McDonald’s Global CMO Silvia Lagnado Leaving in October, Colin Mitchell Elevated to Senior VP Role

McDonald’s Global Chief Marketing Officer Silvia Lagnado plans to leave the world’s largest restaurant company in October and the Golden Arches will move on without a global CMO, Ad Age has learned. Lagnado’s pending departure was announced Monday morning in a message sent to McDonald’s employees by CEO Steve Easterbrook. Lagnado, an executive VP and McDonald’s global CMO since 2015, has had a “significant” impact during her tenure, Easterbrook wrote. “With the team, strategy and work on strong footing, Silvia has decided this is the right time to pursue new challenges and opportunities,” Easterbrook wrote. McDonald’s is not naming a new global CMO. However, it did promote two men who reported to Lagnado to newly-created positions at the senior VP level. Colin Mitchell was named SVP, global marketing, reporting to Easterbrook. Bob Rupczynski was named SVP, marketing technology. Lagnado oversaw a broad range of marketing functions, including brand development, menu strategy, consumer and business insights, and media, merchandising and customer relationship management. “Silvia led a team that defined the brand’s purpose ‘making delicious feel-good moments easy for everyone,’” Easterbrook said in the message to employees. Lagnado helped create the universal visual identity McDonald’s has begun using, established a program to boost the creativity of the company’s advertising, and worked on improving its focus on customers through data, Easterbrook said in the note. Lagnado, he wrote, was also “the driving force” behind McDonald’s partnership with Disney, which was announced in 2018 and includes the return of toys tied to Disney properties in Happy Meals, such as the current one that includes toys based on “The Lion King.”

Mitchell joined McDonald’s from Ogilvy & Mather in 2016 and reported to Lagnado in his role as global brand VP. Now, as SVP, global marketing, he will have oversight of insights and menu innovation and reports directly to Easterbrook. Rupczynski joined McDonald’s from Mondelez International in 2017 and reported to Lagnado in his role as VP, global digital engagement. Now, as SVP, marketing technology, he reports to Daniel Henry, executive VP and chief information officer. Lagnado joined McDonald’s  in 2015, a few years after serving as CMO of Bacardi Limited. She previously spent more than 20 years at Unilever. McDonald’s did not provide details on whether Mitchell’s and Rupczynski’s prior positions would be filled and did not make its executives available for interviews. – Source: AdAge.

Most of Kona Grill Sold to Former CEO’s Company for $20.4M

A federal bankruptcy court has approved the sale of 24 Kona Grill polished-casual restaurants for $20.3 million to Williston Holding, the company headed by former Kona CEO and co-founder Marcus Jundt. The sale would pare the holdings of Kona Grill’s bankrupt parent to three restaurants, according to bankruptcy court documents. But local news reports indicate that at least one of those three, a store in Columbus, Ohio, has been closed. Kona filed for Chapter 11 bankruptcy protection at the end of April. The chain had closed 19 stores over the prior year. Overexpansion was cited as one of the brand’s problems, along with a high turnover of CEOs and heavy-handed cost cuts. Kona cycled through four leaders in the year preceding the bankruptcy filing. Williston’s intentions for the acquired restaurants were not revealed in the filing. Rights to the Kona Grill name were not among the assets included in the deal. Kona Grills are typically large units, measuring between 5,900 and 7,400 square feet, according to Technomic data. The researcher pegged the brand’s average sales per unit at $3.7 million in 2018, down from $4.1 million the prior year. Jundt resigned as CEO of Kona in March after serving in the role for just a few months.  Williston currently operates about 50 restaurants under 10 brands, including Casa Ole, Monterey’s Little Mexico and Uberrito Fresh Mex. – Source: Restaurant Business.

Arby’s is Betting $3.9 Billion that its Customers don’t Want Fake Meat

“We have the meats!” The unmistakable Arby’s tagline is voiced by Golden Globe–winning actor and unmistakable baritone Ving Rhames, who has saved the world time and again by crafting spy gadgets as Luther Stickell in the Mission: Impossible franchise. For Arby’s, he presents “the meats”—an equally essential weapon in the fast food arms race. “We put a bold flag down,” says Jim Taylor, Arby’s chief marketing officer, of the tagline that launched in 2014. “If you are someone with us, who shares a passion for high-quality meat cooked the right way as deliciously as possible, we’re going to be a place you can get an abundance of different types of meat as a centerpiece for every sandwich.” Indeed, in the age of plant-based Impossible burgers and Beyond Meat, Arby’s has not only decided to resist the rising tide of veganism and flexitarianism, it’s positioned carnivore as a “with us or against us” values system, going so far as to recently launch its first “megetable” which is a called “marrot” — a shameless troll of a carrot that’s made entirely out of meat. “Here’s our philosophy: If you try to stand for everything, you end up standing for nothing,” says Taylor, who also leads menu development (including megetables). “At some point you have to draw a line. This is what we’re going to say our brand is all about. We made a decision [that] our brand is going to be about real meat, and there will be other people who get into plant-based, but our true north is we have the meats, and real meats.” To “have the meats” isn’t just an existential anchor. A decade ago, it was a revenue lifeboat. Arby’s sales dropped 5.8% in 2008 and 8.2% further in 2009. “Arby’s performance is amongst the worst in modern restaurant history,” wrote a J.P. Morgan analyst in 2010. That year, as sales and margins continued dropping with no turnaround in sight, the market began speculating that the chain would go up for sale—for as much as $600 million. In 2011, Arby’s did indeed sell to a private equity group, but for a mere $130 million, less than half what the lowest estimates had wagered a year earlier.

Arby’s is currently run by Inspire Brands, which is majority owned by affiliates of Roark Capital Group, investors in meatatarian brands including Buffalo Wild Wings, Hardee’s/Carl Jr.’s, Sonic, and Culver’s. The chain recruited Paul Brown from Hilton to become CEO in 2013, ushering in a new, flesh-based renaissance with same-store growth every year since, for a total of $3.9 billion in revenue in 2018 (or nearly 4x what it made in 2011). Under Brown’s leadership, Arby’s now offers eight different types of meat on the menu all the time, and other varieties are featured in limited-time specials. A brisket sandwich, launched in 2013, contains meat that’s hand-smoked by a multi-generation, family-run business in east Texas. Another sandwich layers bacon atop roast beef. Yet another features thick-cut pork belly. Arby’s even introduced hand-carved gyros nationwide, with a blend of beef and lamb sliced right off the spit. It’s a strategy involving not just meat, but as Arby’s dubs it, meats. Each menu item requires Arby’s to develop new expertise in sourcing products and preparing cuts in-house. Witness the company’s push into selling game, which began when Arby’s launched a limited-edition venison sandwich in 2016. The move was shocking to the press, largely because blander options like beef and pork dominate fast food menus, along with those of American restaurants in general. “We said, in this world, who is passionate about meat? Who loves meat? Hunters,” recounts Taylor. It was “a group that over indexed pretty hard with Arby’s. And we thought, we should do something for them.” “Them” being the 20 million people in the U.S. who kill their own food but can only taste deer seasonally. Arby’s marketed the new product with the tagline “Meat Season” and promoted it with a sign reading, “You say hunting, we say sandwich gathering.” Arby’s sold 1,900 venison sandwiches in just five states during an extremely limited launch in 2016. Some locations sold out in a matter of minutes. For the 2017 release, Arby’s prepped a bigger inventory and sold venison nationwide for one day only—during which time it moved an incredible 96,000 sandwiches. “We’ve tested elk, duck—there will be more of that along the way,” says Taylor. There’s no doubt that Arby’s has found success by appealing to meat eaters, but the formula does seem to discount that many people are eating animals more sparingly these days, whether it’s for reasons of health, the environment, or ethics. Does Taylor worry about the fact that, between 2014 and 2017, Americans identifying as vegan grew 600% — to account for as much as 6% of the population? Or that plant-based alternatives to cheese, milk, and eggs grew 17% between 2017 and 2018 in an otherwise stagnant grocery market? Apparently not. “We’re never going to win over people looking to . . . eat vegetarian meat,” he says. “We’re never going to be that choice.” Plus, there’s the opportunity cost of being another fast food joint pushing faux meat instead of the unique menu items at Arby’s. “Let’s speak to the 95% of the people who are out there versus the 5% we don’t have any right to win with anyway.” But what if trends continue, I ask. What about the world that’s 5 or 10 or 20 years out? Perhaps we produce less meat in order to meet strict carbon emissions goals. Perhaps we cease subsidizing cattle and dairy production.

Wouldn’t the Arby’s strategy need to shift then? “At least half the people 3,000 years from now are still going to be eating meat,” Taylor says with a chuckle. Then he clarifies, quite seriously, that even if 10% of people go vegan it doesn’t concern him. “What I’ve found, for long-term adoption in mainstream America, is ‘How does it taste and what does it cost?’ People are not going to pay more for something that tastes worse. I’ve seen statistics where 80% to 85% of vegetarians come back to eating meat as part of their lifestyle at some point. We want to be that place for people . . . coming back,” Taylor says, laughing again. “That takes a stand at this day and age. Not appealing to vegetarians, in fact, makes us stronger as a brand. We’re 100% carrying a flag for meat-loving America.” Taylor knows his customers. Describing an Arby’s fan as a flag-carrying member of “meat-loving America” or “someone with us” doesn’t seem accidental. Research shows that hunting skews conservative, while veganism and vegetarianism skew liberal. Also, selling a venison sandwich to hungry hunters is one thing; taunting vegans with veggies made of meat is quite another. “When I have a conversation with some of our core guests about what their favorite veggie is, it’s potatoes,” Taylor laughs. “You probably never thought about eating a carrot here, but how about a marrot?” A whopping 77% of all Arby’s locations in the U.S. can be found in states that voted for Trump in 2016. Put differently, there are three times as many Arby’s stores in red states as in blue. McDonald’s, by comparison, runs closer to a 50-50 split, with 58% of its restaurants in conservative-voting states, and 42% in liberal ones. Like all companies these days, Arby’s is focused on building community. And it wants to make sure the meat on its plates stays red. –Source: Arby’s.

Panera to Expand into Airports

Panera Brad will begin adding units at airports and travel plazas under a multiunit development deal with concessionaire HMSHost, the fast-casual chain announced this week. Panera units are slated to open at Charlotte Douglas International Airport and Salt Lake City International Airport next year, with additional airport and travel plaza locations slated to open throughout 2020 and beyond, the company said. “With Panera Bread as our exclusive partner, we are transforming the fast-casual category in airports and motorways across the United States,” HMSHost President and CEO Steve Johnson said in a statement. In addition to Panera’s traditional menu of salads, sandwiches, soups and breakfast offerings, the new units will feature grab-and-go items designed for travelers. Ordering kiosks and app-based ordering will be available at the new nontraditional units. “We’re pleased to partner with HMSHost to bring Panera to airport and travel plaza locations across the U.S.,” said Dan Wegiel, Panera’s executive vice president, chief growth and strategy officer. “Panera is uniquely positioned to fill the void between quality and convenience for hungry travelers, offering the same better-for-you menu options they know and love from our traditional bakery-cafes, with all the speed they need while in transit. The HMSHost partnership expands consumers’ access to the brand, delivering on our vision to bring Panera closer to those who hunger for our food wherever, whenever and however they choose.” – Source: Panera Bread.

Sarasota, Florida’s Tableside Restaurant Group Opening Several New Eateries

From the outside looking in, it seems like Tableside Restaurant Group is on a serious growth curve. The Sarasota-based company just opened three new restaurants in the past few months and has immediate plans for several more. But CEO Joe Seidensticker said what looks like a lot of growth at once is actually just the culmination of several projects coming to head at the same time unexpectedly. In that spirit, Seidensticker said he’s looking forward to getting everything up and running so he and his team can take a breather and focus on guest experience. “It’s just timing on all of these projects. Honestly, we’re just behind schedule on everything,” Seidensticker said. “It wasn’t meant to be a wave. It was meant to be a one-year or two-year process.” Even if it is just because of timing, 2019 has been a busy year for Tableseide. The company reopened its signature concept, Libby’s Neighborhood Brasserie, I Southside Village in May, and is putting a second Libby’s together in Lakewood Ranch that is on track to open in September. – Source: Sarasota Herald Tribune.

Cracker Barrel to Invest $140 Million in Punch Bowl Social

In a surprise announcement, family dining chain Cracker Barrel revealed July 23 it has entered into a strategic partnership with Denver-based Punch Bowl Social. Cracker Barrel plans on investing as much as $140 million and taking on a non-controlling position in the eatertainment brand. The agreement allows Cracker Barrel to acquire a controlling position or full ownership of Punch Bowl Social if it chooses to in the future. The investment in Punch Bowl Social is a way for Cracker Barrel to enter into a new category and drive value for shareholders while exposing both brands to new guests and demographics, Cracker Barrel’s CEO Sandy Cochran said in a statement. “We’re excited to partner with Robert Thompson and his talented Punch Bowl Social management team to support such a differentiated, high-growth concept,” Cochran said. “Cracker Barrel and Punch Bowl Social are both highly experiential brands that emphasize quality food and beverage, hospitality and fun. We love what Punch Bowl Social has built and are excited about helping them continue to grow.”

Punch Bowl Social was founded in 2012 and offers guests an elevated dining experience paired with a variety of social games. The drink menu is comprised of hand-crafted cocktails and the food menu is designed to highlight made-from-scratch dishes. Guests can choose from bowling, table games, karaoke, and even virtual reality games to entertain themselves as they eat.  Today, the brand has 17 locations across 12 states. By the end of 2020, it plans on opening 11 new locations.  “The investment in Punch Bowl Social allows Cracker Barrel to enter a new and expanding experiential food and beverage segment, providing another growth vehicle to deliver shareholder value,” Cracker Barrel said in a statement. “Additionally, the strategic relationship provides Punch Bowl Social with additional resources to drive continued growth.” Founder and CEO Robert Thompson will continue to oversee day-to-day operations as the company enters into the new partnership with Cracker Barrel.  “This relationship represents a tremendous opportunity for the entire Punch Bowl Social family, and we’re thrilled to partner with Cracker Barrel,” Thompson added. “Their high-volume, multi-location expertise will help us continue to realize our vision for growth across the country. Our continued goal is to be an experiential millennial and Gen Z lifestyle brand that creates authentic, social guest experiences. Having Cracker Barrel provide growth capital and strategic resources sets us up for the next exciting chapter for Punch Bowl Social.” – Source: fsrmagazine.

Starbucks Pushes Delivery Program National

Up until now, the Starbucks Delivers program had only been in a test phase, available in 11 select markets including Miami, Seattle, Boston, Chicago, New York, Washington D.C., San Francisco, Los Angeles, Orange County, Houston and Dallas. “We are driven to create new and unique digital experiences that are meaningful, valuable and convenient for our customers,” said Roz Brewer, group president and chief operating officer for Starbucks, in a statement. “Partnering with Uber Eats helps us take another step toward bringing Starbucks to customers wherever they are.” About 95% of the Starbucks menu will be available through the mobile delivery app, excluding items with foam like macchiatos and cappuccinos, which the company said don’t hold up well during the delivery process.

Along with being the preferred delivery partner, Uber Eats will also collaborate with Starbucks on delivery technology and innovation, the company said. “Our customers are huge Starbucks fans and love being able to get their favorite items delivered with Uber Eats speed,” said Jason Droege, vice president of “UberEverything.” “We’re excited to expand our partnership across the United States to make ordering their favorite coffee and breakfast sandwich as easy as requesting a ride.” Starbucks announced its first delivery expansion in December 2018, after a successful pilot test in Miami, and confirmed that the delivery platform test phase that would roll out to about a quarter of U.S. stores nationwide in 11 major markets. The first wave of cities were added to the Starbucks Delivers roster in January, while the second wave of test cities followed in the spring. The Seattle-based coffee chain’s U.S. delivery program has gained from tests in Miami as well as China, where the company partnered with Alibaba Group Holding. Starbucks had accelerated delivery plans in China to keep up with competitors like Luckin. Starbucks has also teamed up with Alibaba and Hema supermarkets to test delivery orders using “ghost” or cloud kitchens, where the delivery-only kitchens are not attached to a restaurant, in order to improve order efficiency and quality. As of March 31, Starbucks had 30,184 locations globally, with 14,778 of those in the United States. – Source: NRN.

Chuck E. Cheese’s Parent Company‘s Merger Deal Collapses

Chuck E. Cheese’s is not heading to Wall Street, at least not right now. The owner of the pizza and games chain, Queso Holdings, has terminated its proposed reverse merger with blank check company Leo Holdings. That deal would have taken public CEC Entertainment, which operates Chuck E. Cheese’s and Peter Piper Pizza. No reasons were given for the termination. The companies announced their proposed merger in April in a deal that would have returned CEC to the public markets five years after Apollo Global Management took the company private in a $1 billion deal. Apollo has been trying to do something with CEC for much of the past two years. It was believed to be considering an IPO in 2017. The chain was then put up for sale, but Chuck E. Cheese’s same-store sales began taking a hit. The chain has been on something of a roll more recently. Same-stores ssales rose 7.7% in the first quarter. They slowed some in the second quarter. but company executives were satisfied with the results. CEC had been planning to use $300 million in proceeds from Leo Holdings to pay down debt, and Apollo would have remained a majority owner of the company after the merger. It is uncertain what CEC plans to do now that its deal with Leo is off. In a blank check reverse merger, a shell company sells stock to investors, uses the proceeds to buy an existing privately held company and then takes on its name after the merger. The blank check company investors then become shareholders in the acquired company, which becomes publicly traded. – Source: Restaurant Business.

Private-equity Group Ares Management Confirms Cooper’s Hawk Investment

Cooper’s Hawk Winery & Restaurants announced today an investment by a fund managed by the Private Equity Group of Ares Management Corporation. Nation’s Restaurant News previously reported a report of a sale. But Cooper’s Hawk CEO Tim McEnery described it differently to NRN: “Cooper’s Hawk has always fueled its growth with private investment, including private equity. With this move, we are simply resourcing our business to accelerate growth by partnering with one of the largest and most respected private equity groups in the world.” Terms of the investment were not disclosed. KarpReilly sold its minority position in Cooper’s Hawk as part of the transaction. “Tim McEnery conceived of a disruptive restaurant concept and lifestyle brand. Tim’s vision has resulted in an incredibly passionate consumer following, driving industry-leading growth and unit economics,” said David Kaplan, co-founder of Ares Management and global co-head of the private equity group.  “Our investment in Cooper’s Hawk follows Ares’ strategy of supporting best-in-class growth businesses. We are thrilled to partner with Tim and the rest of the management team as they continue to lead Cooper’s Hawk through its next phase of growth.” Countryside, Ill.-based Cooper’s Hawk’s, which was founded in 2005, is one of the fastest-growing casual-dining chains. The brand has differentiated itself from competitors with a wine club of nearly 400,000 members, in addition to a restaurant and tasting room. Cooper’s Hawk currently has 36 locations. In the latest reported year, the chain reported sales of $282.3 million, up 16.7% from the preceding year, according to NRN Top 200 data. Adjusted average reported unit sales increased in each of the past three years, from $8.4 million in fiscal 2015 to $9.1 million in the latest fiscal year 2018. In the latest year, Cooper’s Hawk had about 35 restaurant locations. “We are excited to find in Ares a partner that appreciates the uniqueness of Cooper’s Hawk, and its community of employees and wine club members,” said McEnery. “With the significant resources across the Ares platform, we believe together we can accelerate our growth trajectory, while maintaining our relentless focus on delivering a tremendous experience and value proposition to our wine club members and guests. I continue to own a meaningful portion of Cooper’s Hawk and will lead in our unwavering commitment to provide the very best food, wine, and innovative experiences.” North Point Advisors acted as exclusive financial advisor to Cooper’s Hawk and Ropes & Gray LLP served as legal counsel. BofA Merrill Lynch acted as a financial advisor to Ares and Kirkland & Ellis LLP and Davis Wright Tremaine LLP served as legal advisors. – Source: NRN.

Yum Names Mark King as CEO of Taco Bell, Artie Starrs to Head Pizza Hut

Yum! Brands Inc. has named new CEOs for its Pizza Hut and Taco Bell divisions, the company said. The Louisville, Ky.-based quick-service company said with the appointments of Mark King to head the Irvine, Calif.-based Taco Bell division and Artie Starrs, 42, to head the Plano, Texas-based Pizza Hut that all three of its brands would have CEO positions. King, 60, is the former president of Adidas Group North America, and he will report to David Gibbs, Yum Brand’s president, chief operating officer and chief financial officer, the company said. Starrs, 42, is being promoted to Pizza Hut Division CEO from his current position of president for Pizza Hut U.S. Starrs, as well as current KFC Division CEO Tony Lowings, will continue to report to Gibbs. Both appointments are effective Aug. 5. “We believe this global brand division leadership structure at Taco Bell and Pizza Hut will enable the U.S. and international teams to further implement innovative best practices worldwide, strengthen digital and technology capabilities and accelerate growth for franchisees and shareholders,” said Greg Creed, Yum Brands CEO, in a statement. “We’re investing in world-class executives like Mark and fortunate to promote incredible talent throughout our company like Artie,” Creed said. “Mark is an accomplished retail innovator, and Artie is an excellent growth strategist – both are strong culture leaders who will continue to elevate Taco Bell and Pizza Hut into relevant, easy and distinctive global brands.” Gibbs said King was the ideal choice to lead Taco Bell.  “His unique talent rewriting the rules for brands to win in fiercely competitive markets will be central to Taco Bell’s journey to become a $15 billion brand that transcends the quick-service restaurant and retail categories,” Gibbs said. Gibbs said Julie Felss Masino, current Taco Bell North America president, and Liz Williams, current Taco Bell International president, will report to King. The co-presidents led the brand after Brian Niccol left in early 2018 to become CEO of Chiotle Mesican Grill. King stepped down as president of the Adidas Group North America in 2018. “The courage, creativity, culture and potential of Taco Bell make it the only brand I would become part of at this point in my career,” King said. “I’m truly excited and honored to join Yum! Brands and to work with Julie, Liz and the talented team of employees and franchisees who are already making Taco Bell a powerhouse global brand with extraordinary possibilities for the future.” Starrs joined Pizza Hut in 2013 and has served in various leadership roles, including general manager and chief financial officer. “I am looking forward to working more closely with our global brand leaders and franchisees to drive breakthrough innovation and customer experiences,” Starrs said. Starrs will retain direct leadership of Pizza Hut in the U.S. as part of his global responsibilities as Pizza Hut Division CEO. Taco Bell has more than 7,100 restaurants in 30 countries. Pizza Hut has more than 18,000 restaurants in more than 100 countries. – Source: NRN.

Stephanie Lilak Joins Dunkin’ as Human Resources Chief

Dunkin’ Brands Group Inc., parent to Dunkin’ and Baskin-Robbins, has named Stephanie Lilak as senior vice president and chief human resources officer, the company said. Lilak will report to Dunkin’ CEO Dave Hoffmann, the Canton, Mass.-based Dunkin’ Brands announced. She succeeds Rich Emmett, who retired earlier this year as the company’s chief legal and human resources officer. “Stephanie is a transformational leader with a successful track record of helping global businesses implement human capital initiatives that drive growth,” said Hoffmann in a statement.” She’s excelled at developing talent and has dedicated her career to building strong, inclusive corporate cultures.” Lilak comes to Dunkin’ after 23 years in executive-level human resource positions at General Mills. She was also the operations leader for the company’s largest U.S. manufacturing plant. In her new role, Lilak will be responsible for global employee recruitment, training, leadership development, succession planning, compensation and benefits, according to the company. She will also work with franchisees by creating programs to assist with recruiting, training and developing restaurant managers and crewmembers. “I look forward to working with the company’s leadership and our franchisee community,” Lilak said, “to develop and implement strategies designed to attract and retain top-tier talent for both the corporate entity as well as for Dunkin’ and Baskin-Robbins restaurants around the world.” Dunkin’ Brands has 12,900 Dunkin’ restaurants and more than 8,000 Baskin-Robbins units. – Source: NRN

Krispy Kreme Debuts Store, Menu Redesign

Offering donut-infused ice cream available in both milkshakes and scoop sandwiches and allowing guests to customize their donuts are two components of a shop redesign from Krispy Kreme Doughnut Corp. The company planned to preview the redesign at a new Krispy Kreme in Concord, N.C., on July 23. Other innovations include digital and interactive enhancements. The Concord location is one of 45 new shops that Krispy Kreme plans to open in new and existing markets across the country through 2020. “This new shop experience honors the heritage of Krispy Kreme while at the same time acknowledging and addressing the rising expectations of our customers,” said Andy Skehan, president, North America, Krispy Kreme Doughnut Corp. “From our time-tested process of producing the world’s most loved doughnuts to our new Original Glazed donut-infused ice cream, we’re very excited for what the future holds.” The ice cream sandwiches at the Concord location feature Original Glazed donut-infused ice cream scooped between a sliced donut with a combination of toppings and drizzles. Options include vanilla sprinkled, triple chocolate, Cookies & Kreme, vanilla chip, chocolatey caramel coconut and vanilla fruity crunch. The milkshakes are made with Original Glazed donut-infused ice cream and are topped with whipped cream and a mini Original Glazed donut. Flavors include vanilla glazed, double chocolate, salty caramel, classic strawberry and Oreo Cookies & Kreme.

Guests may customize their donuts through a combination of 5 different glazes, 10 toppings and 5 drizzle flavors. The customized donuts are available in three-packs and half-dozen options. A donut theater experience in the Concord shop offers an end-to-end view of the donut-making process. Donut display cases and digital menu boards have new lighting. Customer service enhancements include online ordering, delivery, in-shop self-service pickup, dedicated parking for mobile order pickup and an expanded drive-thru with two lanes and digital order confirmation. Based in Winston-Salem, Krispy Kreme was founded in 1937. JAB Holding Co. acquired the business in 2016. Krispy Kreme now has nearly 1,400 retail shops in 33 countries. Krispy Kreme donuts may be found in about 12,000 grocery, convenience and mass merchant stores in the United States. – Source: Food Business News.

Popeyes to Enter Chinese Market

Popeyes Louisiana Kitchen Inc. is planning to develop and open more than 1,500 restaurants in China over the next 10 years through a partnership with T.F.I. T.A.B. Food Investments. Since 2012, Restaurant Brands International Inc., the parent company of Popeyes, has partnered with T.F.I., a quick-service restaurant operator in Turkey and China. Popeyes is the last of the company’s three brands to enter the Chinese market. The companies opened the first Tim Hortons restaurant in China in February. Burger King, which began operating in China in 2005, has expanded to more than 1,000 restaurants in China since partnering with T.F.I. “We are proud to bring this famous brand to China, and we look forward to introducing its bold new flavors to our guests,” said Korhan Kurdoglu, vice-chairman and chief executive officer at T.F.I. “We plan to build on years of experience of growing successful businesses in China and around the world.” – Source: Food Business News.

A Look at the Menu Innovation Driving KFC Global’s Sales Momentum

About 300 of KFC’s top marketers from around the world will descend upon the company’s global headquarters in Dallas this week to share best practices, industry trends and menu ideas. It’s at this Marketing Planning Meeting—which has been held since 2006—where much of the brand’s menu magic happens. If you’re not fully familiar with what that “magic” entails, consider KFC product launches from around the world: KFC Thailand’s shrimp doughnuts, Singapore’s egg tarts, Australia’s nacho box, the Double Down Dog (a hot dog wrapped in a bun-sized piece of fried chicken) the Mac ‘n Cheese Zinger (with a bun made of mac ‘n cheese) and, of course, the original Zinger Chicken Sandwich, which originated in Trinidad and Tobago in 1984 and finally came to the U.S. in 2017. (Australia sells more than 22 million Zingers each year.) The company’s massive scale of 22,000-plus restaurants in more than 135 countries certainly hasn’t slowed down its innovation wheel. In fact, KFC just launched a chicken tender taco in France, debuted green chili crunch chicken in Malaysia and added “Chizza” (pizza with a fried chicken crust) to the menu in the Philippines. In Canada, the chain unveiled Chachos earlier this year, a take on nachos but with KFC’s chicken tenders instead of tortilla chips. The scope of menu creativity is impressive and the approach has been quite successful. KFC Indonesia rolled out chicken skin fries earlier this summer, for example, and the product sold out on one day. The company’s vegan Imposter Burger, launched in June in the U.K., sold out in just four days. KFC is able to set this pace because it has 18 food innovation teams throughout the world filled with culinarians with big imaginations. Simultaneously, the company stringently adheres to its brand standards (the very 11 herbs and spices that put the chain on the map), thanks to a four-person Food Innovation Team based out of its Dallas headquarters. – Source: Forbes.

Why Tech Training is Essential to Customer Satisfaction

Today, we have added a new channel that seems to be wreaking havoc on employees—online and mobile ordering from the likes of Grubhub and UberEats. Few industries change faster than food and beverage and keeping up with the latest technology and trainings are essential to keeping up with the times, optimizing efficiency, and ensuring great customer satisfaction. Customers visit a quick-service establishment for a quick-service experience, and front-of-house staff must ensure customers get what they came for—a fast meal. When this service goes awry, guests have the ability to quickly share their immediate feedback with their social network, instantly impacting the restaurant’s reputation. This has increased pressure on fast-casual restaurateurs to take training very seriously. The average turnover rate at a fast-food restaurant is 150 percent according to a 2018 report by MIT Tech Review, with this employee turnover attributed to new technology increasing expectations of higher productivity, with no increase in pay. So how can quick-serve restaurants ease the technology learning curve when their staff is coming and going like a revolving door? Here are three best practices to get restaurant operators started. Leverage POS technology that doesn’t require a PhD to learn—One of the most-cited reasons for not being able to retain employees at quick-serve restaurants is their unwillingness to learn new technology, along with not understanding how to handle online ordering and delivery channel increases. Placing the burden on employees becoming technical experts isn’t going to make them stay. Self-ordering kiosks are taking off in the quick-serve industry, but employees shouldn’t be expected to become technical experts on managing them. Providing training on how to use POS kiosks for ordering so that employees can assist customers when they are stuck is paramount but having a strong POS system that won’t go down during the lunch rush is equally important and removes the pressure on employees to ensure systems are running.  Operators should train on the basics of how to use the system versus how to reboot hardware several times per day. Train staff on how to accept and prepare a mobile order—the ordering process used to involve a customer walking into a fast-food establishment and placing their order at the counter. While people still visit the inside of these restaurants, drive-through has become a faster alternative. Today, we have added a new channel that seems to be wreaking havoc on employees—online and mobile ordering from the likes of Grubhub and UberEats. Fast-food employees aren’t used to this new channel and how to handle the processing of these new order types. Setting up a separate area within the restaurant for these off-premise orders and having staff specifically trained on how to fulfill and clear them from the system will create more efficiency and enable this new channel to drive growth. Lean on the cloud for assistance—Very few quick-serve restaurant managers sign up to become an IT expert. The good news is that today’s modern cloud-based systems require less technology savviness than their on-premises predecessors. Whereas managers once had to learn how to maintain an on-site computer server, cloud systems are managed centrally by experts. Keeping the POS and other systems running should be the supplier’s job, leaving managers and staff to focus their time on using the system to best serve the guests. Today’s modern POS systems do much more than simply place orders, and they are relatively easy to use and manage. They manage inventory, employee schedules, menu changes and data that is collected can be used to run detailed analytics on business performance. It’s a wise investment to train staff upfront on various aspects of the system. It not only helps you run the business more efficiently, but will give employees a sense of ownership and pride in their work. If the MIT Tech Review’s study is accurate and we continue to see a dip in employees joining the fast-food industry, it will become even more important than ever for restaurant operators to give employees a sense of ownership in their business. Leveraging today’s modern systems is a great way to do that. – Source: QSR Magazine.

Takeaway.com’s Possible Bid for Just Eat May Spark Food Fight

Takeaway.com is in takeover talks with rival Just Eat Plc, a $5.3 billion deal that would mark a fight against rivals including Uber Technologies Inc. The food delivery industry in Europe has been a battleground, with rivals competing on prices and copying each other’s business models. The all-share deal that’s being considered from Takeaway is another sign the Dutch-based company is intent on taking on its better-known rivals. Food delivery has been one of the fastest growing industries in the tech sector, and investors have been pumping money into startups in a bid to dominate each market. Both Takeaway.com and Just Eat run marketplace models, connecting users with takeout food but leaving delivery to the restaurants. Uber Eats is launching a rival marketplace platform in the U.K., following the entry of Amazon.com Inc.-backed Deliveroo in mid-2018. “The total valuation of companies engaged in restaurant food delivery likely tops $100 billion,” said Bloomberg Intelligence analysts in a note last week, “and would be more if grocery-delivery companies’ food-specific operations were included.”

U.K. Market.

Just Eat confirmed Saturday it’s in talks to be acquired by Takeaway.com, following a report from Sky News. Both companies said that there’s no certainty whether an offer will be made and on what terms. Amsterdam-based Takeaway.com has a market capitalization of 5.1 billion euros ($5.7 billion), compared with Just Eat’s 4.3 billion-pound ($5.3 billion) valuation. A deal for Just Eat would be the second time Takeaway.com has entered the U.K. market. The company first launched in the country in 2012, but sold the business four years later to Just Eat, after struggling with growth. Takeaway.com has also been rapidly expanding following a surging share price. In December it agreed to buy rival Delivery Hero SE’s German operations for about $1 billion, ending an expensive rivalry in a country where both were competing for market share at the cost of profitability. It would also be something of a bailout for Just Eat, which has stuttered in the face of pressure from rivals and an activist shareholder. Once the dominant player in the food delivery market in the U.K., its shares have fallen in the face of growing competition from Uber Eats and Deliveroo amid escalating talk of consolidation in the sector Just Eat shares have fallen 25% over the past 12 months, while Takeaway.com is up 46%. Any deal would also help solve the vacuum at the top of Just Eat’s management. Former Chief Executive Officer Peter Plumb stepped down in January, and interim CEO Peter Duffy has taken himself out of the running for the top job for personal reasons. Jitse Groen, the billionaire founder of Takeaway.com, has been penciled in as the CEO of the combined company, according to a person familiar with the matter. Groen launched Takeaway in 2000 in his dorm room at the University of Twente. The business now has more than 44,000 restaurants on its platform in 12 countries, with the bulk in the Netherlands and Germany. Groen’s wealth is estimated at about $1.5 billion. In 2018, he told Bloomberg News he believed the “most value is in being the largest, by far” in his sector. Investor Cat Rock Capital Management LP has been lobbying for Just Eat to merge with a rival, arguing that consolidation would be the only way to deliver “real value.” Cat Rock holds a 4.9% stake in Takeaway, according to a filing with Dutch market regulator AFM. It’s stake in Just Eat stands at 2.6%, according to Bloomberg Data. Aside from Switzerland, there may be little overlap between the two businesses. Just Eat has expanded in Canada and Latin America, while Takeaway.com has recently moved into southeastern Europe and Israel. – Source: Bloomberg.

Don’t Forget About Sanitation

When expanding or building a new bakery, don’t forget to involve sanitation staff in the process. Too often, engineering/ operations teams focus on the equipment purchases without thinking about ongoing operating costs. Failure to do so may lead to the sometimes-forgotten sanitation team cleaning a mess from decisions made early in a project. “Making pies or cakes that may contain allergens and be subject to microbial growth, for example, will require different design requirements than a bun and roll bakery,” said Joe Stout, president, Commercial Food Sanitation (C.F.S.) and Baking & Snack contributing editor. Depending on if wet or dry cleaning is needed, sanitors may offer insights on building materials, spacing requirements, the number of drains, positioning hose stations and even the sanitary design of equipment. In addition to reducing changeovers and downtime in the long run, their expertise will identify the total ownership cost over the life of the equipment, added Richard Brouillette, C.F.S. director of food safety. “Not everything is shown on blueprints,” he said. “Routing of conduits and other adjustments made during the installation may impact the future ability to clean and inspect equipment.” Working with O.E.M.s, the sanitation department will write cleaning procedures, provide training and build the operation’s master sanitation schedule. “Once production is ramped up, sanitation will be able to determine the periodic cleaning frequencies preventing pest and microbial contamination,” Mr. Brouillette said. Today’s food safety regulations and proliferation of customer audits require bakers to focus on the fundamentals to ensure that every major capital investment is executed properly. That’s something your sanitation team will always remember. – Food Business News.

Standards and Goals in Poultry Pathogen Reduction

On Feb. 14, 2019, at the International Production and Processing Expo (I.P.P.E.) in Atlanta, the Department of Poultry Science at the University of Georgia and the US Poultry and Egg Association (USPOULTRY) organized the educational session, “Salmonella and Campylobacter Control in Poultry Production and Processing – Meeting Food Safety Goals.” Along with the University of Georgia and USPOULTRY the event was put on by a National Turkey Federation (N.T.F.) member launching two new products, one for on-the-farm use and the other for use in processing plants, according to Lisa Wallenda Picard, senior vice-president of policy, trade and regulatory affairs at N.T.F. Because it was a new product launch, Ms. Picard did not speak to the effectiveness of the products and didn’t get into that level of detail with the product launch. She did address the need for the industry to look at food-safety interventions and the importance of making sure all steps are being followed. She reassured attendees that food safety is not a competitive issue and the poultry industry as a whole, along with academia and regulatory bodies, continues to work diligently on controlling Salmonella and Campylobacter. “As an industry, we have been very focused on this issue for quite some time and it’s something we have zoned in on even closer in the last year or so,” says Beth Breeding, vice-president of communications and marketing at N.T.F. “We’re working as an industry together.” Breeding went on to explain that everyone involved in the poultry industry, whether it be processors, producers, regulators or those in academia, were in tune with one another and when something worked for someone, they shared it openly. “We’re also doing a pretty decent amount of consumer education too,” Ms. Breeding said. “Because ultimately, the last food safety step before that product is consumed is at home when it’s being prepared. We want to make sure they know what they’re doing and some of the key areas where mistakes can be made that can lead to illnesses.”

While there is no silver bullet to preventing Salmonella and Campylobacter, Ms. Picard said research still focuses on finding one, and that’s the right strategy. She also agrees with Breeding that educating consumers at home in the kitchen makes a big difference. “We know we could give the consumers a sterile product and if it’s not handled properly or cooked properly, we could end up with the same result,” Ms. Picard said. “Salmonella is one of those few that we know if you handle it properly it’s taken out of the realm of concern as far as from the home.”

In the feed.

Researchers look to feed additives with the hope of knocking down Salmonella and Campylobacter loads before birds arrive at the processing facility. Todd Applegate, Ph.D., department head and professor with the University of Georgia’s Department of Poultry Science, believes feed additives show some promise, but also says, “The efficacy of feed additives on Salmonella and Campylobacter is gray, it’s fuzzy.” Many of the experiments using a limited number of serotypes have not been carried out long enough, Mr. Applegate said, and among other things, the science is just too new. Mr. Applegate covered some of the many different categories of products that fall under feed additives. Specifically, he focused his presentation on probiotics, plant extracts and prebiotics, also typically coming from plants. For example, chicory root produces a high amount of fructooligosaccharides. “The prebiotic component is really the fructooligosaccharide that would produce the beneficial bacteria populations and be synergistic with them,” Mr. Applegate said. “That’s the compound that we’re really looking for.” Short chain fatty acids and beta glucan also have some prebiotic-like activity. According to Mr. Applegate, all these subcategories of prebiotics have somewhat different functions in relation to the animal and the microbial community in the gastrointestinal tract. “They each have a little bit different mechanism,” he said. “All of them are pretty good and we’re looking at combinations of those to try and figure out what that beneficial effect is.”

All the prebiotic feed additives Mr. Applegate mentioned are commercially available and will often be included with a probiotic in a single product. He offered this take away to poultry producers: “I’d say a lot of what we know in this category, how these classes of compounds work in the animal to knock down foodborne pathogens, I would still call it a little bit of a young science.” A graph in his presentation showed 34 articles on probiotic research in Poultry Science and the Journal of Applied Poultry Research, from 1952 to 2006. From 2006 to 2017, the two journals published 167 articles. Mr. Applegate and others continue to try to figure out the role of feed additives in preventing Salmonella and Campylobacter and whether the actual load reduction is predictable. When a company invests in a new product or service, it expects a return on investment and a rate of return. There is some hesitation because a way to calculate the rate of return has yet to be discovered. “Because of brand image and some things that have happened such as recalls, a lot of integrated poultry companies are having a lot of discussions,” Mr. Applegate said. “There is willingness to invest in some of these feed additives, but it’s still an open question. Is it really efficacious? Is it not? Does it really reduce my total load coming in the front door of the processing plant? Those are still open questions.”

In-plant impact.

To control Salmonella and Campylobacter inside the processing facility, staff must not only execute the interventions, but also validate those interventions scientifically to ensure they work, said Juan F. DeVillena, director of quality assurance and food safety at Wayne Farms, during his presentation. He also pointed out that processing plants each have individual needs. “That’s the other part that I touched on when I presented it,” Mr. DeVillena said. “That what I validate for me at my plant might not apply to a different plant in a different place. Mr. DeVillena also talked about the abilities of pathogens to change and become more, or less, threatening as time goes on.Currently, peracetic acid (P.A.A.) has proved effective in the right amounts and applications to help reduce Salmonella, but Mr. DeVillena said during his presentation at least one serotype, Salmonella infantis, has shown resistance, and that P.A.A. is not as effective against Campylobacter. “Campylobacter is the next thing that we need to focus on,” he said. “I don’t know if P.A.A. is going to be the chemical to go to.” Mr. DeVillena said that Campylobacter doesn’t get the same focus as Salmonella, so once Campylobacter does start to make regular appearances on food safety radar, industry will need something other than P.A.A.. “Either the chemical companies are going to have to work on it, and I’m pretty sure they’re already working on it, to develop a new chemical with all the safety considerations, especially employee safety, or other non-chemical interventions for Campylobacter, so we are working on that as well,”

Mr. DeVillena said. Mr. DeVillena also touched on the change in standards brought on by the 1996 HACCP rule. Before HACCP, the standard ratio for Salmonella was 12/51 for broilers and after HACCP the current standard is 5/51. The change was driven by the Initiative for Healthy People 2020. Mr. DeVillena noted however there was not a science to the new standard. The old standard was simply cut in half, and one more removed to go from 12/51 to the new 5/51. In addition to the new standard, categories were added. To meet Category 1 criteria, a facility needed to hit 2/52 for whole birds, Category 2 needed 3-5/52 for whole birds, and Category 3 was >5/52, which fails the standard. Categories 1 and 2 both meet the standard, but to a consumer or buyer unfamiliar with the regulations, Category 1 appears to be better. Mr. DeVillena, as a microbiologist, says statistically the difference between Category 1 and 2 is negligible. Further, he said the difference between 5/52 and 6/52 is negligible as well. He went on to say the numbers used for the new standard and the categories come from a study in the 1950s that stated 25 percent of whole birds were contaminated with Salmonella and 12/51 is roughly 25%, that was the standard. The Initiative for Healthy People 2020 required cutting that by a little more than half, 5/52. The categories were created to showcase a facility cutting the new standard in half, from 5/52 to 2/52. All involved in the session agree that the challenges throughout the food supply chain related to threats posed by Salmonella and Campylobacter are not going away. They will continue to exist throughout nature, but the meat industry, and specifically the poultry processing industry are, and must continue to, work diligently to control the pathogens as much as possible and continue to develop and evolve best practices for doing so. – Source: Food Business News.

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