Restaurant Brands CEO José Cil joins Yahoo Finance Live to discuss Burger King’s new dollar menu, Popeyes’ growth amid the coronavirus pandemic, the digitization of the global restaurant industry and growth potential in 2021 and beyond.
BRIAN SOZZI: Welcome back to "Yahoo Finance Live." You may not see a whopper of a check the next time you leave a jam-packed Burger King drive-through. And you could thank our next guest for that one, Restaurant Brands CEO José Cil is in the Yahoo Finance house. José, always good to speak with you here.
You have our whole digital newsroom buzzing here, José. December 28-- new dollar menu for Burger King. What are you seeing in the communities around these Burger Kings just from an economic standpoint that you had to come out now and launch a dollar menu?
JOSÉ CIL: Hey, Brian. Great to see you. Value's always been a big part of our business. Value for money is one of the key drivers of visitation to quick service restaurants. And so we felt-- and I've talked about this quite a bit over the last year or so. But we're at our best when we have a balanced approach at Burger King with our strong core offerings with the Whopper, the Impossible Whopper, our chicken sandwiches, our premium indulgent products, and then also having a good, balanced approach on value.
And I think we've been a bit too promotional as of late. And so having an everyday value proposition is important all the time, but especially now, when our guests are looking for opportunities to snack, as well as to enjoy our great-tasting products at a great value. So we're excited about this. It's a long-term commitment and proposition. And we think it'll be an important part of our evolving menu innovation for years to come.
BROOKE DIPALMA: Hey, José. Brooke here. Would we see a similar dollar menu at Popeyes and at Tim Horton? And might this set off a discount war in the overall fast food industry?
JOSÉ CIL: I don't-- I don't think it's a discount play at all, Brooke. As I said, it's a great opportunity to offer a balanced approach to our guests. And so having our core menu always available-- the Whopper, the Impossible, and our chicken sandwiches, as well as kind of those premium indulgent products balanced with value, snacking items, and also items that they can kind of round out into a meal-- we think is the right approach.
In addition to that, having our digital platforms kind of evolve with loyalty and with opportunities to get different kind of incentives to come to the restaurant for different day parts-- we think a comprehensive value approach is an important part of the business. And as it relates to Popeyes and Tim's, each of those brands has their own value proposition. The chicken sandwich for Popeyes, for example, is $3.99 a la carte. You probably can't find a better value anywhere in the chicken quick service space.
And with Tim's, our coffee-- our everyday coffee offering is incredible. The loyalty program and rewards programs that we have there is also quite powerful. So we think the combination at a brand level is very unique and specific. But overall, value plays a big part in the business and will always play a big part.
BRIAN SOZZI: Well, José, I want to talk a bit more about what's gone on at Popeyes. I mean, the results there have been ridiculous now for several quarters running. And how much of it is-- you know, in your view, what's happened at Popeyes? Obviously, the chicken sandwich went viral in a way-- and we talked about this previously-- viral in a way you can only dream of.
But you mentioned the chicken space. I mean, everyone's in there now. It's very competitive. It seems like consumers are excited and want more chicken offerings. What have you just seen in that business relative, again, I think to the more legacy brand of Burger King?
JOSÉ CIL: Popeyes' story has been incredible. We've talked about it quite a bit. The chicken sandwich was a great opportunity to bring new customers and new guests into Popeyes to try the great-tasting chicken that we have, whether it's bone-in chicken or boneless chicken or the sandwich itself. We think the category is a great category.
We think consumers across the US and across the globe are kind of flocking to chicken products, in addition to-- for optional reasons, right? They want to have variety in their menu and in their day-to-day diets. And so we think we're well positioned with the Popeyes brand here in the US and all across the globe to be able to meet that growing demand.
But the key is to have great-tasting chicken. And I think that's where Popeyes distinguishes itself from other chicken QSR players. It's an amazing product, amazing taste. The heritage of the brand is in New Orleans, starting in the early 1970s. And the culinary roots of the brand are very well situated for long-time growth, we think, here in the US and beyond.
BRIAN SOZZI: José, since we last talked around earnings, really, the COVID situation worldwide has taken a turn for the worse. Do you still have more than 90% of your restaurants open worldwide?
JOSÉ CIL: We do. What we've seen is that there's been some limited restrictions, in some cases, some more important restrictions around dine-in in particular. I think the strength of our business model, as we've talked about before, is that we have a really strong capability from an off-premise standpoint, whether it's our drive-throughs or our delivery business or curbside pickup with our mobile order and prepay.
We've pivoted very, very significantly towards off-premise. We already had that strength pre-pandemic. But the situation has certainly created an opportunity for us to pivot and to be much more focused on delivering our great-tasting products in all three brands off-premise. And so that's a focus. We've doubled down on outdoor digital menu boards and enhancing and digitizing the drive-through experience for all three brands. We've done the same with our apps and our loyalty programs.
And we think this is an important moment for the industry in general, but I think for our brands in particular, because we've invested and because we've been committed to continue to evolve the brand, innovate around drive-through, as well as around our loyalty programs and our apps. And as a result, we think we're well positioned long term even if in the short term it's a bit choppy and challenging given the case counts and how different communities around the country and around the globe are reacting to it.
BROOKE DIPALMA: And José, it's been over one week since Popeyes launched those Hershey chocolate-filled beignets. Do you expect more dessert menu innovation at Popeyes and at Burger King in the coming year? Are customers looking for that sweet treat at the end?
JOSÉ CIL: I think so. Desserts are a big part of the industry and snacking as well. And the beignets-- I don't know if you've tried them. They're incredible. They're kind of inspired by Cafe Du Monde in New Orleans, kind of a traditional, classic New Orleans concept. And beignets in general are well-received and well-known in New Orleans.
So our culinary team, led by Amy Alarcon, has done a great job with all products at Popeyes. And we think the dessert lineup is a great opportunity to create additional growth in check, as well as some additional visitation for snacking during-- now during the holiday season and heading into the new year. So it's a great opportunity. We think there is much more in front of us on that-- on that side of the menu. And we look forward to sharing more with you as these innovations come forward.
JULIE HYMAN: José, it's Julie here. I wanted to chime in as well. We've been talking a lot about Popeyes and the menu innovation, the popularity of the chicken sandwich, et cetera. The other brands, though, didn't do so hot last quarter, right? Popeyes was sort of the standout. Burger King and Tim Hortons saw declines in same-store sales. What do you expect to do there-- I mean, aside from the sort of world that we're living in right now-- in terms of menu innovation and pulling people back in?
JOSÉ CIL: Hey, Julie. Good to see you. Yeah. As it relates to Tim Hortons in Canada in particular, we've shared quite a bit about the plans we have there. Our focus has been to get back to what made Tim Hortons famous-- delivering exceptional coffee, doing it quickly and with great service.
So we invested significantly in new technology to hold the coffee and ensure consistency. We've added water filtration. So there was an important push at the brand level. We had to put it on pause when the pandemic hit. But we've restarted that and essentially completed that last quarter, beginning of this quarter. We think that's an important element of getting the brand back to its famous roots and continuing to drive customer satisfaction.
We've done additional investments in food quality as it relates to breakfast. And we think there's an opportunity-- as well as lunch. And then we shared quite a bit about the investments we're making in digital, both the loyalty program and modernizing the experience of the restaurants, as well as the drive-throughs with our outdoor digital menu boards. And by the end of next year, with Tim's, we should be in a position to make really significant advances on the drive-throughs.
At Burger King, there's a number of initiatives that are really critical-- image, drive-through evolution, digital and loyalty, as well as the value proposition that I talked about earlier. And we think there's some menu innovation around breakfast, as well as probably chicken, which we think in combination will be a powerful program for BK in the US and beyond.
So we're excited about our plans. We're excited about the team that we have. We're really proud of the franchisees and all of our team members in the restaurants. And we're looking forward to a big 2021 to get back to growth all across the globe. But internationally, we have some exciting news with our BK India IPO and with many of our international franchisees getting back into building pipelines to get back to growth in 2021.
BRIAN SOZZI: All right, we'll leave it there. Restaurant Brands CEO, José, so always good to see you. And hey, thanks for getting those digital menu boards put in my hometown in Burger King. It definitely spruces up the community a little bit.
JOSÉ CIL: Thanks so much, everyone.