A+W ‘pleased with progress’ from no-hormone burger push

The year-end financials for Canada’s second-biggest burger chain find its recasting of its beef as produced with “no added hormones or steroids” has so far been “positively received” by diners.

The A+W Revenue Royalties Income Fund and A+W Food Services of Canada announced their fourth-quarter and year-end results Thursday, booking sales of $278.1 million for the fourth quarter ending Dec. 31, up 7.6 per cent from the year-earlier period, and full-year 2013 sales of $856.4 million, up four per cent from 2012.

The fund booked $6.05 million in distributable cash for Q4, up from $5.33 million in the year-earlier period, and $18.36 million for the full year, up from $17.16 million in 2012.

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Same-store sales growth in Q4 rose 3.1 per cent, the company said, “despite an ice storm that had many homes and businesses without power for some days during the peak Christmas shopping season in central and Eastern Canada.”

For 2013 in all, A+W said, same-store sales growth was up 0.4 per cent compared to 2012, “erasing the impact of a soft first quarter which was impacted by poor weather.”

“The launch of our new beef with no added hormones or steroids has been very positively received by our guests,” A+W Food Service CEO Paul Hollands said in the company’s Q4 release.

“We are focussed on our strategy to reposition and differentiate the A+W brand as a ‘better burger’ quick-service restaurant, and are pleased with the progress we are making.”

The chain also expanded with 37 new A+W restaurants in Canada in 2013; of those, 26 were in Ontario and Quebec, which the company described as “important growth markets.” The fund’s total royalty pool across Canada includes 790 restaurants as of September 2013.

The company on Thursday reiterated its new strategy also involves “accelerating the pace of growth of new restaurants.”

The “Better Beef” concept was launched in September last year, when the company declared its burgers “are now made with beef that has been raised without any added steroids or hormones and contains no added preservatives or additives.” [Related story]

The move meant sourcing beef from suppliers not just in Canada but in the U.S. and Australia, all of which must meet “rigorous verification systems to track the cattle, their feed and their care to ensure the beef meets A+W’s strict specifications.”

“Safe, wholesome”

The move raised the ire of some Canadian ranchers and their supporters, several of whom took to social media to voice displeasure over the chain’s move away from Canadian beef and/or concern that A+W’s campaign could mislead consumers about the safety or quality of Canada’s beef supply. [Related story]

The company’s featured Canadian beef supplier, Alberta-based Spring Creek Ranch, got out in front of such criticisms on Twitter, stating it’s a Canadian company, works with producers in Western Canada and actively seeks Canadian ranchers to join its program. [Related story]

The Canadian Cattlemen’s Association, while not naming A+W, added in a September statement following A+W’s campaign launch that the association “appreciates efforts to connect consumers to farmers and farming practices, provided such marketing campaigns do not misinform the consumer.

“On behalf of the producers who raise cattle on Canada’s 68,500 beef farms, the CCA would like consumers to know that all beef produced in Canada is safe, wholesome and nutritious,” the CCA said.

Cattle producers, the association added, “have used antimicrobials and growth promotants for more than four decades and science shows no negative consequences for the health or safety of animals or humans related to their use.” — AGCanada.com Network

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