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Jack in the Box Ordered to Pay $15M in Wrongful Termination Case

Jack in the Box Inc. said it will challenge a jury verdict that earlier this week ordered the chain to pay more than $15 million in damages in an employee wrongful termination lawsuit. The verdict was made in Los Angeles Superior Court on June 11, according to the company’s June 13 filing with the Securities and Exchange Commission. The restaurant employee, who was not named in the filing, was terminated in 2013. The jury awarded the employee $5.4 million in compensatory damages and $10 million in punitive damages, according to the regulatory filing. Jack in the Box said the restaurant employee was terminated for manipulating critical performance metrics information at the restaurant where she was working. The San Diego-based chain, whose leadership has been questioned by a group of franchisees over the past year, did not comment beyond statements released in the regulatory filing.  In the filing, the company said “punitive damages are not appropriate in a case such as this. It strongly disagrees with the verdict and the damages awarded by the jury.” Jack in the Box said it will file post-trial motions with the trial judge. If those motions were unsuccessful, the chain said it intended to appeal. “Pending resolution of the appeals process, the payment of any damages in this matter will be stayed; however, if necessary, the company will record a charge in its third quarter fiscal 2019 financial statements,” the company stated in its regulatory filing. Source: NRN.

F.D.A. Tackling C.B.D. in Food

Stakeholders in the manufacture, distribution, use and regulation of products containing cannabis or cannabis-derived compounds, such as cannabidiol (C.B.D.), had their say before a panel of Food and Drug Administration officials during a daylong public hearing held May 31 at the agency’s White Oak Campus in Silver Spring, Md. More than 400 individuals and associations applied to address the panel; more than 100 were able to do so. A docket set up by the F.D.A. to collect statements from individuals and stakeholders has received more than 1,211 comments by June 7. The docket will remain open until July 2. The F.D.A. convened the hearing to inform its efforts to develop regulations to bring order, oversight and responsibility to a rapidly growing but heretofore largely unconstrained C.B.D. industry. Acting Commissioner Norman Sharpless opened the hearing on a cautionary note. Mr. Sharpless reminded hearing participants that there remained important questions that must be answered before the safety and appropriate uses of C.B.D. in foods and dietary supplements may be determined. “There are important reasons to generally prohibit putting drugs in the food supply,” Mr. Sharpless said, adding that cannabis extracts including C.B.D. are not exceptions. The official stance of the F.D.A. is that it is not permissible to use C.B.D. in food and dietary supplements. Nevertheless, thousands of products using or incorporating C.B.D. already are available nationwide.

The F.D.A. is playing catchup. To date, it only has taken disciplinary actions in the form of warning letters dispatched to individual manufacturers who have made unapproved and unsubstantiated health claims for their C.B.D. products, claims that the F.D.A. asserted may discourage consumers from seeking critical medical assistance and treatment. At the May 31 hearing, consumers provided testimonials on how C.B.D. helped treat various health issues, academics shared the latest research, and entrepreneurs pointed to the health and economic benefits of their products and industry. The American Medical Association in its submission to the F.D.A. docket pointed to a 2017 report of the National Academies of Sciences, Engineering and Medicine that indicated there was conclusive or substantial evidence that cannabis or cannabinoids are effective for the treatment of chronic pain in adults (cannabis), as antiemetics in the treatment of chemotherapy-induced nausea and vomiting (oral cannabinoids) and for improving patient-reported multiple sclerosis spasticity symptoms (oral cannabinoids). The report also pointed to moderate evidence that cannabis or cannabinoids are effective for improving short-term sleep outcomes for certain individuals. Otherwise, evidence was deemed limited or insufficient for many of the other health benefits touted by some C.B.D. advocates. The need for additional research was viewed as compelling. Many manufacturers of C.B.D. products have joined under the umbrella of the National Cannabis Industry Association. The N.C.I.A. in its comments to the F.D.A. panel and its submission to the comment docket said it sought to partner with the F.D.A. to “develop an appropriate regulatory framework to ensure the safety and efficacy of these important products.” The N.C.I.A. said it was important for the F.D.A. to act quickly to clarify the regulatory environment because of consumer confusion. “Consumers consistently ask why a federally legal substance is currently prohibited in food and wellness products under F.D.A. regulations,” the N.C.I.A. said. “These inquiries will likely remain a source of confusion, especially when so many individuals already use C.B.D. products.”

The N.C.I.A. said it appreciated the F.D.A.’s position that hemp-derived C.B.D. may not be used as ingredient in dietary supplement or food. “At the same time, we are confident that the F.D.A. will quickly change this position in recognition of the broad use, efficacy and safety of these products,” the N.C.I.A. said. “In addition, until such time as the F.D.A. issues a new regulation, we recommend that the F.D.A. continue to exercise its enforcement discretion to allow consumers continued access to hemp-derived C.B.D. products. We support the F.D.A.’s issuing warning letters for drug claims that go beyond substantiated claims and believe that this is the best approach until the F.D.A. issues rules establishing a pathway for regulating food and supplements containing C.B.D.” Food manufacturers and marketing associations also emphasized the importance for the F.D.A. to move quickly to address consumer confusion. Betsy Booren, senior vice-president, science and technology, Grocery Manufacturers Association, told the F.D.A. panel, “As consumer interest for food, beverage, personal care and household products containing cannabis and cannabis derivatives continues to grow, the necessity for national uniform regulatory frameworks that protect public health is of critical importance. The potential patchwork of laws at the state and local level will promote confusion among consumers.” Peter Matz, director, food and health policy, Food Marketing Institute, told the F.D.A. officials, “Because of the consumer interest in this emerging market, and the desire of our members to provide products their customers are seeking, we are fielding more and more questions from companies that are understandably seeking clarity about the current regulatory framework for the sale and labeling of products containing C.B.D. And, while we want to be in full compliance with all F.D.A. requirements, we also want to ensure our members have appropriate assurances that the products they are selling are both safe and being sold appropriately. “Having said that, F.M.I. sees the regulatory challenges surrounding the legal and appropriate sale of hemp and hemp-derived products as a critically important policy issue. And, given the prevalence of these products in the marketplace, we respectfully urge F.D.A. to move swiftly to provide additional clarity and establish a pathway forward.” Amy Abernethy, Ph.D., the F.D.A.’s deputy commissioner, who is in charge of the agency’s working group on cannabis and cannabis-derived compounds, tweeted during the hearing: “Key questions about product safety need to be addressed. Data are needed to determine the safety thresholds for C.B.D … There are both positive supporters of cannabis and cannabis-derived products including C.B.D. and also concerned citizens worried that widely available products can be harmful.” Dr. Abernethy’s comments seem to underscore both the importance of the hearing itself and the fact that much work is yet to be done. Source: Food Business News.

Genetically Engineered Wheat Turns up in Washington

Genetically engineered (G.E.) wheat plants have been discovered in an unplanted agricultural field in the U.S. state of Washington, according to the Animal and Plant Health Inspection Service (APHIS) of the U.S. Department of Agriculture (U.S.D.A.). According to the agency, the G.E. wheat in question is resistant to glyphosate, commonly referred to as Round Up. “There is no evidence that G.E. wheat has entered the food supply,” APHIS said, adding that the U.S.D.A. is collaborating with state, industry and trading partners to provide timely and transparent information about any findings. “There are no G.E. wheat varieties for sale or in commercial production in the United States at this time, as APHIS has not deregulated any G.E. wheat varieties,” APHIS said.   After previous detections of G.E. wheat (unapproved plants were found in 2018 in Alberta, Canada, in 2016 in Washington, in 2014 in Montana and in 2013 in Oregon), the U.S.D.A. strengthened its oversight of regulated G.E. wheat field trials.

APHIS now requires developers to apply for a permit for field trials involving G.E. wheat beginning with G.E. wheat planted on or after Jan. 1, 2016. Bringing G.E. wheat under permit enables APHIS to create and enforce permit conditions that ensure confinement and minimize the risk that the regulated G.E. wheat will persist in the environment. “We appreciate that U.S.D.A. is collaborating with our organizations and our state, industry and trading partners to provide timely and transparent information about their findings as they investigate this discovery,” the U.S. Wheat Associates and National Association of Wheat Growers said in a joint statement. “We understand samples of the wheat plants from the field in Washington were sent to the U.S.D.A. Federal Grain Inspection Service lab in Kansas City as well as U.S.D.A. Agricultural Research lab in Pullman, Wash., for testing and confirmation.” There are no G.E. wheat varieties for sale or in commercial production in the United States at this time, as APHIS has not deregulated any G.E. wheat varieties. “We cannot speculate or comment about any potential market reactions until we learn more from APHIS and have a chance to discuss the situation in more detail with overseas customers,” the U.S. Wheat and NAWG noted. “Based on what we know today from APHIS, we are confident that nothing has changed the U.S. wheat supply chain’s ability to deliver wheat that matches every customer’s specifications.” Source: Food Business News.

Investor Pushes for Takeover of Red Robin

Activist investor Vintage Capital, which holds 1.5 million shares or about 12 percent of Red Robin’s stock, has offered to buy the remaining 88 percent of the struggling burger chain. Vintage proposed an all-cash transaction worth $461.4 million. In a letter to Red Robin, Vintage called on the brand to begin auctioning off the company. Vintage offered a takeover bid with a price of $40 per share. Red Robin’s closing price on June 12 was $25.46. After the letter was released June 13, shares jumped 24.39 percent to $31.67. This time last year, the stock traded over $54. Vintage’s call to sell the company comes only a week after Red Robin adopted a short-term Shareholder Rights Plan, or a so-called “poison pill ” to investors. After meeting with advisers, the burger chain issued the plan to deter investors from “gaining control of Red Robin through the open market,” it said in a statement. Red Robin responded with a statement. In the response, the company admitted it was surprised by the action Vintage was calling for. The company said it welcomes dialogue with shareholders and “appreciates input toward the goal of enhancing shareholder value.” Another concern for investors is the search for a permanent replacement of former CEO Denny Marie Post. Post retired in April after joining the company seven years ago. Vintage expressed concerns the company isn’t able to recruit a replacement because of its ongoing sales declines. “Our sincere hope, as explained to members of the board on a number of occasions, was to work collaboratively to recruit an ‘A+’ operator to accept the CEO role and lead Red Robin back to greatness,” Vintage Capital said in a letter in a filing with the SEC “It is clear that many such quality candidates are refusing to entertain the opportunity due to a lack of confidence in the board’s leadership and Red Robin’s disastrous operating and market performance.”

In the eyes of Red Robin, talks with Vintage and other shareholders regarding the search for a new CEO have always been open. After speaking with Vintage in April, Red Robin retained The Elliott Group to help find highly qualified candidates, it said. “In multiple conversations with Vintage, we have expressed our openness to Vintage’s participation in our ongoing search to identify a world-class CEO, and to maintaining a constructive dialogue,” the company added in a statement. “Given our dialogue to date, we were surprised by the content of the letter we received today, as Vintage has not been willing to propose any CEO candidates.” If no action is taken regarding the sale of Red Robin then Vintage plans on holding a special meeting for shareholders to remove board members and replace them with directors “who will actually act in the best interest of shareholders,” Vintage said in the letter. Red Robin has struggled in recent years to generate consistent growth, especially over the past few quarters as its dealt with growing labor and traffic issues. For the full fiscal 2018 year, revenues fell 3.5 percent to $1.5 billion, leaving the company with a $6.4 million net income loss. Same-store sales have remained mostly negative since 2016. Here’s a look at where the brand has tracked in the past two years in regards to comps: At the end of May, the burger chain announced the impending closure of 10 underperforming restaurants—seven of which are enclosed mall units. These stores had average-unit volumes of $1.8 million and totaled nearly $1 million in pretax operating losses in the first quarter of fiscal 2019. “While we do have faith in the intrinsic value of the Red Robin brand, we have very little confidence that the current board will be able to attract a suitable new leader for the company or initiate or seriously pursue a meaningful sales process,” Vintage said in the filing. “If the board wants to show shareholders that it truly recognizes the serious issues facing the company and is interested in maximizing value for shareholders, we request that the board commit publicly to the launching of a broad review of strategic alternatives [including a sale of the company] to run in parallel with the CEO search process.” In its response to Vintage, Red Robin outlined the goals and priorities it will be focusing on to shift the brand back on course. For the rest of 2019, it’s committed to executing these strategies along with the search for a new CEO:

Stabilizing dine-in revenue by reinforcing Red Robin’s compelling Value proposition

Continuing building To-Go and Catering business

Improving the Guest experience and recapturing Red Robin’s known-for “Gift of Time” convenience

Implementing digital platforms and restaurant technology solutions

Selectively refranchising and reassessing our real estate portfolio. Source: Food Newsfeed.

Private Equity Firm to Seek Sale of Church’s Chicken

FFL Partners is exploring options, including a sale, for fast-food chain Church’s Chicken, according to people familiar with the matter. The San Francisco-based firm is working with an adviser to drum up interest from potential buyers for the chain. It’s seeking around $350 million or more in any transaction, said the people. Representative for FFL and Church’s declined to comment. FFL, formerly known as Friedman Fleischer & Lowe, bought Church’s in 2009 from Bahrain’s Arcapita Bank BSC. At the time, the Financial Times estimated the deal’s value at about $390 million. Church’s traces its roots to a single store across the street from the Alamo in San Antonio that was opened by George W. Church in 1952. The company, which is branded as Texas Chicken outside the Americas, has more than 1,500 locations in 29 U.S. states and more than 20 countries, with annual revenue of more than $1 billion, according to its website. That makes it one of the world’s largest quick-service restaurant chicken chains. Fast-food restaurants are struggling to boost sales in a fiercely competitive environment where giants including McDonald’s Corp. and Yum! Brands Inc.’s KFC are advertising steep discounts. The U.S. dining industry is also facing rising labor and protein costs, while additional pressure is coming from customers’ demand for greater convenience, which can only be met by investment in delivery and new technology. Church’s Chief Executive Officer Joe Christina started in late 2016 and has since worked to improve operations and update the chain’s image domestically. Church’s is now expanding delivery and plans to offer the service in about 900 U.S. locations by the end of this year. Source: Bloomberg.

Billionaire Says he’s Taking ‘Detour,’ will Revisit his Plans after Labor Day

Former Starbucks CEO Howard Schultz says he’s taking a “detour” from a possible independent presidential bid. The billionaire businessman cited health concerns in a message to supporters, and says he’s taking the summer to rest and will revisit his presidential ambitions after Labor Day. Two aides who spoke on the condition of anonymity to share internal discussions confirmed that Schultz’s Seattle-based campaign has made significant staffing cuts. Schultz wrote that he’s taking “this detour from the road reluctantly.” He said his “concern for our country’s future remains, as does my belief that the American people deserve so much more from our elected officials.” He faced intense resistance earlier in the year from Democratic activists who feared an independent run would give President Donald Trump an easier path to re-election. Source: Market Watch/Associated Press.

Meet the Woman Leading Change at Yum! Brands

Chief Transformation and People Officer Tracy Skeans has the Pizza Hut, KFC, and Taco Bell parent hurtling forward. Why You Need To Know Her: Because Tracy Skeans is leading a massive business transformation at Yum! Brands, fueling sales and new-unit growth for the company’s 48,000 restaurants in 140 countries around the world. The company behind KFC, Pizza Hut, and Taco Bell is based in Louisville, Kentucky, but its Pizza Hut headquarters and about 500 Yum!, Pizza Hut (U.S. and International), and KFC International corporate employees are in Plano. Helping to wrangle things from a global perspective is Skeans. She never dreamed she would hold such a high-level, high-impact post, growing up in suburban Pittsburgh, where she and her friends would often hang out at the local Pizza Hut. “It was where it was at,” she says with a smile. Skeans attended Lehigh University, the same school attended by her father, grandfathers, and great-grandfathers. After earning a business degree, she returned to her hometown and worked as an auditor for PWC. She loved getting a hands-on look at how companies ticked. “I’ve always been interested how businesses make money,” she says. “Having access through my various assignments gave me insights into different types of companies and how they operate. Accounting is the language of business.” ALL ABOUT THE YUM! QUICK FACTS ABOUT THE GLOBAL FAST-FOOD GIANT…

Yum! Brands Inc. operates KFC, Pizza Hut, and Taco Bell restaurants.

It has more than 48,000 eateries in over 140 countries.

On average, Yum! opens about eight restaurants a day, making it a global leader in retail development.

More than 500 Yum! employees work in Plano, mostly in the Pizza Hut U.S., Pizza Hut International, and KFC International divisions.

About 41 percent of the company’s global management positions are held by women.

One of her PWC clients, Union Switch & Signal, hired her to work in its treasury department, which gave her experience in international banking systems and finance. In between the travel, she earned an MBA from the University of Pittsburgh. A desire to hold a more traditional corporate finance role took her to Pizza Hut and Dallas in September of 2000. Skeans steadily climbed her way up the corporate ladder, all the while learning different facets of the business, from finance to HR. She was named president of Pizza Hut International in 2015; a year later was promoted to her current global post: chief transformation officer and chief people officer of Yum! Brands. She describes her work as being at the intersection of business and people. “And it’s not just getting the right people in the right roles at the right time,” she says, “but what is the culture of the organization and how do we leverage the strengths of our people? How do we bring in the right talent when we need different capabilities? How do we communicate internally and externally about our organization? And how do we get the three brands, which are huge companies in their own rights, working together in a way that benefits the overall enterprise and yet keep the essence of that brand, its uniqueness, true to itself?” A big job, to be sure. But before she could get started, there was another matter to handle: the spinoff of Yum!’s China operations, a division that had long been a huge part of the company’s growth. The deal, which closed in October 2016, ultimately returned $6.2 billion to shareholders. “It was amazing to be part of the team that laid out the strategies of taking one big, successful global company, dividing it into two big, successful global companies, and then taking it and growing it to the next level, making it stronger not just financially, but for its people,” Skeans says. “It certainly hasn’t been easy every step of the way, but the results appear to be coming in the way we hoped.” Yum! is now nearing the end of its three-year plan to move to a more heavily franchised and profitable business model. It’s focused around four drivers of same-store sales and net-unit growth: distinctive and relevant brands, franchise operations, restaurant development, and culture and talent. Prior to the China spinoff, the company’s restaurants were 77 percent franchise-owned. At the time of separation, Yum! Brands became 93 percent franchise-owned. By the end of 2018, the number was about 98 percent franchise-owned, where it intends to stay. The company holds about 900 of its 48,000 total eateries. Culture has played a big role in making it all happen. “It is the infrastructure,” Skeans says. “A transformation of this scale can only be done one way, and that’s getting the hearts and minds of the people to believe in it and want it to happen.” She and CEO Greg Creed have been visiting with Yum! corporate employees and franchisees around the world and teaching a leadership development course called “leading culture to fuel results.” The company also is laser-focused on ensuring that diversity and inclusion are integrated into all aspects of its business. Last year, it kicked off an initiative to advance more women into senior roles and achieve greater gender parity among its leadership ranks. About 41 percent of its global management posts are now held by women. Locally, the company has a longstanding partnership with Dallas-based Women’s Foodservice Forum; Skeans was named to WFF’s board of directors in January 2018. “Yum! and its three brands have so much growth opportunity ahead,” she says. “We’re proud of the changes we’ve made and navigating the business strategies that we’ve put in place. And knowing that there is so much growth potential still ahead, is really exciting.” Source: D CEO Magazine, Dallas

Tom Reynolds Now Owns 11 Domino’s Restaurants

Tom Reynolds went from delivering pizzas to running the entire business, and he doesn’t own just one Domino’s restaurant. He has 11 of them. “And we’re working on No. 12 right now,” he said. Reynolds started as a delivery driver to work his way through college. He never imagined in the early 1980s he would be where he is today. “My very first night as a driver, some 30 some years ago, I went to the wrong driveway,” Reynolds said. “A guy comes out on the porch with his barking dog and a shotgun.” Reynolds still delivers pizzas today. He works behind the counter, makes pizzas and answers the telephone. He’s walked in all of his employees’ shoes, and that’s one reason he said his franchise was chosen as one of the best in the world for the fourth year in a row. He was recently awarded the International Franchise Association Gold Franny Award. “The Gold Franny Award is given out each year to the top franchisees,” Reynolds said. It’s given to the top 2 percent of Domino’s restaurants in the world based on sales growth, customer service, cleanliness, employee morale and community involvement. “I think a good boss inspires people to go to the next level,” Reynolds said. Reynolds tries to inspire his employees to start their own restaurants. Domino’s owners have to be managers first, and many managers are hired from within the company, Reynolds said. Ninety percent of Domino’s franchise owners start as delivery drivers, according to the company. “We’re working on developing some of our people to become franchise owners themselves, people who started as delivery drivers,” Reynolds said. But Reynolds doesn’t see other franchises as competition. “Absolutely not,” he said. “I’m so happy for them. It’s really one of the highlights of my career.” Reynolds owns restaurants in Shepherdsville, Louisville, Crestwood, Prospect, La Grange, Mt. Washington, Shelbyville and Scottsburg, Ind. Source: WDRB.com.

Beyond Meat CEO on “meatier” patty: Fans will absolutely taste the difference

On the heels of a soaring IPO Beyond Meat is releasing a newer, “meatier” burger. On Tuesday, the plant-based meat producer announced the latest iteration of its original patty. The new version will boast a few key differences, with an emphasis on texture and appearance to better represent the natural feel of beef. Beyond Meat burgers will now come with “juicy marbling,” as the company puts it, to mimic white flecks of fat. This will be represented by plant-based fats like coconut oil and cocoa butter interspersed throughout the product. “[Marbling] is one of the most noticeable attributes of ground beef,” says Beyond Meat founder and CEO Ethan Brown. “And we want to make sure that we capture that for the consumer.” In addition, burgers now quickly transition from fleshy red to barbecued brown during the cooking process. Food scientists accomplished the feat by way of apple extracts, which oxidize and change color (much like real apples) when exposed to heat. On the aroma end, the product reportedly possesses a “neutral aroma” more in line with meat. Beyond Meat burgers are also packed with added protein–a mix of pea, mung bean, and now rice protein–to create 20 grams of plant-based protein per four-ounce patty.

This change, along with the marbled fats, are meant to re-create a fibrous consistency that feels more like the real thing. The company was intent on creating a “differentiated bite,” says Brown, in which some pieces are harder to chew than others. That’s how an animal muscle is processed, and Beyond Meat, he says, wants to replicate everything, down to the small details. “Texture is really important to me,” says Brown.”When we bite into a piece of flesh or beef, it’s like riding a bike; it’s immediately familiar to me in a way that is remarkable. And so we need to make sure that we’re delivering a texture experience that is so much much closer to protein. We’ve made strides in that direction that I’m very proud of.” Fans will “absolutely” be able to taste the difference, notes Brown, saying he’s optimistic they will appreciate the changes. In testing trials over the past year, the majority of those surveyed preferred the new version to its predecessor. “I don’t think anyone will think that this is something that’s wildly different,” says Brown. Still, he concedes, it’s a risky move; there are potential drawbacks to changing a recipe that’s already amassed millions of fans. Not to mention, constant tweaking isn’t simple for a company that refuses to incorporate gluten or GMOs, which competitors like the Impossible Burger rely on. (“We make our scientists’ lives very difficult,” Brown previously told Fast Company. Beyond Meat is dedicated to releasing newer versions, believing the product can always be more meat-like (a strategy intended to keep competitors at bay). It’s why the brand built a state-of the-art, 26,000-square foot R&D lab last year. The El Segundo, California, facility features every machine, gadget, and gizmo dedicated to solving one question: how can we mimic meat? And more importantly, how do we make it look, feel, and taste like the real thing? “There will be people who are upset, and there will be some that will miss the earlier version,” says Brown. “We’re gonna have to bring them along to the 2.0 because we believe that it’s closer to our mission–to make it indistinguishable from its animal protein equivalent.”

Earlier this year, Beyond Meat discontinued its chicken strips offerings. Brown wasn’t satisfied with the taste, so the company retired it completely. The team felt that, armed with new technology and research, it can build a better iteration. For the time being, Beyond Meat is conducting tests and will reenter the poultry space once it feels confident in an updated product. Source: FastCompany.

How Packaging Innovation is Changing the Food Industry

While at one point in time, food packaging’s sole purpose may have been to contain product to keep it safe and fresh, as well as allow for distribution and merchandising, its role has become so much more. And it continues to evolve. That was the foundation of the Global Midwest Alliance’s May 29 seminar, “Fresher, faster, tastier: How packaging innovations are changing the food industry,” held at the Federal Reserve Bank of Chicago. “Food packaging has become a vital source of reinvigoration for a stable yet evolving sector,” said Gail Longmore, chief executive officer and managing director of the Chicago-based not-for-profit educational organization. “The food industry is undergoing rapid changes as new products and categories are developed for consumers demanding fresher and tastier options. Packaging provides a valuable link between those producing and those consuming food products. Businesses can leverage packaging innovations to create value, develop new markets and foster employment. Moreover, important issues related to food safety, distribution and trade revolve around innovative packaging techniques and equipment.”

David Oppedahl, senior business economist with the Federal Reserve Bank of Chicago, explained that 2.3c of every food dollar goes to food packaging, according to the Economic Research Service of the U.S. Department of Agriculture. This includes not only the physical package that the consumer purchases, but also shipping containers, printing costs and more. That also includes sealants. It is possible to use advanced technologies, such as ultrasonic sealing, to minimize seal sizes, which in turn reduces materials and expands profits, said Tony Knoerzer, senior vice-president of sales, UltraThinSeal, Columbus, Ohio. “It’s case pack economics,” he said. “Take chips, for example. The number of bags that fit into a case impacts how many cases are used. This in turn impacts corrugated costs and delivery expenses. If you change to a bag with lower air content and a thinner, stronger seal, you can increase the number of bags in the case.” Retailers benefit, too. “If the bag is narrower, the brand’s facings stay the same at shelf, but there’s now extra space in an aisle for additional merchandising,” Mr. Knoerzer said.

Packaging also may be designed to influence product quality perception. Mr. Knoerzer explained how Lay’s potato chips changed the inside layer of the bag from a metallic aluminum to white. You do not see oil on the white layer,” he said. “When this switch was made, there were fewer product quality complaints and returns.” So how do companies innovate with products and packaging? Sam Ciulla, c.e.o. and executive creative director, Ciulla Associates, Chicago, said there’s soft innovation, which comes in the form of new flavors, sizes and seasonal offerings. “Way too many companies do this, with questionable success,” he said. There needs to be more hard innovation, Mr. Ciulla said. This comes in the form of proprietary structural changes to a typical package or the delivery system. It’s when both graphic and structural design are part of the new product development. At the end of the development process, there should be no answer to “What came first: the product or the package.” The two should be developed simultaneously and provide a solution to a need. Mr. Ciulla cited the example of Pillsbury’s frostings in filled pastry bags. “Through research we learned that consumers like cakes and cupcakes, and they like decorating them at home,” he said. “But they do not want to buy and fill pastry bags. We helped develop a filled pastry bag that allows anyone to pipe frosting like a professional.” The built-in star tip enables four distinct designs: stars, rosettes, swirls and waves. It’s a product in a package that solves a consumer need.

Another example is Backyard Farms L.L.C., Madison, Maine. The company markets tomatoes that are picked ripe and delivered to grocers within one day. With the tagline of “not grown too far from here,” this was a structural branding project that had to support Backyard Farms’ brand attributes, including fresh, friendly, local, sustainable, ripe and delicious. “Our challenge was to develop a package structure that not only helped ship and display the tomatoes, but kept them bundled in their unique set of eight tomatoes on a vine,” Mr. Ciulla said. “A craft paper box with a picket fence and clear window does just that.” The final package design addresses form and function, as well as considers the environment. The boxes are made from 100% recycled paperboard with a minimum of 35% post-consumer content. They are manufactured using 100% wind power and printed using soy inks in nearby Augusta, Maine. In addition, all of the company’s master cases are completely recyclable, and they are sourced close by in Auburn, Maine, to minimize delivery miles. This gets communicated to the consumer visually and with the story on back of pack and web site. Nonni’s Foods, Tulsa, Okla., was looking to expand into the specialty natural foods channel. In order to differentiate from the company’s core club store offerings sold under the La Dolce Vita brand, Nonni’s chose to share the brand’s story and its use of whole food ingredients on the package. “La Dolce Vita was inspired by the founder’s Italian heritage, and the biscotti are made with non-G.M.O. ingredients and nothing artificial,” Mr. Ciulla said. “These are product qualities that today’s N.O.S.H. (natural, organic, sustainable, healthy) consumers are actively looking for. The original club version of La Dolce Vita looked dated and overly ornate for the N.O.S.H. consumer. Nonni’s wanted to communicate a more contemporary classic product, made using an authentic recipe with only high-quality, clean label ingredients.” The newly designed brand identity and packaging for La Dolce Vita takes on a sophisticated approach. Branding and flavor communication appear in prominent locations creating a centered composition that allows the biscotti and real, authentic ingredients to shine. “The simple iconic doily serves multiple functions,” he said. “It holds the flavor communication, it features the product, and it helps create strong brand blocking at shelf. The pinstripe backdrop communicates traditional baking, as well as a modern, bright brand expression that feels authentically premium.” — Source: Food Business News.

Whataburger Sells Majority Interest to BDT Capital Partners

San Antonio, Texas-based burger chain Whataburger Inc. has agreed to sell a majority interest to Chicago-based merchant bank BDT Capital Partners. Terms of the deal were not disclosed. Whataburger’s founders, the Dobson family, will retain a minority interest in the company, and the company’s headquarters will remain in San Antonio. Whataburger’s president and CEO Preston Atkinson and board chairman Tom Dobson will maintain seats on the company’s board of directors but will retire from day-to-day operations and leadership efforts, the company said. Ed Nelson, Whataburger’s chief financial officer/controller will be promoted to president effective July 1. “We’re excited about the partnership with BDT because they respect and admire the brand we’ve built,” Atkinson said in a statement. “They want to preserve it while they help us continue growing a sustainable, competitive business over a long period of time. They don’t plan to change our recipe for success. ”The news was announced just one month after Whataburger hired Morgan Stanley investment bank to look at strategic options for the chain and evaluate options for a partial-sale of the business. BDT will work on long-term growth strategy for the brand moving forward. “We look forward to a long-term partnership with the Whataburger team, continuing their commitment to serving high-quality, great-tasting food at a value and delivering a superior customer experience,” Tiffany Hagge, Managing Director of BDT Capital Partners said in a statement. “We are excited to support Whataburger as they continue to innovate and pursue accelerated growth in existing and new markets.” The company also named several other C-level executives. Effective July 1, Leonard Mazzocco, who will be promoted from vice president of business operations to senior vice president and COO; and James Turcotte, who will continue in his role as senior vice president of the real estate segment and be promoted to chief development officer. In Nation’s Restaurant News’ upcoming Top 200 census, Whataburger reported $2.42 billion in U.S. systemwide sales for the fiscal year ended in December 2018, a 6% increase over 2017. At the end of 2018, Whataburger had 825 restaurants in 10 states. – Source: NRN.

Roy Rogers Unveils New Store Design, Preps for Growth

In preparation for a new expansion effort, Roy Rogers rolled out a fresh store design at a Westminster, Maryland, restaurant. Jeremy Biser, the legacy chain’s EVP, said the update was part of a broader plan to strengthen performance at existing locations. “We’re looking at all aspects of our operations to make our brand more relevant and drive home our positioning as being a cut above the typical [quick-serve],” Biser said in a statement. “At the same time, we are intently focused on increasing efficiencies both to enhance guest satisfaction and build our bottom line. We’re very optimistic that these changes will benefit our business.” Over the past year, the 48-unit chain, founded in 1968, signed new contracts for beverage supply, food distribution, site analysis, and marketing services. It also upgraded menu items, like the Texas Pete Spicy Chicken Sandwich. Roy Rogers peaked at 648 units in the late 1980s. The Westminster update features new lighting to illuminate the exterior and showcase a bolder logo presence. There are natural stone towers and a new pylon and building signage that “more effectively communicates the Roy Rogers ‘holy trio’ of USDA choice top round roast beef, hand-breaded, fresh fried chicken and great-tasting burgers to guests,” the company said.

Inside, Roy Rogers upgraded furniture, fixtures, and equipment along with a new wood-finish plank-tile floor to create a warmer atmosphere and a greater variety of seating options. A blockbuster feature is a live-edge Monkey Pod wood tablet, which shows a modernized look that also maintains Roy Rogers’ rustic vibe. The store remained open throughout renovations. Roy Rogers plans to update its test kitchen store in Frederick, Maryland, next. After, the company said it would remodel one additional restaurant and open two new ones with the design before rolling it out systemwide. “We’re looking for validation that this adds a more modern look and feel to the store, for transaction growth and for enhanced customer loyalty,” Biser added. “So far, customer reaction and initial business results have been very encouraging.” Roy Rogers’ current footprint includes units in Maryland, Virginia, West Virginia, New York, New Jersey, and Pennsylvania. It said it’s targeting the Mid-Atlantic and Northeast for franchise expansion. Roy Rogers started in Falls Church, Virginia, under the direction of Marriott Corp. The company sold off the chain when its hotel division faced financial woes, and Imasco, then the parent of Hardee’s, snapped it up in an attempt to transform Roy Rogers into Hardee’s units to break ground in the Northeast. That conversion attempt failed, and by the mid-90s Hardee’s had sold roughly 110 units to Boston Chicken/Market in the Philadelphia area, 150 units in New York and New Jersey to Burger King and Wendy’s, and 182 restaurants to McDonald’s. In the late 90s, Hardee’s was sold to CKE (Carl Karcher Enterprises), the parent company of Carl’s Jr. Jim Plamondon, the son of Pete Plamondon Sr., who worked for Marriott as executive vice president in charge of their restaurant division, overseeing Roy Rogers and other restaurant concepts under their corporate umbrella, bought his father’s operating company, Plamondon Enterprises Inc., in 1998. Along with his brother, Pete Jr., they acquired the Roy Rogers trademark and rights to franchise the concept from Imasco four years later. By then, there were about 75 restaurants. –Source: QSR Magazine.

Impossible Burger Shortages Hit White Castle and Red Robin

(Bloomberg) — Large restaurant chains Red Robin and White Castle are reporting shortages of Impossible Foods Inc.’s popular meat-free patties, even as the plant-based food producer embarks on a nationwide expansion with Burger King. Calls to a dozen Red Robins and the same number of White Castles on Thursday found that only two locations of each chain had Impossible Foods Inc.’s patties available, with no consensus from the others on when they’d get them back. Individual locations from New York to Hillsboro, Oregon, with the burger on their menu told customers this week that they’re fresh out. The hit-or-miss availability of Impossible Foods items at the chains, which each have hundreds of restaurants, adds to shortages of the popular meat-free patties that mom-and-pop restaurants have been reporting for weeks. They underscore the pressure Impossible Foods is facing to show it can manufacture for the mass market and get a head start on wide distribution before a growing crop of rivals can catch up.

“We’re waiting for it to come in,” said Rebecca Sparks, 34, supervisor at Left Coast Food + Juice in Chicago’s Lincoln Park neighborhood. She said there is no word on when it will be available again. Impossible Foods didn’t reply to requests for comment about the shortages at White Castle and Red Robin. The corporate offices of Red Robin Gourmet Burgers Inc. and White Castle also didn’t respond to requests for comment.

The shortages coincide with the arrival of the Impossible Whopper at Burger King, which was tested in St. Louis in April before expanding to cities such as Miami and Columbus, Georgia. Under terms of a deal inked earlier this year, Impossible Foods patties will be inside Burger Kings nationwide by the end of this year. The chain operates more than 7,300 U.S. restaurants in the U.S. The burger chain, owned by Restaurant Brands International Inc., doesn’t seem to be affected by the shortage. Every Burger King location contacted by Bloomberg, including those in St. Louis, Miami; Montgomery, Alabama; and Columbus, Georgia, said the patties were in stock. Burger King did not immediately respond to requests for comment. The supply hiccups may be a sign of how eager companies are to expand market share as demand soars for meat alternatives and startups making meat alternatives increasingly go national. While overall meat consumption is increasing globally, including in the U.S., there’s also been a rise in plant-based diets in wealthy nations. This has spawned an expanding array of meat substitutes, ranging from products that are meat-like but made from plant matter, to meat that’s grown in a lab instead of taken from slaughtered livestock. Lab-grown meat isn’t yet available to the public.

Impossible Foods told Bloomberg earlier this week that its products are now on menu at about 9,000 restaurants, but couldn’t say how many currently had access to stock. “I’m not going to estimate the number of restaurants that currently have the product or are sold out,” spokeswoman Rachel Konrad said. The company has said that it would sell its products in retail outlets this year, too. It’s currently awaiting Food and Drug Administration approval for its “magic” ingredient known as heme, which is made with genetically modified yeast. That ingredient gives the company’s soy-based burgers their meaty taste, and because it imparts a red color to the raw product, it requires extra approval for grocery sales. Rival Beyond Meat Inc., which has seen its stock rise more than 450% since its recent public offering, said this week that its plant-based sausage breakfast sandwiches are available at almost 4,000 Tim Hortons locations across Canada. Tim Hortons is also owned by Restaurant Brands International. In a recent earnings call, Beyond Meat executives said they’d learned from past supply problems, but the company may not be out of the woods yet. Burrito chain Freebirds, which has more than 70 locations in the U.S., announced on its website that it has temporarily halted sales of its Beyond Meat-based Mexican fare “due to a supply shortage.” Beyond Meat didn’t respond to multiple requests for comment. Beyond Meat’s pea-based burgers were formulated to mimic meat by using plant ingredients that resemble meat molecules. –With assistance from Craig Giammona. – Source: Bloomberg L.P.

Maggiano’s Partners with Make-A-Wish for 16th Annual Eat-A-Dish for Make-A-Wish Campaign

Now through Aug. 7, Maggiano’s Little Italy is hosting its 16th annual Eat-A-Dish for Make-A-Wish campaign. Guests are invited to help the restaurant reach its goal of raising $1,000,000 to grant transformative wishes for children battling critical illnesses. Guests can help grant wishes in one (or more) of the following ways:

Enjoy a chef-featured item through August 7: Guests can choose from dishes such as Angel Hair Saffron Langostino Lobster or Amalfi Lemon Chicken in June and Pesto Perlini Mozzarella Pasta or Salmon with Crispy Calabrian Shrimp in July. For every select featured menu item ordered, $1 will be donated to Make-A-Wish. And for every glass of Wish or Summer Lemonade ordered, 50 cents will also be donated.

Savor each bite of fluffy chef-featured pancakes during brunch or order the chef-featured dessert and $1 will be donated to Make-A-Wish year-round. During the campaign, Guests can look forward to enjoying decadent Banana Split or Chocolate Cannoli Pancakes, Banana Split Cheesecake or six layers of Chocolate Cannoli Cake.

Order the Create Your Own Pasta carryout package between June 10-21 or June 27-July 8 and $3 will be donated to Make-A-Wish.

Get social by sharing a photo of their experience at Maggiano’s on Twitter and/or Instagram using #EatADish4MAW.

To-date, Maggiano’s annual Eat-A-Dish for Make-A-Wish campaign has raised over $9 million and granted more than 1,200 life-changing wishes. “Our passion at Maggiano’s is to make people feel special, so we are honored to have the opportunity to raise money, grant wishes and create special memories for the wish kids,” says Kelly C. Baltes, president of Maggiano’s. “We are fully committed to the belief that a wish experience can be a game-changer for a child with a critical illness, which is why we continue to partner with Make-A-Wish for this life-changing campaign. Year after year, I’m amazed by our incredible Guests and Teammates who go above and beyond to support this campaign, and I am excited about the difference our team will make this year.” “Maggiano’s has continued to be one of our greatest supporters, committed to helping children with critical illnesses replace fear with confidence, anxiety with hope and sadness with joy,” says Richard Davis, president and CEO of Make-A-Wish America. “Wishes are only made possible through the generosity of individual and corporate donors, like Maggiano’s, and we look forward to continuing to grant even more life-changing wishes, one dish at a time.” – Source: Sapore Magazine.

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