A Crack in the Barrel

As a marketing professional who spent nearly four decades revitalizing brands (including having a front-row seat to the steps—and missteps—of clients like Pizza Hut, Taco Bell, and Carl’s Jr.), watching Cracker Barrel go over the falls this week has made me wince. Despite prescient warnings from a passionate member of the company’s board of directors, it seems clear that the rest of the board and management team didn’t respect the currents. Which in this case means the past.

Director Sardar Biglari summed it up in an impassioned October 2024 appeal to his fellow directors. “What the Company has been doing with its remodel program is embarking on a strategy to undifferentiate itself,” he said. “Cracker Barrel is not in dire need of a transformation; it’s in dire need of a turnaround.”

That much is evident, given the company’s lackluster sales and profitability trends. Biglari’s prescription was simple, straightforward, and based on his hard-won experience turning around Steak ‘n Shake: “The single greatest way for Cracker Barrel to create value is by improving operations. The stores must provide a warm, caring, hospitable environment with authentic country cooking.”

In a deck he prepared for the board, Biglari quoted Larry Hyatt, Cracker Barrel’s former CFO, who had similar insight with respect to store decor.

Among the merchandise available for purchase in Cracker Barrel’s Old Country Stores are board games (above) and old-fashioned soda brands (below). (Peter Parisi/The Daily Signal)

“One of the financial strengths of the Cracker Barrel brand is, in our 43 years, we have never, let me say that again, never done a cosmetic remodel,” Hyatt said. “We have never spent one dime of our shareholder’s money on a cosmetic remodel. Why? Because we’re an old country store.”

Bingo. Nobody goes to Cracker Barrel for the food alone (especially recently, underscoring the need for improved operations). The appeal of Cracker Barrel is the entire sensory experience evoking a step back in time, a simpler life, a taste of old-fashioned America.

Remodeling the stores to resemble what one person on the social media platform X described as befitting a Holiday Inn Express is like Disney remodeling Frontierland using a Tomorrowland vibe. Biglari insisted that the company instead remain true to the brand’s heritage. “It should not be all things to all people,” he said, “but known for offerings that are differentiated in an old-fashioned way whose consistent ingredient is quality.”

Big branding missteps like this have happened before, from the recent (Jaguar, anyone?) to the not-so-recent past. Remember New Coke? Before giving it the go-ahead, the Coca-Cola Company conducted extensive research demonstrating that people preferred its taste over that of archrival Pepsi, claims similar to what Cracker Barrel said about its own research. But New Coke wasn’t a flop because of what it was bringing to the world, it was a flop because of what it was taking away: The Original. The Real Thing. The Coke We Grew Up With.

Perhaps Coke can be excused for not anticipating what had never happened before, but it sure seems like a lesson Cracker Barrel’s management team should have recognized, especially given what the brand has come to culturally represent.

Back in 2016, David Wasserman of the Cook Political Report notably examined that year’s presidential election campaign through an insightful lens: He compared election results in Cracker Barrel counties vs. Whole Foods counties and found that variable highly predictive. He and others have continued predicting and evaluating elections by that criterion. In 2024 Trump won 74% of Cracker Barrel counties and only 22% of Whole Foods counties.

I was so fascinated by Wasserman’s insight than I made sure to include the Cracker Barrel vs. Whole Foods metric in a sweeping 2022 study designed to identify the various personality profiles of the U.S. electorate. The findings won’t surprise you. Cracker Barrel enthusiasts are significantly more likely than the average American to be traditional, conservative, evangelical, Bible-believing, churchgoing, gun-owning, pro-life Republicans. Out of the 11 distinct voter types our study identified, they over-indexed in the two most conservative and religious segments.

That doesn’t mean every Cracker Barrel customer fits that exact profile, but those who are not comfortable dining with people who do are not likely to frequent the stores. That may explain why the company’s expansion into left-leaning California didn’t go well. It also makes me wonder how often the people who made the rebranding decisions would be dining at Cracker Barrel if they weren’t making the rebranding decisions. Especially given their fondness for ESG and DEI programs, about which we continue to learn more.

This story is still unfolding, and we may soon better understand exactly what happened. But one of the fundamental tenets of branding is the need to understand and embrace your best customers, because there’s always more people like them out there. The key is to cater to their needs, not expect them to conform to yours. It helps if you’re like them, but you have to at least like them.

Cracker Barrel customers may lack the advanced degrees and cosmopolitan sensibilities of people who populate C-suites and corporate boards. But while the experts have their expertise, those whose butts they need to put in seats do just fine in life based on something more valuable and lasting: good old-fashioned wisdom.

It appears Cracker Barrel could have used more of that.

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