To Our Valued Subscribers:
Here’s it’s the day after tax day and I’m sure you opened up your wallets to Washington, D.C. I hope the tax cut has helped you as an individual as much as it has seemed to help the economy. According to the NRA, 2019 maybe the best sales years for restaurants on record. That would be terrific. In my hometown of Chicago, we have a new Mayor and Cubs fans are about to jump off the ledge of the Willis Tower. Great time to be in the city, so, I hope to see you in about a month. Another great thing about my hometown is the various entertainment venues available. I recently attended a show at the comedy icon 2nd City. Ironically two days later, I read an article in Lead Change with the headline use this improve technique to improve communication.
The purpose of the article is to assist leaders in better communicating with their team. Here’s the tip: Instead of replying to a team member’s idea with the words No But, try using Yes And. You can still not use the ideas; however, team members get the chance to build rather than detract. If you ever attended an improve show you always hear the cast members build by saying Yes And to continue the routine. Give it a try. Also, try and keep up to date on the latest happenings in the Foodservice Industry by reading the latest edition of American Recruiters Global Foodservice News. It is never a No But. Time for me to write my check to Uncle Sam so I’ll see you here in Chicago in a few weeks if the check clears!!
Students from The Culinary Institute of America took home gold medals in both the Commercial Baking and Culinary Arts categories at the New York State SkillsUSA competition at Alfred State College in Wellsville, New York, on March 23. Nora Engelken of Fairway, KS was the winner among postsecondary students in culinary arts and Karam Lee of Salt Lake City, UT took top honors in the commercial baking category. In addition, Brandon Ting Tai Hoe of Flushing, NY was the silver medalist in the baking competition and Beatriz Balderas of New Castle, DE earned a bronze medal on the culinary side. All four are currently in their sophomore year at the CIA. “For our students who participate, competing is SkillsUSA is a valuable addition to their education,” says CIA professor and SkillsUSA advisor Ezra Eichelberger. “When they prepare for competition in the various categories, you can see them develop—not only in the specific skills for that particular event, but also in their organizational skills, interpersonal skills, and overall professionalism.” The students trained under CIA faculty members Lance Nitahara and Didier Berlioz. Chef Nitahara is a CIA graduate who won several culinary competitions as a student. With their victories at the state level, Engelken and Lee have earned the opportunity to represent the CIA at the SkillsUSA national competition this June in Louisville, KY, along with CIA sophomore Jerry Zheng, who will be participating in the Restaurant Service category. Since 2006, the college has had 10 gold medal winners at the national competition. The CIA will also have a representative at this year’s WorldSkills competition. Julia Spondike of Lorain, Ohio, won a cook-off at last year’s nationals to earn the honor of representing the United States in the international competition in Kazan, Russia in August. SkillsUSA is the national organization for students in trade, industrial, technical, and health occupations education. It sponsors annual SkillsUSA Championships in 100 fields to recognize the achievements of career and technical education students and to encourage them to strive for excellence and pride in their chosen occupations. – Source: fsrmagazine.
Starbucks Commits to Closing the U.S. Gender Pay Gap
Starbucks continues to invest in employees. In 2018, Starbucks announced it reached 100 percent pay equity for men and women and people of all races performing the same work. It took the java chain nearly 10 years to pull it off. That’s still lightning quick compared to how long experts believe it will take the country to do so. The American Association of University Women has stated before it could be 100 years, even longer globally, before the gap closes. Their earlier data showed that, in the U.S., women were paid 80 cents for every dollar paid to men. “At the rate of change between 1960 and 2016, women are expected to reach pay equity with men in 2059. But even that slow progress has stalled in recent years,” the AAUW said. “If change continues at the slower rate seen since 2001, women will not reach pay equity with men until 2119.”
At its annual shareholders meeting in March, Starbucks said it maintained pay equity for another year and verified that its China and Canada stores—two of Starbucks’ largest global markets for corporate units—also fulfilled the company’s commitment to achieve and maintain gender equity in pay. Fittingly, Starbucks took another step Tuesday—Equal Pay Day—joining 25 other U.S. employers in the Employers for Pay Equity Consortium to share a set of “Pay Equity Principles” intended to help eliminate the gender pay gap. “The Pay Equity Principles we signed onto today—equal footing, transparency and accountability—were created not only to help us but also other organizations and businesses seeking to eradicate the pay gap,” Starbucks CEO Kevin Johnson said in a statement. “While the signatories to the Pay Equity Principles represent different industries facing different challenges to achieving pay equity, we all agree that by working together we can accelerate the elimination of the national pay gap.” The Billie Jean King Leadership Initiative, National Partnership for Women & Families, American Association of University Women, and the American Civil Liberties Union also signed on in support of the letter. Many of the companies previously inked the White House Equal Pay Pledge in 2016, committing to conduct annual company-wide gender pay analysis; review hiring and promotion processes; to reduce unconscious bias and structural barriers; and embed equal pay efforts with broader enterprise-wide equity initiatives. “The companies are where rubber meets the road,” added Elisa Van Dam, who works with Employers for Pay Equity as liaison with Simmons School of Business at Simmons University in Boston, in a statement. “Legislation is important in bringing attention to the issue, but companies do the work. This shows internally and externally that they are committed and putting the resources in.” Starbucks revealed its Pay Equity Principles last year.
As for how Starbucks got there, it created a collection of tools and best practices for preventing disparities. Included: a calculator to objectively determine target starting pay ranges based on experience. Raises and bonuses are also statistically analyzed before being finalized to ensure systemic bias doesn’t play a role, Starbucks said. The company doesn’t ask candidates for a salary history to avoid importing pay inequities. Additionally, Starbucks provides candidates the pay range of any given role when asked. One of the biggest announcements last year arrived in January, when companies nationwide started to get a hold on just how much tax reform capital they would generate. Starbucks’ corporate tax cuts totaled more than $250 million and Starbucks said it would invest it back into the workforce—a move affecting more than 150,000 employees. This included a new partner and family sick time benefit for all U.S. employees that allowed employees to accrue paid sick time based on hours worked and then use them if they or a family member needs care (one hour for every 30 hours worked). Starbucks also announced its second wage increase for all U.S. hourly and salaried partners in addition to the annual increases already granted in fiscal 2017.
In April 2018, all eligible U.S. hourly and salaried employees received the boost. This included an investment of about $120 million in wage increases that was allocated based on regional cost of living and laws that vary state by state. Lastly, Starbucks announced an additional 2018 stock grant with a one-year vest. On April 16 2018, the company provided the additional grant for all eligible full-time, part-time, hourly, and salaried U.S. employees across all Starbucks’ stores, plants, and support center who were active as of January 1. All retail employees received at least a $500 grant. Store managers received a $2,000 grant, and plant and support center employees (non-retail) grants will vary depending on annualized salary or level. This investment alone, Starbucks pointed out, was valued at more than $100 million. At its March meeting this year, the company provided some additional employee initiative updates, including: Veterans and Military Spouses: With 22,000 hires to date, Starbucks is on track to well exceed its goal of 25,000 hires by 2025. Opportunity Youth: Starbucks is on track to meet its goal of hiring 100,000 Opportunity Youth—defined by the U.S. Department of Labor as 16-24 year-olds not in school or in the labor force—by 2020, with 75,000 hired so far. Partners in Pursuit of a Higher Education: The Starbucks College Achievement Plan—a model for access to higher education for employees in partnership with Arizona State University—has more than 12,000 scholars as of this year and more than 2,300 graduates since its launch in 2014. Through the Starbucks College Achievement Plan, partners earn a bachelor’s degree with tuition costs covered, without a further commitment to Starbucks. The program’s goal is 25,000 graduates by 2025. Starbucks also became one of the largest retailers in the country to offer an employee benefit aimed at helping ease child care burdens. Employees pay $1 an hour for in-home backup child or adult care or $5 per day per child for in-center childcare. (After the 10 backup care days, or for other services offered through Care.com such as pet sitting and housekeeping, partners pay the full cost.) Additionally, employees can access resources to help with senior care planning. They can connect at no cost with a Senior Care Adviser for professional guidance and a customized plan for senior care, from housing alternatives to legal concerns. Below is the full draft of the pay equity letter, unveiled Tuesday. It’s signed by Accenture, Adobe, AirBnB, BCG, Caesars Entertainment, Care.com, Chobani, Cisco, Deloitte, Expedia Group, Gap Inc., Go Daddy, Here, IKEA, L’Oreal, Lyft, Navient, PepsiCo, Starbucks, Stella McCartney, and VMware. While many agree on the idea of equal pay, the hard work is putting it into practice. For over 50 years in the United States, our laws have mandated Equal Pay. Although enforcement of the Equal Pay Act and civil rights laws have helped narrow the wage gap over time, there is still more work to do. Women in the U.S. are still paid only 80 cents for every dollar paid to men in the workforce; the disparity for women of color is even larger. At the current rate of progress, the wage gap will not be closed until 2106. Addressing the pay disparities that remain and the systemic forces that perpetuate them is critical for everyone. We, the undersigned employers, believe that business can play a critical role in eliminating the national gender pay gap. Our organizations employ millions of Americans across multiple industries. Together, we have leveraged our collective experiences to create a shared set of Principles to Pay Equity. While every business has a different approach, our goal is to make the work behind eliminating the pay gap actionable and accessible to companies of all sizes. Principles to Pay Equity:
- Equal Footing: From the start and throughout a career. One of the most important things to get right is starting pay, which greatly impacts pay as an employee advances throughout their career. Compensation should be based on a candidate or employee’s role, skills, abilities and experience, not their gender, race or any other protected classes.
- Transparency. Achieving and sustaining pay equity is an imperfect process. We commit to sharing insights and learnings from our work to achieve pay equity. All employees are encouraged to openly ask and discuss wages without fear of retaliation.
- Accountability. We will hold ourselves accountable through practices such as conducting an annual company-wide gender pay analysis across occupations, reviewing hiring and promotion processes to reduce unconscious bias and structural barriers, and embedding equal pay efforts into broader enterprise-wide equity initiatives. Source: qsrmagazine
Kona Grill Names Christi Hing as Interim CEO
Kona Grill Inc. has named chief financial officer Christi Hing as interim CEO while it continues its search for a successor to Marcus Jundt, who resigned in March, the company reported. Hing becomes the fifth executive in nine months to serve in the top spot at the Scottsdale, Ariz.-based casual-dining brand. Kona Grill filed the interim executive change with the Securities and Exchange Commission as news outlets reported another closure, the shuttering of the company’s restaurant at Chandler Fashion Square in Chandler, Ariz. The company has three remaining restaurants in the Phoenix area. Hing has worked with Kona Grill since 2006 and served as CFO since February 2012. Prior to joining Kona, she worked in financial reporting roles at American Express and in audit positions at PricewaterhouseCoopers LLP. The company has seen five CEOs since August, when the grill-sushi brand promoted Jim Kuhn, chief operating officer, to succeed Berke Bakay in the role. Board members Jundt and Steve Schussler were named co-CEOs in November. Schussler stepped down in January, leaving Jundt as sole CEO until he resigned March 31. Kona on April 3 told federal regulators that its financial performance had deteriorated in the fourth quarter and it would miss its deadline for filing earnings reports for fiscal 2018. The company warned that “revenue has decreased 12.4% and the net loss increased to approximately $32 million, primarily because of a decline in same-store sales of 12.3% since the comparable period for 2017 and $18.3 million of non-cash asset impairment charges for certain underperforming restaurants.” In addition to the Chandler restaurant closing, Kona Grill in the past several months has shuttered restaurants in Las Vegas, Miami and Fort Worth, Texas. Jundt in January said the company was evaluating every location. The brand now has about 40 restaurants. Kona Grill said in January said it had received a notice from the Nasdaq Stock Market that it hasn’t complied with market rules, falling below the listing standard of $15 million minimum market value, and could face being delisted. For the third quarter ended Sept. 30, the last quarter for which the company has reported, Kona Grill’s loss widened to $5.1 million, or 39 cents a share, from $3.3 million, or 33 cents a share, in the same period a year ago. Revenues fell 15.7%, to $37.4 million, from $44.4 million in the prior-year quarter. The brand’s same-store sales in the quarter fell 14.1%. Kona Grill ranked No. 195 in U.S. systemwide sales among the chains in Nation’s Restaurant News’ most recent Top 200, booking $176.3 million for the fiscal year ended in December 2017. – Source: NRN.
Alexander’s Receives $186M Buyout Offer
Alexander’s Holdings Inc. said Tuesday that the Nashville, Tenn.-based company has received a buyout offer from Ancora Advisors LLC that would take the premium dining company private in a cash deal valued at $186 million. In a letter sent to J. Alexander’s this week, Cleveland-based Ancora laid out a proposal to purchase the outstanding shares of the company’s common stock for $11.75 a share in a cash deal. J. Alexander’s said, along with its board of directors and advisers, it “will carefully review, evaluate and respond to Ancora’s letter.” Ancora said taking the company private is the “best path forward” for the brand, which operates 46 restaurants in 16 states including J. Alexander’s, Redlands Grill, Stoney River Steakhouse and Grill, Overland Park Grill and Lyndhurst Grill. The namesake J. Alexander’s restaurants have been around since 1991. Its menu features premium American classic dishes such as hand-cut steaks, prime rib, and fresh seafood. “JAX management itself has acknowledged that its growth and liquidity profile are unfit for public markets,” Ancora said in a regulatory offering filed April 8. “In our view, JAX will continue to be undervalued as a public company given its lack of scale, growth and liquidity. Ancora said it is “strongly opposed to the company attempting to justify its existence as a public entity through strategic acquisitions.” “The company has no currency to do this and, at its current multiple, deals will most certainly be highly dilutive to shareholders. In our view, the only viable manner for shareholders to achieve full and fair valuation is a sale of the business.” The buyout offer comes as the company is undergoing a leadership transition. Earlier this year, J. Alexander’s said it planned to promote its chief financial officer Mark Parkey to CEO and president, succeeding longtime executive Lonnie J. Stout II in the role. The company said the promotion would become effective May 1. With the transition, Stout will become chair of the company’s board. – Source: NRN.
Friendly’s Shutters 23 Restaurants in “Tough Decision”
Earlier in the year, Friendly’s initiated a strategic assessment of its corporate-owned restaurant footprint, the chain’s CEO, George Michel, wrote in an April letter to franchisees. The company was keeping an “eye toward gonging viability and maximizing resource investment.” One side effect is the closure of 23 company-run units, which shuttered across the Northeast this past weekend. The retraction represented a fifth of Friendly’s corporate stores. It now has 77 company units and 97 franchised stores. Friendly’s has closed 57 restaurants since 2017. There were 515 total locations when Sun Capital Partners bought the legacy brand for $337.2 million in 2007. Michel wrote in the letter that Friendly’s plans to accelerate reinvigoration efforts. “Amidst these industry-wide dynamics, our charge is to ensure our beloved brand not only remains relevant with existing audiences but continues to resonate with new generations of patrons and that our operations are structured to support long-term sustainability,” he said, referencing changing demographics, increased competition, rising costs, and shifting consumer preference.
The Wilbraham, Massachusetts-based brand, founded in 1935 by brothers Prestley and Curtis Blake as Friendly (the apostrophe-s was added later), has travelled a rocky road lately. Friendly’s filed for chapter 11 bankruptcy protection in October 2011 and closed a total of 100 underperforming stores, including 40 in its home base of Massachusetts, in an effort to improve business operations. The bankruptcy cleared $297 million in debt. Friendly’s had 254 restaurants at the time (121 company run), and was down to 230 stores, evenly split between corporate and franchised, when Michel took on the CEO role last September. He replaced former Panera Bread executive John Maguire, who left Friendly’s after six years to join Mod Pizza. He also headed up Johnny Rockets during that span. Michel previously worked as CEO of Boston Market Corporation, a job he held since October 2010. Fourteen of this past weekend’s closures occurred in upstate New York. Three were in Massachusetts, three in Connecticut, two in New Hampshire, and one in Maine. “In today’s environment, it is incumbent upon all restaurant operators to engage in such a process, but particularly so for Friendly’s, which, as an established brand, has locations in geographic areas that have changed dramatically in some cases since those restaurants first opened,” Michel wrote in the letter. “While this was a tough decision, we are confident it will best position the brand for a bright future,” he added. He said Friendly’s would turn focus to refreshing its menu, adding off-premises channels, including delivery and catering, and improving the overall restaurant experience. Some reports surfaced that Friendly’s abruptly closed stores without informing employees. However, the company released a statement to several media outlets that employees were, in fact, informed personally and not via a sign. Also, that it’s working to support them with opportunities at other locations, severance pay, and offering other assistance.
Friendly’s was sold to Hershey Foods in 1979 and changed hands a few times before becoming an independent corporation. Sun Capital purchased Friendly’s in 2007. Friendly’s operated 515 total units throughout the Northeast and several Southeastern states at the time. Friendly’s, Johnny Rockets, and Boston Market are all owned by the investment firm. The chain has made several key changes since being acquired, including updating its design, launching drive thrus in many stores, bringing in the Friendlier Prices menu, and improving brand positioning in the marketplace. In March, the company appointed three new agencies of record “as part of its efforts to reinvigorate the beloved community-oriented brand as consumer dynamics and the restaurant marketplace continue to evolve,” it said. The group of agencies hired to create and execute a 360-degree rebranding campaign alongside incumbent agency Cam Media, a Boston area integrated media buying service, are: The Fantastical, a Boston-based advertising agency; HYFN, a Boston-based digital and creative agency; and LAK Public Relations, a New York-based strategic communications firm. “While the Friendly’s brand has long enjoyed a special place in the hearts of consumers, our charge is to infuse a new energy so that it not only remains relevant with existing audiences but also resonates with new generations of patrons,” Michel said at the time. – Source: FSRmagazine.
Bonchon Plans 25 New U.S. Locations in 2019
Bonchon debuts a new flavor this week, the Sweet Crunch. This is the first new sauce offering in 17 years for Bonchon, a sweet part of the brand’s expansion across multiple markets in 2019 as they add 25 locations and enter new states including Washington, Tennessee, North Carolina, and New Mexico. The popular South Korean-born restaurant’s coast to coast expansion represents a 30 percent growth rate—making it one of the fastest growing restaurant chains in the U.S. Bonchon guests will delight in the new Sweet Crunch saucy glaze with every sweet and savory bite. The subtle honey flavor makes the Sweet Crunch a perfect complement to Bonchon’s original fan-favorite sauces, Soy Garlic and Spicy. “The introduction of Sweet Crunch comes at the perfect time as we expand across the country,” says Kevin Choi, Director of Operations for Bonchon. “The Bonchon restaurant experience is based on authentic, Korean cuisine and customer service. Our sauces, developed and handcrafted in Bonchon’s South Korean test kitchen, are made with carefully selected ingredients, ensuring that every bite is mouth-watering delicious!” Founded in Busan, South Korea in 2002 by restauranteur Jinduk Seo, Bonchon’s double-fried crispy chicken uses only high quality and authentic ingredients. The Sweet Crunch sauce is reminiscent of dakgangjeong—a Korean delicacy of sweet crispy fried chicken coated in sticky sauce. The fine-casual dining restaurant also features a full menu of Asian fusion cuisine and Korean specialties like kimchi, bulgogi, japchae, and more. Bonchon debuted in the U.S. in 2006 in the New York area and quickly became one of the fastest growing restaurant chains around the world based on its proprietary sauces, signature fried chicken recipe and other authentic menu offerings. Founded in South Korea in 2002 and established in the United States in 2006, Bonchon, Korean for ‘my hometown,’ currently has 90 US restaurants in operation with franchise outposts in Arizona, California, Colorado, Connecticut, Washington D.C., Florida, Georgia, Hawaii, Illinois, Massachusetts, Maryland, Michigan, Minnesota, New Jersey, New Mexico, North Carolina, Nevada, New York, Ohio, Pennsylvania, Texas, Virginia, and Washington. Bonchon has a total of 340 locations worldwide including Thailand, Philippines, Singapore, Cambodia, Kuwait, Myanmar, and Vietnam. – Source: fsrmagazine.
Using Social Media to Grow Your Catering Sales
As social media has become a more important tool for brands in general, the stakes are especially high for high-profit services such as catering. Hence, a panel during the recent Restaurant Franchising Innovation Summit in Louisville explored ways to fine-tune social media programs for catering. Chris Grundell, vice president of sales at Soci, a social and reputation management platform, served as moderator. The panelists agreed that as online and social media have become popular methods of placing orders, foodservice establishments have had to “up their game” and be able to respond to changing customer expectations. “Consumer behavior changed considerably,” said Zaid Ayoub, founder and CEO of Sajj Mediterranean, a San Francisco restaurant that has grown to nine stores and two food trucks. Online ordering, according to Ayoub, has empowered consumers to expect service on a much shorter notice. Sajj Mediterranean went from requiring a 48-hour notice for catering to a four-hour notice.
Before social media emerged as a powerful marketing tool, Sajj Mediterranean used what Ayoub called “old fashioned guerilla marketing” to promote its catering service — having salespeople knock on doors. Ayoub said his company now lists its recipes online since customers nowadays want more information about their food. Stacey Kane, chief marketing officer, Mahana Poke & Firenza Pizza based in Ashburn, Virginia, agreed that catering services must be capable of executing on demand. “Catering is not easy,” said Kane. “It’s not something you can just press the button on.” Kane said it is important to offer visual images in social media content for catering. Two types of images — pictures of what the food looks like and lifestyle pictures to give context to the food, such as pictures of a tailgating party, are both needed. “You have to have both kinds of imagery nailed down,” she said. How to manage customer reviews. It didn’t take long for the discussion to move to responding to customer reviews. Having an effective response plan in place can be especially difficult for franchise organizations, but is not insurmountable, Kane said. She said a qualified marketing person should work with owners to make sure they do not take reviews personally and respond with messaging that will win back guests. Yelp presents a challenging channel since foodservice providers have little recourse with Yelp in regard to negative reviews.
But Kane said she has nonetheless used Yelp to promote her company by taking a proactive approach. She likes working with Yelp’s community manager team to create events where the brand can be showcased to the valuable Yelp community. “These events allow you to control the message,” Kane said. Sebastian van de Rijt, owner of Bamboo Asia, a San Francisco restaurant which specializes in Indian and Vietnamese cuisine, said he tries to respond to all reviews on Facebook and Instagram. “It (social media) has taken word-of-mouth (marketing) to a whole new level,” he said. Social media tools evolve. Measuring the effectiveness of your social media is important, the panelists agreed. Fortunately, the social media channels have improved the analytics reports they offer to users, said Brittany Warren, director of content marketing, Networld Media Group, owner of the Restaurant Franchising Innovation Summit. Warren said companies need to know their cost per click for their social media orders, a metric she said is available from social media platforms. Companies also need to be able to connect brands’ social media marketing to actions that can be tracked, she said. Social media platforms also offer targeting tools that can be very effective, Warren said, referring to tools that allow companies to target specific groups of customers. “Use the tools the social platforms have put out there to your advantage,” she said. These tools are available for a fee, she said, and they require a certain amount of testing. Ayoub, who concurred that the data provided by social media programs today is helpful, said he wants to know who ordered what through what marketing channel. Companies also have to know what their social media programs are trying to accomplish, Warren said. “What are the problems you are trying to solve for your audience?” she asked. Warren urged listeners to involve local people in social marketing posts, since consumers like to do business with people as opposed to products. She also said it is important for a company to be authentic in their social media messages. Kane agreed, noting that customers like it when a business posts their pictures on Instagram. “The (marketing) content has to be cool,” Ayoub said.
Franchise issues: Franchise operations sometimes have unique challenges with social media programs, several of the panelists agreed. Van de Rijt said he looks for ways to make it fun for franchisees to participate in social media programs. Kane said her company’s franchisees have become far more supportive of the company’s social marketing program since they’ve learned how important it is to their success. While everyone agreed that social media is important for improving catering sales, the panelists were not sure when asked if the company should have a separate web page for catering. Kane said it could work for a company that does not have franchises, but for franchise organizations, she thinks it would be problematic.
WeWork Food Labs to Assist Start-up Companies
WeWork Food Labs will open this year and support growing start-up companies by bringing together entrepreneurs, industry experts and investors. “How we approach food and sustainability today will have an impact on us for generations to come, and as a global community, we are uniquely positioned to drive real change in this industry,” said Roee Adler, global head of WeWork Labs. “WeWork Food Labs will empower innovators across the food and agricultural space, giving them the tools and resources they need to create sustainable solutions that address challenges both within our own community and on a global scale.” Programming will begin this spring. A space opening in New York City in late 2019 will provide members with custom research and development space, a private dining room, a merchandising area and indoor-outdoor space. A work space will include desks, private offices, conference rooms, phone booths, a photo studio and a podcast studio. WeWork Food Labs will operate two simultaneous tracks designed for the unique needs of each start-up. A general food labs program will be accessible through a paid membership. A food labs accelerator will follow a traditional accelerator model. WeWork will seed $1 million in equity investments in the first accelerator model. The community will include start-ups, policy makers, university partners and venture capitalists. Unovis Partners, a global investment firm focused on companies developing replacements for animal protein products, is involved. New Crop Capital, the venture capitalist fund of Unovis Partners, will join the space and review start-ups in the WeWork Food Labs for potential investments. With growing greenhouse gas emission rates, a rising global population and environmental concerns around food waste, the food industry is ripe for innovation, according to The We Company, which offers the WeWork Labs platforms. “In a way, building a food start-up is much more difficult than building start-ups in other areas,” Mr. Adler said. “Facilities can be expensive, equipment is required (and) procurement of customer pipelines can be difficult.”WeWork Labs already is helping over 1,000 start-up companies and is in 49 locations covering 32 cities and 15 countries. Another WeWork Labs platform seeks to assist new mining advances in Brazil. – Source: Food Business News.
Consumer Perceptions of ‘Clean’ are Changing
The perception of clean remains a powerful force in food and beverage product development. What started as a trend focused on removal of specific ingredients from formulations has rippled through the supply chain and to the farm. Food and beverage manufacturers are advocating for improved production practices to enhance the functionality and sustainability of raw materials. During the Wheat Quality Council’s annual meeting in Kansas City on Feb. 20, Hayden Wands, vice-president of global procurement, commodities for Grupo Bimbo S.A.B. de C.V., Dallas, told attendees consumer desire for clean labels is altering the way commercial bakers are baking bread. This interest has created a need for improved wheat functionality. “Our consumers are changing in their day-to-day demands,” Mr. Wands said, citing as an example consumers’ preference for clean labels. As a result, bakers need to be able to buy flour with specific baking qualities since they are limited with solutions that can improve the quality of the flour through additives such as some dough conditioners or emulsifiers. “It forces more functionality on the flour itself,” he said. Mariano Lozano, chief executive officer of Danone North America, White Plains, N.Y., told those attending the International Dairy Foods Association’s Dairy Forum 2019 in Orlando, Fla., Jan. 20-23, that the dairy industry needs to rethink its sustainable agriculture practices because the current approach is not working for farmers, the soil or processors.
Consumers are becoming more aware of the environmental impact of some key ingredients used in product formulations. Research released by the market research company Packaged Facts, Rockville, Md., identifies the Gen Z demographic as a driver of consumer interest in the widening definition of clean label. In its report Looking Ahead to Gen Z: Demographic Patterns and Spending Trends, Packaged Facts said, “Compared to their millennial counterparts a decade ago, 18- to 24-year-olds today are more likely to look for organic or natural foods when they go food shopping and to prefer foods without artificial additives. They also are more likely to be vegetarians.” Data from Nielsen shows 73% of global consumers said they would change or probably would change their consumption habits to reduce their impact on the environment. Another 81% said it was either “extremely” or “very” important that companies implement programs to improve the environment. “No longer is the purchasing decision boiling down to a simple question of how much does it cost, and how much do I want this item?” said Julia Wilson, director, global responsibility and sustainability for Nielsen, in a Feb. 7 webinar hosted by the company. “Consumers are thinking more deeply about what happened before their moment of purchase and what will happen to whatever packaging or other materials used in the product after they’re done using it.” Giving consumers options.
To meet the varied needs of Gen Z and other consumers, Danone N.A. is taking a “one-size-does-not-fit-all” approach in how it thinks about sustainability. Its goal is to be carbon neutral by 2050. The company is investing in the land in both dairy farming and planting crops for the manufacture of plant-based products. “By advancing regenerative agriculture practices, we help to restore the soil so it works harder for us,” Mr. Lozano said. “We take a multi-faceted approach.” The approach includes offering a variety of plant-based products, such as almond, cashew, coconut, oats, pea and soy. The company educates its family farmers about rotating crops to improve soil and yields. “By investing in a sustainable approach to agriculture, we reduce uncertainty in our own costs, leading to more innovation,” Mr. Lozano said. That innovation is taking place in both the dairy and plant-based categories. The company’s new Two Good yogurt is made with a slow-straining process. The technology removes most of the sugar from the milk before the yogurt is made. Each cup is slow-strained down to two grams of total sugar. The result is a Greek-style yogurt rich in protein with 85% less sugar than average yogurts. On Feb. 8, the company opened a new building at its DuBois, Pa., facility to increase production of plant-based foods. This multi-million-dollar investment to expand capacity grows the nation’s largest production facility for plant-based yogurt alternatives and adds capabilities. “Many people who enjoy our products look for plant-based options because they are interested in lessening their impact on the environment through diet,” said Chad Stone, plant director at the DuBois facility. – Source: Food Business News.
Can Restaurants Ditch Disposables?
When John Shin launched the now two-unit fast-casual concept Prawn in Los Angeles three years ago, he looked for disposable foodware that was compostable. “Being in the food industry for so long and seeing the massive amounts of waste, I just wanted to make sure what we’re doing is sustainable,” he said. There have been challenges. To-go container lids tended to melt over the concept’s hot broth-based dishes, for example. Shin has seen guests throwing their compostable bowl into the recycling bins, which is a no no. In fact, Shin said he wasn’t sure how his compostable waste was handled at the food hall where the first Prawn debuted. Shin and other restaurant operators say they are trying to do the right thing. But they are increasingly frustrated by the lack of infrastructure available that would allow them to deal with waste responsibly. “It’s a travesty,” said Shin. “They basically created a product that the city and state hasn’t created an infrastructure for yet. If we’re going to fix this, regulation is needed. But there needs to be rules in place about how these materials are processed.” In fact, regulation is coming. Fueled by reports of Texas-sized islands of plastic garbage floating in the Pacific Ocean, dead whales, with bellies full of shopping bags, and a video od a sea turtle with a straw stuck up its nose, consumers and lawmakers are increasingly saying “no” to single-use plastic. Environmental groups for years have painted a grim picture of a world increasingly littered with discarded plastic. Scientists are also raising concerns about the tiny fragments of broken-down microplastic, which have become omnipresent in soil and marine life. Beach cleanup efforts by various groups have revealed that much of that waste is a product of the foodservice industry: straws, stirrers, cups and their lids, plastic bags and cutlery. As a result, lawmakers are taking action. Last year, legislation restricting restaurants from offering plastic straws began cropping up across the country, joining the growing number of states and municipalities regulating the use of plastic bags and polystyrene. More recent proposals go even further. Laws restricting restaurant use of plastic cutlery and other disposables have been enacted in California; New York; San Francisco, Seattle; Portland, Oregon; Berkeley, Calif.; Malibu, Calif.; and Boulder, Colo., and the bills keep coming. In Hawaii, for example, state lawmakers are considering a bill that would prohibit the sale, use or distribution of plastic beverage bottles, utensils, stirrer sticks and polystyrene foam containers. Maryland state lawmakers have adopted a statewide ban on polystyrene containers and cups, which awaits the governor’s signature. – Source: Restaurant Hospitality.
Imported Foods Must be Safe
The Food and Drug Administration on Feb. 25 issued the F.D.A. Strategy for approach to ensuring certain imported foods are safe. the Safety of Imported Foods, a 17-page document that describes the agency’s multi-layered. The strategy outlined by the F.D.A. has four goals: preventing safety problems in the foreign supply chain prior to a food’s entry into the United States; detecting and refusing entry of unsafe foods at U.S. borders; responding quickly when the F.D.A. learns of unsafe imported foods; and measuring the agency’s progress to ensure its imported food safety program remains effective and efficient. To prevent safety problems prior to a food’s entry into the United States, the F.D.A. said it will take new steps to further ensure food offered for import meets the same standards as domestically produced food. “One of our tools to achieve this goal is onsite inspections of foreign food facilities,” said Scott Gottlieb, M.D., F.D.A. commissioner, and Frank Yiannas, deputy commissioner, in a joint statement introducing the strategy.
Such inspections have begun under the F.D.A.’s Foreign Supplier Verification Programs (F.S.V.P.) rule, which requires importers to verify their suppliers are meeting U.S. food safety standards. The F.D.A.’s Accredited Third-Party Certification program is another line of defense. The program provides a framework for audits of foreign food plants to verify compliance with U.S. food safety standards that may be used by importers to establish eligibility in the Voluntary Qualified Importer Program (V.Q.I.P.), which offers importers expedited review and entry of their food based on the safety assurances that the audits provide. The F.D.A. strategy also seeks to foster collaboration with regulatory agencies of certain countries whose food safety systems and oversight activities have been recognized as providing comparable levels of public health protection as those in the United States. The food safety systems of Canada, New Zealand and Australia have been assessed and recognized as comparable to the U.S. system under the F.D.A.’s systems recognition program, and talks are underway with the European Union on a mutual assessment of food safety systems. “By leveraging partnerships between the United States and other countries with very strong food safety systems through our systems recognition program, we’re able to prioritize our inspection and border screening activities on foods imported from higher-risk areas,” Dr. Gottlieb said. The F.D.A. is responsible for examining foods offered at the border for import into the United States. To this end, the F.D.A. utilizes Predictive Risk-based Evaluation for Dynamic Import Compliance Targeting (PREDICT), an automated import screening tool that helps identify high-risk shipments of food. As part of its new strategy, the F.D.A. said it will optimize the tool by incorporating new sources of data from foreign supplier verification programs, voluntary importer incentive programs, accredited third-party auditors, foreign regulatory authorities and domestic supply chain activities. The F.D.A.’s third goal is enhancing its ability to respond to unsafe imported food. The agency said it will use data from multiple sources to optimize use of physical examination and to develop strategic and directed surveillance sampling.
The F.D.A. will also capitalize on opportunities for improving the efficiency of its response to food safety incidents, for example by using mandatory recall authority, import alerts and improved information sharing with its regulatory partners as appropriate. To ensure the F.D.A. import program remains effective and adopts modern tools to advance its purposes, the agency said it will develop an improved global inventory of food facilities and farms to help it optimize resource allocation for imported food safety oversight to areas of higher risk and strategically employ the full range of its regulatory tools as effectively as possible. The F.D.A. said it also is in the process of developing performance measures and outcome indicators for imported food safety and intends to publish its measures and non-confidential data about imported food, foreign suppliers, F.S.V.P. importers and other importers to the public as it becomes available. Food Business News.
Food & Wine Magazine Names Best New Chefs of 2019
Food & Wine magazine painted its vision of the food world Tuesday with its release of its annual list of the 10 Best New Chefs. It’s a diverse group that Food & Wine restaurant editor Jordana Rothman praised for plumbing the depths of their roots to create food that spoke to their heritages. “Over the course of six months, 24 cities and about 30,000 miles, I encountered chefs wading into the ever-more-intimate deep, committing to the detail work of cuisine rooted in identity, choosing always, to take the long way home,” she said in her introduction of the chefs. “This is what food looks like right now at the edge of a decade of transformation in American restaurants. An age in which fine dining loosened up; in which the food world recognized the limitations of a Eurocentric culture and came to understand what it was missing without kimchi and nam prik and jerk; in which critics wondered, blindly, where all the women and people of color were hiding, then found them in plain sight, aprons knotted, heads down, sometimes twice as good but half as seen. It was a decade that recognized, far too late, that professional kitchens weren’t always fair places (or healthy places, or safe places) and began the work of transforming itself.” Food & Wine’s annual list has boosted the careers of many chefs. Past winners of the 31-year-old award include Nancy Silverton, Thomas Keller, Tom Colicchio, Nobu Matsuhisa and David Chang. Joining those ranks this year are:
Bryan Furman of B’s Cracklin’ Barbeque with locations in Atlanta and Savannah, Ga.
Caroline Glover of Annette in Aurora, Colo.
Brandon Go of Hayato in Los Angeles
Matthew Kammerer of Harbor House inn in Elk, Calif.
Paxx Caraballo Moll of Jungle BaoBao in San Juan, Puerto Rico
Misti Norris of Petra and the Beast in Dallas
Kwame Onwuachi of Kith and Kin in Washington, D.C.
Junghyun Park of Atomix in New York City
Mitsuko Soma of Kamonegi in Seattle
Nite Yun of Nyum Bai in Oakland, Calif. Source: Restaurant Hospitality.
Lucky Strike Sold to Former Dave & Buster’s Owner
As emerging eatertaiment brand Lucky Strike enters its next phase of growth, it will have a party familiar with the space backing it. Wellspring Capital Management LLC, which bought Dave & Buster’s for $375 million in 2006 before selling it four years later, announced it closed the acquisition of the 21-unit brand. Terms of the deal were not disclosed. “Wellspring has a long history of partnering with founders like Steven Foster and Kevin Troy who have redefined their industries and are poised for incredible growth. Although a nationally known player today, Lucky Strike still has a large whitespace opportunity,” said Alex Carles, a managing partner at Wellspring, in a statement. Wellspring dealt category front-runner Dave & Buster’s to Oak Hill Capital Partners for $570 million in 2010. There were 46 units when Wellspring announced it was buying the brand in 2005 and 56 when it sold it to Oak Hill (there are 125 today). The brand was then sold to the public in 2014 and remains a publicly traded company. It just reported same-store sales gains of 2.9 percent in the fourth quarter— its first positive period in six quarters. Wellspring also bought fast-food company Checkers & Rally’s in 2006 for an estimated $188 million. It sold the brand to Sentinel Capital in March 2014 for an undisclosed amount. Oak Hill purchased Checkers ans Rally’s for roughly $525 million in March 2017. Sherman Oaks, California-based Lucky Strike’s 21 venues are spread across 12 states (Illinois, New York, Pennsylvania, California, Massachusetts, Hawaii, Arizona, Wisconsin, Texas, Ohio, Colorado) and Washington, D.C. It’s known for premium bowling lanes, live music, and an assortment of high-tech games. The brand aims to combined dining, nightlife, and interaction into one. It was founded in 2003 by Foster and Troy. Foster was featured on a 2010 episode of CBS’ Undercover Boss and started Spinoff, an upscale roller disco, in the late 1970s. “We are very pleased that Wellspring has invested in Lucky Strike given the firm’s prior successes supporting businesses in our space and many others,” Foster said in a statement. We are extremely proud of what the brand has accomplished since our founding and look forward to accelerating our growth trajectory alongside Wellspring.” Added Matthew Harrison, a partner at Wellspring: “Lucky Strike represents an exciting opportunity to build on Wellspring’s successful track record in the restaurant and entertainment sectors. The company has built an impressive brand in experiential retail, a standout area of growth within a dramatically shifting retail landscape. Wellspring’s experience in this space through investments such as Dave & Buster’s position us to be value-add partners to Steven, Kevin, and the rest of the Lucky Strike team.” Source: fsrmagazine.
C.H. Guenther Acquires McDonald’s Bun Baker
C.H. Guenther & Son L.L.C. has acquired Mid South Baking Co., supplier of buns and English muffins to quick-service restaurants in the southern United States. Financial terms of the transaction were not disclosed. Founded in 1978, Mid South provides buns and English muffins to 3,500 McDonald’s restaurants in 18 states. The company operates two baking plants, in Bryan, Texas, and Pelahatchie, Miss. “C.H. Guenther’s culture, scale, product set and manufacturing expertise will allow Mid South to grow our reach and better serve our customers,” said Steve Warden, president of Mid South. “They are well-aligned with our emphasis on customer service and product quality, and we believe we can accomplish great things together.” C.H. Guenther & Son, owned by Pritzker Private Capital, produces branded and private label food products. With the acquisition of Mid South, the company now employs more than 3,500 in 24 food manufacturing locations in the United States, Canada and Western Europe. The company’s roots date to 1851, when Carl H. Guenther built a flour mill near Fredericksburg, Texas. The business moved to San Antonio in 1859 and was renamed Pioneer Flour Mills in 1898. The original name was readopted in 1999. Following a period of rapid expansion in the 2000s, the business was acquired by the Pritzker Group in 2018. “Steve and the rest of the Mid South team have an impressive track record of success building the company into the market-leading bakery it is today,” said Dale Tremblay, chief executive officer of C.H. Guenther. “They have been able to scale with their customers while maintaining the highest levels of service, quality and safety. We are thrilled to welcome Mid South to the C.H. Guenther family and look forward to working together to better serve our collective customers.” The acquisition of Mid South is the third for C.H. Guenther in the past year. In January, the company acquired German bakery supplier Wback, and in 2018, C.H. Guenther acquired Cookietree Bakeries. – Source: Food Business News.
Impossible Foods Lands another Restaurant Chain Partner
Red Robin has bought into the vegan burger craze. The casual dining chain, known for its menu featuring dozens of gourmet burger iterations, has partnered with Impossible Foods to launch the Impossible Cheeseburger, its first foray into plant-based protein burgers. The new menu item will be available across all of Red Robin’s 570 locations in the U.S. starting on April 1.
The deal with Red Robin marks the largest restaurant chain partnership that Impossible Foods has locked in to date. The company also signed on to produce its signature plant-based protein for all 377 White Castle locations in the U.S. last fall. “Red Robin takes meat seriously — and it’s a major endorsement that the Impossible Cheeseburger is now part of Red Robin’s justifiably famous menu,” Lisa Will, Impossible Foods’ vice president of sales, said in a statement. A WELCOME SALES BOOST. From Red Robin’s perspective, the chain could use the attention that a popular new menu item launch could bring. Red Robin has been struggling to pull its sales up for multiple quarters, feeling the pressure from operational inefficiencies and being slow to adapt to new digital sales channels, including online ordering and delivery. In the fourth quarter of 2018, Red Robin reported a 4.5 percent decline in comparable store sales and a 4.4 percent decline in comparable guest count at its restaurants, compared to the same period in the prior year. Total revenue was down 10.8 percent in the quarter. “2018 was, in sum, a very disappointing year for us,” Red Robin CEO Denny Marie Post told investors on the company’s most recent earnings call. “It brought a lot of hard-earned learning, which we are using to urgently set new plans to turn our performance around.” A SUCCESSFUL NEW RECIPE. Impossible Foods debuted Impossible Burger 2.0, a revamped version of the original faux meat burger, at the Consumer Electronics Show in Las Vegas earlier this year. The new recipe was cited as the reason that Red Robin’s culinary team chose to work with Impossible Foods to develop a vegan burger offering. The Impossible Burger is now on the menu at over 5,000 restaurant locations in the U.S., due in part to a distribution partnership with DOT Foods. Impossible Foods is planning to launch a packaged version of the burger in grocery stores later this year. The company has also hit its fair share of obstacles as it has grown. Impossible Foods announced its first voluntary recall last week over a piece of plastic found in a shipment of its Impossible Burger mix, and the U.S. Food and Drug Administration has repeatedly investigated the faux meat company over its central recipe ingredient, the “heme” compound. The suspicious attention has been enough to turn some restaurant chains to Impossible Foods’ direct competitor, Beyond Meat. The plant-based protein purveyor has signed large restaurant chains including Carl’s Jr. and A&W as its partners, already has a grocery distribution deal in place, and has put its Beyond Burger on the menu at upwards of 11,000 restaurants in the U.S. due to an exclusive distribution deal with foodservice giant Sysco. Beyond Meat filed to go public late last year. – Source: Skift Table.
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