Buffalo Wild Wings Executive Summary
Buffalo Wild Wings (BWW) enjoys a unique positioning as the largest sports bar brand (also 2nd largest casual chain) that is famous for its wings flavored with 24 sauces & seasonings in ascending order of heat to go with a side of celery & carrots with choice of 2 dipping sauces. BWW replicates the social and interactive energy of a stadium with wall-to-wall high-def TVs, creating a cost effective and enjoyable place for guests to watch games and hang-out with friends. The chain’s well-established brand equity around wings, beer & sports is extended by an offer of beers, burgers, sandwiches and salads. Brand strategy includes the following objectives: (1) leverage menu items beyond wings (and their dramatic price volatility) in order to broaden the brand’s appeal beyond sports fans; (2) leverage improvements to product quality, cook time & alcohol offerings in order to further differentiate from local sports bars; and (3) communicate a compelling reason for consumers to leave their homes in order to come socialize in-restaurant. Fortunately, the chain has recently been able to emphasize price point deals fueled by a -30% drop in wing costs for the YTD period ending 8/31/22, helping to address the current economic backdrop. BWW’s value constructs include: Happy Hour deals; BOGO free Boneless Thursdays; BOGO 50% Traditional Wings Tuesdays; $9 Wing Bundles with fries; and lunch combos at $8, $10 & $12 price points. Further, interesting menu innovation includes: Bird Dawgs (hand-breaded chicken tenders with hot dog toppings & bun); a new Saucy Chicken Sandwich starting at $5.99; and $9.99 Boneless Bar Pizza (available in Buffalo or Honey BBQ). BWW’s carry-out business benefits from a designated to-go room, separate entrance & designated parking places and off-premise has extended its market reach. Having said all this, BWW is vulnerable to wing cost volatility which increases the risk to top-line sales and margins while making it difficult to provide stable menu pricing. Significant COGs underperformance reflects the challenge of its high bone-in wing mix and it is notable that BWW’s unit-level EBITDAR significantly underperforms its own system-high, reflecting elevated food & labor costs. In conclusion, BWW enjoys considerable brand equity as the largest and perhaps most iconic sports bar chain with a positioning that currently benefits from manageable wing prices.