Restaurant Brands CEO: Expect 'more innovation' amid chicken sandwich wars

Popeyes and Burger King parent company Restaurant Brands International (QSR) and its rivals are still pouring money into the chicken sandwich wars.

After years of chicken sandwich competition among fast food giants — including McDonald's (MCD), Chick-fil-A, Wendy's (WEN), and KFC (YUM) — the new Restaurant Brands CEO told Yahoo Finance that the company is preparing even more chicken sandwich innovation in hopes that the menu item can once again fatten profit margins and customer engagement.

"I think we totally changed the game in chicken sandwiches a few years back with the Popeyes chicken sandwich," Restaurant Brands International CEO Joshua Kobza told Yahoo Finance Live (video above). "For me, it is hands down the absolute best product out there in the space. ... I don't know why anyone would go anywhere else because our product is so amazing, and we've been doing some new things with our chicken sandwiches as well."

"We just launched a blackened chicken sandwich," Kobza continued, "and we're launching even more innovation around our chicken sandwich through the back half of this year."

Chicken sandwiches becoming 'as robust as the burger business'

When Popeyes entered the chicken sandwich wars in 2019, it was met with a viral social media reception that led to a multi-year influx of new franchisees and restaurant growth.

At the height of that demand, Popeyes systemwide sales (from both company- and franchisee-owned stores) grew 18.5% for the year. The performance of the "Louisiana Kitchen" that year handily overshadowed the growth of sister company Burger King, at 9.3%, and competitor McDonald's, which reported constant currency systemwide sales growth of 7%.

While Restaurant Brands International gained consumer mindshare early on, the fast food chain's stock struggled to outpace its quick service industry competitors. But recent turnaround efforts at Restaurant Brands have been well underway, as reflected in the stock's 19% gain year to date.

Last year, Popeyes experienced its strongest year of restaurant growth since it was acquired by Restaurant Brands in 2017, increasing its number of restaurants by 10.4%. And in the first quarter of 2023, Burger King sales grew by a solid 10.8% while Popeyes sales rose by 5.6%.

However, Restaurant Brands faces competition from other quick-service restaurants that aren't showing signs of retreating.

When asked recently whether the chicken sandwich wars are done, McDonald's chief marketing and customer experience officer Tariq Hassan replied, "No."

"We continue to steal share in that side of the business," Hassan told Yahoo Finance at the Cannes Lions Festival of Creativity. "It is going to be as robust as the burger business is. As you look at the consumption of chicken in the country, it continues to grow. We are not taking our eye off the ball. We've got a great sandwich in [the] McCrispy."

Brad Smith is an anchor at Yahoo Finance. Follow him on Twitter @thebradsmith.

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