Dive Brief:
- In August, Applebee’s will fold menu items, including Cheetos wings, Cheetos cheese bites and waffle fries, from its virtual brand Cosmic Wings into its overall menu, Applebee’s president John Cywinski said on Tuesday during Dine Brand’s Q2 earnings call.
- The virtual brand will remain in place and available to Applebee’s markets, but will be available to dine-in and to-go customers, he said.
- Applebee’s will continue to explore virtual brands going forward and will share any plans once they go through a testing phase, he said.
Dive Insight:
With Applebee’s virtual brand only available to about 13% of its guests via delivery, the company decided to bring it to the broader menu to increase visibility and expose it to 100% of guests, Cywinski said. The company originally launched the brand through a partnership with Uber Eats in 2021, and has since expanded it with DoorDash and Grubhub.
During the second quarter, Applebee’s off-premise business made up 26% of sales, with Carside To Go and delivery equally split, Cywinski said. Off-premise sales, however, declined during the first half of the year by 12.5% to $578.7 million compared to $661.6 million year-over-year, according to the company’s 10-Q filing.
Sales were up 7.6% during the first half of the year suggesting that the brand is benefiting from more diners returning to eat out. The addition of Cosmic Wings food items could help grow dine-in sales further by enticing diners with an expanded menu.
At sister brand IHOP, its virtual brands, Thrilled Cheese and Super Mega Dilla are providing incremental sales and profits in over 1,000 restaurants that offer at least one of these brands, IHOP President Jay Johns said. He noted they plan to continue growing these brands.
Other chains have been integrating virtual brands into other channels. Wingstop launched Thighstop last year, but merged its offerings into its core menu three months later. Brinker International expanded its virtual brand It’s Just Wings in March 2021 through a Google integration and now also sells it through a branded website.
