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Dear Loyal Readers:
As we begin the “Dog Days of August”, we hope your summer is raging on! We also know, that this time of the year, is your planning cycle for 2019 and beyond. My American Recruiters Colleagues and I are on top of the trends, (both segment sales and wages) that will be shaping the 2019 year. All it takes is a call to me or my associates, and we will be happy to assist in your planning process. We look forward to hearing from you.
One of the trends that may impact your 2019 plan is an article I recently read in the Time/Health Newsletter. The article sighted studies (Harvard & The University of Illinois) that show that companies should incorporate Micro-Breaks into your work day especially those positions that deal with service centers and inside sales. Micro-Breaks are not long (average 3 to 5 minutes) but do have very positive effects on the employees who use them. (Look at what the Tech companies like Google etc. are doing!) During the Micro-Break, the research encouraged employees to stretch and hydrate. The effects have been extremely beneficial for both the employees and the organization. Following the Micro-Break, employees are more focused and less likely to commit errors and the organization has seen less frequent sick time and higher productivity. A Win-Win!!  Since this is a good time to take that Micro-Break, grab a water and read the latest edition of American Recruiters Global Foodservice News. Many of the trends currently impacting today and the future are included; so, take good notes. Oh yeah My CUBS are in first place!! Until next time, have a great start to August.
Craig Wilson
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US Foods in $1.8 Billion Deal to Buy Group of Companies

The five companies, called SGA’s Food Group of Companies, are based in Scottsdale, Ariz., and had a combined $3.2 billion in net sales last year, according to a statement. By comparison, Rosemont-based US Foods has about $24 billion in annual revenue. “This acquisition will significantly increase US Foods’ reach across key markets in the attractive and growing Northwest region of the U.S. and adds one of the most well-regarded regional distributors to our company,” US Foods Chairman and CEO Pietro Satriano said in the statement. Of the five companies in the group being acquired, 75 percent of sales come from Food Services of America, a distribution company that serves 16 West and Midwest states from nine distribution centers, the statement said. The deal “expands US Foods’ network in the attractive and growing Northwest,” the statement said. US Foods went public in May 2016. In 2015, Sysco scrapped a planned acquisition of US Foods after a judge granted the Federal Trade Commission’s request for a preliminary injunction to block the deal. The deal had been announced in late 2013. – Source: Crain’s Chicago Business.

Starbucks Details U.S. Expansion Plans

Starbucks Corp. will focus on new store openings in Middle America and the South to expand geographically in the United States. Expansions in U.S. menus will come through beverage innovation. “Our U.S. real estate strategy will be driven by placing the majority of our new stores throughout middle America and the South, with careful consideration of the format type,” said Rosalind G. Brewer, chief operating officer and group president of Americas, in a July 26 call to discuss second-quarter earnings. “More than 80% of stores built in the next few years will be drive-through as data (indicate) significant opportunities for store expansion in higher-growth, lower-cost markets, especially when considering rising wages and occupancy costs.”

Starbucks will place fewer units in Seattle and Manhattan, although the company is encouraged by the business in the two metro areas, Ms. Brewer said. “But at the same time, they’re highly dense areas with increased occupancy cost and increased labor spend in those areas,” she said. Turning to the Starbucks menu, beverage innovation is coming in various platforms. “While not yet enough to offset declines in Frappuccino sales, we see substantial accretive growth from draft, refreshers, tea and cold brew platforms,” Ms. Brewer said. “In general, consumer demand for cold beverages has grown from 37% of sales five years ago to more than 50% of sales today. There is also strong demand for customization, including blonde espresso as an alternative to our bolder signature roast and plant-based milk and cold foam for our cold coffee and tea beverages.” She shared examples of beverage innovation. “Cold foam is a cold froth skim milk designed to be a perfect creamy finish to our cold beverages,” Ms. Brewer said. “Launched this spring, we are just beginning to explore some of the opportunities here as evidenced by our latest offering, the salted cream cold foam cold brew. Draft allows us to extend beyond cold brew and has proven highly incremental, especially for occasional afternoon customers. We’re accelerating this platform to more than 2,800 stores by the close of fiscal year ‘18, up to more than 6,000 stores by year-end fiscal year ‘19.” Starbucks also is exploring multi-tap systems to add customization and innovation across tea and milk, she said.

In its Americas region, Starbucks opened 180 net new stores in the third quarter while comparable store sales growth was 1%. Operating income of $908.7 million was down 7% from $974.8 million in the previous year’s third quarter. Revenues climbed 6% to $4,230.6 million from $3,991.9 million. The Starbucks Rewards loyalty program added 1.9 million active members in the United States. Total member spend now represents 40% of U.S. company-operated stores. Mobile order and pay represented 13% of U.S. company-owned transactions in the third quarter. Companywide in the third quarter, net earnings attributable to Starbucks of $852.5 million, or 61c per share on the common stock, were up 23% from $691.6 million, or 47c per share, in the previous year’s third quarter. Consolidated net revenues grew 11% to $6,310.3 million from $5,661.5 million, primarily driven by incremental revenues from the impact of ownership change in east China, incremental revenues from 2,015 net new Starbucks store openings over the past 12 months, favorable foreign currency translation and 1% growth in comparable store sales. “While we fell short of the expectations we had entering the quarter, we’ve made measurable progress against two commitments we’ve made to our shareholders: to deliver predictable, sustainable growth at scale and to create meaningful increases in shareholder value long into the future,” said Kevin R. Johnson, chief executive officer and president.

Starbucks opened 511 net new stores in the third quarter and now operates 28,720 stores across 77 markets. Starbucks has entered a global coffee alliance with Nestle S.A., Vevey, Switzerland, in which Nestle will obtain the rights to market, sell and distribute Starbucks, Seattle’s Best Coffee, Starbucks Reserve, Teavana, Starbucks Via and Torrrefazione Italian packaged coffee and tea in all global at-home and away-from-home channels. “We anticipate that the Nestle transaction could close as early as the end of August, which would result in a dilutive e.p.s. impact of 2c to 3c in FY ’18,” said Scott H. Maw, executive vice-president and chief financial officer. “I would remind you that we expect revenue and e.p.s. to be negatively impacted in 2019 by two to three points each as a result of this transaction, with the range around the final number driven primarily by the potential accounting treatment for the $7.2 billion upfront payment.” Starbucks in the third quarter closed more than 8,000 company-owned stores and its corporate offices in the United States on May 29 to conduct racial-bias training. The closures for training had a 2c impact on e.p.s., Mr. Johnson said. In Starbucks’ China and Asia Pacific region, operating income of $234.1 million was up 5% from $223.8 million in the previous year’s third quarter. Total net revenues of $1,229 million were up 46% from $840.6 million, but comparable store sales slipped by 1%. In the Europe, Middle East and Africa region, operating income of $34.9 million was more than triple the $9.8 million in the previous year’s third quarter. Net revenues of $275.4 million were up 10% from $249.9 million. For the first three quarters of the fiscal year, Starbucks companywide had net earnings attributable to Starbucks of $3,762.8 million, or $2.67 per share, which was up 80% from $2,096.1 million, or $1.43 per share, during the same time of the previous year. Total net revenues over the first three quarters were $18,419.9 million, up 10% from $16,688.5 million. – Source: Food Business News.

BJ’s is Officially One of the Hottest Restaurants in America

The calendar might say one thing, but BJ’s Restaurants’ struggles feel like they were ages ago. Since the third quarter of fiscal 2017, which ended October 3, 2017, the 200-unit chain has transformed from a brand on a six-quarter negative sales streak into one of the hottest concepts in casual dining. After a strong start to fiscal 2018, where same-store sales lifted 4.2 percent and traffic 0.4 percent, BJ’s Restaurants cooked up a red-hot second quarter to inject even more optimism into the surging brand. Profit soared 76 percent as comps rose 5.6 percent, year-over-year. Traffic boosted 2.5 percent. Adjusted earnings per share of 79 cents, or net income of $16.9 million, stomped the Zacks Consensus Estimate of 64 cents by 23.4 percent and revenues of $287.6 million beat forecasts of $283 million. The sales outpaced an average of Knapp-Track and Black Box by more than 460 basis points.

To capture how far—and quickly—BJ’s has climbed, here’s one metric: Shares on the stock market have returned 76.1 percent in the past year, crushing the industry’s 4.1 percent growth. CEO Greg Trojan called the results “a testament to the strength of BJ’s brand and the broad attraction to our unique concept as well as our team members’ continued commitment to deliver gold standard service and hospitality each and every day.” It’s also a positive kickback from the broad directional changes BJ’s introduced throughout the course of 2017. BJ’s slow-roast items, off-premise delivery expansion, and Brewhouse Specials, along with digital and loyalty improvements, allowed the concept to pull back on discounting while driving solid gains and guest traffic, Trojan said. Just about a year ago this month, in the second quarter of fiscal 2017, BJ’s completed the rollout of its slow-roasting ovens. These premium items, which include Prime Rib, Baby Back Pork Ribs, and more, sagged the brand’s bottom line out the gate. The transition, disruption, and expense, along with start-up costs and operating inefficiencies, resulted in additional investments in labor and cost of sales. “However, with the implementation of these new platforms solidly in place we can begin leveraging these investments throughout our business to continue delivering higher quality food, service and hospitality to our guests and returns for our shareholders,” Trojan said last July.

That statement has aged nicely. BJ’s set 42 daily sales records and 23 weekly sales records this past quarter. Slow-roast entrée incidents hit an all-time high in Q2 to play a starring role in that watershed stretch. The chain’s net check growth was about 3 percent in the quarter, driven by an increase in gross checks of about 2 percent, and less discounting benefitted net sales by about 1 percent. The slow-roast menu, happy hour specials, and the popular Brewhouse Specials—weekly promotions that change by the day and special occasions (10 loaded burgers on Wednesdays, $3.14 for mini pizzas on this year’s Pi Day for example)—are helping BJ’s drive frequency to different dayparts while improving customer satisfaction scores. Trojan noted that new Brewhouse Specials are in the works to keep the deals fresh and incremental over time. These new initiatives took months and marketing to marinate, not just from an awareness standpoint, but also from an operational one. “… I think some of those improvements really come down to the fact that last year at this time we were rolling out a lot of initiatives. And our operators are really able to settle in, get through the learning curves, and optimize those initiatives. And when you can give better service and better food together, that’s going to grow your comp sales, and I think that’s what we’re seeing this year in regards to our business,” president and CFO Greg Levin said in the call. “You know I think the key is just continue to focus on the quality and the uniqueness of the food. And I feel really good about that,” Trojan added. Another thing BJ’s did was slow down its unit development. The brand has said in the past it sees national capacity for at least 435 restaurants—and is sticking by that—but wanted to hit the brakes a bit in the interim as the labor market tightened up and BJ’s solidified its model. There were 194 units this time a year ago. BJ’s opened two restaurants—in Hagerstown, Maryland, and Albany, New York—in Q2, with the latter marking the third opening so far in 2018. BJ’s said it expects to debut one additional restaurant in each of the third and fourth quarters, giving the chain five 2018 openings. Trojan said the slowdown has never been related to new-store performance. “It was really the challenges that the industry and we were feeling around driving traffic and comp sales in our existing base of restaurants,” he said. “And we felt strongly [about] that, and given the headwinds and turbulence we wanted our resources, most importantly our human resources, focused on our existing restaurants.” BJ’s growth strategy is also showing a higher proportion of new restaurants in fresh markets, rather than the fill-ins across core areas, like Texas, California, and Florida, the company was charting before. BJ’s expects growth to pick up moving forward. And the business model looks prime to do so. Restaurant-level operating margin expanded 120 basis points to 19 percent in Q2. Food and packaging costs fell 120 basis points. Labor was essentially flat as a percentage of revenue, rising 10 basis points to 35.5 percent. And BJ’s is telling a compelling digital story right now. The brand’s off-premises sales, including takeout, large-party catering, and delivery finished Q2 at a run rate of 7.6 percent of sales. Trojan said he believes there’s an opportunity to grow the channel by at least another 50 percent over the next several years. For perspective, it was 5.7 percent a year ago. Additionally, Trojan said there’s space for technology to play an increasing role in enhancing BJ’s service, hospitality, and efficiency through its app, handheld server tablets, and ongoing website improvements. These were also part of BJ’s 2017 overhaul. The handheld devices, takeout training, and delivery were just starting to break the surface last year. It’s been gaining momentum ever since. Off-premises business grew more than 30 percent in Q1. BJ’s collaborated with DoorDash and even launched alcohol delivery last August in select markets. Trojan added there’s “still a lot of growth ahead of us in the world of off-premises” thanks to product development and further leverage of its slow-roast platform. BJ’s upgraded Premier Rewards Plus loyalty program launched at all restaurants in February, and has opened “the door for us to make our guests’ interaction with our brand more customized and satisfying than ever. In addition, our overall marketing message and media placement is more targeted than ever, which is helping drive traffic across all of our markets,” Trojan said. The platform simplified BJ’s reward structure (guests earn points at a rate of 1 point for each $1 spent on food and beverages). It has resulted in an increase in loyalty guests, both in signups and the percent of checks. Loyalty sales are coming in the mid-teen range currently. “All of it has tended to be more sticky and driving more guests into our restaurants,” Levin said. It’s coexisted nicely with the handheld tablets, too. “There’s no question when we observe and see how handhelds make it easier for the guest and our servers to converse and exchange information relative to loyalty. It’s helping us execute our loyalty program in a much more seamless way,” Trojan said. – Source: FSRMagazine.

Chick-fil-A Starts its International Expansion in Toronto Next Year

The chicken-sandwich chain announced that it is heading north to Toronto to open its first franchised restaurant outside of the United States. With sales booming domestically, the move could be the start of international growth for the chain that has a strong following of devotees. The first three locations will open in 2019, with the goal of opening at least 15 restaurants in the Toronto area over the next five years, according to a company press release. “Toronto is a dynamic and diverse city with a vibrant restaurant culture, a deep talent pool and a strong, growing economy,” said Rich Matherne, vice president, international at Chick-fil-A. The move comes on the heels of soaring sales for Chick-fil-A. Rising from $7.9 million in revenue for 2016 to more than $9 billion, the Atlanta-based chain reports that it has had 50-consecutive years of sales growth. Additionally, the company recently made headlines by announcing its plan to offer full meal kits next month – making it one of the first quick-service restaurant to do so. Though Chick-fil-A does not currently have any standalone franchised locations in Canada, it has previously ventured into the country. The company opened a limited-menu licensed location in Calgary International Airport in May 2014. Social media users had mixed reactions to the announcement. While some celebrated, others stated their opposition to the Chick-fil-A for the company’s documented support for anti-same-sex marriage organizations. – Source: USA TODAY.

Grindmaster-Cecilware Announces New Vice President of National Accounts

Grindmaster-Cecilware, a leading manufacturer of commercial beverage and cooking equipment, announced the promotion of Kenny Stratton to the role of Vice President of National Accounts. He will be responsible for managing all sales activities for National Accounts. Kenny is an experienced sales leader in the beverage equipment industry and has been with Grindmaster-Cecilware since 2013. In his most recent role as a National Account Director for Grindmaster-Cecilware, Kenny led customer solution development for national accounts resulting in high profile equipment roll-outs and remarkable overall sales growth for National Accounts. Prior to his national account role, Kenny was the Central US Area Sales Director for the company. Before Grindmaster-Cecilware, Kenny was the Director of Business Development at Franke Coffee Systems and before that, a District Sales Manager for Bunn. Kenny’s sales experience, leadership ability, and knowledge of the beverage industry make him an ideal fit for his new role as Grindmaster-Cecilware’s Head of National Accounts. Grindmaster-Cecilware is owned by Electrolux. The company is based in Louisville, KY with manufacturing facilities in Louisville and Rayong, Thailand. Grindmaster-Cecilware sells products under the market leading brands Grindmaster, Cecilware, Crathco, and American Metal Ware. – Source: Grindmaster-Cecilware.

Former Cheddar’s CEO Named President of Maggiano’s

In a move to further “differentiate and perfect the guest experience at Maggiano’s,” Brinker International tapped industry vet Kelly C. Baltes as the next president of the 52-unit Italian chain. Baltes will be responsible for overseeing all aspects of Maggiano’s restaurants, including strategies and future growth of the brand, the parent company of Chili’s said in a release. “When you ask a guest about their experience at Maggiano’s, they often tell stories of how we made them feel special in the restaurant and go above and beyond to make a celebratory moment even more memorable,” Wyman Roberts, chief executive officer and president of Brinker, said in a statement. Baltes arrives at Brinker with more than 30 years of industry experience. He was the chairman and chief executive officer of Cheddar’s, Inc. The casual chain, now owned by Darden, more than doubled its footprint under Baltes, who was hired to lead the brand in August 2007. There were 63 restaurants at the time. He left in 2014. Ian Baines, previously CEO and president of Darden’s Smokey Bones concept, started at Cheddar’s in fall 2014 and remained with the brand through its transaction last April. However, in July, Baines stepped away from the role at the now 165-unit casual brand, which serves an average of 6,000 guests per week at each restaurant. Baltes helped lead the brand’s name change to Cheddar’s Scratch Kitchen from Cheddar’s Casual Café. Before, he served as executive vice president of operations for Red Lobster, where he led the operational and profitability transformation that lifted Red Lobster to its top performance in almost a decade, Brinker said. Baltes also held leadership roles at Olive Garden. “It is an honor for me to join the incredible Maggiano’s family. I have been a longtime admirer and guest of Maggiano’s and have a great deal of respect for the culture, hospitality and made-from-scratch Italian-American cuisine,” Baltes said in a statement. “I look forward to visiting each restaurant, meeting Teammates and working with the leadership teams for continued success of the brand.” Maggiano’s reported a 0.5 percent same-store sales lift, year-over-year, in the third quarter that ended March 28. Chili’s comps fell 0.4 percent at company-run stores and 3.2 percent at U.S. franchise units. As a company, Brinker reported net income of $46.9 million, or $1.02 per share, compared with $42.4 million, or 86 cents per share, year-over-year. Revenue was $812.5 million, up from $810.6 million. – Source: FSRMagazine.

Guy Fieri Opening Chicken Restaurant at Disney World

The celebrity chef is teaming up with Planet Hollywood founder and chairman Robert Earl with a new restaurant concept, Chicken Guy!, and the first location is opening up at Walt Disney World’s Disney Springs this summer. According to a press release, Fieri and Earl are teaming up yet again after the successful launch of Fieri’s sandwich and burger menu at Planet Hollywood in Orlando. As the name implies, the new eatery will feature all-natural fresh chicken tenders brined in fresh lemon juice, pickle brine, fresh herbs, and buttermilk, served in a variety of manners. They’ll be grilled, fried, and served on sandwiches, on skewers, and in salad bowls. And because no chicken tender is complete without tasty sauces, Chicken Guy! will have plenty of them. There will be an “array” of sauces available for dipping and slathering on your sammies. “I’ve had the pleasure of getting to know Guy — first with the launch of his sandwich and burger menu at Planet Hollywood. Since then, we have kept in touch, determined to work on more projects together,” Earl said in a statement. “We have found the perfect venture with Chicken Guy!, certain to be a crowd-pleaser. I have personally tasted all the menu items and can’t wait to open at Disney Springs and across the country, because I know our guests will love what Guy has put on the menu.” As Earl’s statement implies, though the flagship location will be in Disney Springs, Fieri and Earl are looking to spread their chicken tenders across the country. And who knows? They just may become the next great fast-casual chain in America: — Source: Reuters.

San Francisco Wants To Ban Multi-Million Dollar Corporate Cafeterias

A new San Francisco law seeks to ban the “insanely awesome” subsidized corporate cafeterias that have grown up in the Bay Area. If the law passes, companies like Google and Facebook won’t be allowed to operate cafeterias in any future office buildings in San Francisco. The law, which is endorsed by the Golden Gate Restaurant Association (GGRA) and Supervisors Asha Safai and Aaron Peskin, follows the city of Mountain View’s recent similar ban on a cafeteria in a new Facebook office. The new San Francisco legislation wouldn’t have an impact on the existing 51 corporate cafeterias across San Francisco. It’s all a direct reaction to the glaringly negative impact of corporate cafeterias on existing and new local food businesses in the city’s mid-market district.

The late Mayor Ed Lee’s controversial central market tax exclusion, colloquially known as the “Twitter tax break,” enticed technology companies like Twitter, Square, Uber, and Spotify to build office buildings in a clearly defined area of mid-market. This allowed real estate brokers to truly sell the area to restaurant owners and many seasoned operators hedged their bets on the historically troubled neighborhood. But under a year later, mid-market saw a restaurant bloodbath. High-profile spots like Bon Marche, Oro, Cadence, and more closed in quick succession. All of the restaurants that shuttered cited corporate cafeterias as one contributing factor to the lack of business needed to stay open. The remaining restaurants can now imagine what business would look like when millions of dollars are diverted from the “billion dollar palace cafeterias into alternatives that stimulate the local community. According to GGRA executive director Gwyneth Borden, some companies may also consider implementing alternatives like paid onsite cafeterias, catering-in food from outside business, and offering a daily food stipend for employees to use as they wish. To give a rough idea how much money will be involved: Former executive head chef at Google, Nate Keller, estimated the company spent $80 million on food costs in 2008. Imagine how much that figure has inflated in ten years time. Some companies are already opting for some subsidized food alternatives. Square, for example, shuts down its cafeteria on Fridays and provides a stipend for employees to use as they wish. ZeroCater and Zesty work with restaurants to provide larger scale catering for corporations. Detractors of the amendment might fear big government. Proponents could argue that if you don’t get people outside, interacting and spending money on the streets of the city, you’re not going to have much of a community to speak of. It’s an especially timely proposition considering the impending availability of 6 million square feet of new office space when the newly approved Central SoMa plan is completed. This is a legislative measure which would amend the San Francisco Planning Code. It will be heard in Committee at the San Francisco Board of Supervisors in September and, according to Borden, would become effective likely 30 days after passage. – Source: Eater San Francisco.

Restaurant CEOs See “Material Shift” in Roles

The quickening shift in restaurant sales from in-store dining to carryout and delivery is changing how human resources departments recruit and retain workers, leaders of four growing organizations said. “We will see a material shift in the next couple years in how HR is viewed within the boardroom,” said Paul Damico, CEO of the 39-unit Chicago-based Naf Naf Grill LLC. “In the past, it was just this silent force that was there and kept us out of trouble. “I see a shift in where we are going, to want to hear from HR more and more about how they are helping drive the business,” said Damico during a panel discussion Monday at the Chain Restaurant Total Rewards Association conference in Chicago. Damico discussed the future of the restaurant industry with Ethan Samson, vice president and deputy general counsel of Lettuce Entertain You Enterprises; Keith Kinsey, CEO of Portillo’s; Tim McEnery, CEO of Cooper’s Hawk Winery & Restaurants; and panel moderator Trey Darby of the Lockton Companies. In the next five years, Damico added, studies indicate 50 percent of restaurant sales will come from outside the four walls of the restaurant. “That’s going to be delivery and online ordering,” he said, and it will require human resources to work with trainers on new positions that will evolve to accommodate dealing with third-party or in-house drivers, working separate to-go lines and operating separate point-of-sale systems. Damico said restaurants’ hourly employee base has changed significantly in the past 10 years and will see more in the next 10. “A lot of that has to do with technology,” Damico said. “They need to understand what our app is; they need to understand how the customer orders on that app; they need to know that when DoorDash shows up, we need to treat them with kid gloves, because they represent the brand when it gets to the customers’ homes.” Damico said about 95 percent of Naf Naf Grill’s units now have dual lines, one of which is designed to accommodate to-go and delivery orders. “There are so many more complexities within the box today that not only the manager has to deal with but down to what the hourly employee has to deal with,” he said. “How are we going to get them ready and make them comfortable?”

Growing off-premise sales have also altered restaurant design and packaging, said Kinsey of Oak Brook, Ill.-based Portillo’s, which has more than 50 units. Portillo’s introduced delivery at nearly all its locations in November. “We spent a lot of time engineering the packaging so it holds the fries and keeps the shakes better,” he said. “We are also redesigning our restaurants to extend that to-go area and have it staffed by different people with different training and different hospitality skills. And they have different skills on the computer to track the orders.”Portillo’s units can have between 150 and 200 employees per restaurant, and they have to be able to accommodate drive-thru, walk-up and delivery courier guests. “It’s definitely changing how you operate a restaurant,” Kinsey said. Samson of Lettuce Entertain You, who said that delivery has become a significant part of sales volume, noted that third-party delivery shifts risk to those platforms. “It’s important for us to look at the delivery platforms as an extension of the guests,” Samson said. “We interact with our delivery partners regularly and make sure they are integrated into our secret-shopper ratings program.” Samson said LEYE instills its service values in delivery company partners so they can relay that to the guest. To help develop leaders within the LEYE organization, Samson said the company developed a leadership workshop over the past three years to give promising operators and corporate employees additional leadership tools. “It’s really important for them to develop the team behind them,” he said. “It’s essential not only to our success but to their success as leaders. We say, ‘You are not ready to step and advance your career until you’ve got the person behind you ready to step into your place.’” McEnery said the Orland Park, Ill.-based Cooper’s Hawk, which is looking at creating an airport version of the full-service concept, considers it important for employees to develop their successors before moving into a new position in the growing company.  “At Cooper’s Hawk, that’s the whole game,” said McEnery, who started washing dishes in a restaurant at age 12. This past year, Cooper’s Hawk created an employee program called “Driving Development,” McEnery explained, that includes a scorecard to track the development of others as well as the opportunity to earn a car. Workers get points for developing others and points for those who move into other positions and locations. The BMW car prizes go not only to general managers but also executive kitchen managers. So far, Cooper’s Hawk has awarded cars to 20 people in nine states because they have helped develop the next wave of leaders, McEnery said. The CRTRA, established in 1976, has more than 100 company members that represent more that 150 restaurant brands. Its members look at such topics as employee compensation, benefits, paid time off and work/life balance. – Source: NRN.

Restaurant Innovation Summit to touch down in Dallas

Learn the latest about foodservice technology when our annual Restaurant Innovation Summit touches down in Dallas this fall. This year, we’ll kick off RIS, Nov. 7-8 at The Empire Room, a new location. Learning sessions will focus on such areas as: Current restaurant technology trends; The future of digital payments and loyalty programs; Food-tech investment trends; Discussions with chief digital officers about their roles and responsibilities; Kiosk designs to improve the customer experience; Insights straight from Generation Z, and

Understanding block-chain and its applications in food sourcing; Food Innovations, including plant-based and alternative proteins. Attendees will stay at the W Dallas Victory hotel, but there’ll be fun and interesting side trips and parties at venues including the Dallas Cowboys’ AT&T Stadium, where there’ll be a foodservice and technology tour, time on the field at the 50-yard line and a drinks and dessert reception in the team’s locker room. The event is on a first-come, first-served basis to the first 50 registrants, so sign up fast. Besides the conference’s sessions and events, attendees can also take part in our Welcome to Dallas and Election Night Watch Party, where they can watch the Nov. 6 midterm election coverage at the W Dallas hotel. Health-conscious and sports-minded attendees will also get to participate in our RIS Run along the Katy Trail on Nov. 7 and a RIS Rise Yoga session on Nov. 8. There’s going to be something for everyone at this year’s Summit, so join your industry peers, technology vendors and subject matter experts and share the latest information and innovations that increase sales and improve your customers’ dining experience. – Source: The National Restaurant Association.

Prepared Foods Insights: A Freezer’s Worst Enemy

Ice not only poses a worker safety issue, but it also can expand and crack the freezer’s structure or damage the drive. Jonathan Lasecki, Ashworth’s chief engineer, suggested using proper food-safe lubricants after regular sanitation. “You need to be careful with any water because oil and water don’t mix,” he said. “When you mix them together and they start freezing, you can have catastrophic failure very quickly.” Rushing into production is never a good idea when freezing products. “Operators need to leave enough time to dry out the freezer and make sure nothing is leaking before they take it to cold temperatures,” said Kenneth King, commercial support manager at Ashworth. “When they bring the temperature down really fast, they can freeze the belt to the support rails and potentially cause damage to the system as well as the belt.” Once in operation, routinely search for signs of frost or ice buildup in the freezer. “As moisture builds up in a production freezer, it can degrade the performance of the freezer itself,” said Erik Fihlman, program manager, bakery and prepared foods for Linde L.L.C. “Moisture ingress from the surrounding work environment can be a big contributor to potential downtime, and new freezers are designed to minimize this.” On spiral freezers, Anthony Salsone, sales engineer, G&F Systems, said properly designed entry and exit vestibules limit or even prevent condensation that can disrupt the process, represent a major food safety concern and restrict the efficiency of the spiral blast freezer.

Meanwhile, IJ White offers its Auto Pressurization System that automatically balances the pressure differential at the infeed and discharge openings on spiral blast freezers. The P.L.C.-controlled system significantly reduces the amount of cold freezing air spilling from the spiral’s low opening and prevents warm, moist air infiltration from entering a higher conveyor opening. As a result, Peter White, president, IJ White Systems, said Ultra Series blast freezers can save energy while increasing the production time between coil defrosts. However, Mr. Fihlman pointed out that moisture also naturally emits from baked foods during freezing. “Whether it’s cookie dough or buttered-up Texas toast, the product contains a certain amount of moisture, and when the product freezes, the moisture wants to leave,” he said. “Where’s it going to go? It’s going to go inside that spiral freezer or tunnel chamber, and that moisture builds up.” To protect performance, Mr. Fihlman recommended bakers rely on a freezer that can provide a modulated flow of cryogen based on heat removal demand — using either liquid nitrogen or liquid carbon dioxide — to quickly create a “crust” that seals in moisture and helps prevent ice from forming on the floor or walls. In coolers for setting caramel or chocolate or for making chips, cleaning without water reduces the chance for bacteria formation and subsequent contamination.

IPCO recently rolled out a food-safe, salt-based system to remove gunky material buildup, mainly, but not only, for bake oven belts. “Think of it as a shocking device where you’re shooting salt at the belt that pulverizes and cleans it,” said Craig Bartsch, general manager, belts, IPCO North America. “It’s almost like a sand blaster. We put it over the belt, and it’s shooting salt at a high velocity on the belt. It breaks up the material on the belt, and there is a vacuum system that recoups the salt and debris.” Overall, he added, the whole process may take about 8 hours. When completed, the bakery can place the mobile unit on another cooling belt. “With this system, bakers sometimes can clean while the lines are in operation if they can find an area of the belt where they can access it while in production,” Mr. Bartsch said. Advantech Bakery Technology uses ultraviolet light to kill bacteria and viruses hidden in and around the coil areas of its new line of modular-designed cooling tunnels. That’s vital in many bakery and snack plants because the cooler comes after the oven. “Once you bake it, the product cools down and heads to packaging,” explained Russ Garland, president of Advantech. “Anytime you can eliminate bacteria growth in the airstream components, it’s a good thing.” Advantech partnered with Atlantic Ultraviolet Corp. to supply the Ster-l-ray germicidal ultraviolet lamps as a broader sanitary design initiative for its coolers, which are designed for enrobed and coated cookies, bars, pretzels, and even gluten-free snacks. Its coolers feature double doors to provide quick access for cleaning and maintenance as well as impingement plates and ductwork that are independent from the hoods. “This allows you to take those components and clean them in another area of the bakery,” Mr. Garland said. Often the best sanitary design eliminates or reduces moving parts in freezers, said David Bogle, global R.&D. director, spiral platform, Intralox. It also makes those parts easier to repair. “For instance, drum motors historically were all located in the freezer under a spiral,” he noted. “Now, those motors are located above the freezer box, which is a much easier environment for a motor and gearbox.” With coolers and freezers, proper sanitation and timely maintenance ensure maximum uptime and nip unexpected surprises in the bud. – Source: Food Business News (by Dan Malovany).

Dunkin’ rolls out Donut Fries nationwide

Dunkin’ Brands has launched Donut Fries, a new food mashup featuring individual pieces of buttery, croissant-style donut dough tossed in cinnamon sugar and served warm. “We were brainstorming in one of our culinary innovation sessions,” said Rick Golden, manager of Donut Excellence who created Donut Fries. “We tested different kinds of dough, adding cinnamon and sugar for the right amount of crisp. The end result is delicious. They are sharable. They are fun. And they bring together two of America’s favorites. What’s not to love?” Dunkin’ Brands said it tested the Donut Fries earlier this year in the Boston and Providence, Mass., markets, an initiative that proved successful enough to roll the product out nationwide. Dunkin’ Donut Fries are available in a pack of 5 for $2. – Source: Food Business News.

Venture Capital Investing in Food Accelerating

Emerging food and beverage brands continue to capture the interest of investors. Since 2013, food and beverage start-ups have raised $9.5 billion across 2,100 deals globally, said Zoe Leavitt, senior intelligence analyst at CB Insights, a data analytics firm. “We’ve seen a real explosion in new venture capital firms focused specifically on the food space as well as more traditional tech and venture capital investors making some of their first investments into food,” Ms. Leavitt said. “As of last year, the sheer number of unique investors participating in the food and beverage space had more than doubled since 2013. There is definitely a lot of excitement there.” Several factors are attracting new investors to the packaged food sector, Ms. Leavitt said. Consumer demand for healthy, sustainable and personalized options has helped spark a surge in venture capital firms, incubators and accelerators focused on food and beverage. “There has been a ton of capital that has come into this space, and it’s really fueled by the continued increased disruption that’s happening from the shift in consumers’ eating and drinking habits,” said Clayton Christopher, co-founder and partner of CAVU Venture Partners, an investment fund focused on consumer brands. “Consumers aren’t eating and drinking and consuming the same brands that our parents used to. Most of the brands in our pantries and refrigerators weren’t around 15 years ago… There has been a ton of disruption in the trend toward better-for-you, more transparency and higher quality.”

CAVU Venture Partners was founded in 2015 by three food and beverage industry veterans with an “operators first, investors second” mindset. Mr. Christopher previously was co-founder and chief executive officer of Sweet Leaf Tea Co., which Nestle Waters North America acquired in 2011, following an initial investment in the brand in 2009. Another CAVU partner and co-founder, Rohan Oza, previously was a marketing executive at The Coca-Cola Co. and Glaceau. “We founded CAVU with the belief that the best and the brightest entrepreneurs could get access to cash … what they need is expertise and know-how, folks to help guide them along the path to the top of the mountain and ideally be able to climb more quickly and efficiently,” Mr. Christopher said. “We really focus on the relationship more than the transaction, and that’s not the typical Wall Street way.” Within three years, CAVU’s portfolio has expanded to 18 brands, including Health-Ade Kombucha, Chef’s Cut Real Jerky, High Brew Coffee and Hippeas, a line of organic chickpea puffed snacks. Bai Brands, an early investment for CAVU, was sold to Dr Pepper Snapple Group for $1.7 billion in 2016. “We’re not going to make an investment unless we feel like there’s significant value we can add, which is why the scope of our investments has been very narrow, within food and beverage,” Mr. Christopher said. “We certainly looked at other areas — consumer electronics, restaurants and apparel — but we’ve been very focused on this area where we feel we can move the needle the most.”

Moving the needle. With the industry’s largest and more mature companies seeking new paths to growth, many have established venture funds or incubators in pursuit of innovation. “Major food companies are facing challenges,” Ms. Leavitt said. “They’re looking to start-ups that can offer them these new, healthier, more personalized products that they can also sell online, use direct-to-consumer subscription distribution, helping these big food companies start to prepare for a more online world … and to not be so reliant on the traditional grocery, brick-and-mortar retail channels.” She cited Nestle’s recent investments in Freshly, a subscription-based meal delivery start-up, and Blue Bottle Coffee, a specialty coffee roaster and retailer, as an exploration of alternative distribution models. “I think that’s going to be a growing area of focus, especially since grocery stores are expanding their own private label products this year; there’s a lot of talk about that, so food companies are increasingly wanting to avoid the grocery store,” she said. Tyson Foods’ recent investment in tech start-up FoodLogiQ demonstrates the poultry processor’s interest in partnering with the companies behind breakthrough products, technologies and business models. FoodLogiQ provides traceability, food safety and supply chain transparency solutions on a single platform developed for the food industry.

Tyson Ventures, the Chicago-based venture capital fund of Tyson Foods, focuses on two strategic pillars: sustainability and what the company refers to as “the Internet of Food.” Earlier investments include Beyond Meat, the maker of plant-based burgers and sausages; Memphis Meats, a producer of cultured meat products using animal cells; and Tovala, a technology-enabled meal delivery company. In May, Tyson Ventures co-led a seed investment in Future Meat Technologies, a Jerusalem-based biotechnology company advancing a distributive manufacturing platform for the cost-efficient, non-G.M.O. production of meat directly from animal cells, without the need to raise or harvest animals. “A trend I find particularly interesting is looking at some of these meat companies, like Tyson Foods and Cargill, that are making what I see as very long-term bets on plant protein and lab-grown meat,” Ms. Leavitt said. “They’re starting to hedge their bets, looking even 10 years out. Lab-grown meat obviously is not something that is commercially viable today. When we do see these very traditional major corporations making long-term bets, I think that’s a very positive signal for the food start-up ecosystem. It’s a signal that major corporations are taking the start-up world seriously and are going through these major shifts to focus more on long-term innovation.” Plant-based protein is the proposition of many of the most well-funded food and beverage start-ups, she added, pointing to Soylent and Ripple Foods as additional examples. Impossible Foods, creator of the plant-based Impossible Burger, has raised approximately $396 million since its founding in 2011, with $214 million of that in the past 18 months, according to documents filed with the Securities and Exchange Commission. “In terms of other trends, coffee is definitely hot right now,” Ms. Leavitt said. “We’re seeing a lot of coffee, cold brew start-ups. Nestle and JAB Holding are continuing to snap up coffee companies. As the two of them duke it out, I’m guessing we’ll continue to see more investment in the coffee space. “Healthy beverages overall is another trend. Over the past few years, there’s been trends in cold-pressed juices, coconut water, and now kombucha. These beverages replace soda and promise more long-term health benefits.” Looking at the long term. Despite rising interest rates and trade uncertainty, Ms. Leavitt said she expects continued strong interest from investors in early-stage food and beverage businesses. “I would predict major food companies are going to continue to invest in and acquire start-ups to head off the rising threat in these smaller companies stealing market share,” she said. The macroeconomic environment “isn’t really having an effect right now on the massive shift that’s happening in the way consumers are consuming products,” Mr. Christopher noted. “That’s here to stay, and we see it continue to accelerate, and I think that trend will continue,” he said. “As long as that’s happening, and as long as these large strategic publicly traded companies are desperate for growth, and I think that’s going to continue to happen, there’s going to be an appetite… “We see a great road ahead for at least the foreseeable future on being able to make great investments within C.P.G. and helping grow these brands to a place where there’s going to be plenty of appetite from strategics that would love to bring these products into their portfolios.” Mr. Christopher said his firm has helped portfolio companies operate more effectively and scale up in several ways, from building leadership teams to expanding retail distribution to overhauling packaging design. “Nobody’s got a crystal ball, but first and foremost what we look for is incredibly passionate entrepreneurs,” he said. “And then, best-in-class products and great brands, or at least brands we feel like could become lifestyle brands. We’re not investing in just a product but a brand that can become a platform for something much, much greater… “Your company is going to be worth a lot more if it becomes more of a lifestyle brand with a full platform of products. Strategic find that valuable.” He added, “We typically aren’t going into these deals trying to engineer a particular financial outcome. We are usually making our investments with a long-term view. We oftentimes see a lot more opportunity within these businesses than even the entrepreneurs are able to see. When we look at what a valuation is compared to some other firms that may be looking at the same business, we are able to look at it a bit differently because we’re able to oftentimes see more opportunity, just given our intimate experience in growing these types of businesses than other firms are able to do. “Given that we’re investors, I like to say we don’t cross our fingers and hope for a great outcome. We roll up our sleeves and help design a great outcome, or at least do everything we can to help those companies continue to grow.” – Source: Food Business News. (By Monica Watrous). (Source:Chef’s Cut, Hippeas, Blue Bottle, Beyond Meat, High Brew, Health-Ade, Memphis Meats).

 

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