Beyond The Huddle: How Cracker Barrel Got Cooked
When you chase Gen Z and forget your core customers, you’re serving up a recipe for disaster.
Brands often face a tough challenge when they’re dealing with an aging consumer base. Some chase the customer they want instead of the one they have. Others, smartly, develop a new offering appealing to the new customer they desire.
Such is the case with Cracker Barrel. They smartly pursued developing the new, but succumbed to chasing the new by “transforming” their brand.
Here’s why this is a mistake. In politics, the people who supported you will never trust the new you, and the people you hope to attract will always remember who you were. It doesn’t matter if you’re a politician switching parties or a restaurant chain suddenly chasing mentions on TikTok; this strategy rarely works.
While everyone is focused on the recent change in the logo, Cracker Barrel’s demise has been building for more than a decade. Its problems have many owners, from an activist investor who has wrecked the company, to walking away from local management, to cutting portions while raising prices, to forgetting the most crucial element of any restaurant, food quality.
It’s also a perfect case study for marketers. Think of it as a clash between The Kellogg School of Management at Northwestern, focused on the brand identity and value proposition, vs the short-term gain and returns from the MBAs at Wharton, looking to bleed every ounce of revenue from a regional roadside brand.
While everyone is focused on the new management team and their role in cooking the brand, they are only putting the final touches on the company’s decline. It’s an interesting story and a learning lesson.
A Local Brand With Deep Roots
Having grown up in Nashville, roughly two exits away from the first Cracker Barrel and the organization’s headquarters in Lebanon, Tennessee, we have grown and aged together. As a kid from a solidly working-class home, this was the full-service restaurant treat for Friday nights. My brother and I spent a lot of time playing checkers in front of the wood-burning fireplace that exists in each store. The checkerboard is the genesis of the brand’s name. The founder, Dan Evins, named the restaurant after the barrels of soda crackers, often with a checkerboard atop, that he encountered in local roadside markets and filling stations that littered America’s highway system.
The Evins family was in the gas business, and Dan thought roadside travelers would enjoy a nice sit-down restaurant along the new interstate highway system, which would eventually steal travelers from the highways, and put the old local highway markets, with a later assist from Walmart, out of business. Race had nothing to do with the brand’s name or history.
The restaurants all have a gift shop or “store” to hold customers while they are waiting for their table, providing an additional revenue stream by providing snacks for the travelers on the road (here’s looking at you, Moon Pies a Chattanooga Based Candy, and Goo Goo’s, a Nashville candy staple) which made it unique. Kitschy southern items, candies, goat’s milk lotion, and some dry goods provided a revenue stream out of reach for most restaurants.
The now-replaced logo was the creation of Bill Holley, employee number one for the Nashville-based ad agency The Buntin Group, where he worked for 50 years directing art, creative design, and copywriting. The only child of a sharecropper from rural Tennessee, and a graduate of a local art school, he helped define Cracker Barrel’s brand, one he really understood, and his life story is emblematic of the American dream.
Until 2011, Buntin was the primary agency of record for Cracker Barrel. While they had forays with other firms, they usually ended up back at Buntin, who knew the business and knew the out-of-home advertising (i.e., billboards) required for a roadside eatery chain.
Leaving their longtime agency was just one element of a very bad year. 2011 was the inflection point, and the spot in the road where the wheels began to come off the brand.
Investor Pressure and Cultural Controversy
The chain has long been accused of discrimination, faced countless charges of sexual harassment, and had numerous EEOC complaints. In 1991, they were accused of only hiring people who weren’t gay. In 2004, the chain had agreed to an $8.7 million settlement to resolve lawsuits with the NAACP, capping more than ten years of charges of discrimination.
In 2011, a political blogger noted that Barack Obama only won 36% of counties that have a Cracker Barrel, reopening old charges of discrimination at the restaurant.
In July of 2011, Cracker Barrel left Buntin and hired Euro RSCG Chicago, a unit of the French advertising and public relations company, Havas. The change occurred following the June announcement that an activist investor, Sardar Biglari’s Biglari Holdings, revealed its stake in the Company.
Since 2011, Biglari has tried everything possible to emulate his prior takeovers of Steak’ n Shake, Western Sizzlin, and Friendly’s. His general modus operandi is to gain seats on the board, engineer a merger with his existing company, and leave shareholders out of any potential payday from a takeover.
This war is continuing, he’s still trying to wrestle control of the brand, even using the Steak n Shake X account to poke fun at Cracker Barrel’s PR problems.
As with any company with investor issues, squeezing every last dollar out of the brand, above all else, became its primary goal. I should note that this is my view from the outside, watching this whole saga. Insiders may have a different take.
To its credit, the company was very successful in wringing out as much revenue as possible.
In 2013, along with some other Atlanta agencies I’ve worked with over the years, I was part of an RFP on developing new pricing models for the chain. While we didn’t get the contract, the winner definitely worked with their team to version and raise prices across the board.
If you look at customer sentiment and reviews since then, you will see a lot of negative comments about higher prices and lower food quality. If you look at the company’s stock price, it had a great run from 2011 to 2020, until the pandemic wrecked the industry. While their stock recovered momentarily in 2021, it’s been a steady ride lower since.
As the stock and revenues declined, they followed the path of other chains and added beer and wine to the menu in 2022, trying to attract customers aged 25 to 34 and 45 to 54. While I understand going for the easy revenue, it went against the company’s wholesome and traditional brand.
COVID also ended the détente with Biglari, who made a lot of money on his investment up and until this point.
The Strategic Crossroads
Before the pandemic, Cracker Barrel rightly understood that it was a legacy brand with an aging customer base.
When faced with this challenge, as I mentioned earlier, successful brands start new companies or offerings. They don’t walk away from their base, hoping to attract a younger clientele.
The father of modern management theory, Peter Drucker, is often misquoted to illustrate this point. “Company cultures are like country cultures. Never try to change one. Try, instead, to work with what you’ve got.” This quote is often used by marketers and consultants like myself to rightly point out that changing an organization’s culture and brand is so challenging and expensive that working within its existing framework or starting a new brand may be more practical.
In short, don’t piss off your current customers to attract the crowd you want.
It’s far cheaper in the long run to create a new brand or culture. Bud Light learned this the hard way. Invest in the new company, product, or service and maintain the legacy brand with slow evolutionary type changes.
To their credit, Cracker Barrel, under their prior CEO and former CFO, Sandy Cochran, followed the correct strategy. They invested in Maple Street Biscuit Co. to enter the breakfast and lunch market, and they invested in a Colorado chain, Punch Bowl Social, a bowling and games concept aimed at a 25- to 34-year-old audience.
This was a smart move–invest resources to get younger in a new brand. Just one problem, the pandemic wrecked Punch Bowl, which ended up filing for bankruptcy and simultaneously ending the latest fleeting détente with Biglari, who used the problem as another salvo against the company’s leadership.
With a newly energized Biglari, Cochran retired and was replaced by the new and current CEO, Julie Masino, who worked previously with Taco Bell and Mattel. New Chief Marketing Officer Sarah Moore joined up after 17 years at MGM Resorts, International operator of resorts such as the Bellagio and Mandalay Bay in Las Vegas.
If you look at the current management team, they are almost all new to the company.
They’ve also hired a new agency team to support their brand refresh:
New York-based Blue Engine is handling public relations, experiential marketing, and partnerships. They also work with Burger King and Planet Fitness.
Prophet out of San Francisco is handling their brand marketing efforts, restaurant redesigns, and brand marketing campaigns. They’ve worked with Chick-fil-A, JetBlue, and The North Face. They also worked with AB InBev, the parent company of Budweiser and Bud Light, on ESG initiatives and commitments. Fun fact, the firm was started in 1992 by podcaster and professor of marketing at the New York University Stern School of Business,
.New York-based Viral Nation is managing social media and “expanding Cracker Barrel’s digital presence and evolving its position in culture. For the normies reading this, they handle TikTok and hire influencers.
So what’s the new vision?
In May of 2024, new CEO Julie Masino laid out a plan “to drive relevancy, deliver food and experiences guests love, and grow profitability.” To do this, they laid out the following efforts in a press release detailing plans to achieve these goals:
Refining the brand: The Company has engaged a leading branding agency (Prophet) to refine and strengthen positioning to delight existing and new guests.
Enhancing the menu: Introducing menu innovation, streamlining processes to improve execution, and optimizing strategic pricing to protect value and enhance profitability.
Evolving the store and guest experience: Delivering exceptional guest experience through operational excellence and improved store design and atmosphere.
Winning in digital and off-premise: Growing the off-premise business (i.e., takeout/catering and food delivery) and leveraging technology such as Cracker Barrel Rewards, their loyalty program.
Elevating the employee experience: Upgrading training and development programs, simplifying job roles, and utilizing technology.
At first glance, most of this is pretty standard CMO fare. Grow off-premise revenue, improve technology, and develop a rewards program to get data on your customers.
It’s the refined brand positioning, particularly geared toward new guests, that is where the problems start. They hired three agencies as far away from their current customers as possible, all with a heavy emphasis and focus on virality. For agencies, it’s far easier to tout success with social media metrics than conversions in a restaurant.
The CMO, Sarah Moore, added some background on the “strategic transformation” in an interview with Marketing Dive, discussing the challenges of winning Gen Z while not losing sight of their current customers. While acknowledging the challenge, the interview was mainly about TikTok, popping up on podcasts such as Smartless, and Gen Z virality.
In short, they are going for virality and trying to target Gen Z customers. This is what the whole transformation is about.
It’s a total disconnect from their current customer base, who are more likely to watch Fox News and ESPN and support banning TikTok rather than spending all day on the app. While it’s a fun listen, particularly the live stuff they did post-pandemic, this audience is not listening to Smartless.
Having been on both the client and supplier side of the marketing research business, I’ve been in a lot of these meetings dealing with this issue. You have a company with an aging customer base, declining revenues, and investor pressure to improve net revenue, looking for solutions.
Cracker Barrel started down the correct path, but investor pressure forced them toward another primrose path chasing youth, which doesn’t work for Madonna nor for brands built on a traditional, wholesome, old-timey aesthetic.
Who Cracker Barrel Actually Serves
Cracker Barrel’s customer profile is families and older adults who value traditional, affordable dining.
Here’s the breakdown:
Families: Seeking family-friendly experiences and value.
Older Adults: Valuing familiarity and a comfortable homestyle dining environment.
Travelers: Locations are typically roadside, offering a sit-down option over fast food. Cracker Barrel historically spent a lot on out-of-home advertising (billboards) to drive traffic.
Middle-Income Households: Families within a three to five-mile radius looking for a value-oriented dining experience that supplements the variable traveler clientele.
The whole transformation plan alienates these audiences across the board. Trying to find a middle ground between minimalist design and an old country store, coupled with higher prices, is not what the customer base wants.
The CEO came from Taco Bell, which remodeled its locations without issue. But this is not a quick-serve restaurant built on value tacos and third meals with a focus on “elevated” drive-thru experiences.
The Three Paths Forward
Cracker Barrel now faces three choices. Once they pick one, it will be nearly impossible to switch paths.
First, they can move forward by denying there’s any issue and downplaying the significance of any complaints. This appears to be the current course of action, and it’s the most dangerous since it risks escalating the crisis.
Second, they can double down and stay on the current path and try to rally a new younger demographic who professes their love of the new store and its merchandise aimed at their age group. They can then cite the incremental growth and social media metrics showing how the new execution is working if they just stay the course. This requires investor patience, and it risks further alienating longtime customers who now feel they’re not wanted. This is what killed Bud Light. A marketing executive explaining that a domestic beer brand in every professional and collegiate stadium should no longer focus on frat guys, but be more inclusive, killed a strong brand. Saying you want a younger demo, and the criticism is overblown, is a recipe for disaster.
The third option, which I think is the best course, is to simply say, “We’re sorry, we hear you, and acknowledge the misstep.” This allows Cracker Barrel customers to feel heard and valued. Tell them, our stores are aging, and we want to hear from you about what you want to see as we update each location. Implement some of their suggestions, so they feel valued.
If this PR crisis is still an issue for Cracker Barrel after two weeks, they are likely facing a long and expensive process if they do anything but the third option. The danger here is that investors are not known for their patience. By the time this “transformation” is completed, and any gains with a younger audience are achieved, the management team is likely out the door.
A Smarter Path
They should read the room and the current cultural climate, pursue option three, and turn this crisis into an opportunity.
If they were my client, here’s what I would advise.
Doubling down on a traditional, nostalgic vibe aligns strongly with the cultural and political climate in another Trump administration and the momentum of the “Make America Healthy Again” (MAHA) movement.
Cracker Barrel’s core menu is rooted in homestyle cooking, which lends itself to using grass-fed meats, fresh vegetables, and reduced sugar items without losing its comfort appeal.
Focus on the food quality and push a home-cooked, wholesome vibe. Your most troublesome investor, Biglari, pushed Steak and Shake to drop seed oils for beef tallow at the advent of the age of MAHA. Follow that route. Keep prices low by leveraging local seasonal produce such as fresh, never frozen corn on the cob. Drop high fructose corn syrup and dyes. Switch to beef tallow for the fried chicken.
If you have an aging customer base, more than a few are dealing with high blood pressure and pre-diabetes, so find items that are healthier options for those customers, including smaller portions for the seniors.
Now, Cracker Barrel will never be a healthy dining experience, but it can provide nostalgic patrons with a path to limit the damage.
Lean into the brand’s southern tradition and go with a kitschy, quirky redesign that exaggerates the time capsule with a heartland vibe. Add regional design touches, highlighting legacy brands from the area, but keep the tone inclusive, focusing on families of all types, health, and a great dining experience.
While you do this, focus on investing in other brands, such as the Maple Street Biscuit Co., to develop a new revenue stream while you slowly evolve your legacy Cracker Barrel brand. If you have a traditional family-oriented brand, you can’t have a sudden change in direction in two to three years without a backlash. Instead, make incremental changes that fit with the current culture.
Short-termism among return-oriented investors is just as destructive as management teams who want to build something new that they like. Rapid modernization alienates customers who value consistency. Respect the current cultural winds, and don’t fight it. Your investors know not to fight the Fed; you shouldn’t fight or even get into the culture war.
Also, hire someone local and closer to your brand to help and to listen to your customers. I’m sure the Buntin Group or Bohan here in Nashville would be more than happy to help.
Regardless of what you choose, remember this. You will be an excellent case study for marketing students for years to come. How you handle and respond will be debated in classrooms across the country for a long time.
When I was in Grad school, I learned a lot from a long-out-of-print book on crisis management cleverly titled “We’re So Big and Powerful Nothing Bad Can Happen To Us,” which covered some of America’s crisis-prone corporations of the time.
I have an extra copy of the book if anyone at Cracker Barrel wants it.
Yeesh. This explains SO much.