Open Letter: What a Difference a Year Made

Rhea-AI Summary

On February 11, 2021, Restaurant Brands International reflected on the transformative impact of the past year, particularly due to the pandemic. Key learnings included the growing reliance on digital sales and the importance of drive-thrus, as well as significant improvements in food quality across its brands: Burger King, Tim Hortons, and Popeyes. The company noted increased digital sales and the success of loyalty programs, with plans for product launches and modernization of drive-thrus. Looking ahead, RBI is optimistic about unit growth and market share as economies reopen.

Positive

• Digital sales doubled in North America.
• Successful launch of loyalty programs in Canada, with one-third of adults participating.
• Plans for new product launches across all three brands including a new chicken sandwich at Burger King.
• Installation of outdoor digital menu boards at one-third of drive-thrus, enhancing customer experience.
• Expecting unit growth in line with 2018 and 2019 levels.

Negative

• None.

TORONTO, Feb. 11, 2021 /PRNewswire/ - Nearly a year ago, Burger King launched a viral campaign showing the iconic Whopper sandwich covered in mold to demonstrate the beauty of no artificial preservatives. The soundtrack was from Aretha Franklin singing, 'what a difference a day made'.

I was reflecting on that campaign, and all the other plans we had in the first quarter of 2020 before countries, companies and families around the world reset all their priorities to focus on winning our most important fight in a generation.

What a difference a year made.

We're into our second month of 2021 and our motivation and mindset has been forever changed for the better because of the year we all endured.

We learned so much managing through this pandemic. We learned that our three iconic brands of Burger King, Tim Hortons and Popeyes are loved, trusted and have so much more opportunity for growth. We learned that our investments to drive accelerated digital sales came just at the right time as our guests' purchasing habits rapidly moved online during the pandemic. We learned the enduring value of drive-thru as a safe and efficient sales channel, especially with governments mandating dining room closures. 

Food and Beverage Quality

We've made important progress in 2020 on the quality of our food. This includes making the Whopper free of colors, flavors and preservatives from artificial sources. It includes launching fresh cracked eggs in all our breakfast sandwiches at Tim Hortons and rolling out a rich, new dark roast blend of coffee. It includes two years of work to create what is now perhaps the most famous chicken sandwich in the world from Popeyes.

All three brands are planning exciting product quality launches this year, including a new chicken sandwich at Burger King; new lunch sandwiches and expansion of our cold beverages at Tim Hortons; and exciting new innovations at Popeyes that build on the culinary genius of the Chicken Sandwich. This is a deliberate journey, now more than a year-long at each of the brands, to create quality, craveable menu items that excite our guests.

Guest Experience

Last year, we outlined the importance of revolutionizing the drive thru experience. With well more than half of our sales coming through the drive thru in our home markets even before the pandemic, enhancements like our outdoor digital menu boards significantly change the way guests interact with our brands.

We have now installed outdoor digital menu boards at around a third of the roughly 10,000 Burger King and Tim Hortons drive-thrus in the US and Canada. The rollout of outdoor digital menu boards at Popeyes is now also underway and on a combined basis, we expect to modernize over 10,000 drive-thrus across North America by mid-2022. All indications are that our guests are excited by the better, quicker and contactless service they are receiving. This is an addition to our opportunity to be a leader in our home markets in guest-centric, predictive selling through our drive-thrus and fully integrated, easy-to-use loyalty in all service modes.

With many elements of our technology infrastructure now in place and fully integrated, we've increased our focus on improving and personalizing our interactions with our guests through our digital platforms. We believe this type of tailored interaction will be an increasingly important differentiator as digital adoption continues to increase over time.

Digital Leadership

Driving rapid digital innovation has been essential to the recovery of our business. We have increased support for and continued to build on our e-commerce platforms, reimagined service opportunities like curbside pickup and expanded delivery services into thousands of new restaurants. The outcome has been the more than doubling of digital sales in North America.

We saw the exciting adoption of our Tims Rewards program in Canada, with one-third of all Canadian adults using it within just 18 months of its launch. Our app is one of the most used on a monthly basis in the Canadian food space and we are encouraged by the level of engagement we've seen from our guests. A winning loyalty program is one that our guests love and value – and one that our franchisees see driving growth in their restaurants. I'm proud to say what we are seeing on both is very encouraging. 

Our Burger King app in the US continues to see a growing active user base supported by improvements to the user experience, compelling digital offers and engaging campaigns over the last year. We're excited to make the next big step and have launched tests of our new loyalty program in select markets across the country.

Additionally, we continue to expand our 'white label' delivery program, which allows our guests to order food directly through our app with delivery fulfillment from our aggregator partners, but at a more favorable cost to our restaurant owners.

We have been on an exciting digital journey to become a leader in our industry and we have invested in strong digital and technology talent to join our global team and work on these strategic projects that we are rolling out to strengthen our business model and improve the level of service we provide to our guests.

Most Loved Brands

Core to our vision of building the most-loved restaurant brands in the world are the values that we live by as a company: life is too short for small dreams; you value things more when you own them; your growth is based entirely on what you do and how you do it; a wide range of voices and perspectives make us stronger; find ways to do things differently to make them better; and above all, be a hard-working, good person.

While the leadership teams for our three restaurant brands have been laser-focused on the recovery of our business, we have made sure that a few, important long-term priorities didn't get lost in the fog of business disruption.

Earlier this year, we announced the first global visual identity update at Burger King in 20 years. The team spent most of 2020 doing the hard work of tying together all the essential elements for a unified visual identity, including our logo, colors, uniforms, restaurant design, digital platforms and packaging – all designed to build brand love, and keep Burger King fresh, modern and an industry trend setter.

Tim Hortons improved its perception in Canada in 2020, in large part because of our commitment to the communities where our restaurant owners live and work. This included widespread support from our franchisees for frontline workers with free coffee and baked goods, along with mobile coffee trucks that donated products at hospitals and long-term care facilities across the country throughout the pandemic.

Sustainable Company and a Great Place to Work

In 2020 we also announced our Restaurant Brands for Good framework and published a number of major initiatives on our website. We advanced work on sustainable packaging and recycling; created new policies on animal welfare and deforestation; made large shifts in our use of real ingredients and concluded a comprehensive carbon footprint analysis that will allow us to make substantive new commitments in 2021.

Additionally, we made important commitments on diversity and inclusion in 2020 and once again achieved 100% on the Corporate Equality Index as a positive LGBTQ+ workplace. And, for the first time in our history, we were certified as a Great Place to Work because of positive reviews from our employees across more than 60 questions about culture and management. This reflects the hard work of so many of our managers who have kept our teams close and engaged everyday while many have been working from home.

2020 Business Performance

In terms of business performance in 2020, I want to say to our many shareholders – and as substantial shareholders ourselves – that we are confident that our efforts throughout 2020 in food and beverage quality, restaurant experience, digital leadership and brand building will be beneficial to returning our business to the growth we know we are capable of in all three brands. Further, we believe the foundation we laid has positioned us exceptionally well to win market share as economies around the world reopen and routines normalize.

So much of our growth story has, and will continue to be, anchored to the amazing power of our network of franchisees that have driven unit growth from just hundreds a decade ago at Burger King, to consistently well over a thousand across our three brands before this past year. Heading into 2021, we are picking up where we left off, and expect to deliver unit growth generally in line with 2018 and 2019 levels.

Finally, I am very thankful to our guests, owners, employees and shareholders for your confidence in RBI. The quality of our plans today is the result of a team that refused to be distracted by short-term barriers that we couldn't control and instead focused on the right long-term priorities to grow our restaurant brands for many years to come.

What a difference a year made.

Jose Cil
CEO, Restaurant Brands International

Forward-Looking Statements

This letter contains certain forward-looking statements and information, which reflect management's current beliefs and expectations regarding future events, initiatives and operating performance and speak only as of the date hereof. These forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties. These forward-looking statements include statements about our expectations regarding the effects of the COVID-19 pandemic on our results of operations, liquidity and prospects and those of our franchisees and our ability to continue to navigate the impact of the pandemic, our expectations regarding our 2021 and long-term restaurant growth goals and our progress toward those goals, the impact of our strategic initiatives on the long-term growth prospects of our brands, the timing of technology roll out, our future plans with respect to our sustainability, diversity and inclusion initiatives, and the impact of our initiatives on the financial health of our franchisees. The factors that could cause actual results to differ materially from RBI's expectations are detailed in filings of RBI with the Securities and Exchange Commission and applicable Canadian securities regulatory authorities, such as its annual and quarterly reports and current reports on Form 8-K, and include the following: risks related to unforeseen events such as pandemics; risks related to supply chain; risks related to ownership and leasing of properties; risks related to our franchisees financial stability and their ability to access and maintain the liquidity necessary to operate their business; risks related to RBI's ability to successfully implement its domestic and international growth strategy and risks related to its international operations; risks related to RBI's ability to compete domestically and internationally in an intensely competitive industry; risks related to technology; and changes in applicable laws and regulations, including tax laws or interpretations thereof. Other than as required under U.S. federal securities laws or Canadian securities laws, we do not assume a duty to update these forward-looking statements, whether as a result of new information, subsequent events or circumstances, change in expectations or otherwise.

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SOURCE Restaurant Brands International Inc.

FAQ

What recent changes has Restaurant Brands International implemented regarding food quality?

Restaurant Brands International has made significant improvements, including removing artificial colors, flavors, and preservatives from the Whopper, and introducing fresh cracked eggs at Tim Hortons.

How has the digital sales performance changed for RBI in North America?

Digital sales have more than doubled in North America, driven by increased e-commerce platform support and innovations.

What is the expected growth for Restaurant Brands International in 2021?

RBI expects unit growth generally in line with levels seen in 2018 and 2019, as economies reopen.

How is RBI enhancing the drive-thru experience for customers?

RBI has begun installing outdoor digital menu boards at drive-thrus, which improve customer interaction and service.

What are the key brands under Restaurant Brands International?

The key brands include Burger King, Tim Hortons, and Popeyes.