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A&W CEO Paul Hollands

David Jordan

| March 3, 2010

Image by: Adam Blasberg

A&W CEO Paul Hollands on the secret to success for Canada’s second-largest hamburger chain (in a word: boomer).

It’s 11 a.m. on a wet Wednesday morning in North Vancouver. Pedestrians dash from the SeaBus terminal to the protective awning of Lonsdale Quay, the lucky ones shielding themselves with an umbrella, others fending off the torrential rain with whatever comes to hand: a newspaper, a jacket pulled up over the head.

Staff on the third floor of the grey office building overlooking the deserted concrete plaza below are oblivious; there’s a party going on. A couple of dozen folks dressed like your mom and dad – strictly a sweater-and-slacks crowd – cluster around a reception area festooned with bouquets of orange and brown balloons. Coffee cups are raised and a final cheer erupts before the crowd breaks up and staff wander back toward their cubicles in groups of two and three.

If it isn’t immediately obvious whose office this is, the pedal-car in the corner is a dead giveaway. Inside the orange-painted ’50s-vintage kids toy is a stuffed bear with a big A&W imprinted on its orange sweater. This is the head office of A&W Food Services of Canada Inc., the country’s number-two burger chain, behind McDonald’s. Today’s party was in celebration of the opening of two new outlets: one in Sept-Îles, Quebec, and the other in Stouffville, Ontario. Staff might be forgiven if a touch of office-celebration fatigue has set in; the company opened 22 new outlets last year and has 26 in its sights in 2010.

President and CEO Paul Hollands ushers me into his office. The fit 53-year-old speaks in well-modulated tones as he recounts how A&W has succeeded in its strategy of appealing to the boomer generation’s nostalgia for the simpler pleasures of days gone by. Although product innovation is a key part of that strategy, innovations have centred on classic burgers rather than food fads of the day. “We’re a classic heritage brand,” Hollands says. “A heritage brand is built around simple ideas that are powerful regardless of the age.”

If Hollands remains resolutely on message, it’s probably because he has lived and breathed hamburgers and root beer for the past 30 years. After majoring in business at UBC, Hollands worked briefly at Shoppers Drug Mart before joining A&W in 1980 as a junior marketer. “I’m a marketer by trade,” he explains. Like the consummate pitchman, he agilely deflects questions about the personal challenges of running a $700-million-a-year company, returning constantly to the corporate “we.”
“We’re really a strategy-driven business,” he says when asked what his primary responsibility is. “My job is to help facilitate a great team of senior people in terms of executing a great strategy.” That strategy, he reiterates, is all about catering to the boomer demographic.

To maintain its share of the Canadian burger market, Hollands explains, A&W needs to expand – and that means focusing a lot of time and energy on Ontario and Quebec. It’s just a question of math, he says: B.C., with a population of about four million, has about 160 A&W outlets; Ontario, with a population of 11 million, has only 150.

And for Hollands that means living out of a suitcase about four days out of every 10. “We’re a West Coast-based retail chain,” he explains, “but most of the population of the country is not on the West Coast. So you spend a lot of time on an airplane, because in retail you’ve got to go where retail outlets are.”

Expansion is limited to Canada because the company is built solely upon ownership of Canadian rights to the A&W trademarks, which are owned by U.S.-based A&W Restaurants Inc. (That company was founded by Roy Allen and Frank Wright in California in 1922; the first Canadian A&W restaurant opened in Winnipeg in 1956.) The Canadian rights to the trademarks are held by A&W Revenue Royalties Income Fund, which collects a three per cent royalty from all restaurants, operating under the A&W Food Services of Canada banner.

Whether the company will continue its remarkable growth as boomers enter their golden years remains an open question, but one thing’s for certain: in the Hollands family, at least, the infatuation with nostalgia lives. When asked about his own family’s eating preferences, Hollands responds that his 11-year-old son “is a big fan of the Sirloin Baby Burger.”

Tags

To whom it may concern, My

Submitted by Anonymous on Tue, 2010-08-10 06:56.

To whom it may concern, My wife and i and a lot of other senior citizens go to store #4275 at eight am in the morning and could you tell me why your music is so loud at that time.We complained to everybody but they dont care.the young staff does not care about the older generation.Most of us come everyday.If you dont care about us tell and we will find another place likeTim Hortons.Dont you forget its the customer that pays your BILLS.maybe you do not care.your staffs greatest excuse is that we cannot turn down the volume the button is broke.WE might be crazy but we are not Stupid.

You need to work on those

Submitted by Anonymous on Wed, 2010-07-28 17:08.

You need to work on those veggie burgers .....the combo's are expensive and the burger patties are DISgusting

Mr.Hollands On June 9th,2010

Submitted by Anonymous on Wed, 2010-06-09 17:41.

Mr.Hollands On June 9th,2010 around 10:45am in the town of Fowlerville,Michigan 48836 My husband and I stop at our local KFC/A&W Restaurant asking for a Papa Burger Combo for both of us,along with a Rootbeer Pop (Soda) . Receiving our order after using a $ 1.00 off coupon so getting $2.00 off total coming to $ 11.12 and setting down to eat we both realize that our food is reheated from the previous night, as the burgers had been reheated and were dark on the outside but cold on the inside, our fries were also the same way, the only fresh thing was our Rootbeers (pop or soda) So there fore I do beleive that you as the CEO of A&W Restaurants should come to this A&W undercover and check this out. Sincerely,Rose Line former customerThe Store # is385002 Manager Tina Moore 517-223-2037 My address is 436 Meadow Lane Fowlerville,Michigan 48836 phone 517-223-2596 I do hope you are concered enough to at least check this complaint out. Thank You

Stuck in a 1950's time warp,

Submitted by Yves (not verified) on Thu, 2010-03-11 17:43.

Stuck in a 1950's time warp, A & W is the foodservice equivalent of the bug trapped in amber, unchanging, beautiful, but unclear. Root beer & burgers is a steady formula that works ... so following the principle that "if it isn't broken, don't fix it" ... A&W marches on and good luck to them. As the 21st century marches on, the general attack on both childhood obesity & adult fat due to poor nutrition will intensify; the burger shacks will be in the health regulation cross-hairs, whether they are number one, number two, or three in the nation. If A & W were to take a leadership roll into salads and a fundamentally healthier menu as opposed to perpetuating great-grandpa burgers and marketing buzz of that ilk, then the 21st century would look better for the people we all should be concerned about: the customers and their health.