped tomatoes.

In addition, the company’s revamped Garden Side Salad will include sliced cucumbers and red peppers apart from 5 other ingredients, along with the restaurant's signature lettuce blend, unlike other companies’ Side Salads, which generally have 2-3 ingredients. Wendy's’ salad offerings have an added advantage because they come in both full and half-size portions, giving customers varied value options.

The BBQ Ranch Chicken Salad is priced at $6.19 for the full-size and $4.19 for the half-size. On the other hand, the Asian Cashew Chicken Salad is priced at $5.99 for the full-size and $3.99 for the half-size. The Garden Side Salad carries a price tag of $1.59.

The new salads replace the Baja Salad and the Chicken BLT Cobb, which were losing popularity. Wendy’s revamped salad line presently has the Apple Pecan Chicken Salad and Spicy Chicken Caesar Salad, besides the newly introduced ones.  

The company’s new salads contain almost 60% lower saturated fat than the Baja and Chicken BLT Cobb salads. In our view, besides the lower fat levels, the attractive price range will appeal to the customers.

Wendys’ is revamping its salad line come at a time when the fast-food industry is becoming highly competitive. Salads have an extra appeal to consumers who prefer healthy and low-carbohydrate products — key targets that Wendy’s is eager to attract. Additionally, the National Restaurant Association has rated the Asian and Barbeque flavors among the top food trends for 2014, making these an automatic choice to gain market share.

Lately, U.S. eateries are serving a healthier menu, to cater to consumer preferences for fresh, organic, nutritious and low-calorie food. This has also prompted some restaurant chains to offer gluten-free (wheat-free) products. Though not exactly lower in calories, these food items do provide alternative choices for people with dietary restrictions. Such restaurant chains include Domino's Pizza Inc. (DPZ), which offers gluten-free crusts, and Dunkin’ Donuts owned by Dunkin' Brands Group Inc. (DNKN) offering gluten-free pastries in some markets.

Wendy’s currently carries a Zacks Rank #1 (Strong Buy). Another stock in the same sector that is worth considering is Famous Dave's of America Inc. (DAVE), which has the same Zacks Rank as Wendy’s.

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