To Our Valued Subscriber:

As this is the last American Recruiters Global Foodservice Newsletter for 2019, on behalf of me and all my American Recruiters colleagues, we want to THANK all our clients and candidates for working with us this year. Regardless of which segment of the Foodservice Industry you are in, it’s still a people business, and by working together, your organization and American Recruiters continues to provide the industry with the most talented and effective teams.

Again, Thank You for your support. We also want to wish you and your team a great Holiday Season. Forget politics, this is a great time to reflect on the many blessings living here brings and how we as an industry and a nation share the freedom to pursue our goals. To those of you who have family members in the military we thank them for their service and remember you in our thoughts. Best to you all for a safe and enjoyable season and my team and I look forward to assisting you reach your 2020 goals.

Craig Wilson

President American Recruiters

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Global Food-Delivery Battle Heats Up With $4 Billion Deal

European food-delivery giant Delivery Hero has agreed to buy a South Korean rival for $4 billion, heating up the global battle to meet growing consumer demand for delivered meals. Online food-delivery businesses around the world are joining forces and attracting investment as more consumers opt to have their meals brought to their homes or offices, with A,azon.com Inc. and Uber Technologies Inc. joining the fray in recent years. Asia in particular is seen as a hot market, where a rising middle class offers hundreds of millions of potential new customers. However, tapping that potential is costly and companies have struggled to make a profit. Fierce competition has food-delivery startups racing to sign up restaurants, hire motorcycle delivery drivers and offer discounts on popular dishes. They also need to spend big on advertising to convince consumers to try a relatively novel way of purchasing food. Delivery Hero on Friday said buying Woowa Brothers would help it better compete and expand across Asia, as well as solidify its position as the largest food-delivery platform outside of China by number of orders.

The deal comes amid a flurry of consolidation in the sector. Dutch firmsTakeaway.com NV and Prosus NV are battling to buy U.K. food-delivery platform Just Eat PLC—a firm now valued at more than $6 billion—while Amazon recently invested in another British high flier, Deliveroo. Seoul-based Woowa, which launched in 2010, is South Korea’s largest online food-delivery service. The company, which does business under the brand name Baedal Minjok, has more than 8 million monthly active users and fulfilled 365 million orders in the 12 months ended September. Despite the presence of several platforms in the region, Woowa founder Bongjin Kim said the South Korean market was “still in the very early stages of development,” with the majority of customers ordering food by phone. As more consumers across Asia get online and grow accustomed to e-commerce and digital payments, investors are betting they will also turn to apps for sustenance. To fund the fast-growing industry, investors poured $8.2 billion into food-delivery startups in 2018, according to PitchBook, a market-intelligence firm. Asia has been a particularly popular focus for investment, with various local and international platforms vying for growth. Southeast Asia, home to 600 million people, is particularly competitive. Grab Holdings Inc., which last year bought Uber’s business in the region, has a popular service called GrabFood. Earlier this year Grab raised $1.46 billion from Japan’s SoftBank Group Corp. in a deal that valued the company at $14 billion. It competes with Indonesia’s Gojek, which counts Alphabet Inc.’s Google among its investors. Uber said in September it was ending its food operations in South Korea amid intense competition from rivals. Uber Eats does still operate in India, where it competes with Swiggy—part owned by Prosus—and Zomato, which is backed by Ant Financial Services Group, an affiliate of China’s Alibaba Group Holding Ltd. Food-delivery services in China also have deep-pocketed backers, including Tencent Holdings and Alibaba. Berlin-based Delivery Hero isn’t the only European platform expanding in Asia. London-based Deliveroo operates in various markets and has opened a kitchen service in Singapore for multiple restaurants where customers order through its app and dine under one roof. Earlier this year it raised $575 million in a funding round led by Amazon to fuel expansion. However, that deal has since attracted scrutiny from Britain’s antitrust watchdog. At the same time, Deliveroo has pared back some of its business in Europe, closing its operations in Germany earlier this summer, where it faced stiff competition from Takeaway.com’s Lieferando brand, as well as Delivery Hero. – Source: The Wall Street Journal.

Restaurants Kept Adding Jobs in November

The restaurant industry added 25,300 jobs in November, or nearly 1 out of every 10 new jobs in the economy, as the business continues to expand with little sign of a slowdown. New U.S. Labor Department data released Friday shows that the industry now employs 12.3 million people, up more than 300,000 over the past year. Overall, the economy added 266,000 jobs last month, while the unemployment rate fell slightly, to a 50-year low of 3.5%. The report sent stocks soaring. The S&P 500 index rose nearly 1% in early morning trading Friday. The vast majority of restaurant stocks were up, too. Average hourly earnings are up 3.1% over the past year, according to the monthly survey. Wage growth is paramount to restaurant sales growth. Among leisure and hospitality workers, wage growth is up 3.5% over the past year. The restaurant industry has grown considerably over the past decade, buoyed by a growing overall economy. But there are signs of a slowdown more recently even as the industry continues to add jobs at a higher-than-average pace. Same-store sales have weakened this year, according to the Black Box Intelligence index. While same-store sales rose 1.6% in November, much of that was due to a calendar shift, rather than organic sales. And traffic declined 0.9%. Black Box expects weaker same-store sales in December. Restaurant job growth over the past year has been considerably higher than the overall rate of hiring—the number of people employed at eateries has grown by 2.6% over the past 12 months, while overall job count has risen by 1.5%. That has put greater pressure on wages at restaurants while making it particularly difficult for operators to find worker in certain markets. While job growth apparently slowed down this spring, it has resurged in recent months, likely as independents continue opening new locations along with small chains, and as companies such as ghost kitchens experiment with new models. Source: Restaurant Business.

4 operations Trends to Expect in 2020

Reusables will see more widespread adoption: It’s been well over a year since plastic straws were at the epicenter of sustainability debates, and in that time the lens has widened considerably to include, well, pretty much everything else that might hold a takeout meal. Single-use takeout containers, cups and utensils are all under increased scrutiny. In the meantime, a cottage industry has popped up with new packaging materials and “closed-loop” systems to offer alternatives to one-time-use containers. And new laws, such as one in California that allows customers bring their own containers, is paving the way for greater consumer acceptance. As a result, 2020 could be a breakout year for these alternatives. Go Box container. New York-based Just Salad, an early adopter in this area, has offered a reusable bowl for more than a decade. But the last year has seen brands large and small exploring similar options. New York-based fast-casual chain Dig, which has nearly 30 units, recently rolled out a pilot program where reusable melamine takeout bowls are rented, returned and tracked via an app. And in Germany, McDonald’s is piloting a reusable cup program called ReCup, in which customers pay a deposit of 1 euro to receive their drink in a reusable carryout cup that they can return to any participating restaurant. Expect more brands to follow suit. — Christi Ravneberg

Lounges blur the lines between living rooms and dining rooms. Like the fogging of 20-20 vision that can come with age-related presbyopia, restaurants appealing to Millennial customers in 2020 will continue to blur the lines between living rooms and dining rooms. The restaurant lounge has made inroads at such brands as Fogo de Chão, Paul Martin’s American Grill and Punch Bowl Social, all of which have provided areas for lolling about and sharing both culinarily and socially. And lifestyle brands like Restoration Hardware are approaching the trend from the other direction, turning their living-room focus toward hospitality, offering restaurants and wine bars within the confines of the gallery showrooms. “It’s a new occasion,” said Barry McGowan, CEO of Plano, Texas-based Fogo de Chão, which has 42 restaurants in the United States, eight in its home country of Brazil and four in Mexico. The brand has launched its “Next Level Lounge” in Plano and Irvine, Calif., where the restaurants feature areas with soft sofa-like seating and lounge chairs that would feel comfortable in a high-end family room. “We’re adding music,” McGowan said. “We’re reformulating the seating to create a space where they want to hang out.” Restoration Hardware CEO Gary Friedman said the home furnishings retailer continues to roll out food and drink to its stores, which helps the brand “seamlessly integrate food, wine, art and design” and provides a sensory experience that can’t be replicated in online shopping. The retailer has restaurants in its Chicago, Nashville, New York, Minneapolis, Toronto stores as well as in West Palm Beach, Fla., and Yountville, Calif., and “conceptual designs for the restaurants in Atlanta, Tampa and Denver.” — Ron Ruggless

Portion sizes will shrink: The introduction of the fast-casual healthy bowl several years ago was the first step in revolutionizing the historically sandwich-heavy office lunch. But as the wellness craze — led by demand from Millennials and other younger customers — ushered in an era of poke bowls, ancient grain bowls and other wholesome options, there is one final frontier for the healthy lunch: portion size. While ingredients have gotten healthier, portion sizes have not gone down. For example, at the farm-centric fast-casual chain Dig, a roasted chicken market bowl with brown rice and two vegetable sides will cost you an average of 1,070 calories (or more than half of the daily recommended allowance). But as food costs go up, we predict that portion sizes — from traditional quick-service to fast-casual eateries — will start to shrink. It’s both a waste issue and waist issue, as restaurants are beginning to offer half-portion sizes for lunch in particular, so that food waste will be minimized. — Joanna Fantozzi

Employers will consider workers’ money matters: The perennial challenge of retaining good employees isn’t going away any time soon. But next year, expect to see innovative restaurant companies come up with creative ways to keep their teams ngaged. Outside-the-box thinking around benefits and employee quality of life has been gaining steam in recent years. In 2018, Starbucks added backup child care and elder care, and Noodles & Company rolled out expanded maternity leave benefits. Shake Shack made headlines this year by testing a four-day workweek for managers. And Table 301 Restaurant Group in Greenville, S.C., earlier this year introduced a $200 a month rent subsidy to help select employees live closer to the restaurants and cut their commutes. This year also saw a shift toward a tried-and-true approach to retention: Show them the money. Brands including Burger King, Noodles & Company, Lemonade and Modern Market began experimenting with “instant pay” perks that allow employees immediate access to their accrued pay in between traditional pay periods. Chipotle, meanwhile, introduced a bonus program for hourly workers and paid out $700.000 to more than 2,600 employees in its first payout in July. And four-unit Hot Chicken Takeover out of Columbus, Ohio, known for a holistic approach to hiring and benefits, offers cash advances and a savings match program. These moves are often backed by financial education and augmented with budgeting and savings tools to help employees reduce financial stress. As Joe DeLoss, co-founder of Hot Chicken Takeover, put it: “If we invest in our team’s personal stability, we see the benefit of that.” — Christi Ravneberg. – Source: NRN.

Serious Issues Between McDonald’s Franchisees

McDonald’s black franchisees are choosing to leave the chain, Business Insider reported. In 2008, there were about 304 black franchisees at the chain and in 2017, there were 222. The average cash flow of black franchisees is much less than the average cash flow of all of the chain’s restaurants, the report said, citing franchisees, former corporate employees and internal documents viewed by the website. McDonald’s black franchisees are choosing to leave the chain as the disparity in performance between their restaurants and their white counterparts grows, Business Insider reported. The average cash flow of black franchises is much less than the average cash flow of all of the chain’s restaurants, the report said, citing franchisees, former corporate employees and internal documents viewed by Business Insider. The gap has grown over time. In 2012, it was less than $24,600 per month and in 2017, it was about $60,600, according to documents from the National Black McDonald’s Owners Association, or NBMOA, cited by Business Insider.

Some African American franchise owners are leaving the system. In 2008, there were about 304 black franchisees at the chain, but by 2017, there were 222, according to documents from NBMOA. “It is among our top priorities that all McDonald’s franchises in all communities have the opportunity to prosper, grow and achieve their business ambitions,” McDonald’s said in a written statement to CNBC. “These efforts are rooted in our core belief that diversity and a vibrant, inclusive and respectful McDonald’s makes us stronger. McDonald’s is proud to foster opportunities for entrepreneurship, economic growth and mobility in communities across the country.” Business Insider’s report said that black franchises are much more likely to be located in places where sales are lower and costs like security are higher. “In general the trajectory of the treatment of African American Owners is moving backwards,” Larry Tripplett, the CEO of NBMOA, said in a letter obtained by Business Insider to east and west zone presidents in March. “Through no fault of our own we lag behind the general market in all measures.” McDonald’s reviews data from franchisees, including financial qualifications, where they live and whether they are able to meet corporate standards. According to Business Insider, multiple franchisees said they were unable to buy stores with higher cash flows due to their financial situations or other factors. Another concern is a decline in the black leadership at the company. McDonald’s lost many of its black leaders during the 2018 restructuring of its U.S. field organization, Business Insider reported. McDonald’s told CNBC that “the decrease in African American franchisees is also broadly proportional to the decrease in the overall number of franchisees at McDonald’s over the last several years.” In November, Chris Kempczinski took over the company’s CEO after McDonald’s fired its former CEO Steve Easterbrook for having a consensual relationship with an employee, which violated its policy. On the day of Easterbrook’s departure, Tripplett said in his NBMOA letter, “We are cautiously optimistic about some of the results we are beginning to see.” In a written statement from Tripplett shared with CNBC, he said: “Working in collaboration with McDonald’s, we both are committed to delivering world-class hospitality, operational excellence, and increasing guest visits. We are working together to make the McDonald’s brand shine by fully integrating African Americans at all levels. We both recognize that when we move together; we move further. And we are encouraged by our progress.” – Source: CNBC.

Taco Bell Has Developed a Meat Substitute that Looks and Tastes like Ground Beef

Taco Bell, which has yet to jump on the plant-based protein trend, has developed two meatless menu items for international consumers including a Crunchy Taco filled with “meat” made of pulled oats and legumes. The meatless plant-based ingredient, which looks and tastes like ground beef, is seasoned with Taco Bell’s proprietary spices. The taco is topped with shredded lettuce, cheese and creamy chipotle sauce. Over the past week, the so-called Oatrageous Taco became a permanent item in Spain after first testing in Finland. It will land on European menus in summer 2020. The “simple clean ingredients” are “going to be something you’ve never had before at a Taco Bell,” Steven Gomez, the brand’s director of international product development, said during a media tasting held Monday at the chain’s Irvine, Calif. headquarters. But will the crumbled meat substitute reach Taco Bell’s 7,000 domestic locations? “Never say never,” Gomez said. In Cyprus, Taco Bell is using halloumi, a semi-hard cheese made from sheep’s milk, to create a protein substitute in a Crunchwrap. The cheese, which has a higher melting point compared to other types of cheese, is breaded and fried. “It is almost like a fried mozzarella,” Gomez said. “The savory salty deliciousness of the cheese works really well with our ingredients.” He said the permanent menu item in Cyprus might make its way to Taco Bell restaurants in Europe as an LTO. The meatless menu offerings come as Taco Bell restaurants in the U.S. have avoided partnering with plant-based leaders such as Impossible Foods and Beyond Meat. Chains adding or testing plant-based products include KFC, Pizza Hut, White Castle, Carl’s Jr., Subway, Red Robin Gourmet Burgers and Brews and Umami Burger. Rather than partner with one of the major plant-based meat suppliers, Taco Bell has stayed true to its brand by developing its own vegetarian menu. Debuting in September, the Taco Bell Vegetarian Favorites menu includes four items: Black Bean Crunchwrap Supreme, a Black Bean Quesarito, a 7- Layer Burrito and a regular bean burrito. The black bean products were developed in-house for the niche menu. Taco Bell sells 350 million vegetarian items a year. About 9% of all items ordered are either vegetarian or made vegetarian by some type of substitution or removal. The chain has more than 550 international restaurants. – Source: NRN.

Another Broken Egg Cafe Plots Aggressive 2020 Growth

Another Broken Egg Cafe has begun execution of its 2020 growth strategy, which includes a focus on targeting experienced, multi-unit franchisees, development in hot new geographies, and further brand expansion in existing markets that are seeing solid growth. The brand’s strategic growth plans are designed to further capitalize on the continued and projected future growth of the breakfast and brunch dayparts in the years ahead. Another Broken Egg Cafe is scheduled to open seven new cafes by May of 2020. This rapid growth is backed by the brand’s new cafe opening strategy designed to leverage the sales opportunities surrounding each new location and while working together with multi-unit restaurant franchisees looking to expand their portfolio of brands into breakfast and brunch. ABE is eager to work with these newly signed franchisees, several of whom have experience with other historically successful growth concepts like McDonalds, Buffalo Wild Wings, and Five Guys. With plans for 300 cafes by 2025, it is no surprise that Another Broken Egg Cafe is continuing to target its development initiatives toward experienced multi-unit restaurant franchisees looking to expand into breakfast and brunch. The brand’s recent development efforts have been very successful and will help to get 2020 off to a strong start with unit growth in three new states including Arizona, Kansas, and Pennsylvania. By targeting its ongoing development efforts toward existing multi-unit restaurant operators, the brand is looking to expand into priority growth markets like Chicago, Detroit, Las Vegas, Minneapolis and suburban D.C. where the competitive daytime cafe penetration is low and while consumer demand for breakfast and brunch is continuing to grow.

Not only does Another Broken Egg Cafe plan to bring its one-of-a-kind southern-inspired dishes to new states and to new markets, it is also looking to infill states where the brand is currently experiencing solid success. This unit expansion is planned for Alabama, Florida, Georgia, Indiana, Mississippi, North Carolina, Ohio, Tennessee, and Texas together with both new franchise partners and with existing franchise operators of the brand. To wrap up a very successful development year in 2019, Another Broken Egg Cafe recently opened a new corporate-owned cafe in the upscale Destin Commons retail center located in the heart of Destin, Florida. The location for this cafe was an easy choice as the brand has enjoyed ongoing success in nearby Sandestin and Miramar Beach. With leases to be signed before the end of 2019, ABE plans to continue their corporate-owned cafe expansion into Columbia, South Carolina, a new market for the brand, and additional corporate expansion is planned for Jacksonville and Orlando in 2020. The chain has 68 locations in 12 states. – Source: fsrmagazine.

McDonald’s Promotes Ian Borden to New international President Role

McDonald’s Corp. has named Ian Borden, left, to the position of president of the company’s international division, an expanded role created in the aftermath of the firing of Steve Easterbrook. The new role comes after Joe Erlinger was named McDonald’s USA president after Easterbrook’s abrupt exit last month. Erlinger was previously president of international operated markets. He became president of the U.S. division when Chris Kempczinski was named CEO and president of McDonald’s Corp. Borden most recently served as the Chicago-based chain’s president of international developmental licensed, or IDL, markets. In his expanded role, he will continue to oversee global licensed markets while assuming oversight for all international markets including international operated markets, McDonald’s said. He reports directly to Kempczinski. “Ian has a proven record of focusing on the customer to deliver profitable business growth while strengthening collaboration with our global franchisee community,” Kempczinski said in a statement. “His deep experiences leading McDonald’s in markets across the world uniquely position him to connect the dots to drive strong results. I’m delighted to announce his expanded role for McDonald’s and am confident he and the talented leaders in our wholly-owned and developmentally licensed markets will make McDonald’s even better throughout the communities in which we operate.” – Source: NRN.

Murphy Elevated to President of Dunkin’ Americas

Scott Murphy, formerly chief operating officer of Dunkin’ U.S., has been elevated to the role of president of Dunkin’ Americas for Dunkin’ Brands Group, Inc. He assumes the responsibilities from David L. Hoffmann, who remains chief executive officer of Dunkin’ Brands. A 15-year veteran of the company, Mr. Murphy in his new role will oversee operations, restaurant development, franchising, field marketing, supply chain and consumer packaged goods for the approximately 10,000 Dunkin’ restaurants in North and South America. He joined the company in 2004 as director of international supply chain and became vice-president of strategic supply later that year. In 2013, he was named chief supply officer and senior vice-president of international operations. Two years later, he advanced to the role of senior vice-president of operations for Dunkin’ U.S. and Canada. He assumed his current role in 2018. Earlier in his career, he worked at A.T. Kearney, a global management consulting firm. He has a bachelor’s degree in marketing and international business from Georgetown University and a master’s degree in business administration from the Massachusetts Institute of Technology Sloan School of Management. “Scott is a rare leader who is both strategic and impactful,” Mr. Hoffmann said. “He inspires all who work with him through his vision, attention to detail and ability to implement change. During his tenure with the company, Scott has earned the respect of his peers, forged strong relationships with franchisees and suppliers, and contributed significantly to the company’s success with a strong focus on franchisee profitability. He has also been a key leader in implementing the Blueprint for Growth, our five-year strategic plan for Dunkin’ U.S. “His most recent accomplishments include the roll-out of menu simplification, our highly successful espresso relaunch, operational improvements and the expansion of our NextGen restaurants. I am confident that under Scott’s leadership, we will continue to build on our legacy of strong franchisee relations and drive customer noticeable change at Dunkin’.”  Additionally, Dana Reid has been promoted to vice-president of field marketing for Dunkin’ U.S. Ms. Reid joined the company in 2008 as Dunkin’ U.S. field marketing manager and was later promoted to director and senior director for the same division. Prior to Dunkin’, she was vice-president of marketing and communications for the Fenway Sports Group and began her career with MasterCard Worldwide as part of its sponsorships team. She has a bachelor’s degree in sports management from the University of Massachusetts in Amherst. “Dana is a strong people manager with keen marketing skills and solid franchisee relationships, making her the ideal leader to oversee our field marketing team, which works closely with operations and franchisees to drive sales, traffic and brand loyalty,” Mr. Hoffmann said. “With the promotion of these two deserving individuals, I am confident we will better serve our guests, better partner with our franchisees and continue to move the Dunkin’ U.S. business forward.” – Source: Dunkin’ Brands Group, Inc./Food Business News.

Ethan Stowell Restaurants Takes on Investor to Grow Beyond Seattle

After winning a strategic investment in November with an eye on growth, Seattle restaurateur Ethan Stowell is closing three restaurants at the end of the year and converting them to other concepts, the company said. In November, Seattle Hospitality Group announced a strategic investment in Ethan Stowell Restaurants, or ESR, the multiconcept group founded by Stowell in 2007. Terms of the deal were not disclosed, but the goal is to grow the Seattle-focused ESR beyond the Puget Sound region. Seattle Hospitality Group was founded in 2002 by travel and tourism entrepreneur Howard Wright. The company holds interests in some of Seattle’s top destinations, including the recently renovated Space Needle, Chihuly Garden and Glass and several prominent hotels and resorts. “This pairing is the perfect joining of companies that are committed to the Pacific Northwest,” said Stowell in a statement. “Seattle Hospitality Group’s long-term strategic vision of creating best-in-class experiences directly aligns with ours and we are very much looking forward to tapping into Howard’s vast experience and insights as Seattle’s premier hospitality ambassador, while we continue to grow ESR.” With the move, however, comes a change. Three Seattle restaurants will close at the end of the year and be converted. Steve Hooper, ESR’s president, said in a statement that the company is shifting focus to existing growth brands, such as Tavolàta and How to Cook a Wolf. A variation of the latter concept opened this year in New York as Wolf in a flagship Nordstrom location, for example. Overall, the group operates 17 restaurants, as well as three fast-casual locations in the healthy Asian concept Kigo Kitchen. “To better service this increased focus we have found ourselves in the position of needing to simplify what has become a sizable portfolio of different concepts and service models,” said Hooper. “All of our other concepts and locations are strong and performing well.” New Year’s Eve will be the last day of regular business for the small-plate seafood concept Marine Hardware; the grill-centric Bramling Cross and the taco-focused Super Bueno. In their place, Stowell is making the following changes:

Marine Hardware will become an event space for groups looking for more intimate celebrations, the company said. Down the road the location may become a pop-up space for aspiring chefs and restaurateurs to test new concepts.

Bramling Cross will be remodeled in early 2020 to become a dedicated event space. Parent company Ethan Stowell Restaurants has been expanding catering operations and needed a space specifically for hosting larger celebrations, dinners and corporate events, the company said.

Following a redesign and remodel, Super Bueno will be converted to sister concept Tavolàta with the goal of reopening in late Spring. In addition, another Tavolàta location is scheduled to open in Seattle in 2020, which will bring that fresh pasta concept to four locations.

Stowell said in a statement, “We love these concepts. But if I’m being honest, they’ve all been challenging from an operational perspective and never been as successful as they need to be.” – Source: Restaurant Hospitality.

18 States Call for Keeping the 80/20 Tip Credit Rule

The attorneys general of 18 states and the District of Columbia have blasted a proposed change in the way restaurants determine when they’re obliged to pay servers and other tipped employees the full minimum wage instead of taking a tip credit, saying federal regulators’ planned discontinuation of the 80/20 guideline would be illegal. In a letter to U.S. Department of Labor (DOL) Secretary Eugene Scalia, the chief legal officers contend that the agency has not shown the 80/20 rule to be an administrative burden on employers or a source of legal confusion, assertions that might surprise many full-service restaurants.  The 80/20 guideline holds that restaurateurs are required to directly pay servers and bartenders the full minimum wage for nontipped side work that exceeds 20% of their time on the clock. The rationale is that the employees are not earning tips for those duties and hence are entitled to the same wage their nontipped co-workers are paid. Otherwise, employers in all but seven states can count servers’ gratuities as part of their minimum wage. In Massachusetts, for example, where the state minimum wage is $12 an hour, restaurateurs are required to pay bartenders and servers just $4.35 per hour if they collect at least $7.65 in tips. A number of restaurants have been sued for back pay by employees alleging they were entitled to the full wage because more than 20% of their shifts were spent refilling saltshakers and catsup bottles, rolling silverware in napkins or doing similar side work. Restaurateurs often counter that the plaintiffs are exploiting the difficulties of keeping minute-by-minute records of a server’s shift. They also argue that some side work figures into how much employees pocket in tips. By helping to bus and reset tables, for instance, they can serve more customers and increase their gratuities accordingly.

DOL sought to address those issues by by proposing the 80/20 rule be replaced with what it framed as a more realistic guideline. It proposed that employers be permitted to take a tip credit for any side work done just before or after a bartender or member of the waitstaff is servicing customers, even if that time amounts to more than 20% of the shift. Under that guideline, the attorneys general wrote in their letter to Scalia, “employers could schedule servers to start work well before the restaurant opens and to stay long after closing to prepare food, clean, or perform any number of other nontipped duties, without any limit on how much nontipped work may be compensated at the lower service rate.”  In addition, “the proposed rule not only impacts workers, but creates uncertainty for employers while offering ample opportunities for increased wage theft.” Advocates for the restaurant industry don’t agree. “At its core, the tip credit is about tips, not the duties of an occupation,” Angelo Amador, executive director of the National Restaurant Association’s Restaurant Law Center, said in a letter to the head of DOL’s Wage and Hour Division. “That is why the Department should take this opportunity to step back from trying to micromanage restaurant work at the level of task assignment and, instead, return its focus to what the Wage and Hour Division is designed to do: ensure that employees receive the wages” they’re due under federal law. In the letter, the attorneys general also argue that the new rule would be a violation of the Administrative Procedures Act, a law intended to prevent arbitrary changes in regulations based on legislation. The Act requires that any changes be based on a clear need for modification, yet “it is simply untrue that the 80/20 rule has engendered confusion,” the letter contends. Similarly, it asserts that DOL is aiming to “relieve employers of an oppressive administrative burden without providing any evidence that such a burden exists. “We strongly urge the Department to withdraw this proposed change,” the letter concludes. It was signed by all 19 of the attorneys general, who were all described in media reports as being members of the Democratic Party. In contrast, “we encourage the Department to specify in the final rule that so long as side work occurs during the same shift or workday in which the employee engages in the main duties of their occupation, the tip credit is available for the entire shift so long as the other statutory criteria are met,” Amador wrote on behalf of the National Restaurant Association.

Famous Dave’s Parent Company to Open Travis Clark Concept in December

BBQ Holdings, Inc. announced its partnership with Travis Clark for its newest restaurant, which is opening on December 9 at 3510 Northwest Expy, Oklahoma City, Oklahoma, 73112. The upscale barbecue restaurant opening is the first of several new barbecue concepts that the company is launching before the end of 2019. Clark Crew BBQ Founder, Travis Clark is a highly respected Pitmaster, who along with his Oklahoma-based competition BBQ team, have won over 650 top-10 awards, along with World Champion and Team of the Year titles, all while cooking on some of the biggest stages against some of the best teams in the country. “The opening of Clark Crew BBQ marks a major milestone as we continue to work towards curating the best possible barbecue experience for our guests,” says Clark. “The awards don’t come without consistency. At CCB, you can expect a world-class experience each and every time you walk through our doors.” Since partnering with BBQ Holdings in 2018, Clark has worked with the Famous Dave’s Culinary team to improve food quality and consistency across the Famous Dave’s system. His emphasis has been on the core BBQ proteins, including Brisket, Ribs, Pork and Chicken. “We’re looking forward to this new phase of innovation,” says Jeff Crivello, BBQ Holdings CEO. “After celebrating 25 years of serving America’s favorite BBQ with our Famous Dave’s brand, we’re continuing to look for ways to evolve and serve new guests. I know the recipes and processes that Travis spent years creating will accomplish those goals.” – Source: fsrmagazine.

MOD Pizza Announces Rocky Mountain Expansion

MOD Super Fast Pizza Holdings, LLC announced it has expanded its development agreement with Best Pizza, LLC, its exclusive franchisee in Colorado. The deal increases Best Pizza’s development agreement from 25 to 45 locations, and adds Southern Wyoming to their territory. Best Pizza is operated by industry veterans Bob Merullo, Kevin Embree and Scott Schooler, who opened their first MOD in the Denver area in September 2014, and currently operate 16 locations across Colorado. The new MOD locations will open over the next seven years. “Colorado has been a fantastic market for MOD, and the team at Best Pizza has done an incredible job bringing the MOD brand to life across the state,” says Scott Svenson, co-founder and CEO of MOD Pizza. “As our largest franchisee, they continue to develop high performing stores, consistently deliver a great experience to customers, and are making positive impacts in each of their local communities. We are really proud to be working with Bob and his team and are confident their success will continue as they expand further in Colorado and into Southern Wyoming, extending MOD’s footprint to 29 states.” Seattle-based MOD Pizza is a pioneer of the fast casual made-to-order pizza segment, founded in 2008 by entrepreneurs Scott and Ally Svenson. The Company has been recognized as the fastest growing restaurant chain in the United States for the past four years, and currently has over 460 locations system-wide*, with an additional 20+ stores slated to open by the end of 2019. At its core, MOD is purpose-led company committed to using the business to make a positive social impact in the communities it serves. “We’ve loved introducing MOD to new communities over the past several years, and we’re really excited for this next stage of development,” adds Bob Merullo, CEO of Best Pizza, LLC. “It’s rare to find a brand that is steadfast in its commitment to build a successful business while putting its people and their communities first. We’ve found that unique mix with MOD and we’re looking forward to what the future holds.” Best Pizza opened the first MOD Pizza franchise location in September 2014 and currently operates 16 locations spread across the greater Denver area, Colorado Springs, Fort Collins and Greeley. – Source: Sapore.

E. coli Outbreak Spreads to 23 States

An outbreak of E.coli linked to romaine lettuce grown in the Salinas region of California has spread to 23 states, according to the Food and Drug Administration (F.D.A.). Health officials traced the outbreak to three farms in the region but are still investigating the exact source. A total of 102 illnesses and 58 hospitalizations have been reported, according to the Centers for Disease Control and Prevention. The cases are concentrated in Wisconsin, where 31 illnesses have been reported. Other states with cases include Arizona, California, Colorado, Florida, Iowa, Idaho, Illinois, New Jersey, North Carolina, Michigan, Minnesota, Montana, Nebraska, Pennsylvania, South Dakota, Texas, Virginia and Washington. “This remains an evolving and fluid situation,” the F.D.A. said. “Information about our findings will be forthcoming as the investigation proceeds.” The agency still advises restaurants, retailers, suppliers and distributors to voluntarily withdraw product grown in the region and withhold distribution of Salinas romaine for the remainder of the growing season. The region, which includes Santa Cruz, Santa Clara, San Benito and Monterey counties, produces 61% of the nation’s leaf lettuce. Romaine harvested outside of Salinas is not currently implicated in the outbreak investigation. –Source: Food Business News.

Keeping Ready-to-Eat Meats Clean and Safe

Safe and clean has become a mantra in the ready-to-eat (R.-T.-E.) meat space. Preservatives are added to R.-T.-E. meats to maintain food safety and extend shelf life by retarding oxidation, but they also must meet consumer expectations. Clean ingredients have become a requirement to draw and hold the attention of label-conscious consumers. “Future of food,” a white paper published by the ingredient solutions manufacturer Kerry, Beloit, Wis., underscores the importance of clean label to many consumers. The research, which included a survey of 2,100 ingredient and nutrition-conscious consumers, showed that “clean label is the foundation and a building block in consumers’ overall expectations from food and beverage.” Consumers are looking beyond clean label as they filter unacceptable ingredients, according to the white paper. They now are more attentive to the added nutrition and functional benefit of ingredients. “The findings from this research study is case-in-point of how consumers are constantly evolving in their needs and expectations from food and beverages,” said Soumya Nair, director of marketing insights at Kerry. “Clean label, once a differentiator and trend, is now a table-stake and an expectation from consumers. While the gravity of clean label and its subsequent attributes differ by the food or beverage in focus, its importance among consumers has only been compounding over the years.” Ready-to-eat meat processors have several ingredients perceived as clean to consider. Propionic acid, acetic acid and citric acid all fall into the organic acid category. Propionic acid is considered the most effective of the acids while vinegar, a natural source of acetic acid, is being used by processors as a label-friendly, natural antimicrobial. Buffered vinegar is where a great deal of innovation has been taking place; it is an ingredient people understand and don’t view as a chemical preservative. Suppliers offer liquid and dry formats of buffered vinegar, even no-sodium and organic options, making it easy to add to brines, marinades, spice blends or it can be directly applied to meat. Corbion, which has U.S. offices in Lenexa, Kas., recently introduced organic vinegars under its Verdad product line. The three new vinegar products are formulated for organic and non-G.M.O. processed meats. Verdad PC300 Organic Vinegar is buffered with potassium carbonate, a common treatment, and contributes no sodium to the finished product, according to Corbion. Verdad SB300 Organic Vinegar is buffered with baking soda. Verdad OV300 Organic Vinegar delivers a low-cost solution that contributes no sodium to the end application.

Target applications for the ingredients include turkey breast, chicken cuts or strips, ham, cooked and fresh sausages, beef or pork pot roast, roast beef and enhanced beef or pork. “Vinegar-based solutions leverage natural fermentation processes to help the industry answer the growing demand for products with simpler labeling,” said David Charest, vice-president — meat industry for Corbion. “Our new organic solutions respond to a dimension of the clean label market that just keeps growing.” Rosemary and green tea extracts often are combined with buffered vinegar for a multi-prong approach to extending shelf life by addressing color retention and food safety with one ingredient. Some suppliers offer natural, clean label pathogen protection ingredients made from fruit and spice extracts. They often are described as true “uncured” ingredient solutions, as they are free of celery-based ingredients, which are inherent sources of natural nitrates, and chemical nitrites. Such ingredient systems create several hurdles for pathogen control, including polyphenol and flavonoid antioxidants, as well as dried vinegar. Blends of essential oils and oleoresins also have been shown to exert food safety benefits. As the market for snacks featuring blends and combinations of meat and other primary ingredients continues to proliferate, it is important for manufacturers to understand the challenges of creating a safe product that meets consumer expectations. – Source: Food Business News.

Selecting Packaging Technology to Ensure Food Safety

Meeting the requirements of the Food Safety Modernization Act (FSMA) and ensuring the safety of baked and snack food products in today’s market is paramount, and selecting the right technology for the job can be critical. Since product characteristics differ from pies to cakes to salty snack foods, sourcing the right inspection and detection technology for each application is important to ensuring products are contamination-free. FSMA outlines that manufacturers must identify hazards, define preventative controls to eliminate or reduce the hazards, determine process parameters for these controls and then implement and continue to monitor the process to ensure corrective actions are taken to verify the system is working properly. Preventive controls for physical hazards often include metal detectors and X-ray detection systems designed for food products. Looking at the use of metal detectors for baked items, one of the biggest challenges is “product effect.” This occurs when a product has a conductive property impacting the magnetic field generated by the metal detector. This can be found in high salt, high moisture product environments such as warm bread coming out of the oven. The warm bread coupled with the high salt content can impact the metal detector’s ability to distinguish between actual non-ferrous metal contaminants and the false signal given by the combination of typical attributes. This is further complicated by the varying densities, air bubbles and other physical characteristics of each loaf, since no two loaves are exactly alike. In these situations, X-ray equipment produces the desired results as product effect is not a factor. For products such as cakes and pies, the recommended inspection machinery for these products is dependent on the packaging materials used. Since most pies are packaged in aluminum foil pans, metal detectors can be used to examine ingredients and dough. However, after the pie has been placed into the pan and/or folding carton, X-ray inspection is needed.

Typically, metal detectors work well with frozen baked foods that no longer have a product effect that “just out of the oven” versions do. The trick is to ensure that the freezer is efficient and is holding the product at the correct temperature. If a product isn’t completely frozen, its unfrozen center may “look” like a piece of metal to the detector. Although most snack foods don’t have the product effect issues found in baked items, spotting contaminants is challenged by the packaging material of choice. The majority of snack foods today are packaged in metalized film — which means these packages are not good candidates for metal detectors. Sourcing the right technology for each baking and snack food application is critical to food safety. The next stop in the Pack Expo portfolio of trade shows, Pack Expo East, set for March 3-5, 2020, in Philadelphia, provides the ideal opportunity for snack food manufacturers to explore new advances in food safety technology and find solutions to packaging challenges. Produced by PMMI, The Association for Packaging and Processing Technologies, the three-day event will bring together 7,000 attendees, with 400 companies showcasing new technologies in 100,000 net square feet of exhibit space. Pack Expo East attendees will enjoy all the educational and networking opportunities traditionally offered at Pack Expo while allowing for more face-to-face time with exhibitors to find applicable answers. For more information and to register for Pack Expo East 2020, go to www.packexpoeast.com. Registration is $30 through Aug. 30 after which the price increases to $100. – Source: Food Safety Monitor.

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