Baked foods are finding their way back into American hearts — and stomachs. Even before Oprah declared that she loves bread, Kat Cole, president of Focus Brands, parent company to Cinnabon, Auntie Anne’s, Schotzsky’s and others, was bringing Cinnabon cinnamon rolls to consumers through a variety of channels while overcoming six years of net sales declines following the Great Recession and the trend toward healthier eating.
During her keynote address at the American Society of Baking’s BakingTech conference, held Feb. 29 – March 1, Cole, the former Cinnabon president, explained that the primary lesson she learned when taking over a battered company was the power of honestly owning a brand and what it stands for.
“The brand itself was incredibly powerful and loved by consumers,” she recalled. “But if your sole business is based in malls and airports, and there’s a recession that affects peoples’ discretionary income, they don’t travel, and they don’t shop. So we had no one to sell to.”
Through research that at times involved nothing more than simply talking to people, Cole unlocked the relationship between the consumer and the Cinnabon brand.
“What I realized was that we owned irresistible indulgence,” she said. “We happened to use the vehicle of a cinnamon roll to deliver that, but our company was famous for how we made people feel when they treated themselves.”
And through this discovery, she put a stop to the company’s “Project 599,” the company’s planned initiative to offer an alternative to its famous over-sized, 880-calorie cinnamon roll, at the same size for less than 600 calories.
The truth was that consumers who purchased a Cinnabon cinnamon roll did so because they were seeking an indulgence, and a reduced-calorie version of that was not going to do the trick.
“The problem was it was chasing the consumer — and not getting honest about what that consumer wanted,” Cole explained. “As a company, we were only chasing a broad trend.”
Cole turned to the MiniBon, a product that had only been offered in about 10% of the company’s franchises, to offer a portion-controlled version of the “disturbingly delicious” treat. While the original cinnamon roll retailed for $3.60, the MiniBon sold for $2.50. After only 2% of transactions reflected a trade-down, the bakery gained an additional 12% in transactions.
“We only had two points of cannibalization going from what we already had in a smaller format, preserving our formula and being honest about who we are, we found the answer to driving sales and liberating the brand,” she said.
In the four years that Cole was Cinnabon president, the company went from $500 million to a billion dollar brand, doubling sales and launching 100 stock-keeping units with partners such as General Mills, Burger King, Pilot/Flying J and more, creating what she described as “creative ubiquity,” a term that describes placing a brand in numerous places without making it any less special.
“We found the secret sauce,” she said. “It’s choosing the right partners, and then going big or going home.”
Cole explained that while it’s important to partner with big companies such as General Mills, there is great value in partnering with small, entrepreneurial startups, as well. Partnering with small companies not only keeps Cinnabon young, but they also keep the company on its toes.
“You never know when a small company is going to break into the marketplace,” she cautioned. “If you aren’t finding a way to keep your business fresh with startups and understand how you can escalate your access to market through the right partners, you are minutes away from being disrupted. We’ve gotten good at knowing when to go big and when to go small.”
The secret to turning around a business battered by the recession and the health craze, Cole said, was rooted in owning the brand and standing up for what it is, for better or worse.
“The moment we stood firmly in our truth and called ourselves an indulgence, there wasn’t much more anyone could say,” she said.
The second secret was in understanding the value of partnership and willingness to take risks.
“These behaviors have been foundational to not only Cinnabon but also to Focus Brands growing to the multi-billion dollar, relevant business it is today,” she explained. “We are always looking for great manufacturing partners to launch new products in the business, but we are also looking for partners who are crystal clear that we own credibility with this brand.”