Wendy's CEO: From AI-Powered Drive-Thrus to Thick Bacon

In the fast-paced world of fast food, Wendy's CEO Kirk Tanner is making bold moves to keep the chain ahead of the curve. From deploying AI-powered drive-thrus to revamping the menu with thick bacon and innovative chicken offerings, Tanner is betting big on technology and menu innovation to enhance customer experience and operational efficiency. But as Wendy's accelerates its digital transformation, it faces both opportunities and challenges that could shape its future in the competitive fast-food landscape.

Wendy's investment in AI-powered drive-thrus, such as Wendy's FreshAI, is a testament to its commitment to delivering a "perfect every time customer experience." The company has already installed digital menu boards at over 300 locations and voice-enabled AI at roughly 100 restaurants. FreshAI, powered by Google Cloud's large language model, processes orders in English and Spanish, and aims to give crew members more time to prepare food. The initial test in Columbus showed that the AI-enabled drive-thru service times were 22 seconds faster than the average in the region, demonstrating the potential for productivity gains and cost savings.



However, the deployment of AI in drive-thrus is not without its risks. McDonald's halted tests after customers reported the tool got orders wrong, indicating that there could be challenges in accurately interpreting customer orders. Additionally, some Wendy's customers have expressed concerns about the lack of human interaction, with one user stating, "the day I pull up and there is no human interaction is the day I order 10 meal 'deals,' drive off and never return." Despite these risks, the benefits of Wendy's FreshAI for long-term growth are significant. The technology has the potential to increase operational intensity across every restaurant, including a framework of operating the one best way with clear standards, consistency, and accountability. This could lead to increased restaurant-level margins and an exceptional experience for customers.

Wendy's focus on menu innovation, particularly with its emphasis on chicken and beverage offerings, is poised to significantly impact its market position and customer loyalty. By targeting key customer categories such as families, multicultural customers, and Gen Z, Wendy's aims to enhance its appeal and drive more frequent visits. For instance, the chain plans to introduce new and improved chicken options, including core menu items and limited-time offers (LTOs), to capitalize on the growing chicken category. This strategy is supported by extensive testing and consumer feedback, ensuring that the new offerings align with cultural trends and consumer passion points.



In comparison to its competitors, Wendy's strategy of focusing on menu innovation and customer-centric offerings sets it apart. For example, McDonald's and Taco Bell have experimented with AI at the drive-thru window, but Wendy's is taking a more comprehensive approach by integrating AI with menu innovation. Wendy's FreshAI, powered by Google Cloud's large language model, processes orders in English and Spanish and aims to give crew members more time to prepare food. The initial test in Columbus showed that the AI-enabled drive-thru service times were 22 seconds faster than the average in the region, demonstrating the potential for productivity gains and cost savings.

Furthermore, Wendy's is leveraging its proprietary consumer model to understand the motivation behind customer choices, focusing on opportunity identification and prioritization, initiative development, and continuous measurement and learning across consumer groups. This data-driven approach allows Wendy's to design its menu of the future with a laser focus on customer preferences and trends, positioning it to deliver on that menu in a way that only Wendy's can.

In summary, Wendy's emphasis on menu innovation, particularly with its chicken and beverage offerings, is a strategic move to enhance its market position and customer loyalty. By targeting key customer categories and leveraging data-driven insights, Wendy's is poised to outpace its competitors and become a leader in the fast-food industry. However, as the company continues to invest in AI and menu innovation, it must also address the potential risks and challenges associated with these technologies to ensure long-term success.