Growing the `Whopper' brand

Burger King, the world's second-largest fast-food chain, plans to boost its U.S. sales and market share with an aggressive campaign that will stress the superiority of its food over that of No. 1 McDonald's.

Burger King, a unit of London-based Diageo Plc, can boost its U.S. share to 24 percent from 20.8 percent in the next three years, Dennis Malamitinas, chief executive of Miami-based Burger King, said.

Malamitinas made his comments in an upbeat presentation to analysts -- Burger King's first since 1991 -- that some analysts speculated might have been a prelude to a Burger King spinoff by Diageo. Malamitinas said a spinoff isn't in the works. "Burger King is not up for sale," Malamatinas told the Bloomberg Forum after the meeting. "Diageo is totally committed to growing this brand around the world." Burger King also plans to improve the appearance of its 7,600 U.S. and Canadian restaurants as it reduces price competition and steps up advertising that touts taste, the executive said. It's facing stiff competition from McDonald's, which is introducing a new food- production system at its more than 12,000 U.S. stores. "The brand is in great shape, not only in North America, but in the rest of the world," Malamatinas told the analysts. "We're not satisfied; we think we can drive this brand even harder." Burger King had North American sales last year of $7.8 billion, about 45 percent of McDonald's $17.1 billion. But its U.S. market share grew by 1.2 percentage points from 1995 to 1997, while McDonald's slumped by a tenth of a point. Malamitinas took over at Burger King in March 1997. Before that he headed the Asia Pacific business for Diageo's International Distillers and Vintners, now known as UDV. In addition to Burger King and beverage companies, Diageo owns the former Pillsbury food company, marketer of Green Giant vegetables, Haagen Daz ice cream and other brands. Burger King, the maker of the Whopper and the newly introduced Big King, new-formula french fries and other new products, also sees growth in select international markets, Malamatinas said. "You will not see us pursuing a stamp collection strategy," Malamatinas stressed, differentiating Burger King from McDonald's, which has entered many foreign markets. Burger King sees continued opportunities in Latin America and South America. In Europe, where the company has suffered from decentralized management, Burger King has shed its French operations and is focusing on Germany, the United Kingdom and Spain. The company also plans to develop in the Asia Pacific region, where its primary focus has been Australia. "Burger King represents tremendous potential for growth around the world," Malamatinas said. "We will grow but it's going to be in a very focused and disciplined manner." Deborah Cohen prepared this article for Bloomberg News.

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