Lobster and Caviar Burgers? Wendy's Menu Goes Upscale in Japan

Lobster Surf & Turf Burger and the Premium Caviar & Lobster sandwich. (Wendy's)

In the U.S., Wendy's (WEN) serves such signature items as fresh, square ground-beef patties and the Frosty. In Japan, where the fast food chain is looking to expand, it's adding decidedly more upscale fare to its menu -- namely, lobster and caviar.

The Lobster Surf & Turf Burger and the Premium Caviar & Lobster Sandwich will be offered for a limited time at Wendy's Tokyo locations -- one in the fashionable Omotesando neighborhood, home to many luxury shops, and a second opening Aug. 17 in the Roppongi Hills complex.

"Each sandwich is priced at ¥1,280 or approximately US$16.28," reports Burger Business. "Or go big (¥1,580/$20.11) for the Garden Sensation salad with lobster and caviar." The dishes use Omar lobster meat imported from Canada.

"These premium specialty sandwiches are really designed for the Japanese consumer," explains Bob Bertini, a Wendy's spokesman. "We have a joint venture in Japan and as part of that we have kitchens that help design sandwiches that make particular sense for that market."

Wendy's japan"Seafood is a huge part of Japanese culture and diet, and this just makes sense."

The Japanese restaurant market is intensely competitive, Bertini said, "and this is a way to help differentiate ourselves from other chains in the country." He added that there are no plans to introduce a similar sandwich line in the U.S., where Wendy's entrées don't tend to top $5 or $6.

Wendy's left Japan 2009, and reentered in December 2011 with a new slate of ritzy offerings, including a $16 burger topped with foie gras and truffle sauce.

The company's joint venture partner in Japan is Ernest Higa, a Hawaiian-born businessman who previously introduced Domino's Pizza (DPZ) to the Land of the Rising Sun.

Says Bertini, "He was a pioneer of the Japanese home delivery market, so he has lots of experience from a food standpoint in Japan. He knows what has worked well in the past and where the trends are going."

"He really has, in terms of sandwiches, something that no one else has."

In a 2010 interview with Columbia Business School's Chazen Web Journal, Higa explained his entrepreneurial philosophy: "I have a basic bias that most successful concepts or products in the United States have a chance to be successful in Japan -- but you have to adapt it for the Japanese marketplace." Higa recounted how he took an established U.S. chain, Domino's, and made it work in a country where, according to conventional wisdom, pizza had little chance of catching on.

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"There were other U.S. pizza chains that were already in Japan that were not succeeding," Higa said, "because there was an issue of taste profiles or how it was done. And I felt that if you adapted it right, it could succeed."

"The business model was proven. What's important is to maintain that business model but adapt the food itself for the Japanese taste and the Japanese profile."

Presaging his approach to Wendy's, Higa turned Domino's pizza into more of an upscale commodity, customized for Japanese tastes. He offered toppings like squid, tuna and teriyaki chicken, "which you wouldn't even think about in the United States." And he changed what he called "the market positioning," increasing prices and upgrading the product, transforming a mass market business into a gourmet brand.

Higa added that a product's life cycle in Japan is very short, requiring the constant development of new innovations. "The Japanese consumer, as compared to the U.S., they want higher quality, higher service, generally speaking, and they also want variety."

"It's an affluent economy and a very sophisticated consumer" -- which explains the lobster, caviar, and $20 price tag on that salad.

Wendy's, "along with competitors such as McDonald's (MCD) and KFC owner Yum Brands (YUM), is betting heavily on foreign expansion," reports the LA Times.

Expert Cooks Up Recipe For Burger King as Newly Public Company
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Lobster and Caviar Burgers? Wendy's Menu Goes Upscale in Japan

Burger King (BKW) might still be home of the Whopper, but it's far from ruling the burger industry these days.

The fast-food restaurant ranks third among the hamburger giants: Last year, Wendy's (WEN) unseated the chain for the No. 2 spot, and it has never been in range of McDonald's (MCD), the undisputed leader, according to consulting firm Technomic.

Burger King's new status as a public company could give the place to "Have it your way" a fresh start, and energize its recent efforts to woo back shoppers, Steven West, an analyst with ITG Investment Research, tells DailyFinance.

The company returned to the New York Stock Exchange last week, its home from 2006 until 2010, when it was acquired by private investment firm 3G Capital.

3G's revival strategy for Burger King included its biggest menu expansion ever last year -- adding items from premium salads and frappe drinks to bacon sundaes -- and a star-studded national ad campaign that ditched its (arguably creepy) "King" mascot for celebrities like soccer star David Beckham and Jay Leno.

Fast-food lovers seemed to respond: For its most recent quarter, Burger King posted its best comp-store sales performance in more than two years.

But there's still work to be done at the No. 3 burger chain if it's going to take a bigger bite out of the fast-food market, West says.

In the battle for burger supremacy, McDonald's has been eating the competition's lunch for the past eight years, West says.

"They're on their second remodeling effort in the U.S., and they have definitely raised the bar when it comes to consumer expectations," he says.

Meanwhile, Burger King "has been trying for a decade to replicate the McDonald's playbook and has failed to do so."

But the IPO could mean a reversal of fortunes for Burger King. "Their new restructuring plan, the use of joint ventures and the procurement of financing through the IPO could spell good times ahead for the 'king of the Whopper,'" West says.

First, Burger King will use its newly public status to get its financial house in order, West says.

"In this case, the proceeds will be used to pay down debt, thus lowering interest expense, and helping with net earnings."

Then comes reinvesting in the business and stepping up expansion -- especially overseas. "Over the next few months, Burger King will see accelerated re-franchising of company-owned stores ... then accelerate unit growth both domestically and internationally, though about 80% to 90% of unit growth will likely be international," he predicts.

Burger King will "continue to bolster their menu offerings in the U.S." -- but new items must be "innovative" if the chain wants to win over more fast-foodies, West says.

That push should go hand-in-hand with beefing up customer service, he says. Indeed, new and more complex menu items, like smoothies, frappes and wraps, have slowed down its service because they reflect "new ingredients, new processes, etc., and thus take [workers'] time to become efficient at making them fast-enough for a drive through operation."

McDonald's has fancied up its units with store remodels that include new half-moon-shaped booths, wooden blinds and even flat-screen TVs, which have changed the popular idea of how a fast-food chain should look these days.

Hence, Burger King needs to spruce up its digs, too. "They need to remodel the store base," West says. "As McDonald's CEO says, 'You can't sell a $6 burger out of a $3 store.' "


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