'If you look far enough ahead, the zigs and zags don't have to be so big'

Mike Woodhouse says staying true to its DNA has helped Cracker Barrel outperform its competitors during the recession [From our print edition featured in Monday's City Paper]

Email | Print By Geert De Lombaerde

Mike Woodhouse

Mike Woodhouse has been with Cracker Barrel since 1995 and was named the company’s president in 2000. He added the CEO title a year later and took the chairman’s spot in November 2004. During the 64-year-old’s time at the helm, shares of Cracker Barrel have risen 130 percent — more than 150 percentage points more than the S&P 500 over that time.

Earlier this month, the company celebrated the 40th birthday of a restaurant concept that has for many become synonymous with road trips and comfort food. Woodhouse recently talked to Post Editor Geert De Lombaerde about safeguarding and growing his company’s enduring brand.

Cracker Barrel is an established brand today. How was it perceived at its start?

Danny Evins, our founder, was an oil jobber in the 1960s who traveled the country and saw the need for a place to take a break from the highway and get a good meal. In the early days after he started the company, there was not nearly the density along the interstates that there is now. There was more a of discovery element to Cracker Barrel then.

Today, Cracker Barrel is about quality, service, Southern hospitality and value. We’ve done a great job of taking that wherever we go. One of our challenges is to take the qualities that make our brand what it is and build on them. Paying attention fundamentally to what our brand is about has been my No. 1 job the last few years. I’ve really focused on combining the subtlety and personality of our brand with the running of a big public company.

Given that public-company dynamic— especially during a recession like this one — do you feel pressured to cut spending on the brand?

No. We spend an enormous amount of money on training. We serve 220 million guests per year; if we cut back on our training, we will very quickly lose what we’re about and very quickly lose some of those customers.

We’re not cutting corners on the quality and the quantity of our food. That’s part of our long-term appeal. It’s a question of trust: When you come to one of our restaurants, the items that are still on the menu today that were offered 10 years ago are of the same quality. We have not skimped regardless of commodity costs.

That’s helped us in the market. One of the ways our industry measures success is the Knapp-Track index, which tracks sales and guest counts. On average, restaurants are below the sales levels of a year ago and traffic is down. Many of our competitors are discounting heavily and yet they are still experiencing significant decrease in traffic.

We have outperformed our peers on those measures during the recession. We have taken a moderate price increase… and our traffic is doing better than the competition. The reason for this is the high quality, the hospitality, the honest value — in other words, staying true to our brand.

Given Cracker Barrel’s Southern hospitality feel, are there geographic limits to the brand?

Let me make a distinction: We’re not a theme restaurant. We’re not going to teach everyone to speak as if they’re from Tennessee. Preserving the basics of our brand is about finding the right people and our mission is about pleasing people. If we find the right people, we can please our customers.

There’s a lot to be said for staying true to your brand’s original premise, but don’t you still have to zig and zag a bit over time to adjust to the market?

If you look far enough ahead, the zigs and zags don’t have to be so big. When we sold Logan’s Roadhouse [in October of 2006], we set out a broad strategy for Cracker Barrel itself. Because we did that then, we’ve had to do less zigging and zagging since.

How much of your time do you devote directly to brand-related activities?

Well, before this call, I was trying the new Cracker Barrel popcorn. So much of what I do is about our brand. We have a new-menu team, of which I’m a member, but I’ve also spent a lot of time on our Seat to Eat initiative [a $13 million program to speed up food preparation times and will be rolled out companywide over the next 18 months.] The brand finds its way into just about everything we do.

You’ve had a lot of success in recent years with your record label. Have there been brand extensions that haven’t worked out so well?

Sure, we’ve tried a few things and looking back, they were things where my gut told me, ‘This isn’t quite right.’ But in the process of changing and learning, you’re going to have some failures and course corrections.

So we shouldn’t look for a Cracker Barrel theme park any time soon.

No, but we have a nice corporate campus here in Lebanon. That does it just fine for us.

You mentioned our label. The music has been such a good thing for us the last few years. Obviously, we have an advantage from having in the Nashville tie-in. Having these country music personalities associated with our brand adds to the authenticity that people know us for because these country music personalities are actual Cracker Barrel users. It goes toward the idea of having spokespeople who actually use the products they endorse.

From an advertising point of view, Cracker Barrel is renowned for its billboards. Why, after all these years, are they still such a success?

For one thing, we have 1,500 of them. You can’t drive far without seeing one; the number of impressions is tremendous.

But we’ve also moved back to a more traditional format. Our previous generation was a bit more colorful and featured green beans, carrots and the like. People told us, ‘We like them, but we can’t tell it’s a Cracker Barrel ad.’ So we’ve gone back to the more traditional approach. [Ed. note: Cracker Barrel has worked with Nashville ad agency Buntin on its billboards since 2000 and on its radio and TV ads since 2004.]

Billboards will account for 59 percent of your advertising spending this year. Given the growth of the Web and its relatively lower cost, isn’t there a temptation to move more dollars there?

Advertising has a very interesting future and we’re paying attention to all the possibilities that are out there. But for now, we believe in doing a few things and doing them very well.

Sounds like that idea sums up a lot about Cracker Barrel these days.

The temptation is to always want to do be doing something different. We’ve adopted the phrase ‘relentless repetition’ for our organization, especially in our restaurant operations. At the corporate office, our job is to make sure that phrase, that concept makes it to our front-line people.

We want to be ready when things pick up. We are ready with new food promotions and we are working hard on our structural costs even as we keep our focus on improving operations.