The covid-19 pandemic caused huge disruption and a ripple effect of unintended consequences – and change – for foodservice

More than two years ago the way in which the world’s population worked and lived changed forever. The coronavirus pandemic that began in China and began to spread rapidly, globally, was first identified as a “contagious virus”. Quickly mandates from CDC, WHO and national governments were issued to control the spread by wearing masks, distancing in stores/malls and large events, closing schools, and the requirement to take two vaccines (at different times) and, months later, a booster. Some states and healthcare organizations, including individuals’ health, religion, and those with certain allergies were not required to be vaccinated.

Under normal of normal conditions providing foodservice can be daunting, add to this a worldwide pandemic and it becomes a major challenge. Due to the changes in more technological equipment, food selection (more plant-based and organic), low wages in the last few years major changes in the ways “we used” to do it too, caused foodservice to make changes in almost all operations of the service.

Be ready for change

Major changes can cause fears and mental health problems for, personnel and customers when conflicting information is provided by various sources (fake news) especially when fear is real. How do we protect our families, our customers? Will I have a job? Why do I have to be vaccinated? Why do I have to wear a mask?

Changes result in layoffs, or a refusal to work. To offset the closure of businesses, reduced hours of work the US government provided stimulus compensation and some businesses were forced to pay unemployment compensation for the lack of jobs. In some locales these two payments were more money than full-time paid work, therefore many persons did not return to work, causing a reduction of the workforce. Some small businesses closed their businesses for good.

After some evaluation as to where and how the changes are affecting the personnel and the operation, the main discussions centered on whether to shut down, sell, keep, or change to a different type of foodservice operation to recover lost revenue. It also brought into focus the fact that every foodservice operation must always have an up-to-date emergency plan, (including a number of contingency plans), maintain a list of qualified personnel looking for positions, and conduct meetings with staff to include lifelong learning.

In conclusion: always be prepared for a major disaster by maintaining a disaster food area, under lock and key. Keep items that do not require cooking, some baby formula, and medical drinks (Ensure). At all times maintain a safe and sanitary workplace. Keep good records too – you might need them again. Source: Ruby Parker Puckett FFCSI

Hospitalizations and Caseloads Have Fallen in each State . . . .

California, New York End Indoor Mask Mandates

New York and California, two of the largest restaurant markets in the country, announced the expiration of their respective mask mandates for indoor public spaces. California first implemented its rule in mid-December, back when the statewide seven-day average case rate increased by 47 percent and hospitalizations spiked by 14 percent. The rule was initially set to end on January 15 but was extended to February 15. When the mandate ends, vaccinated customers will no longer have to wear masks indoors, but unvaccinated individuals will still be required to do so. Gov. Gavin Newsom said hospitalizations have decreased by 65 percent, in an announcement on Twitter. As of Tuesday, 73.5 percent of California residents ages 5 and older have been fully vaccinated. Despite the move, Los Angeles County intends to keep its indoor mask mandate. The local public health department will hold their restrictions until hospitalizations drop below 2,500 for seven straight days and case counts decrease to 50 new cases per 100,000, according to KABC News. “This is not the right time to stop wearing our masks when around others indoors, and in outdoor crowded settings,” L.A. County Public Health Director Barbara Ferrer told the media outlet. New York’s statewide mask requirement, which started December 13, was for all indoor public places, except those that have a vaccine requirement. At the time, cases increased by more than 4,000 per day since late November. Similar to California, the mandate was set to expire on January 15, but was extended to February 10. The state’s seven-day COVID case average is about 7,000 per day, a stark decline from 85,000 on January 9, according to Johns Hopkins University. As of Tuesday morning, 74.6 percent of New York’s population were fully vaccinated. “Positivity rates down and hospitalizations are down, cases per 100,000 are down and new admissions are down,” Hochul said. “So New Yorkers, this is what we’ve waiting for —tremendous progress after two long years.” Other states like Delaware, Oregon, New Jersey, and Connecticut have also relented on mask mandates. –Source: FSR

One of the major reasons Employees Churn so Quickly in Foodservice is an Unclear communication Surrounding Job Roles and Company Culture . . . .

Why Restaurants Must Change the Hiring Process to Address Labor Shortage

In the midst of the Great Resignation, every industry is scrambling to fill staffing shortages. Yet no industry has been impacted quite as hard as accommodation and foodservice. According to the Bureau of Labor Statistics, quit rates in this sector rose from 4.8% to 6.9% over the past year alone, more than any other industry, while hiring has remained stagnant. There are countless reasons why foodservice is so acutely susceptible to labor shortages: long, oftentimes unpredictable hours, low pay in many cases, lack of benefits, and increased risk of COVID exposure representing just the tip of the iceberg. With prolonged government relief in the lockdown months early in the pandemic, many foodservice workers were afforded time and opportunity to explore different career paths. The result is an industry desperately attempting to reopen but unable to attract the workers needed to meet demand. Hiring efforts for restaurants—particularly multi-location quick-service restaurants (quick-service restaurants)—need to adapt for a changing labor force. Short-term incentives are an essential first step, but to truly address and scale efforts for an unpredictable market, restaurants need to revamp and reprioritize their hiring systems, incorporating automation and adaptability to make the hiring experience simple for not only candidates but hiring managers as well.

The Trouble with Focusing on Short-Term Incentives

Foodservice work is a highly competitive landscape. For most employees, there is little difference from one job to another; and often this means that an applicant looking at one location of a quick-service restaurant could just as easily take a similar position at a restaurant a few doors down. This competition is the driving force behind new hiring incentives many restaurants are adopting to address their labor shortages. Higher wages, signing bonuses, and other similar incentives are becoming the norm for restaurants looking to stand out from the pack. While all of these incentives are important and help address the needs many workers are facing, they’re short-term fixes. As wages rise across the industry, there will eventually be a parity where incentives are the same everywhere and restaurants will no longer be able to use higher pay as a distinguishing point. These incentives also do little to address the core problem facing foodservice hiring efforts: employee retention. A new hire could be lured by higher pay, but once they have worked for weeks or months, they may find that the job doesn’t meet their expectations, and they move on. In order for restaurants to truly adapt to a changing market, they need to not only be able to hire at scale but hire the right people at scale. Small adjustments in the hiring process like realistic expectation setting for the position, communicating opportunities for growth, and transparency in hours and compensation are major first steps towards long-term employee retention. These efforts, however, are nothing without follow-through. By approaching job postings and the hiring process with transparency and living up to the expectations set in the long term, employers build a foundation of trust that can greatly contribute to retention efforts.

How Adopting New Hiring Systems Can Transform Long-Term Staffing Objectives

For how much quick-service restaurants have invested in making the customer experience as innovative and enjoyable as possible, very little has been done on the people and culture side. In order to create a hiring process that focuses on not only hiring, but retention as well, restaurants need to rethink their entire hiring infrastructure. New systems need to focus on three core principles: expectation setting, providing a frictionless experience, and velocity of hire. One of the major reasons employees churn so quickly in foodservice is unclear communication surrounding job roles and company culture. A worker may take a job, but after a few weeks may be dissatisfied with the position and move on because it was never made clear to them what they would be doing. In the application phase, employers need to give candidates realistic job previews to set expectations for their roles. The hiring process should be a two-way street; not only do employers want the best candidates, but the candidates need to evaluate whether the role is the best fit for them. The hiring experience needs to be as frictionless as possible. In current processes, a candidate may be interested in applying at a restaurant but face a number of bureaucratic hurdles that can dissuade them from continuing. For example, a candidate may go to the restaurant’s website, create a profile and fill out application materials; then, they are moved to an applicant tracking system (ATS) site where they need to also create a profile and fill out additional materials. This information may be time-consuming and redundant, and every step gives an applicant an opportunity to abandon the process. By instituting a unified system that leverages automation and only asks minutes of a candidate’s time, employers can remove barriers to the process. The result is velocity

At a time when a major distinguishing point between two competing quick-service restaurants can be as simple as who a candidate can start working for immediately, a fast hiring process can make all the difference. Lastly, with new tools in automation, these hiring systems can integrate evaluations designed to identify candidates with a likelihood for retention. Using smart tools can not only aid in volume hiring efforts but can provide a more focused hiring process without the burden of recruitment placed on time-strapped restaurant managers. Instituting a unified system enables quick-service restaurants to scale their hiring efforts across multiple store locations based on need. The labor shortage in restaurants is a multifaceted issue that doesn’t have one clear solution. By focusing on structural change in hiring systems themselves, however, quick-service restaurants are able to create the conditions for a frictionless, transparent candidate hiring experience that focuses on retention. Instituting new hiring systems that leverage automation enables hiring efforts to be easily scaled up and down depending on candidate demand, which is essential now more than ever given the unpredictability of the foodservice landscape. – Source: FSR.

Pennsylvania Restaurant & Lodging Association Adds Lauren Brinjac to Team

The Pennsylvania Restaurant & Lodging Association (PRLA) announced the newest addition to its team, Lauren Brinjac. Brinjac will serve as the Senior Director of Government Affairs, working closely with, Director of Government of Affairs, Zak Pyzik, and Greenlee Partners. Brinjac will report to PRLA President John Longstreet. Lauren brings to the PRLA a wealth of Harrisburg experience having served for ten years as Director of Government Affairs for the Insurance Agents & Brokers Service Group. She previously served as a Legislative Coordinator and Lobbyist for the Pennsylvania Bar Association. Her expertise in government affairs and established presence in Harrisburg makes her a significant asset to the PRLA team. “I am thrilled to be joining such a respected organization that advocates for and supports the Commonwealth’s tourism and hospitality industry,” explains Brinjac. “The last two years have been difficult for hospitality owners, employees, and patrons alike. PRLA has provided a critical voice and guidance to those in need and continues to advocate for its members. I am proud to be leading an impactful organization’s Government Affairs team and working with and advocating for its members.” “PRLA is in great hands with Lauren on our Government Affairs team,” states PRLA President John Longstreet. “After spending much time with her in the selection process, both Zak and I feel that her addition will make the “new” PRLA government affairs team a cohesive and complementary presence.” – Source: FSR.

Avanti Named 2022 Dealer of the Year

“Under the leadership of Mark Rossi, Avanti Restaurant Solutions has emerged as a disruptive force in the foodservice industry,” said Maureen Slocum, FE&S publisher. “The company’s forward-thinking leadership has led to a tremendous culture that empowers the company’s roster of A-list players to support their customers and supply chain partners equally well. In addition, Avanti continues to invest in various forms of technology to help add value to all of their relationships.” Representatives from the foodservice equipment and supplies dealership will accept this honor during FE&S’ 2022 Dealer of the Year & All-Industry Awards Gala, which will take place Sat., May 21 at the Four Seasons Hotel Chicago. Foodservice Equipment and Supplies named Avanti Restaurant Solutions the 2022 winner of the magazine’s celebrated Dealer of the Year Award.

This is the first time Avanti Restaurant Solutions has earned FE&S Dealer of the Year honors, although Rossi received the magazine’s Top Achiever — Dealer award in 2012. In 2020, Avanti Restaurant Solutions reported annual revenues of $30.63 million, making it the 47th largest foodservice equipment and supplies dealer in the country, per FE&S 2021 Distribution Giants Study.

“This is a testament to the resilience and determination of our tribe who lives and breathes our core values, DNA, and culture,” said Mark Rossi, founder, and CEO of Avanti Restaurant Solutions. “We are so appreciative of our loyal partners and clients who have been with us throughout this journey over nearly two decades. I am deeply touched by what I consider to be the greatest honor of my professional career.”

FE&S is able to present its 2022 Dealer of the Year & All-Industry Awards Gala thanks to the support of its platinum sponsors: Ali Group, Alto-Shaam, and Middleby.

FE&S Dealer of the Year & All-Industry Awards Gala recognizes the foodservice community’s brightest stars by presenting them with some of the industry’s most time-honored awards, including the FE&S Hall of Fame Award, Top Achievers, Facility Design Project of the Year, and DSR of the Year.

Anyone interested in learning more about the 2022 Dealer of the Year & All-Industry Awards Gala should contact Maureen Slocum at maureen@zoombagroup.com.  – Source: FES.

Starbucks Continuing to Adapt to Shifting Market Conditions

Starbucks Corp.’s top-and-bottom-line performance reflected strength even as the quick-service chain continues to adapt to changing market conditions influenced by the omicron variant of COVID-19. Earnings rose 31% and sales rose 19% during the quarter ended Jan. 2 when compared to the first quarter of fiscal 2021. Omicron impacted Starbucks in two primary ways. First, employees out sick impacted staffing at some stores, and, second, it affected customer mobility. The impact on mobility may be seen in the fact US same-store traffic was down double-digits when the first quarter of fiscal 2022 is compared to the same period of the previous year. “Now we did see, on the good side, a positive side, return of the breakfast daypart and peak transactions, which gives us optimism for hope in terms of growing those transactions during that period,” said John W. Culver, chief operating officer and group president of North America, during a Feb. 1 conference call with securities analysts. “In addition, I would say that we’re going to continue to leverage the convenience channels of mobile order and pay as well as drive-thru and delivery to meet the changing customer needs to drive transaction growth going forward as well.  “Lastly, I would say that we will continue to assess the store footprint to make sure that we are building new stores and relocating additional stores, existing stores, into the areas where customers are, given the pandemic and the changes that have occurred in the pandemic.” Starbucks’ first-quarter net income was $816 million, equal to 69¢ per share on the common stock, an improvement over the first quarter of fiscal 2021 when earnings were $622 million, or 53¢ per share. Quarterly sales were $8 billion, up from $6.8 billion the year prior. North America business unit sales rose 23% during the quarter to $5.7 billion. The increase was attributable to a 12% increase in transactions and a 6% increase in average ticket, according to the company. “Our average ticket remained elevated even as group ordering continues to normalize, driven by pricing, record-breaking food attach, which had its seventh consecutive quarter at an all-time high and strong holiday performance,” said Rachel Ruggeri, chief financial officer. Drive-thru and mobile ordering accounted for approximately 70% of US company-operated store sales, the company said. “In terms of the stores and where we saw traction in that, the suburban and the rural stores, where drive-thrus are the most prevalent, continue to outpace the rest of the portfolio,” Mr. Culver said. “Our drive-thrus had its fourth straight quarter of double-digit comp growth.” Management messaged that additional price increases are on the horizon as inflationary pressures impact Starbucks’ supply chain. The company raised prices in October 2021 and January 2022, and Ms. Ruggeri said additional pricing is planned for the balance of the year. “In terms of elasticity, we have not seen any meaningful impact to customer demand,” she said. “To the contrary, our customer demand continues to grow. We’re coming off of a very strong quarter in terms of transaction growth at 12% for the quarter in the US, the highest since pre-pandemic levels, and our ticket is also very strong as well. So, we watch that very closely and we will adjust accordingly.” – Source: Keith Nunes/Food Business News.

Eating and drinking places again led the nation in job creation, onboarding about 108,000 new workers, the federal figures show

Restaurant Hiring Accelerates Despite Omicron, New Stats Show

Restaurants and bars accelerated their hiring in January despite widespread reports that the surge in COVID infections from the omicron variant had dampened sales and traffic, onboarding about 108,200 new workers in total, new federal statistics show. The additions accounted for roughly one of every four new hires by all employers outside of the farm sector, according to the just-released statistics from the U.S. Bureau of Labor Statistics (BLS). The industry’s January recruitments compare with the addition of about 103,000 jobs in December. It remained the nation’s leading creator of jobs. BLS found that January wages at leisure and hospitality businesses topped the prevailing rates of a year ago by more than 13%, signaling that the supply for restaurant and bar workers still far outstrips demand. The industry’s collective payroll grew to 11.4 million, still down about 1 million jobs from pre-pandemic employment levels. Restaurant and bar jobs

Source: U.S. Bureau of Labor Statistics

Friday’s job report brought surprisingly good news overall about hiring. Earlier in the week, Biden administration officials had taken to news and talk shows to temper expectations. They noted the job numbers would likely be disappointing because they were gathered during the height of the omicron surge. On the contrary, nonfarm jobs grew by 467,000 in January, compared with increases of 311,000 and 398,000 in December and November, respectively. Unemployment remained at 4%. Source: Restaurant Business.

Restaurants are at a conflicting stage of the pandemic, says Yaron Goldman, CEO of Rib & Chop House parent Finally Restaurant Group . . . .

How Rib & Chop House’s Premium Subscription Program Elevates the Dine-In Experience

The steakhouse, which has 11 units in Wyoming, Montana, Colorado, and Utah, has seen “huge demand” from customers wanting to go out and enjoy themselves. It’s an industrywide experience—51 percent of adults said they aren’t eating at restaurants as much as they’d like, which is up 6 percentage points from January 2020, according to the National Restaurant Association’s 2022 State of the Industry. However, as brands face this demand, they’re stricken with intense labor shortages that forced some to limit operating hours. In that same report, 65 percent reduced business hours in the past three months because of staffing shortages. “We had anecdotally people talking about how guests would come up to the host or hostess and say, ‘Hey, here’s some cash, can I get a table?’” Goldman says. “Things like that to try to get moved to the top of the waitlist or if they didn’t have a reservation.” These occurrences triggered brainstorming sessions among the Rib & Chop House leadership team. What if it was possible to legitimize this transaction and engage those high-end users, or as the brand fondly calls them, “chopaholics.” Those discussions led to the $600 Royalty Card, a monthly subscription program that provides multiple benefits to the steakhouse’s most loyal customers, such as priority on waitlists, 10 percent discount on food and beverages, $600 in gift cards each year, free birthday entrees, and a branded steak knife set. A limited number of Royalty Cards are available for each Rib & Chop House unit. The “skip the line” perk is arguably the biggest amenity, says Goldman. If a guest comes in without a reservation and there’s a 45-minute wait, they can simply show their Royalty Card status, and they will be moved to the top of the list. Goldman says there may still be a marginal amount of waiting time, but likely just 20 percent of the normal length. Royalty customers spend 10 to 20 percent more, and frequency is up almost 20 percent. “It’s the heavier user,” the CEO says. “We call them ‘chopaholics’—the people who when they’re going out for steak dinner, we’re the place they come for. We’re their restaurant of choice. It’s the same ones that have been loyal guests for a really long time. They know they’re going to come in ‘X’ amount of times a year or month, and they’re like, ‘OK, I’m coming here anyway. So why wouldn’t I take advantage of this program?’” Rib & Chop House tested the service at two locations—which are both sold out of memberships—and recently rolled it out to a third restaurant. The plan is to launch the Royalty Card systemwide by the end of the month. The only issue right now is supply chain stoppages delaying the delivery of steak knives, but those should come in over the next couple of weeks. During tests, one of the significant learnings was how to properly communicate the Royalty Card to customers, says Goldman. That’s not only true for people receiving the subscription, but also for non-members waiting in long lines and seeing Royalty members move to the front. “We’ve seen people who are in line and say, ‘OK I’m just going to buy a reservation. I’m going to buy a Royalty membership right now, so I can have the top of the waitlist,’” Goldman says. “ … We get an email every time we get one. So like on Friday and Saturday nights, we’ll see three and four back-to-back sold at 6:30 p.m. We talked about the possibility of that happening, but I didn’t know that really would. It has, which has been phenomenal for us.” Royalty members walking into a restaurant don’t affect the wait times of non-members because each store sets aside tables specifically for those users. To determine how many tables are necessary every night, restaurants use a predictive model based on seating capacity, whether it’s a weekend or weekday, what may be happening in town, and how many memberships have been sold. For example, if a store has 150 memberships and it’s Friday night, it may hold five or six tables. The system assumes some Royalty members are still making reservations. “It’s more for they’re driving around town and just got back in a town like, ‘God I would love to just sit down and have a meal and you can go there, we know the wait won’t be too long because we have this royalty membership,” Goldman says. “But it’s not like royalty members don’t continue to use our existing reservation system.” Although it’s still early, no member has canceled their subscription yet. The program renews each month automatically, with no long-term commitments. Goldman says the steakhouse considered making it an annual deal, but that was viewed as too aggressive, especially without knowing more details about execution and feedback from members and non-members. “We wanted to tread lightly because you never want to do any program like this, but it ends up backfiring on you, and you upset guests or anything of that effect,” Goldman says. “So we’ve just been going slowly, going as fast as we can, but being very thoughtful about how to do it in a way that increases the frequency, increases average ticket.” “It makes a great experience for the guests and for the employees too; they usually get some more by Royalty members, as well,” he adds. “They are higher tippers, they have higher ticket averages. They’re happier. It’s a real positive.” The Royalty Card is different from Rib and Chop House’s Member Rewards, which allows customers to earn 5 percent back on all purchases and $10 back for every $200 spent. Similar to that loyalty program, Goldman envisions the steakhouse using the Royalty Card to gather more information about heavy users to understand what it takes to drive more traffic among all customers. But those conversations are for the future as the chain remains focused on a smooth launch. Goldman expects the attrition rate to become clearer after a year, and at that point, Rib & Chop House can flex the program to ensure guests are receiving the right benefits. All those decisions will be supported by customer surveys and focus groups. The steakhouse already has plenty of other ideas in the bank, such as quarterly gifts (cookbook, chef coat, and wine glass) and a concierge phone number that Royalty Card users can call if they’re planning a special event. The goal is to take it to that next level, but first, Goldman says, Rib & Chop House must navigate the hurdles. “We’ve made some objective numbers that had to hit before we do that,” he says. “And then also we just want to get the right feedback that says, ‘OK what do we need, what do we need to do here to make sure that we’re executing?’”  — Source: FSR.

Chef Nina Compton, James Beard award winner, Top Chef Finalist, and owner of Compère Lapin, located at Provenance Hotel’s The Old 77, will celebrate Black History Month this February with a series of collaborative multi-course, pre-fixe dinners taking place at their sister restaurant Bywater American Bistro beginning Thursday, Feb. 3 . . . .

Chef Nina Compton Black History Month Dining Series

The month-long series will showcase a variety of black-owned companies and purveyors and celebrate their craft, paired with Chef Nina’s culinary delights. Guests can enjoy these special dinners every Thursday throughout the month with prices starting at $50 per person (excluding tax and gratuity), with reservations available between 5:30 p.m. and 9:00 p.m. The series will debut with a dinner paired with offerings from Kahawa Coffee, a company started by Margaret Nyamumbo who grew up in a community of coffee farmers and created the brand to support and give back to other women. Kawaha Coffee sources directly from female coffee farmers in Kenya and Rwanda to further empower and benefit them for their work. Additional February collaborations include the activism-driven sugarcane producers, Provost Farm (Feb 10), and premium whiskey brand, Uncle Nearest (Feb 17). Dishes on the menu this evening include coffee-rubbed hamachi, coffee roasted carrots as well as coffee and cane syrup glazed pork belly with buttermilk dumplings. Expect to see Provost Farms’ sugar cane-focused menu feature spicy sugar cane roasted shrimp, molasses and sour orange roasted pork belly, and cane sugar cookies. While Uncle Nearest whiskey will be incorporated into a whiskey aged salmon, BBQ pork ribs, and whiskey soda bread. – Source: My New Orleans.

Every consumer and business owner knows the story all too well by now . . . .

Consumers, Restaurant Operators Feel the Pinch of Rising Prices

The U.S. inflation rate is at its highest point in 40 years, and basic commodities like gas and food have seen the highest rising prices. That’s causing a painful shift in the food industry that’s likely to be felt for some time. The stunning increase has made consumers hyper-aware of the pinch on their wallets, with 80% saying in a recent Datassential survey that they are concerned about inflation in the U.S. economy, and 82% say they’re seeing signs of inflation and rising prices.

Raised awareness about rising prices

Over half of consumers have experienced higher prices at all types of restaurants, and three in four said they have had to spend more for groceries, according to Datassential’s Five in Focus Post-COVID inflation report. Most consumers (71%) say they have noticed rising prices at the grocery store, while 56% say they’ve noticed price hikes at convenience stores. Consumers have seen the most price hikes in these two areas, but they’ve also become apparent to many when going out to eat or ordering food from a restaurant. For fast-food, fast-casual, and sit-down restaurants, a little more than half of the consumers said prices seemed higher, according to the report. For fine-dining restaurants, 49% of consumers said prices seemed higher, and 42% said prices seemed higher with third-party delivery services. Fewer consumers perceived rising prices at neighborhood bars/pubs and sports bars, with a little more than a third reporting higher prices with each. For operators in the food industry, this is particularly a critical issue because consumers are more likely to cut back on ordering in or eating out than they are on groceries, which are a core staple of consumers’ budgets. So while fewer consumers have noticed rising prices on restaurant menus, the impact and ripple effect will be far more widespread.
Navigating cost price increases

On the operator side, more than half of foodservice operators (58%) have had to raise menu prices, mostly to compensate for higher costs and supply shortages. Operators are navigating higher prices for most commodities, but are feeling the hit most when sourcing beef, chicken, and to-go packaging — a particularly hard hit considering the rapid rise in takeout and delivery amid the multiple COVID-19 waves and the growing desire for convenience among consumers. Chicken is also the most menued protein, and both chicken and beef supplies were already lower earlier in the pandemic as consumers flocked toward them in larger numbers.

According to Datassential, three in four (76%) operators do not foresee inflation improving any time soon, expecting that it will continue to hurt the already-fragile food industry, and two-thirds are worried that consumers will respond by tightening their food budgets. Nearly half (42%) of consumers planned to already take action by cutting back on restaurant dining in response to rising prices. Both consumers and operators believe that the worst is far from behind us, saying that rising prices and the resulting consumer price consciousness could continue until inflation eases and broader economic health is improved. – Source: the National Restaurant Association.

El Pollo Loco interim CEO Larry Roberts on operation simplification as a solution . . . .

Will it Help Solve the Various Challenges Facing the Grilled-Chicken Chain?

Faced with staffing challenges, inflation, the need to speed drive-thru times and a goal of driving 5% unit growth by 2023, El Pollo Loco’s interim CEO Larry Roberts has a plan:

Simplification

It’s a theme that runs through many of the go-forward initiatives for the Costa Mesa, Calif.-based grilled chicken chain. Roberts is also chief financial officer and stepped in after the resignation of Bernard Acoca in October while the board conducts a search. Acoca was named CEO of Zaxby’s. There’s no update on the permanent replacement at El Pollo Loco. But in an interview with Nation’s Restaurant News, Roberts offered more detail on how El Pollo Loco is addressing recent challenges. Preliminary fourth-quarter results indicated that staffing challenges took a 5-6 percentage point bite out of same-store sales for the grilled-chicken chain, though results were positive. The Dec. 29-ended quarter showed systemwide same-store sales up 11.1%, including a 6.2% increase at company-owned units and a 14.4% increase at franchised locations. On a two-year basis, comp sales were up 10.3% systemwide.

Roberts said it’s difficult to say how many restaurants are feeling the impact of staffing issues, as it varies day-to-day. But he said the number of omicron cases has started to drop and the number of restaurants dealing with sick or quarantining workers has also started to decline.

“I’m optimistic that we’re through the worst of it and we’re coming out of it,” he said. “And so, in February, we’ll get a lot better in our restaurants and be able to open all the operating hours and service channels.” Still, the lingering effects of The Great Resignation remain, and Roberts said El Pollo Loco now sees recruitment and retention as the No. 1 priority. Like others throughout the industry, El Pollo Loco has taken various steps to improve the labor situation. The chain has raised wages to compete in markets where that is needed, he said, and restaurants are encouraged to show workers more appreciation. General manager pay has been increased in high-volume restaurants as a retention tool. New technology has been brought in to speed the application process, and area restaurant leaders have been trained to go out in their trade areas to do on-the-ground recruiting, he said. But perhaps the biggest initiative is one that will impact El Pollo Loco’s performance on a number of fronts: operation simplification. Though it describes itself as “QSR plus,” El Pollo Loco is not like typical quick-service restaurants in that food is prepared from scratch, including salsas and guacamole. Roberts is looking to make the production process a bit easier for workers to execute.

The chain is approaching simplification in three ways:

Menu: The first step is combing through the menu to reduce SKUs. Robert said some work on that was done in January, but more menu reduction will be done in March. Some low-volume items might come off the menu, he said, but in many cases, it could be tweaked to existing items to eliminate some ingredients.

Process: The chain is looking for ways to reduce some work in restaurant kitchens. Traditionally, El Pollo Loco purchased serrano peppers with stems on, because they’re cheaper, for example. Now the chain is buying de-stemmed chiles, which cost more but save workers from the stemming process. “That’s a job that people hate to do,” he said.

Equipment: New equipment will be rolled out in the next several months to help streamline production. A new processor for tomatoes, for example, will make better-tasting salsa with the added win of being easier to clean. Current tomato-processing equipment can take up to 45 minutes per blade to clean, he said.

Streamlining back-of-the-house processes will also help speed drive-thru times, which is another goal, said Roberts. Roughly half of El Pollo Loco sales come through the drive-thru, but Roberts sees an opportunity to grow that business with additional technology. Before the pandemic, El Pollo Loco was testing the use of workers using tablets to help move the drive-thru line faster. That test was put on hold when COVID hit, but Roberts said it will resume once the omicron wave is more fully resolved. With average unit volumes north of $2 million and a lane largely to itself as a grilled-chicken concept in a world of fried chicken and burgers, El Pollo Loco is still on track to hit 5% unit growth in 2023, Roberts said. “It’ll be challenging in the current environment, where you have the challenge of getting things built, but you also have people wanting to see how things play out before they jump in,” he added. With 480 units, about 60% of which are franchised, the plan currently is to open about five company-owned restaurants a year in Southern California and Las Vegas. The chain will work with existing franchise operators in existing markets to open another seven to 10 per year, and then the balance will come from either existing or new franchisees in new markets. About 14 restaurants have been remodeled, and one converted, with the new more-flexible restaurant design, rolled out in 2020. The company has been value-engineering the design to bring down costs, he said. This year the first ground-up restaurant with the new-prototype design is scheduled to open in Las Vegas — and that unit will also include some of the more-efficient back-of-the-house elements. In 2022, about 20 company locations and 30-40 franchised units will remodel with the new design, he said. “We’re excited about it. Franchisees love it, they’re very excited about it. One reason is they were engaged in the process,” he said. – Source: NRN.

Wall Street’s Excitement About Beyond Has Fizzled Over Three Years . . . .

Beyond Meat Loses Some Early Restaurant Fans as Others Double Down

Even as Beyond Meat Inc. gains new deals to develop meatless menu items, enthusiasm is fading at some of the company’s earliest restaurant backers, raising questions about the staying power of plant-based meat.

Almost three years after Del Taco Restaurants Inc. became one of the first major chains to sell Beyond’s plant-based protein products in hundreds of stores, the company is now testing its removal at three of its four Florida stores. TGI Friday’s Inc., an early adopter of the Beyond Burger, plans to keep selling it but said sales are flat and it’s less enthusiastic about adding more of the company’s fare to its menu. Inspire Brands Inc.’s Dunkin’ stopped selling Beyond’s sausage sandwich at most of its 9,000 U.S. locations last year after almost two years, with only several hundred keeping it available.

At the same time, McDonald’s Corp. is expanding its test of the McPlant, a plant-based burger made by Beyond. And KFC is running a national limited-time offer of Beyond Fried Chicken. Vegetarian main dishes had been notoriously lacking at those restaurants, whereas there are still other, non-Beyond meatless options at Del Taco, Friday’s, and Dunkin’ for those who want them.

“I don’t think it’s becoming a big percentage of the mix anytime soon,” said Michael Halen, a restaurant analyst at Bloomberg Intelligence.

Restaurants cycle through menu options all the time, but Beyond and its competitors are striving to show investors they can become regular staples for mainstream diners. As the first major publicly traded plant-based meat company, with a stock that fell 48% in 2021, the pressure on Beyond is palpable. The recent moves by some of its restaurant partners show how difficult it is to take plant-based meats from niche to mainstream.

“With more than 62,000 foodservice points of distribution globally, we are thrilled with our significant success to date, including at some of the largest restaurant chains in the world,” a company spokesperson said in an emailed statement, adding that the food maker continues to test and introduce new items with restaurants.

Pre-Covid Boom

Before Covid hit, plant-based meats were quickly piling up on menus. Shipments from distributors to foodservice locations in dollars rose 46% in 2019, according to research from NPD Group Inc. Sales plummeted 15% in 2020 amid pandemic closures and some restaurants shrinking their options. Some of those dollars came back last year, but shipments were still down 1% compared with 2019.

Investors will be closely watching Beyond’s earnings report, expected at the end of this month, after a disappointing sales projection last quarter sent the stock down 13%. Just three of the 22 Wall Street analysts covering Beyond recommend buying shares, according to data compiled by Bloomberg. Fourteen have hold ratings on the stock and five call it a “sell.”

“It’s still a very, very narrow niche, and the chains are challenged to keep low-volume items on the menu in this supply-constrained Covid environment,” said Bob Goldin, a partner at food-company consultant Pentallect Inc. “What I sense is there’s just a lot of tactical withdrawals” of companies exiting the plant-based space, he said.

Del Taco began selling Beyond’s seasoned plant-based crumbles nationwide in 2019, at almost 600 restaurants. Del Taco said it was the first national Mexican-themed fast-food chain to sell plant-based protein options.

Now, three out of four Del Taco stores in Florida no longer sell Beyond’s version of ground beef. The move is part of a broader reduced-menu trial to make ordering faster and more accurate, the company said, and the item is still available in other restaurants across the country.

At TGI Friday’s, sales of the Beyond Burger, added nationally in January 2018, are stagnant, according to Chief Executive Officer Ray Blanchette. “It’s not growing, not for us,” he said in an interview, though the company said it does not plan to remove it. “It’s not part of our menu strategy today in areas that we kind of want to lean in.”

The company had looked into adding appetizers and chili made with Beyond’s products before the pandemic, but Covid-19 complicated the trial and the items didn’t perform that well. “It just wasn’t for our guests,” Blanchette said.

Limited Appeal

While vegan and vegetarian patrons will continue to order these kinds of items, they don’t hold much appeal outside of that, said Joseph Szala, managing director of Vigor, a restaurant consultancy. Restaurants are balancing that against their menu-reduction strategies. “Smaller menus mean quicker and more accurate ordering, preparing, delivering,” he said, all of which add up to happier customers.

In June, after Dunkin’ removed Beyond’s sausage from the vast majority of its 9,000 locations, it said the two companies would continue working together. No further menu additions have been announced to date. Dunkin’ didn’t respond to a request for comment.

“Just because a restaurant is discontinuing it, it doesn’t just mean that it’s a fad,” said Morningstar analyst Rebecca Scheuneman. “Plant-based meats really appeal to certain demographics — specifically younger demographics. Our younger generations are really concerned about the environment and the impact that the meat industry is having on the environment.”

Scheuneman said she thinks Beyond shares are “really undervalued” and its products are “still in the early stages” of adoption.

Even with its recent slump, Beyond’s stock is still up more than 140% since its initial public offering in May 2019. McDonald’s shares have gained 35% over that time and the Russell 1000 Index is up about 54%.

Other chains are just starting to test the waters with meat alternatives. Last month, Chipotle Mexican Grill Inc. introduced its own plant-based chorizo across the U.S. Shake Shack Inc. tested a veggie patty in limited markets in 2020. Torchy’s Tacos, a chain with over 100 locations, has announced the addition of a vegan taco made with Beyond Beef, and Beyond has also been working on plant-based proteins with Taco Bell, which like KFC is owned by Yum! Brands Inc.

“You will see more chains jump on the bandwagon with plant-based,” said Pentallect’s Goldin. “But that doesn’t mean they’ll stay on the bandwagon.” – Source: Bloomberg L.P.

The chain is the latest to acknowledge problems related to the omicron surge, which has left many companies without enough staff to keep operating . . . .

Papa Johns Warns Customers of Pandemic-Related Disruptions

Count Papa Johns as the latest chain to experience labor shortfalls because of the pandemic. The Louisville, Ky.-based pizza chain on Friday sent a letter from CEO Rob Lynch to its customers, warning them of closed stores, shortened hours, or a lack of drivers because of the pandemic. “Thank you for being patient as we navigate restaurant operations during this unprecedented time,” Lynch wrote, noting that customers “may experience some changes in your local restaurant,” including the reduced hours or lack of drivers. “We always aim to put our customers first and are taking specific actions to ensure a quality experience for you.”

Those actions include efforts to clean each restaurant, increasing its carryout orders so customers get their order quicker, and updating its website and mobile app to provide “clarity on restaurant hours, wait times and ordering options.”

It also said it is “hiring the best team of pizza lovers” along with a link for those interested in taking a job.

The company in a statement said it is seeing “unprecedented levels of demand.”

“Like all sectors of the economy, we are experiencing temporary staffing challenges, which in limited cases may impact our ability to deliver or take orders,” the company said. “Since we hold ourselves to the highest customer service standards, we have reached out proactively to our loyal PapaRewards members, conveying our gratitude for their patience.”

It’s only the latest indication of the disruption the omicron variant is having throughout the industry. Restaurants were struggling with a labor shortage that intensified throughout the summer and into fall. The remarkable spread of the omicron variant, which sickened as many as 1 million people a day at its worst in December, has resulted in an unprecedented number of workers calling out sick.  –Source: Restaurant Business.

Most Popular Video Ads for Eight QSR Chains . . . .

Chick-fil-A Serves Up Most-Viewed QSR YouTube Ad Of 2021

Video ads for eight QSR chains—topped by Chick-fil-A—made up the list of the 10 most-viewed QSR spots on YouTube in 2021, according to digital ad-tech provider AcuityAds.

With 71.3 million views, Chick-fil-A’s two-minute effort titled “The Whoopsery” was a Willy Wonka-style, the animated fairy tale that launched in November in the walkup to Christmas.

While helping adorn a Christmas tree, a young girl accidentally breaks an ornament that had belonged to her grandmother. She and a grieving friend are then transported to a magical place called The Whoopsery, where a wizard-like chef helps to restore the trinket. The only mention of Chick-fil-A is its name superimposed at the very end of the spot. “Branding is about building positive memories and associations with the brand,” AcuityAds chief strategy officer Seraj Bharwani tells Marketing Daily. “I can’t think of a better way to accomplish this goal than to produce and deliver a memorable and heartwarming story creating a positive affiliation with the Chick-fil-A brand. “Over the past decade, consumer attention and engagement with brand-created stories have consistently been better than the standard 30-second commercials touting weekly promotions,” Bharwani adds. Close behind Chick-fil-A was this 15-second spot (68.6 million views) promoting Burger King’s “$1 Your Way” menu promotion. Participating restaurants offered items like a bacon cheeseburger or chicken sandwich for one dollar each as a way to help people cope with financial restrictions during the pandemic.

Featuring the Mafia-inspired character Tony Bolognavich portrayed by actor Brad Garrett, the first-ever Super Bowl spot from Jimmy John’s garnered 66.9 million views and the #3 spot. Having earned the title “King of Cold Cuts” and made a fortune doing so, Bolognavich laments the entry of Jimmy John’s into his turf with the chain’s “high-quality, reasonably priced sandwiches.”

The “chicken wars” redux was the subject of the #4 YouTube QSR ad from Kentucky Fried Chicken—at 35.6 million views. The voice of KFC founder Colonel Sanders disses competing chains known more for making burgers than chicken sandwiches by noting “It’s none of their business.”

Subway scored the #5 spot at 32.2 million views with a fast-talking explainer about myriad new menu offerings—so many that “We Don’t Have Time For Tom.” That’s a reference to football legend Tom Brady, who appears chagrined at the end of the commercial.

KFC was one of two QSRs—the other being Burger King—to land two spots in the top 10, the second being this promo for…yes, its chicken sandwiches. The 15-second video scored 28.8 million views and landed at #6.

McDonald’s followed at #7 (23.1 million) with a promo for its crispy chicken sandwich. “We could let this crispy, juicy, tender chicken speak for itself. But then who would speak for the crinkle-cut pickle?” asks the voiceover.

Debuting in January, Burger King’s second top-10 commercial—for the chain’s “2 For $5 Drive-Thru” special—regaled customers with a Christmas carol sung by the Los Angeles-based Jingle 6 a cappella group. Also featuring the Burger King mascot, the spot had 22.5 million views.

Dunkin’ encouraged viewers to “Toast your way, all day” — as in, bacon-topped or regular avocado toast and a grilled cheese melt. This 15-second commercial landed 21.3 million views and spot #9. Rounding out the top 10—with 20.7 million views—was this 15-second El Pollo Loco spot that declared “No more sad lunches” like leftover pasta. It marked the introduction of the chain’s four-variety Loco Lunch Box containing entrées, sides, and chips.

AcuityAds said its technology harnessed “all publicly available view data on social platforms” to create the list.  – Source: Marketing Daily.

Rusty Taco’s president believes the chain could open 40–50 units annually—or even higher—in the future. Rusty Taco is owned by Inspire Brands, the parent of Buffalo Wild Wings, Arby’s, and other major restaurants . . . .

Arby’s Parent Powers Growth of Emerging Taco Brand

Brendan Mauri was promoted to president of Rusty Taco just a few months after joining the brand as head of marketing. He describes it as both an interesting and challenging time. Interesting because the fast-casual was looking to fuel franchise growth, but challenging because those events took place during the early part of 2020, just as the COVID pandemic began sweeping through the U.S.

In the face of turmoil, Mauri remained confident because he knew Rusty Taco was backed by Inspire Brands, the second-largest restaurant company in the U.S. and parent of well-known chains Buffalo Wild Wings, Dunkin’, Jimmy John’s, Sonic, and Arby’s. The taco concept leveraged work completed across the system, including knowledge of local restrictions, implementation of new operational procedures, and use of new sanitation practices.

Within a few months of the initial shock, sales returned to black, and it’s only accelerated from that point.

“I’m fortunate to have worked at other brands—lots of great brands—but the franchise group at Rusty Taco is just a really strong group,” Mauri says. “So that really helped, as well, just being able to collaborate with them, bounce ideas off, and have them talking to each other.”

The 38-unit Rusty Taco was founded in 2010 by Rusty Fenton. A year after he passed away from cancer, Buffalo Wild Wings acquired a majority interest. Then in 2018, the casual-dining giant was purchased by Arby’s Restaurant Group, bringing Rusty Taco along with it. The acquisition brought Inspire to life.

With the backing of the multi-brand platform, Rusty Taco has spent recent years setting itself up for growth, Mauri says. Multiple franchise agreements were signed in 2021, which will lead to growth throughout Utah, Nevada, Virginia, and Texas. Several new operators are already a part of the Inspire family.

Sean Cosper of Home Run Restaurant Group, who owns 13 Arby’s in Utah, plans to open three Rusty Taco stores in Salt Lake City. Ian and Taylor Cain of Ocathain Partners, a brother-sister team that opened a Sonic restaurant in 1999, is developing two Rusty Taco locations in Reno, Nevada. Sheila Abusaab of Lion’s Den, who oversees Sonic stores throughout West Texas, signed a five-restaurant deal, with the first units to open in Midland and Lubbock.

Meanwhile, brothers Fenil and Jitesh Patel from Tacos of Heaven are new to Inspire Brands, after operating a host of restaurant brands and hotels over the years. They plan to debut two Rusty Taco locations in Norfolk, Virginia.

With several stores now under construction, Mauri believes 2022 will be the “launch point for growth.”

If Rusty Taco expands strategically, the president says there’s potential for 40–50 new units per year, possibly even higher. For 2022, the fast-casual is eyeing 30 percent growth, which would be about a dozen restaurants.

The chain’s most recent opening came in San Antonio, a restaurant owned by Andy Besing and Perrin Larsh of Lone Star Restaurant Group. The duo also operates four Arby’s restaurants. Mauri says warm-weather states like Texas, New Mexico, and Arizona are attractive because of the outdoor patio potential, but he also notes franchisees have had success in Minnesota and Ohio.

“I think it speaks to our brand can really play well almost anywhere,” Mauri says. “And tacos and margaritas and amazing queso are such a broad appeal and a growing category. So what we’re seeing is, we’ve got some focus areas, but especially with Inspire, we have franchisees coming to us from Inspire, in particular, that may be maxed out in the market they’re in and they’re interested in diversifying into another brand. And so we’re open to a variety of regions when opportunities come at us that way.”

“We’re founded on a street taco neighborhood taco stand experience, and we always stay true to that,” says Brendan Mauri, president of Rusty Taco.

Rusty Taco restaurants are usually between 2,400 and 2,800 square feet, but some stores fall outside of that range, like one 2,000-square-foot store that’s performed well, according to the president. The brand has inline and standalone outlets, but endcap is the preferred and most common destination due to the patio space.

Although more quick-service chains are exploring drive-thru, Rusty Taco decided to move against that trend because of its scratch-made menu. However, the fast-casual does plan to investigate mobile order pickup windows.

Before COVID, the brand skewed toward dine-in; almost two years into the pandemic, the mix between the dining room and off-premises is about 50/50. Digital used to represent less than 10 percent of sales, and that’s risen to around 30 percent.

“We want to be in tune with guest trends and what guests are looking for going forward,” Mauri says. “And so we’ve certainly adapted in that way. That said, a big part of our brand also is the dining experience—come as you are, relaxed atmosphere. When it’s in-season we do a great amount of our business on patios and so I think it’s a balance. But our food travels really well. We see so many people taking it to-go that we’re adapting to that, as well.”

One of Rusty Taco’s most notable off-premises ventures was the opening of Inspire’s Alliance Kitchen, the first ghost kitchen owned and operated by a multi-brand restaurant company. Based in Atlanta, the venue allows customers to order through a particular brand’s online ordering platform or via third-party apps.

Mauri says Alliance Kitchen facilitated Rusty Taco’s first entrance into Atlanta and has provided valuable learnings on nontraditional operations. The chain already has one in U.S. Bank Stadium in Minneapolis, and the president sees potential for more nontraditional spots in airports, college campuses, and other stadiums.

“[Alliance Kitchen] has allowed the ops teams across the brands to see how all the brands operate side by side, and that’s given us various insights that we can apply to all of our restaurants across the country,” Mauri says.

Rusty Taco is among a list of taco fast casuals eyeing growth in 2022 and beyond. The 150-unit Fuzzy’s Taco Shop hopes to double in size to more than 300 stores in the next five years. The chain opened this year by announcing a 50-unit agreement for the Southeast. Additionally, Velvet Taco aims to reach 40 units by the end of 2022, and Torchy’s Tacos recently debuted its 100th store.

Mauri says there’s room for multiple chains in the category, given the high demand. As for how Rusty Taco will maintain its share of that available demand, he points to the collaborative support of Inspire, which helped the company roll out an award-winning learning management system, among other initiatives.

The industry veteran also lauds Rusty Taco’s simple and fresh menu, filled with unique ingredients, house-made salsas and sauces, and hand-made tacos.

“We’re founded on a street taco neighborhood taco stand experience and we always stay true to that,” Mauri says.  – Source: QSR.

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