Red Robin Unveils Seasonal Menu Items - Analyst Blog

Red Robin Gourmet Burgers Inc. RRGB added more flavor to its wine menu for adults with the introduction of Mango Moscato Wine Shake. The shake, made with Alice White Moscato, SKYY Infusions Moscato vodka, mango purée and vanilla soft-serve ice cream, will be available till Sep 1.

Red Robin unveiled another seasonal drink — Citrus Moscato Fizz — a refreshing blend of SKYY Infusions Moscato vodka, muddled citrus and soda.

Red Robin's master mixologist, Donna Ruch, is the mastermind of the latest drinks and it comes after the immensely popular O'Fest Beer Shake. The Beer Shake included vanilla soft-serve, caramel and Sam Adams OctoberFest, and was first marketed during the autumn of 2012. On popular demand, the drink made a comeback in September last year.

In our view, the beverage innovation coupled with the growing popularity of wine, especially the Moscato varietal will drive the popularity of the Mango Moscato Wine Shake.

The fast casual restaurant chain also introduced two burgers — D.G.B. (Damn Great Burger) and Black & Bleu. While the D.G.B. comes with oven-roasted tomatoes, roasted garlic aioli and arugula with citrus olive oil dressing, Black & Bleu contains portobello mushrooms, grilled onions, Bleu cheese sauce flavored with a Dijon sauce.

The restaurant chain added some variety to its platter with the introduction of Red's Tavern Fries and Chocolate Banana Chunk Bite-Tini. While the former consists of fries served with Red's Secret Tavern Sauce, American cheese and bacon, the latter is a crispy bread pudding with chocolate stuffing.

Menu innovation is an effective tool to survive in the highly competitive fast casual dining industry. In our view, Red Robin's seasonal menu innovation will increase traffic in the upcoming months. Additionally, Red Robin's operational strategies such as expansion into the high-growth markets like Florida and Chicago are added positives. Also, the company's smaller prototype restaurant concept — Red Robin's Burger Work — is also expected to drive profitability.

Many other restaurateurs such as The Wendy's Company WEN, Jamba, Inc. JMBA and Burger King Worldwide, Inc. BKW are also resorting to menu innovation in recent times to drive profitability and adapt to the changing consumer preferences.

Red Robin currently carries a Zacks Rank #3 (Hold).