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Wendy's Gets Rid Of Its Bakery, But The Pretzel Bun Lives On

The company is selling its bakery operations, which make the "standard" and "value" buns for its burgers. But experimentation on the bun front will continue.

Posted on May 6, 2015, at 1:49 p.m. ET

Larry Busacca / Getty Images

Wendy's, creator of the Pretzel Bacon Cheeseburger, isn't done experimenting with new frontiers in hamburger buns. It's just decided to leave the task to better bakers than itself.

The company will sell the New Bakery Company, its bakery operation in Zanesville, Ohio, which produces "standard buns" and "value buns" for the chain. While Wendy's will continue to buy from the bakery after the sale, the move gives it greater flexibility to source higher-end buns from other producers. Revenues from Wendy's bakery were $61.8 million in 2014.

The company "thought the appropriate thing to do would be to put it in the hands of a true bakery operator," said Wendy's Chief Financial Officer Todd Penegor on Wednesday's earnings call.

Spokesman Bob Bertini says Wendy's will not phase out standard buns, but will continue to use different "artisan buns that deliver a distinctive taste experience."

"You can expect continued innovation in this area," he said in an email to BuzzFeed News.

Wendy's has looked to improved bread options such as pretzel buns, brioche buns, and flatbread to differentiate itself from other chains selling premium burgers. It added the Pretzel Bacon Cheeseburger to its permanent menu last year, and has described the pretzel bun as "a cornerstone of our menu innovation."

The new menu items resulted in initial sales bumps, but whether Wendy's better-burger strategy will continue to have a positive impact is debatable as consumers continue to look for value items on fast food menus. McDonald's recent premium offerings such as McWraps failed to lift sales, although the chain is pursing new options such as customizable burgers. Burger King, meanwhile, has seen gains with value deals on its burgers.

Wendy's big opportunity "remains the price/value area," said CEO Emil Brolick on the call.

Wendy's reduced its outlook for comparable sales at company-owned restaurants to increase just 2.5% to 3% in 2015, down from a previously stated 3%.

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