Food-Industry Convulsion Prompts Papa John’s To Tap Another New CEO

Rob Lynch’s move from Arby’s to become CEO of Papa John’s underscored the musical-chairs nature of life at the top of America’s food chain these days, as changing dietary habits and digital technologies roil executive suites at one restaurant company and consumer-packaged-goods giant after another.

The board of Louisville-based Papa John’s reportedly lured Lynch from his perch as president of Arby’s and had no qualms about immediately displacing the current Papa John’s CEO, Steve Ritchie. That apparently was the case even though Ritchie had managed to steady Papa John’s and level out its performance after a decline in revenues and stock value in the wake of controversy over racially charged remarks by founder and former CEO John Schnatter. Ritchie, a long-time Papa John’s franchisee, replaced Schnatter 18 months ago.

Lynch offered a pedigree that the Papa John’s board couldn’t resist, as a career-long brand wizard who came to Arby’s from Taco Bell in 2013. As chief marketing officer and president, he helped revitalize the roast-beef brand with unapologetic positioning behind its traditional menu. “We’ve got the meats,” Arby’s brand slogan has been for a while, voiced robustly by actor Ving Rhames. Arby’s also has sold venison sandwiches for limited stints in some heartland locations, and Lynch refused to usher in plant-based-sandwich options as some burger chains have done.

Papa John’s has been battling problems for two years, since Schnatter first complained about the national-anthem policy of the National Football League, then a close marketing partner of the pizza chain. Papa John’s has slipped to No. 4 in the U.S. pizza business, behind Domino’s, Pizza Hut and Little Caesars.

But beyond its unique reputational challenge, Papa John’s also has been dealing with issues that it shares with many U.S. restaurant and food companies these days. They include the disruptive effects of third-party food-delivery services that pose either a new opportunity for pizza and fast-food chains or a threat to their own delivery systems.

Both traditional CPG companies and restaurant chains also are reckoning with the fast rise in popularity of plant-based analogs to burgers, chicken nuggets and dairy products. And even-broader changes in the American diet and appetites have forced food retailers to give shelf space to startups that intrigue consumers and to take it from many processed-food brands that were dominant for decades.

So it wasn’t a huge surprise when, for example, Campbell Foods eased out CEO Denise Morrison in the spring of 2018, and when Kraft Heinz recently installed Miguel Patricio as its new CEO, ousting Bernard Hees. Chiefs of many other mainstay packaged-foods companies remain under pressure as they cope with the strong new dynamics in the market.

In the foodservice arena, even Chipotle, long a paragon of woke-ness among restaurant chains when it came to the modern fast-food patron, in 2018 brought in as CEO Brian Niccol, a marketer who had helped revitalize the Taco Bell brand. Niccol replaced Chipotle founder Steve Ells as CEO and promptly turned around a brand that had suffered from some food-poisoning incidents and from a lack of menu refreshment. He addressed food-safety concerns head on with a new advertising campaign around the freshness of Chipotle’s ingredients, and veered heavily into digital technologies such as mobile ordering and payments.

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