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To Our Valued Subscribers:
It was great seeing so many of you at the recent NAFEM show. I hope the show was as productive for you as it was for many of our clients and candidates. The opportunity to meet face to face in a Foodservice environment can never be underestimated. The NRA Show is not that far away so, my colleagues and I suggest you start you planning now for this valuable setting. Since the trip to Orlando, the Patriots’ have once again achieved the top spot in the NFL and as we have just celebrated Valentine’s Day, an article I read concerning building relationships seems appropriate. The article penned by Christopher Schilling in Institutional Investor stressed the importance of building teams. “High-functioning teams put the right people in the right positions to make the right plays, and they all pull in the same direction. On those teams, the stars are the first to take the blame for whatever went wrong and give their teammates all the credit for the big plays.” The article also states that Social psychology theorize that heightened and persistent self-focus is central to the development of depression. Other studies have shown that first-person singular pronouns, such as “I”, “me,” and “my,” are closely associated with the state of self-focus. The higher the use of these pronouns, the higher the measurement of self-focus, and vice versa.  What does it mean for you and your organization? WE NOT ME should be your mantra!! (Seems to work for Brady and Belichick!!) Another way to stay on top is to read the latest edition of American Recruiters Global Foodservice News.  Loaded with up to the minute Foodservice news you can use, it will keep you and your team ahead of your competition. Again, great to see you in Orlando and I look forward to May in Chicago.
President, American Recruiters
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Can Plant-Based Burger Startups Reframe the Masculinity of Meat?

In a Bud Light ad from 2013, a Pittsburgh Steelers fan is seen tailgating with his small barbecue grill. Amid a backdrop of festive jersey-clad men, our protagonist wears a look of utter confusion and disappointment as he holds a box of something completely foreign: quinoa veggie burgers. “Ugh,” utters his inner monologue, “why did she pack these things?” The “she,” we’re led to presume, is a girlfriend, wife, mother, or some other hopelessly clueless woman in his life who sends a grain patty to a beefy, masculine football event. “I ate one by accident last time,” he continues, investigating the patty like a dead body. None of this is surprising: Veggie burgers and tofu dogs have long been the subject of societal ridicule. Beef, meanwhile, is a sign of masculinity. Consumers are trained to think that eating meat is tightly interwoven with strength, confidence, and virility. “This is probably one of the most difficult disruptions that you’ll see in [the food] industry because consumption of animal protein is so intimate with our own evolution and who we are as a species,” says Ethan Brown, CEO of Beyond Meat. Companies like Beyond Meat and their competitor Impossible Burger–which both recently launched new versions of their plant-based patties that are designed to mimic meat–hope to redefine how we envision traditionally animal-based foods and the role it plays in our lives. It certainly won’t be easy: They’re fighting against centuries of ingrained cultural and social symbolism, not to mention the mythology of the all-holy hamburger.

A RAW DEAL? The market for plant-based foods has grown at a dizzying pace. In the last year, retail sales jumped by more than 20% to total $3.7 billion, driven by plant-based meat, reports the Good Food Institute. Impossible Foods produces 500,000 pounds of its Impossible Burgers per month to serve more than 5,000 restaurants. Competitor Beyond Meat, meanwhile, saw sales of its meat-free burgers, chicken strips, and sausage increase by 70% The company, which tripled its production capacity in 2018, struggled to keep its products stocked on grocery store shelves. Still, the faux meat market is minuscule compared to the trillion-dollar meat industry, itself the largest segment of U.S. agriculture. That’s partially due to a perception that the best protein comes from animals. A U.S. National Health and Nutrition Examination Survey showed that men and teenage boys consumed the highest amount of meat and poultry, in comparison to other demographics. Not only that, many eat double the amount necessary: U.S. Government data found that the average man between the ages of 30 to 39 consumed an average of 110 grams of protein, and nearly all of that comes from meat–which is a major dietary risk factor for coronary heart disease, among other health conditions. As Carla Seipp, a writer for trend forecasting firm The Future Laboratory writes in a recent column its masculine associations with meat that date back to caveman times are proving difficult to overcome: “With almost half (46%) of Americans believing that plant-based protein sources are healthier than their animal-based counterpart, according to Mintel, could it be that it’s not a lack of demand or interest among men, so much as shame that has so far stagnated their interest in plant-based proteins?” She points to a long history of positioning: Protein shakes and supplements, for example, market to men for weight gain and muscle. Numerous aspects in society–from advertising to popular TV characters–reinforce an exaggerated narrative of how meat consumption intersects with masculinity. Entertainment tropes see men ordering a steak, while women, a salad. A key step in human evolution came from the protein boost our ancestors got from learning how to hunt, but for millennia, meat was a treat not consumed two to three times a day. Our current fixation with meat was molded in the 1950s, with the introduction of the concept of four basic food groups, explains Carol J. Adams, author of The Sexual Politics of Meat making meat seem like the only available source of protein. Around the world, there are plenty of vegan and vegetarian sources of protein, like falafel in the Middle East or lentil patties in South India. In modern America, the hamburger has become our preferred delivery system of single-portion protein. “The hamburger, in a sense, was an imitation of a complete protein-from-plant patty,” says Adams. The argument to switch to a plant-based alternative is a strong one: Apart from health concerns, avoiding meat can dramatically reduce one’s environmental footprint. But often, people fear they cannot give up cherished cultural food items. “What made it your hamburger and why do you think you can’t give it up?” asks Adams. “The rigidity around eating that we’ve ended up with is sort of remarkable.” It’s not solely about taste, says Adams, since Beyond Meat and Impossible Burger mimics hamburgers quite well. Plant-based burger companies are up against something far stronger: the mythology about what a burger accomplishes. “People are perfectly happy eating vegan food as long as they don’t know that’s what they’re doing,” says Adams. “They only get anxious when they realize that they haven’t eaten something they’ve come to believe they need.”

BREAKING THE BEEF CYCLE. Advertising continues to be filled with such delicate representations of male anxiety. From Taco Bell to Dodge, men are told they need to eat enough meat to be “manly” or strong enough. A classic of the genre is the 2006 Hummer ad that showed a young man buying tofu at a cash register. Directly behind him in line is another man buying an abundance of ribs, steaks, and barbecue charcoal. Embarrassed by by his weak purchase decision, the newly minted tofu owner drives straight to a Hummer dealer. The tagline is: “Restore the balance.” “There’s such an over-the-top emphasis,” says Adams. “As if you eat three times the meat, you’re going to be able to do three times [the physical exertion] . . . or play basketball against men three times your size.” Beyond Meat tackles this assumption by employing a number of professional athletes to serve as vegan spokesman. For several years, the brand demonstrated that well-known athletes from the NBA, WNBA, MLB, and World Surf League can adopt a lean, clean, plant-based diet and still perform at capacity. “We’ve tried to run straight at the question: Is a plant-based meat sufficient for humans to be vital and robust?” says Brown. “Our marketing speaks very much to the ability for the highest-performing people in our society to perform not just as good, but better as result of the consumption of plant based meat–particularly, our plant-based meat.” Instead of succumbing to masculine tropes, Beyond Meat grapples with the heart of the matter. It did this through the familiar trajectory athletes instead of dieticians in lab coats. The point was to inspire people, not lecture them. “We don’t want to preach to people,” says Brown. (Beyond Meat isn’t the only company to take up sports affiliations. Don Lee Farms, which sold more than 1 million plant-based burgers at Costco, sponsors NFL events). Beyond Meat also goes through indirect routes to reach consumers. Brown recalls women approaching him at grocery store sampling activations a few years back. They said they needed help convincing their husbands to adopt plant-based protein because doctors directed them to reduce red meat consumption. He realized there was an opportunity in converting the decision makers. “[Men] are the ones that are most likely to object at the dinner table,” says Brown, “so we tackle that issue, then we arm mom–who continues to be the CEO of the household–with the information and inspiration she needs.” Inspiration is chief among Beyond Meat’s strategies.

The company looks to brands like Tesla, which found a sexy and exciting solution to an environmental issue, then marketed it as a cool, aspirational product. Just as a Tesla isn’t sacrificing design, Beyond Meat doesn’t want to sacrifice taste. “Our obligation is to make this [food transition] seamless for the consumer so they can enjoy the products and continue to do what they love,” says Brown. Likewise, Impossible Foods, manufacturer of the Impossible Burger, tries to deliver as close as possible what a consumer loves about meat from a cow, and that includes protein: Their patties possess the same bioavailable protein, iron, and fat content of 80/20 ground beef. In its mission, the company specifically partnered with top carnivore chefs who would appeal to hardcore meat eaters: Momofuku’s David Chang, offal enthusiast Chris Cosentino, and self-described “meat-centric” Iron Chef star Michael Symon (who boasts a tattoo of a pig) Consumers were willing to trust celebrity chefs who had once, like Chang, swore off meat substitutes. “It was the best endorsement out there–that the best chefs working with beef are choosing our product to serve,” says Jessica Appelgren, VP of communications at Impossible Foods. Today, Impossible Food’s customers skew male (57%); 18- to 34-year-olds are its largest demographic. The timing is right for these companies to better resonate with wider audiences. Millennials are now the largest percentage of self-identified vegetarians than any other generation (although they still constitute a tiny percentage of consumers). Celebrities also help publicize the cause: Beyoncé, Arnold Schwarzenegger, and Liam Hemsworth are just a few of the stars who have spoken about their plant-based diets. (A recent study found that a majority of men found a plant-based diet more filling.) Seipp believes that even the fact that companies such as Beyond Meat and Impossible Foods have male CEOs and founders has an influence. “They’re breaking down these barriers,” she tells Fast Company. It’s not there just yet, but it’s getting close. Till then, these burger brands entice men where they can be found–in sports, at popular burger joints, and in the BBQ meat section at stores. In fact, Beyond Meat is now found at Carl’s Jr., the fast food chain that was once synonymous with sexist, breast-focused ads. The brandhas since dropped these campaigns.) In perhaps what might be the biggest marker that the tide is shifting, Beyond Meat finds itself fielding requests from a most unlikely group: bikini models. Brown says that since the Carl Jr.’s collaboration announcement, a number of high-profile models reached out with the same request: “Hey, can you shoot one of those [sexy burger] ads with me?” – Source: Fast Company.

Chicago Rep Roll-up

Legendary Chicago rep group, Miller & Stryker, has just combined with another Chicago powerhouse, Culinary Equipment Group, to create the new Culinary Equipment Group! Talented sales pros, James Carr, Howard Cohen, Sam Franklin, and Ed Sutryk will now offer a more in-depth coverage of the Northern/Central Illinois market, along with the backing of a highly experienced inside sales and marketing team that is unmatched in the territory. “We are excited about stepping up our game with this merger. More feet on the street, more marketing muscle and improved technology will boost our service levels and allow us to deliver stronger results,” said Ed Sutryk, one of Culinary Equipment Group’s principals. Culinary Equipment Group is a Chicago-based foodservice equipment manufacturers’ rep firm serving Northern/Central Illinois and Northwest Indiana. – Source: new Culinary Equipment Group!

MOD Pizza Taps Chipotle Veteran as New CMO

MOD Pizza has tapped former Chipotle executive Mark Shambura to oversee brand and marketing strategy as its new chief marketing officer, the fast-casual pizza chain said. Shambura most recently was executive director of marketing for Chipotle Mexican Grill. Previously, Shambura was at Creative Artists Agency, where he worked on Chipotle’s “Back to the Start” campaign, and developed marketing programs for other foodservice clients including Starbucks and The Coca-Cola Company. He also previously worked at home decor company One Kings Lane. Shambura replaces Tracy Cioffi, the chain’s first CMO, who took the role in August 2017. “Mark is an intuitive and collaborative leader with deep expertise in complex national and local marketing operations,” MOD’s CEO, Scott Svenson, said. “He will add tremendous value to MOD’s executive team at a critical stage in our growth as we extend our leadership in the fast-casual pizza category and double-down on our commitment to making a positive social impact.” Shambura said he is “thrilled to join a team that is not only dedicated to growing a world class brand, but that is also deeply committed to being a force for good.” The Bellevue, Wash.-based chain is shoring up its leadership as it gears up for continued growth. The chain named John Maguire, a veteran of Friendly’s and Johnny Rockets, its chief operating officer in October to focus on “all phases of expansion and growth.”

Bellevue, Wash.-based MOD, which has more than 400 locations, was the fastest-growing chain in NRN’s 2018 Top 200 report, with 80 percent year-over-year U.S. systemwide sales growth. – Source: NRN.

Brent Berkowitz Named COO of Sage Restaurant Group

The Denver-based Sage Restaurant Group has promoted Brent Berkowitz to the role of chief operating officer, the company said. Berkowitz was hired as senior vice president of operations in early 2018 for the group, which operates and licenses about 13 restaurant, bar and coffeeshop concepts across the country, mostly adjacent to hotels. He replaced co-founder Peter Karpinski, who served previously as COO. In December, Karpinski announced plans to step down from day-to-day operations to “actively retire.” Working in restaurants since he was 17 years old, Berkowitz’s experience includes management positions with Innovative Dining Group in Los Angeles, where he served as director of development and operations for eight years, the company said. Walter Isenberg, Sage’s president and CEO, said in a statement, “Brent has an impressive amount of experience in the hospitality industry, and a stellar track record of increasing sales year over year. We are thrilled to have him trailblaze Sage Restaurant Group into its next chapter.” Sage concepts include Urban Farmer in Ohio, Colorado, Pennsylvania and Oregon; Emporium Kitchen in Colorado and Georgia; Departure in Colorado and Oregon; and Mercat in Chicago, among others. –Source: NRN.

Tyson Foods Sizes up Sustainability

“If the largest U.S. food company can prove the viability of farming practices that are good for the planet and for profits, it would be a game changer,” said Jenny Ahlen, director of the EDF+Business supply chain program. “We’re using scientific analysis to measure the benefits of sustainable farming practices, help companies like Tyson evaluate the impact of their sustainability initiatives, and inspire transparency across the supply chain.” The partnership’s first project will work on land stewardship. Tyson and the E.D.F. plan to scale agriculture practices on 500,000 acres of corn that reduce greenhouse gas emissions, improve water quality and maximize farmer profitability. Tyson plans to meet its land stewardship goal of improving environmental practices across 2 million acres of corn production by 2020 with the help of the E.D.F. “Developing a sustainable food system is important to our business and the planet,” said Justin Whitmore, vice-president of continuous improvement and chief sustainability officer at Tyson Foods. “Joining forces with E.D.F. enables us to bring together the best of our joint expertise in supply chains and sustainable agriculture, and deliver value to growers, businesses and the environment.” Cloud-based technologies from MyFarms and Farmers Business Network (F.B.N.) will be used in the pilot program. Both services collect information on agricultural production practice. They also provide insights from the analysis of that data and will inform sustainability practices. “Farmers are the most important stewards of the land, and it’s vital they have tools and markets to farm sustainably and be profitable doing so,” said Charles Baron, co-founder of the F.B.N. “F.B.N. is committed to finding new opportunities for crop farmers to develop markets for sustainable practices.” My Farms and the F.B.N. will enroll farmers into the initial project. The F.B.N. will provide this opportunity to its 7,600 members, who own almost 30 million acres. Farmers enrolled in MyFarms can also work with the partnership to pilot a new scientific method, based on scientific research compiled by the E.D.F., for calculating nitrogen loss. “MyFarms believes that farmers have both the desire and the opportunity to learn from one another,” said Chris Fennig, managing director of MyFarms. “We also recognize the value of their long-term business relationships, so we’ve built a set of cloud-based tools that enable advisors to better inform their farmer clients about opportunities to improve economic and environmental outcomes at the farm gate.” – Source: Food Business news.

Starbucks Expands Uber Delivery Venture to San Francisco, London

The service will start in San Francisco, to be followed by Boston, Chicago, Los Angeles, New York and Washington D.C. “in the coming weeks.” Starbucks is planning to bring delivery service to nearly a quarter of U.S.-owned stores in seven cities this spring, the company said in a statement. The announcement builds on a trial run that started in September in Miami. Almost all of Starbucks’ menu items will be available with delivery times of within 30 minutes — and an initial $2.49 booking fee. The coffee chain is planning to test delivery programs in other countries this year, with London being the first European city targeted for a pilot later this month. Starbucks has long been testing how to build out a delivery service in its home market. In 2014, then-CEO Howard Schultz said the chain would soon begin offering delivery in select U.S. markets. Starbucks began testing a service in Seattle, and in the Empire State Building in Manhattan in 2015. But the Empire State location has since been converted into a mobile-order-only store, and a Seattle trial with startup Postmates has since ended. Starbucks already has a significant delivery business in China, using Alibaba Group Holding Ltd.’s Ele. me platform, involving 2,000 stores across 30 cities in China. The expansion of the deal with Starbucks adds another major U.S. brand to Uber Technologies Inc.’s restaurant delivery arm. McDonald’s Corp. in May said it will expand delivery service to 1,000 more U.S. restaurants, using UberEats to handle the McDelivery” program. In November Uber said it’ll triple headcount working on food delivery across Europe, the Middle East and Africa in its fight for market share against local rivals including Deliveroo and Just Eat Plc. – Source: Bloomberg News.

Labor Tips for 2019: Everything Restaurants Need to Know

Labor continues to be a massive headache for restaurants. In an industry known for thin margins, a coalescence of economic factors, new legislation, resource scarcity, and consumer preferences have put restaurants in a proverbial pressure cooker. The way in which people work is also shifting, thanks to digital disruption and the rise of the gig economy. Add to all of that historically low unemployment rates (3.7 percent in September, according to the Bureau of Labor Statistics), and restaurants have a recipe for a workforce disaster. The future may be a moving target, but there is strength in numbers—not size, but rather data. Understanding the complex forces that are driving costs up and draining the pool of potential employees can help operators navigate the new landscape and even get ahead of some changes. Here’s a snapshot at where we stand with labor in 2019. It’s not a crystal ball, but it’s a good starting point.

TALK ABOUT TURNOVER. In terms of labor challenges, turnover is a constant for the restaurant industry like many other retail sectors. The scale is especially pronounced in limited service, which, according to TDn2K, has reached record highs. In 2017, quick service witnessed 132 percent turnover in hourly employees and 50 percent turnover in managers. That rate has mostly plateaued for hourly employees, but it’s still on an uptick for managers. With unemployment so low, competition over workers—particularly skilled and experienced ones—is fiercer than ever. The repercussions of this revolving door syndrome are steep, costing restaurants thousands of dollars per employee.

THE YOUNG AND THE RETENTION-LESS. When it comes to young people, the restaurant industry has reason for hope. According to the Bureau of Labor Statistics, 55 percent of 16–24-year-olds were employed as of July 2018. Hospitality (including foodservice) amassed the largest portion of teen and young adult workers at 26 percent—well ahead of perennial competitor retail, which only claimed 18 percent. These numbers are all the more impressive when recalling the rocky economic conditions that came to a head just after the Great Recession. In 2005, 59.3 percent of 16–24-year-olds were employed; by 2011, fewer than half (48.8 percent) had jobs. In 2016, teenagers ages 16–19 comprised 17.4 percent of restaurant employees, the highest level in seven years. While these figures are heartening, restaurants can no longer take a revolving door of younger workers for granted. For one, the industry is especially saturated with more restaurants vying for market share—and workers. Also, the gig economy has imbued many with an entrepreneurial spirit. From starting their own online shops to building a new app, these teens and young adults are choosier than their forebears. Restaurants that want to attract this group had better be offering them something a startup cannot (hint: benefits, steady work, and camaraderie).

OUR EMPLOYEE, YOUR BRAND. Youth springs eternal in consumerism. Less than a decade ago, brands zeroed in on millennials and have since expanded their focus to include the up-and-coming Gen Z. To win these groups as loyal customers, restaurants needn’t look farther than their own back (or front) of house. Take a peek at these insights from research and consulting firm Y-Pulse, which surveyed 1,400 restaurant workers aged 18–34. One key takeaway? Solicit feedback, welcome new ideas, and involve younger staff in the business.

“OUR GREATEST ASSET”. Even with teens and young adults making a big return to foodservice, another key demographic for the industry remains precarious at best. Under President Donald Trump, the U.S. has cracked down on immigration, with attempts to push legislation that would repeal Deferred Action for Childhood Arrivals (DACA) and significantly limit legal immigration from developing countries. Immigrants, including those with green cards and work visas as well as those who are undocumented, are a critical part of the restaurant workforce. In April, the National Restaurant Association released an op-ed penned by former executive vice president of public affairs Cicley Simpson in support of DACA. “Our restaurants’ DACA-eligible employees are hard-working young people early in their careers, paying their way through school or pursuing a career in the restaurant industry. Their coworkers and customers depend on them to provide delicious meals and an excellent dining experience. That teamwork defies distinctions based on immigration status or political perspective and is the engine that keeps the restaurant industry moving forward. As an industry, we understand that these people are our greatest asset,” Simpson wrote in the op-ed.

LOSING STEAM. While larger chains aren’t immune to workforce shifts, smaller, independent operators are oftentimes more immediately impacted. Payroll services and human resources provider Paychex pulled data from 350,000 businesses with fewer than 50 employees to break down job growth by industry and region. Overall, the rate at which small businesses in the U.S. added new jobs slowed 0.75 percent between September 2017 and 2018. Compared with most other sectors, leisure and hospitality fared poorly, witnessing a 1.28 percent slowdown; trade, transportation, and utilities, for example, saw their growth dip by only 0.13 percent. This notable deceleration can be attributed to myriad factors, like market oversaturation, workforce shortage, uncertainty over immigration legislation, rising labor costs, and the ongoing trade wars. In the immediate future, tariffs could put money back in restaurants’ pockets, as growers cannot afford to sell overseas and will have to slash their prices. Long-term, the financial pressure felt by farmers will reach foodservice, too.

MCDONALD’S: A SOFT TOUCH. With some 850,000 Americans working at McDonald’s, the fast-food leader has a unique opportunity—some may even say responsibility—to take a proactive stance in building the pipeline of young employees. Nearly 60 percent of its workers are 16–24 years old, the youngest of which belong to Gen Z. These teens and young adults are just beginning to enter the workforce and remain something of an enigma to marketers and employers alike, but a recent survey conducted by McDonald’s sheds light on the up-and-coming generation. Released last summer, the Workforce Preparedness Study revealed a disconnect between the demand for employees with soft skills and the actual pool of viable candidates. “Gen Z, our youngest workforce generation and the first born as digital natives, recognizes they lack the soft skills that are most critical to helping them grow early in their careers. Most importantly, Gen Zs acknowledge they need help getting these skills as they find themselves struggling to enter the workforce—and we can no longer continue to ignore the gap,” says Melissa Kersey, chief people officer for McDonald’s USA, via email. “For employers like McDonald’s, this is our chance to help these young people develop the skills they need in the future.” To that end, the company has launched the Youth Opportunity program with the goal to help 2 million young people build soft skills and overcome the barriers to employment by 2025. McDonald’s is taking both a hyper-local and global approach. For example, in its hometown of Chicago, the brand is donating $1 million in grants to career training organizations, while in Europe its franchisees are working to offer 42,000 apprenticeships over the next six years. McDonald’s has long positioned itself as a great first job, and Youth Opportunity takes that mantra a step further. “Employers, especially those often providing someone with their first work experience, play a critical role in training and preparing young people for a successful future,” Kersey says. “Employers must think beyond just their company needs and focus on being a good corporate citizen. … Not only is this the right thing to do, [but also,] younger generations expect it.” If recent developments are any indication, the Youth Opportunity program and its accompanying initiatives will continue to expand. In late October, McDonald’s kicked off the Where You Want to Be campaign, which introduces employees to the professional tools available on the company’s Archways to Opportunity education and career advising program. “By offering restaurant employees more opportunities to further their education and pursue their career aspirations, we are helping them find their full potential, whether that’s at McDonald’s or elsewhere,” Kersey says. – Source: QSR.

The Old Spaghetti Factory Turns 50 in Style

In the restaurant industry, where concepts often burn out in less than a year, making it to five years—or even a decade—is a monumental feat. The Old Spaghetti Factory is celebrating its 50th anniversary in 2019. For perspective, Sally and Guss Dussin opened the Portland, Oregon-based company and began serving up its famous spaghetti when Neil Armstrong landed on the moon, gas was 35 cents per gallon, and The Beatles released their final album as a group. Since opening in 1969, the Old Spaghetti Factory has expanded across the U.S. without losing sight of the values the Dussins created the company around. “We were young and full of aspiration. We trusted Guss’ instincts in the restaurant industry and believed in the simplicity of delicious, affordable three-course meals,” 90-year-young Sally Dussin, co-founder, The Old Spaghetti Factory, said in a statement. “We also wanted to create a unique dining experience that was warm and welcoming for guests of all ages, which led to our design, inside and out.” Guss and Sally’s son, Chris, who is now chairman of the company, has been a part of the company since its inception. He was about 13 years old when the original Old Spaghetti Factory opened.

THE OLD SPAGHETTI FACTORY: Guss Dussin at the Old Spaghetti Factory in Seattle. Dussin says it was a natural move to begin working in the family business. “My dad was in the restaurant business when I was growing up, as was my grandfather before him here in Portland, so I kind of grew up going to my dad’s restaurants,” he says. “I think I was 14 when I first started bussing tables. We made a trip up to Seattle because we had opened a Spaghetti Factory up there at spring break and that was probably the first time that I bussed tables and helped out a little bit.” Dussin continued to work in the restaurant throughout high school and into college. He was able to see how everything from the kitchen to management operated in a restaurant. However, he wasn’t always sure he would stick around. He says, “There were certainly times where, especially in high school, I didn’t know if I wanted to be in the business. From when I was a teenager my dad would always be talking to me about, ‘well you’re going to be in the company and someday you’ll run the business,’ so he always planted the seed. Let’s put it that way.” After spending time in California in the late 1970s, Dussin returned home to work in the company’s offices to learn “more about the corporate side of things.” During this experience, Dussin still missed California. He was able to convince his father to let him open up a store in Fullerton, California, and lead the project from the ground up. “I got to be part of the construction of the store and then open it up and I ran it for three years,” he says. “I still own it today but it was great experience for me to be out on my own and see what it was like to start something up and have to own it and pay for it, and run it.”

The Fullerton location was a turning point for Dussin. Now that he had his own piece of the company and was able to see a project from start to end, Dussin felt like he was able to grow while running the business over three years. He saw it as a sign he was meant to be in the family business. “It was a little different feel I think that I felt like it was mine. It gave me a little time to grow, too,” he says. “I was in my late 20s when I went down there, I think I was 28. And then I came back here when I was around 31 or so and started doing more things at the office working with my dad and starting to learn more of the details of the business—negotiating leases, looking at sites, and the operations—you pick up on a lot of things when you’re around it in this environment whether its purchasing or marketing.” Dussin served as the company’s president from 1997–2015 when he moved into the chairman position and his brother-in-law, Dean, took over as president. “It’s more than just a business, I think to us it’s a family,” Dussin says. “The fun part of coming here every day still is all the long-term employees we have that have been with us for 30 to 40 years. There’s just not many companies that I think that are in that position anymore especially in the restaurant industry. I’m proud we’ve made it to 50 and hopefully we can continue on down the road.” Relevance through innovation.

The restaurant industry is as competitive as ever, and The Old Spaghetti Factory recognizes the need to remain innovative with menu items and stay on trend with flavor in order to keep guests flowing through the door. Over 50 years, menus are destined to change. The original iteration, which once featured spaghetti and veal, has expanded to include salads, appetizers, and chicken dishes. All of which add variety for customers, Dussin says. “There’s no doubt that our menu has evolved,” he says. “It was very limited in the beginning with spaghetti and sauces. But as time went on and competition started to grow in our markets we started adding some chicken dishes and things. [My dad] felt like people in those days wanted a little more variety.” Each menu decision is made with value in mind. Some past dishes weighed down the kitchen and were removed because it they stuffed throughput. The Old Spaghetti Factory simplified systems over the years to keep menu prices down without sacrificing quality. “For us, we are still about volume and value with the price side, so we have to do the volume in order to make the restaurant successful,” Dussin says. “The only way you can do that is if you have a system that’s simplistic and not too complicated where you can get the food out. We still have nights where we do over 1,000 people for dinner, so that’s really been the key to it.” Five decades later, Dussin believes the concept behind the Old Spaghetti Factory is still approachable for guests young and old. He says, “Everybody likes pasta. So, it’s kind of in that category of foods that people are used to eating and something you look forward to.” Besides consistently producing high-quality dishes, the company is focused on maintaining its well-guarded culture. This is achieved, Dussin says, by hiring the right employees and ensuring the guest experience is consistent each time customers walk through the doors. It might seem like a simple set of guidelines to follow, and it is. But maintaining these standards is the key reason

The Old Spaghetti Factory has stayed relevant for so long, Dussin says. “We’re still here because we’ve been consistent in what we’ve done for 50 years,” Dussin says. “And once you get to be our age if you are consistent you kind of become part of the community, part of the fabric of that community, so then people start looking at it like well that’s our Spaghetti Factory.” A design that ages well. Another aspect of the Old Spaghetti Factory that has remained steady since 1969 is the décor. Sally Dussin dreamed up a unique experience, one that involved trolleys and classy antique lighting. Guests would be welcomed with “bed-booths,” Tiffany-style chandeliers, stained glass displays, and cozy wood interiors inside the trolley. The original Spaghetti Factory trolley, which is still in use at the South Waterfront Portland location, was found in a field near Reed College in Portland. As accessibility became an issue, the brand began to build trolley replicas on the ground. Even at the age of 90, Sally Dussin still comes into the office and advises on design. Chris says in a statement, “Mom and Dad had a deal—he took care of the food and kitchen side of the restaurants and she handled the design. It worked out really well, and for decades guests have enjoyed the food and atmosphere.” Growth goes forward. The family-owned company’s growth strategy over the years wasn’t so much about breaking into as many markets as quickly as possible, but strategically expanding when the right opportunities arose. Restaurants opened in Seattle, followed by Spokane, Tacoma, and San Jose, California. Today, the company owns and operates 42 U.S. locations. “Once he got where there was four or five stores I think he felt like from there he could kind of branch out to other areas of the country,” Dussin says of his dad. “He realized it was more than just a Portland concept, and then we started to expand out and away from home.” The Old Spaghetti Factory made its way to Salt Lake City, Denver, and the company opened more locations in Southern California. People would approach Guss with different opportunities or have old buildings they thought would fit well with the brand’s aesthetics. This strategy directed The Old Spaghetti Factory’s growth rather than forcing it to go into a specific market, Dussin says. Unlike other companies that dive into markets with plans to construct new buildings, The Old Spaghetti Factory tries to take over older, historic buildings. “In some places we’ve taken old buildings that are historic even and rehabbed them and brought them back to life,” Dussin says. “People in the community wherever we’ve gone and done that love that they feel like we’ve kind of reclaimed their history, and the Spaghetti Factory is part of it now.” “It’s not just slap up a building that’s a prototype and put your sign up and open it. It’s not a Chili’s,” he adds. “There’s nothing wrong with those companies, Chili’s or Olive Garden or any of the rest of them, they’re good companies, but they don’t generate that kind of excitement and personal connection to the guest that we do.”

The Old Spaghetti Factory in San Diego. As the company ages, the buildings are, too. The upkeep is not cheap for these large spaces and The Old Spaghetti Factory is constantly reinvesting money. That’s simply one of the realities of having a brand that’s been around for five decades, Dussin says. When stores have been up and running for 25 years, at some point upgrades will need to be made.  Even with the cost of maintenance going toward older locations, The Old Spaghetti Factory hasn’t slowed down construction of new locations. Over the last 15 months, the company has opened four new stores. Thanks to good opportunities, Dussin says, “We’re seeing that we’re getting more opportunity to grow because there aren’t a lot of people that can take a 10,000- or 12,000-square-foot space anymore.” A comfortable growth rate for the company is two new locations per year. “We feel good through cash flow and things that we’re generating that we could [do that],” Dussin says. However, Dussin, like his father, won’t turn down an opportunity if it makes sense for the company. The focus of growth is shifting toward the Midwest, where Dussin says wages and cost of doing business is less expensive. A new store in Wichita, Kansas, is slated to open sometime this summer. “We feel like we’ve got lots of areas around the country that we’re not in that we can expand to,” Dussin says. “We feel good about where we’re going and what the future brings.” Guss and Sally Dussin surrounded by Mizithra cheese in Greece. The franchising debate. While they’ve talked about franchising, Dussin says, the company hasn’t gone down that road because it can turn into more of a headache in the end. Dussin jokes that he considers some family members who own multiple units franchisees, but the company hasn’t gone further than that. “We still have the two locations in Japan that are franchises that we’ve had for a long time but we’re not really pursing going to other places to franchise,” he says. “We’ve had a lot of interest from other people in different countries coming to us now and wanting to go that route, but I don’t know. It just complicates things. You’ve got to pick the right partner, you’ve got to have somebody who’s going to follow your recipes and not want to change things. It’s one more thing to worry about.”

The Old Spaghetti Factory According to the Numbers: Since January 10, 1969:

22 million pounds of Mizithra has been served at The Old Spaghetti Factory.

142 million spumoni scoops have created just as many smiles.

Upward of 80 million loaves of freshly baked bread have been presented to patrons upon arrival.

Guests have eaten 10,394,729,409 feet of spaghetti (enough to travel to the moon and back over four times)

The most popular menu item by far is the Spaghetti with Mizithra Cheese and Browned Butter, a Dussin family recipe.

The dish almost didn’t make it on the menu. When Guss Dussin originally applied for his business and liquor license he was told he needed to add one more item to the menu. That item: Spaghetti with Mizithra Cheese and Browned Butter.The Cotton Candy Limeade is The Old Spaghetti Factory’s most photographed beverage. — Source: fsrmagazine.

How Millennials Disrupted Dinnertime

In recent years, millennials have been blamed for the downfall of canned tuna, mayonnaise, American cheese and cereal. Another casualty of the generation may be the traditional homecooked dinner. Shifting demographics have upended the evening mealtime routine, said Dave Donnan, senior partner at A.T. Kearney. Generations ago, he said, a family of four or five would gather around the dinner table and eat whatever dish mom prepared. Today, 62% of households are either single or couples, he said. “That has changed the dynamic of how we make food, and in addition to this it’s just not one meal anymore because even if I have more than one person at the table, somebody will be gluten-free, another will be a vegan, and then someone will be paleo, and someone is trying to be keto,” Mr. Donnan said during a Jan. 14 presentation at the Winter Fancy Food Show in San Francisco. “Each one of those different menu options is causing more complexity to our meals.” The rise of specialty diets emerged as a theme in several talks at the event. Sophie Egan, an author and freelance writer, described the perpetuation of a “very me-centric American food culture” that has fueled a fascination with functional ingredients and personalized nutrition. “Personalized nutrition stands to further distance us from each other and the table,” she said during a Jan. 13 presentation at Winter Fancy Food.

Millennials and what Mintel refers to as the “iGeneration,” the cohort born between 1995 and 2007, have disrupted the institution of dieting, said David Lockwood, director of Mintel Consulting. In a survey, Generation X and baby boomer participants indicated they had tried approximately 3.5 different diets in the past year and 4.5 different diets over a lifetime, Mr. Lockwood said. “Already, at their young age, millennials and iGens, the youngest groups, are dieting more frequently in their short lifetimes than older adults in their long lifetimes,” he said. “What you get is serial dieting. People who will go through Whole30, paleo, even keto now, and just try them over and over and over and keep doing it. “That’s so important for food innovators … what that means is it’s changing almost everything about the way we’ve thought about and developed products for and marketing to diets. Younger generations don’t even stick with a diet long enough to see how it’s supposed to work.” New products and services further enable an expectation of customization, Ms. Egan said. For example, she said, there are 87,000 possible beverage combinations at Starbucks. “This has evolved to build-your-own fast-casual models where you are a participant in the meal making — you’re sort of the orchestra conductor, dialing your meal to your unique hedonic and health profile,” she said. “This stems from a much deeper undercurrent in our food culture, which has been described today as … this need for transparency. It’s a sense of, ‘It’s my right to know what’s it my food. It’s my right to know what I’m putting in my body.’” Food service models are scrambling to keep pace. Raley’s, a regional supermarket chain, shifted its focus recently to broaden its assortment of prepared foods. Evelyn Miliate, corporate chef at Raley’s, said the retailer offers meals and mini meals, mix-and-match meal components and meal kits catering to different dietary preferences. “What drives our growth is giving customers choices, whether it be dietary choices, sizes of meals that they eat, varieties, just the way you cook it,” Ms. Miliate said. “We don’t market it as lifestyle diets such as keto or paleo diets, but we certainly have (those trends) in mind while we’re developing our products.” Meal kit company HelloFresh recently expanded its offerings to draw more consumers, said Matthew Fitzgerald, senior vice-president of brand marketing. “The meal kit concept hasn’t been accessible for everybody, so we pioneered a multi-brand strategy,” he said. “We bought a company called Green Chef based in Boulder, Colo., that has specialty meal plans, especially keto and organic ingredients. We are seeing very strong demand for those types of diets.” HelloFresh also added value meal kit brand Every Plate, with prices beginning at $4.99 per meal. “We saw in our research many people across the country felt left out by this trend,” Mr. Fitzgerald said. “They just could not afford meals starting at $9.99 per person. Using our supply chain, technology, insights into how we design our recipes and how we can help the home cook, we were able to unlock a concept at a much more accessible price point, and it’s actually our fastest growing plan to date.” Uber Eats, the food delivery service, also has evolved its model to tap into specific dietary needs, said Bowie Cheung, director of operations. “From a food delivery app perspective, one way you go about doing that is introducing filters for your dietary restrictions or preferences, whatever it might be,” Mr. Cheung said.

Prepared foods, meal kits and restaurant delivery are capturing more growth as consumers increasingly seek convenient dinnertime solutions, Mr. Donnan said. “In fact, 70% of consumers, according to a recent NPD survey, said they like to eat at home, but only 10% of consumers said they love to cook,” he said. “So, we’ve got this dichotomy between wanting to be home to eat but not wanting to cook.” – Source: Food Business News.

Transportation, Food Safety Seen in 2019 Regulatory Landscape

The Food Safety Modernization Act created a sea change in the relations between government and industry in their collaborative pursuit of ensuring a safer food supply for Americans. With most FSMA rules well into implementation, the food industry has been able to direct increased attention to other regulatory issues it will confront in 2019. Food Business News interviewed representatives of some key food industry groups, who provided their views on what’s ahead in the new year. “An ongoing transportation crisis is reducing accessibility, availability and affordability of the food, beverage and household goods that American families need,” said the G.M.A. “There is a critical shortage of truck drivers, demand for existing trucks is dramatically greater than the available supply, and inflexible regulations and needed infrastructure repairs exacerbate the problem.

The consumer packaged goods (C.P.G.) industry accounts for one-fifth of all freight on the roads today and will advocate for necessary changes to protect consumer access and affordability.” Lee Sanders, senior vice-president, government relations and public affairs, A.B.A., said adjustments to the Hours of Service Regulations may provide one of the most promising areas to make gains for the food industry in 2019. Ms. Sanders added that in light of the troubled electronic logging device (E.L.D.) roll-out, the Federal Motor Carrier Safety Administration has announced through multiple posted petitions and advance notices of proposed rulemaking that the time may have come to reevaluate what makes the most sense for truckers and trucking companies. “The American Bakers Association has taken this opportunity to co-submit with the International Dairy Foods Association an exemption request that would allow truckers hauling essential food staples to be exempt from ‘hours of service’ in the time ahead of a natural disaster — better preparing Americans for storms and allowing our drivers to complete their runs.” Additionally, the A.B.A. has commented on several other proposed changes to the hours of service rules, including the recent successful preemption of California’s meal and rest break provisions — allowing for uniform break standards across state lines, Ms. Sanders said. Among A.B.A.’s other chief regulatory priorities for 2019 are seeking consistency in Food and Drug Administration food facility inspections, commenting on aspects of the F.D.A.’s Multi-Year Nutrition Innovation Strategy, and monitoring potential actions under California’s Proposition 65. Ms. Sanders said implementation of the FSMA continues to be a concern for the baking industry. “For most bakers, it has been business as usual, old G.M.P.-type (Good Manufacturing Practices) inspections,” she said. “However, some F.D.A. officials venturing into the preventive control arena during inspections appear to be relying on draft F.D.A. guidance documents. This ‘draft status’ is creating inconsistency during inspections, leaving manufacturers confused about where to focus their efforts.

In 2019, the A.B.A. recommends that the F.D.A. maintains its educational and training focus for inspectors.” In 2018, Scott Gottlieb, M.D., F.D.A. commissioner, announced the agency’s Multi-Year Nutrition Innovation Strategy and encouraged public comments on the plan. “A.B.A. will have the opportunity to weigh in on modernization of health claims and the definition of ‘healthy,’ as well as revisit the standards of identity to address and allow emerging technology as part of the equation as bakers move forward with development of innovative new products,” Ms. Sanders said. “Sodium reduction policy is also part of the nutrition innovation strategy, where, again, product innovation will be key.” Ms. Sanders said the A.B.A. was closely monitoring increased activity under California’s Proposition 65. “Over the past few years, special interest groups and plaintiff attorneys have scrutinized and questioned the baking industry’s products,” she said. “These questions are concerning because wheat-based products, such as bread and cereals, are recommended by the U.S. Department of Agriculture’s MyPlate program as a nutritious and necessary staple for healthy eating patterns.” In addition to the transportation crisis, the G.M.A. said it will continue efforts to ensure regulatory uniformity and packaging innovations. “A patchwork of dissimilar state and local regulations creates consumer confusion, increases costs and harms innovation,” the G.M.A. said. “We will advocate for policies that unify the intent of regional policymakers under national standards ensuring that manufacturers and consumers alike can rely on a single set of clear rules and facts-based information.” The G.M.A. said C.P.G. companies increasingly utilize environmentally friendly packaging consistent with consumer interests. “Much more work remains, however, to address America’s patchwork approach to recycling and to drive innovation in sustainable packaging,” the G.M.A. said. “The C.P.G. industry will demand plastics innovation and uniform approaches to recycling. “

Beverage regulatory trends. Duane Stanford, executive editor, Beverage Digest, commenting on what he views as regulatory issues high on the list of beverage industry priorities, pointed to two that relate to facilitating innovation in developing beverages with functional and wellness characteristics. “A request by Coke for the F.D.A. to clarify its rules against fortifying carbonated beverages (the so-called jelly bean rule) could have important implications for making sparkling beverages of all kinds more functional, to meet consumer demand,” he said. Mr. Stanford was referring to The Coca-Cola Co.’s letter to the F.D.A. dated Oct. 11, 2018, in connection with the agency’s request for public comments on its Multi-Year Nutrition Innovation Strategy. Among Coca-Cola’s comments was a request that the F.D.A. update its fortification policy, which was codified in 1980. “Currently, the fortification policy restricts fortification of carbonated beverages,” Coca-Cola said. “This restriction primarily impacts our ability to innovate with new carbonated water, tea and juice beverages. “To be clear, we do not intend for our comments to imply we are seeking the opportunity to fortify traditional sodas. Our request is for allowing the fortification of some sparkling beverages, not the random fortification of snack foods, or foods and beverages with significant amounts of added sugar.” The other issue that in recent months has commanded increased attention in the beverage industry has been the use of hemp-derived cannabidiol (C.B.D.) as an ingredient because of its reputed salutary health effects such as easing pain and inflammation and even relieving anxiety. “Clarification of the laws around the use of C.B.D. in food and beverages will be important as large consumer packaged goods manufacturers try to understand how aggressively to pursue innovation and investment in the category,” Mr. Stanford said. Already food and beverage companies in states that have legalized medical and/or recreational use of hemp or marijuana have seen the development, production and marketing of several C.B.D.-infused foods and beverages. The Agriculture Improvement Act of 2018, the farm bill, removed industrial hemp and its derivatives, such as C.B.D., from the Controlled Substance Act. But the substances remain regulated by the F.D.A. This has special import when it comes to introducing products containing the substances into interstate commerce. The F.D.A. also has authority to approve or disapprove therapeutic and health claims related to beverages and foods with C.B.D. as an ingredient. The F.D.A. has committed to calling a meeting of stakeholders to discuss “pathways by which products containing cannabis or cannabis-derived compounds can be marketed and how we can make these legal pathways more predictable and efficient,” Dr. Gottlieb said. It was thought several beverage companies with nationwide reach were closely monitoring developments and weighing entry into what may become a multi-billion-dollar segment.

Inspection modernization will continue to be of interest to meat processors in 2019, said Eric Mittenthal, vice-president of public affairs for the North American Meat Institute (NAMI). “In the case of pork, we’ve seen success with the New Swine Slaughter Inspection System (N.S.I.S.), which builds upon the traditional meat inspection system to help focus resources where they are needed most to ensure positive food safety impacts,” Mr. Mittenthal said. The U.S.D.A.’s Food Safety Inspection Service announced the launch of the N.S.I.S. as a pilot program in 2018. Those companies opting into the program take on greater responsibility by performing certain food safety monitoring functions, subject to verification by the F.S.I.S., with the aim of allowing federal inspectors to direct their attention more fully to the most critical points in the slaughter process and on inspecting 100% of live animals prior to slaughter and all carcasses after slaughter. One goal of the N.S.I.S. is to allow opportunities for processors to innovate and streamline the slaughter process. For instance, under the N.S.I.S., plant processing line speed would not be capped at 1,106 pigs per hour. But importantly, the N.S.I.S. plants’ slaughter lines may operate only as fast as managers can guarantee their compliance with food safety rules. NAMI also was monitoring efforts by the U.S.D.A. and the F.D.A. to move forward with a joint regulatory framework around emerging technologies for products from cell-based cultures. “While broad areas of regulatory authority have been laid out, we will be interested in more details as this effort progresses,” Mr. Mittenthal said. “We need a regime put into place that won’t disadvantage traditional processors and that can ultimately be a win-win proposition for both industry and consumers.” Pointing to a third area of concern, Mr. Mittenthal noted the U.S.D.A. may move forward toward promulgating so-called “Farmer fair practices” rules in coming months that relate to meat producer business practices and marketing agreements. “Past proposals have sought to lower the bar to lawsuits against packers and processors by growers, and eliminate requirements to show economic harm to industry versus potentially frivolous complaints,” Mr. Mittenthal noted. “We will be following that process in terms of its scope and impacts on companies on competitiveness, which could ultimately impact consumers as well.” – Source: Food Business News.

Red Robin Hits the Road with Food Truck

Red Robin Gourmet Burgers Inc. has hit the road with a nine-state tour in its new “Forever Yummm” food truck, expecting to cover 9,200 miles in three-and-a-half months and offer samples along the way. The Greenwood Village, Colo.-based casual-dining brand is looking to highlight its burgers and bottomless sides as it begins to celebrate its 50th anniversary. The brand was founded in 1969 in Seattle. “The fully functional food truck is designed to allow fans to experience all the Yummm and fun surrounding Red Robin’s 50th celebration,” said Amy Woolen, Red Robin’s vice president of brand marketing, in a statement. “It’s highly approachable and gives people a reason to join in on the fun and celebrate this milestone with us.” Red Robin’s Forever Yummm Food Truck debuted recently at the brand’s annual leadership conference. The truck has started its national tour in Washington State, where the brand began, and will hit Oregon, California and Arizona before heading east to North Carolina and New York. The truck will pass through Michigan and Oklahoma with its last stop in Colorado in early April. Denny Marie Post, Red Robin’s president and chief executive officer, said: “Through the years, while the restaurant has changed and the menu has evolved, the brand continues to meet the needs of generations because we infuse fun, creativity and innovation into everything we do.” In addition to the food truck, Red Robin is encouraging consumers to share their version of the brand’s “Red Robin … YUMMM!” jingle. Renditions shared on Instagram and Twitter using the #RR50Contest hashtag from Feb. 1 through March 22 or captured during one of the Forever Yummm Food Truck Tour stops will be featured n www.foreveryummm.com. Red Robin will also select the top 50 entries with prizes and award one final grand prize of 50 years of Red Robin. Red Robin has 570 restaurants across the United States and Canada, including Red Robin Express locations. – Source: NRN.

Resurrected Bennigan’s Plans its Second Act

Paul Mangiamele likes to say, customers didn’t give up on casual dining; casual dining gave up on customers. You could also argue restaurant pundits and professionals across the nation gave up on Bennigan’s. The Norman Brinker-founded brand was left for dead in 2008 when it underwent one of the most sudden—and spectacular—collapses the industry had seen. The rare Chapter 7 bankruptcy filing shuttered all 150 of the company’s corporate units. There were 138 franchises hanging on, but many of those closed shortly after. Seventy remained during proceedings, and Bennigan’s continued to shrink to the 15 domestic locations it has today. The main difference between Chapter 11 and Chapter 7 is that, in the latter case, the company is so far in debt that it can’t continue operations. Often called “liquidation bankruptcy,” this is why Bennigan’s collapse was so swift and dramatic. But one thing that took place during bankruptcy kept the brand’s pulse beating, faint perhaps, but still going. When Atalaya Capital Management bought the brand out of bankruptcy in 2008, Mangiamele, a restaurant veteran with three-plus decades of experience, was recruited by investors to lead Bennigan’s turnaround. One thing about Mangiamele, formerly president and CEO of Salsarita’s, is that he wasn’t a comeback specialist looking for one success so he could résumé jump to another. He truly might be the biggest Bennigan’s fan this side of a Monte Cristo. In fact, in 2015, Mangiamele, along with his wife, purchased the iconic chain, as well as Steak and Ale—Brinker’s 1966 creation that was wiped out overnight by the filing—from Fortress Investment Group. The move signaled the birth of Legendary Restaurant Brands LLC. Paul Mangiamele bought the company in 2015. This past year, Bennigan’s opened three U.S. restaurants: Steubenville, Ohio; Mandan, North Dakota; and Monahans, Texas. All three are experiencing double the sales volume of legacy units in a box that’s about half the size of the original 10,000-square-foot prototype. There are 18 international units as well. Bennigan’s executed a master franchise agreement with the Baila Group of Companies last year to expand into four major cities in the Islamic Republic of Pakistan. Other overseas locations are planned for Guatemala, Honduras, El Salvador, and Amsterdam. In total, Mangiamele says, more than 100 Bennigan’s are in some stage of development. Same-store sales are tracking positive, too. After an initial burst, they’ve leveled out to about 3 percent, year-over-year. From a compounded-annual growth rate, average-unit volumes are tracking 40 percent higher since Mangiamele jumped in. Small markets, big wins.

As you can see from 2018’s openings, Bennigan’s current growth chart is centered on small markets with large trade areas. Instead of starting in big cities and moving out, Bennigan’s is debuting in smaller cities and coming in. There are a few reasons for this but it all returns to unit-level economics and profitable franchisees, Mangiamele says. It’s cheaper land. More affordable rent. A quicker return on investment. The trade areas expand from a few blocks to 20, 30, 40 miles, “as soon as we open the doors,” he says. One of the challenges faced by casual brands nationwide is the proliferation of convenience-driven options into the restaurant marketplace. Impulse diners simply don’t flock to sit-down chains like they used to. Look at the mall dynamic, for example. Brands like Maggiano’s and The Cheesecake Factory have weathered the retail crisis because they serve occasions, not foot traffic. Customers are targeting these brands, for birthdays, rehearsal dinners, nights out, instead of making a lunch-time decision to drop in. Opening in a small market can mirror the effect, Mangiamele explains. “If I open a Bennigan’s in Manhattan, it’s ho-hum, another restaurant,” Mangiamele says. “You open in Monahans, Texas, and it’s the biggest event of the century.” And, again, people will travel from much farther to reach a destination restaurant. They don’t need to be multi-tasking. The restaurant isn’t relying on real-estate connections like shopping centers, parking garages, and so on. “It’s a whole different dynamic,” Mangiamele says. “And one that has been able to generate very, very high volumes for those stores.” It doesn’t hurt either that it’s Bennigan’s planting a flag, he adds. Regardless of what happened in 2008, the chain doesn’t lack for brand attraction. It even features trademarked menu items, like the Death by Chocolate dessert. Mangiamele says some of the recent openings have resulted in lines snaking around the building. “I know I’m often the victim of exaggeration, but I really, truly love the response to these brands. It’s humbling. To see people, honest to goodness, pressing their noses up against the glass, waiting for us to open. I tell them, cut the preshift short. Open the door. Let the guests in so we can serve them. They’ve been waiting long enough for us.”

Past being a brand of choice, Bennigan’s immediately becomes an employer of choice in these small markets. Staffing is currently facing one of the most challenging dynamics in restaurant history. Restaurant employment has grown by more than 1.8 percent, year-over-year, during the last two months, according to TDn2K. However, the number of vacancies that need to be filled because of turnover continues to rise. In December, the U.S. jobless rate rose to 3.9 percent from a 49-year low of 3.7 percent the previous month. That tightened market isn’t quite as laced up in some of these smaller towns, Mangiamele says. You don’t run into the ultra-competitive workplace battle you see in larger cities, where incentives, like flex hours and other gig benefits, are as valuable as dollar figures. When Bennigan’s drops down it creates a stir from the consumer to the worker to the operators.

Bennigan’s small-market strategy is paying off big. Another reason this has been successful is that Bennigan’s remains selective in finding savvy, local entrepreneurs who are as passionate about the brand as Mangiamele is. Or at least in the same universe. In underserved markets, these operators know the lay of the land and how to market, and how to embed the brand into the community well past grand opening. Mangiamele believes franchisees have benefited from this close structure, too. They’ve enjoyed the intimate relationship and back-and-forth Mangiamele provides from a very committed perch. He’s a CEO who also owns the company and has put all of his money on the win line. “That’s credibility that can’t be equaled with a lot of brands,” he says. Mangiamele has been on the other side, where he’s invested as a franchisee and hoped for franchisor support. “The way this works is: they make money, I open restaurants. It’s a beautiful formula,” he says. “I want them to feel the partnership and collaboration.” Mangiamele says if you look at the company’s franchise disclosure documents, one thing is missing: litigation with franchisees. “Why? Because we talk to them every week,” he says. “We see them all the time. We establish that emotional connection. Loyalty translates into focuses on the guest and focusing on more sales generation and then exploring ways to add to the revenue, whether it be delivery or catering. In-fighting is distracting to a restaurant company. And I try to avoid that.” Sticking to what got you hear, Mangiamele isn’t shy about sounding off on what’s wrong with the segment. Casual dining, for many brands, is suffering from “the insidious disease called brand drift,” he says. It’s what Mangiamele refers to as a “complete and utter abdication of the connection from the brand to the guest.” “You’re saying, come on in, we’re full service, but help yourself,” he says. “That’s crazy. It’s just crazy. But I applaud every time any new brand rolls out something like that [kiosks and other service replacements] because I’ll just take those defected customers and I’ll put them in a Bennigan’s.” “I’ve said this a million times,” Mangiamele adds. “But culture, people, and passion beat strategy and tactics every day of the week. I’ll go to the grave saying that.”

Back in the glory days of casual dining, Mangiamele says, the food was “pretty damn good.” The chains were doing ridiculously high volumes. But then they moved further and further away from their original success components. It’s why you see a lot of classic chains trying to return to past brand promises as opposed to reinventing new ones. “It’s going on nine years now that I’m fighting the good fight and bringing that panache, that fun, that value, that family-friendly atmosphere and vibe back into our brands.” So what about some of the buzzier trends out there? Let’s take off-premises for example. Mangiamele says, simply, that casual dining lives and dies by a pretty straightforward premise: hot food is hot and cold food is cold. That’s the No. 1 commandment. Failing on that target has caused Mangiamele to be a bit hesitant on delivery. But he’s not ready to ignore it. Bennigan’s has worked on creating a menu that makes sense for the space. Deliberate choices like offering cold sandwiches and, instead of French fries, stocking bags of potato chips. Additionally, making sure they have canned soda in the back to give to take-out customers instead of fountain drinks. “We have a mission and a purpose. And the purpose is to live our brand 25/8. And to deliver flawless execution to go above and beyond the call of duty.” — Paul Mangiamele, CEO of Legendary Restaurants. Bennigan’s rolled out a catering initiative “that’s working very well.” And has different, in-house, big-party initiatives to satisfy larger events.

Another possible future channel could be retail, Mangiamele says. Similar to Goldbelly and the now-closed Carnegie Deli, Mangiamele sees opportunity in having its trademarked items distributed for delivery. “That adds to incremental sales and the overall system,” he says. “And it still builds brand awareness, which is all important.” “Don’t win on price” One casual-dining phenomenon lately has been higher check averages offsetting traffic declines. Or the opposite: value-based incentives driving traffic while cutting into franchisee’s profit margins. In Bennigan’s case, Mangiamele says, the chain has never tried to win on price. He fears the result of getting locked into discounting, and losing the key. Bennigan’s instead works on value, he says. Value not in low price points but in abundance. The portions are large on purpose, Mangiamele says, so guests walk out with enough food for lunch. Then the sentiment becomes: this was a great deal, even if it cost $14. “OK, you now have two meals that cost you $7 each. Try to go to a fast-food place and get something similar. It doesn’t exist,” Mangiamele says. He adds that, in his opinion, deep discounting cheapens the value of a brand. It creates confusion on the store level. Most traffic increases you see in full service these days? It’s because of delivery, Mangiamele says. “If you look at in-store sales traffic, it’s down almost everywhere,” he says. “You have to continue to work on what’s happening inside your four walls as you work along these other initiatives. And if you can’t improve that, you’re going to suffer the consequences.” Bennigan’s Monte Cristo is world famous. The three Cs. Mangiamele says the restaurant industry is a fierce fight for market share, regardless of the category. You can work on everything, food quality, food safety, training, and so, and still break down. Mangiamele, in response, likes to keep the company’s mission statement simple and easy to comprehend. Competence. Character. Culture. “I’ve been lucky enough to stand on Norman Brinker’s shoulders and represent the only two brands he created during his career. I think that’s cool as hell,” Mangiamele says. Corporate longevity has helped Bennigan’s guard those traits and promote company pride. Shawn Finn, the company’s VP of operations, has been onboard since 1987. Its VP of supply chain and administration, Deanna Alder, since 1989. The average tenure at Bennigan’s, Mangiamele says, is more than 16 years.“We have a mission and a purpose,” he says. “And the purpose is to live our brand 25/8. And to deliver flawless execution to go above and beyond the call of duty.” When Mangiamele walks into a new restaurant one of the first things he does is ask the team, “What’s our mission.” “Why are we here? What do you stand for? Because I think if a lot of teams don’t know that then, as a brand, you’re just marking time,” he adds. “That’s part of the exodus of different restaurants’ employees. They don’t know what they stand for. There is no mission. So they go, well, somebody offered me another 15 cents and they’re gone.”

The international pipeline Bennigan’s has seen tremendous response overseas, Mangiamele says. The Middle east, South America, the chain continues to sign master deals with the intention of growing rapidly in new markets. Mangiamele says the demand for U.S. brands remains strong, and being flexible helped Bennigan’s thrive early on. About 10–15 percent of the menu can be curated so that Bennigan’s doesn’t end up trying “to out-local the locals,” Mangiamele says. “I think a lot of other brands have made that mistake,” he says. You’re bringing your brand over but you’re trying to out-local the locals, which is a really bad idea. Bring an aspect of the local instead. Not only the cuisine and the menu, but even the way the restaurant is built.” One example is specs and sourcing. Whenever it makes more sense, Bennigan’s gets product. There’s no strict set of guidelines that stall the operation. A Larnaca, Cypress, restaurant, for example, sources meat from New Zealand.

 

 

 

 

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