Wendy’s newest breakfast item is made by another fast-food chain

By Jordan Valinsky, CNN

New York (CNN) — Wendy’s is sweetening its breakfast lineup with a new treat that comes from an unusual place: another fast food chain.

It’s a risky bet that other chains have made before. Partnerships between rivals can boost sales, but they can also anger restaurant owners. And they risk diluting brands and giving consumers fewer reasons to go to some individual stores.

Beginning February 26, Wendy’s is partnering with Cinnabon to add a new a cinnamon roll-like baked good to its morning menu, marking a partnership between two chains that often compete for similar price-conscious customers.

It’s common for fast food chains to partner with other brands they might not consider direct rivals. “This is a way to license the brand and get it reach well beyond its existing store base,” according to Jonathan Maze, the editor-in-chief of trade publication Restaurant Business.

He said that Cinnabon often does that, including selling its cinnamon rolls at Pizza Hut a few years ago and last month forming a partnership with Subway for a footlong cinnamon churro.

“It’s more of a concern for franchisees because it can dilute the brand and perhaps give people less reason to go to an actual Cinnabon,” Maze told CNN. Also, most Cinnabon locations haven’t yet opened for the day when Wendy’s sells breakfast, which ends at 10:30 am.

McDonald’s has also been experimenting with Krispy Kreme to sell their donuts at some restaurants in Indiana and Kentucky. Perhaps Wendy’s adding cinnamon pull-aparts might entice some dissatisfied customers of McDonald’s, which last year scrapped its McCafé bakery lineup that also included a cinnamon roll.

The “Cinnabon Pull-Aparts” are made from sweetened dough that’s dunked in a glaze then baked with cinnamon, brown butter and sugar. It’s then topped with Cinnabon’s signature cream cheese frosting a flavor profile like the center of a cinnamon roll, Wendy’s announced Wednesday.

Wendy’s chose Cinnabon because it wanted to partner with a similar brand that also “evolves around quality and delivering an experience that delights our customers,” said John Li, global vice president of Culinary Innovation, at a virtual press conference. “Cinnabon was the brand that had that overlap with the level of importance they put on quality.”

Breakfast’s birthday

Next month marks Wendy’s fourth year of selling breakfast. The chain entered the fast food breakfast battle in March 2020 with a $20 million investment in an effort to compete against rivals that have long-held morning supremacy, notably McDonald’s.

The chain previously predicted that breakfast would make 10% of its sales, with figures reaching 8.5% in 2021 before Wendy’s stopped reporting individual sales for the morning menu.

During Wendy’s most recent earnings call, former CEO Todd Penegor said it was a “highly profitable daypart,” but admitted that it’s still “tying to ingrain the breakfast daypart and the habit” with customers.

Wendy’s initially launched with a traditional menu (lots of egg sandwiches), but it also had a few uniquely Wendy’s takes like a “Breakfast Baconator” and a Frosty-ccino beverage.

The menu has evolved. Part of Wendy’s plan to grow breakfast is to continually expand its offerings, including recently adding a Taco Bell-like breakfast burrito and an English muffin sandwich that resembles a McDonald’s McMuffin. In a more uniquely Wendy’s take, a Frosty cream cold brew iced coffee as well as French toast sticks are new on the menu.

As for adding cinnamon pull-aparts, Wendy’s Li said research showed them that customers were craving “comfort and nostalgic experiences” and that a “sweet and indulgent item is perfect for bringing someone into that comfort zone.”

“We think ‘Cinnabon Pull-Apart’ will resonate and appeal to those younger audiences, along with our iced coffee and cold brew,” Li said. Surging sales of iced coffee are being driven by Gen-Z because they think those are more refreshing, better tasting and more of a treat compared to hot coffee.

Wendy’s will give investors an update on breakfast during its next earnings report Thursday.

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