Dive Brief:
- Brinker International will rightsize its virtual brands, Maggiano’s Italian Classics and It’s Just Wings, by raising prices and cutting menu items that result in food waste, CEO Kevin Hochman said Wednesday during Brinker’s fiscal Q4 2022 earnings call.
- The virtual brands made up 6% of total sales by the end of the fiscal 2022 year, Hochman said, but their high number of SKUs puts operational pressure on kitchen staff.
- Brinker previously reported significant sales growth from It’s Just Wings, which became a $170 million business by the end of fiscal 2021.
Dive Insight:
The company is also reassessing kitchen operations and adding It’s Just Wings items to Chili’s core menu as part of its push to improve its virtual brands.
Chili’s drives 24 times the sales of It’s Just Wings, so there could be additional opportunities to grow the virtual brand with the chain’s help. Applebee’s put its Cosmic Wings virtual brand menu onto its core Applebee’s menu earlier this year to expand its reach.
Chili’s popular chicken tenders can also be placed on It’s Just Wings’ menu, Hochman said. This item can provide growth without adding a new SKU, training or back-of-house processes, Hochman said.
“We're very bullish on being able to leverage some of the great items on It’s Just Wings on core Chili's [menu], as well as doing it vice versa to grow both businesses,” Hochman said.
Maggiano’s virtual brand currently has 26 unique SKUs that service about 2% of the business, which Hochman said was too much and would likely be cut down by about half. It’s Just Wings won’t need as much trimming since the brand was designed well to work with the existing kitchen operations. Its smoked wings, however, have a low mix and result in high food waste, and cutting the item will help improve the P&L of It’s Just Wings, Hochman said.
It’s Just Wings has proven popular during busy dinner service, which has “stopped up” the kitchen’s fry zone during those hours, Hochman said. The company is working on ways to boost capacity since the fry zone is likely to be a source of growth going forward, he said.
Brinker will raise pricing on these brands because a vast majority of their orders are for delivery, and customers are willing to pay for convenience, Hochman said.
The company will also add It’s Just Wings menu items as a premium item at Chili’s bar. Brinker is trying to bring traffic back to the bar through its Raise the Bar initiative, which will include new menu and drink items, happy hour and the launch of NFL Sunday Ticket, a TV service by the league that plays live out of market games. Hochman said the company anticipates increased traffic at the bar will spill into the dining room.
Brinker also wants to grow Chili’s off-premise business, which made up 34% of sales during fiscal Q4, CFO Joe Taylor said.
“If you just look at the numbers, even in just off-premise, core Chili's does roughly five times to six times the business [of] our virtual brands,” Hochman said. “We think there's also opportunity not just in the virtual brands, but growing off-premise on the core Chili's business.”
