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Dear Loyal Readers:

It is hard to believe that it is Labor Day already! Where has the summer gone? I hope you all had a great Holiday and are getting ready to head into the final quarter with renewed enthusiasm. Since it is around Labor Day that started me thinking about labor in general and especially the new labor market. We are now entering into hiring and working with Generation “Z”. (Those people born between the mid 90’s and mid-2000. Next year they will make up 32% of the population surpassing millennials.). They are important because in future decades, leaders will be managing individuals for whom meaning matters as much as, or more than, money.

 

According to a survey of university seniors conducted by MNI, (a media strategy firm) of college seniors asking them: what do they expect when deciding on which organization to go with, here are some of the results which I hope you find as interesting as I did; especially, since this will be the new workforce. Here is what they are looking for in an organization:

* A Defined Purpose Focused Business Mission. What is the bigger “why” behind your business.

* An Empowering Passion-linked work culture. This was a number response for those that said they would stay with a firm more than 3 years.

* The company Invest in development, mentoring and meaningful work. Of the three Mentoring is the key. Do you have a program in place?

* Make diversity and inclusion a priority. They want parity for women, minorities and others. (Never easy!)

 

There is more to the study, so, if you would like to know more about the “new workforce” please feel free to contact me or any of my American Recruiter Associates. We are here to assist you today and in the future. Enjoy the latest edition of American Recruiters Global Foodservice as you watch summer disappear. (My CUBS are still in 1st!)

 

Craig Wilson

President

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Cava Group to Acquire Zoe’s Kitchen

Cava Group, Inc., a Mediterranean restaurant operator, has agreed to acquire fast-casual restaurant group Zoe’s Kitchen, Inc. in a transaction valued at approximately $300 million. The combined companies will have 327 restaurants in 24 states. Zoe’s Kitchen shareholders will receive $12.75 in cash for each share of common stock. The amount represents a premium of approximately 33% to the company’s closing share price and 30-day volume weighted average price on Aug. 16. Following the close of the transaction, Brett Schulman, chief executive officer of Cava, will lead the combined company. Ron Shaich, founder, chairman and former CEO of Panera Bread, will serve as chairman. The acquisition of Zoe’s Kitchen will be financed through a significant equity investment in Cava led by Mr. Shaich’s investment fund, Act III Holdings. “As a close observer of the fast-casual restaurant industry, I am thrilled at the prospect of what Cava and Zoe’s Kitchen can accomplish together,” Mr. Shaich said. “Together these businesses will create the leading company in one of the most important categories in fast casual today — Mediterranean — with the capabilities to drive extraordinary customer satisfaction and powerful growth.” The merger is subject to certain closing conditions, including shareholder approval. The deal is expected to close in the fourth quarter of this year. Founded in 1995, Zoe’s Kitchen features a menu of wholesome Mediterranean-inspired dishes. The company has 261 restaurants in 20 states. “I am proud of the significant work the team has executed over recent years to grow the Zoe’s Kitchen footprint, build brand affinity and secure a leadership position in the Mediterranean and better-for-you category,” said Kevin Miles, CEO of Zoe’s Kitchen. “These efforts made it an attractive candidate for a transaction of this kind. I’d like to thank each and every team member who will continue to make Zoe’s a differentiated dining experience every day.” Cava operates more than 60 restaurants in 10 states and sells packaged dips and spreads in Whole Foods Market and other specialty grocery stores around the country. The brand was founded by three Greek-American childhood friends who partnered with Mr. Schulman to grow the business. “Today’s announcement is an exciting milestone for Cava, and we’re thrilled to welcome Zoe’s Kitchen to our family,” Mr. Schulman said. “Together, these two brands are united by a shared heritage and passion for exceptional Mediterranean cuisine. Now with the addition of Zoe’s Kitchen, we will be able to broaden our geographic footprint and meet the needs of even more guests — whether in Bethesda or Birmingham, Plano or Pasadena — who crave delicious, healthy food without compromise. As part of the Cava family, Zoe’s Kitchen will benefit from Cava’s track record of bold culinary innovation and leveraging data and technology to drive growth and convenience.” – Source: Food Business News.

Arby’s Plans 100 Restaurants in South Korea

Arby’s Restaurant Group Inc. is planning its biggest expansion yet in Asia. The Atlanta-based restaurant chain announced Aug. 21 it has signed a development agreement to build 100 new Arby’s locations in South Korea. The restaurants are expected to start opening in 2019. S. Fresh Co. Limited is the franchisee. “We are excited that S. Fresh will help bring the Arby’s brand to new guests throughout South Korea,” said Tim Murphy, president and managing director of international for Arby’s parent company, Inspire Brands. “We know that Koreans will enjoy experiencing the unique flavors, original recipes and a variety of high quality protein choices that Arby’s has to offer.” – Source: Atlanta Business Chronicle

Fort Lauderdale-born Gyroville Fast Casual Greek Chain Expanding Beyond South Florida

You won’t offend Gyroville founder Lambros Kokkinelis if you don’t know how to pronounce gyro, the signature offering at the 10-location fast casual Mediterranean restaurant chain he founded in Fort Lauderdale in 2009. It’s now expanding to other states, even to South America. “In Greece, they pronounce it ‘yee-roe,’” Kokkinelis explained in a recent interview at the chain’s flagship store at West Cypress Creek Road and North Andrews Avenue in Fort Lauderdale. “But the restaurant name is pronounced ‘jiro-ville.’” That’s gyro as in gyroscope, gyrocompass and gyroplane. South Florida is home to eight Gyroville restaurants: two in Fort Lauderdale, two in Pembroke Pines, plus one each in Plantation, Doral, Hialeah and Kendall. No matter how you pronounce it, gyro means round, and the gyro sandwiches at Gyroville derive their name not from their roundish-wrap but from the cylindrical shape in which the meat arrives at the restaurant before it’s roasted on a slow-turning vertical spit, and shaved off as the sandwiches are ordered throughout the day. – Source: Sun Sentinel.

China’s Newest Quick-Service Arrivals

What does a pretzel brand do in a country where there’s no word for pretzel? In Chinese languages there is no character that specifically translates to “pretzel,” so when Wetzel’s Pretzels entered the market this summer, they had to get creative. Wetzel’s decided to pair the company logo along with characters for “fresh baked.” The company’s first location in China opened in the popular Reel Mall in Shanghai in June and another has since opened. The brand’s message hasn’t been lost in translation — it’s gaining traction with Chinese customers. Through the company’s research, Doug Flaig, Wetzel’s vice president of franchising, found that consumers gravitate toward products made with limited ingredients, freshly prepared in front of them. Wetzel’s was able to bring over the essentials of their brand — the simple menu of pretzels hand-rolled onsite, along with bakery smells and bright yellow and blue branding.

Now how to define a pretzel for a new market? “We went and toured a lot of mall properties and met with landlords and we really had to explain what the product was, so I brought with me videos of us preparing it,” Flaig said. “But when they saw how it was made and they saw how the products resonated with the consumers, they were really pleased with and they felt like it was something different and unique that they hadn’t seen before in that city or in that market.” To help bring the brand to China, the Pasadena, Calif-based quick-service company relied on Will Zhu, a Chinese national who became the company’s master franchisee. Zhu approached the company after having tried Wetzel’s while traveling in California. So far, “consumer reaction has been really positive,” Flaig said. A few months later, Wetzel’s Pretzels has two mall-based locations open in China, two more in the works and ultimately plans to open 50 locations in the next 10 years.

The company is part of a new wave of brands looking to expand their reach in the most populous country. Brands like McDonald’s, KFC, and Pizza Hut have paved the way, with varied levels of success, but the newer brands entering the market are finding competition from homegrown sources and discovering new demands and desires from Chinese consumers. Craving coffee “In general, there’s just a sense that there’s a great deal of potential in China,” said Michael Schaefer, global food and beverage analyst for Euromonitor, a market research provider. “It’s almost like we’re getting a second wave of some international chains, especially coffee chains looking to set up shop there.” Chinese consumers are excited about specialty coffee. Starbucks Coffee Co. has been in the region for nearly two decades, but in the past few years has seen impressive growth. In fact, the company recently announced it is opening a cafe every 15 hours in China. Although the Starbucks had a disappointing Q3 in China, the company attributed this to a rapid opening of new locations that partly cannibalized sales from existing sites. The company currently has approximately 3,400 stores in China. “Having been in China since 1999, the strength of our brand, the trust we have built with our customers and partners, and our working knowledge of the many nuances of the China market uniquely positions us for continued long-term success,” CEO Kevin Johnson said during the third-quarter earnings call. Starbucks is planning to introduce delivery in the large markets of Beijing and Shanghai this fall and revealed a deeper partnership, including on-demand ordering, with Alibaba, sometimes referred to as the Amazon of China.

It seems Restaurant Brands International Inc.-owned Tim Hortons is ready to follow in Starbucks’ footsteps. In July the coffee brand announced an exclusive master franchise joint venture agreement to open more than 1,5000 Tim Hortons restaurants throughout China in the next ten years. “We’ve been flat in sales over the last few quarters in the U.S. and Canada,” Alex Macedo, the president of Tim Hortons, told The Wall Street Journal in July. “We feel really good about the China opportunity right now.” Facing challenges and competition Brands entering the market today face new concerns, said Schaefer. “I personally don’t see any guarantees here. I think Chinese consumers are becoming much more sophisticated,” said Schaefer. “There’s a great deal of preference for local products. Local players are becoming much more advanced. There’s a huge amount of investment capital and talented restaurant operators in China, [and] a lot of new Chinese brands that are growing.” In the coffee space, for example, Beijing-based Luckin Coffee has opened over 500 outlets in Chinese cities less than a year after launching, according to the business news site Quartz. Another concern for foreign brands is the perception of being unhealthy and lacking transparency, said Schaefer. “I think a lot of the big brands the biggest American brands like McDonald’s and KFC and so on, have spent the last couple of years in a kind of transition period,” said Schaefer. “We saw Yum! Brands spin off its China operations, they’re franchised now, and that was a big deal. And both McDonald’s and Yum brands and many other brands have had a number of food safety scandals in the 10 years that they’ve been involved with. I think there’s been a reordering of demand of the supply chain of what consumers are looking for.” Yum! Brands, Inc. spun off its China operations in 2016 after economic and food safety concerns. But Yum, which owns KFC, Pizza Hut and Taco Bell, has recently begun growing the later brand in China. “We see Yum Brands doing more and more with Taco Bell as kind of its international American brand,” said Schaefer. “Taco Bell kind of represents a next step in the kind of American experience that is being sold through a chain restaurant.” Taco Bell currently has three restaurants in China and while the core of the brand is consistent, said Lawrence Kim Taco Bell’s VP of growth, the company creates menu items specifically for the Chinese consumers’ taste such as a shrimp and avocado burrito, a crunchy crayfish taco and oolong milk tea. Quick-service brands the Taco Bell face increasing competition in the U.S., so while growth in China might be tricky it’s hard to pass up. “The size of the prize is so worth it that you go through the growing pains, versus a very small market,” said Charles Jemley, the new CFO of CKE Restaurants Holdings, Inc. CKE the parent company of Carl’s Jr. and Hardee’s, has fewer than 20 locations in China right now but has ambitious plans for growth. Jemley, who worked on international growth for Yum and Starbucks, has found challenges with real estate and labor in the country, but said, “you cannot be a global brand and not be China. You just can’t do that. It’s too big a market.” And international growth has its fair share of softer benefits, too. “What I really like about internationally, honestly, is it’s also a clean sheet of paper, oftentimes for the brands that have the history like our brands do you can test fast and learn fast there,” said Jemley. “A lot of innovation at the brands I’ve been at previously have come from their overseas operations.” – Source: NRN.

White Castle to Open its First Restaurant in Arizona in 2019

The Ohio-based hamburger chain known for its sliders will open at “The Block” at Pima Center, a 22-acre mixed-use development under construction near the Loop 101 and Via de Ventura, part of the Talking Stick Resort Entertainment District. The restaurant slated to open in “late 2019,” the company said. “For years, Cravers in Arizona have been asking us to feed their souls by bringing our delicious sliders to the state, and we’re happy to announce that we’re going to make this dream a reality,” said Jamie Richardson, vice president at White Castle, in a prepared statement. It is expected to bring 50-75 jobs to the area. It will be the first family-owned location west of the Mississippi, the company said. In 2015, a 24-hour White Castle opened on the Las Vegas Strip. That is a licensee-owned store. At the time, it was the closest restaurant to Arizona though White Castle sells frozen versions of its sliders in grocery stores. In 1982, White Castle reportedly sent two semi-trucks and thousands of sliders to Fountain Hills, Arizona, an event that became known as “Midwest Fest.” The fast-food chain was founded in 1921 in Wichita, Kansas. It now operates more than 400 restaurants in 13 states, predominantly in the Midwest and East Coast. “The Block” at Pima Center broke ground this week, according to Daniel Lupien. It is expected to open in spring 2019. It will have a mix of restaurants, stores, hotels and office space, he said in an email. Tru by Hilton and Home2 Suites by Hilton will have hotels there, along with Texas Roadhouse and Starbucks. Lupien said the team is in negotiations with fifteen other restaurants and stores.

Nestle, Starbucks Close Licensing Deal

Nestle S.A. and Starbucks Corp. on Aug. 28 finalized a transaction that grants Nestle the perpetual global license to market, sell and distribute certain Starbucks coffees and teas at retail and food service outlets outside of Starbucks stores around the world. The agreement does not include Starbucks’ ready-to-drink products, which are subject to other licensing agreements, or sales of any products within Starbucks coffee shops. The two companies said the alliance will allow them to work closely on Starbucks’ existing range of roast and ground coffee, whole beans, and instant and portioned coffee.The $7.15 billion agreement first was announced on May 7. “This partnership demonstrates our growth agenda in action, giving Nestle an unparalleled position in the coffee business with a full suite of innovative brands,” said Ulf Mark Schneider, chief executive officer of Nestle. “With Starbucks, Nescafé and Nespresso we bring together the world’s most iconic coffee brands. The outstanding collaboration between the two teams resulted in a swift completion of this agreement, which will pave the way to capture further growth opportunities.” The business that Nestle is acquiring has annual sales of approximately $2 billion. The agreement is expected to significantly strengthen Nestle’s coffee portfolio in the North American premium roast and ground and portioned coffee business and also will unlock global expansion opportunities in grocery and food service for the Starbucks brand. “This global coffee alliance with Nestle is a significant strategic milestone for the growth of Starbucks,” said Kevin Johnson, president and c.e.o. of Starbucks. “Bringing together the world’s leading coffee retailer, the world’s largest food and beverage company, and the world’s largest and fast-growing installed base of at-home and single-serve coffee machines helps us amplify the Starbucks brand around the world while delivering long-term value creation for our shareholders.” – Source: Food Business News.

Taking Sports Nutrition Products to the Next Level

The sports nutrition market is no longer a niche sector. Rather, these specialty products are designed for appealing to a mass-market health-conscious lifestyle. Today’s shoppers seek out varied food formats — including baked goods — to get the nutrients they need to perform at their best. “Like other food groups, baked goods are trending toward more nutritious formulations that provide multiple benefits, such as energy management, gut health, less fat, less sugar, fewer calories, added fiber, gluten-free and more,” said Jon Peters, president of Beneo. “Taking some sugar out while keeping the label clean is particularly challenging in baked goods.

However, as in all categories where there is a consumer desire, new baked goods that qualify for the sports nutrition category will continue to be developed.” Creating indulgent baked snacks that deliver proven health benefits will be key for bakers in this growing and evolving market. Bakers are wise to be proactive players in the U.S. sports nutrition market, which was valued at $28.4 billion in 2016 and is expected to reach $45.3 billion by 2022, according to Zion Market Research. Sports nutrition is all about improving athletic performance. The target audience includes everyone from professional athletes to those looking for an energy boost. Products include foods, beverages and supplements specially formulated with macro and micronutrients that assist with overall health, performance and muscle development. “When formulating for sports nutrition, the carbohydrate-to-protein ratio is important for someone who is looking to gain muscle mass,” said Jeff Reget, account manager of private label nutrition for Agropur Ingredients. “The protein will assist with the rebuilding of the muscles while the carbs will provide the refuel energy needed for the protein to build up the muscles.” That target ratio is about 3-to-1, carbohydrates to protein. Baked goods have the carbs. With most products, it’s all about adding protein. The baked goods category includes a wide variety of finished products, so when producers want to add a sports angle, there are many opportunities such as refuel cookies and energizing muffins. “On the sweet side, brownies, cookies and cakes are a great place to start since they offer a familiar platform to add functional ingredients,” said Alison Raban, certified food scientist for BI Nutraceuticals. “And on the savory side, crackers, flatbreads and baked chips are other platforms consumers enjoy that can be formulated to include sports nutrition ingredients.” Some of the newest products in baked goods have been centered on smaller bites or balls, giving consumers more control over how much they eat at a given time, Ms. Raban said. Smaller portions offer a convenient form of snack that consumers may enjoy at home, on a hike or on their way to the gym. Additionally, the darker flavors from Maillard browning or the addition of chocolate and caramel help mask many off tastes associated with sports nutrition ingredients. “The higher total solids content and firm body of many baked products makes them ideal vehicles to incorporate value-added nutrients with minimal impact on the overall sensory profile of the product,” said Jayesh Chaudhari, senior director of R.&D. solutions for Prinova USA. “In addition, a higher load of carbohydrates with fiber, good fat and protein may offer the advantage of covering off-notes from vitamins and the metallic taste from some minerals.”

When it comes to athletic fuel, protein content attracts many shoppers to a product because it is associated with increasing strength, building muscle, enhancing recovery, slowing age-related muscle loss, reducing appetite and more. Launches of sports-related products with a protein claim increased by 25.4% in 2016, according to Innova Market Insights. This trend shows no sign of abating. Dairy proteins, which contain all the essential and nonessential amino acids, have long been the leader in helping brands introduce products that resonate with the fitness audience. Many sports nutrition products will include both types of dairy proteins: casein and whey. The combination of fast-digesting whey proteins with slow-acting casein proteins is essential for athletic recovery. Together, they provide a constant flow of amino acids and the essential nutrients needed to replenish a body and maximize post-workout recovery while building and repairing lean muscles. In general, dairy proteins in baked applications provide functional properties other than just fortification. This includes browning, water binding, increased viscosity, fat reduction and carbohydrate reduction. Dairy proteins may also replace eggs. There are many options to choose from. Agropur offers a low-fat whey protein isolate that is free of sugar as well as carbohydrates. This product is frequently used as an egg replacer, partial flour replacer and partial fat replacer in baked goods. “Whey protein hydrolysates make sense for sports nutrition as they are easier for the body to absorb over isolates or concentrates,” said Marissa Stubbs, account manager of bakery products for Agropur. “The long protein chains are broken down into smaller chains, allowing for easier absorption by the body.” Milk Specialties Global offers a heat-stable whey protein concentrate that incorporates protein into baked goods, even sweet treats such as cookies and cakes. “It can turn an ordinary cake formula into a protein-packed indulgence,” said Suvash Kafley, senior director of process and product innovation at Milk Specialties. “Not only does it add protein, but it also may create a more appealing label by helping to reduce fat in the formula. The proteins help maintain strong air cells that will not collapse throughout baking. This results in a cake with similar height and crumb structure as a full-fat formula.”

Baked goods make sense for sports nutrition because they deliver proteins different than beverage or bar formats that are popular among athletes and active lifestyles, said Michael Hiron, vice-president of sales at Milk Specialties. Plant-based proteins, most notably from peas, rice and soy, are also gaining traction in sports nutrition, especially when used in blends to deliver a more complete amino acid profile. In baked goods that might be otherwise vegan, plant-based proteins help keep the vegan claim. “Some of our most popular plant-based proteins are pumpkin seed protein and lentil protein as well as whole food ingredients like chia seeds and quinoa,” Ms. Raban said. “Formulators can easily incorporate these steam-sterilized powders into many different types of baked goods to deliver on consumers’ drive to add more plant-based protein to their diet.” For products looking to make gluten- or egg-free claims, quinoa may replace wheat flour, and chia seeds may substitute for eggs in baked goods, Ms. Raban explained. Lenny & Larry’s markets individually wrapped baked goods loaded with protein and fiber. The company’s vegan Complete Cookie relies on vital wheat gluten, pea protein and rice protein to deliver 16 grams of protein per cookie. All three baked goods contain 5 grams of fiber. More examples include Brooklyn-based Protes Protein Snacks, which offers vegan pea protein-based baked chips. Enjoy Life Foods markets poppable Protein Bites, which are also vegan, drawing their protein from rice and pumpkin seeds. There is an entire spectrum of nutrients associated with sports nutrition, so it’s impossible to pack them all into a single product and still deliver on taste. Identifying the product’s performance goal may help with nutrient selection. Managing blood sugar is one goal that may make workouts more effective and sustainable. “Alternative sweeteners are redefining the common approach of the sports nutrition industry,” Mr. Peters said. “They shift the focus from carbohydrate and protein utilization toward improved blood sugar management and fat burning.” Beneo offers isomaltulose, a low-glycemic sweetener made from beet sugar that occurs naturally in honey. It is fully digestible, and it provides full carbohydrate energy in a balanced and sustained way, eliminating the undesired “boost and crash effect” generally associated with other sugars. “Isomaltulose provides natural energy in a balanced way with less blood glucose fluctuation and steadier insulin release, resulting in an improved metabolism,” Mr. Peters said. “This helps the body burn more fat for energy, which makes it an ideal carbohydrate in sports nutrition.” Even natural caffeine makes sense as a source of energy. Studies show an average improvement in performance of about 12% with more benefits noticed during endurance exercise than with shorter exercise. This non-calorie stimulant, however, may exert a diuretic effect. Too much is never a good idea. “Consumers often turn to caffeine before a workout to give an extra boost during workouts,” Ms. Raban said. “Many formulators prefer to use botanical ingredients that are natural sources of caffeine. This includes guarana, yerba mate, guayusa, kola nut and green tea.”

Beets are also a trending ingredient due to their naturally occurring nitrates that are converted to nitric oxide in the body. These nitrates have been associated with better workouts and recovery, Ms. Raban said. Fiber is another nutrient that is often part of high-protein performance foods. Some provide additional benefits including sweetness, creaminess (fat mimetic), color and even texture. “Many consumers don’t realize that high levels of protein can affect digestion,” Ms. Raban said. “Including fiber can help with some of the uncomfortable effects when consuming large amounts of protein.” Inclusions are an easy way to add protein and other nutrients along with flavor, color and texture. Most baked goods benefit from their addition, as they add eye appeal that attracts the shopper. “Inclusions can carry protein of any source, whey or plant-based, to add flavor in any baked good,” said Aaron Dare, global director for encapsulates and inclusions at Balchem. “Our inclusion line includes flavorful, high-fat options as energy sources that make sense for bars designed for keto and paleo diets, where you need energy without increased sugars.” Balchem’s encapsulation technology protects heat-sensitive sports nutrition ingredients, enabling their use in baked applications. “We offer a stable vitamin C for sports bars,” Mr. Dare said. “We offer multiple taste-masking capabilities that can help improve the flavor of vitamin B-complex and energy ingredients such as caffeine and guarana.” Encapsulating minerals such as magnesium, iron, zinc and copper may assist in formulation, and they offer beneficial healthy attributes. “These minerals are necessary for muscle building and repair,” Mr. Dare said. Prinova offers functional market forms of vitamins and minerals, including customized blends for the fortification of baked goods. “Some forms are more soluble and bioavailable than others and offer different taste profiles and stability,” Mr. Chaudhari said. “We design precise formulations choosing the most compatible market forms based on the finished product characteristics, processing conditions and regulatory requirements.”

While often focused on muscle health, athletes tend to forget the importance of managing their immune system. Sports nutrition products may be formulated to assist. “The demands of working out can often predispose athletes to getting sick, which can throw off training,” said Michael Kemp, nutrition manager of North America at Kerry. Kerry’s beta 1,3/1,6 glucan is extracted from the cell wall of a proprietary strain of baker’s yeast, and more than a dozen clinical studies demonstrate its ability to help strengthen the immune system. Several of these studies have shown the ingredient to help increase vigor and mental clarity while reducing fatigue, tension, confusion and upper respiratory tract infection after intense events, such as a marathon. The ingredient is stable to common baking temperatures and is largely neutral to taste in baked goods. The best sports nutrition products are ones that are convenient or easily snackable. Many athletes are eating meals in non-traditional locations such as during a workout, at the gym or on the go to and from the gym. “Making a sandwich between squat sets is not going to happen,” Mr. Kemp said. “Being able to integrate a food into the schedule of an athlete is of really high importance today.” Source: Food Business News.

Health Officials Determine Cause of Ohio Chipotle Foodborne Illness

Health officials in Ohio released their findings on Aug. 16 regarding the recent foodborne illness outbreak at a Chipotle Mexican Grill restaurant in Powell, Ohio that sickened 647 people. The Delaware General Health District said that stool samples collected in July tested positive for the toxin that Clostridium perfringens forms in the gastrointestinal tract. The food samples did test negative for C. perfringens bacteria. A specific food has not been identified as the source for the illness, Delaware Health said. The Centers for Disease Control and Prevention (C.D.C.) is still carrying out other tests at its lab. In response to the news, Chipotle chief executive officer Brian Niccol released a statement regarding the outbreak. “Chipotle has a zero-tolerance policy for any violations of our stringent food safety standards, and we are committed to doing all we can to ensure it does not happen again,” Mr. Niccol said. “Once we identified this incident, we acted quickly to close the Powell restaurant and implemented our food safety response protocols that include total replacement of all food inventory and complete cleaning and sanitization of the restaurant.” Additionally, Mr. Niccol said, the company will retrain all restaurant employees nationwide starting next week on food safety and wellness protocols. “To ensure consistent food safety execution, we will be adding to our daily food safety routines a recurring employee knowledge assessment of our rigorous food safety standards,” he said. Chipotle is still recovering its image from the foodborne illness outbreak of late 2015 that included several cases of E. coli O26 across 11 states followed by the discovery of norovirus at a Boston-based restaurant that reportedly sickened 80 customers. –Source: Food Business News.

Former Krispy Kreme Exec Joins Biscuitville as CDO

Anne Goldman, former senior director of global real estate and development at Krispy Kreme Doughnuts Corp., has joined Biscuitville Fresh Southern as chief development officer. She succeeds Tim Hegarty, who has retired from the company. Prior to joining Biscuitville, Ms. Goldman was with Krispy Kreme for five years. Earlier, she was development manager at Dunkin’ Brands and also worked at Sonic Drive-In, Dollar General and McDonald’s Corp. “I am delighted to join the Biscuitville team and help the organization achieve its goals, particularly around growth and new development ventures,” Ms. Goldman said. “Biscuitville is a beloved North Carolina brand and is well-positioned for its next chapter because of the strong brand culture, a focus on quality and people excellence. It is a privilege to be part of this company.” Kathie Niven, who took over as president of Biscuitville earlier this year, described Ms. Goldman as “a seasoned development executive and retail market growth strategist.”  “She is a high-energy and results-oriented leader that demonstrates an entrepreneurial approach to her work,” Ms. Niven said. “She will take the lead on the continued evolution of Biscuitville’s restaurants, inclusive of accelerating our market development plans, continuing to oversee the build-out of our remodel strategy and working with our leadership team on entry into new markets.” Ms. Goldman received a bachelor’s degree in science from Meredith College and a post-graduate certificate in corporate law from Meredith College’s Paralegal Program. Biscuitville is a family-owned and privately-held chain of quick-service restaurants that specializes in Southern breakfast and lunch foods. Biscuitville has locations in North Carolina and Virginia. – Source: Food Business News.

Former Wrigley Exec to Lead Peet’s Coffee

Kenneth C. (Casey) Keller Jr. has been named chief executive officer of JAB Holding Co. subsidiary Peet’s Coffee, effective Aug. 6. He succeeds Dave Burwick, CEO of Peet’s since 2012. Casey Keller, new CEO of Peet’s Coffee Mr. Keller most recently was global president of Wm. Wrigley Jr. Co., a subsidiary of Mars, Inc. He joined Wrigley in 2011 as president of Wrigley North America, later assuming responsibility for Wrigley Americas. Prior to joining Mars, Mr. Keller was president of Alberto Culver USA and held various senior roles with Procter & Gamble, HJ Heinz and Motorola. He also previously served in the United States Navy. “We are thrilled to have Casey joining Peet’s as CEO,” said Olivier Goudet, chairman of Peet’s Coffee’s board of directors. “Casey has an impressive track record in the C.P.G. space, and his focus on growth and long-term value creation makes him the ideal leader for Peet’s. We have ambitious plans at Peet’s, and Casey has the unique expertise and terrific experience to continue growing this great company.” Founded in 1966, Peet’s Coffee is a U.S. specialty coffee company with about 200 restaurants. The company also sells its bagged coffee and ready-to-drink beverages in more than 16,000 grocery locations. – Source: Food Business News.

Former Dunkin’ President to Lead Cicis Pizza Chain

William M. Mitchell has been named chief executive officer of Cicis, a pizza buffet restaurant chain with more than 430 restaurants in 31 states. Mr. Mitchell succeeds Darin Harris, who stepped down from the role in January. Before joining Cicis, Mr. Mitchell was president of Dunkin’ Brands International at Dunkin’ Brands Group, Inc. He also held leadership roles at Papa John’s International, including president of global operations. Additionally, Mr. Mitchell was responsible for business planning and operation of 1,400 Popeyes restaurant locations for AFC Enterprises before the Popeyes restaurant chain was acquired by Restaurant Brands International, Inc. “Bill has an outstanding track record as a leader of large franchise systems, improving operations, customer service and overall business growth,” said Ben Fishman, managing director of Cicis parent company, Arlon Group. “We have deep confidence that he will continue to strengthen and improve Cicis in meaningful ways for our strategic partners and most importantly, our guests.” – Source: Food Business News.

Doug Thompson Named COO at Texas Roadhouse

For all intents and purposes, Doug Thompson helmed the chief operating officer role at Texas Roadhouse for the past three years, ever since Steve Ortiz’s 2015 retirement. The 540-unit chain made the change official August 23. Thompson, 55, was appointed to the post by the Louisville-based company’s board, and signed a contract through January 7, 2021. Like many of Texas Roadhouse’s C-suite positions, Thompson is a longtime employee who has worked his way up. He started with the company in 2002 as a market partner before being promoted three years later to regional market partner. Thompson held the title of vice president of operations since 2015. Previously, he clocked time as a unit operator with Outback Steakhouse and Bennigan’s Restaurants. Thompson also has a 7.5 stake in a Stillwater, Oklahoma, Texas Roadhouse; a 5 percent stake in a Warwick, Rhode Island, location; and a 30.5 percent stake in a Gilbert-East, Arizona, store. Per Louisville Business First, Thompson will receive a base salary of $450,000 for the first partial year in the position. An annual salary for the rest of his term will then be determined by Texas Roadhouse’s board’s compensation committee. Thompson will receive an incentive bonus of $450,000 for the first year of the term, and an amount to be determined for the remaining years. The chain’s current policy calls for the bonus to be based on goals established by the compensation committee. It can be cut to zero or doubled for good performance. Additionally, Thompson earns 2,000 shares of restricted stock for the first year of employment, which will be vested after his first year. In May, Texas Roadhouse promoted Tonya Robinson to Chief Financial Officer, replacing company president Scott Colosi, who served in the interim role since 2015. Robinson, previously vice president of finance and investor relations, joined Texas Roadhouse in 1998. Texas Roadhouse reported same-store sales gains of 5.7 percent at company-run units and 3.9 percent at domestic franchised stores (70 of the restaurants are U.S. franchises) in the second quarter. Traffic lifted 4.3 percent. The chain achieved net income of $44.2 million, or 62 cents per share, and revenue of $629.2 million, up from $566.3 million in the year-ago period. – Source: fsrmagazine.

Krystal Debuts Smaller Prototype

The Krystal Company this past week pulled the wraps off a new prototype in Jackson, Miss., that executives say squares the brand with modern customers’ needs. The new restaurant opened softly in Jackson, Miss., replacing a unit built in the 1970s, and is the first of five under the new format planned this year, said Paul Macaluso, Krystal president and CEO, in an interview. “A lot of our prototype updates are in response to changing consumer needs,” Macaluso said. “There’s more focus on the drive-thru, a lot of efficiencies in kitchen design so we can service the drive-thru more quickly, and we’ve expanded the space at the drive-thru window so more people can work there. ”Krystal is shaving square footage in the new building as well. The Jackson prototype is 1,788 square feet compared to older units that ranged between 2,000 to 2,500 square feet. “It’s an 86-year-old brand and more than half our restaurants are more than 40 years old, so we have a lot of older facilities, Macaluso said. “More people used to come in and sit down, and they are no longer doing that.” Seating for the Jackson unit is 36 to 46 compared to an average of 75 seats in older units. The proportion of kitchen space was also increased. The new design also allows for more and larger windows. The company also expects between 30 percent and 40 percent energy savings with high-efficiency air-conditioning systems and light-emitting diode lighting insides and out, Macaluso said. The Jackson drive-thru also features two kiosks for ordering, which can shave off 20 to 30 seconds off the wait time, Macaluso said. “It’s an investment for the second menu board and the second speaker box,” he added, “but we think that’s a worthwhile investment.”

The scrape-and-build program for the new prototype units require about 120 days for demolition and construction, Macaluso said. “A lot of these are still viable trade areas, so employees are moving to other restaurants during the rebuild,” he said. About half the restaurants now have third-party delivery, Macaluso said, and that’s especially popular for late-night orders. Part of the redesign includes areas for third-party delivery couriers to pick up their orders more quickly. Macaluso said the new restaurant prototype, aspects of which were incorporated into a rebuild 18 months ago in Marietta, Ga., is part of revitalization for the brand, which debuted in 1932 in Chattanooga, Tenn. “This is the first of between 50 and 100 new restaurants over the next five years,” he said. Along with the new prototype, the company is also working on the brand positioning under new Krystal chief marketing officer Dominic Losacco (left), who worked with Macaluso at Moe’s Southwest Grill. The company has introduced a new “Square Talk” campaign, highlighting its signature square slider burgers, and leaning more heavily into digital marketing, Losacco said. “Brand accessibility is a big part of the campaign,” said Losacco, who added that advertising was moving toward a more digital base and the new restaurant design featured elements such as 10-seat communal tables in the restaurants.

The company has introduced a new “Live a Little” advertising campaign for the quick-service brand that relies on social and digital platforms and promotes the #SquareTalk hashtag. “#SquareTalk is more than a play on words about our iconic square burgers,” Losacco said. “It means Krystal gives it to you square and simple in a way that other QSRs can’t.” Krystal, owned by the Atlanta-based Argonne Capital Group LLC since 2012, has 362 restaurants in 11 states. – Source: NRN.

Buffalo Wild Wings Fires Up New Value Menu, Fantasy Game for Football Season

With a new marketing chief at the controls, Buffalo Wild Wings unveiled an extensive new partnership and ad campaign Wednesday it hopes will turn its Sundays into serious traffic and profit drivers. Kicking off Sunday, September 9—week one of the NFL calendar—Buffalo Wild Wings will showcase an exclusive game, menu, marketing push, and other activations, especially in regards to its Blazin’ Rewards program, intended to capitalize on football season.

It starts with the 1,200-unit chain’s partnership with DraftKings, an online fantasy sports site. The parties created a custom-built fantasy football game—Blazin’ Fantasy Football—available on mobile through the Buffalo Wild Wings’ Blazin’ Rewards App. Exclusive to rewards members, customers can enter each week and compete for prizes, including free wings for a year, gift cards, and rewards points. Buffalo Wild Wings said there would be 600 total winners each week. “As America’s largest sports bar, millions of fans spend their game days at Buffalo Wild Wings each week,” said Paul Brown, chief executive officer of Inspire Brands, the newly formed company that also includes Arby’s and fast casual R Taco. “We are thrilled to partner with the industry leader in fantasy, DraftKings, to deliver an experience to our guests that they can’t get anywhere else.” The fantasy contests start at the beginning of each game and again at halftime of the 1 and 4 p.m. (eastern) contests. Customers have to download the Blazin’ Rewards app and then click the Blazin’ Fantasy Football icon. There they can pick a team and have the choice to “double down” on a player as their “Blazin’ Pick choice,” who receives double points.

Buffalo Wild Wings is banking on the promotion not only driving in-store traffic, but also helping expand its rewards program and database. In turn, the chain could remarket with future promotions and bring guests into its online ordering platform, boosting sales across different channels. Buffalo Wild Wings’ Blazin’ Rewards app went national last summer. At the time, the company said there were more than 2 million users signed up across the country. By October, there were more than 3 million. This effort will serve an engaged audience at least once a week, four times that day, in theory. What’s to say a percentage of those guests won’t become loyal diners during other occasions? ‘Escape to Football.’ Buffalo Wild Wings’ fresh creative campaign, developed by Figliulo&Partners, launches August 30. Known as “Escape to Football,” it “explores the reality that everyone has commitments and obligations in life that can keep them from where they’d rather be on game day: watching football,” Buffalo Wild Wings said. These spots include characters in real-life scenarios, such as being stuck at a PTA meeting, taking family photos, or working late at the office. They then ultimately escape to Buffalo Wild Wings. “We’ve all been there—it’s game day and we’re stranded somewhere, instead of watching the game live. It’s a painful, almost helpless feeling for any true fan,” said Seth Freeman, who was announced as Buffalo Wild Wings’ new CMO on August 27. “The new creative celebrates the reality that a game should be enjoyed with friends, surrounded by TVs, great food, and cold beer.” Additional spots will be available for radio and the campaign features a refreshed logo, with a neutral brown and honey mustard color palette and an updated buffalo that is forward-leaning. A football menu focuses on value.

Beginning September 6, Buffalo Wild Wings is also leveraging a new football menu that features options starting at $5. There are two new items: Bratwurst & Fries, and a 38-ounce domestic pitcher of beer option. The menu will be available Monday through Friday at participating locations. Bratwurst & Fries; 38-ounce Domestic Pitcher; Cheeseburger & Fries; Tall Craft or Import Beer, Specialty Cocktails. These changes are perhaps the biggest since Buffalo Wild Wings came under new ownership in February. Arby’s Restaurant Group, backed by Roark Capital, purchased the chain for $2.9 billion and took it private as part to Inspire Brands. One franchisee, Diversified Restaurant Holdings, reported a 10.9 percent decrease in traffic at its 65 units last quarter. This football-focused campaign, along with the possibility of sports gambling, are among Buffalo Wild Wings early efforts to reignite in-store business and drive comp sales back into positive territory. Before going private, the company estimated its financial performance for fiscal 2017 with same-store sales ranging from negative 1.6–1.7 percent, with total revenues for the year between $2.067–$2.069 million compared to $2.026 million in the prior-year period. In the third quarter of fiscal 2017, the company reported a net earnings decrease of nearly 20 percent as its cost of sales rose to 30.8 percent of restaurant sales from 28.9 percent during the same quarter last year. Buffalo Wild Wings posted adjusted earnings per share of $1.36. Same-store sales decreased 2.3 percent at company-owned restaurants and fell by 3.2 percent at franchise locations. Overall sales rose by 0.5 percent to $473 million while revenue also increased 0.5 percent to $496.7 million. – Source: Fsrmagazine.com.

What Top Restaurants are Doing to Win The Labor War

When the Cheesecake Factory announced its second quarter earnings in August, its stock dipped 14 percent the next day. That happened despite the fact that its same-store sales rose 1.4 percent and revenue jumped 4 percent. Yet one of the major factors in The Cheesecake Factory’s declining stock price—as is the case for many restaurant chains these days—was rising costs, punctuated by spiking labor fees. Several factors are converging to cause these labor hikes including: many cities like New York, by December 2019, and Los Angeles in 2020 (for companies with 20 or more employees), are raising minimum wage to $15 an hour; a declining national unemployment rate of under 4 percent, making recruiting staff more difficult; stiff competition in the gig economy from major players such as Amazon, Uber, and Lyft, who are attracting scores of workers who otherwise may have gravitated to restaurants. When labor costs rise and finding new employees is more difficult than ever, something has to give.

Restaurant chains are stepping up recruiting, trying to offer more career opportunities, but many are finding it hard to innovate and attract top talent, let alone retain those workers. When nationwide eateries are grappling with identifying new staff, while contending with thinning margins, they face a tough conundrum. Will they cut staff? Consider introducing more tablets, kiosks or other technology-forward models to reduce wait staff? Or raise prices to maintain margins and offset rising costs?   Ray Camillo, CEO of Blue Orbit Restaurant Consulting, an Atlanta-based firm, attributes the heated competition for hiring staff to several factors, including a “shrinking workforce and supply and demand.” While many restaurants offered $12 an hour several years ago, those hourly fees haven’t kept pace with rising salaries in other industries, making it difficult to attract new hires. Many eateries are zeroing in on reducing food costs and becoming more efficient, says Chris Wunder, senior director of recruitment at Leap Hospitality, a Liberty, Missouri-based restaurant management consulting firm. Some have tried paying managers more, giving them more responsibility, and working long hours, which can help save operating costs in the long run. Take Nick Sarillo, owner of three Nick’s Pizza & Pub restaurants in Chicago, which employ 260 staff in total. When he opened Nick’s 23 years, he made employee retention a cornerstone of his eateries. Indeed he runs intensive training session and posts his values on its website. For years, he maintained an 80 percent retention rate, and based on the restaurant’s strong reputation, he could rely on a stack of resumes when a staffer left. But those applications are thinning out, and his retention rate has dipped to 70 percent. Last week, an experienced manager informed him that he had been offered a 35 percent increase in salary, which he couldn’t decline.

When Sarillo met recently with his leadership team, they brainstormed innovative solutions. The restaurants have always had a sign posted outside that said: “We’re Always Hiring Great Team Members.” Now it’s printing a note and handing it out with each check at the end of each mail to reinforce that theme. In addition, he’s offering a $100 referral fee to current employees who recommend someone that is hired, and for the first time he’s attending a job fair. Ultimately, retaining staff is about “taking care of employees, putting them first, and customers second,” Sarillo says. Nonetheless, negative stories about toiling at many eateries abound. In fact, many restaurant managers aren’t helping their cause, says consultant Camillo. When wait staff and kitchen staff “find every day stressful and chaotic, every day is a new drama or conflict du jour, and they don’t know exactly what it takes to do a good job,” the restaurant is going to face a hard time hiring, and, most of all, retaining staff. Providing a “living wage,” so wait staff aren’t living in the throes of poverty is one way to attract new staff, Camillo says. Being a waiter is difficult and tough and involves delivering constantly superior customer service. Many wait staff have to relinquish holidays, work irregular schedules, and deal with demanding customers. Despite many cities raising their minimum wage, it hasn’t led to cutbacks in staff at Texas Roadhouse, a chain of 560 eateries, says Travis Doster, its Louisville, Kentucky-based spokesperson. Rather, the chain stepped up hiring as a way to differentiate itself from competitors. “We’re a high-labor, high-touch concept by design. Our servers average three tables, rather than the industry average of five or six,” he says. Though margins have been cut by rising labor fees, Texas Roadhouse’s CEO Kent Taylor likes to say, “Sales cure all. If you’re getting people through the door, that’s a restaurant’s job.” But Texas Roadhouse’s president Scott Colosi, in a July conference call, said that he wouldn’t be surprised that due to the higher labor costs ”we took prices up a little bit, especially in those markets where minimum wage is on the rise. Despite the occasional price increase, Doster says, “Were a value concept. It’s easy to raise prices, difficult to lower them. If we have high traffic, employees are happy, busy and making money.” And while he says there’s no silver bullet, that formula reduces turnover and cuts down on the need to recruit new staff. Texas Roadhouse trains new hires in groups of three to four people, sets clear expectations, and tries to “focus on being a family,” Doster says. “If you set expectations, fewer people will try you for a week and then leave. We focus on being more than a job, but a team.” It’s also one of the few restaurant chains closed for lunch Monday to Friday. “If we’re open from 4 p.m. to 10 p.m. we focus on one great shift,” Doster says. Its mission is to “celebrate, motivate and recognize staff.” Managers get a piece of the profits through Texas Roadhouse’s managing partner program, meat cutters vie for the best meat cutter award in a contest with a $25,000 prize, and team events are also held. Many restaurant chains post job opportunities on websites such as Indeed, Snagajob, and Craigslist, which works effectively for them, Camillo says. But hiring online can be a trap, Wunder from Leap Hospitality says. Many candidates click on sites, apply to 10–15 jobs in seconds, and don’t think whether they want the job. Most often, they waste a manager’s time. One consultant was asked what chains are doing to innovate in recruiting new staff. He thought for a minute and admitted that nothing came to mind. Managers of restaurant chains in smaller cities outside New York, Los Angeles, and Chicago must rely more on creating strong networks, meeting people, creating relationships, and selling recruits on opportunities to build a career at their restaurant, Wunder says. Camillo adds the best way to deal with staff is to retain them. “If you become the employer of choice for your community, you don’t have to worry about employee issues or hiring, and you spend less money on turnover and hiring,” – Source: fsrmagazine.com.

Papa John’s: ‘Schnatter is Harming the Company, not Helping it’

Papa John International, Inc.’s board of directors fired back at the company’s founder and largest shareholder, former CEO and board chair John Schnatter, in response to his accusations of malfeasance and incompetence. “John Schnatter is promoting his self-interest at the expense of all others in an attempt to regain control,” the board’s special committee of independent directors said in a statement released recently. “Schnatter is harming the company, not helping it, as evidenced by the negative impact his comments and actions have had on our business and that of our franchisees. We have tried to meet directly with John Schnatter to discuss how we can move forward in the best interest of all stakeholders.” The committee was established after Schnatter’s resignation as board chair in July following accusations of his using inappropriate, racially charged language in a conference call in May.

The committee’s mission is to examine policies related to Papa John’s corporate culture and issues related to diversity and inclusion. Since then, Schnatter, who owns about 30 percent of the company’s shares, has said his resignation was a mistake and that he has been blamed inappropriately for the pizza delivery chain’s poor performance since last year. He has set up his own web site savepapajohns.com, to tell his side of the story. Schnatter himself, during a Nov. 1 quarterly earnings call last year, blamed the chain’s declining sales in part on the National Football League’s failure to clamp down on silent protests by its players during the singing of the national anthem. In the aftermath of that, share prices fell and Schnatter eventually stepped down as CEO. He was replaced by his anointed successor, Steve Ritchie, at the beginning of 2018. “The Board specifically directed John Schnatter not to talk about the NFL controversy related to the National Anthem on the 2017 third quarter earnings call,” the committee said in its statement. “In direct defiance of these instructions, John Schnatter made unscripted comments about the NFL controversy. The committee listed that act along with other instances of Schnatter’s “continued pattern of ignoring decisions of the Board.” Also on that list: • “When independent market research showed that a change in spokesperson [from Schnatter to someone else] and advertising strategy was warranted, John Schnatter commissioned his own research and produced separate commercials that starred himself.” • Schnatter reportedly met with the chain’s management and staff “on numerous occasions” without Ritchie’s knowledge and gave directions to that management without informing Ritchie or the board. “John Schnatter was reminded on many occasions that the CEO is to direct management, not the non-executive Chairman [Schnatter’s position at the time],” the committee said, adding that Schnatter had proposed having communications between management and the board go through him, which “was totally rejected by the Board.” • Schnatter violated board instructions in July when he met with another restaurant company’s executives without Ritchie being present.

Schnatter “misinformed the board about the circumstances surrounding the termination of the Company’s relationship with Laundry Service,” a marketing agency that Papa John’s had hired in October and that quit in May after the reported meeting in which Schnatter used the inappropriate language. The committee also denied accusations by Schnatter that the board had asked him to be executive chairman. “It is simply not true,” it said. “Rather, John Schnatter suggested to individual Board members that he should become Executive Chairman and even directed a member of management to make unauthorized contact with the Compensation Committee’s independent consultant in July 2018 to ask for peer compensation data.” It also called “not true” Schnatter’s assertion that the board agreed that Ritchie should step down as CEO. “The Board’s decision to appoint a new CEO at the end of last year was unanimous as was the later decision to appoint a new Chairman [Olivia Kirtleywho was appointed in late July]. John Schnatter praised Steve Ritchie in his own book as a ‘model of what a leader should be’ and fully supported his appointment as CEO. However, when the Company decided to implement a new marketing plan that did not feature John Schnatter, he began to criticize the management team and undermine the new CEO’s leadership.” The committee said it tried to meet directly with Schnatter “to discuss how we can move forward in the best interest of all stakeholders.” But Schnatter didn’t respond to those requests until last week, and then the conditions were unreasonable, according to the committee. They included cancelling the company’s annual Operators Conference, which is scheduled to take place next week, and allowing Schnatter alone to reschedule it. It said that conference of around 1,500 team members and franchisees was “a critical annual meeting.” “John Schnatter’s demand that it be cancelled just one week in advance was unreasonable and does not support his purported concern for the future success of Papa John’s, franchisees, employees and team members.” – Source: NRN.

Thank you for reading The Global Foodservice E-newsletter from American Recruiters! If you have news that you think would be a great addition to an upcoming issue, please email Katie Wilson at kwilson@ariteam.com

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