Arby's buys Wendy's--neutral for beef

The fast food biz is all agog about Tri-Arc Corp., owners of Arby's, buying Wendy's in an all stock deal. Wendy's has been on a steady downward slide ever since the death of founder Dave Thomas a few years ago. His daughters and early franchisees made a competing bid for the company, but the board of directors chose to sell to corporate raider Nelson Peltz and his firm.

Both companies are major purveyors of beef. Since 80% of the beef sold in America is ground, what happens in the fast food segment is always very important to the beef industry. I've always been critical of Arby's for bastardizing good roast beef. I remember the early days of the chain, when they sliced beef right off roasts to the bun. It was great. I couldn't get enough. Some 30 years ago, they went to plywood beef, pasting together little snippets of beef with gelatin into "roasts" and slicing that.

The flavor and texture have never been the same, so I eat turkey or ham when I go to Arby's. Wendy's, like most of the fast food chains, have quit cooking burgers on the grill and serving them hot off the grill onto the bun. Now they are cooked once a day, kept warm in a drawer and made into sandwiches when the customers order. The fresh taste is history. McDonald's, Burger King and Wendy's are all guilty of the same crime.

That said, Arby's has showed considably more marketing prowess recently than Wendy's, so from that standpoint it might be a positive thing for Wendy's. Arby's deli sandwiches are far superior to Wendy's attempt, and Arby's salads are far more creative than Wendy's. Arby's has tried creative ways to market beef, such as the pot roast sandwich, which was very good but didn't catch on, and a reuben sandwich, with the jury still out. If Tri-Arc brings such creativity to Wendy's, it will be a good thing.

Both Arby's and Wendy's have beef-driven menus and are heavy sellers of the product. That's good for the beef industry, and we want them both to be successful. There can be upward beef sales if they are successful, but at least the Wendy's deal probably is a neutral for beef sales and not something for the cattle industry to get too exercised about.