Bob Evans Beats COVID with Proven Turnaround Strategy

Pre-COVID, the chain had already boosted off-premises and simplified its menu.

July 20, 2021 Ben Coley

Bob Evans' COVID-19 journey doesn’t quite match up with most casual-dining chains.

For one, the brand’s fiscal calendar starts in April, which in 2020 proved to be one of the worst months in restaurant history. Mid-scale/family-dining transactions declined by 81 percent for multiple weeks, according to The NPD Group.

The company managed to stave off those disastrous results. Before COVID was in the everyday vocabulary of Americans, the 480-unit brand grew off-premises sales to nearly 20 percent of its total business. So when jurisdictions shut down on-premises dining for weeks—or months, in some cases—Bob Evans was prepared with the right channels and food that travels well.

In 2021, the company projects $780 million in sales and north of $65 million in EBITDA, which are “somewhat historic numbers,” CEO Saed Mohseni says.

“An entire year for us was COVID,” he notes. “And we ended the year frankly substantially well-positioned to come out of COVID in 2021.”

Bob Evans, which had its restaurant division snatched up by Golden Gate Capital for $565 million in 2017, can trace its recent success to a years-long turnaround strategy featuring a host of initiatives that fit into exactly what the chain needed to navigate the pandemic. These measures include simplifying the menu by focusing on core items, revamping the chain’s value proposition to create stronger messaging in all dayparts, shifting media away from traditional platforms in favor of a larger digital presence, and partnering with third-party delivery companies, in particular DoorDash, and launching a new ad campaign showcasing farmers.

A LOOK BACK: Bob Evans and the Rebirth of 'America’s Farm Fresh'

CMO Bob Holtcamp says the cornerstone of all those moves was leveraging the idea of “America’s Farm Fresh” and labeling Bob Evans as a place where consumers could find “great, affordable, abundant food that was fresh and tasty and would satisfy their entire family.”

On the operations side, Bob Evans heavily invested in hospitality training for off-premises business, says COO Mickey Mills. Restaurants shifted physical spaces to be more efficient and accurate with takeout orders. The menu was simplified to highlight executable dishes while eliminating ingredients that couldn’t be cross-utilized very well. Mills estimates that Bob Evans changed more than 70 ingredients throughout the menu and upgraded others to create a more quality product.

For Bob Evans, it was just a matter of repositioning ideas and putting them to use during COVID. Same-store sales and profitability have both seen increases because of the concerted effort.

"When we talk about—and I don't really like the word 'turnaround'—when we talk about continued improvement of the company, that continued improvement really started by making operations focused on a menu that was relevant to the consumer, and having a marketing plan that really focused on us reminding people that Bob Evans was born on a farm, and it's really about fresh products,” Mohseni says.

“Then when COVID hit, we were well-positioned to capitalize on our prior successes," he continues. "I think great restaurant companies start with having the right marketing program in place, but at the same time you have to be able to execute one guest at a time. And for us to create highly satisfied guests starts with making sure that hospitality is in place, quality of products is in place. And all of those were efforts that we put together.”

Bob Evans

Prior to COVID, Bob Evans heavily invested in hospitality training for off-premises business.

Mohseni says it’s imperative to note that Bob Evans has a “very broad” consumer base, contrary to what people may believe. The breakfast and lunch daypart comprise a younger demographic, and the company has capitalized on the opportunity, especially through off-premises channels. The number of guests per check has increased 10 percent, and the brand has seen a shift to a younger audience. Currently, roughly 70 percent of guests are under 54 years old, including a seven-point increase in the 35- to 44-year-old demographic.

Although Bob Evans is attracting a new crop of customers, it’s not doing anything to alienate or oppose the wishes of its core consumers. As Holtcamp explains, the chain is using similar occasions and product innovations to attract both new and old customers.

“We're really using one stone to go after two birds, if you will,” Holtcamp says.

Among the menu innovations are Fresh Berry dishes that pair Bob Evans’ farm-fresh breakfasts and salads with vine-ripened and hand-picked strawberries. Examples include Fresh Berry Farmer’s Choice Breakfast, Fresh Berry French Toast, Summer Berry Salad, and more. All of the items are available through the end of August. The chain followed up that announcement by introducing new “Pick 2 Combos” for lunch and dinner. New choices include four half-size salads and one half-size sandwich.

In the fall, Bob Evans will introduce Avocado Chicken, Avocado Omelet, and some other items.

“Our core guest is very interested in new things from Bob Evans,” Holtcamp says. “So those are examples of bringing something new that definitely will appeal to a younger audience or someone who doesn't use us today. But they also very much excite and delight our existing user who just is always looking for something new. That's the way in which we are looking at it. We're innovating down paths where Bob Evans has great credibility. That allows us to satisfy our core guest as well as new guests.”

To Mohseni, balancing simplification and innovation comes down to one simple fact: Bob Evans isn’t offering fewer choices—it’s selling more quality selections. For instance, the chain used to have bone-in chicken, grilled chicken, and chicken breasts. However, the bone-in option was removed and the chicken was upgraded for use in multiple areas like the Honey Butter Chicken Biscuit, Grilled Chicken Sandwich, and the $7.99 Dinner Bell Plates menu.

“Just so happens nearly 90 percent of all the chicken that people are eating out there is not bone-in chicken,” Holtcamp says. “So we satisfied consumers with multiple different options and simplified the operations right at the restaurant.”

Bob Evans

The brand removed bone-in chicken and upgraded the protein for use in multiple areas.

Although Bob Evans is after new customers, that doesn’t necessarily mean it will run to COVID’s other innovations, namely ghost kitchens and virtual concepts. The two strategies have taken the industry by storm and have been leveraged. by major full-service brands like Chili’s, Applebee’s, Cracker Barrel, and Red Robin. Mohseni says sometimes innovation happens by choice, and other times it occurs by force—ghost kitchens and virtual brands came from the latter.

The CEO believes there’s a “tremendous amount of opportunity” to continue focusing on Bob Evans’ core brand, which serves more than 70 million people across the country on a yearly basis. For now, he views virtual kitchens as a distraction, but the chain will continue to monitor industry trends and see how matters evolve.

“My experience in this business is, it is very difficult to make burgers and pizza at the same time,” Mohseni says. “You're going end up doing one thing not very good. And then our total commitment is about improving quality, providing high quality, high hospitality to our guest. I think if we started serving kung pao chicken on the side of Bob Evans menu it would be a distraction. And especially with the labor force as it is today, I'm not seeing too many restaurants able to pull it off and able to have a very diverse menu and be able to have quality food executed every single time.”

The path to post-pandemic life does have its bumps, like the labor shortage and the supply chain, but Mohseni views both issues as short-term. He also points out that the restaurant business is never without challenges, and that he’d much rather face these issues as opposed to not having enough guests.

In the coming months, Bob Evans hopes to take advantage of pent-up demand as consumer confidence continues to increase and nervousness around COVID slips away. And with all the innovation planned and the new customers within grasp, there’s no reason to think the legacy chain won’t be successful in its endeavors.

“I expect a pretty bright future, short-term and long-term for Bob Evans because the concept is unique and has proven that it can outlive and survive many challenges over the last 72 years,” Mohseni says. “And I think that we're in a position right now to benefit from the consumer coming back from COVID. I truly believe that the next five years is going to be—I don't want to call the golden years because a company like Bob Evans been around for many, many golden eras—but it will be a very, very good five years for the organization.”