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Cracker Barrel’s Masino on Menu Enhancements · Choppin’ It Up by Bloomberg Intelligence

0:12
Speaker 1: Welcome to Chopping it Up. I'm your host, Mike Hallon,
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Speaker 1: the senior restaurant and food Service analyst at Bloomberg Intelligence.
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Speaker 1: Our research and that of bi's five hundred analysts around
0:21
Speaker 1: the globe can be found exclusively on the Bloomberg terminal. Today,
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Speaker 1: we're joined by Julie Messino, CEO of Cracker Barrel. Thanks
0:28
Speaker 1: for doing this, Julie.
0:29
Speaker 2: Thanks Mike. It's a pleasure to be here.
0:31
Speaker 1: All right. So you don't know this about me, but
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Speaker 1: I have a legendary appetite. So I'm looking forward to
0:36
Speaker 1: accepting the challenge you issued on the last earnings call
0:38
Speaker 1: about finishing that ginormous quote un.
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Speaker 2: Cash broadcast or all Shepherds Pie, I love it. You
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Speaker 2: might be the first, Mike. Let's see if you can
0:47
Speaker 2: do it.
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Speaker 1: Okay, Yeah, I'll have to. Maybe I'll come in after
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Speaker 1: a fast. It might call that cheating if you will,
0:53
Speaker 1: but whatever I need to do to get it done.
0:55
Speaker 1: But it's funny. I listened to the call and then
0:57
Speaker 1: have you ever seen great outdoors with John Candy?
1:00
Speaker 2: Yes?
1:00
Speaker 1: Of course, Monny eats the old ninety six er. So yeah,
1:03
Speaker 1: after listening to a call, I brought that I pulled
1:06
Speaker 1: that scene up on YouTube and I watch, It's so.
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Speaker 2: Good, that's awesome. It's just such a delicious item, honestly,
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Speaker 2: Like I watched so many people. They get so excited
1:14
Speaker 2: because it comes out and it's just it's gorgeous when
1:17
Speaker 2: it comes out right, because it's in a skillet. It's
1:19
Speaker 2: got this beautiful crusty hash brown casserole topping on it.
1:22
Speaker 2: It's got dice tomatoes and like some stura cream, and
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Speaker 2: it just looks impressive and it's pretty exciting when it
1:27
Speaker 2: comes down and people jump it and jump it with
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Speaker 2: gusto like they're gonna get it. They're gonna get the
1:32
Speaker 2: very first star I saw somebody eating. And I was
1:34
Speaker 2: at our Mel Juliet store that we had recently remodeled,
1:36
Speaker 2: and I'm sitting next to this couple. It's an older couple.
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Speaker 2: They're very very sweet, and she was the one who
1:41
Speaker 2: ordered it, and she like went in like hard, she
1:45
Speaker 2: went in ham on it right, like she was gonna
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Speaker 2: do it's gonna do it. It's just like, oh, I
1:49
Speaker 2: just can't. I mean, it was it's just cute because
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Speaker 2: it's so delicious, and you keep you keep going because
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Speaker 2: it's delicious right, Yeah, okay, I look for it. I
1:58
Speaker 2: look forward to you doing it, Mike.
1:59
Speaker 1: I look, yeah, yeah, I'll let you know how it goes.
2:01
Speaker 1: It sounds dangerous but at.
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Speaker 2: The same time but delicious. Yeah, delicious, very cool.
2:06
Speaker 1: Please tell me a little bit about your career journey
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Speaker 1: and what attracted you to Cracker Barrell.
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Speaker 2: Oh gosh, I mean, I'm one of those people. I've
2:14
Speaker 2: just I've been so fortunate. I've been so grateful that
2:18
Speaker 2: people have taken chances on me, and I've just you know,
2:22
Speaker 2: worked for brands that I love. That's really always been
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Speaker 2: my guidepost, you know, from early on in my career,
2:29
Speaker 2: you know, working at Coach, working at Jay Crew, they
2:32
Speaker 2: were just brands that I loved. And then when I
2:35
Speaker 2: had the opportunity to go to Starbucks and Taco Bell,
2:38
Speaker 2: it was like, you know, it's like an absolute no brainer.
2:40
Speaker 2: And then when crackerber called same kind of thing, it
2:43
Speaker 2: was like, yeah, I mean it's always been like, is
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Speaker 2: it a brand that I love? Where are they in
2:49
Speaker 2: their journey? Do I think that I can help them?
2:51
Speaker 2: Do I have like a point of view on it?
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Speaker 2: And yeah, So it's I've just been I've been really
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Speaker 2: fortunate that people have taken chances on me, worked with
3:00
Speaker 2: great people, and again brand.
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Speaker 1: Said, I love so good stuff. How are you changing
3:06
Speaker 1: the culture there?
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Speaker 2: That's a better question to ask other people versus me.
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Speaker 2: I mean, I'm sure that my team would have a
3:14
Speaker 2: lot to say about that. I think one, I really
3:20
Speaker 2: believe in the art of the possible, and so I
3:23
Speaker 2: really learned from some people that I've had the opportunity
3:26
Speaker 2: to work for, to swing for the fences, to aim high,
3:29
Speaker 2: to really approach problems with optimism because there were there
3:33
Speaker 2: to solve situations for consumers and for your team, right,
3:36
Speaker 2: how do you make their lives better? How do you
3:38
Speaker 2: meet their needs, whether it's coffee or hush prodcast rule,
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Speaker 2: Chipherd's buy or a handbag. Like in my career, it's
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Speaker 2: like all of those things, and you're really just saying,
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Speaker 2: what is that problem or what is that opportunity that
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Speaker 2: I'm trying to solve, and how do we get after it?
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Speaker 2: So I am a pretty optimistic person. I believe most
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Speaker 2: things in life can be done, they can be fixed,
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Speaker 2: they can you know, and they're doing. And so I
4:02
Speaker 2: also really believe in collaboration. I believe in people bringing
4:05
Speaker 2: their best self every day. I believe in learning from
4:08
Speaker 2: where you find yourself and constantly improving. So that's probably
4:12
Speaker 2: the biggest thing I talk with the teams about is
4:14
Speaker 2: like athlete I call it athlete mentality. Right, you know,
4:17
Speaker 2: somebody wins the Super Bowl, they're back in the I mean,
4:20
Speaker 2: they go on the party and they get drunk. But
4:22
Speaker 2: then the next day they're back and they're watching the
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Speaker 2: tapes like, where did we lose inches? Where did we
4:27
Speaker 2: you know, where could we have done a little bit better?
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Speaker 2: And I think, especially in the restaurant industry, like every
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Speaker 2: guest in front of you is an opportunity to be better,
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Speaker 2: you know, to do better than you did the last time.
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Speaker 2: And it's just such a great It's That's what I
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Speaker 2: love about it. That just the frequency that, like you know,
4:43
Speaker 2: some people would argue I'm a little masochistic in that,
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Speaker 2: but like you just you always have the opportunity to
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Speaker 2: be better and to do more, and that to me
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Speaker 2: is really really exciting.
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Speaker 1: Cool. So as you're you've made a lot of new
4:55
Speaker 1: hires recently, as you're executive team finally in place.
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Speaker 2: Yeah, yeah, I mean I had said I wouldn't say
5:01
Speaker 2: a lot really just too I mean, Chris, our new
5:04
Speaker 2: head of strategy, started I think in like March, and
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Speaker 2: then Sarah joined us in July. Both are just amazing executives.
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Speaker 2: But we've got a great team. We've got a team
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Speaker 2: that really has a lot of industry experience, and I
5:15
Speaker 2: think that balance of kind of old and new but
5:19
Speaker 2: fresh thinking from the outside and really just people who
5:22
Speaker 2: kind of question. I mean, I think probably another thing
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Speaker 2: I'm doing to the culture is I question everything. If
5:27
Speaker 2: you find somebody who's like worked for me before, they'll
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Speaker 2: be like, oh, yeah, she could be exhausting. She asked
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Speaker 2: a lot of questions. But really with the intent of
5:36
Speaker 2: being better right and learning and moving things forward, I
5:39
Speaker 2: have a lot of curiosity about how to improve, how
5:41
Speaker 2: to just constantly be our best. And so I think
5:45
Speaker 2: that's where building a team. You know, when you're building
5:47
Speaker 2: an executive team or just teams in general, whether you're
5:50
Speaker 2: the GM at a restaurant, you know you're trying to
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Speaker 2: put together an assemblage of talents and skill set and
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Speaker 2: people who don't always approach things the same way. Because
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Speaker 2: I find that when you bring diverse thinking and perspectives together,
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Speaker 2: that's where you end up with the best answers, So
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Speaker 2: for me, that's what I'm always trying to orchestrate as well.
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Speaker 1: Great, you spent a lot a lot of time talking
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Speaker 1: about the company's food enhancements on the last earnings call,
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Speaker 1: So it seems like a the innovation team has been
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Speaker 1: busy and the new items are resonating better than they.
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Speaker 2: Have for the last several years.
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Speaker 1: How has the R and D process been improved?
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Speaker 2: Well, so today that's now reporting up through Sarah, and
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Speaker 2: Sarah's brought in a great guy from the industry. His
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Speaker 2: name is Matt Banton. We're super excited to have both
6:34
Speaker 2: of them there because they bring fresh perspectives to kracobral
6:38
Speaker 2: And then we've got some people who've been with Crocobell
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Speaker 2: for a really long time. Chef Bill Joe really the
6:43
Speaker 2: team there, They really Tina. They know the brand, they
6:47
Speaker 2: know our vendors, they know kind of our standards and
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Speaker 2: all of that. And so again it's that mix up
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Speaker 2: of old and new, fresh perspective, people who really loved
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Speaker 2: the brand for a long time. We're working on an
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Speaker 2: innovation right now that is going to pool. Oh your mind.
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Speaker 2: It's like it is one of those things where similar
7:04
Speaker 2: to hashbron cast role shepherds Pie. The team took an
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Speaker 2: icon an icon of cracker barrel and just said, how
7:11
Speaker 2: do we think about it differently, which is kind of
7:13
Speaker 2: what happened with hashbron cast role shepherds Pie. Like, what
7:15
Speaker 2: else can we do with this hashbron cast role? Can
7:17
Speaker 2: we want like a pancake? Make it a topic on something.
7:20
Speaker 2: We've turned them intoitator tots, like We've done all kinds
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Speaker 2: of fun stuff and so this new one, I'm just
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Speaker 2: I can't wait to actually talk about it publicly. But
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Speaker 2: they're just always innovating and Matt is such a driver.
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Speaker 2: I'm so excited to have him on the team. He's
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Speaker 2: got energy probably similar to mine, and that he's he's
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Speaker 2: really pushing to fill the pipeline, to think about the
7:41
Speaker 2: stage game process a little bit differently, to make sure
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Speaker 2: that we have plenty of room for testing and learning.
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Speaker 2: We're also pulling out the archives. We're looking at things
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Speaker 2: that we've done in the past that might need to
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Speaker 2: come back in a new and different way, or it
7:55
Speaker 2: might be time to revisit some of those things. So
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Speaker 2: the team is just really energized, I would say, under
8:02
Speaker 2: their leadership, and I think look like anything when you
8:05
Speaker 2: have momentum. Momentum is so contagious, it's so precious. I'm
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Speaker 2: always telling the leadership team, like our job as leaders
8:12
Speaker 2: is to create momentum, because when you have it, it's
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Speaker 2: just the flywheels starts spinning and that's when things get
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Speaker 2: really really good. And I would say an innovation pipeline
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Speaker 2: is the exact same way when you are at it
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Speaker 2: and you're filling it, and like innovation begets innovation, and
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Speaker 2: that creative mindset starts spinning. Like it's just it's a
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Speaker 2: really rich and wonderful place to be. And that team
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Speaker 2: is on fire right now, really thinking about a lot
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Speaker 2: of good stuff. So I we tell you hash Broncast, Roll,
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Speaker 2: Shepherd's Pie, the pot Roast, the new chicken and rice,
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Speaker 2: the ribs. That's this is just the beginning. We've got
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Speaker 2: a few things if you kind of get out there
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Speaker 2: a little bit. We've got a few things in tests
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Speaker 2: around the country, and we've got a big test that's
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Speaker 2: getting ready to launch, similar to the last kind of
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Speaker 2: twenty item tests that we did in Texas. We're doing
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Speaker 2: another really big one in December where some I know
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Speaker 2: some things in there are going to be like absolute
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Speaker 2: rock stars and going to hit the menu. So team
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Speaker 2: has been real busy. I'm real proud of them.
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Speaker 1: Exciting hourly turnover improved the impressive seventeen percentage points in
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Speaker 1: the first quarter. What's driving that?
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Speaker 2: Gosh, that's really I can't take any credit for that.
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Speaker 2: That's the field, right, That is great leadership. We've made
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Speaker 2: some changes. We've really talked to the field leaders about
9:23
Speaker 2: owning development, about owning ninety day turnover, about literally onboarding
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Speaker 2: everybody onto their teams and making sure that they feel
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Speaker 2: like they're building the right teams and that they are
9:35
Speaker 2: really personally in that. We've we had some other positions
9:38
Speaker 2: in the past a cracker barrel that were sort of
9:40
Speaker 2: in between the GM and you know, a server, or
9:44
Speaker 2: the GM and the girl cook. And what we said was, no,
9:47
Speaker 2: you're the leader, this is your team. We want you
9:48
Speaker 2: to build it, we want you to own it. Now
9:50
Speaker 2: they've got a lot on their plates, so not exactly
9:53
Speaker 2: an easy conversation, but they get it right. And what
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Speaker 2: I think that does is it just builds accountability, of
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Speaker 2: build trust, It builds that sort of I'm in it
10:02
Speaker 2: with you mentality. I'd say that's The biggest part, frankly
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Speaker 2: is just really leaders focused on and focused on building
10:09
Speaker 2: their teams, developing their talent. But then I would say, secondly,
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Speaker 2: we are really trying to focus and prioritize better as
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Speaker 2: an organization and not keep changing the plan, not keep
10:21
Speaker 2: changing what we ask the field to do. Tell you
10:23
Speaker 2: one thing on one day and change it a couple
10:26
Speaker 2: days later. That's chaos. If you've ever operated in an
10:29
Speaker 2: environment like that, it's really hard. And we had been
10:32
Speaker 2: doing a little bit of that in the past, and
10:34
Speaker 2: so really keeping them focused, keeping them on the right things,
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Speaker 2: taking care of guests, the metrics that matter. You know,
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Speaker 2: We've spent a lot of time getting them, getting them
10:44
Speaker 2: really focused on executing with excellence every guest, every day,
10:48
Speaker 2: every shift. And I really believe that's what's paying off
10:50
Speaker 2: because then as a team member, you know what to do,
10:53
Speaker 2: you know what's expected of you, you know how you're
10:55
Speaker 2: going to be judged and what you're going to be
10:57
Speaker 2: held accountable to, and that's exciting, right. I think one
11:01
Speaker 2: of my management philosophies is that people don't wake up
11:05
Speaker 2: wanting to screw up, Like they don't come into work
11:07
Speaker 2: wanting to do a bad job. They really don't. They
11:10
Speaker 2: come in wanting to be recognized for the work that
11:12
Speaker 2: they're doing. They've made a choice. They could do many
11:15
Speaker 2: other things, work many other places, but they're there, and
11:18
Speaker 2: so recognizing that contribution, helping them be their best, giving
11:22
Speaker 2: them the tools to make their jobs easier, to make
11:25
Speaker 2: them enjoyable, to recognize their contributions to me is really
11:29
Speaker 2: what being a great leader is all about, and building
11:31
Speaker 2: those teams is all about because people want to do good,
11:34
Speaker 2: they really do, especially in the hospitality business. You want
11:37
Speaker 2: to take care of people. You want to have the
11:38
Speaker 2: time to smile and chat with them and create their
11:41
Speaker 2: day and work together as a team. That's what this
11:43
Speaker 2: industry is all about.
11:46
Speaker 1: Yeah, well, it sounds like transparency is part of the
11:50
Speaker 1: culture shift, right, Like that's as.
11:53
Speaker 2: An employee, that's yeah, for sure.
11:55
Speaker 1: That's a wonderful thing. Yeah, you want to look to
11:57
Speaker 1: your point so great good stuff.
12:00
Speaker 2: In trouble Sometimes sometimes I say things I really shouldn't say,
12:02
Speaker 2: you know, Yeah, the team or the finance.
12:05
Speaker 1: Team is like, yeah, they can be a stick in
12:12
Speaker 1: the muddle.
12:13
Speaker 2: So yeah, every so often, No, but again, people you
12:16
Speaker 2: got to lean into the fact that people want to
12:18
Speaker 2: do the right thing. And when you give them the
12:19
Speaker 2: information and make better decisions about where you're going and
12:23
Speaker 2: why and what's important, I believe that people rise to
12:27
Speaker 2: the occasion.
12:27
Speaker 1: Yeah, you mentioned on the call that value scores improved
12:31
Speaker 1: even though pricing was up four point seven percent in
12:33
Speaker 1: the quarter. How are you delivering value to your customers?
12:36
Speaker 2: Gosh, it's one of the things that Cracker Barrel has
12:40
Speaker 2: done so well for so long, Mike. I I was
12:45
Speaker 2: shocked when I got here, truly, Like I hadn't actually
12:48
Speaker 2: eaten at a Cracker Barrel in a while. I grew
12:49
Speaker 2: up going to it. But I came in and my husband,
12:52
Speaker 2: who's like good Jersey boy East Coaster, he had never
12:55
Speaker 2: actually been to a Cracker Barrel when I was interviewing
12:57
Speaker 2: for this job. When we went and we sat down
12:59
Speaker 2: and he was like, my god, you get so much
13:02
Speaker 2: food for a such a great price. Like he's like,
13:05
Speaker 2: this is incredible, you know, And it's I think it's
13:08
Speaker 2: one of those little I want to say, like hidden
13:12
Speaker 2: gems or like untold you know, we don't shout it
13:15
Speaker 2: from the rooftops, but it's the thing that in all
13:19
Speaker 2: the research as we were building the transformation plan, that
13:21
Speaker 2: came back time and time and time again from our guests.
13:24
Speaker 2: It wasn't that you have the cheapest price. It was
13:27
Speaker 2: that you give us a fair price, a reasonable price,
13:31
Speaker 2: but really delicious, abundant quality food. And that is the
13:36
Speaker 2: magic of cracker Barrel. It's not about being the cheapest
13:39
Speaker 2: or whatever. But I mean, that's sort of the other
13:43
Speaker 2: interesting thing. I don't know if you heard Craig talk
13:45
Speaker 2: about it yesterday, but our average check for the quarter
13:49
Speaker 2: is like fifteen dollars, and the average casual dining check
13:53
Speaker 2: in the same quarter as twenty seven dollars, right, So
13:56
Speaker 2: it just we're a screaming deal for the home cook nature,
14:01
Speaker 2: the handcrafted nature of our food, how delicious it is,
14:03
Speaker 2: how abundant it is. So I think that's that guess
14:06
Speaker 2: really recognize that. So while we've had to take a
14:08
Speaker 2: little bit of price to offset inflation to do some
14:12
Speaker 2: of the things that we're doing, and frankly we were
14:13
Speaker 2: behind on price. We hadn't taken a lot of price
14:16
Speaker 2: over the last several years. There was some opportunity as
14:19
Speaker 2: we were looking because people weren't playing back that we
14:21
Speaker 2: were the lowest even though we were, so we knew
14:24
Speaker 2: we had a little bit of opportunity to sort of
14:26
Speaker 2: right size some of those like item prices, but really
14:29
Speaker 2: make sure that we're focusing on creating a great experience,
14:32
Speaker 2: delivering high quality food, making sure that people felt like
14:36
Speaker 2: it was still abundant because we haven't changed portion sizes
14:38
Speaker 2: in years either. So really just all of those things
14:42
Speaker 2: continuing to come together. I think people are really recognizing
14:45
Speaker 2: it and it's resonating with them when value is so
14:48
Speaker 2: important because so many people are screaming and dealing and
14:52
Speaker 2: you know, it's just not kind of how we play
14:53
Speaker 2: our game.
14:55
Speaker 1: Yeah, some of the companies you know that we cover
14:57
Speaker 1: that are outperforming, actually most of them are have higher
15:01
Speaker 1: cost of goods sold than their competitors, right, so they're
15:04
Speaker 1: giving more, you know, on that plate than their competitors,
15:08
Speaker 1: and its showing up in the sales and traffic.
15:10
Speaker 2: Yeah, for sure. I mean people people eat what there is.
15:14
Speaker 2: They always have, they always will, right Like when that
15:15
Speaker 2: plate comes out, it's it's got to beautiful, it's going
15:18
Speaker 2: to be full, it's going to be what you're expecting.
15:20
Speaker 2: And then you're doing the math the whole time, like
15:22
Speaker 2: from when you order to when you actually pay the bill.
15:24
Speaker 2: Is that is that value equation right?
15:26
Speaker 1: You know, so, I'd imagine the remodels will help, But
15:31
Speaker 1: how else do you plan to get gen Z to
15:32
Speaker 1: put Cracker Barrel in its consideration set?
15:35
Speaker 2: Mike, Clearly your TikTok account is not up to date.
15:39
Speaker 2: I mean we are, we are all over that with
15:42
Speaker 2: some really fun ways. I mean one of the beauties
15:45
Speaker 2: of Cracker Barrel is that we really do connect across generations. Right,
15:49
Speaker 2: It's not just about the boomers or X or Z
15:53
Speaker 2: or Alpha. Like. Literally, it's a place where you walk in.
15:56
Speaker 2: It's why I love being out in our restaurants. It
15:58
Speaker 2: feels like you're in America. You look around and everybody
16:02
Speaker 2: looks different. They're different ages, they're different ethnicities. You see families,
16:05
Speaker 2: you see singles, you see friends together. It's literally a
16:08
Speaker 2: slice of America, which I really really love. Everyone's welcome
16:11
Speaker 2: and everybody enjoys Craco Barrel. But specifically that younger generation,
16:16
Speaker 2: they're really finding us. They're finding us in some interesting ways. One,
16:20
Speaker 2: they probably already experienced us with their family, either their
16:23
Speaker 2: parents or their grandparents or something like that. But truly,
16:28
Speaker 2: we've had quite a few things go viral on TikTok lately,
16:31
Speaker 2: more so in the merch category. So I don't know.
16:34
Speaker 2: I actually this was not planned, but I do have
16:36
Speaker 2: these sitting here on my desk. Have you seen these?
16:38
Speaker 2: These are these Altoid retro sours. This is like a
16:42
Speaker 2: huge item from like I want to say, the nineties,
16:45
Speaker 2: maybe it's the two thousands. I'm not honestly not even sure.
16:49
Speaker 2: But we are an exclusive carrier of these. These cannot
16:52
Speaker 2: keep in stock, Like I literally had to beg a
16:55
Speaker 2: favor to get them because I really love them. But
16:58
Speaker 2: those so those have blown up all over the socials,
17:01
Speaker 2: all over TikTok. But the other crazy fun thing is
17:04
Speaker 2: we have these sweaters that we call toofers because it
17:07
Speaker 2: looks like it looks like you're wearing a sweater or
17:10
Speaker 2: a sweatshirt with a T shirt underneath it, and but
17:14
Speaker 2: of course you're not. And they're embroidered and they have
17:17
Speaker 2: all kinds of fun things on it, everything from like
17:19
Speaker 2: Christmas things to the latest collection that the merch team
17:23
Speaker 2: did is actually a hunting and fishing collection, so it's
17:26
Speaker 2: like deer and like a bass, and like all kinds
17:29
Speaker 2: of those blew up on TikTok. We had all these
17:33
Speaker 2: like gen A gen Z girls like filming themselves running
17:37
Speaker 2: into Cracker Girl to get these things. They of course
17:39
Speaker 2: they all buy like an extra large and like, you know,
17:42
Speaker 2: because big sweaters are in again and we literally sold
17:45
Speaker 2: out of them in like a week. So it's like
17:47
Speaker 2: one of the hottest, hottest things we've had. And so
17:49
Speaker 2: we've got Christmas ones right now that are all the rage.
17:52
Speaker 2: But you know, we are, we are doing it so
17:55
Speaker 2: lots of ways. And then you know, as we were
17:57
Speaker 2: talking about earlier, there's so many items on the menu
18:00
Speaker 2: that really are for everybody, you know, whether whether you
18:03
Speaker 2: want to have something as indulgent as the Ashbroncast Rule
18:06
Speaker 2: Shepherd's By or something might a like our girled chicken tenderloine,
18:09
Speaker 2: which is like a perennial favorite, low calorie, delicious marinated
18:14
Speaker 2: chicken brass. Like, you know, we've got something for everybody
18:16
Speaker 2: on the menu.
18:18
Speaker 1: Great, And yeah, I gotta I've been neglecting my TikTok feed.
18:21
Speaker 1: I'm not gonna lie.
18:24
Speaker 2: I was like, you clearly have not seen Cracker all
18:26
Speaker 2: because we are. We are. It's fun, It's super fun.
18:29
Speaker 2: It's just such a fun way to communicate with your guests.
18:32
Speaker 2: You know, that's really pillar one of our transformation is
18:35
Speaker 2: about making sure that we are relevantly out there communicating
18:39
Speaker 2: with people the way they want to be communicated with,
18:41
Speaker 2: right and so, and that's a little different generationally, Right,
18:44
Speaker 2: it's a little different based on your need state in
18:46
Speaker 2: your life. If you have children or you don't, or
18:48
Speaker 2: you know, you're going from work, you want delivery, you know.
18:51
Speaker 2: So we just have to make sure that we're in
18:53
Speaker 2: all of those spaces in ways that are right for
18:56
Speaker 2: the brand and right for our guests, so that we're
18:58
Speaker 2: there to make sure that again we're solving problems for people.
19:01
Speaker 2: So letting people know that we got you, We've got
19:04
Speaker 2: all these great items in these great solutions in cracker
19:06
Speaker 2: Barrel can be a solution for them across many dimensions
19:09
Speaker 2: of their life.
19:10
Speaker 1: Yeah, it's great, and it's really paid dividends TikTok for
19:13
Speaker 1: you know, Chili's this year.
19:15
Speaker 2: They absolutely hundred percent. George and Kevin have done a
19:18
Speaker 2: great job on that.
19:19
Speaker 1: Yeah, all right, So you communicate that remodels are an
19:24
Speaker 1: important piece of the turnaround with restaurants saintst Our sales
19:29
Speaker 1: outperforming retail. Could there be an opportunity to maybe shrink
19:32
Speaker 1: the size of the retail store. Yeah.
19:35
Speaker 2: I mean, look, you never say never to anything because
19:37
Speaker 2: as I already told you, I look at everything, I
19:39
Speaker 2: question everything all the time. But no, right now we're
19:42
Speaker 2: thinking quite the opposite. Retail is such a differentiator for us.
19:46
Speaker 2: It is, I truly believe, part of the special sauce
19:49
Speaker 2: of Cracker Barrel. You know, it is so unique. I
19:52
Speaker 2: mean I challenge you to wander around the Cracker Barrel
19:55
Speaker 2: retail store and not find something like there's something for
19:59
Speaker 2: everybody in from food to cord, apparel to games and toys.
20:04
Speaker 2: I mean literally we've got everything. I mean cards, I mean,
20:08
Speaker 2: it's crazy the amount of stuff we have. But that's
20:12
Speaker 2: just part of the charm, right there's something for everybody.
20:15
Speaker 2: And what we're doing right now though with retail is
20:18
Speaker 2: really saying kind of like we did on restaurant, what
20:21
Speaker 2: are the metrics that matter? How do we actually really
20:24
Speaker 2: think about the ways to win and what's important in
20:26
Speaker 2: this business? Right on the restaurant side, it was like
20:28
Speaker 2: food made recipe, right, it's got to be to people
20:31
Speaker 2: in a quick and timely manner.
20:32
Speaker 1: You know.
20:33
Speaker 2: The skill level of some of the different positions was
20:35
Speaker 2: important and making sure that things are made to recipe.
20:38
Speaker 2: And you know, we're doing the same thing on retail,
20:40
Speaker 2: so what should the layout be, right, I don't think
20:44
Speaker 2: we actually have an optimized layout over on that side
20:46
Speaker 2: of the business today. We in a lot of the
20:49
Speaker 2: work on the strategic transformation. People said, I love that
20:53
Speaker 2: side of the business, but like gosh, I feel like
20:55
Speaker 2: I'm always standing in the wrong place. Sometimes I'm bumping
20:58
Speaker 2: into something. I'm trying to get into the restaurant and
21:00
Speaker 2: other people are trying to come out. And so it's
21:03
Speaker 2: a little bit of a pain point today in terms
21:05
Speaker 2: of customer flow, not that they don't like being there,
21:09
Speaker 2: but we can improve and optimize the customer flow. So
21:12
Speaker 2: we've just done a lot of customer journey work, kind
21:15
Speaker 2: of first time in the history of the company, to
21:17
Speaker 2: really understand journeys and what you know, if you're coming
21:20
Speaker 2: in for a to go order, what that journey looks like,
21:22
Speaker 2: versus if you're coming in for breakfast with your family,
21:24
Speaker 2: versus if you're coming in for a quick lunch, like,
21:26
Speaker 2: those journeys are all really really different. And so how
21:28
Speaker 2: do we optimize the layout of the retail space and
21:31
Speaker 2: the items and where they are and how people want
21:34
Speaker 2: to shop for them in a way that really again
21:37
Speaker 2: meets their needs and provides a great experience. So if
21:41
Speaker 2: you come back to kind of the three imperatives that
21:44
Speaker 2: I've talked about that underpin the transformation, right, the first
21:47
Speaker 2: one is that relevancy piece, Right, do we have all
21:49
Speaker 2: the right things relevancies about gaining market share? You know,
21:52
Speaker 2: how do we make sure that when you're thinking about
21:54
Speaker 2: the decisions whether it's to eat or shop, preper brels
21:57
Speaker 2: top of mind. The second one is food and experiences
21:59
Speaker 2: that people love and crave, and so that all comes together.
22:02
Speaker 2: And then the last one is driving profitability. So as
22:05
Speaker 2: we have those underpin everything we're doing. Thinking about the
22:09
Speaker 2: layout of the retail items, where they are, how you
22:11
Speaker 2: journey through that is really really important to driving all
22:14
Speaker 2: of those, especially that second experiential pillar.
22:18
Speaker 1: And advertising during NASCAR and college football as well as
22:22
Speaker 1: Bravo have been some of the changes that have been
22:24
Speaker 1: made to Cracker Barrows marketing. Right, what else can you
22:26
Speaker 1: share about your plans for the rest of the fiscal year.
22:29
Speaker 2: Yeah, maybe you should have Sarah come on and talk
22:32
Speaker 2: to you about all the great work that she and
22:33
Speaker 2: the team are taking on Right now, I would point
22:38
Speaker 2: you towards our homemark promotion. This is really the first
22:41
Speaker 2: time we've done something like this over the holidays. It's
22:43
Speaker 2: super exciting. You got to go in through our loyalty program,
22:47
Speaker 2: so it was sort of highlighting that. But somebody is
22:50
Speaker 2: going to win a walk on role in a Hallmark
22:54
Speaker 2: holiday movie, which I mean talk about cross generational appeal.
22:59
Speaker 2: That's one of those things too that like young and old,
23:01
Speaker 2: everybody like finds himself watching a holiday Hallmark movie and
23:05
Speaker 2: in a weird way enjoying it. I think. So it is.
23:09
Speaker 2: It's an exciting promotion. So we've got a lot of
23:12
Speaker 2: cool things going on there. And frankly, the other nice
23:15
Speaker 2: thing about it is our team members can win too
23:17
Speaker 2: because we allow them to participate in the loyalty program.
23:20
Speaker 2: So I'm really curious, like if a guest is going
23:22
Speaker 2: to win, if a team member is going to win.
23:24
Speaker 2: I've got the guy who leads all the field operations.
23:27
Speaker 2: He's like gunning away, you know. So it's it's it's
23:29
Speaker 2: super it's a super fun thing. But that's showing up
23:32
Speaker 2: in lots of different ways. I get. We talked about
23:34
Speaker 2: TikTok already that's a great place where we're really driving
23:38
Speaker 2: a different type of content and a different type of engagement.
23:41
Speaker 2: I think you'll see some real changes in the way
23:43
Speaker 2: we approach Instagram that's looking and feeling really different under
23:47
Speaker 2: Sarah's leadership, and really just trying to match up the
23:52
Speaker 2: message with the guest with the channel, right. And then
23:55
Speaker 2: that's what great modern marketing is all about, is reaching
23:59
Speaker 2: you the way you want to be reached, with a
24:01
Speaker 2: message that resonates. And so it's not kind of you know,
24:05
Speaker 2: I've worked for people before who've said like spray and pray,
24:07
Speaker 2: like where you just like put it out there and
24:09
Speaker 2: you know, you buy a lot of mass media and
24:11
Speaker 2: you try to like get everybody. It's it's targeted now, right.
24:14
Speaker 2: Good marketers are really data driven. They understand need states,
24:18
Speaker 2: they understand their audience segmentation, They know who they're talking
24:21
Speaker 2: to and what's going to really resonate with them and
24:23
Speaker 2: really drive that relevancy and what they need and want
24:27
Speaker 2: from a relationship with the brand, right, which is ultimately
24:30
Speaker 2: what you're doing. The last thing I'd say in all
24:32
Speaker 2: of that is our loyalty program is another really important
24:36
Speaker 2: way in because with six million people in that program,
24:39
Speaker 2: it is it is a such an important marketing vehicle,
24:44
Speaker 2: but also just way for us to reward those really
24:48
Speaker 2: valuable guests. I mean, it's a great way also for
24:50
Speaker 2: us to deliver value because you can earn and redeem
24:53
Speaker 2: on both sides of the business. And so it's got
24:55
Speaker 2: a marketing role, but it's also got obviously a loyalty role.
24:59
Speaker 2: It's got you know, kind of frequency business driving roles.
25:02
Speaker 2: So I think Sarah and the team are really onto
25:05
Speaker 2: some exciting things, really driving that kind of stickiness and
25:10
Speaker 2: emotional connection that Krackerrel's always Crackerrel's always had an emotional
25:15
Speaker 2: place of people's heart, but really just making it feel
25:17
Speaker 2: more modern and relevant for today through the marketing.
25:21
Speaker 1: Yeah. Yeah, and a lot of you know, a lot
25:22
Speaker 1: of the chains that we've covered have revamped or loyalty
25:25
Speaker 1: programs this year at a lot of the big reason
25:28
Speaker 1: is they just weren't really working. So I guess you know,
25:31
Speaker 1: how confident are you that loyalty is incremental and kind
25:35
Speaker 1: of if you could talk a little bit about how you're.
25:36
Speaker 2: Measuring it, Yeah, sure, I'm confident now. I wasn't in
25:40
Speaker 2: the beginning, but we've spent We spent a few months
25:43
Speaker 2: over the summer really digging in. Part of it was
25:46
Speaker 2: hard because it was a brand new program, right, We
25:48
Speaker 2: only launched it last September or October, right, and so
25:52
Speaker 2: kind of just even before it was a year old,
25:54
Speaker 2: we had such such uptake from our guests, such love
25:58
Speaker 2: out of the gate for wanting to be loyalty program
26:00
Speaker 2: for Cracker Barrel. Like literally all of our activations still
26:03
Speaker 2: are way ahead above our projections. You know, we're sitting
26:07
Speaker 2: at over six million people at the end of Q one,
26:09
Speaker 2: and it's just tremendous in one year. They're spending more,
26:12
Speaker 2: they're coming more often, and so really our challenge the
26:16
Speaker 2: summer was is it incremental? How incremental is it? We
26:19
Speaker 2: saw that they were about twenty six percent of traffic.
26:22
Speaker 2: I think I've shared that publicly, and so we weren't
26:27
Speaker 2: sure in the beginning. I wasn't really sure at all,
26:29
Speaker 2: but we are very confident now we've really dissected that.
26:33
Speaker 2: We're really now starting to segment them, understand what motivates
26:37
Speaker 2: their behavior, what they want in a loyalty program too. Right,
26:40
Speaker 2: You kind of don't want to just feel like you're
26:42
Speaker 2: being marketed to or that it's turning into a transaction
26:45
Speaker 2: or somebody's just trying to get you in. You wanted
26:47
Speaker 2: to feel like genuine and in a way that adds
26:50
Speaker 2: value again to your life or solves a problem. So
26:53
Speaker 2: we're doing a ton of testing right now on offers,
26:57
Speaker 2: on constructs, on you know, ways to even think about
27:01
Speaker 2: the two sides of the business. So in Q one
27:04
Speaker 2: we did a lot of testing on retail plus restaurant
27:07
Speaker 2: and how does that resonate with different sub segments of
27:10
Speaker 2: the six million. So lots to continue to learn there.
27:14
Speaker 2: But what I love about it is it can be
27:16
Speaker 2: very hint driven, right, It's very factual, and then you
27:20
Speaker 2: can apply that across other populations and really get to
27:24
Speaker 2: some interesting business driving and more than anything like, yeah,
27:27
Speaker 2: it drives the business, but it drives that satisfaction and
27:31
Speaker 2: that emotional connection, which is really really what you're after
27:34
Speaker 2: as a brand. You know, you want people who genuinely
27:37
Speaker 2: love you, who want to be a part of what
27:38
Speaker 2: you're doing, and that to me is the big exciting
27:40
Speaker 2: part of it for sure.
27:43
Speaker 1: Can you share anything about the back of the house
27:45
Speaker 1: optimization tests that.
27:46
Speaker 2: You're doing, it's still early. I did talk about it
27:50
Speaker 2: a little bit, or Craig did a can remember which
27:52
Speaker 2: one of us got the question yesterday. But it's exciting
27:56
Speaker 2: because I really believe, as we talked earlier about, people
28:00
Speaker 2: want to do good work. They want to feel good
28:02
Speaker 2: about the work that they do, and when you can
28:04
Speaker 2: make it easier for them to do their jobs well, like, gosh,
28:08
Speaker 2: that's just nirvana for everybody. And a lot of our
28:11
Speaker 2: processes at Cracker Barrel have not changed in a very
28:14
Speaker 2: very long time. So what we sort of realized as
28:18
Speaker 2: we were going through the transformation is, gosh, we really
28:20
Speaker 2: need to look at the back of house and say,
28:22
Speaker 2: there's newer technology, there's newer ways to do things. Yeah,
28:26
Speaker 2: we know how to do it. We've been doing it
28:27
Speaker 2: this way for a while. And there's some real pros
28:29
Speaker 2: to that. There's some real things that you want to keep,
28:32
Speaker 2: but then there's also a lot of opportunity for improvement.
28:34
Speaker 2: And that's what this process is about. It's a multi
28:37
Speaker 2: year project, it's a big one, but it's really saying
28:41
Speaker 2: are there new processes we should look at? Are there
28:43
Speaker 2: new ways to make the food? Where really we start
28:45
Speaker 2: with quality as the number one metric and all of this, like,
28:49
Speaker 2: how do we improve quality and just think about other
28:53
Speaker 2: ways to drive efficiency and make the jobs more enjoyable.
28:55
Speaker 2: There's so much handwork and what we do at Cracker Barrel.
29:00
Speaker 2: We're not taking that away because that's the other thing
29:02
Speaker 2: people love, and our teams have such pride in what
29:04
Speaker 2: they do and the food that they create and that
29:06
Speaker 2: we share with people. But there are ways to do
29:09
Speaker 2: it easier, I or more easily. Sort that was bad grammar.
29:14
Speaker 2: I was talking to a group a couple of weeks
29:16
Speaker 2: ago that there were to do probably four five hundred
29:19
Speaker 2: people in the audience, and I said, okay, who literally
29:21
Speaker 2: goes and buys ahead of lettuce and chops it up
29:24
Speaker 2: to make a salad? Still today? Right, like two people
29:28
Speaker 2: raise their hand out of like five hundred. I was like, okay,
29:31
Speaker 2: you guys are absolute. You know, rock Star over achieves
29:35
Speaker 2: everybody else goes and buys pre bag lettuce right, pre
29:37
Speaker 2: washed and like and it's those kind of things that
29:40
Speaker 2: we are still hand doing all of that at Cracker Barrel.
29:42
Speaker 2: And it's like, gosh, we could buy pre chopped onions.
29:45
Speaker 2: They taste just the same as the onions that you cut.
29:49
Speaker 2: And those are the things that can make people's lives
29:51
Speaker 2: a lot easier in the back of the house, right,
29:53
Speaker 2: and you know, there's just there's just a lot to
29:55
Speaker 2: be said for things like that. So those are the
29:57
Speaker 2: kind of things that we're looking at. And then we'll
29:59
Speaker 2: attack a QUI, then we'll attack layout and the whole
30:02
Speaker 2: nine yards. That's why it's multi year, multi phases. First
30:05
Speaker 2: phase has been in test in a couple of stores,
30:07
Speaker 2: and I think, as I said on the announcer or
30:09
Speaker 2: on the call yesterday, we will roll it system wide
30:12
Speaker 2: the first phase in Q three and then we'll get
30:15
Speaker 2: after equipment, we'll get after layout and things like that.
30:18
Speaker 2: So it's exciting, yeah, for sure.
30:22
Speaker 1: All right, So what's your go to order?
30:24
Speaker 2: Mine? Well, gosh, it's it depends on the time of day.
30:28
Speaker 2: Breakfast pancakes. I love our Mama's pancakes. I'm a blueberry
30:32
Speaker 2: pancake fiend, and Cracker Rarel has the best pancakes in
30:35
Speaker 2: the world. Like, show me somebody who wants to challenge
30:38
Speaker 2: us on that, like we should do like the old
30:39
Speaker 2: school kind of taste off. But our pancakes are the best.
30:43
Speaker 2: So it's hard for me to know. I love it.
30:46
Speaker 2: I love it to see get the one with the
30:47
Speaker 2: like the fruity pebble things in it, or blueberries, or
30:50
Speaker 2: because we do all kinds of fun things.
30:52
Speaker 1: He does that. He's like a chocolate chip guy.
30:54
Speaker 2: He likes I love our blueberry pancakes, So that's probably
30:58
Speaker 2: my go to for the morning. What sh'all kind of
31:02
Speaker 2: bop around a lot of times. I'll really get our
31:04
Speaker 2: girl chicken tenderloins. I love those. They're so delicious. They're
31:07
Speaker 2: marinated and so yummy and a little bit more on
31:09
Speaker 2: the healthy side. For you dinner, I'm all over. If
31:12
Speaker 2: I'm in a restaurant that has some of the new
31:14
Speaker 2: test items. There's a new item coming out for Spring
31:17
Speaker 2: that I don't want to ruin for you that is amazing.
31:19
Speaker 2: I will definitely order that. I really I like to
31:24
Speaker 2: let the server guide me, you know, and see what
31:26
Speaker 2: they love and what they want me to try. Some
31:29
Speaker 2: stores are real proud of like the different things that
31:31
Speaker 2: they make, but I'll, you know, pretty much anything. I
31:35
Speaker 2: literally had the fish fry last Friday because somebody was
31:38
Speaker 2: in a restaurant the day after Thanksgiving and a guest
31:42
Speaker 2: had come in to talk to me and we were
31:45
Speaker 2: just talking and he's like, gosh, you know, I really
31:47
Speaker 2: love the fish fries, Like, you know, it used to
31:50
Speaker 2: be like twelve ninety nine, now it's fourteen ninety nine.
31:53
Speaker 2: He's like, I understand that you have to raise prices.
31:55
Speaker 2: He's like, it's still an amazing value. He's like, I
31:57
Speaker 2: get it. I get it, and I love the quality
32:00
Speaker 2: fish is better than this other person's fish. And he's like,
32:03
Speaker 2: you know. It was a really nice conversation. So he
32:05
Speaker 2: and I sat and had a fish fry together. So
32:06
Speaker 2: that was fun. I mean, I will literally go all
32:10
Speaker 2: over everything. I am also a big hashbron caster a girl,
32:13
Speaker 2: so I loved that from when I was a kid
32:16
Speaker 2: coming to Cracker Barrel and it's hard for me to
32:19
Speaker 2: not get that. Very cool. What's your go to?
32:23
Speaker 1: Oh? I'm a breakfast guy, so I intermitt it fast.
32:28
Speaker 2: Oh do you that's why you were talking about fasting
32:30
Speaker 2: before the hashbroncaster.
32:31
Speaker 1: Yeah, so you know a lot of times I like
32:33
Speaker 1: to do breakfast for lunch or dinner. So I'll lean
32:37
Speaker 1: in pretty heavily to the Crackbow breakfast at any time.
32:41
Speaker 2: Yeah. I did that Thursday night. So we had worked
32:43
Speaker 2: all day on Thanksgiving and I was with one of
32:46
Speaker 2: the leaders. And finally, I think at about eight o'clock
32:48
Speaker 2: we sat down to have Thanksgiving dinner and I had
32:53
Speaker 2: had the Country fried turkey the day before, and I've
32:56
Speaker 2: been eaten so much turkey because it's Thanksgiving. I was like,
32:59
Speaker 2: I think I'm gonna have Grandma's that I had a
33:01
Speaker 2: French toast and eggs Thanksgiving for better. So yeah, that's
33:05
Speaker 2: one of the great things about Crockerrell too. You your
33:07
Speaker 2: breakfast all day long, which is super fun.
33:10
Speaker 1: So yeah, well, good stuff, Thanks for doing this. I
33:13
Speaker 1: love your passion. You know, I'm looking forward to seeing
33:16
Speaker 1: all the things you accomplished with the team there.
33:19
Speaker 2: We're can a team. It's not man one person. We're
33:21
Speaker 2: seventy thousand strong out there taking care of our guests
33:24
Speaker 2: every single day and really just trying to make them happy.
33:26
Speaker 2: That's what it's all about.
33:27
Speaker 1: That's awesome. So where can the audience go to find
33:29
Speaker 1: the nearest cracker barrel? And other than TikTok and Instagram
33:33
Speaker 1: or any other social media platforms they should follow the.
33:35
Speaker 2: Those are probably the big ones. We're on Facebook too,
33:37
Speaker 2: because I know a lot of people are still on Facebook,
33:39
Speaker 2: even though I haven't been on in years. So I
33:41
Speaker 2: can't even tell you what the Crackerbil stuff looks like
33:43
Speaker 2: on Facebook. Shame on me. But I would say go
33:46
Speaker 2: to our website. It's a great place to find a store.
33:49
Speaker 2: The other thing is we do a great app and
33:52
Speaker 2: so in that as a store locator, you can also
33:55
Speaker 2: auto join the wait list. So if you are, you know,
33:58
Speaker 2: coming in on Sunday morning, when a lot of our
34:00
Speaker 2: guests like to join us, or Saturday morning for brunch
34:02
Speaker 2: or on the way to a you know, kids sports
34:05
Speaker 2: sporting event, you can join the waitlist from the app,
34:08
Speaker 2: which is kind of a hashtag pro tip, and then
34:11
Speaker 2: you just kind of walk in and sit down when
34:13
Speaker 2: you're ready, which is really exciting, so.
34:15
Speaker 1: Great, and I also want to thank the audience for
34:17
Speaker 1: tuning in. If you liked the episode, please subscribe and
34:20
Speaker 1: leave a review. Check back soon for another discussion on
34:23
Speaker 1: chopping it up.