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To Our Valued Subscribers:

What a beginning to June. As the tragedy that started in Minneapolis and the aftermath have spread throughout the country, just as many states were in the process of reopening, this is certainly a time of uncertainty for all business. Our industry has been and continues to be one of the hardest hit. With the demonstrations and in some cases civil disorder, many cities have had to levy curfews, and limit, if not eliminate access to its major areas. Again, not good news for our industry. There is some better news as the stock market is showing signs of rebounding to pre-Covid-19 levels and many organizations are putting together their reopening strategies. Most manufacturers we have contacted expect to be fully operational by the end of June. Good news for sure. With the current state of cultural divisions, a few tips I have gleaned from an article I read authored by noted African American author and leadership consultant, Alaina Love , gives some tips as to how cultures can become more inclusive. The following are of two of her many suggestions:

  • Offer opportunities for employees of all backgrounds to share with you and with their colleagues what they are experiencing. Scheduling a standing audio or web call on this subject is way for employees to feel heard and offers an opportunity for learning — the rare silver lining that may come from this most recent tragedy.
  • Engage your employees in developing a long-term solution: recognize that what you’ve done in the space of inclusion and diversity in the past may be insufficient for the new norm we are operating within. Your employees are experiencing the company culture directly and are in the best position to offer ideas about how to improve it. Invite their voices to be heard, listen to them, and implement their ideas

These are just two of the many suggestions she has; and, if you would like to discuss these or other suggestions, my American Recruiter colleagues and I have, give them or me a call. Also, we would like to discuss our new Outplacement Gateway Services with you if you have not responded top our last invitation to see how the program can provide a real cost savings to your company. Enjoy the latest edition of American Recruiters Global Foodservice News and stay well.

Craig Wilson

President, American Recruiters

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Libbey, Glass Tableware Maker, Files for Bankruptcy

Libbey, a glass tableware maker, joined the parade of retail-related companies filing for Chapter 11 bankruptcy amid the coronavirus pandemic. “While we entered 2020 with positive momentum from our strong finish in 2019, the dramatic and prolonged impact of Covid-19 on the demand for our products and on our business is truly unprecedented in Libbey’s more than 200-year history,” Libbey CEO Mike Bauer said in a statement. “As a result, entering this process is a necessary step to address our liquidity, strengthen our balance sheet and better position Libbey for the future.” The filing applies only to the company and its U.S. units. Libbey’s international units in Canada, China, Mexico, the Netherlands and Portugal aren’t included and are operating normally. Libbey is in talks with its lenders and other stakeholders regarding the terms of a consensual financial restructuring plan. The company has $160 million in agreed financing from some of its existing lenders. This includes $100 million revolving credit facility and a $60 million term loan. “Following court approval, the company expects this financing, together with cash flow from operations, to support the business during the court-supervised process,” Libbey said. It joins storied names such as Neiman Marcus, J.Crew and Hertz that also have turned to bankruptcy. Many of the bankrupt companies were struggling before the pandemic. Libbey reported revenue of $208.9 million for the fourth quarter, down 1.3% from a year earlier. Libbey shares closed at 79.57 cents Friday, down 1.78%. The stock has dropped 44% over the last three months. – Source: The Street.

Macrow to CMO at McDonald’s in Management Shuffle

McDonald’s Corp. announced the promotion of Alistair Macrow to senior vice president, chief marketing officer, in charge of global menu strategy, global brand, global insights, family, and global marketing enablement at the company. Mr. Macrow assumes these responsibilities from Colin Mitchell, senior vice president, global marketing. Mr. Mitchell is leaving the company “… in search of a new challenge,” said Christopher Kempczinski, president and chief executive officer of McDonald’s. “Many in the system — and particularly those in our European and Asian markets — will know Alistair,” Mr. Kempczinski said. “He has a reputation for setting bold visions and driving meaningful results. In his nearly 15 years with McDonald’s, Alistair has repeatedly tapped into his intimate knowledge of the customer to make holistic brand visions tangible — first in the UK and most recently as chief marketing officer for our internationally operated markets. Colin and Alistair will work together to ensure a smooth transition, and Alistair will work with Ian Borden to identify his successor.” Mr. Macrow also will work to strengthen the company’s marketing training programs and career planning process to develop the next generation of CMOs for McDonald’s. Working in partnership with Mr. Macrow will be Morgan Flatley, senior vice president and US chief marketing and digital customer experience officer. Ms. Flatley oversees field marketing, digital, media, customer relationship management (CRM), brand content and engagement, consumer insights and strategy, and menu for the US market. “Morgan has significantly strengthened our strategic marketing capabilities in the US and globally and built strong relationships with our agency and owner-operator partners,” Kempczinski said. “As we emerge from this global pandemic, consumers’ trust in the McDonald’s brand and compelling marketing programs in every country where we operate will be critical to re-establish the strong business momentum we enjoyed leading into this crisis, I’m confident Alistair and Morgan can lead McDonald’s to even greater heights following this crisis. More importantly, both personify the values of inclusivity and innovation that define McDonald’s, and that I expect from our senior leaders.” – Source: Food Business News.

Starbucks Accelerating Store Portfolio Transformation

Starbucks Corp. announced plans to accelerate the transformation of its store portfolio in the United States through the integration of the physical and digital customer experience. Over the next 18 months, Starbucks will increase convenience-led formats in company-operated locations with drive-thru and curbside pickup options, as well as new Pickup-only locations. The store experiences will be powered by the Starbucks App, the company said. “Starbucks stores have always been known as the ’third place,’ a welcoming place outside of our home and work where we connect over a cup of coffee,” said Kevin Johnson, chief executive officer at Starbucks. “As we navigate through the COVID-19 crisis, we are accelerating our store transformation plans to address the realities of the current situation, while still providing a safe, familiar and convenient experience for our customers.”The store portfolio transformation includes the expansion of new Starbucks Pickup stores in dense markets, including New York, Chicago, Seattle and San Francisco. Convenience-led enhancements, such as drive-thru and walk up windows, will be expanded in suburban areas. Store layouts will be renovated to include a separate counter for mobile orders at high volume locations. Before COVID-19, approximately 80% of US transactions were on-the-go, driven in part by the Starbucks App, which allows customers to order and pay ahead. The strategy of adjusting locations through store renovations, new formats, relocations and new builds aligns closely with evolving customer preferences as a result of the pandemic, including higher levels of mobile ordering, contactless pick up and reduced in-store congestion, Mr. Johnson said. The company’s first pickup-only store began operating in Penn Plaza in New York City last year. A second location, near Grand Central Terminal, will open soon. In addition to new Pickup stores, Starbucks will increase the number of stores offering curbside pickup and will pilot a select number of locations to exclusively offer the format. Expanded drive-thru capabilities include opening new locations outside of densely populated cities and in new markets, as well as new experiences that could include double lane drive-thru or drive-thru plus curbside pickup. In conjunction with the opening of new stores with updated formats, Starbucks will close up 400 stores in North America during the next 18 months, including 200 in Canada. – Source: Food Business News.

Just Eat in Pact to Purchase Grubhub

The European food delivery company entered into a definitive agreement to acquire 100% of the shares of Grubhub in an all-stock transaction. Combined, the two companies will create the largest online food delivery service outside of China, measured by gross merchandise value and revenues. The announcement comes after several weeks of negotiations between Uber and Grubhub over a potential combination. Uber has expressed a need for consolidation in the food delivery space but also said “that doesn’t mean we are interested in doing any deal, at any price, with any player.” Grubhub went public in 2014 and was the No. 1 food delivery service in the United States for several years. Growing competition has weighed on the company recently, with Matt Maloney, chief executive officer at Grubhub, citing “promiscuous diners” using more than one delivery app as a major challenge. The deal builds on the recent $11 billion merger of UK-based Just Eat PLC and The Netherlands-based Takeaway.com. It represents the company’s entry into the US food delivery market and expands its existing presence in North America through the Canadian business SkipTheDishes. “Matt and I are the two remaining food delivery veterans in the sector, having started our respective businesses at the turn of the century, albeit on two different continents,” said Jitse Groen, CEO and founder of Just Eat Takeaway.com. “Both of us have a firm belief that only businesses with high-quality and profitable growth will sustain in our sector. I am excited that we can create the world’s largest food delivery business outside China. We look forward to welcoming Matt and his team to our company and working with them in the future.” Mr. Maloney will run the combined company’s North American business and join its board. “I’ve known Jitse since 2007 and his story is much like mine,” he said. “Combining the companies that started it all will mean that two trailblazing startups have become a clear global leader. We share a focus on a hybrid model that places extra value on volume at independent restaurants, driving profitable growth. Supported by Just Eat Takeaway.com, we intend to accelerate our mission to be the fastest, best and most rewarding way to order food from your favorite local restaurants in North America and around the world.” – Source Food Business News.

Investment Group Acquires Krystal Restaurants

Krystal filed for bankruptcy in January and was put up for sale as part of the reorganization process. Fortress emerged as the successful bidder of the business. Thomas Stager was named president of Krystal, effective immediately. He replaces Tim Ward, former president and chief operating officer. Mr. Ward, along with former chief financial officer Bruce Vermilyea, are no longer with Krystal. Additional company plans will be announced soon, the company said. Mr. Stager is a long-time leader in the restaurant industry and an operator who has led successful turnaround assignments in both franchisee and franchiser sectors with large brands including Pizza Hut and Arby’s, Krystal said. “The new partnership is excited to continue growing the brand, maintaining an overriding focus on enhancing customer experience,” said Angela Johnson, vice president of marketing for Krystal Restaurants. “Even during this unusual time, our iconic brand continues to perform well, and we see exceptional opportunities for growth looking ahead.” Krystal Restaurants is known for serving hamburgers on a square bun at 300 restaurants in 10 states. Krystal’s Atlanta-based Restaurant Support Center serves more than 6,000 employees.  Fortress Investment Group is a global investment manager with offices in Atlanta and approximately $43.5 billion of assets under management as of Dec. 31, 2019. Golden Child is an active investor and manager in the restaurant sector and has extensive turnaround experience. – Source: Food Business News.

Restaurant Transactions Improve as 1.4 Million Workers Return to the Job

Major restaurant chain customer transactions have continued improving as more dining rooms reopen. Transactions were down 18% year-over-year in the week ended May 31, up 3% from the previous week, according to data from NPD. Transactions at major full-service chains were down 37% year-over-year, a 15% improvement from the prior week. Quick-service restaurant chain transactions declined 16%, compared to an 18% decline in the week ended May 24. Recovery has been slower in states and regions where restaurants remain closed for in-store dining. New York and California saw a 34% and 27% decline in restaurant transactions during the last week of May, respectively, NPD said. Transactions in Kentucky, which lifted its ban on in-store dining May 11, declined 2%. “The United States foodservice industry today remains solidly in the re-start phase as restaurants begin to reopen their on-premises operations,” said David Portalatin, food industry adviser at The NPD Group. “The industry will move to the recovery phase when all states reopen on-premise dining and we can begin to make a detailed assessment of how many permanent restaurant closures there are and how that will affect what the industry will look like as it reemerges.” The restaurant industry also rehired approximately 1.37 million workers in May, according to federal employment data released June 5. The industry employed more than 7.5 million workers throughout the month, up 22% from April’s historic low of 6.3 million but down 37% from February. “While there is still a very long road to recovery for the restaurant industry, (the) jobs report is encouraging for the nearly 8 million industry employees laid off during the shutdown,” said Tom Bené, chief executive officer of the National Restaurant Association. “As the economy begins to recover, restaurants are reopening and employees are being rehired. The 1.4 million restaurant jobs added in May is nearly three times more job gains than the next closest industry.” Source: Food Business News.

Carl Howard, CEO of Fazoli’s, Discusses how the Chain has Thrived Dduring the Coronavirus Pandemic

Restaurants have had to adjust to a completely new set of circumstances since the novel coronavirus pandemic struck in mid-March, and most of them are still trying to build back sales that were devastated as dining rooms were required to close and people were told to stay home to avoid contracting or spreading the virus. Forced to find new ways to drive traffic and build revenue, many operators made innovations that will also serve them well as society opens up. Limited-service Italian chain Fazoli’s made a number of innovations in response to the crisis, some that were focused on the new situation, such as discounted bundled meals, and others that arguably should have been implemented earlier, such as speeding up cook times and streamlining drive-thru service. Carl Howard, who has been the 215-unit chain’s CEO since 2008, has overseen all that and the result has been an actual increase in same-store sales in May — in fact, it was the highest-grossing May on record. In this episode of the In the Kitchen with Bret Thorn podcast, Howard discusses how Fazoli’s is on track to surpass last year’s sales, operational changes made to comply with new regulations, and how the chain is moving forward with low-carb and gluten-friendly innovations that were tested last year. – Source: NRN.

Darden Inches Closer to Life as Normal

Darden announced that dine-in traffic at flagship brands Olive Garden and LongHorn Steakhouse has led to an improvement of more than 10 percentage points in same-store sales. As of Sunday, 49 percent of dining rooms were open in a limited capacity. The company expects more than 65 percent to be open by the end of May. The news comes as more than 60% percent of the states have announced reopening guidelines for dining rooms in some fashion. Darden started reopening dining rooms April 27 at 25 to 50 percent capacity, depending on the state or local mandate. At Olive Garden, same-store sales were down 38.1 percent in the week ending May 17. For restaurants with dining rooms open specifically, comps slid 26.1 percent with 398 restaurants open for an average of 6.7 days.  For LongHorn, comps were down 44.1 percent in the week ending May 17. But at units with dine-in traffic, same-store sales decreased 28.1 percent with 275 dining rooms open last week for an an average of 6.9 days.  Darden’s weekly cash burn rate is now less than $10 million, including capital expenditures. In early April, the burn rate was approximately $25 million per week. The company has $700 million in cash on its balance sheet and has access to more than $1.4 billion in liquidity. “As we continue to reopen our dining rooms, we remain dedicated to providing a safe environment for our team members and guests,” CEO Gene Lee said in a statement. “Early signs show that our loyal guests are grateful for the opportunity to dine-in with us, and they appreciate the added safety measures we have implemented. At the same time, our to-go business remains strong. I am pleased that we are able to return some team members from furlough to support these phased openings, and we look forward to safely serving more guests as more communities begin to reopen.” – Source: fsrmagazine.

Investments in Workers Helped &Pizza, Tender Greens and Brinker International Weather the Coronavirus Crisis

Early investments in being “employee focused” has helped &Pizza weather the pandemic with about 90% of workers employed, 85% of the 50-unit chain’s restaurants open and “putting up a fair amount of profit,” said CEO Michael Lastoria on Friday. Tender Greens tapped its solid relationships with farmers and other foodservice businesses and had success offering grocery boxes — selling some 20,000 at the height of the shutdown, said CEO Denyelle Bruno. Brinker International, parent to more than 1,250 Chili’s Grill & Bar and Maggiano’s Little Italy, said developing solid general managers paid off, building a team of community leaders that could “stand on their personal reputations and management styles and sense of belonging,” said Rick Badgley, chief people and administrative officer. The three executives shared their strategies on a panel titled “Power & Purpose: A Lidership Panel,” as part of the Restaurants Rise digital summit. Lastoria said &Pizza benefited from being “digital first” long before the pandemic, leaning in as guests increasingly shifted to digital ordering. But Lastoria also credited early moves to invest in “tribe members,” as &Pizza calls its workers. In mid-March, as states began to shut down dine-in service, Lastoria said the company made the commitment to increase wages across the board as an incentive to encourage workers to show up. &Pizza also partnered with the ride-sharing company Lyft to provide affordable effective transportation to work, extended sick pay and launched a campaign to serve pizzas to hospitals, which gave workers an opportunity to feel they were doing something important for the health of their communities. “Those things combined allowed us to keep over 90% of our workforce employed through this, including in corporate, which we call support, and it’s been really healthy, at least for our brand. The most important thing to grow out of this: you need a workforce that feels appreciated, motivated and encouraged to show up and do the right thing and to want to help lift up this company,” he said. Bruno agreed that making that kind of investment in workforce culture can help keep team members loyal and connected through a crisis. “If you’re waiting for a crisis to do the kinds of things you need to do to make sure you have loyal employees and that people feel committed … if you’re waiting for those opportunities to show your people you care or your commitment, you’re going to fall short,” she said. “I have spent my career focusing on employees, and even to the chagrin of people I’ve worked for on occasion,” she added. “Focusing on the guest to me is secondary because I think if you’re making a great product and if you’re really supporting and developing and training and listening to your team members, they’re going to carry the brand.” All three executives shared how their respective companies addressed the unrest following the death of George Floyd at the hand of Minneapolis police officers. &Pizza offered workers three days’ paid time off for activism. Tender Greens is expected to launch a new program beinging fresh food to those in need in South Los Angeles, and Brinker will continue to emphasize diversity and how restaurants can serve underserved communities. Despite the challenge of the pandemic and weeks of protests, all three chains said they see opportunities for growth ahead. “Some will be for sad reasons and some will be because some brands weren’t relevant going into this,” said Bruno. “For those that have the capital and the product to succeed in the new world, there will be opportunities.” “We’re not running out the door, as we all know capital is a bit tighter,” he added. “But there are certain markets, we’re hearing from both brokers and others, that it could be an opportunistic time to look at some growth avenues while still balancing the fiduciary back to shareholders and what your capital constraints are. But we’re optimistic.” — Source: Nation’s Restaurant News and Restaurant Hospitality.

Earl Enterprises Buys Bravo Cucina Italian and Brio Tuscan Grille Restaurants

Earl Enterprises, the parent company of Buca di Beppo, Earl of Sandwich and Planet Hollywood, has confirmed the purchase of Bravo Cucina Italian and Brio Tuscan Grille respaurants in a deal that will bring back 4,000 employees left in “limbo” since FoodFirst filed for bankruptcy, Robert Earl, chairman of Earl Enterprises, said. Orlando-based Earl Enterprises said: “We agreed to assume at least 45 leases from the existing portfolio. We’re still finalizing that exact list, but we are optimistic that the final count will be higher than 45.” Amid the COVID-19 crisis, FoodFirst permanently closed or “rejected” 48 of the company’s nearly 100 locations and filed for Chapter 11 bankrptcy protection. According to a May 26 bankruptcy filing, the purchase price would include $25 million to be credited against the debt owed by the seller to the buyer, plus $50,000 in cash and $4.5 million in assumed liabilities. At the time, Earl Enterprises said it was interested in at least 45 of 53 Bravo/Brio locations left operating. “We’re very excited about adding these restaurants to our group and look forward to not only investing in the future of Brio and Bravo but also the employees who are the backbone of these two restaurants,” Earl said in a statement. Brio has locations in 12 states, including Arizona, California, Delaware, Florida, Kentucky, Michigan, Missouri, Nevada, New Jersey, Ohio, Texas, and Utah. Bravo has restaurants in 12 states, including Alabama, Florida, Kentucky, Michigan, Missouri, North Carolina, New Mexico, Ohio, Pennsylvania, Tennessee, Virginia, and Wisconsin. The company said it is in the process of reopening dining rooms in an organized manner. “Fans of these two beloved restaurants can rest assured that the inspired cuisine, gracious service, and unique charm that make up the brand identities of Brio and Bravo will not only be preserved but nurtured to reach even greater heights,” Earl Enterprises said in a statement. – Source: NRN/Earl Enterprises.

Outback Steakhouse Parent Offers new Protocols, Including Letting Patrons Wait in Cars

Bloomin’ Brands Inc., parent to the Outback Steakhouse, Carrabba’s Italian Kitchen and other brands, has reopened dine-in capacity at about three-quarters of its U.S. restaurants and expects to have some indoor seating at “substantially all” of its domestic dining rooms by the end of June, the company said. The Tampa, Fla.-based casual-dining company, which also owns the Bonefish Grill and Fleming’s Prime Steakhouse & Wine Bar, said that as of June 7 it had 760 company-operated U.S. restaurants offering limited in-restaurant dining, though operations had changed since state and local governments had imposed coronavirus restrictions. For example, customers are allowed to wait in their autos until their tables are ready. “We are leveraging our table management notification system to allow guests to wait in their cars for their table,” said David Deno, Bloomin’ Brands CEO, in a business update.The company has also instituted additional sanitation and disinfecting measures, enhanced hand-washing, use of gloves and face coverings for employees and contactless payment options for customers. “Each dining room seating configuration has been modified to adhere to social distancing and reduced capacity standards,” Deno said. For its Outback brand, which had 373 restaurants open for dine-in service as of June 7, same-store sales were down 13.6% from the prior-year period. “We are encouraged by these sales trends as we begin to reopen our dining rooms,” Deno said. “By the end of the month, we expect to have substantially all our domestic restaurant dining rooms opened with limited seating capacity.” Across all four of its brands, Bloomin’ said same-store sales had improved from negative 42.2% in the week ended May 10 to negative 28.3% in the week ended June 6. By brand in that five-week period, the company said same-store sales improved for: Outback, to negative 24.7% from negative 32.8%; Carrabba’s, to negative 21.4% from negative 39%; Bonefish, to negative 40.5% from negative 62.4%; and Fleming’s, to negative 45.2% from negative 66.9%. Dine-in capacity by brand in the week ended June 10 included: 373 Outback; 153 Carrabba’s; 133 Bonefish; and 48 Fleming’s. Other stores were offering off-premise service. Deno said that with the COVID-19 restrictions in March Bloomin’ had made the decision not to furlough employees, which smoothed the reopening of dine-in service. “Our decision to not furlough any employees during this pandemic has allowed us to quickly prepare our restaurants for the reopening of dining rooms in a safe and efficient manner,” he said. The company was “tightly managing” its cash burn. As of June 11, Bloomin’ said it had total liquidity position of $493 million, which included about $128 million of cash and $365 million of revolving-credit capacity. “Our liquidity position over the last several weeks has improved due to increased sales performance, working capital inflows and earned tax credits for employee relief pay related to the CARES Act,” the company said, referring to the Coronavirus Aid, Relief and Economic Security legislation passed by Congress and signed by President Donald Trump on March 27. – Source: Bloomin’ Brands.

Rubio’s Permanently Closing 7% of its Stores

Fast-casual Mexican chain Rubio’s Coastal Grill is permanently closing about 7% of its units, pulling out of Colorado and Florida because of the impacts of the coronavirus on its business, the company confirmed. The Carlsbad, Calif.-based brand, which has approximately 170 locations, will close six stores in Colorado and six in Florida. “Unfortunately, due to the business impact of COVID-19, Rubio’s has made the difficult decision to close 12 locations in the Colorado and Florida markets, and is in the process of formalizing these closures now,” a chain spokeswoman said. “Rubio’s will continue to focus on their core markets—California, Arizona and Nevada.” The chain, which serves traditional Baja dishes, has been shrinking in recent years. It had 204 stores in 2018, according to Restaurant Business sister company Technomic. Its sales remained largely flat from 2018 to 2019, according to Technimic. Rubio’s generated $232 million in sales in 2019. It ranked 158th on Technomic’s Top 250 largest chains of 2020. – Source: Restaurant Business.

A Letter from Tom Ben

In light of all that has happened in our industry, in our communities, and in our businesses during this unprecedented time, I know it is sometimes hard to know what tomorrow brings. Having said that, I am confident that the passion, creativity, and entrepreneurial spirit that has made this industry great for so many years will enable us to emerge, once again, stronger, more cohesive and committed to serving our guests and our communities for the future. As a veteran of the restaurant and foodservice sector, I am certain that there is no other industry that will be more important or have more influence in this nation’s turnaround than our own. As president and CEO of the National Restaurant Association, I am committed to engaging all parts of the restaurant and foodservice industry to come together as one—chains, independents and franchisees; suppliers, distributors, and operators; and the national and state restaurant associations—so that we may use our collective experience and knowledge to advance a thriving restaurant and foodservice community, while enhancing the quality of life for all. The limitless opportunities our industry provides for everyone is what drew me to this position, especially at a time like this. The restaurant and foodservice industry is one of the only places I know where an employee can join the workforce in an entry-level role, just as I and many of you did, and work up to the most senior levels.  Those of us in the restaurant industry are the prototype for servant leadership. It is rare to find a leader in our industry who hasn’t spent time in the kitchen of a restaurant washing dishes or in the dining room serving customers. These experiences shape who we are as leaders and help us to always remain humble while keeping our customers at the forefront of our decision making. It is truly an honor to be given the opportunity to lead this industry into a new era. To me, that means listening intently to the needs of operators and serving our industry with the same passion, dedication and enthusiasm that restaurants serve their customers. Most looking forward to: “Leveraging my industry knowledge and experience in partnership with the talented team of professionals at the Association and Foundation to create value for our members and ultimately make a difference for the industry.” – Source: National Restaurant Association/Restaurant Business.

Food Safety Audits During COVID-19

The coronavirus is fundamentally changing the way the food industry thinks about all kinds of processes and procedures — including, in many cases, food safety outbreaks. The outbreak is “uncharted territory for everyone,” said Candy Lucas, senior director of food safety, South division, for Kieler, Wis.-based PSSI. “It’s hard to say how this will impact any future audits of grocery suppliers as there are so many things to consider,” Lucas said. “Any audit would be government regulated, and at this point there has been no type of address to this pandemic.” PSSI believes it might have the effect of changing the housekeeping and GMPs in grocery stores in how often they’re cleaning and sanitizing all the areas of the store. The company has already seen changes with grocery stores closing early to deep clean at night, offering sanitizing wipes for the carts, and sanitizers at checkouts, Lucas said. “The world is changing, and we will all be adapting to it. We believe the awareness of sanitization will be heightened because of the food traffic in grocery stores.” Westwood, NJ-based Comprehensive Food Safety and its sister company, RK Environmental, launched their COVID-19 Task Force in February, said Stan Cherkasky, Comprehensive Food Safety’s managing director. The overarching focus, he said, was to protect the health and safety of our clients’ employees and customers. “It’s critically important, now more than ever, to help our industry ensure employee health, safety and well-being. Our COVID-19 client solutions have been readily embraced by our clients to complement their mitigation strategies.” These solutions focus on effective mitigation strategies to combat coronavirus, and on the health and safety of retail employees and customers. The solutions, coupled with the company’s clients’ COVID -19 protocols, have been very effective, Cherkasky said.

Comprehensive Food Safety’s COVID-19 solutions include:

Remote/Virtual COVID-19 crisis response assessment and training

Virucidal protection service to combat coronavirus

Health self-assessments (food safety-focused) based on CDC and FDA guidelines

Remote food safety consulting, auditing and virtual training

In light of the coronavirus, Cherkasky said, many retail chains, large and small, have shifted their focus from routine, instore, third-party audits to other approaches. Employee safety and health concerns are critical, and remote auditing is becoming more and more the norm during the coronavirus. “Most third-party retail audit firms have a ‘check-box mentality,” Cherkasky said. “CFS ‘training audits,’ however, focus on sustainable improvement, while building a culture of accountability. It’s not acceptable to have a repeat critical violation on an audit report.” – Food Safety Monitor/Food Business News.

New Technologies, New Services

St. Louis-based ASI LLC saw big changes in 2019 and the first part of 2020, enabling the company to provide its commissary, supplier and retail clients with even better food safety audit and other services, said Tyler Williams, vice president of operations. “The two main areas that we’ve had our largest strides in are our technology and our ever-growing list of new services,” he said. On the technology side, ASI has been working on harnessing the power of both its audit and training platforms, Williams said. The company’s auditing system now gives it greater control over the entire audit and corrective action process, along with excellent reporting capabilities. Also new and improved for 2020 is ASI’s training platform, which has helped streamline both internal and external training. The company is also now able to offer online, on-demand training to the public. ASI’s other main focus has been to grow its list of services that it can provide to the industry. PSSI helps its customers stay “two steps ahead of their audits” with its Real-Time Performance Metrics (RPM) platform, Lucas said. “The data and corrective actions recorded by our team through the RPM platform is exactly the type of documentation regulators are looking for to validate the consistency and effectiveness of each cleaning process,” Lucas said. The platform not only helps streamline data tracking and reporting needed from a compliance standpoint, she added. It also enables food safety sanitors to proactively respond to any changes or concerns related to the sanitation process in real-time, which in return will set PSSI’s customers up for audit success. PSSI’s audits include but are not limited to GMPs, foreign material control, regulatory compliance and verification of documentation for all procedures and policies in place, which is crucial to supermarkets, said Kent Bruns, the company’s senior director of food safety, north division. “The eight steps of sanitation go into everything that audits entail,” he said. “Sanitation is one of the cornerstones of food safety. It starts with a clean plant.” PSSI helps its supplier partners become audit-ready and achieve SQF and BRC certification, which the majority of companies require for their audits, Bruns said. PSSI does that through its eight-step sanitation protocol. Every PSSI auditor first examines the plant with a visual inspection to verify the sanitation process is effective. The final step is documentation, which provides plant managers with the data they need to be audit-ready. PSSI also helps with SSOPs, food safety sanitor training guides, and pre-op measures, Bruns added. The company collectively gathers data for trend analysis to identify any potential food safety opportunities for its plants. “Our audit is internal,” he said. “Our customers don’t use our audits. They have their own process. We provide our real-time tracking tools and the eight steps of sanitation to help provide them with the tools and information to prepare for their audits.” Generally, suppliers utilize third party auditors to perform required audits by supermarkets such as SQF and BRC. Those audits encompass the entire food safety system, which includes sanitation. – Source: Food Safety Monitor/Food Business News.

Changing the Culture

Comprehensive Food Safety’s audits and inspections include one-on-one training of its clients’ foodservice handlers, department heads and staff, Cherkasky said. Changing a company’s food safety culture from top to bottom is one of Comprehensive Food Safety’s specialties, he said. The company offers its clients full-time consultant-auditors, industry leadership in both food safety and IPM, affordable turnkey solutions for retailers, a flexible, proprietary cloud-based platform and many other services. One emerging trend in the industry, Cherkasky said, is risk-based retail food safety audits with a focus on perishables. One problem is the fact that integrated pest management is often outsourced to the pest control operator, often with little or no responsibility by the retail organization. “There is a noticeable lack of attention to OSHA safety and integrated pest management during routine food safety audits,” he said. “Employee health and safety must never be comprised.” The retail grocery industry is entering a new era that’s focused on advancing technology, and real-time reporting and information sharing, Cherkasky said. “Flexible, cloud-based reporting platforms are being used more and more throughout the retail industry to mitigate , drive compliance, and to improve quality. The days of manual reporting systems are gone forever.” Cloud-based reporting platforms provide laser-focused insight and corresponding action, he added. And the ability to have users in each store is essential to ensure timely corrective actions that address root causes. Most important, he said, the platform should be easily customizable to meet the unique and constantly-changing retail reporting requirements across the industry. “This is essential to comply with all regulatory requirements, to accelerate culture shift and to ensure sustained results.” – Source: Food Safety Monitor/Food Business News.

FDA Addresses Food Safety During and After Pandemic

Government and industry are working to ensure the safety of the US food supply remains strong during the coronavirus (COVID-19) pandemic even as the Food and Drug Administration (FDA) has been forced to curtail certain inspections and other activities for the duration, Frank Yiannas, the FDA’s deputy commissioner for food policy and response, asserted in an interview published by the agency April 16. Mr. Yiannas outlined changes to FDA inspection activities during the pandemic, the importance of industry carrying out its responsibilities under the Food Safety Modernization Act (FSMA) and how lessons learned during the pandemic may shape the approach of both the agency and industry to ensuring the safety of the food supply in the future. “For the time being, we are not doing in-person routine surveillance inspections of farms and food facilities in this country and others that export foods to the United States,” Mr. Yiannas confirmed. “We are doing this to limit exposure to the virus and out of concern for the safety of FDA investigators, state investigators and workers in these farms and facilities as people all over the world are sheltering in place.” Mr. Yiannas said the FDA is still conducting critical inspections when needed. “Such inspections could be necessitated by natural disasters, outbreaks of food illness, Class 1 recalls and, in some cases, inspections of firms with a poor track record when it comes to food safety,” he said. With regard to imported foods, product examinations at the ports of entry continue as informed by the use of PREDICT, the FDA’s risk-based import screening tool.

The FDA also is conducting a limited number of remote inspections involving the electronic submission of records by importers covered by the Foreign Supplier Verification Program requirements. “We are prioritizing importers of food from foreign suppliers whose onsite food facility or farm inspections have been postponed due to COVID-19,” Mr. Yiannas said. But most important, Mr. Yiannas pointed to the responsibilities of industry under FSMA, which changed the paradigm on food safety to prevention from detection. “FDA-regulated facilities are required to have preventive controls in place each and every day to ensure that the foods they produce are safe,” Mr. Yiannas said. “Industry has the primary responsibility to ensure that the foods they produce are safe, and, by and large, they’re doing an amazing job at providing safe and available food to consumers. Clearly, at this critical time, food safety is as important as it has ever been, and we expect food producers to redouble their food safety efforts.” Asked about the status of the FDA’s forward-looking New Era of Smarter Food Safety initiative, Mr. Yiannas said, “We had planned to publish the New Era of Smarter Food Safety blueprint in March but had to shift our efforts to pandemic response.” The New Era initiative announced last year aims to create a more digital, traceable and safer food system by leveraging new technologies, analytical tools and approaches to keep pace with the rapid changes underway in the production and distribution of food. “We have been working behind the scenes on the framework that will support this work going forward and will publish the blueprint when the time is right,” Mr. Yiannas said. “But the issues and challenges we’ve seen in our pandemic response has shown me how timely this work is and how valuable it will be in the future. “For example, part of the New Era work involves dealing with the reality of e-commerce as more and more consumers order foods online that are delivered right to their door. “We have been considering what steps we need to take to ensure the safety of those foods in how they are produced, packaged and transported. When we first started talking about this, we were anticipating that 20% of groceries would be ordered online by 2023. That benchmark may have been blown out of the water by consumers sheltering in place. I don’t see that trend reversing when the crisis has passed.” Another core element of the New Era initiative is to foster and support food safety cultures on farms and in food facilities. “We do not believe we will make dramatic improvements in reducing the burden of foodborne disease without addressing how employees think about food safety and how they demonstrate a commitment to this goal in how they do their jobs,” Mr. Yiannas said. “It’s clear to me that a food safety culture is also one that protects the employees from risks associated with workers who are sick, regardless of the type of virus or bacteria, and supports the maintenance of clean and sanitized facilities.” – Source: Food Safety Monitor/Food Business News.

Report: 85 Percent of Independent Restaurants Could Close Without Direct Aid

Dan Wu, an immigrant chef and owner of Atomic Ramen in Lexington, Kentucky, operated his restaurant for two and a half years before COVID hit. The location’s closure turned from temporary to indefinite as the government instituted stay-at-home orders and dining room restrictions. To-go and delivery weren’t feasible lifelines. Eventually it became clear the restaurant wasn’t going to hang on, so Atomic Ramen closed permanently about three weeks ago. Wu’s situation is an example of what numerous independent operators are facing nationwide. According to a report released by Compass Lexecon in conjunction with the Independent Restaurant Coalition, 85 percent of independent restaurants could permanently close by the end of 2020—crumbling a segment that generates about $760 billion in sales and employs 11 million people. This if direct aid, like a stabilization fund, is not provided. Independent restaurants are more at risk of permanently going out of business due to the pandemic because consumer spending at these establishments has been disproportionately affected and they lack the same access to capital markets, the Coalition said. “With millions of jobs at stake, the collapse of independent restaurants would ignite a downward economic spiral with ripple effects in other already hard-hit industries in the travel, hospitality and leisure sector that would be felt for years,” the report reads. “Mass failure may also destabilize the commercial real estate market if these restaurants cannot pay rent, which could also incite a spillover effect in the larger economy.” Wu said this spells trouble for minority business owners. “What I’m afraid of is that the people that are least likely to survive are going to be these small single locations—immigrant-run, women-run, people-of-color-run operations. … We’re the ones that don’t have the infrastructure like the chain restaurants to survive this,” Wu said during a briefing Wednesday. At the federal government level, Democratic Rep. Earl Blumeanuer from Oregon is proposing legislation called the RESTAURANTS Act, which would establish a $120 billion fund for foodservice or drinking establishments that aren’t publicly traded or part of a chain that includes 20 or more locations under the same name. The funds would provide grants to restaurants and bars and prioritize locations with annual revenues less than $1.5 million. The money is intended to target small, local restaurants, particularly those owned by women and people of color. The dollars would cover typical costs such as payroll, benefits, mortgage, rent, utilities, maintenance, supplies, food, and debt obligations. Compass Lexecon’s report estimates that Blumeanuer’s legislation would grow the economy up to $271 billion and reduce the unemployment rate by an estimated 2.4 percentage points. Blumeanuer said he’s working with Republican Sen. Roger Wicker from Mississippi to refine the proposal and ensure it receives bipartisan and bicameral support. The bill could be introduced as early as this week. “We’re ready to move,” Blumeanuer said. “I’ve had expressions of support from Republicans and Democrats in the [House of Representatives].” The report states independent restaurant revenues dropped more than 70 percent in the final two weeks of March and are still 60 percent lower compared to last year. At least 4.5 million of the roughly six million jobs that have been lost in the food and drink industry have come from independent brands. On May 18, a handful of restaurant operators—including some representing the Coalition—met with President Trump and his administration at the White House. Although it wasn’t a major topic, the idea of a stabilization fund was floated amid conversation. “Our people walked away feeling very good about the interest,” Blumeanuer said. “There’s been no proposal per say from the administration but they felt that it was a very productive conversation. People recognized how essential the restaurant industry is and how they’re hanging by a thread.” The Coalition views the stabilization fund as a long-term solution as opposed to the Paycheck Protection Program, which has proven insufficient. Originally, the program provided eight weeks of loan forgiveness, which wasn’t nearly enough time for restaurants to rehire employees and reopen business. Congress recently extended the forgiveness period to 24 weeks and the deadline to rehire employees to December 31.  Wu received a PPP loan, but he described the program as cumbersome and confusing and couldn’t make use of it. The changes to the program came too late.  However, the chef said the stabilization fund would give him and many other independent operators hope of reopening their restaurants. “For us, something like the stabilization fund that’s geared directly toward our industry I think is going to be a huge help because we need more than eight weeks worth of confusing loans,” Wu said. “We need money to get through this and we need money to continue because by the time our customers are coming out and feeling safe about eating and dining with us again, they may be walking into a decimated landscape and that’s really not something any of us want.” – Source: fsrmagazine

Role reversal at Yum Brands: Taco Bell hurting, Pizza Hut Seeing Record off-Premise Sales

COVID-19 has triggered a role reversal for two chains under the Yum Brands portfolio: Taco Bell and Pizza Hut. Pizza Hut’s U.S segment, which has struggled to find its footing the last few years, recorded in early May its highest delivery and carry-out average sales week in the past eight years, Yum Brands reported in a mid-quarter update released. “In our delivery and carry-out only focused restaurants, quarter-to-date same-store sales growth was approximately 15%, reflecting strength in our off-premise business,” the Louisville, Ky.-based company said. Taco Bell has done well at dinner, but continues to experience “significant traffic declines during the breakfast and late-night occasions,” Yum Brands reported. In late March, some Taco Bell restaurants temporarily stopped serving breakfast. In addition, the late-night segment has been hit hard as fewer people are out in the eveneing due to the temporary closures of bars and entertainment events. Global same-store sales at Yum Brands declined 19% for all of April and May. The figure does not include Habit Burger Grill, which became part of the Yum Brands portfolio in mid-March. Yum said the vast majority of the decline was driven by temporary restaurant closures.  Temporary closures across the globe, primarily tied to the company’s Pizza Hut and KFC brands, reached about 11,000 locations during the peak period of the pandemic.  For the same period, KFC global same-store sales declined 26%. Pizza Hut global same-store sales fell 10%. Taco Bell global same-store sales dropped 11%. “Trends have improved meaningfully in recent weeks, however, the COVID-19 pandemic continues to impact sales in numerous markets across the world, particularly in markets where we continue to experience significant temporary restaurant closures,” the company said. In the U.S, Pizza Hut and KFC restaurants are bouncing back in recent weeks due to each brand’s strength in the dinner daypart, Yum said. During this intra-quarter period, KFC U.S. is experiencing same-store sales growth in the mid-teens; Pizza Hut U.S. is seeing same-store sales growth in the low-teens; Taco Bell is experiencing “slightly positive” same-store sales growth.  As of June 9, the company had 1,000 net reopens. About 5,000 locations, or 10% of the company’s global system, remained temporarily closed.  – Source: NRN.

Chili’s Pays all its Rents, with Cash Left Over for Debt Service

With dining rooms back in operation at 873 of Chili’s Grill & Bar’s 1,622 restaurants, the casual chain is generating enough cash to meet all of its rent obligations and pay down debt, parent company Brinker International said. Sales for Chili’s units that have resumed dine-in service climbed on average to within 10.8% of their year-ago levels during the week ended June 3, Brinker said. It noted that those stores have retained 70% of their heightened takeout and delivery business, the sole source of revenues while dining rooms were closed because of state governors’ emergency stay-at-home directives. Systemwide, same-store sales for the week were down 18.9%. Executives had earlier indicated that Chili’s cash flow would turn positive when the slide in comparable sales had been checked at 30%. Brinker’s second concept, Maggiano’s Little Italy, did not fare as well. Comps for the week ended June 3 were down 69.9%, the company said. Last week, the family-style Italian chain named a new president, Steve Provost, to succeed Kelly Baltes, who had held the post for less than two years. No reason was given for Baltes’ departure. Overall, Brinker says it has cash on hand of $113 million, with access to another $429 million from a revolving credit facility. The midquarter business update from Brinker was the latest indication that many large restaurant chains are bouncing back from the sales free-falls of March, when dining rooms were shut down by state edict and consumers were encouraged by government and health officials to stay home. Wendy’s reported yesterday that its same-store sales for May were down just 1.9%. Like Wendy’s, Brinker said today’s intra-quarter business update will be its last, and that it will resume providing financial updates on a quarterly basis. – Source: Restaurant Business.

Retail, Restaurants Forever Changed Due To Pandemic

As retail and restaurant chains develop their reopening strategies, executives may use this opportunity to cull unprofitable locations. Almost two-thirds (65%) of retailer and restaurant chains plan to reopen all their locations, 25% plan to open a portion of their locations and 10% don’t plan to return to the brick and mortar channel at all, per Cambridge Retail Advisors.  The company fielded an online COVID-19 Survey to primarily C-level executives at retail and restaurant organizations. Online sales have long been predicted to eventually level off to around 30%-40% of total sales (up from 10%-15% in 2019). The current pandemic has accelerated the curve and taken perhaps three to five years out of the digital evolution, according to the report. Fifty-nine percent of companies reported moderate to complete disruption of their supply chain. The disruption has increased retailers and restaurants to focus on developing an agile approach to the global supply chain, creating total visibility of enterprise inventory availability and exploring micro-fulfillment strategies, says Hunter Harris, managing partner at Cambridge Retail Advisors.  More than half (56%) feel that the pandemic will permanently change the way people shop and most consumers will move exclusively to BOPIS (buy online, pick up in store) or BOPAC (buy online, pick up at curbside) shopping, says Marty Whitmore, managing partner at Cambridge Retail Advisors. “Retail and restaurant companies have quickly adapted their customer journeys and processes to respond to new expectations and safety requirements,” Whitmore says in a release. “Enhancing online and omni-channel capabilities has been an imperative as consumers have rapidly shifted brick and mortar shopping to low contact transactions.” Retail and restaurant organizations that didn’t previously offer BOPIS and BOPAC have quickly implemented these services to retain customers and maximize revenues, he adds. The top priorities identified by C-level retail and restaurant executives include employee compensation and safety (86%), implanting BOPIS improvement (67%) and shifting from working in an office to working at home (62%). – Source: Marketing Daily.

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