In the 1980s, Wendy’s ran a very successful advertising campaign with the now-famous phrase, “Where’s the beef?”
This phrase has taken on new meaning as just under 20% of the company’s restaurants are out of beef. Obviously, this is a difficult problem as Wendy’s is famous for its hamburgers.
The problem traces its origins to meat processing plants that are shut down, or are shutting down due to problems with a large number of workers contacting coronavirus. These shut downs are now impacting the operations of Wendy’s.
- Where’s The Beef Commercials – Wendy’s 1984 (May 30, 2014, haikarate4)
- Wendy’s Wonders ‘Where’s the Beef’ Amid Meat Shortage (May 5, 2020, Inside Edition)
This post is based on the CNBC article, Nearly A Fifth of Wendy’s US Restaurants Are Out of Beef, Analyst Says, by Amelia Lucas, May 5, 2020; the NY Post article, Trump Says He’ll Call Wendy’s Executive to Help Fix Meat Shortage, by Bob Fredericks, May 6, 2020; and the YouTube videos in the Spotlight. Image source: Shutterstock / smirart
1. Why was Wendy’s one of the first to be hit by the meat shortage?
Guidance: Over the years, Wendy’s success has been tied to its use of fresh meat. Although McDonald’s has moved its Quarter Pounder to fresh beef, its restaurants still use frozen beef as well. Since fresh meat can’t be stored as long as frozen, Wendy’s ran into difficulties with its supply chain providing fresh meat, when many meat processing plants shut down. Fast food chains using frozen beef will have a little buffer while they use up the current inventory of frozen beef.
2. What should Wendy’s do?
Guidance: The obvious answer is to get more fresh beef. Wendy’s claims that its supply chain is still functioning. The shortage is temporary, and more meat processing plants are re-opening. Meat processors have also been labeled as an essential business.
Other than waiting for meat processing plants to re-open, Wendy’s may want to look outside its normal supply chain. In the short term, the shortage appears to be regional. The chain should look closely at its individual restaurants to maximize the availability of beef to each restaurant. This may require more shipping to get the beef to the regions that are most effected by the shortage.
Another possible approach is to try to reduce demand for products using beef (hamburgers, etc.) Some restaurants are rationing their hamburgers by only allowing single patty burgers. Promotion of other products would be another approach. It would be a good time to feature chicken sandwiches, or even to offer discounts on chicken to take pressure off the demand for hamburgers.