To Our Valued Subscribers:

I hope you and your families are having a Safe and Healthy second half of your summer. This cover letter begins with a small history lesson. What era immediately followed the Spanish Flu of 1918? Give up? The Roaring Twenties. Here’s another trivia question: what era immediately followed the Black Plague in Medieval times? The Renaissance Era. True! Now that companies like Moderna, BioNTech/Pfizer, and 15 others are into human trials, things are definitely looking up! In fact, the CEO of Pfizer is betting a billion dollars he’s got the winning vaccine and ramping up production before it clears FDA Phase III extended human trials. BioNTech vaccine attacks the RNA of Covid-19, whereas Moderna’s vaccine helps the body create neutralizing antibodies that prevent the virus corona from attaching to the human body. Both are promising. In fact, Corning Glass is retooling one of its east coast plants to have the capability of producing billions of vials per year! Like I said, things are looking up!

It is projected that winning vaccines will be approved in the fall with the likelihood of administrating shots in Q1 of 2021. At that point in time, isn’t it safe to say that 2021 will be our millennium’s Roaring Twenties? What does this mean? If you are a dealer who is planning on installing projects, it’s a crap shoot for sure, but if the project is going to take six-months with construction, its time to begin phasing up for “Normal” once again. Will things be the same as 2019? Unlikely, but the restaurants that survive will even be better. And any restaurant chains or owners who call it quits will be leaving valuable real estate locations that will need renovations for another investor/restaurant concept to retool. Either way, business will be intense.

Up to now, people use an old expression that the glass is either half-full or half-empty. They are missing the point. The glass can be refilled. This will be the case for 2021. Staff your business accordingly. What new skill sets will you need? What will your customers demand of you? As managers and owners of your business, you have an unparalleled opportunity to: 1) Determine what your organization needs to be doing in the new era of 2021, 2) Determine the gaps in the talent and skill sets you have currently, and 3) Take advantage of the incredible talent that is available to the unprecedented change in our economy in the past quarter. At American Recruiters, we have had incredible candidates come our way, most still furloughed and not sure if they will be rehired. Meanwhile most stimulus packages will have run out by August 1. You may want to look this talent NOW and grab what you need before its gone!

Like I said, do you want to look at a half-filled glass, or would you prefer refilling it to the top for 2021?

Let’s talk.

Craig Wilson

President

____________________________________________________________________________________________________________________________________________

Ruby Tuesday Hawking Nathan’s Famous Hot Dogs to Earn Extra Revenue as a Host, not Ghost, Kitchen

Startup restaurant matchmaker Franklin Junction finds restaurants with spare kitchen space, and marries them with brands that want to expand their delivery-only reach. Ruby Tuesday, which has permanently closed several restaurants in recent months, has found a new way to generate revenue during the pandemic: sell hot dogs from Nathan’s Famous. Dozens of Ruby Tuesday restaurants are acting like host, not ghost, kitchens for the iconic hot dog chain, as well as other brands looking to expand their delivery-only reach in the United States. The companies were brought together by Franklin Junction, a marketplace platform that matches restaurants with spare kitchen space with brands that want to expand their delivery-only reach.  Aziz Hashim, founder of Franklin Junction, says his company is a cross between Airbnb and Match.com for the restaurant industry. But don’t call it a ghost kitchen operation. He refers to restaurants like Ruby Tuesday as “host kitchens” looking to earn money off their excess kitchen space. Hashim says Franklin Junction acts more like Amazon by providing a marketplace for restaurants who want to generate new revenue by selling food from other brands using third-party delivery companies like Grubhub. Franklin also uses proprietary data to ensure restaurants like Nathan’s are matched with host kitchens that are in the right market, where there’s known demand for their menu as a delivery product. “There is no one doing what we are doing,” said Hashim, who has trademarked the term “host kitchen.” Franklin Junction also ensures brands are matched with host restaurants that have the correct kitchen equipment needed to cook products. For example, Ruby Tuesday restaurants are using “spare” ovens and flat grills in their kitchen to cook signature items from Nathan’s. Ruby Tuesday cooks prepare the meals.

This allows each brand to benefit because there are no startup costs to launch the partnership, Hashim said. “Franklin Junction is a marketplace platform that puts excess kitchen capacity together with brands that want to expand,” he said. “There’s no capital expenditure.” In the case of Nathan’s, the brand’s ready-to-cook meal kits and signature menu items are prepared and sold in host kitchens across the country, including Frisch’s Big Boy and Ruby Tuesday restaurants. The brand is betting on delivery-only marketplace to build its brand. Earlier this year, it began working with ghost kitchen operator Kitopi. “Restaurant delivery sales have seen incredible growth during these unprecedented times,” James Walker, Nathan’s senior vice president of restaurants, said in a statement. “The idea around delivery-only kitchens is something we began researching and implementing many months ago. When we came across this unique opportunity, we jumped at the chance to partner with Franklin Junction and collaborate on making New York favorites more accessible to Nathan’s enthusiasts around the country.” Frisch’s and Ruby Tuesday, as host kitchens, collect revenue from selling a secondary product for delivery only. They, in turn, pay Franklin Junction a fee per transaction. From that fee, Franklin pays Nathan’s. Hashim declined to discuss the exact cost structure, as every agreement is different, he said. For Ruby Tuesday, a new revenue channel is needed. The company has closed dozens of restaurants since the start of the year, according to various media reports. The company could not be reached immediately for comment. However, in early July, the company told Business Insider that  they had “made the decision to close select locations in an effort to better position our restaurants for future business.” Hashim said Franklin Junction is a platform designed “to help as many retail locations and brands thrive in this uncertain restaurant reality.” Besides brokering deals among Nathan’s, Frisch’s Big Boy and Ruby Tuesday restaurants,  Franklin Junction has also created its own delivery-only brands: The Captain’s Boil and Order XOXO.  The company declined to reveal the names of other brands and host kitchen partners it is working with. Franklin Junction said its partner concepts will be deployed across a network of about 550 host kitchens. It expects to have 1,000 facilities join the platform by the end of 2020. – Source: NRN.

Restaurants Expand Grocery Offerings to E-Commerce Sites

When restaurants were forced to close dine-in operations at the start of the coronavirus crisis, a number converted their spaces into grocery stores. Since supermarkets were deemed essential businesses, a storefront selling food and other staples for housebound consumers fell under the same umbrella. In the beginning, most operators offered a limited selection of produce, meat, eggs, milk and other necessities—including those scarce rolls of toilet paper. Foodservice distributor Sysco even helped its restaurant customers set up and stock retail outlets. But as the pandemic dragged on, restaurants began peddling more unique items that consumers couldn’t buy elsewhere. And chefs went back into the kitchen to create signature grab-and-go meals, sauces, baked goods and more to fill their shelves and refrigerated cases. Fast-forward several months and restaurants that can open are refocusing on feeding customers through takeout, delivery, patio dining and even table service indoors. But others are still running their grocery businesses to bring in an additional source of revenue during these tough times. And a few have branched out into e-commerce and delivery. Back in April, independent restaurant Olmsted in Brooklyn, NY, set up the Olmstead Trading Post in its separate private dining room space. With dine-in still very limited in New York City today, it’s still in operation and has become a destination for neighborhood residents, says chef-owner Greg Baxtrom.

When the grocery outlet first opened, Baxtrom sold housemade items such as hot sauces, relishes, jams, granola, charcuterie, kombucha and breads and sweets from Olmsted’s pastry chef. He’s since expanded into grab-and-go prepared dishes, such as the restaurant’s signature vegetable tagliatelle, as well as cocktail kits and seasonal produce that Baxtrom and his team pick up from the farmer’s market or harvest from the restaurant’s patio garden. At first, customers had to line up outside and wait their turn to come in a few at a time to shop, but now they can order online for curbside pickup. And Olmsted’s new e-commerce site allows fans to order from an expansive selection of goods and get the items delivered. Fast-casual Sajj Mediterranean is also betting on e-commerce to boost revenue. In addition to its brick-and-mortar locations and food truck, it launched the online Sajj Market earlier this month. The e-commerce site offers both readymade items, such as the concept’s signature dips, spreads and a la carte menu options, as well as pre-marinated proteins, falafel mix, taboulleh, housemade beverages and assorted hard-to-find spices, grains and legumes.  New for retail purchase online are Sajj meal kits, in choices such as chicken or steak shawarma, accompanied by prepared falafel, turmeric rice, pita mixed greens and assorted Middle Eastern spreads. Each is built to feed four diners. “With our guests’ ever-changing buying habits and the evolution of the direct-to-consumer segment, we wanted to enhance the Sajj experience by offering on-demand, ready-to-enjoy meals and make it easier for guests to bring Sajj safely into their homes,” founder and CEO Zaid Ayoub said in a statement. Consumers can purchase the menu items and ingredients on the website and have them delivered to their door the next day. Currently, the market is only servicing the San Francisco Bay Area but there are plans to expand across the state and eventually, into other areas of the country. – Source: Restaurant Business.

All of a Sudden, QR Codes are Everywhere. QR codes are finally cool 

The quirky, oft maligned “quick response” barcodes have found a niche in restaurants amid the coronavirus, when social distance is the name of the game and human contact is best kept to a minimum. Operators are placing the codes at the hostess stand, on table tents or outside the door, allowing guests to scan them with their phones to pull up a menu, order and pay. They’ve become a standard offering from ordering software suppliers. The process requires little to no contact with a traditional waiter, nor does the guest need to download an app to do it. “It’s so easy. Literally you just open your camera and you take a picture and it pops up,” said Julie Zucker, CMO of Branded Strategic Hospitality, a multiconcept operator that also invests in technology companies. Branded implemented QR codes at one of its restaurants, an upscale sports bar in Manhattan called Duke’s, about two years ago. Guests loved it, Zucker said, because it allowed them to easily order drinks or food on busy game days without having to flag down a server or squeeze through a crowd to the bar. When the pandemic hit and dining rooms were closed, Branded used the QR codes to support curbside takeout at Duke’s and two neighboring concepts. The codes are also in place at outdoor tables where seated guests can scan and order from any of the three restaurants. They’re alerted via text when their order is ready and can pick it up at the bar. “It was a labor issue for us,” said Michael Schatzberg, founder and managing partner of Branded. “Now a lot of restaurants are embracing QR for this contactless, ‘I don’t want to touch a menu.’” It’s no surprise that guests have been receptive to the codes. Nearly a third of consumers said disposable or single-use menus would make them feel safe as restaurants reopen, according to Restaurant Business sister company Technomic. QR codes take that one step further by putting menus on guests’ phone screens. “Add to this the fact that there is no need to download anything additional, then you may have a real consumer win,” said Robert Byrne, director of consumer and industry insights for Technomic.

For restaurants, the codes can help solve the labor crunch brought on by the pandemic by requiring less waitstaff. They also offer an opportunity to engage more deeply with guests. “This is the first time that restaurant POS [systems] have really had access to the patron of the restaurant,” said Jennifer Sherman, VP of product for NMI, a payment technology company. “I think that’s gonna open up an interesting new world of user experience, of diner experience.” That could mean built-in customer satisfaction surveys, loyalty programs or the option to easily split the check, Sherman said. For Branded, it might be video embedded in the beverage menu of a mixologist making a drink and talking about it. “You can really take this to a lot of fun places,” Schatzberg said. In short, the codes offer a number of benefits at a relatively low cost to the restaurant. And yet until recently, they hadn’t found a foothold in the U.S. the way they had in other countries. In China, for instance, QR codes are a way of life. That’s because big Chinese e-commerce companies such as Tencent and Alibaba built their mobile payment apps around the codes, leading to widespread adoption of cashless payment in the country, according to a 2017 article from abacus, a division of the South China Morning Post. “They’re cheap to create, easily spread and all you need is a phone with a camera,” the article said. In the U.S., the pandemic could accelerate a similar shift toward cashless payment powered by QR technology. “While people thought it was cool before … I think now it’s almost becoming a way of dining life,” Zucker of Branded said. However, the codes haven’t necessarily caught on everywhere. Danielle Baerwald, owner of Erv’s Mug in Oak Creek, Wis., said she has not seen a single customer use one since the casual fine-dining restaurant began offering the option when it reopened its dining room on May 22.  Her customer base skews older, she said, and regular menus are still available—sanitized after each use. “Some people just look at you kind of weird like you’re talking a foreign language” when they’re given the option to view the menu on their phone, she said. Her comments were echoed by a couple of other operators who responded to a question about QR codes on RB’s Coronavarius   Coronavirus in the Food and Beverages Industry’s Facebook group, though most said they’d had a good experience. At Branded restaurants, Schatzberg is fully embracing the codes. While he said paper menus will be available in the future for guests who ask, QR will be the primary ordering method. “As a general rule, I think you will sit down, and your phone is the ordering tool for everything,” he said. – Source: Restaurant Business.

Fast –Delivery Company Chowbus Raises $33M

Fast-growing food delivery company Chowbus raised $33 million in a Series A funding round, the company announced. The funding was led by venture capital firms Altos Ventures, based in Silicon Valley, and Left Lane Capital, based in New York City. Other contributors were Hyde Park Angels, Fika Ventures, FJ Labs and Silicon Valley Bank. Founded in 2016, Chicago-based Chowbus focuses on authentic Asian food, hand-picking its restaurant and grocery partners to ensure quality. It increased revenue 700% in the past year and has grown its staff by 300%, the company said in a statement announcing the funding. Chowbus offers delivery and pickup as well as a new contactless dine-in service that allows users to order and pay from their phone in the restaurant. It also has a delivery bundling feature that lets diners order from multiple restaurants in a single order. It’s available in 22 markets, including New York, Los Angeles and Chicago. The company said it will use the new funding to grow existing business, expand into new cities and launch new products. “Chowbus is proud to empower independent Asian restaurants and grocery stores across North America to share their diverse cuisine and grow their business,” said Linxin Wen, co-founder and CEO of Chowbus. “When we say we’re true partners to the restaurants we work with, we mean it. By eliminating hidden fees, helping them showcase their best dishes, and other efforts we make on their behalf, we really go the extra mile to help our restaurant partners succeed.” – Source: Restaurant Business on-line.

Chili’s Owner Launches Virtual Wings Concept

Brinker International now has three restaurants in its portfolio, and it didn’t take any additional real estate to get there. The company Friday unveiled “It’s Just Wings,” a virtual, delivery-only brand Brinker said will be separate and distinct from Chili’s and Maggiano’s. But the concept can only be ordered through DoorDash’s app or website. Brinker said the decision fits for three key reasons:

It allows Brinker to leverage the company’s scale and 1,000-plus kitchen capacity with no extra equipment needed (It’s Just Wings will operate out of current Chili’s and Maggiano’s, customers can’t walk in and order in-store). Doesn’t create complexity within current system of existing brands. Ensures It’s Just Wings leadership is focused on bringing the best product at the best possible value for guests. “For us, virtual brands are about using our scale, knowledge and experience building lasting brands and the access delivery provides in order to connect with guests in a new way,” Brinker said in a statement to FSR. It’s Just Wings features 11 sauces, such as truffle hot sauce and ponzu sauce. Additionally, curly fries are included in every order at no additional cost. Fried Oreos is a dessert option as well. Brinker said wings “were the perfect choice for leveraging our existing kitchens, and operational and culinary expertise.” The company has tested the new brand since November 2019, working on cooking methods, sauces, and partnering with DoorDash to scale. It officially went live on June 23, Chili’s rolled out delivery nationwide through DoorDashin June 2019. “It’s Just Wings is a virtual, delivery-only Brinker brand created to meet the guest’s need for value and convenience,” CEO Wyman Roberts said in a statement. “Between our exclusive partnership with DoorDash, more than 1,000 company-owned kitchens across the country and 45 years of operational expertise, we had the secret recipe to leverage our scale to provide quality food at a value straight to the guest’s door.” “Brinker International has been fiercely committed to building and perfecting a true omni channel offering for their customers across delivery, take out and dine-in, and we’re proud to be their exclusive delivery partner,” added Christopher Payne, chief operating officer at DoorDash. “With this new delivery-only brand we’re excited to take our partnership to new heights in order to continue serving guests in meaningful ways.” Brinker has weathered the COVID-19 pandemic better than some in its category. As of June 8, 873 of the 1,060 company-run Chili’s in the U.S. featured open dining rooms. At those units, same-store sales were down 11 percent during the week ending June 3. Restaurants reported limited cannibalization by retaining more than 70 percent of the off-premises sales they were seeing when dining rooms began to reopen in the final week of April, the company added. Chili’s has been aggressive with re-openings since the option surfaced. During the week ending April 29, more than 300 units reopened. That figure doubled by mid-May. Brinker said during its Q3 review in June that comp sales, on average, were running 20 points higher than casual-dining competitors. Systemwide, same-store sales fell 18.9 percent at Chili’s in the week ending June 3. They dropped 69.9 percent at Maggiano’s. – Source: fsrmagazine.

McDonald’s And Chipotle Will Require Face Masks in All U.S. Locations

McDonald’s will require customers at its 14,000 U.S. restaurants to wear face masks starting Aug. 1—while Chipotle’s policy went into effect today—making the fast food chains the latest corporations to implement mandatory mask policies.  Chipotle said that all patrons and employees are now required to wear a mask at the chain’s 2,630 restaurants. McDonald’s said in a statement it would provide a mask for any customer without one. Patrons who refuse to wear a mask at McDonald’s will be taken care of in a “friendly, expedited way” and receive their orders in a pickup area separated from other customers. The company also said it will add panels to protect front- and back-of-house workers. McDonald’s will not open any additional restaurants’ dining rooms for limited indoor service for another 30 days due to the rise of Covid-19 cases in the U.S., though the company noted that this “continues to be an owner/operator-led decision.” Chipotle has also limited dining room capacity and appointed “stewards” at their restaurants who are “responsible for directing customers, managing the dining room and sanitizing as guests complete their dine-in meals.” Many major retailers like WalMart, Starbucks and Target have mandated masks in all U.S. locations over the past month. See Forbes’ list of all the retailers with mandatory mask policies. – Source: Forbes.

Papa John’s will Hire 10,000 more Workers as it Tries to Meet Demand for its Pizzas

Papa John’s announced it would hire 10,000 more workers as it tries to meet surging demand for its pizzas. Consumers who are sheltering in place are ordering more Papa John’s food during the coronavirus pandemic. During the three months ended June 28, the pizza chain’s North American same-store sales soared 28%, according to its preliminary estimates.  The company recently added 20,000 employees. At the end of 2019, it had 16,500 employees, according to its annual report. Spokeswoman Lindsay English said that Papa John’s has about 70,000 workers employed in its North American system, which includes its franchised restaurants. Papa John’s is not the only large restaurant chain to announce hiring plans amid widespread unemployment. Rival pizza chains Pizza Hut and Domino’s announced plans to hire thousands to meet demand as lockdowns began across the U.S. Other large restaurant chains, such as McDonald’s and Chipotle x back. Papa John’s also said it is expanding its college tuition program to include Southern New Hampshire University and University of Maryland Global Campus. Employees and their immediate family members can get reduced tuition. Shares of Papa John’s, which has a market value of $3.1 billion, have risen 48% so far this year. — Source: CNBC.

National Restaurant Association Touts Restaurant Safety, Urges Governors, Mayors to hold off on Further Shutdowns

Hoping to avert further shutdowns, the National Restaurant Association on Monday urged the nation’s governors and mayors not to reclose restaurant dining rooms that are operating within current guidelines. In a letter to the National Governors Association and the U.S. Conference of Mayors, Lawrence Lynch, the NRA’s senior vice president, science and industry, wrote that the restaurant industry has been diligent in its commitment to stepped up safety protocols. The letter aims to dispel “inaccurate information” about the role of restaurants in spreading the virus. Also on Monday, however, news reports around the country indicate restaurant and bar owners are becoming increasingly unwilling to comply with government-imposed limitations. In New York, the state liquor authority reportedly handed out 105 violations to restaurants and bars over the weekend for blatant disregard of social-distancing rules, mostly in New York City. Gov. Andrew Cuomo tweeted that another 27 violators were added to that list on Sunday night. “While the vast majority of restaurants and bars are in compliance, a few bad actors are not,” he tweeted. Last week, a multi-agency task force created by the governor said it had conducted nearly 1,100 compliance checks at restaurants and bars between July 21-23, documenting 84 violations. Those businesses face fines of up to $10,000 per violation.

Ten venues in New York had their liquor licenses suspended, including Cipriani Downtown in Manhattan, where patrons were seen drinking and standing around tables in front of the restaurant, mostly without masks. Inside, an employee behind the bar had no face covering and patrons were buying alcohol at the bar, in violation of state orders, according to the governor’s task force. “We are very proud of what New Yorkers did to flatten the curve of this virus, but we have to protect our progress because no one wants to do that again,” said Cuomo in a statement. “That’s why we’re watching the bar and restaurant violations and the congregations in front of these establishments, as we believe it’s connected to the increased infection rate with young people.” In Texas, hundreds of bars reportedly opened over the weekend in as act of defiance dubbed “Freedom Fest,” despite a statewide shutdown order that followed a spike in COVID-19 cases across the state. Bar owners said the move was in part to protest that restaurants were allowed to remain open, albeit with limited capacity and safety protocols in place. News reports indicated coronavirus protocols were breached recently at restaurants and bars in Pittsburgh, Washington D.C., Minnesota, Baltimore and Chicago, just to name a few. In the letter to governors, Lynch argued public mask requirements are effective and must be followed, saying restaurants that violate safety and health laws should not remain open. “Our industry truly believes that we are all in this together and that any bad actors are not representative of our industry,” he wrote. Lynch described restaurants as unwavering in their commitment to customer and employee safety. The NRA worked with leading health agencies to develop guidelines for safe re-opening. He said inaccurate information about restaurants continues to dot media coverage, such as a non-peer-reviewed paper about spread of the virus in a crowded restaurant in China that has become a talking point for health officials, though it “cannot and should not be used as a reliable scientific model and was never reproduced, and relies on customer density and seating patterns not allowable in any U.S. restaurant,” Lynch wrote. “The ongoing comparisons between a single restaurant in China to America’s restaurant industry, seeped in a legacy of food handling safety, has had a negative impact on U.S. restaurants, our employees and has hindered our path toward recovery,” Lynch wrote. During the height of the shutdown, the restaurant industry in March through June lost more than $145 billion in revenue, the NRA said. Just as restaurants were gearing up to reopen in some states, more than 100,000 locations have been shuttered again by state and local mandates since the beginning of July, putting more people out of work and costing restaurant owners thousands, Lynch wrote. “Closing the dining rooms of restaurants that are operating within the prescribed guidelines harms our communities and hinders our recovery,” the letter said. – Source: The National Restaurant Association.

Denny’s Offers Rewards Members Free Delivery

Denny’s Corp. is giving its loyalty-program members a chance to get free delivery for the rest of the year through the Denny’s on Demand platform, the company said. The Spartanburg, S.C.-based family-dining chain said Denny’s Rewards members can place an order via Denny’s on Demand between July 27 and Aug. 9, and then they will receive a weekly coupon via email to be redeemed for free delivery once a week until the end of 2020. Non-member customers can sign up for Denny’s Rewards anytime during the July-August period. The program can be accessed through the website or with the smartphone app. “Over the past several months, as in-restaurant dining has been in a state of change due to COVID-19, we have seen higher instances of our guests opting for Denny’s comfort food via delivery,” said John Dillon, chief brand officer for Denny’s, in a statement. “We want to be able to serve our guests in a myriad of different ways, be it in-restaurant, pickup or delivery, and being able to alleviate delivery fees through the end of the year is a perfect way to thank our guests for sticking with us during the recent challenging times,” Dillon said. In a May first-quarter earnings call, John Miller, Denny’s CEO, said that before the coronavirus pandemic was declared in March, off-premise sales represented about 12% of the brand’s business and nearly 60% of these transactions were pickup orders with delivery orders representing the balance. “As our business was shifting, we were able to accelerate some national broadcast media to feature a free-delivery message when ordering through our website or mobile app while also introducing a contactless delivery option,” Miller said. For the first quarter ended March 25, Denny’s net income was $9 million, or 16 cents a share, down from $15.5 million, or 24 cents a share, in the same period last year. Revenues fell to $96.7 million from $151.4 million in the prior-year quarter. As of March 25, Denny’s had 1,695 franchised, licensed and company restaurants around the world including 147 restaurants outside the United States. – Source: NRN.

When it Doors Shut, Opportunity Opened for Angry Crab Shack

Angry Crab Shack didn’t waste its quarantine. The 12-unit seafood chain instead used that time to upgrade its menu, packaging, training program and more. Sloane Emden was employed as the general manager of an Angry Crab Shack in Phoenix when the coronavirus shut down his restaurant. Emden spent years working in restaurant kitchens, advancing from cook to chef, but when the 70-hour work weeks got to him he transitioned to GM roles at various operations. During the lockdown, Angry Crab Shack’s VP of Operations, Eric Kardon, spent some time looking over employees’ resumes and took notice of Emden’s varied experience. “He worked through the skill sets of all the employees and asked if I was still interested in being a chef,” says Emden. “I felt it was a good opportunity to fine tune and standardize the menu and focus on proprietary products.” He immediately got to work. The first order of business was to add more detail to the recipe file so everyone—from novice to experienced cook—could execute the same item consistently across all 12 locations. “The file went from 100 to 280 pages, getting as specific as the water in which the seafood is boiled,” says Emden. A new equipment section is included in front so every kitchen worker knows exactly what to use.

Angry Crab Shack specializes in Louisiana-style seafood dishes, and founder Ron Lou developed a proprietary Cajun spice to use on the shellfish boils and some fish preparations. Emden decided to “run with it,” he says, expanding the unique seasoning into other menu items. He worked with a new supplier to replace the chain’s standard panko-crusted shrimp with a batter-dipped shrimp that incorporates the spice into the batter for the shrimp and fried cod. Those upgraded products will now be distributed systemwide. Next, Emden took over the chain’s central commissary kitchen to film entertaining step-by-step cooking videos. Kitchen team members can now see firsthand how to prepare and present Angry Crab Shack’s signature gumbo, jambalaya, barbecued beef and all the other items on the menu. The two-minute videos are stored in the cloud so everyone has access, says Emden. “We also took two photographs of how to plate each dish—one for dining in and the other for carryout,” he says. “We redesigned where everything goes, the garnish, the sauce, the fries, etc. and copied it over to the to-go containers.” The photos are posted on the walls in every Angry Crab Snack kitchen. Those takeout and delivery containers were also upgraded during the pandemic. Emden swapped out the old Styrofoam packaging for containers that have a clear top and black bottom for better performance and appearance.  “The new packaging has a perforated top with vent holes that stop the cooking process,” says Emden. “In the restaurants, we put the seafood boils into a clear plastic bag, and customers open and eat the food right away, but if we used those bags for to-go orders, the contents would continue to cook.” The containers also keep fries crisp in transit and the vents don’t interfere with heat retention, he adds. The packaging is currently getting a test run in one of the restaurants in the system. The fourth pillar in the “makeover” is a change in the management training program. Here, Emden put his GM skills to work to expand training from two to four weeks. “Every manager now learns both front- and back-of-house procedure,” he says. Continuing education is key to successful restaurant operations, Emden believes. Next up: revamping catering packages, improving the barbecue offered at three locations, tweaking the desserts and adding fried appetizers. “This latest version is 1.0, but we’re already working on 2.0. We want to be constantly improving,” he says. – Source: Restaurant Business.

How Comfort Food Brands can Chart a Course for Post-Pandemic Growth

In mid-March when the novel coronavirus was declared a pandemic, there was uncertainty about what the future would look like. Shoppers wondered what else would run out if they couldn’t even get toilet paper. So, many decided to stock up. Shoppers realized they’d risk exposure if they visited a grocery store. Suddenly they were looking to minimize trips and stock up on foods that would hold them over indefinitely. Many looked to familiar favorites, as evident in Campbell’s sales surge. Campbell’s said sales increased 15% to $2.24 billion during the company’s third quarter ending April 26, driven in large part by a 35% increase in soup sales, ready-to-eat, condensed and broth. For the week ending March 21, the company’s Meals & Beverages division saw a 366% increase in weekly case orders compared to a year ago. These familiar favorites had several benefits; they were shelf stable, easy to prepare and affordable. They also pulled on our nostalgic heart strings. This pandemic has sapped the energy out of us and replaced it with stress. We’ve been balancing work, kids at home, many activity closures and economic hardship. “For many parents, it can feel overwhelming to face competing demands at home and work along with possible financial challenges during this unprecedented crisis,” said Arthur C. Evans Jr., PhD. American Psychological Association’s chief executive officer. In the face of job losses and adjusting to working from home and online learning, comfort foods were gateways to some relief. People needed solutions for quick cooking at home, easy snacks and overall value. Worrying about healthy “food rules” and daily access to fresh produce wasn’t a top priority for many consumers. Familiar comfort food brands had to adjust their manufacturing plants and their supply chains to meet increased demand. Campbells shared that it initially had troubles meeting the surge. Its supply chain teams had to adapt quickly, increase manufacturing, hire more help, change production schedules and alter the variety of products produced. Comfort and convenience brands are actively and successfully proving they can be trusted, have taste appeal and are worth keeping in the pantry. But for how long? Campbell’s saw a 6% quarterly increase in the number of households buying its products, and is working hard to increase and test new marking to hold on to new buyers. Maintaining this new audience will be paramount to their future success.

Time for brand building.

For many Americans, there will always be space in the pantry for popular brands like Campbell’s and other mainstream comfort foods. But for others, the risk of abandonment post-pandemic is high. Some experts think this pivot to quick, easy and affordable eat-at-home trends will last another 12 months. While the initial panic for shelf-stable foods is gone, the economy isn’t in the clear. Shoppers still need options that provide value and convenience. Cooking at home will remain popular for a while. Pantry staples, frozen meals and comfort foods have an opportunity to grow their relevance. In the meantime, these brands are getting great exposure. Now they are at or near the top of the chain, having elbowed out fancy, more expensive choices. They are getting face and taste time with the next generation of eaters and, more importantly, of future shoppers. They should not waste this opportunity. There are steps they can take to capitalize on this newfound exposure. Remain on shelf, fully stocked to be there when shoppers come looking.

The parents of these brands should help retailers optimize their ecommerce sites so their brands are suggested more and shown more as suites of products that offer versatile meal solutions.

Suggest creative ways to use them, including time savings tips, how
they can be served up as snacks and how they can be paired with fresh foods to make healthy meals, thereby presenting a longer-term vision for how they will fit post-pandemic.

Elevate messaging around their nutritional value, as many of these products are fortified with vitamins.

Consider adding more function and nutritional value either in the base brands or through brand extensions.

Try new flavor variations.

Bundle with other complementary brands to drive more versatility.

Try direct to consumer (DTC) sales directly or as a part of meal kits.

The coronavirus pandemic is certainly impacting all food and beverage manufacturers in unique ways. Naturally, brand teams will have to manage the near-term issues to ensure product availability. But they should also plan for a post-pandemic future. – Source: Smart Brief.

Trudy’s Texas Star to be Purchased for $6.5 Million

Private equity firm Hargett Hunter Capital Management has agreed to purchase Texas-based chain Trudy’s Texas Star out of bankruptcy for $6.5 million. The firm prevailed at an auction on July 23. A hearing to approve the transaction will be held on August 17. The North Carolina-based firm outbid Austin restaurant Steiner Steakhouse, which bid $6.45 million. The brand operates Trudy’s North Star, Trudy’s Texas Star, Trudy’s South Star, and South Congress Cafe. It was founded in 1977 by Gary Wayne Truesdell. Due to health concerns, he recently stepped aside and allowed his son, Gary Stephen Truesdell, to run the restaurant. The restaurant filed for bankruptcy on January 22. According to the filing, its financial woes began with the opening of Trudy’s Four Star in 2011, which included a 13,000-square-foot main floor as well as a basement and rooftop patio. The unit lost almost $1 million per year until it closed in January 2019. The losses from the store placed a “substantial debt” on the company. Soon, the organization became delinquent on payroll taxes, state taxes, and obligations to suppliers and employees. The filing states Trudy’s filed bankruptcy in response to a levy from the IRS, which froze the brand’s credit card receipts. At the time of the filing, Trudy’s employed 275 full and part-time employees at its three operating locations. When one location temporarily closed in November because of a fire, its employees were reassigned to other Trudy’s locations. Jeff Brock, Hargett Hunter’s founder and managing partner, told the Austin Business Journal that his firm will “put some tender loving care into the facilities” and ensure “we update everything.” He said the private firm doesn’t have any plans for major expansion. “What we want to do is get it right,” Brock told the publication. “Everything else will fall into place.” Hargett Hunter currently has six restaurant brands in its portfolio, including Marugame Udon, Cajun Steamer Bar & Grill, Live.Eat.Surf Restaurants, Original ChopShop Co., Bellagreen, and STACKED. The brand has reportedly been hit hard by the pandemic. Steve Sather, attorney for Trudy’s, said earlier in July that sales were about 25 percent to 30 percent of prior year volumes, according to the Austin Business Journal. Gary Stephen Truesdell referred to it as living paycheck to paycheck. “We got to the point a couple of times where we wondered if we were going to be able to make payroll,” he said to to media outlet. “We’re keeping our employees employed and we’re paying our taxes.” – Source: fsrmagazine.

HEALS Act Would Cut Unemployment Benefits and Tweak Paycheck Protection Program

On Monday, GOP leadership in the Senate introduced a $1 trillion stimulus package—labeled the HEALS Act—that would deliver more checks to citizens, several tweaks to the Paycheck Protection Program, and cut enhanced unemployment benefits by $400. In the $2.2 trillion CARES Act, unemployed workers receive an extra $600 per week on top of state and local benefits. Several operators in the restaurant industry have voiced concern over the enhanced funds because some employees have chosen to stay on the unemployment insurance as opposed to returning to work. In many cases, workers are receiving more money through the unemployment benefits than they did at their job. The deadline for the enhanced benefits will expire on Friday. In the HEALS Act, that $600 would be slashed to $200. The extra $200 would last until September, and then in October, payments would transition to 70 percent of a worker’s lost wages. In the Democrats’ $3 trillion proposal in May, the $600 unemployment benefits would expire in January. However, the Democratic bill has been essentially ignored by Republicans in the Senate. The new bill would also include liability protections for schools, healthcare workers, and employers to shield them from lawsuits related to COVID-19. The provision has been a strong point of division between Republicans and Democrats. But restaurant operators have shown support for it. At a May meeting between the Trump administration and restaurateurs, RBI CEO José Cil said he expects “frivolous” and “unfounded” lawsuits against operators that are “trying to do the right thing, trying to survive.” Trump responded by saying, “The Democrats don’t want to give you the liability provisions. They just don’t want to have that.  And it’s crazy that they don’t. But the Democrats do not want to give that to people, and that’s not a good thing.” The distribution of stimulus checks to most citizens would be nearly identical to the CARES Act. Single taxpayers would receive $1,200 while married couples get $2,400. The dollar amount begins to phase out with incomes of $75,000 for single taxpayers and $150,000 for married couples. Families also receive $500 for each dependent; the only difference is the funds won’t be restricted to dependents that are 17 years and younger. The HEALS Act also includes several changes to the Paycheck Protection Program. The revamped edition is called the Continuing Small Business Recovery and Paycheck Protection Program Act. Here are a few highlights: The provision would authorize $100 billion in long-term, low-cost loans to recovery sector businesses, which include “seasonal businesses and businesses located in low-income census tracts” that have no more than 500 employees and at least a 50 percent drop in revenue.

The package provides $190 billion of funds for first-time and second-time recipients. Businesses seeking a second round of funding must have no more than 300 employees and demonstrate at least a 50 percent drop in revenue.

Businesses cannot receive another PPP loan that would push their total funding (including the first loan) to more than $10 million.

$25 billion would be set aside for companies with 10 or fewer employees and $10 billion set aside for community lenders.

Unlike the CARES Act, which sets a $10 million maximum, the HEALS Act includes a $2 million maximum.

The 60/40 allocation between payroll and nonpayroll costs remains.

Forgivable expenses would expand to include covered supplier costs, covered worker protection expenditures, and covered operations expenditures.

Borrowers are allowed to select the timing of an 8-week forgiveness period.

The forgiveness application process would be simplified for smaller loans.

Other items of note in the HEALS Act Include:

The bill includes a refundable payroll tax credit equal to 50 percent of COVID safety expenses, including testing, cleaning supplies, and PPE. The credit is capped at $1,000 for the first 500 workers, with $750 for the amount of workers between 500 and 1,000 and $500 for each employee over 1,000. Expenses between March 12 and January 1 are eligible.

The legislation would allow 100 percent deductions for business meals through December 31. The current law maxes deductions at 50 percent. The provision is intended to assist with demand at restaurants. The HEALS Act includes $105 billion to help schools reopen and $16 billion for COVID testing. The Independent Restaurant Coalition, which is pushing for the $120 billion RESTAURANTS ACT for independent operators, isn’t satisfied with the HEALS Act. “Look around your neighborhood: there’s a good chance one of your favorite restaurants or bars has closed forever. The longer Congress waits to deliver relief to independent restaurants, the more businesses risk permanently shuttering and wiping out at least 16 million jobs across the country,” the organization said in a statement. “The changes to the Paycheck Protection Program proposed by Senator McConnell today are a good start, but independent restaurants don’t another loan when we are accumulating more debt and taking on more losses due to circumstances out of our control. A ‘good start’ isn’t enough four months into the pandemic—we need immediate relief now.” – Source: fsrmagazine.

Pandemic Weighs on McDonald’s Performance

McDonald’s Corp. executives believe the worst impacts of the pandemic on sales performance are in the past. In the latest quarter, the restaurant company’s net income dropped 68% and revenues plummeted 30%, driven by temporary restaurant closings, limited operations and dramatic changes in consumer behavior. “As you can see, it remains a dynamic situation as the threat of COVID-19 continues to depress consumer sentiment, and the vagaries of the pandemic create an unpredictable operating environment,” Christopher J. Kempczinski, president and chief executive officer of McDonald’s Corp., said during a July 28 earnings call. “In many markets around the world, most notably in the US, the public health situation appears to be worsening. Nonetheless, I believe that Q2 represents the trough in our performance as McDonald’s has learned to adjust our operations to this new environment.” McDonald’s net income for the second quarter ended June 30 was $483.8 million, equal to 65¢ per share, which compared with $1.5 billion, or $1.97 per share, in the prior-year period. The latest quarter included higher general and administrative expenses related to increased marketing and franchisee support. Revenues totaled $3.8 billion, down 30% from $5.4 billion the year before. Global comparable sales declined 24%.

In the United States, comparable sales decreased 8.7% for the quarter, sequentially improving over the three-month period. “Pre-COVID, nearly 70% of customer orders were in-restaurant across our larger markets,” said Kevin M. Ozan, chief financial officer. “So closing the dining area or even limiting dine-in capacity has a substantial impact on results. Today, almost all restaurants and about two-thirds of the dining rooms have reopened in the segment, although many restaurants are still operating with restrictions, such as limited hours or channels based on local regulations.” Nearly 95% of McDonald’s restaurants in the United States have a drive-thru, a competitive benefit throughout the pandemic, Mr. Ozan added. “As customers shifted to a more contactless experience, drive-thru accounted for nearly 90% of our sales again this quarter,” he said. “We also continue to see an uptick in delivery and digital transactions per restaurant.” Delivery, drive-thru and digital are three strategic priorities for McDonald’s going forward. “In terms of enduring behavior, I think whether it’s the use of kiosk, the use of mobile, the use of delivery, the use of drive-thru, certainly one of the things is that customers are looking for more of a contactless type of experience,” Mr. Kempczinski said. “They’re looking for more of a digital type of experience, one that they can navigate on their own.” Breakfast has been weak spot for McDonald’s in recent years due to heightened competition and a lack of operational focus.  The pandemic has since canceled many morning commutes, pressuring the fast-food chain’s performance during the daypart. “Breakfast has been one of the more challenged dayparts due to coronavirus,” Mr. Kempczinski said. “If you look at how we’ve performed through the pandemic, even though breakfast is certainly in the US still the most challenged daypart, we’re actually growing our breakfast share. And so while it is a drag from an overall standpoint, we’re gaining share at breakfast.” Looking ahead to the third and fourth quarters, management said it plans to significantly increase marketing spend to accelerate recovery and drive growth. “There will be some innovation,” Mr. Kempczinski said. “I would say that the bulk of that spend is not intended to be going toward innovation. The bulk of that spend is intended for really core menu items and perhaps spotlighting some of our service channel opportunities like, for example, digital… It is going to be largely against the base business because our view is, right now, consumers are still looking for sort of the trusted favorites, which is why core menu makes sense for us.” Shares of McDonald’s trading on the New York Stock Exchange closed on July 28 at $196.24, down $5.01, or 2.5%, from the previous close. – Source: Food Business News.

Thank you for reading The Global Foodservice E-newsletter from American Recruiters!