Wendy’s completes ‘Project Gold Hamburger’

When Wendy’s decided to remake its 42-year-old hamburger, the chain agonized over every detail. A pickle chemist was consulted. Customers were quizzed on their lettuce knowledge. And executives went on a cross-country burger-eating tour. The result? Dave’s Hot ‘N Juicy, named after late Wendy’s founder Dave Thomas. The burger–with extra cheese, a thicker beef patty, […]

When Wendy’s decided to remake its 42-year-old hamburger, the chain agonized over every detail. A pickle chemist was consulted. Customers were quizzed on their lettuce knowledge. And executives went on a cross-country burger-eating tour.

The result? Dave’s Hot ‘N Juicy, named after late Wendy’s founder Dave Thomas. The burger–with extra cheese, a thicker beef patty, a buttered bun, and hold the mustard, among other changes–is being served in U.S. restaurants as of Monday. The word from Wendy’s Canada is that the burger is “coming soon.”

“Our food was already good,” said Denny Lynch, a Wendy’s spokesman. “We wanted it to be better. Isn’t that what long-term brands do? They reinvent themselves.”

For Wendy’s, based in Dublin, Ohio, reinvention is critical. That’s why executives at the 6,600-restaurant chain spent the past 2.5 years going over burger minutiae during an undertaking they call Project Gold Hamburger. That included deciding whether to switch from white onions on its burgers to red (they did), to change the fat/lean ratio of the meat (they didn’t), or to go with plain or crinkled pickles (they picked crinkled).

Wendy’s is trying to boost lacklustre sales and fight growing competition from much bigger rival McDonald’s on one end and expanding fast-casual chains like Five Guys on the other. Part of the problem is that Americans in the economic downturn are being pickier about how they spend their dining-out dollars. But the biggest issue is that Wendy’s, which hadn’t changed its burger since the chain began in 1969, let its food offerings get stale while competitors updated their menus.

“We have a lot of catching up to do in some areas,” said Gerard Lewis, Wendy’s head of new product development. “But after we launch this hamburger there will be folks who need to catch up to us.”

Project Gold Hamburger started around early 2009, shortly after hedge fund magnate Nelson Peltz bought Wendy’s and combined it with Arby’s. The marriage ultimately failed, with Peltz selling Arby’s to a private-equity firm this summer.

It was clear that Wendy’s had lost its way. In six of the past 11 quarters, the company has reported lower or flat revenue at restaurants open at least a year, a key measure of a company’s growth. And after Thomas died in 2002, Wendy’s struggled to find a new face for ads, at one point running bizarre commercials featuring a man wearing a red pigtailed wig.

Wendy’s also faces strong competition from McDonald’s, which has snatched customers from rivals by remaking itself into a hip, healthy place to eat, with smoothies, Wi-Fi and coffee drinks. Last year, McDonald’s had 49.5% of the fast-food burger market in the U.S, up from 41.6% in 2002, according to research firm Technomic. During the same period, Wendy’s share fell to 12.8% from 14%. Burger King’s fell to 13.3% from 17%.

Anxious to reverse the decline, Wendy’s polled more than 10,000 people about their likes and dislikes in hamburgers. Surveys showed that people like Wendy’s food, but thought the brand hadn’t kept up with the times. So, executives were shipped off to eat at burger joints around the country to measure burger characteristics like fatty flavour, salty flavour and whether the bun fell apart.

Then, it was time for Wendy’s to consider the chain’s own burger, ingredient by ingredient. Each time researchers made a tweak, they asked for feedback, visiting research firms around the country to watch through two-way mirrors as people the variations.

Wendy’s chefs also tested new products at the headquarters. From test kitchens, they slipped new burger incarnations through little windows into a “Sensory Test Area,” a white-walled room with 16 cubicles where tasting volunteers–and sometimes employees–ranked each burger.

Many suggestions sounded good but didn’t pan out. They tried green-leaf lettuce, but people preferred keeping iceberg because of its crunchiness. They thought about making the tomato slices thicker but didn’t want to ask franchisees to buy new slicing equipment. They even tested a round burger, a trial that was practically anathema to a company that’s made its name on square burgers. While Wendy’s did not go with the round shape, it changed the patty to a “natural square” with wavy edges because tasters said the straight edges looked processed.

Among the proposed changes were some golden nuggets. Tasters said they wanted a thicker burger, so Wendy’s started packing the meat more loosely, trained cooks to press down on the patties two times instead of eight and printed “Handle Like Eggs” on the boxes that the patties were shipped in so they wouldn’t get smashed. And Wendy’s researchers knew that customers wanted warmer and crunchier buns, so they decided that buttering them and then toasting them was the way to go.

In the end, Wendy’s changed everything but the ketchup. It switched to whole-fat mayonnaise, nixed the mustard, and cut down on the pickles and onions–all to emphasize the flavour of the beef.

Wendy’s says that it knows some customers may not like the new burger–or its price. Wendy’s says prices for the burgers will likely increase because of the higher-quality ingredients, maybe by 10 or 20 cents.

Wendy’s is hoping the burger will be one of many successful changes. The chain, which got a new CEO last week, wants to expand overseas and on the West Coast, relaunch a breakfast line that’s easier for on-the-go eating, and sell more high-margin snacks and beverages.

And early next year, it will introduce new chicken sandwiches. The project is code-named Project Gold Chicken.

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