The virtual brand was unveiled in roughly 1,300 kitchens nationwide . . . .

Applebee’s Launches a Cheetos-Inspired Wings Brand

The formation of Cosmic Wings, Applebee’s new delivery-only concept, is the confluence of three opportunities, says Scott Gladstone, vice president of strategy and development. The rise of delivery and growth of the wing category are no-brainers. But the third one, an exclusive partnership with Cheetos, is where Cosmic Wings most plants its flag. The virtual brand launched Wednesday in roughly 1,300 kitchens nationwide and is available only through Uber Eats. The menu features bone-in and boneless wings and cheese bites covered in multiple flavors, including Original Cheetos and Cheetos Flamin’ Hot wing sauce. It also includes chicken tender dippers, waffle fries, and onion rings. Applebee’s has a relationship with Cheetos through its partnership with beverage provider, PepsiCo. Gladstone says the chain was in discussion with Cheetos for a long period and was waiting for the right time frame to release the innovation. “We felt that the timing was perfect and a great way to showcase these flavors through a concept that really leans into being unique in that you can find things you can’t find anywhere else,” Gladstone says. “Cosmic Wings will be a brand that is going to be sustainable and that we’ll be innovating against as we go. We expect to see different types of flavors being introduced over time. But for launch, certainly, Cheetos is a great opportunity to introduce some flavors that people love.” Applebee’s is no stranger to the virtual brands game. For nearly a year – before several chains entered the now crowded space—the chain tested Neighborhood Wings to leverage guests’ demand for the food category. From that, Applebee’s gleaned a number of learnings, primarily the importance of differentiation. Those valuable lessons led to a creative food mashup with one of the U.S.’s most recognizable snack brands. “We’re winding down Neighborhood Wings and rolling out Cosmic Wings and really leveraging those learnings. You have to stand out in a crowded field,” Gladstone says. “There’s a lot of virtual brands now in the space, remarkably.

A couple of years ago, there was a lot of skepticism about a virtual brand, and now it’s pretty widespread and known. And so, there’s a lot of concepts out there that’s all wings, and you have to stand out, and that’s what we’re doing with Cosmic Wings.” Jessica Spaulding, marketing senior director for Frito-Lay North America, says her company saw a 58 percent increase in cooking among consumers amid the COVID pandemic. And one of the top do-it-yourself recipes submitted was sprinkling Cheetos dust on wings. That served as an inspiration and starting point for the partnership with Cosmic Wings. “This is only the beginning,” Spaulding says. “We’re so excited to partner and work with Cosmic Wings to bring more really exciting food mashups in the future.” To establish efficiency in Applebee’s kitchens, franchisees were heavily involved from the beginning of the ideation phase through launch. As the brand does with all initiatives, it will continue to capture feedback from operators to ensure Cosmic Wings doesn’t harm the experience at Applebee’s. With that said, one of the reasons virtual brands have become so popular is the low overhead and minimal effect on labor expenses. “It’s something we will measure as we go,” Gladstone says. “The hypothesis for many in the space is that it’s a relatively low investment as it relates to human capital. There’s certainly an investment in training and ongoing support for the brand. But from an incremental cost perspective, it’s expected to be relatively lower than you would expect if you’re launching a brand on a standalone basis.” Chef Stephen Bulgarelli, culinary lead for Cosmic Wings, says the good news for kitchens is that Applebee’s already produces bone-in and boneless wings. In fact, the product is the best-selling appetizer at the restaurant. Because the back of the house has familiarity, it shouldn’t be too much of a stretch to add in Cosmic Wings, Bulgarelli says. “The sauce comes in ready to go for them,” Bulgarelli explains. “So there’s not a whole lot of complication. If it goes gangbusters as we expect it to, we could run into a little bit of a space issue, but again, I have full confidence that our kitchens can handle this.” In conduction with the rollout, Cosmic Wings is enticing consumers with a zero-dollar delivery fee on all orders $15 or more from Wednesday through February 28. The initial marketing activity will be followed by more in-app promotions as Cosmic Wings builds visibility on the Uber Eats platform and its subscription program.

The virtual concept is planning some advertisements outside the app, as well, in the coming weeks. Cosmic Wings’ partnership with Uber Eats will be key in understanding customer behavior. According to Gladstone, the brand has the utmost confidence that the third-party delivery company will provide the necessary tools to foster growth. “Uber Eats has been a great partner—a leader in the space,” Gladstone says. “They have nationwide coverage. They have a large devoted guest base. We think they’re the perfect partner to launch this activity, and we’re certainly going to look to them and be partnering with them to provide us with that feedback on the concept.” “We think that the product is great,” he continues. “It’s a pretty broad menu. We’ve got not only the Cheetos flavors but a wide range of wing flavors as well as a new waffle fry and a new chocolate chip cookie and some appetizers. So there’s a lot there, and we need to ensure that we’re capturing all of that feedback and ensuring that we’re innovating, and going forward in the right way.” Cosmic Wings will launch as one of the largest virtual brands in terms of locations. The scale is comparable to Chili’s delivery-only concept, It’s Just Wings, which rolled out to 1,050 stores in June of last year.  Chili’s has noted in recent months that It’s Just Wings is on pace to become a $150 million brand. In August, the brand estimated that the virtual concept is totaling more than $3 million per week in sales. That equates to comps growth in the low-single to mid-single digits. In January, Chili’s revealed that its Just Wings would soon move to takeout. Gladstone says Cosmic Wings has set some internal metrics, but nothing has been announced publicly yet. He expects more information about specific goals to be revealed in future earnings calls as the brand develops. He adds Applebee’s is always looking for opportunities to create a long-term sustainable model for casual dining. Gladstone believes Cosmic Wings will be a part of that going forward, but the extent of it is still to be determined. “There’s certainly a number of benchmarks out there that we’ve looked to, to understand what this opportunity could look like,” Gladstone says. “And we think it’s going to be a brand that could be sustainable. That’s our goal—to create a concept that will stand on its own and that consumers will look to when they’re really wanting a great wings experience in the online space. That’s ultimately what the measure of success will be.” –Source: FSR Magazine.

Chipotle adds Udemy to Personal-Development Offerings . . . .

Fast-Casual Brand Works to Build Virtual Community Among Remote Workers

Chipotle Mexican Grill Inc. has enhanced its remote-employee learning and personal development offerings to include Udemy for Business, an online, on-demand educational platform, the company said. The Newport Beach, Calif.-based fast-casual brand said all full-time restaurant support center employees, executive team directors, team directors, and field leaders have to Udemy, which offers more than 5,500 courses on topics ranging from technology to wellness. The addition of Udemy is part of the brand’s efforts to create a community for remote workers. “Through online educational opportunities, employee resource groups, and its culture committee, Chipotle is providing a purposeful remote work experience for its employees,” the company said in a statement. Among inclusion-based groups, Chipotle also has introduced the United Network of Influencers Furthering Inclusion and Ethnic Diversity (UNIFIED) as an employee resource group. UNIFIED is the company’s first resource group in a completely virtual setting, Chipotle said. Unified includes a minority mentorship program, roundtable discussions with prominent speakers and panels, and quarterly training programs to promote diversity and inclusion in the workplace. UNIFIED this month is hosting a virtual book club in honor of Black History Month. The group will provide all participating employees with a copy of the chosen book, free of charge. “Our employees are seeking real connection more than ever before, and it’s our responsibility to cultivate an environment where they can continue to thrive and pursue their passions with like-minded co-workers, even in a virtual setting,” said Marissa Andrada, Chipotle’s chief diversity, inclusion, and people officer, in a statement. Other employee resource groups include those for lesbian, gay, bisexual, transgender, and questioning employers as well as one for women in the workplace and another for wellness. As of Dec. 23, Chipotle Mexican Grill had more than 2,750 restaurants in the United States, Canada, the United Kingdom, France, and Germany. – Source: NRN

MyHOP email club members can get a free short stack any time in April . . . .

IHOP Issues IOUs for National Pancake Day to Cut Down on Crowds During Pandemic

Today is not only Mardi Gras or Fat Tuesday; it’s also National Pancake Day when IHOP customers are normally treated to a free short stack of the family-dining chain’s buttermilk pancakes. But this year, realizing that a global pandemic is no time to invite throngs of people into its more than 1,600 restaurants looking for free food, the chain is postponing the offer, and instead of giving customers an IOU that can be redeemed any time in April. The move by IHOP, a subsidiary of Dine Brands Global Inc. based in Glendale, Calif., is not only a safety measure but also a move to bring more members into its loyalty program. Existing members of the MyHOP email club, and those who sign up by March 31, 2021, are automatically given the IOU coupon, which can be redeemed in restaurants or online via the chain’s website, IHOP.com, or its mobile app. Non-members can get a short stack at no extra charge with a minimum of $10 purchase in restaurants or online. IHOP is also using the occasion to raise funds for charity by encouraging guests to make donations on their checks, online or in restaurants to the Children’s Miracle Network Hospitals, its national charity partner, as well as local charities including Shriners Hospitals for Children and the Leukemia and Lymphoma Society. “At IHOP, our top priority is the safety of our guests and team members,” IHOP president Jay Johns said in a press release announcing the offer. “Given nothing about this past year has been ordinary – and while we look forward to celebrating National Pancake Day with guests under our blue roof in the future – we recognize it’s not possible to gather millions of our closest family and friends in our restaurants on a single day this year. As a result, we decided to flip National Pancake Day on its head and give our guests an entire month to redeem their free Short Stack with an IOU, while also continuing to put purpose behind our pancakes by giving back to those most in need: our charity partners.” – Source: NRN.

The House is voting on the $25 billion RESTAURANTS Act the week of Feb. 22: here’s what it entails . . . .

The Reupped Legislation from the Original 2020 RESTAURANTS Act would Distribute Grants of up to $10 Million to Small Restaurants and Restaurant Groups

After Congress reintroduced the RESTAURANTS Act to provide long-term relief to restaurants as a bipartisan, bicameral effort, and the Senate separately passed the budget resolution amendment for restaurant industry relief during the week of Feb. 4, the $25 billion RESTAURANTS Act is one step closer to passing in Congress after the House Small Business Committee voted to approve the proposal on Wednesday. During the week of Feb. 15, the House Budget Committee will meet to put the legislation package together and vote on it. The House of Representatives is expected to vote on the full relief package the week of Feb. 22, with a Senate vote to follow if it passes. Here is what we know so far about the 2021 version of the RESTAURANTS Act legislation that was originally proposed by Rep. Earl Blumenauer (D-Or.) during the last Congressional session and passed by the House in October: The $25 billion round of funding would be divided into government-funded grants with a maximum of $10 million per restaurant group or $5 million per individual restaurant location. Eligible businesses include foodservice and drinking establishments like restaurants, bars, caterers, breweries, taprooms, and tasting rooms that are not part of an affiliated restaurant group with more than 20 locations. Participants cannot be publicly traded and there are limits on private equity firms. Participants also cannot currently be an applicant for the Shuttered Venues Operators grant program. – Source: NRN.

Will Delivery Still be King in a Post-COVID World . . . . ?

When Normalcy Returns, don’t Expect Customers to Shift Completely Back to in-house Dining: Delivery has Become an Essential Growth Driver

Restaurant operators say the year of pandemic-related shutdowns has changed habits and preferences. And those changing consumer trends are reshaping the industry, from the way restaurants operate, to their dependence on off-premise and the design of brick-and-mortar locations. As the COVID vaccine reaches more people and the economy settles into a new post-pandemic sense of normalcy, this is part of a three-part series looking at how restaurants are adapting for the new consumer. Before March 2020, certain demographics — Millennials and Gen Z — were more likely to swipe and scroll through their third-party delivery apps on their phone, while other demographics were more likely to prefer dining in person or picking up the phone to place a takeout order every once in a while. But the arrival of the COVID-19 pandemic became the great off-premise equalizer. Now, 53% of adults say purchasing takeout or delivery food is “essential to the way they live,” and 68% of customers say they are more likely to purchase takeout or delivery food than they were before the pandemic, according to data from the National Restaurant Association’s State of the Industry report released in January. And restaurants are responding to that demand: 46% of family-dining and fine-dining restaurants said they added delivery options between March and December, along with 44% of casual-dining and fast-casual restaurants.  “Consumers are more receptive to how they pay for restaurant meals now, in terms of technology,” said Hudson Riehle, the association’s senior vice president, research and knowledge group. “For operators, the ability to execute off-premise definitely has the tenacity to continue forward.” But not all off-premise opportunities are created equal. According to Datassential, drive-thru and takeout or curbside pickup have been the top off-premise restaurant experience for consumers during the pandemic, with 62% of surveyed consumers using the drive-thru for meals eaten at home, and 46% using takeout. Despite the jump in popularity during the pandemic, delivery comes in third: with 41% of customers ordering delivery directly from the restaurant and 34% using a third-party app for delivery. Even though Datassential’s research showed drive-thru and takeout as the more popular options among consumers, don’t discount the growth of delivery app literacy, Datassential’s group manager Mark Brandau said. “The growth in delivery has been pretty consistent: it’s one of those things that once people try it, they tend to stick with it,” Brandau said. “There might have been some ebbs and flows over the summer with outdoor dining, but delivery is a steady option because we always end up back home. If I need to feed my family I don’t want to have to go back out.”

During the pandemic, traditional sit-down dining categories like casual- and family-dining saw their off-premise sales grow significantly, with 69% of family-dining and 70% of casual-dining restaurants reporting off-premise as a larger portion of their sales during the pandemic, according to the National Restaurant Association report. But is the demand for off-premise options (and smaller push for delivery) a temporary trend that will snap back as soon as customers are able to safely return to restaurants? The answer is complicated. The National Restaurant Association reported the phenomenon of pent-up demand for on-premise dining during the pandemic. According to their State of the Industry report, 84% of customers said in April that they’re not eating in restaurants as often as they’d like. And although that number diminished over time, the pent-up demand for on-premises dining reached 67% by December. The question remains whether consumers will continue to demand digital convenience or whether they will be putting more value on the experience of eating out. Datassential’s Brandau thinks consumers will want a little bit of both: “Home and work have been our only places for so long, that we just want a third place back,” Brandau said. “I think the demand for dining out will come back, and in terms of using these convenient options, it will depend on what the customer needs occasion by occasion. Soon, your average restaurant will be better prepared to handle those different consumer need states than they were before and during the pandemic.”

Keeping the customer satisfied

The other major consideration when customers balance cravings for delivery versus in-store dining will be quality of experience. According to September 2020 data from Datassential, customers reported a mixed experience with food delivery, with 73% saying delivery is too expensive once you factor in fees and tips, and only 59% said they would continue using delivery apps in the future after the pandemic ends. Research from data and insights company Black Box Intelligence came to similar conclusions: as of December, consumer sentiment of food obtained from limited-service brands through delivery were 23% more negative than positive. In contrast, dine-in experiences received 14% more positive mentions than negative. Full-service brands received a negative net consumer sentiment of -6% for delivery and +56% for dine-in experiences. “When people go to restaurants, they tend to be more satisfied with their experience,” said Victor Fernandez, vice president of Black Box Intelligence. “The compounded problems with takeout are if the order is not right, takes too long, etc. and you don’t know who the responsible party is [the restaurant or delivery service]. So that means we have a higher adoption rate but with the lower guest sentiment.” – Source: Restaurant Hospitality.

The hospitality business has landed 18% of all loans to date . . . .

Restaurants and Hotels Draw $18B in PPP Loans, the Highest in any Industry

Restaurants and hotels have landed more than $18 billion in loans under the current version of the Paycheck Protection Program (PPP), or 18% of all the dollars okayed to date, making the hospitality industry the leading borrower by a considerable margin. Data released by the U.S. Small Business Administration (SBA), the administrator of the PPP, shows that the average loan across all industries is $78,000, with about 70% of the loans amounting to less than $50,000. The snapshot of PPP activity shows that the number of second-draw loans—advances made to small businesses that have previously borrowed money under the 11-month-old program is about three times the tally of first-time loans. Just under $101 billion has been lent to date under the re-upped program, which began in mid-January. About $284 billion has been allocated for the program, with Congress considering a boost of $7.3 under the COVID relief bill that’s currently being hammered out in the House o Representatives. Since the program began at the start of the pandemic, about $623.4 billion has been lent to businesses. Restaurants are the leading borrowers in terms of loans approved, according to the SBA. The next most common borrower was the construction industry, which has drawn 14% of all money lent as of Feb. 7.

The chain rolled out alcohol, dinner options, a new kid’s menu. And has more in the works . . . .

Cracker Barrel’s Revitalized Menu Marries Tradition and Innovation

Cracker Barrel’s culture is rooted in heritage, but that doesn’t mean tradition can’t be reimagined. The commitment to innovation was on full display in 2020 as the 663-unit brand released a revamped dinner menu, diversified its family meal deals, and introduced alcohol for the first time in its 51-year history. Cammie Spillyards-Schaefer, vice president of culinary and menu strategy, says Cracker Barrel is always listening to consumers, examining the macro environment, understanding competitors, and taking notice of inspirational chefs at independents. The chain keeps an eye on all those matters, and then develops products. Once all the checkpoints are met at the home office, the food heads toward an operational test where operators get their hands on new offerings, test them and receive feedback from guests. That process is exactly how alcohol made its way to Cracker Barrel. Consumers said they wanted options for beer and wine, especially on weekend dinner occasions. Spillyards-Schaefer says the chain is also aware guests may sometimes dine at another restaurant simply because they don’t have alcoholic offerings. So with the new program, a veto vote is eliminated, and guests are provided with an enhanced experience. CEO Sandy Cochran said in December alcohol proved to be incremental in Q1 and mixed 1 percent. At that point, the program was offered in 250 stores, but Cracker Barrel projects it will roll out to roughly 600 by the end of the fiscal calendar. Wine options include Gambino Sparkling Wine, Sutter Home Moscato, Sutter Home Chardonnay, Sutter Home Merlot, and Sutter Home Cabernet Sauvignon, while the beer menu features Budweiser, Bud Light, Miller Lite, Pabst Blue Ribbon, Angry Orchard Cider, and Twisted Tea. The favorite so far has been the Orange and Strawberry Mimosa, which customers have been drinking all day, not just the morning daypart.

Cracker Barrel’s mimosas have been popular all times of the day.

“I think because people eat breakfast with us all day, and that’s a really important part of our brand, they might be eating pancakes at dinner, but the idea of combining those with a mimosa is delicious, right?” Spillyards-Schaefer says. “The other thing we’ll see is they might be eating Southern Fried Chicken, and what’s better than champagne and fried chicken? And so they’ll have an Orange Mimosa with a Southern Fried Chicken, and we know that our guests like that little cup of sweet, indulgent kind of drink. And so that seems to be fitting the bill for them.” The introduction of alcohol coincided with an evolution of the dinner menu that called for simplicity and innovation. For example, Cracker Barrel previously had a larger and smaller portion size for its Chicken and Dumplings—one with two sides, and the other with three sides. Spillyards-Schaefer says it was difficult for customers to understand the difference and for cooks to remember correct portion sizes. So the brand aligned portion sizes and gave customers a choice of either two or three sides. “Something that sounds as simple as that actually eases execution tremendously in our back-of-house,” Spillyards-Schaefer says. “… There’s never been a more important time than COVID—and all of the challenges that it brings—to keep a high level of execution in our restaurants.”

Cracker Barrel also removed low-performing items across the menu to make room for new dinner offerings that guests would enjoy even more, like the Chicken Pot Pie, Maple Bacon Grilled Chicken, Country Fried Pork Chops, Pot Roast Supper, and Barrel-Cut Sugar Ham. Spillyards-Schaefer says COVID did slow Cracker Barrel’s major launch of the revamped dinner menu, but she adds it pushed the brand to streamline the process and bring innovation to the market faster than it ever has before. It’s a new strategy Cracker Barrel will maintain coming out of the pandemic. “Chicken Pot Pie had a really great guest response, both in sales performance, but also in how they loved the item,” Spillyards-Schaefer says. “It’s just one of those natural fits for Cracker Barrel—it looks beautiful on TV, it eats really well, and people absolutely loved it. And that barrel cut ham, it’s an inch thick, 24-ounce ham steak, and so that thing going through the dining room is pretty impressive, and it’s one of those eye-catchers.” Being a family-oriented restaurant, Cracker Barrel made sure not to exclude children from the innovation. The company’s new Kid’s Menu comprises Mini Confetti Pancakes, Lil’ Barrel Cheeseburgers, Dirt Cup Dessert, and a Milk n’ Cookies Straw. Spillyards-Schaefer says the standouts have been the pancakes—filled with fruity cereal and served with syrup and butter— and the Dirt Cup, which mixes layers of chocolate pudding with chocolate cookie crumbles and gummy worms.

Cracker Barrel learned kids enjoy interactive and captivating presentations.

To test those products, Cracker Barrel brought both parents and children into qualitative focus groups. The brand learned kids enjoy interactive and captivating presentations. As a result, kids are provided with smaller, user-friendly utensils, and pancake syrup is served in ramekins so little guests can dip their food. The chain balanced their research with the wishes of parents. Milk is the best example; parents want their kids to drink milk, so to entice the kids, Cracker Barrel created a milk straw that has cookies and cream flavor beads in it. “You can’t wear your feelings on your sleeve when you talk to kids about what they like and don’t like right,” Spillyards-Schaefer says. “They’re super honest. But it was really fun to watch them actually eat the food and talk about the food.” Cracker Barrel’s menu transformation extended beyond the four walls as well. For years, the brand was known for its large, Heat n’ Serve meals offered during the holidays. Those typically serve eight to 10 guests, but with COVID infiltrating the U.S., the brand knew it needed to help consumers in smaller gatherings. So Cracker Barrel introduced new meals that serve up to six guests, such as the Thanksgiving Heat n’ Serve Family Dinner that includes turkey breast, dressing, gravy, cranberry relish, rolls, and two sides. Along with a variety of serving sizes, Cracker Barrel is also moving forward with a wider range of proteins in its family meal deal program. The chain tested a Prime Rib Heat n’ Serve a meal that feeds four to six people. Spillyards-Schaefer says the product was “extremely popular” and that it’ll likely be part of a holiday offer sometime soon. “Sometimes we need completely new innovation and the Prime Rib Heat n’ Serve is a great example of that,” Spillyards-Schaefer says. “That’s not available in our stores. Cracker Barrel is all about traditions, and what’s more traditional at a holiday than prime rib? So for us to be able to deliver a great item like that, that’s only off-premise was a really fantastic thing that drove business and drove sales and we think drove incrementality to the holiday occasion, which is fantastic.” Spillyards-Schaefer says the restaurant will finish rolling out its new dinner menu later this year.

There’s one final phase that will involve taking Cracker Barrel favorites like the Hash Brown Casserole, Southern Fried Chicken, and Mac and Cheese and inserting a “little twist.” Those items are currently in development and will be tested and sent to the market shortly after. Additionally, Cracker Barrel is investing in catering occasions by testing Meatloaf Sliders, which is meatloaf with cheese, grilled onions, and caramelized ketchup on a bun. It’s served with a side of cobbler. Spillyards-Schaefer says consumers can always expect Cracker Barrel to meet their needs. She recalls working as a chef in fine dining early in her career where she touched a couple of restaurants. Now she’s touching guests at more than 600 stores across the country, and the experience couldn’t be more rewarding. “I love this brand,” Spillyards-Schaefer says. “I genuinely love what Cracker Barrel brings to the table and the experience that we give—developing food that meets our guests’ needs, but still delights them in new ways because they still want the things they’ve been enjoying in Cracker Barrel for 50 years. But they also want new things. And so being able to balance that and bring that to market for this brand is truly a joy.” – Source: FSR Magazine.

Sysco Corp. is making it easier for restaurants to rebuild following a tumultuous year that shuttered thousands of independent operators and left millions of foodservice workers without a job . . . .

Sysco Sees Restaurant Recovery Accelerating

More than 17% of restaurants closed permanently or long-term in 2020, according to the National Restaurant Association. Sysco has worked with the organization to lobby for restaurant relief and guide operators through the process of applying for aid. “We were the first to offer educational webinars to our independent customers on how they can access the funds available to them via the PPP programs and the only distributor to lobby on behalf of our customers for that support,” said Neil Russell, senior vice president of corporate affairs and chief communications officer at Sysco, during a Feb. 16 presentation at the Consumer Analyst Group of New York virtual meeting. “Those efforts continue today with bipartisan efforts to move the RESTAURANTS Act forward, with additional grants to restaurants, allowing them to not only pay their employees but fund their operations by purchasing food and supplies from their distributor.” With vaccines being distributed across the country and local restrictions on restaurants easing or lifting, Sysco is gearing up for recovery in 2021 and beyond. The company expects its US business will recover quicker than its international business. “Our international business has some challenges in front of it, given the lockdowns in particular countries,” said Kevin Hourican, president, director, and chief executive officer at Sysco. “That will be a longer recovery period for us. However, we are seeing signs of light in our US business. Assuming restrictions continue to ease, we’re excited about the opportunity that consumers will quickly come back to the restaurants.” The company is making investments in inventory and staffing in advance of business recovery. “We’ve said this from the beginning of this crisis, the most difficult part of the COVID challenge is in the recovery window when you need to build back inventory, build back staffing and you’re not yet receiving the cash inflows from your customers in order to pay for those products and to support the payroll of the people,” Mr. Hourican said. “Sysco is uniquely positioned to be able to make those investments with no qualms to support our customers so that we can accelerate from a growth perspective faster than the recovery.”

In December Sysco launched a program called Restaurants Rising, which waived delivery minimums on regularly scheduled order delivery days. The company isn’t pulling back on delivery frequency as part of the program, something many foodservice distributors did as volumes decreased. “We’re doing more to help small independent customers than any foodservice distributor in this industry,” Mr. Hourican said. “No order minimums is a big deal in this industry.” The company is investing in its technology platform to better serve customers as they emerge from the pandemic. It recently updated its Sysco Shop platform to improve price transparency and price competitiveness. Sysco also is leveraging its expertise to help restaurant operators optimize menus to focus on profitability. “We can connect them to a delivery aggregator,” Mr. Hourican said. “We can help them improve their website to make it a clickable, orderable online menu. We can do things like helping them with outdoor dining solutions. We’re helping connect our customers to resources to purchase outdoor heaters and outdoor patios to extend that selling season through these winter months.” – Source: Food Business News.

As more states lift bans on on-premises dining, transactions at major US restaurant chains continued to improve . . . .

Restaurant Industry Continues Slow Recovery as States Reopen

As more states lifted bans on on-premises dining, transactions at major US restaurant chains continued to improve in the week ended May 17, down 21% from the prior-year period, registering a small gain from a 23% decline the week before and marking the fifth consecutive week of improvement, according to The NPD Group. Major quick-service chain restaurant transactions declined 20% during the week, compared to a decline of 21% the prior week from the year-ago period. An estimated 93,000 restaurant units reopened during the week in states that had previously restricted on-premises dining. At major full-service chain restaurants, transactions were down 49% from a year ago, up from a 58% decline the week before. Full-service restaurants in states where on-premises dining was permitted to reopen as of May 10 improved 13 percentage points in the week ended May 17, The NPD Group said. Full-service restaurants in “open” states have a 22-percentage-point advantage over those that remain closed for in-store consumption. “The reopening of restaurant dine-in services across the country will certainly continue to help drive improvements, but it’s important to keep in mind that restaurant on-premise dining operations are not serving to full capacity because of safety protocols,” said David Portalatin, food industry adviser at the NPD Group. “Equally important to the industry’s recovery is the consumer’s comfort level with dining in at a restaurant now.” As of May 22, restaurants in Kentucky were allowed to begin reopening dining rooms at 33% capacity, and restrictions on in-store dining were lifted in several regions of Maryland. Colorado restaurants were expected to reopen May 27 at 50% capacity with an eight-person party limit and six-foot social distancing. In Illinois, dining rooms are expected to reopen on May 29 for outdoor dining only, with party limits and six-foot social distancing. Dining rooms remain closed in New Mexico, Massachusetts, Delaware, Minnesota, New York, and New Jersey. – Source: Food Business News.

PEOPLE NEWS

Lynn Schweinfurth named executive vice-president and chief financial officer for Red Robin Gourmet Burgers, Inc. . . . .

Red Robin Taps Restaurant Industry Vet as New CFO

Lynn Schweinfurth succeeds Guy Constant, who will move to the role of executive vice-president and chief operating officer. In her new role, Ms. Schweinfurth will be responsible for leading all financial disciplines at Red Robin, including accounting, operations analysis, strategic and financial planning, treasury, investor relations, and overseeing the company’s supply chain. Ms. Schweinfurth joins Red Robin from Fiesta Restaurant Group, Inc., the parent company of the Pollo Tropical and Taco Cabana restaurant brands. She was senior vice-president, CFO and treasurer for Fiesta since 2012. Before that, she was vice-president of finance and treasurer for Winn Dixie stores and c.f.o. for Lone Star Steakhouse. Earlier in her career, Ms. Schweinfurth held various senior finance leadership positions at Brinker International, Inc., Yum! Brands, Inc. and PepsiCo, Inc. “Lynn’s extensive strategic, finance, and capital markets experience with recognized restaurant brands rounds out Red Robin’s leadership ranks as we continue to build a best-in-class organization to drive growth in a rapidly evolving business,” said Denny Marie Post, chief executive officer of Red Robin. “We are excited to have Lynn on the Red Robin team and look forward to her contributions in achieving our long-term vision. We are also pleased that Lynn’s arrival will allow us to complete the transition of Guy Constant from c.f.o. to c.o.o. Guy’s focused leadership and clear operational vision will help ensure we serve the needs of Red Robin guests and build our traffic momentum.” – Food Business News.

Aslam Khan is the new chief executive officer of TGI Fridays . . . .

TGI Fridays Taps Industry vet as New CFO

Aslam Khan has been named chief executive officer of TGI Fridays. He succeeds John Antioco, who has served as interim CEO since Robert Palleschi left the company late last year. Mr. Khan is the founder and chairman of the multi-brand franchise company Falcon Holdings L.L.C., which he founded in partnership with Sentinel Capital Partners, a majority shareholder in TGI Fridays. Westlake, Texas-based Falcon Holdings operates Church’s Chicken, Hardee’s, Carl’s Jr., Long John Silver’s, A&W Restaurants, and Piccadilly restaurants. Mr. Khan will remain an owner of Falcon, which has grown to operate more than 500 restaurants since its inception in 1999 and has become Church’s Chicken’s largest franchisee. In his new role at TGI Fridays, Mr. Khan said he will work with Stephanie Perdue, who joined the company as chief marketing officer from Taco Bell in February, to refine TGI Fridays’ menu and marketing message. “TGI Fridays is an authentic, one-of-a-kind brand with a distinctive market position,” Mr. Khan said. “I am looking forward to working closely with Fridays’ talented management team and franchisees, and focusing on continuously improving our operations, championing innovation, and pursuing our mission of providing our guests an excellent experience. TGI Fridays is a casual dining restaurant based in Dallas, Texas, that operates more than 900 restaurants in 61 countries. – Food Business News.

Lance Tucker (left), new chief financial officer, and Phil Crawford, new chief technology officer for CKE Restaurants . . . .

Carl’s Jr., Hardee’s Parent Hires Two New Execs

Two foodservice veterans are joining CKE Restaurant Holdings, Inc., the parent company of Carl’s Jr. and Hardee’s. Lance Tucker has been named chief financial officer, and Phil Crawford has been appointed chief technology officer. “We are excited to build on the strength of our current management team with the addition of these two exceptional hires,” said Ned Lyerly, chief executive officer of CKE Restaurants. “Lance and Phil will be key contributors as we build on our brands’ momentum, innovate and address new consumer behaviors.” Mr. Tucker was most recently executive vice president and CFO for Jack in the Box, Inc. Before that, he spent nine years at Papa John’s International, Inc., most recently as senior vice president, CFO, chief administrative officer, and treasurer. “The power of CKE’s iconic brands, combined with its experienced management team and franchisee network, represents an exciting opportunity to showcase my strengths as we create value for guests, franchisees, and stakeholders,” Mr. Tucker said. “It’s a privilege to support these brands, and I look forward to partnering with the many entrepreneurs who have chosen to bring Hardee’s and Carl’s Jr. to local communities across the country and around the world.” Mr. Crawford joins CKE from Godiva Chocolatier, Inc., where he was the global chief technology officer. Prior to that, he was chief information officer and head of technology for Shake Shack, Inc., and earlier he was CIO for Yard House Restaurants for 11 years. In his new role, Mr. Crawford will lead CKE’s information technology function. “Technology is an enabler to a connected future that will transform experiences for our guests and employees, our relationship with our franchisees, and how we operate globally,” Mr. Crawford said. “CKE is committed to becoming a leader in innovation, and I’m humbled by the opportunity to help them build a technology roadmap to support its business goals.” – Source: CKE Restaurant Holdings, Inc.

New locations are already in the works . . . .

Texas Roadhouse is Fine-Tuning Jaggers, a Franchise-Ready Fast Casual

Promoting Jerry Morgan to the president of Texas Roadhouse in December freed up CEO and founder Kent Taylor to focus on fresh ideas, he said. And it’s something competitors should take notice of. Taylor, who shouldered president duties since Scott Colosi’s retirement in June 2019, has already been busy. Not just in the steakhouse realm, either. He’s spent the past six or so months exploring two main outlets—retail initiatives, and fine-tuning Texas Roadhouse’s little-known fast-casual, Jaggers. “We’ve been very successful in the full-service world, so why not retail and fast food, too?” Taylor said. In 2021, Texas Roadhouse expects to open 25–30 company restaurants, including as many as five Bubba’s 33 locations, and one Jaggers. The latter debuted its latest store in early December and “continues to perform way above our expectations,” Taylor said. “We have a few more company-owned locations already in the works for 2022, and we will continue to explore potential franchise opportunities,” he added. There are now three Jaggers—in Louisville, Kentucky (the recent one); Noblesville, Indiana; and Indianapolis. It’s not unlike Texas Roadhouse to spread locations when building a brand. It did the same with Texas Roadhouse in the 1990s when it had stores in Cincinnati, Ohio; Sarasota and Clearwater, Florida; and, of course, the original Clarksville, Indiana, unit. Taylor even bought a PO box in Dallas just so he could put a Texas address on comment cards. Burger brand Bubba’s 33, created by Taylor in 2013, has grown to 31 locations, scattered across 14 states.

Taylor has always had a penchant for big ideas. He famously tried to shake things up as a KFC manager by making sandwiches and offering bottled water. He left before trouble as a caught up to him. Taylor’s first solo venture, Buckhead Hickory Grill (now Buckhead Mountain Grill), arrived in 1991 and is still in operation. He sold his interest three years later, a year after launching Texas Roadhouse with a $300,000 investment from three Kentucky doctors. Jaggers, boasting a menu focused on burgers, chicken sandwiches, tenders, shakes, and salads, sprung to life in 2015. Taylor told the Louisville Business Journal it was built around the idea of, “What if Chick-fil-A and Five Guys got married and had a kid?” Essentially, taking three category staples—chicken, burgers, and salads—and trying to be best-in-class at all of them. And it brought Taylor back to quick service for the first time in three decades. Taylor picked Indianapolis as the first location so he could drive over and check-in. It’s a 3,000-square-foot venue built atop a parking lot that, fittingly, was once a Texas Roadhouse before relocating. Why Taylor sees whitespace with Jaggers isn’t complicated. COVID-19 did a lot of things in the past year or so, but it’s undoubtedly lit the ignition on convenience and to-go preference among consumers. It’s simply a good time to get into the fast-food business. What’s interesting to note as well, is Texas Roadhouse’s makeup as a company. The brand has 503 corporate Texas Roadhouses and just 69 franchises (there’s another 28 internationally).

Bubba’s is entirely company-run. So Jaggers not only dips Taylor’s expertise back into counter service, it creates a franchising vehicle the company has never really had before. Or at least has chosen to mostly avoid with Texas Roadhouse and its managing partner system. Taylor brought the notion up only one other time Thursday, to say, if Texas Roadhouse takes this route with Jaggers, they’d be looking at “additional sales without the cost of developing sites.” He was answering a question on the overall landscape of development, with COVID closures tossed in, and how construction costs continue to rise despite real estate coming up. What Texas Roadhouse might save in rent, in other words, would get offset by increases in materials, like concrete and lumber. Even trades such as plumbing, HVAC, and electric, are going up. It’s something likely to squeeze corporate development industry-wide in the coming months. Franchising, however? That’s a bit of a different topic, although how it shakes out in COVID’s wake isn’t certain, either. Much of it boils down to which brands are aggressively stockpiling cash and where investors and firms see runaway, as well as how money moves behind the curtain with M&A, bankruptcies, and other developments still to come. There remains a lot of debt and a lot of opportunities, and plenty of questions. Taylor said his efforts of the past six months “sets us up for future growth over the next decade.” He’s hinted at this before. BTIG analyst Peter Saleh believes the future could hold “several hundred locations at a minimum” for Bubba’s 33 alone. Jaggers is really a mystery at this point, however. But that’s not necessarily a roadblock. Both Bubba’s and Texas Roadhouse stores average north of 7,200 square feet per unit. It cost the company $6.1 million to build a Texas Roadhouse in 2020, up from $5.5 million in 2019 (thanks to those construction costs). Bubba’s 33 was $6.7 million in 2019.

As successful as Texas Roadhouse has been over the years, those figures keep boom targets tempered. Although Saleh projects 800–1,000 locations in the company’s eventual future thanks to a new growth path focused on smaller markets. A lot of these lower-population areas are mostly served by independents, and generally less attractive to larger chain competitors. Meaning, if industry closures are carried by independents this year, the current disruption could disproportionally impact smaller markets and open unit potential for well-capitalized operators. Or, put more specifically, it could swing the door wide for Texas Roadhouse, which diverted roughly a third of its development in 2020 to smaller markets—those with populations of 40,000 to 60,000. Taylor previously said the brand would continue targeting these areas. Even Bubba’s 33 plans to throw darts at less-dense markets. Overall, there’s plenty of growth prospects for Texas Roadhouse. Jaggers might just be the wildcard nobody is talking about yet. Not forgetting Taylor’s other project, he said Thursday the company recently signed two licensing agreements to expand its retail presence. The first is for a bottled version of its margarita mix. The second is for a canned cocktail seltzer that will be offered in a variety of Texas Roadhouse branded margarita flavors. Both are expected to hit retail sometime this year. “These initiatives, together with our Butcher Shop business are low-risk and require minimal investment. We believe, over time, they have the potential to generate strong returns,” Taylor said.

 “The challenges we faced in 2020 were unlike any other”

Texas Roadhouse reported a net income of $19.5 million in Q4, announced Thursday, or 28 cents per share. This was down from $42.7 million and 61 cents, respectively, in the year-ago period. Revenue declined 12 percent to $637.9 million from $752.2 million. As restaurants across the country, this winter stretch was a wild one. October, November, and December same-store sales increased 0.8 percent, decreased 6.3 percent, and then fell 18.2 percent. For the full quarter, comps declined 8.9 percent at company stores and 11.2 percent at franchises. Normally, these figures would seem like impossible swings. But these are strange times. After October’s positive push, Texas Roadhouse had to reclose 90 dining rooms and layer in additional capacity restrictions at many others, starting in mid-November. Yet by the time the quarter ended, more than 98 percent of corporate restaurants returned some level of dining room capacity. COVID is simply an era with no baseline. Sales have benefited from these reopenings and eased restrictions. Stores with limited capacity averaged more than $108,000 for the first seven weeks of fiscal 2021. And for restaurants with open dining rooms, to-go averaged just over $25,000 per week, or roughly 23 percent of sales, during that stretch. Notably, restaurants with 75 percent and above are averaging slightly under $23,000 per week (20 percent of total sales). “So to-date, we are seeing a minimal drop-off in to-go sales as indoor dining capacity increases,” CFO Tonya Robinson. It’s the formula sit-down chains nationwide want to bank on: Dine-in business flooding back and to-go sales sticking around to some elevated degree.

Texas Roadhouse installed windows in its “corral” and outdoor waiting areas to make it easier for customers to grab to-go food. It’s also introduced some technology into the experience, such as two-way texting so people can check-in and know when their food is ready for pick-up. To-go, broadly, pressured Texas Roadhouse’s margins a bit because it’s less profitable, thanks to lower drink mix. Also, the company pays to-go employees minimum wage instead of a tipped wage. Robinson said there’s about a $4 gap in per-person average between the dining room and to-go orders. At the beginning of December, there were 100 locations operating as off-premises-only units. There is just eight today. There are 165 operating in the 75 to 100 percent capacity bucket. Texas Roadhouse also moved its apps to a different platform in October and has seen downloads (this is true of Bubba’s 33 as well) rise in recent months. – Source: FSR.

Another Broken Egg Cafe is looking to expand throughout the Southeast, Midwest, and Texas to complement its existing footprint of cafes in those areas . . . .

Another Broken Egg Café Adds 12 Locations to Pipeline

Another Broken Egg Café has signed a seven-unit franchise agreement extension with multi-unit operator Morning Chef. One of Another Broken Egg Cafe’s fastest-growing franchisees, Morning Chef, will now have plans to open 10 units throughout Ohio with up to four openings planned for 2021. “Our pipeline began to build towards the end of 2020 and that momentum has carried into 2021,” says Jeff Sturgis, Chief Development Officer of Another Broken Egg Cafe. “We’re excited that Morning Chef is investing further in our brand and we look forward to watching them begin to saturate key markets throughout Ohio.” Including the company’s agreement with Morning Chef, Another Broken Egg Cafe has already signed agreements in 2021 to open 12 locations and debuted new restaurants in Orlando, FL; Bossier City, LA; and Cincinnati, OH. All locations will feature the brand’s expansive full bar and signature hand-crafted cocktails that complement Another Broken Egg Cafe’s southern breakfast, brunch and lunch menu. The company’s pivot towards off-premise amid the pandemic combined with an innovative food and beverage program has positioned the brand as an attractive investment for franchisees. “We made a variety of changes to help our franchisees drive sales and improve profitability when COVID-19 hit and our ability to pivot quickly has enabled many of our stores to perform better than they did pre-pandemic,” says Paul Macaluso, president & CEO of Another Broken Egg Cafe. “We look forward to seeing the success continue and we’re eager to partner with additional operators to help our brand grow in new markets.” Another Broken Egg Cafe is looking to expand throughout the Southeast, Midwest, and Texas to complement its existing footprint of cafes in those areas. With plans to open up to 18 locations in 2021 and reach 300 units open and in development by 2023, Another Broken Egg Cafe is aggressively seeking single- and multi-unit operators to drive growth. – Source: Another Broken Egg Café.

The fresh vending company makes its first move into the restaurant space . . . .

Dunkin’ Partners with Farmer’s Fridge to Bring New Grab-N-Go Options to Customers

In its first partnership with a restaurant brand, Farmer’s Fridge, the fresh vending company, is testing some of its salads, bowls, and breakfast items at select Dunkin’ locations. The pilot program is taking place at six Dunkin’ stores at which a limited selection of items is on offer behind the counter. Eventually, they will be available in grab-and-go cases rather than the traditional Farmer’s Fridge stand-alone vending fridges. “Dunkin’ was exploring new food options focused on plant-forward ingredients,” said Meghan Hurley, head of marketing for Farmer’s Fridge. “Our CEO was introduced to the Dunkin’ folks in 2020 and the idea was launched.” Historically, Farmer’s Fridge has set up its vending operations in airports, college campuses, office buildings, hospitals, and similar venues. There are now about 350 installations, but this is the first venture with a QSR. Dunkin’ is offering two Farmer’s Fridge salads and two bowls, including a harvest salad, Greek salad, pesto pasta, and a burrito bowl—the last a combo of black beans, a brown rice-quinoa blend, fire-roasted corn, roasted fajita veggies, and guacamole. Also on the menu are chia pudding, apple-cinnamon oats, and a yogurt parfait. None of these were developed specifically for Dunkin; these items were already in the fridges, said Hurley.

As in its vending operations, all the food is packed into recyclable plastic jars. Dunkin’ customers can either recycle these at home or bring the jars back to the store where the purchase was made. “Dunkin’ is committed to delivering a wide variety of delicious, convenient menu choices to help keep our guests running all day long, including options that make it easier to eat on-the-go,” said a Dunkin’ spokesperson. “We are currently testing Farmer’s Fridge prepackaged salads, grain bowls, and breakfast items inside a total of six restaurants in the Chicago and New Jersey markets. The test is designed to gather valuable feedback from consumers, franchisees, and their employees to help inform future decisions.” With many of its fridges in locations that immediately shut down at the start of the pandemic, Farmer’s Fridge had to quickly transform its business model. “We lost 70% to 80% of our business that first week, but by the end of March, we built an e-commerce site on Shopify and launched self-delivery in some markets,” said Hurley. “People still wanted healthy food fast, so we were serving the same occasion as we did at the office.” The company also relocated some of its fridges in hospitals and universities to make them more accessible to frontline workers and quarantining students.

Farmer’s Fridge also debuted a Chef Collab series, using well-known restaurant chefs to create recipes for fridges and home delivery. “When restaurants shut down, we asked the chefs what they would make at home, and they developed dishes for us,” said Hurley. The lineup includes Bill Kim, Paul Kahan, Missy Robbins, and Stephanie Izard. Girl and the Goat’s Izard created a tofu bowl. Almost a year later, Farmer’s Fridge business is back to pre-pandemic levels, said Hurley, but sales are going through different channels. With about half the fridges currently inactive, the company is doing more wholesale, e-commerce, and delivery. In 2021, “we want to take a step back and build out these channels,” said Hurley. “The menu team also wants to focus on product development and develop recipes based on trends and customers’ needs. The Dunkin’ items are just in test right now, but we hope to partner with other restaurants in the future.” – Source: Restaurant Business.

It’s been almost a year since the coronavirus pandemic forced restaurants across the country to change the way they operate . . . .

Community Connections Help Independent Restaurants Stay Afloat Amid Pandemic

A massive surge in off-premises dining has allowed some restaurants to stay in business, but for many, the transition has been arduous and the future is uncertain. Rather than setting unrealistic goals of returning to business as usual, restaurateurs would be wise to focus on making off-premises sales a sustainable part of their business for the foreseeable future, a panel of independent restaurant operators said during a webinar hosted on February 17 by the University of Maryland’s Robert H. Smith School of Business. Restaurant operators from Maryland and Washington, D.C., shared their stories of transition and discussed plans for what comes next.

The off-premises shift requires reinvention

Eateries that already had takeout or delivery programs in place before the pandemic were able to get them up and running faster after the initial shutdown, according to panelists, but the transition required time and money. About half of US casual dining operators said they devoted more resources to expanding the off-premises side of their business since the beginning of the outbreak last March, according to the National Restaurant Association’s State of the Restaurant Industry report. Janet Yu, owner of Hollywood East in Wheaton, Md., said the restaurant “had a good carryout following” before the pandemic, but keeping it going over the past year has required her to make major changes. Working with a smaller staff to meet increased takeout demand drove Yu to revamp the menu to make it more cost-effective, and the restaurant is closed two days a week to give cooks time to prep. Updating menus, perfecting takeout packaging, and figuring out the best way to take and fulfill an influx of off-premises orders can seem almost as complicated as starting a restaurant from scratch. “Every time we pivot, that’s the same as opening a new concept,” said Josh Phillips, general manager of Espita in Washington, D.C. After adding a grocery operation, off-premises ordering, and patio dining at the Mexican restaurant, Phillips and his team took the leap of actually opening an additional concept. The virtual brand — Ghostburger — took about three weeks to launch with a menu of burgers and cheesesteak sandwiches that Espita’s staff prepares and guests can order online. The ghost kitchen immediately surpassed Phillips’ expectations, pulling in $26,000 in its first week. Thanks to the success of its off-premises business, Espita has been able to bring back 31 employees, and Phillips said he’s “planning on doing Espita side-by-side with Ghostburger forever.” Another D.C. restaurateur making permanent changes to his business model is Peter Opare, chef and co-owner of Open Crumb in the city’s Anacostia neighborhood. The eatery, which had generated most of its revenue supplying hot bar items to Whole Foods Market, saw sales fall 70% when the pandemic brought a swift end to self-serve prepared foods. Since March, Opare has focused more on takeout and delivery, including a family meal service. Open Crumb has offered family meals for several years, but the recent acquisition of a packaging machine has allowed Opare to scale up, and he plans to launch prepackaged meals soon.

Third-party services take a bite out of the bottom line

The rise in off-premises orders has forced many restaurant operators to rely on third-party delivery services. While these services can help restaurants reach more customers, they are seen as a double-edged sword by many because of the high fees they charge both restaurants and diners. Opare said that eating the cost of these fees has been a necessary trade-off to growing off-premises business, and recent restrictions put on these charges have helped. Washington, D.C., capped the commission fees that third-party delivery services can take at 15% back in May as an emergency measure to provide relief to the District’s restaurants. Several other cities, counties, and states have enacted or are considering similar rules, but the caps are temporary and several panelists pointed out that 15% is still a high price to pay for struggling restaurants. The panelists agreed that the best way to avoid these fees is to encourage customers to place orders directly with restaurants and opt for takeout rather than delivery. It’s an approach that’s becoming more common — almost three-quarters of casual dining operators have added curbside pickup since March, according to the National Restaurant Association. At Espita, Phillips uses a mobile payment service called GoTab, which charges a 1% fee for online pickup. Eric Shu-Pao Wang, co-founder and partner of D.C. restaurants Toli Moli and Thamee, said he avoids dealing with delivery services by essentially having customers hire their own. He asks customers to use a service called Skip the Line to arrange for someone else to pick up their carry-out order. Yu said some of her regular customers will often coordinate neighborhood orders, with one person coming to pick up as many as a dozen orders. Hollywood East has been in business 25 years, and loyal customers from the surrounding community have been key to its survival. Rather than try to expand through third-party partners, Yu said she had to ask a delivery service to take her restaurant off of its website because of issues with customer payments. Restaurateur Jackie Greenbaum, who co-owns Little Coco’s and Bar Charley in Washington, D.C., and Quarry House Tavern in Silver Spring, Md., echoed Yu’s frustration with third-party services. “We used to have huge fights with Postmates and DoorDash,” she said, citing issues with apps listing old menus featuring dishes that hadn’t been offered at the restaurant in years. These types of errors on the part of third-party companies make restaurants look bad because it takes the customer interaction out of their hands, Greenbaum said.

Communication drives community support

Fortunately, more consumers are catching on to the fact that the best way to help their favorite restaurants and make sure their order is handled correctly is to order directly from the restaurant. In fact, 64% of adults said they prefer to order directly through the restaurant, rather than from a third-party service, according to the National Restaurant Association. Greenbaum said most of her customers opt for pickup and credited the news media with educating consumers about the drawbacks of third-party services for both diners and restaurants. Opare concurred, explaining that while there will always be some people who prioritize convenience over all else, most of his customers know that ordering takeout directly is “better for us and them.” All five panelists emphasized the importance of communicating with customers about the issues restaurants are facing, and how patrons’ continued support is essential to helping eateries weather the storm. “If anybody wants to know how to support their local favorite restaurant, I think the best thing they can do is call…and ask them how they would like to be supported,” Phillips said. “Restaurants are part of communities. When we treat restaurants as a part of a community, the community thrives, the restaurant thrives.” – Source: Smart Brief.

While many restaurants saw off-premises sales rise during the pandemic, it wasn’t enough to make up for their lost on-premises business . . . .

Off-Premises Sales, not Enough to Offset Lost on-Premises Business

With on-premises capacity limited – and sometimes nonexistent – during the pandemic, restaurant operators had no choice but to sharpen their focus on off-premises business. This was particularly true in the full-service segment, with roughly one-half of operators saying they devoted more resources to expanding the off-premises side of their business since the beginning of the COVID-19 outbreak in March 2020. As restaurants added new off-premises options in recent months, consumers responded by increasing their usage of takeout and delivery. National Restaurant Association survey data shows that a higher proportion of consumers are ordering off-premises meals from restaurants than before the pandemic – especially for the lunch and dinner dayparts. Prior to the coronavirus lockdowns, just under 60% of adults said they ordered takeout or delivery from a restaurant for their dinner meal during the previous week, according to weekly surveys conducted by the Association. During the last 9 months, an average of 65% of adults ordered takeout or delivery for dinner on a weekly basis. The trend is similar for the lunch daypart. Over the last 9 months, an average of 46% of adults ordered takeout or delivery for their lunch meal during the previous week. In early March, only 37% of adults reported similarly.

Not filling the on-premises void

Across each of the six major industry segments, off-premises represents a larger proportion of sales than it did pre-COVID. However, for the vast majority of operators, this wasn’t nearly enough to offset their on-premises sales losses. This was particularly true in the fine-dining segment. Among fine-dining operators who say their off-premises business increased compared to pre-COVID levels, 77% say their additional off-premises sales have made up less than 20% of their lost on-premises sales. Fully one-half of fine-dining operators say their higher off-premises sales have made up less than 10% of their lost on-premises sales. Meanwhile, only 4% of fine dining operators say their added off-premises sales recovered more than half of their lost on-premises business. In the family dining and casual dining segments, just over one-half of operators say their additional off-premises sales made up less than 20% of their lost on-premises business. Results were somewhat more favorable in the limited-service segment, with roughly one in four operators saying their additional off-premises sales made up more than half of their lost on-premises business. Still, most limited-service operators say it was only enough to offset a fraction of their on-premises sales shortfall. – Source: The National Restaurant Association.

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