January 7, 2025 • 34 mins
Cracker Barrel’s innovation team is “on fire” and just getting started, CEO Julie Masino tells Bloomberg Intelligence. In this episode of the Choppin’ It Up podcast, Masino sits down with BI’s senior restaurant and foodservice analyst Michael Halen to discuss the company’s approach to menu enhancement. She also comments on Cracker Barrel’s value, changes to its marketing program and a 17 percentage-point improvement in employee turnover in 1Q.
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Episode Transcript
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Speaker 1 (00:12):
Welcome to Chopping it Up. I'm your host, Mike Hallon,
the senior restaurant and food Service analyst at Bloomberg Intelligence.
Our research and that of bi's five hundred analysts around
the globe can be found exclusively on the Bloomberg terminal. Today,
we're joined by Julie Messino, CEO of Cracker Barrel. Thanks
for doing this, Julie.
Speaker 2 (00:29):
Thanks Mike. It's a pleasure to be here.
Speaker 1 (00:31):
All right. So you don't know this about me, but
I have a legendary appetite. So I'm looking forward to
accepting the challenge you issued on the last earnings call
about finishing that ginormous quote un.
Speaker 2 (00:41):
Cash broadcast or all Shepherds Pie, I love it. You
might be the first, Mike. Let's see if you can
do it.
Speaker 1 (00:48):
Okay, Yeah, I'll have to. Maybe I'll come in after
a fast. It might call that cheating if you will,
but whatever I need to do to get it done.
But it's funny. I listened to the call and then
have you ever seen great outdoors with John Candy?
Speaker 2 (01:00):
Yes?
Speaker 1 (01:00):
Of course, Monny eats the old ninety six er. So yeah,
after listening to a call, I brought that I pulled
that scene up on YouTube and I watch, It's so.
Speaker 2 (01:08):
Good, that's awesome. It's just such a delicious item, honestly,
Like I watched so many people. They get so excited
because it comes out and it's just it's gorgeous when
it comes out right, because it's in a skillet. It's
got this beautiful crusty hash brown casserole topping on it.
It's got dice tomatoes and like some stura cream, and
it just looks impressive and it's pretty exciting when it
comes down and people jump it and jump it with
(01:29):
gusto like they're gonna get it. They're gonna get the
very first star I saw somebody eating. And I was
at our Mel Juliet store that we had recently remodeled,
and I'm sitting next to this couple. It's an older couple.
They're very very sweet, and she was the one who
ordered it, and she like went in like hard, she
went in ham on it right, like she was gonna
do it's gonna do it. It's just like, oh, I
(01:49):
just can't. I mean, it was it's just cute because
it's so delicious, and you keep you keep going because
it's delicious right, Yeah, okay, I look for it. I
look forward to you doing it, Mike.
Speaker 1 (01:59):
I look, yeah, yeah, I'll let you know how it goes.
It sounds dangerous but at.
Speaker 2 (02:02):
The same time but delicious. Yeah, delicious, very cool.
Speaker 1 (02:06):
Please tell me a little bit about your career journey
and what attracted you to Cracker Barrell.
Speaker 2 (02:11):
Oh gosh, I mean, I'm one of those people. I've
just I've been so fortunate. I've been so grateful that
people have taken chances on me, and I've just you know,
worked for brands that I love. That's really always been
my guidepost, you know, from early on in my career,
you know, working at Coach, working at Jay Crew, they
(02:32):
were just brands that I loved. And then when I
had the opportunity to go to Starbucks and Taco Bell,
it was like, you know, it's like an absolute no brainer.
And then when crackerber called same kind of thing, it
was like, yeah, I mean it's always been like, is
it a brand that I love? Where are they in
their journey? Do I think that I can help them?
Do I have like a point of view on it?
(02:54):
And yeah, So it's I've just been I've been really
fortunate that people have taken chances on me, worked with
great people, and again brand.
Speaker 1 (03:02):
Said, I love so good stuff. How are you changing
the culture there?
Speaker 2 (03:08):
That's a better question to ask other people versus me.
I mean, I'm sure that my team would have a
lot to say about that. I think one, I really
believe in the art of the possible, and so I
really learned from some people that I've had the opportunity
to work for, to swing for the fences, to aim high,
(03:29):
to really approach problems with optimism because there were there
to solve situations for consumers and for your team, right,
how do you make their lives better? How do you
meet their needs, whether it's coffee or hush prodcast rule,
Chipherd's buy or a handbag. Like in my career, it's
like all of those things, and you're really just saying,
what is that problem or what is that opportunity that
(03:50):
I'm trying to solve, and how do we get after it?
So I am a pretty optimistic person. I believe most
things in life can be done, they can be fixed,
they can you know, and they're doing. And so I
also really believe in collaboration. I believe in people bringing
their best self every day. I believe in learning from
where you find yourself and constantly improving. So that's probably
(04:12):
the biggest thing I talk with the teams about is
like athlete I call it athlete mentality. Right, you know,
somebody wins the Super Bowl, they're back in the I mean,
they go on the party and they get drunk. But
then the next day they're back and they're watching the
tapes like, where did we lose inches? Where did we
you know, where could we have done a little bit better?
And I think, especially in the restaurant industry, like every
guest in front of you is an opportunity to be better,
(04:34):
you know, to do better than you did the last time.
And it's just such a great It's That's what I
love about it. That just the frequency that, like you know,
some people would argue I'm a little masochistic in that,
but like you just you always have the opportunity to
be better and to do more, and that to me
is really really exciting.
Speaker 1 (04:53):
Cool. So as you're you've made a lot of new
hires recently, as you're executive team finally in place.
Speaker 2 (04:59):
Yeah, yeah, I mean I had said I wouldn't say
a lot really just too I mean, Chris, our new
head of strategy, started I think in like March, and
then Sarah joined us in July. Both are just amazing executives.
But we've got a great team. We've got a team
that really has a lot of industry experience, and I
think that balance of kind of old and new but
(05:19):
fresh thinking from the outside and really just people who
kind of question. I mean, I think probably another thing
I'm doing to the culture is I question everything. If
you find somebody who's like worked for me before, they'll
be like, oh, yeah, she could be exhausting. She asked
a lot of questions. But really with the intent of
being better right and learning and moving things forward, I
have a lot of curiosity about how to improve, how
(05:41):
to just constantly be our best. And so I think
that's where building a team. You know, when you're building
an executive team or just teams in general, whether you're
the GM at a restaurant, you know you're trying to
put together an assemblage of talents and skill set and
people who don't always approach things the same way. Because
I find that when you bring diverse thinking and perspectives together,
that's where you end up with the best answers, So
(06:04):
for me, that's what I'm always trying to orchestrate as well.
Speaker 1 (06:08):
Great, you spent a lot a lot of time talking
about the company's food enhancements on the last earnings call,
So it seems like a the innovation team has been
busy and the new items are resonating better than they.
Speaker 2 (06:20):
Have for the last several years.
Speaker 1 (06:22):
How has the R and D process been improved?
Speaker 2 (06:25):
Well, so today that's now reporting up through Sarah, and
Sarah's brought in a great guy from the industry. His
name is Matt Banton. We're super excited to have both
of them there because they bring fresh perspectives to kracobral
And then we've got some people who've been with Crocobell
for a really long time. Chef Bill Joe really the
team there, They really Tina. They know the brand, they
(06:47):
know our vendors, they know kind of our standards and
all of that. And so again it's that mix up
of old and new, fresh perspective, people who really loved
the brand for a long time. We're working on an
innovation right now that is going to pool. Oh your mind.
It's like it is one of those things where similar
to hashbron cast role shepherds Pie. The team took an
(07:08):
icon an icon of cracker barrel and just said, how
do we think about it differently, which is kind of
what happened with hashbron cast role shepherds Pie. Like, what
else can we do with this hashbron cast role? Can
we want like a pancake? Make it a topic on something.
We've turned them intoitator tots, like We've done all kinds
of fun stuff and so this new one, I'm just
I can't wait to actually talk about it publicly. But
they're just always innovating and Matt is such a driver.
(07:31):
I'm so excited to have him on the team. He's
got energy probably similar to mine, and that he's he's
really pushing to fill the pipeline, to think about the
stage game process a little bit differently, to make sure
that we have plenty of room for testing and learning.
We're also pulling out the archives. We're looking at things
that we've done in the past that might need to
(07:53):
come back in a new and different way, or it
might be time to revisit some of those things. So
the team is just really energized, I would say, under
their leadership, and I think look like anything when you
have momentum. Momentum is so contagious, it's so precious. I'm
always telling the leadership team, like our job as leaders
is to create momentum, because when you have it, it's
(08:15):
just the flywheels starts spinning and that's when things get
really really good. And I would say an innovation pipeline
is the exact same way when you are at it
and you're filling it, and like innovation begets innovation, and
that creative mindset starts spinning. Like it's just it's a
really rich and wonderful place to be. And that team
is on fire right now, really thinking about a lot
of good stuff. So I we tell you hash Broncast, Roll,
(08:36):
Shepherd's Pie, the pot Roast, the new chicken and rice,
the ribs. That's this is just the beginning. We've got
a few things if you kind of get out there
a little bit. We've got a few things in tests
around the country, and we've got a big test that's
getting ready to launch, similar to the last kind of
twenty item tests that we did in Texas. We're doing
another really big one in December where some I know
(09:00):
some things in there are going to be like absolute
rock stars and going to hit the menu. So team
has been real busy. I'm real proud of them.
Speaker 1 (09:06):
Exciting hourly turnover improved the impressive seventeen percentage points in
the first quarter. What's driving that?
Speaker 2 (09:14):
Gosh, that's really I can't take any credit for that.
That's the field, right, That is great leadership. We've made
some changes. We've really talked to the field leaders about
owning development, about owning ninety day turnover, about literally onboarding
everybody onto their teams and making sure that they feel
like they're building the right teams and that they are
(09:35):
really personally in that. We've we had some other positions
in the past a cracker barrel that were sort of
in between the GM and you know, a server, or
the GM and the girl cook. And what we said was, no,
you're the leader, this is your team. We want you
to build it, we want you to own it. Now
they've got a lot on their plates, so not exactly
an easy conversation, but they get it right. And what
(09:57):
I think that does is it just builds accountability, of
build trust, It builds that sort of I'm in it
with you mentality. I'd say that's The biggest part, frankly
is just really leaders focused on and focused on building
their teams, developing their talent. But then I would say, secondly,
we are really trying to focus and prioritize better as
an organization and not keep changing the plan, not keep
(10:21):
changing what we ask the field to do. Tell you
one thing on one day and change it a couple
days later. That's chaos. If you've ever operated in an
environment like that, it's really hard. And we had been
doing a little bit of that in the past, and
so really keeping them focused, keeping them on the right things,
taking care of guests, the metrics that matter. You know,
We've spent a lot of time getting them, getting them
(10:44):
really focused on executing with excellence every guest, every day,
every shift. And I really believe that's what's paying off
because then as a team member, you know what to do,
you know what's expected of you, you know how you're
going to be judged and what you're going to be
held accountable to, and that's exciting, right. I think one
of my management philosophies is that people don't wake up
(11:05):
wanting to screw up, Like they don't come into work
wanting to do a bad job. They really don't. They
come in wanting to be recognized for the work that
they're doing. They've made a choice. They could do many
other things, work many other places, but they're there, and
so recognizing that contribution, helping them be their best, giving
them the tools to make their jobs easier, to make
(11:25):
them enjoyable, to recognize their contributions to me is really
what being a great leader is all about, and building
those teams is all about because people want to do good,
they really do, especially in the hospitality business. You want
to take care of people. You want to have the
time to smile and chat with them and create their
day and work together as a team. That's what this
industry is all about.
Speaker 1 (11:46):
Yeah, well, it sounds like transparency is part of the
culture shift, right, Like that's as.
Speaker 2 (11:53):
An employee, that's yeah, for sure.
Speaker 1 (11:55):
That's a wonderful thing. Yeah, you want to look to
your point so great good stuff.
Speaker 2 (12:00):
In trouble Sometimes sometimes I say things I really shouldn't say,
you know, Yeah, the team or the finance.
Speaker 1 (12:05):
Team is like, yeah, they can be a stick in
the muddle.
Speaker 2 (12:13):
So yeah, every so often, No, but again, people you
got to lean into the fact that people want to
do the right thing. And when you give them the
information and make better decisions about where you're going and
why and what's important, I believe that people rise to
the occasion.
Speaker 1 (12:27):
Yeah, you mentioned on the call that value scores improved
even though pricing was up four point seven percent in
the quarter. How are you delivering value to your customers?
Speaker 2 (12:36):
Gosh, it's one of the things that Cracker Barrel has
done so well for so long, Mike. I I was
shocked when I got here, truly, Like I hadn't actually
eaten at a Cracker Barrel in a while. I grew
up going to it. But I came in and my husband,
who's like good Jersey boy East Coaster, he had never
actually been to a Cracker Barrel when I was interviewing
(12:57):
for this job. When we went and we sat down
and he was like, my god, you get so much
food for a such a great price. Like he's like,
this is incredible, you know, And it's I think it's
one of those little I want to say, like hidden
gems or like untold you know, we don't shout it
from the rooftops, but it's the thing that in all
(13:19):
the research as we were building the transformation plan, that
came back time and time and time again from our guests.
It wasn't that you have the cheapest price. It was
that you give us a fair price, a reasonable price,
but really delicious, abundant quality food. And that is the
magic of cracker Barrel. It's not about being the cheapest
(13:39):
or whatever. But I mean, that's sort of the other
interesting thing. I don't know if you heard Craig talk
about it yesterday, but our average check for the quarter
is like fifteen dollars, and the average casual dining check
in the same quarter as twenty seven dollars, right, So
it just we're a screaming deal for the home cook nature,
(14:01):
the handcrafted nature of our food, how delicious it is,
how abundant it is. So I think that's that guess
really recognize that. So while we've had to take a
little bit of price to offset inflation to do some
of the things that we're doing, and frankly we were
behind on price. We hadn't taken a lot of price
over the last several years. There was some opportunity as
we were looking because people weren't playing back that we
(14:21):
were the lowest even though we were, so we knew
we had a little bit of opportunity to sort of
right size some of those like item prices, but really
make sure that we're focusing on creating a great experience,
delivering high quality food, making sure that people felt like
it was still abundant because we haven't changed portion sizes
in years either. So really just all of those things
(14:42):
continuing to come together. I think people are really recognizing
it and it's resonating with them when value is so
important because so many people are screaming and dealing and
you know, it's just not kind of how we play
our game.
Speaker 1 (14:55):
Yeah, some of the companies you know that we cover
that are outperforming, actually most of them are have higher
cost of goods sold than their competitors, right, so they're
giving more, you know, on that plate than their competitors,
and its showing up in the sales and traffic.
Speaker 2 (15:10):
Yeah, for sure. I mean people people eat what there is.
They always have, they always will, right Like when that
plate comes out, it's it's got to beautiful, it's going
to be full, it's going to be what you're expecting.
And then you're doing the math the whole time, like
from when you order to when you actually pay the bill.
Is that is that value equation right?
Speaker 1 (15:26):
You know, so, I'd imagine the remodels will help, But
how else do you plan to get gen Z to
put Cracker Barrel in its consideration set?
Speaker 2 (15:35):
Mike, Clearly your TikTok account is not up to date.
I mean we are, we are all over that with
some really fun ways. I mean one of the beauties
of Cracker Barrel is that we really do connect across generations. Right,
It's not just about the boomers or X or Z
or Alpha. Like. Literally, it's a place where you walk in.
(15:56):
It's why I love being out in our restaurants. It
feels like you're in America. You look around and everybody
looks different. They're different ages, they're different ethnicities. You see families,
you see singles, you see friends together. It's literally a
slice of America, which I really really love. Everyone's welcome
and everybody enjoys Craco Barrel. But specifically that younger generation,
they're really finding us. They're finding us in some interesting ways. One,
(16:20):
they probably already experienced us with their family, either their
parents or their grandparents or something like that. But truly,
we've had quite a few things go viral on TikTok lately,
more so in the merch category. So I don't know.
I actually this was not planned, but I do have
these sitting here on my desk. Have you seen these?
These are these Altoid retro sours. This is like a
(16:42):
huge item from like I want to say, the nineties,
maybe it's the two thousands. I'm not honestly not even sure.
But we are an exclusive carrier of these. These cannot
keep in stock, Like I literally had to beg a
favor to get them because I really love them. But
those so those have blown up all over the socials,
all over TikTok. But the other crazy fun thing is
(17:04):
we have these sweaters that we call toofers because it
looks like it looks like you're wearing a sweater or
a sweatshirt with a T shirt underneath it, and but
of course you're not. And they're embroidered and they have
all kinds of fun things on it, everything from like
Christmas things to the latest collection that the merch team
did is actually a hunting and fishing collection, so it's
(17:26):
like deer and like a bass, and like all kinds
of those blew up on TikTok. We had all these
like gen A gen Z girls like filming themselves running
into Cracker Girl to get these things. They of course
they all buy like an extra large and like, you know,
because big sweaters are in again and we literally sold
out of them in like a week. So it's like
(17:47):
one of the hottest, hottest things we've had. And so
we've got Christmas ones right now that are all the rage.
But you know, we are, we are doing it so
lots of ways. And then you know, as we were
talking about earlier, there's so many items on the menu
that really are for everybody, you know, whether whether you
want to have something as indulgent as the Ashbroncast Rule
Shepherd's By or something might a like our girled chicken tenderloine,
(18:09):
which is like a perennial favorite, low calorie, delicious marinated
chicken brass. Like, you know, we've got something for everybody
on the menu.
Speaker 1 (18:18):
Great, And yeah, I gotta I've been neglecting my TikTok feed.
I'm not gonna lie.
Speaker 2 (18:24):
I was like, you clearly have not seen Cracker all
because we are. We are. It's fun, It's super fun.
It's just such a fun way to communicate with your guests.
You know, that's really pillar one of our transformation is
about making sure that we are relevantly out there communicating
with people the way they want to be communicated with,
right and so, and that's a little different generationally, Right,
(18:44):
it's a little different based on your need state in
your life. If you have children or you don't, or
you know, you're going from work, you want delivery, you know.
So we just have to make sure that we're in
all of those spaces in ways that are right for
the brand and right for our guests, so that we're
there to make sure that again we're solving problems for people.
So letting people know that we got you, We've got
all these great items in these great solutions in cracker
(19:06):
Barrel can be a solution for them across many dimensions
of their life.
Speaker 1 (19:10):
Yeah, it's great, and it's really paid dividends TikTok for
you know, Chili's this year.
Speaker 2 (19:15):
They absolutely hundred percent. George and Kevin have done a
great job on that.
Speaker 1 (19:19):
Yeah, all right, So you communicate that remodels are an
important piece of the turnaround with restaurants saintst Our sales
outperforming retail. Could there be an opportunity to maybe shrink
the size of the retail store. Yeah.
Speaker 2 (19:35):
I mean, look, you never say never to anything because
as I already told you, I look at everything, I
question everything all the time. But no, right now we're
thinking quite the opposite. Retail is such a differentiator for us.
It is, I truly believe, part of the special sauce
of Cracker Barrel. You know, it is so unique. I
mean I challenge you to wander around the Cracker Barrel
(19:55):
retail store and not find something like there's something for
everybody in from food to cord, apparel to games and toys.
I mean literally we've got everything. I mean cards, I mean,
it's crazy the amount of stuff we have. But that's
just part of the charm, right there's something for everybody.
And what we're doing right now though with retail is
(20:18):
really saying kind of like we did on restaurant, what
are the metrics that matter? How do we actually really
think about the ways to win and what's important in
this business? Right on the restaurant side, it was like
food made recipe, right, it's got to be to people
in a quick and timely manner.
Speaker 1 (20:32):
You know.
Speaker 2 (20:33):
The skill level of some of the different positions was
important and making sure that things are made to recipe.
And you know, we're doing the same thing on retail,
so what should the layout be, right, I don't think
we actually have an optimized layout over on that side
of the business today. We in a lot of the
work on the strategic transformation. People said, I love that
(20:53):
side of the business, but like gosh, I feel like
I'm always standing in the wrong place. Sometimes I'm bumping
into something. I'm trying to get into the restaurant and
other people are trying to come out. And so it's
a little bit of a pain point today in terms
of customer flow, not that they don't like being there,
but we can improve and optimize the customer flow. So
we've just done a lot of customer journey work, kind
(21:15):
of first time in the history of the company, to
really understand journeys and what you know, if you're coming
in for a to go order, what that journey looks like,
versus if you're coming in for breakfast with your family,
versus if you're coming in for a quick lunch, like,
those journeys are all really really different. And so how
do we optimize the layout of the retail space and
the items and where they are and how people want
to shop for them in a way that really again
(21:37):
meets their needs and provides a great experience. So if
you come back to kind of the three imperatives that
I've talked about that underpin the transformation, right, the first
one is that relevancy piece, Right, do we have all
the right things relevancies about gaining market share? You know,
how do we make sure that when you're thinking about
the decisions whether it's to eat or shop, preper brels
(21:57):
top of mind. The second one is food and experiences
that people love and crave, and so that all comes together.
And then the last one is driving profitability. So as
we have those underpin everything we're doing. Thinking about the
layout of the retail items, where they are, how you
journey through that is really really important to driving all
of those, especially that second experiential pillar.
Speaker 1 (22:18):
And advertising during NASCAR and college football as well as
Bravo have been some of the changes that have been
made to Cracker Barrows marketing. Right, what else can you
share about your plans for the rest of the fiscal year.
Speaker 2 (22:29):
Yeah, maybe you should have Sarah come on and talk
to you about all the great work that she and
the team are taking on Right now, I would point
you towards our homemark promotion. This is really the first
time we've done something like this over the holidays. It's
super exciting. You got to go in through our loyalty program,
so it was sort of highlighting that. But somebody is
(22:50):
going to win a walk on role in a Hallmark
holiday movie, which I mean talk about cross generational appeal.
That's one of those things too that like young and old,
everybody like finds himself watching a holiday Hallmark movie and
in a weird way enjoying it. I think. So it is.
It's an exciting promotion. So we've got a lot of
(23:12):
cool things going on there. And frankly, the other nice
thing about it is our team members can win too
because we allow them to participate in the loyalty program.
So I'm really curious, like if a guest is going
to win, if a team member is going to win.
I've got the guy who leads all the field operations.
He's like gunning away, you know. So it's it's it's
super it's a super fun thing. But that's showing up
(23:32):
in lots of different ways. I get. We talked about
TikTok already that's a great place where we're really driving
a different type of content and a different type of engagement.
I think you'll see some real changes in the way
we approach Instagram that's looking and feeling really different under
Sarah's leadership, and really just trying to match up the
message with the guest with the channel, right. And then
(23:55):
that's what great modern marketing is all about, is reaching
you the way you want to be reached, with a
message that resonates. And so it's not kind of you know,
I've worked for people before who've said like spray and pray,
like where you just like put it out there and
you know, you buy a lot of mass media and
you try to like get everybody. It's it's targeted now, right.
Good marketers are really data driven. They understand need states,
(24:18):
they understand their audience segmentation, They know who they're talking
to and what's going to really resonate with them and
really drive that relevancy and what they need and want
from a relationship with the brand, right, which is ultimately
what you're doing. The last thing I'd say in all
of that is our loyalty program is another really important
way in because with six million people in that program,
(24:39):
it is it is a such an important marketing vehicle,
but also just way for us to reward those really
valuable guests. I mean, it's a great way also for
us to deliver value because you can earn and redeem
on both sides of the business. And so it's got
a marketing role, but it's also got obviously a loyalty role.
(24:59):
It's got you know, kind of frequency business driving roles.
So I think Sarah and the team are really onto
some exciting things, really driving that kind of stickiness and
emotional connection that Krackerrel's always Crackerrel's always had an emotional
place of people's heart, but really just making it feel
more modern and relevant for today through the marketing.
Speaker 1 (25:21):
Yeah. Yeah, and a lot of you know, a lot
of the chains that we've covered have revamped or loyalty
programs this year at a lot of the big reason
is they just weren't really working. So I guess you know,
how confident are you that loyalty is incremental and kind
of if you could talk a little bit about how you're.
Speaker 2 (25:36):
Measuring it, Yeah, sure, I'm confident now. I wasn't in
the beginning, but we've spent We spent a few months
over the summer really digging in. Part of it was
hard because it was a brand new program, right, We
only launched it last September or October, right, and so
kind of just even before it was a year old,
we had such such uptake from our guests, such love
(25:58):
out of the gate for wanting to be loyalty program
for Cracker Barrel. Like literally all of our activations still
are way ahead above our projections. You know, we're sitting
at over six million people at the end of Q one,
and it's just tremendous in one year. They're spending more,
they're coming more often, and so really our challenge the
summer was is it incremental? How incremental is it? We
(26:19):
saw that they were about twenty six percent of traffic.
I think I've shared that publicly, and so we weren't
sure in the beginning. I wasn't really sure at all,
but we are very confident now we've really dissected that.
We're really now starting to segment them, understand what motivates
their behavior, what they want in a loyalty program too. Right,
(26:40):
You kind of don't want to just feel like you're
being marketed to or that it's turning into a transaction
or somebody's just trying to get you in. You wanted
to feel like genuine and in a way that adds
value again to your life or solves a problem. So
we're doing a ton of testing right now on offers,
on constructs, on you know, ways to even think about
(27:01):
the two sides of the business. So in Q one
we did a lot of testing on retail plus restaurant
and how does that resonate with different sub segments of
the six million. So lots to continue to learn there.
But what I love about it is it can be
very hint driven, right, It's very factual, and then you
can apply that across other populations and really get to
(27:24):
some interesting business driving and more than anything like, yeah,
it drives the business, but it drives that satisfaction and
that emotional connection, which is really really what you're after
as a brand. You know, you want people who genuinely
love you, who want to be a part of what
you're doing, and that to me is the big exciting
part of it for sure.
Speaker 1 (27:43):
Can you share anything about the back of the house
optimization tests that.
Speaker 2 (27:46):
You're doing, it's still early. I did talk about it
a little bit, or Craig did a can remember which
one of us got the question yesterday. But it's exciting
because I really believe, as we talked earlier about, people
want to do good work. They want to feel good
about the work that they do, and when you can
make it easier for them to do their jobs well, like, gosh,
(28:08):
that's just nirvana for everybody. And a lot of our
processes at Cracker Barrel have not changed in a very
very long time. So what we sort of realized as
we were going through the transformation is, gosh, we really
need to look at the back of house and say,
there's newer technology, there's newer ways to do things. Yeah,
we know how to do it. We've been doing it
this way for a while. And there's some real pros
(28:29):
to that. There's some real things that you want to keep,
but then there's also a lot of opportunity for improvement.
And that's what this process is about. It's a multi
year project, it's a big one, but it's really saying
are there new processes we should look at? Are there
new ways to make the food? Where really we start
with quality as the number one metric and all of this, like,
how do we improve quality and just think about other
(28:53):
ways to drive efficiency and make the jobs more enjoyable.
There's so much handwork and what we do at Cracker Barrel.
We're not taking that away because that's the other thing
people love, and our teams have such pride in what
they do and the food that they create and that
we share with people. But there are ways to do
it easier, I or more easily. Sort that was bad grammar.
(29:14):
I was talking to a group a couple of weeks
ago that there were to do probably four five hundred
people in the audience, and I said, okay, who literally
goes and buys ahead of lettuce and chops it up
to make a salad? Still today? Right, like two people
raise their hand out of like five hundred. I was like, okay,
you guys are absolute. You know, rock Star over achieves
(29:35):
everybody else goes and buys pre bag lettuce right, pre
washed and like and it's those kind of things that
we are still hand doing all of that at Cracker Barrel.
And it's like, gosh, we could buy pre chopped onions.
They taste just the same as the onions that you cut.
And those are the things that can make people's lives
a lot easier in the back of the house, right,
and you know, there's just there's just a lot to
(29:55):
be said for things like that. So those are the
kind of things that we're looking at. And then we'll
attack a QUI, then we'll attack layout and the whole
nine yards. That's why it's multi year, multi phases. First
phase has been in test in a couple of stores,
and I think, as I said on the announcer or
on the call yesterday, we will roll it system wide
the first phase in Q three and then we'll get
after equipment, we'll get after layout and things like that.
(30:18):
So it's exciting, yeah, for sure.
Speaker 1 (30:22):
All right, So what's your go to order?
Speaker 2 (30:24):
Mine? Well, gosh, it's it depends on the time of day.
Breakfast pancakes. I love our Mama's pancakes. I'm a blueberry
pancake fiend, and Cracker Rarel has the best pancakes in
the world. Like, show me somebody who wants to challenge
us on that, like we should do like the old
school kind of taste off. But our pancakes are the best.
So it's hard for me to know. I love it.
(30:46):
I love it to see get the one with the
like the fruity pebble things in it, or blueberries, or
because we do all kinds of fun things.
Speaker 1 (30:52):
He does that. He's like a chocolate chip guy.
Speaker 2 (30:54):
He likes I love our blueberry pancakes, So that's probably
my go to for the morning. What sh'all kind of
bop around a lot of times. I'll really get our
girl chicken tenderloins. I love those. They're so delicious. They're
marinated and so yummy and a little bit more on
the healthy side. For you dinner, I'm all over. If
I'm in a restaurant that has some of the new
(31:14):
test items. There's a new item coming out for Spring
that I don't want to ruin for you that is amazing.
I will definitely order that. I really I like to
let the server guide me, you know, and see what
they love and what they want me to try. Some
stores are real proud of like the different things that
they make, but I'll, you know, pretty much anything. I
(31:35):
literally had the fish fry last Friday because somebody was
in a restaurant the day after Thanksgiving and a guest
had come in to talk to me and we were
just talking and he's like, gosh, you know, I really
love the fish fries, Like, you know, it used to
be like twelve ninety nine, now it's fourteen ninety nine.
He's like, I understand that you have to raise prices.
(31:55):
He's like, it's still an amazing value. He's like, I
get it. I get it, and I love the quality
fish is better than this other person's fish. And he's like,
you know. It was a really nice conversation. So he
and I sat and had a fish fry together. So
that was fun. I mean, I will literally go all
over everything. I am also a big hashbron caster a girl,
so I loved that from when I was a kid
(32:16):
coming to Cracker Barrel and it's hard for me to
not get that. Very cool. What's your go to?
Speaker 1 (32:23):
Oh? I'm a breakfast guy, so I intermitt it fast.
Speaker 2 (32:28):
Oh do you that's why you were talking about fasting
before the hashbroncaster.
Speaker 1 (32:31):
Yeah, so you know a lot of times I like
to do breakfast for lunch or dinner. So I'll lean
in pretty heavily to the Crackbow breakfast at any time.
Speaker 2 (32:41):
Yeah. I did that Thursday night. So we had worked
all day on Thanksgiving and I was with one of
the leaders. And finally, I think at about eight o'clock
we sat down to have Thanksgiving dinner and I had
had the Country fried turkey the day before, and I've
been eaten so much turkey because it's Thanksgiving. I was like,
I think I'm gonna have Grandma's that I had a
(33:01):
French toast and eggs Thanksgiving for better. So yeah, that's
one of the great things about Crockerrell too. You your
breakfast all day long, which is super fun.
Speaker 1 (33:10):
So yeah, well, good stuff, Thanks for doing this. I
love your passion. You know, I'm looking forward to seeing
all the things you accomplished with the team there.
Speaker 2 (33:19):
We're can a team. It's not man one person. We're
seventy thousand strong out there taking care of our guests
every single day and really just trying to make them happy.
That's what it's all about.
Speaker 1 (33:27):
That's awesome. So where can the audience go to find
the nearest cracker barrel? And other than TikTok and Instagram
or any other social media platforms they should follow the.
Speaker 2 (33:35):
Those are probably the big ones. We're on Facebook too,
because I know a lot of people are still on Facebook,
even though I haven't been on in years. So I
can't even tell you what the Crackerbil stuff looks like
on Facebook. Shame on me. But I would say go
to our website. It's a great place to find a store.
The other thing is we do a great app and
so in that as a store locator, you can also
auto join the wait list. So if you are, you know,
(33:58):
coming in on Sunday morning, when a lot of our
guests like to join us, or Saturday morning for brunch
or on the way to a you know, kids sports
sporting event, you can join the waitlist from the app,
which is kind of a hashtag pro tip, and then
you just kind of walk in and sit down when
you're ready, which is really exciting, so.
Speaker 1 (34:15):
Great, and I also want to thank the audience for
tuning in. If you liked the episode, please subscribe and
leave a review. Check back soon for another discussion on
chopping it up.
Welcome to Chopping it Up. I'm your host, Mike Hallon,
the senior restaurant and food Service analyst at Bloomberg Intelligence.
Our research and that of bi's five hundred analysts around
the globe can be found exclusively on the Bloomberg terminal. Today,
we're joined by Julie Messino, CEO of Cracker Barrel. Thanks
for doing this, Julie.
Speaker 2 (00:29):
Thanks Mike. It's a pleasure to be here.
Speaker 1 (00:31):
All right. So you don't know this about me, but
I have a legendary appetite. So I'm looking forward to
accepting the challenge you issued on the last earnings call
about finishing that ginormous quote un.
Speaker 2 (00:41):
Cash broadcast or all Shepherds Pie, I love it. You
might be the first, Mike. Let's see if you can
do it.
Speaker 1 (00:48):
Okay, Yeah, I'll have to. Maybe I'll come in after
a fast. It might call that cheating if you will,
but whatever I need to do to get it done.
But it's funny. I listened to the call and then
have you ever seen great outdoors with John Candy?
Speaker 2 (01:00):
Yes?
Speaker 1 (01:00):
Of course, Monny eats the old ninety six er. So yeah,
after listening to a call, I brought that I pulled
that scene up on YouTube and I watch, It's so.
Speaker 2 (01:08):
Good, that's awesome. It's just such a delicious item, honestly,
Like I watched so many people. They get so excited
because it comes out and it's just it's gorgeous when
it comes out right, because it's in a skillet. It's
got this beautiful crusty hash brown casserole topping on it.
It's got dice tomatoes and like some stura cream, and
it just looks impressive and it's pretty exciting when it
comes down and people jump it and jump it with
(01:29):
gusto like they're gonna get it. They're gonna get the
very first star I saw somebody eating. And I was
at our Mel Juliet store that we had recently remodeled,
and I'm sitting next to this couple. It's an older couple.
They're very very sweet, and she was the one who
ordered it, and she like went in like hard, she
went in ham on it right, like she was gonna
do it's gonna do it. It's just like, oh, I
(01:49):
just can't. I mean, it was it's just cute because
it's so delicious, and you keep you keep going because
it's delicious right, Yeah, okay, I look for it. I
look forward to you doing it, Mike.
Speaker 1 (01:59):
I look, yeah, yeah, I'll let you know how it goes.
It sounds dangerous but at.
Speaker 2 (02:02):
The same time but delicious. Yeah, delicious, very cool.
Speaker 1 (02:06):
Please tell me a little bit about your career journey
and what attracted you to Cracker Barrell.
Speaker 2 (02:11):
Oh gosh, I mean, I'm one of those people. I've
just I've been so fortunate. I've been so grateful that
people have taken chances on me, and I've just you know,
worked for brands that I love. That's really always been
my guidepost, you know, from early on in my career,
you know, working at Coach, working at Jay Crew, they
(02:32):
were just brands that I loved. And then when I
had the opportunity to go to Starbucks and Taco Bell,
it was like, you know, it's like an absolute no brainer.
And then when crackerber called same kind of thing, it
was like, yeah, I mean it's always been like, is
it a brand that I love? Where are they in
their journey? Do I think that I can help them?
Do I have like a point of view on it?
(02:54):
And yeah, So it's I've just been I've been really
fortunate that people have taken chances on me, worked with
great people, and again brand.
Speaker 1 (03:02):
Said, I love so good stuff. How are you changing
the culture there?
Speaker 2 (03:08):
That's a better question to ask other people versus me.
I mean, I'm sure that my team would have a
lot to say about that. I think one, I really
believe in the art of the possible, and so I
really learned from some people that I've had the opportunity
to work for, to swing for the fences, to aim high,
(03:29):
to really approach problems with optimism because there were there
to solve situations for consumers and for your team, right,
how do you make their lives better? How do you
meet their needs, whether it's coffee or hush prodcast rule,
Chipherd's buy or a handbag. Like in my career, it's
like all of those things, and you're really just saying,
what is that problem or what is that opportunity that
(03:50):
I'm trying to solve, and how do we get after it?
So I am a pretty optimistic person. I believe most
things in life can be done, they can be fixed,
they can you know, and they're doing. And so I
also really believe in collaboration. I believe in people bringing
their best self every day. I believe in learning from
where you find yourself and constantly improving. So that's probably
(04:12):
the biggest thing I talk with the teams about is
like athlete I call it athlete mentality. Right, you know,
somebody wins the Super Bowl, they're back in the I mean,
they go on the party and they get drunk. But
then the next day they're back and they're watching the
tapes like, where did we lose inches? Where did we
you know, where could we have done a little bit better?
And I think, especially in the restaurant industry, like every
guest in front of you is an opportunity to be better,
(04:34):
you know, to do better than you did the last time.
And it's just such a great It's That's what I
love about it. That just the frequency that, like you know,
some people would argue I'm a little masochistic in that,
but like you just you always have the opportunity to
be better and to do more, and that to me
is really really exciting.
Speaker 1 (04:53):
Cool. So as you're you've made a lot of new
hires recently, as you're executive team finally in place.
Speaker 2 (04:59):
Yeah, yeah, I mean I had said I wouldn't say
a lot really just too I mean, Chris, our new
head of strategy, started I think in like March, and
then Sarah joined us in July. Both are just amazing executives.
But we've got a great team. We've got a team
that really has a lot of industry experience, and I
think that balance of kind of old and new but
(05:19):
fresh thinking from the outside and really just people who
kind of question. I mean, I think probably another thing
I'm doing to the culture is I question everything. If
you find somebody who's like worked for me before, they'll
be like, oh, yeah, she could be exhausting. She asked
a lot of questions. But really with the intent of
being better right and learning and moving things forward, I
have a lot of curiosity about how to improve, how
(05:41):
to just constantly be our best. And so I think
that's where building a team. You know, when you're building
an executive team or just teams in general, whether you're
the GM at a restaurant, you know you're trying to
put together an assemblage of talents and skill set and
people who don't always approach things the same way. Because
I find that when you bring diverse thinking and perspectives together,
that's where you end up with the best answers, So
(06:04):
for me, that's what I'm always trying to orchestrate as well.
Speaker 1 (06:08):
Great, you spent a lot a lot of time talking
about the company's food enhancements on the last earnings call,
So it seems like a the innovation team has been
busy and the new items are resonating better than they.
Speaker 2 (06:20):
Have for the last several years.
Speaker 1 (06:22):
How has the R and D process been improved?
Speaker 2 (06:25):
Well, so today that's now reporting up through Sarah, and
Sarah's brought in a great guy from the industry. His
name is Matt Banton. We're super excited to have both
of them there because they bring fresh perspectives to kracobral
And then we've got some people who've been with Crocobell
for a really long time. Chef Bill Joe really the
team there, They really Tina. They know the brand, they
(06:47):
know our vendors, they know kind of our standards and
all of that. And so again it's that mix up
of old and new, fresh perspective, people who really loved
the brand for a long time. We're working on an
innovation right now that is going to pool. Oh your mind.
It's like it is one of those things where similar
to hashbron cast role shepherds Pie. The team took an
(07:08):
icon an icon of cracker barrel and just said, how
do we think about it differently, which is kind of
what happened with hashbron cast role shepherds Pie. Like, what
else can we do with this hashbron cast role? Can
we want like a pancake? Make it a topic on something.
We've turned them intoitator tots, like We've done all kinds
of fun stuff and so this new one, I'm just
I can't wait to actually talk about it publicly. But
they're just always innovating and Matt is such a driver.
(07:31):
I'm so excited to have him on the team. He's
got energy probably similar to mine, and that he's he's
really pushing to fill the pipeline, to think about the
stage game process a little bit differently, to make sure
that we have plenty of room for testing and learning.
We're also pulling out the archives. We're looking at things
that we've done in the past that might need to
(07:53):
come back in a new and different way, or it
might be time to revisit some of those things. So
the team is just really energized, I would say, under
their leadership, and I think look like anything when you
have momentum. Momentum is so contagious, it's so precious. I'm
always telling the leadership team, like our job as leaders
is to create momentum, because when you have it, it's
(08:15):
just the flywheels starts spinning and that's when things get
really really good. And I would say an innovation pipeline
is the exact same way when you are at it
and you're filling it, and like innovation begets innovation, and
that creative mindset starts spinning. Like it's just it's a
really rich and wonderful place to be. And that team
is on fire right now, really thinking about a lot
of good stuff. So I we tell you hash Broncast, Roll,
(08:36):
Shepherd's Pie, the pot Roast, the new chicken and rice,
the ribs. That's this is just the beginning. We've got
a few things if you kind of get out there
a little bit. We've got a few things in tests
around the country, and we've got a big test that's
getting ready to launch, similar to the last kind of
twenty item tests that we did in Texas. We're doing
another really big one in December where some I know
(09:00):
some things in there are going to be like absolute
rock stars and going to hit the menu. So team
has been real busy. I'm real proud of them.
Speaker 1 (09:06):
Exciting hourly turnover improved the impressive seventeen percentage points in
the first quarter. What's driving that?
Speaker 2 (09:14):
Gosh, that's really I can't take any credit for that.
That's the field, right, That is great leadership. We've made
some changes. We've really talked to the field leaders about
owning development, about owning ninety day turnover, about literally onboarding
everybody onto their teams and making sure that they feel
like they're building the right teams and that they are
(09:35):
really personally in that. We've we had some other positions
in the past a cracker barrel that were sort of
in between the GM and you know, a server, or
the GM and the girl cook. And what we said was, no,
you're the leader, this is your team. We want you
to build it, we want you to own it. Now
they've got a lot on their plates, so not exactly
an easy conversation, but they get it right. And what
(09:57):
I think that does is it just builds accountability, of
build trust, It builds that sort of I'm in it
with you mentality. I'd say that's The biggest part, frankly
is just really leaders focused on and focused on building
their teams, developing their talent. But then I would say, secondly,
we are really trying to focus and prioritize better as
an organization and not keep changing the plan, not keep
(10:21):
changing what we ask the field to do. Tell you
one thing on one day and change it a couple
days later. That's chaos. If you've ever operated in an
environment like that, it's really hard. And we had been
doing a little bit of that in the past, and
so really keeping them focused, keeping them on the right things,
taking care of guests, the metrics that matter. You know,
We've spent a lot of time getting them, getting them
(10:44):
really focused on executing with excellence every guest, every day,
every shift. And I really believe that's what's paying off
because then as a team member, you know what to do,
you know what's expected of you, you know how you're
going to be judged and what you're going to be
held accountable to, and that's exciting, right. I think one
of my management philosophies is that people don't wake up
(11:05):
wanting to screw up, Like they don't come into work
wanting to do a bad job. They really don't. They
come in wanting to be recognized for the work that
they're doing. They've made a choice. They could do many
other things, work many other places, but they're there, and
so recognizing that contribution, helping them be their best, giving
them the tools to make their jobs easier, to make
(11:25):
them enjoyable, to recognize their contributions to me is really
what being a great leader is all about, and building
those teams is all about because people want to do good,
they really do, especially in the hospitality business. You want
to take care of people. You want to have the
time to smile and chat with them and create their
day and work together as a team. That's what this
industry is all about.
Speaker 1 (11:46):
Yeah, well, it sounds like transparency is part of the
culture shift, right, Like that's as.
Speaker 2 (11:53):
An employee, that's yeah, for sure.
Speaker 1 (11:55):
That's a wonderful thing. Yeah, you want to look to
your point so great good stuff.
Speaker 2 (12:00):
In trouble Sometimes sometimes I say things I really shouldn't say,
you know, Yeah, the team or the finance.
Speaker 1 (12:05):
Team is like, yeah, they can be a stick in
the muddle.
Speaker 2 (12:13):
So yeah, every so often, No, but again, people you
got to lean into the fact that people want to
do the right thing. And when you give them the
information and make better decisions about where you're going and
why and what's important, I believe that people rise to
the occasion.
Speaker 1 (12:27):
Yeah, you mentioned on the call that value scores improved
even though pricing was up four point seven percent in
the quarter. How are you delivering value to your customers?
Speaker 2 (12:36):
Gosh, it's one of the things that Cracker Barrel has
done so well for so long, Mike. I I was
shocked when I got here, truly, Like I hadn't actually
eaten at a Cracker Barrel in a while. I grew
up going to it. But I came in and my husband,
who's like good Jersey boy East Coaster, he had never
actually been to a Cracker Barrel when I was interviewing
(12:57):
for this job. When we went and we sat down
and he was like, my god, you get so much
food for a such a great price. Like he's like,
this is incredible, you know, And it's I think it's
one of those little I want to say, like hidden
gems or like untold you know, we don't shout it
from the rooftops, but it's the thing that in all
(13:19):
the research as we were building the transformation plan, that
came back time and time and time again from our guests.
It wasn't that you have the cheapest price. It was
that you give us a fair price, a reasonable price,
but really delicious, abundant quality food. And that is the
magic of cracker Barrel. It's not about being the cheapest
(13:39):
or whatever. But I mean, that's sort of the other
interesting thing. I don't know if you heard Craig talk
about it yesterday, but our average check for the quarter
is like fifteen dollars, and the average casual dining check
in the same quarter as twenty seven dollars, right, So
it just we're a screaming deal for the home cook nature,
(14:01):
the handcrafted nature of our food, how delicious it is,
how abundant it is. So I think that's that guess
really recognize that. So while we've had to take a
little bit of price to offset inflation to do some
of the things that we're doing, and frankly we were
behind on price. We hadn't taken a lot of price
over the last several years. There was some opportunity as
we were looking because people weren't playing back that we
(14:21):
were the lowest even though we were, so we knew
we had a little bit of opportunity to sort of
right size some of those like item prices, but really
make sure that we're focusing on creating a great experience,
delivering high quality food, making sure that people felt like
it was still abundant because we haven't changed portion sizes
in years either. So really just all of those things
(14:42):
continuing to come together. I think people are really recognizing
it and it's resonating with them when value is so
important because so many people are screaming and dealing and
you know, it's just not kind of how we play
our game.
Speaker 1 (14:55):
Yeah, some of the companies you know that we cover
that are outperforming, actually most of them are have higher
cost of goods sold than their competitors, right, so they're
giving more, you know, on that plate than their competitors,
and its showing up in the sales and traffic.
Speaker 2 (15:10):
Yeah, for sure. I mean people people eat what there is.
They always have, they always will, right Like when that
plate comes out, it's it's got to beautiful, it's going
to be full, it's going to be what you're expecting.
And then you're doing the math the whole time, like
from when you order to when you actually pay the bill.
Is that is that value equation right?
Speaker 1 (15:26):
You know, so, I'd imagine the remodels will help, But
how else do you plan to get gen Z to
put Cracker Barrel in its consideration set?
Speaker 2 (15:35):
Mike, Clearly your TikTok account is not up to date.
I mean we are, we are all over that with
some really fun ways. I mean one of the beauties
of Cracker Barrel is that we really do connect across generations. Right,
It's not just about the boomers or X or Z
or Alpha. Like. Literally, it's a place where you walk in.
(15:56):
It's why I love being out in our restaurants. It
feels like you're in America. You look around and everybody
looks different. They're different ages, they're different ethnicities. You see families,
you see singles, you see friends together. It's literally a
slice of America, which I really really love. Everyone's welcome
and everybody enjoys Craco Barrel. But specifically that younger generation,
they're really finding us. They're finding us in some interesting ways. One,
(16:20):
they probably already experienced us with their family, either their
parents or their grandparents or something like that. But truly,
we've had quite a few things go viral on TikTok lately,
more so in the merch category. So I don't know.
I actually this was not planned, but I do have
these sitting here on my desk. Have you seen these?
These are these Altoid retro sours. This is like a
(16:42):
huge item from like I want to say, the nineties,
maybe it's the two thousands. I'm not honestly not even sure.
But we are an exclusive carrier of these. These cannot
keep in stock, Like I literally had to beg a
favor to get them because I really love them. But
those so those have blown up all over the socials,
all over TikTok. But the other crazy fun thing is
(17:04):
we have these sweaters that we call toofers because it
looks like it looks like you're wearing a sweater or
a sweatshirt with a T shirt underneath it, and but
of course you're not. And they're embroidered and they have
all kinds of fun things on it, everything from like
Christmas things to the latest collection that the merch team
did is actually a hunting and fishing collection, so it's
(17:26):
like deer and like a bass, and like all kinds
of those blew up on TikTok. We had all these
like gen A gen Z girls like filming themselves running
into Cracker Girl to get these things. They of course
they all buy like an extra large and like, you know,
because big sweaters are in again and we literally sold
out of them in like a week. So it's like
(17:47):
one of the hottest, hottest things we've had. And so
we've got Christmas ones right now that are all the rage.
But you know, we are, we are doing it so
lots of ways. And then you know, as we were
talking about earlier, there's so many items on the menu
that really are for everybody, you know, whether whether you
want to have something as indulgent as the Ashbroncast Rule
Shepherd's By or something might a like our girled chicken tenderloine,
(18:09):
which is like a perennial favorite, low calorie, delicious marinated
chicken brass. Like, you know, we've got something for everybody
on the menu.
Speaker 1 (18:18):
Great, And yeah, I gotta I've been neglecting my TikTok feed.
I'm not gonna lie.
Speaker 2 (18:24):
I was like, you clearly have not seen Cracker all
because we are. We are. It's fun, It's super fun.
It's just such a fun way to communicate with your guests.
You know, that's really pillar one of our transformation is
about making sure that we are relevantly out there communicating
with people the way they want to be communicated with,
right and so, and that's a little different generationally, Right,
(18:44):
it's a little different based on your need state in
your life. If you have children or you don't, or
you know, you're going from work, you want delivery, you know.
So we just have to make sure that we're in
all of those spaces in ways that are right for
the brand and right for our guests, so that we're
there to make sure that again we're solving problems for people.
So letting people know that we got you, We've got
all these great items in these great solutions in cracker
(19:06):
Barrel can be a solution for them across many dimensions
of their life.
Speaker 1 (19:10):
Yeah, it's great, and it's really paid dividends TikTok for
you know, Chili's this year.
Speaker 2 (19:15):
They absolutely hundred percent. George and Kevin have done a
great job on that.
Speaker 1 (19:19):
Yeah, all right, So you communicate that remodels are an
important piece of the turnaround with restaurants saintst Our sales
outperforming retail. Could there be an opportunity to maybe shrink
the size of the retail store. Yeah.
Speaker 2 (19:35):
I mean, look, you never say never to anything because
as I already told you, I look at everything, I
question everything all the time. But no, right now we're
thinking quite the opposite. Retail is such a differentiator for us.
It is, I truly believe, part of the special sauce
of Cracker Barrel. You know, it is so unique. I
mean I challenge you to wander around the Cracker Barrel
(19:55):
retail store and not find something like there's something for
everybody in from food to cord, apparel to games and toys.
I mean literally we've got everything. I mean cards, I mean,
it's crazy the amount of stuff we have. But that's
just part of the charm, right there's something for everybody.
And what we're doing right now though with retail is
(20:18):
really saying kind of like we did on restaurant, what
are the metrics that matter? How do we actually really
think about the ways to win and what's important in
this business? Right on the restaurant side, it was like
food made recipe, right, it's got to be to people
in a quick and timely manner.
Speaker 1 (20:32):
You know.
Speaker 2 (20:33):
The skill level of some of the different positions was
important and making sure that things are made to recipe.
And you know, we're doing the same thing on retail,
so what should the layout be, right, I don't think
we actually have an optimized layout over on that side
of the business today. We in a lot of the
work on the strategic transformation. People said, I love that
(20:53):
side of the business, but like gosh, I feel like
I'm always standing in the wrong place. Sometimes I'm bumping
into something. I'm trying to get into the restaurant and
other people are trying to come out. And so it's
a little bit of a pain point today in terms
of customer flow, not that they don't like being there,
but we can improve and optimize the customer flow. So
we've just done a lot of customer journey work, kind
(21:15):
of first time in the history of the company, to
really understand journeys and what you know, if you're coming
in for a to go order, what that journey looks like,
versus if you're coming in for breakfast with your family,
versus if you're coming in for a quick lunch, like,
those journeys are all really really different. And so how
do we optimize the layout of the retail space and
the items and where they are and how people want
to shop for them in a way that really again
(21:37):
meets their needs and provides a great experience. So if
you come back to kind of the three imperatives that
I've talked about that underpin the transformation, right, the first
one is that relevancy piece, Right, do we have all
the right things relevancies about gaining market share? You know,
how do we make sure that when you're thinking about
the decisions whether it's to eat or shop, preper brels
(21:57):
top of mind. The second one is food and experiences
that people love and crave, and so that all comes together.
And then the last one is driving profitability. So as
we have those underpin everything we're doing. Thinking about the
layout of the retail items, where they are, how you
journey through that is really really important to driving all
of those, especially that second experiential pillar.
Speaker 1 (22:18):
And advertising during NASCAR and college football as well as
Bravo have been some of the changes that have been
made to Cracker Barrows marketing. Right, what else can you
share about your plans for the rest of the fiscal year.
Speaker 2 (22:29):
Yeah, maybe you should have Sarah come on and talk
to you about all the great work that she and
the team are taking on Right now, I would point
you towards our homemark promotion. This is really the first
time we've done something like this over the holidays. It's
super exciting. You got to go in through our loyalty program,
so it was sort of highlighting that. But somebody is
(22:50):
going to win a walk on role in a Hallmark
holiday movie, which I mean talk about cross generational appeal.
That's one of those things too that like young and old,
everybody like finds himself watching a holiday Hallmark movie and
in a weird way enjoying it. I think. So it is.
It's an exciting promotion. So we've got a lot of
(23:12):
cool things going on there. And frankly, the other nice
thing about it is our team members can win too
because we allow them to participate in the loyalty program.
So I'm really curious, like if a guest is going
to win, if a team member is going to win.
I've got the guy who leads all the field operations.
He's like gunning away, you know. So it's it's it's
super it's a super fun thing. But that's showing up
(23:32):
in lots of different ways. I get. We talked about
TikTok already that's a great place where we're really driving
a different type of content and a different type of engagement.
I think you'll see some real changes in the way
we approach Instagram that's looking and feeling really different under
Sarah's leadership, and really just trying to match up the
message with the guest with the channel, right. And then
(23:55):
that's what great modern marketing is all about, is reaching
you the way you want to be reached, with a
message that resonates. And so it's not kind of you know,
I've worked for people before who've said like spray and pray,
like where you just like put it out there and
you know, you buy a lot of mass media and
you try to like get everybody. It's it's targeted now, right.
Good marketers are really data driven. They understand need states,
(24:18):
they understand their audience segmentation, They know who they're talking
to and what's going to really resonate with them and
really drive that relevancy and what they need and want
from a relationship with the brand, right, which is ultimately
what you're doing. The last thing I'd say in all
of that is our loyalty program is another really important
way in because with six million people in that program,
(24:39):
it is it is a such an important marketing vehicle,
but also just way for us to reward those really
valuable guests. I mean, it's a great way also for
us to deliver value because you can earn and redeem
on both sides of the business. And so it's got
a marketing role, but it's also got obviously a loyalty role.
(24:59):
It's got you know, kind of frequency business driving roles.
So I think Sarah and the team are really onto
some exciting things, really driving that kind of stickiness and
emotional connection that Krackerrel's always Crackerrel's always had an emotional
place of people's heart, but really just making it feel
more modern and relevant for today through the marketing.
Speaker 1 (25:21):
Yeah. Yeah, and a lot of you know, a lot
of the chains that we've covered have revamped or loyalty
programs this year at a lot of the big reason
is they just weren't really working. So I guess you know,
how confident are you that loyalty is incremental and kind
of if you could talk a little bit about how you're.
Speaker 2 (25:36):
Measuring it, Yeah, sure, I'm confident now. I wasn't in
the beginning, but we've spent We spent a few months
over the summer really digging in. Part of it was
hard because it was a brand new program, right, We
only launched it last September or October, right, and so
kind of just even before it was a year old,
we had such such uptake from our guests, such love
(25:58):
out of the gate for wanting to be loyalty program
for Cracker Barrel. Like literally all of our activations still
are way ahead above our projections. You know, we're sitting
at over six million people at the end of Q one,
and it's just tremendous in one year. They're spending more,
they're coming more often, and so really our challenge the
summer was is it incremental? How incremental is it? We
(26:19):
saw that they were about twenty six percent of traffic.
I think I've shared that publicly, and so we weren't
sure in the beginning. I wasn't really sure at all,
but we are very confident now we've really dissected that.
We're really now starting to segment them, understand what motivates
their behavior, what they want in a loyalty program too. Right,
(26:40):
You kind of don't want to just feel like you're
being marketed to or that it's turning into a transaction
or somebody's just trying to get you in. You wanted
to feel like genuine and in a way that adds
value again to your life or solves a problem. So
we're doing a ton of testing right now on offers,
on constructs, on you know, ways to even think about
(27:01):
the two sides of the business. So in Q one
we did a lot of testing on retail plus restaurant
and how does that resonate with different sub segments of
the six million. So lots to continue to learn there.
But what I love about it is it can be
very hint driven, right, It's very factual, and then you
can apply that across other populations and really get to
(27:24):
some interesting business driving and more than anything like, yeah,
it drives the business, but it drives that satisfaction and
that emotional connection, which is really really what you're after
as a brand. You know, you want people who genuinely
love you, who want to be a part of what
you're doing, and that to me is the big exciting
part of it for sure.
Speaker 1 (27:43):
Can you share anything about the back of the house
optimization tests that.
Speaker 2 (27:46):
You're doing, it's still early. I did talk about it
a little bit, or Craig did a can remember which
one of us got the question yesterday. But it's exciting
because I really believe, as we talked earlier about, people
want to do good work. They want to feel good
about the work that they do, and when you can
make it easier for them to do their jobs well, like, gosh,
(28:08):
that's just nirvana for everybody. And a lot of our
processes at Cracker Barrel have not changed in a very
very long time. So what we sort of realized as
we were going through the transformation is, gosh, we really
need to look at the back of house and say,
there's newer technology, there's newer ways to do things. Yeah,
we know how to do it. We've been doing it
this way for a while. And there's some real pros
(28:29):
to that. There's some real things that you want to keep,
but then there's also a lot of opportunity for improvement.
And that's what this process is about. It's a multi
year project, it's a big one, but it's really saying
are there new processes we should look at? Are there
new ways to make the food? Where really we start
with quality as the number one metric and all of this, like,
how do we improve quality and just think about other
(28:53):
ways to drive efficiency and make the jobs more enjoyable.
There's so much handwork and what we do at Cracker Barrel.
We're not taking that away because that's the other thing
people love, and our teams have such pride in what
they do and the food that they create and that
we share with people. But there are ways to do
it easier, I or more easily. Sort that was bad grammar.
(29:14):
I was talking to a group a couple of weeks
ago that there were to do probably four five hundred
people in the audience, and I said, okay, who literally
goes and buys ahead of lettuce and chops it up
to make a salad? Still today? Right, like two people
raise their hand out of like five hundred. I was like, okay,
you guys are absolute. You know, rock Star over achieves
(29:35):
everybody else goes and buys pre bag lettuce right, pre
washed and like and it's those kind of things that
we are still hand doing all of that at Cracker Barrel.
And it's like, gosh, we could buy pre chopped onions.
They taste just the same as the onions that you cut.
And those are the things that can make people's lives
a lot easier in the back of the house, right,
and you know, there's just there's just a lot to
(29:55):
be said for things like that. So those are the
kind of things that we're looking at. And then we'll
attack a QUI, then we'll attack layout and the whole
nine yards. That's why it's multi year, multi phases. First
phase has been in test in a couple of stores,
and I think, as I said on the announcer or
on the call yesterday, we will roll it system wide
the first phase in Q three and then we'll get
after equipment, we'll get after layout and things like that.
(30:18):
So it's exciting, yeah, for sure.
Speaker 1 (30:22):
All right, So what's your go to order?
Speaker 2 (30:24):
Mine? Well, gosh, it's it depends on the time of day.
Breakfast pancakes. I love our Mama's pancakes. I'm a blueberry
pancake fiend, and Cracker Rarel has the best pancakes in
the world. Like, show me somebody who wants to challenge
us on that, like we should do like the old
school kind of taste off. But our pancakes are the best.
So it's hard for me to know. I love it.
(30:46):
I love it to see get the one with the
like the fruity pebble things in it, or blueberries, or
because we do all kinds of fun things.
Speaker 1 (30:52):
He does that. He's like a chocolate chip guy.
Speaker 2 (30:54):
He likes I love our blueberry pancakes, So that's probably
my go to for the morning. What sh'all kind of
bop around a lot of times. I'll really get our
girl chicken tenderloins. I love those. They're so delicious. They're
marinated and so yummy and a little bit more on
the healthy side. For you dinner, I'm all over. If
I'm in a restaurant that has some of the new
(31:14):
test items. There's a new item coming out for Spring
that I don't want to ruin for you that is amazing.
I will definitely order that. I really I like to
let the server guide me, you know, and see what
they love and what they want me to try. Some
stores are real proud of like the different things that
they make, but I'll, you know, pretty much anything. I
(31:35):
literally had the fish fry last Friday because somebody was
in a restaurant the day after Thanksgiving and a guest
had come in to talk to me and we were
just talking and he's like, gosh, you know, I really
love the fish fries, Like, you know, it used to
be like twelve ninety nine, now it's fourteen ninety nine.
He's like, I understand that you have to raise prices.
(31:55):
He's like, it's still an amazing value. He's like, I
get it. I get it, and I love the quality
fish is better than this other person's fish. And he's like,
you know. It was a really nice conversation. So he
and I sat and had a fish fry together. So
that was fun. I mean, I will literally go all
over everything. I am also a big hashbron caster a girl,
so I loved that from when I was a kid
(32:16):
coming to Cracker Barrel and it's hard for me to
not get that. Very cool. What's your go to?
Speaker 1 (32:23):
Oh? I'm a breakfast guy, so I intermitt it fast.
Speaker 2 (32:28):
Oh do you that's why you were talking about fasting
before the hashbroncaster.
Speaker 1 (32:31):
Yeah, so you know a lot of times I like
to do breakfast for lunch or dinner. So I'll lean
in pretty heavily to the Crackbow breakfast at any time.
Speaker 2 (32:41):
Yeah. I did that Thursday night. So we had worked
all day on Thanksgiving and I was with one of
the leaders. And finally, I think at about eight o'clock
we sat down to have Thanksgiving dinner and I had
had the Country fried turkey the day before, and I've
been eaten so much turkey because it's Thanksgiving. I was like,
I think I'm gonna have Grandma's that I had a
(33:01):
French toast and eggs Thanksgiving for better. So yeah, that's
one of the great things about Crockerrell too. You your
breakfast all day long, which is super fun.
Speaker 1 (33:10):
So yeah, well, good stuff, Thanks for doing this. I
love your passion. You know, I'm looking forward to seeing
all the things you accomplished with the team there.
Speaker 2 (33:19):
We're can a team. It's not man one person. We're
seventy thousand strong out there taking care of our guests
every single day and really just trying to make them happy.
That's what it's all about.
Speaker 1 (33:27):
That's awesome. So where can the audience go to find
the nearest cracker barrel? And other than TikTok and Instagram
or any other social media platforms they should follow the.
Speaker 2 (33:35):
Those are probably the big ones. We're on Facebook too,
because I know a lot of people are still on Facebook,
even though I haven't been on in years. So I
can't even tell you what the Crackerbil stuff looks like
on Facebook. Shame on me. But I would say go
to our website. It's a great place to find a store.
The other thing is we do a great app and
so in that as a store locator, you can also
auto join the wait list. So if you are, you know,
(33:58):
coming in on Sunday morning, when a lot of our
guests like to join us, or Saturday morning for brunch
or on the way to a you know, kids sports
sporting event, you can join the waitlist from the app,
which is kind of a hashtag pro tip, and then
you just kind of walk in and sit down when
you're ready, which is really exciting, so.
Speaker 1 (34:15):
Great, and I also want to thank the audience for
tuning in. If you liked the episode, please subscribe and
leave a review. Check back soon for another discussion on
chopping it up.
Host
Michael Halen
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