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Darden CEO: Olive Garden is Doing Just Fine

Darden CEO Rick Cardenas could sense a common theme as analysts peppered him and CFO Raj Vennam with inquiries during the company’s recent Q1 earnings call.

“We’re getting a lot of questions on traffic at Olive Garden,” the chief executive pointed out.

There’s a reason why. Olive Garden has seen a recent decline in visits from customers with household incomes below $50,000, a movement multiple brands have experienced across quick service and casual dining. Same-store sales grew 2.3 percent in Q1, a quarter-over-quarter slowdown from the 6.5 percent rise in Q4, and traffic is down 9 percent versus pre-pandemic comparisons. Because of the inflationary environment, segment profit decreased to $216.1 million year-over-year, down from $253.3 million in the year-ago period.

But Cardenas said there’s context to consider. In terms of traffic, Olive Garden is comping against a Q1 2020 that used a BOGO offer for roughly nine weeks and another promotion that had high couponing. The pre-COVID marketing and promotional activities drove double-digit traffic.

Moving forward, the brand will be selective in bringing promotional activity back. Anything that’s introduced will be evaluated through three must-haves—elevate brand equity, simple to execute, and not at a deep discount.

“Some of those guests that we were doing in these dining rooms [pre-pandemic] might not have been as profitable as we’d like, right?” Cardenas said. “We had a lot of coupons. There were times that we had five coupons in one week at Olive Garden when we were running Never Ending Pasta Bowl, right? And so we had to ask ourselves, is that the right thing to do to drive traffic just to have a full restaurant if that traffic really isn’t very profitable? We do a lot of work when they’re there. And so are we better off with a loyal guest that doesn’t need all of those discounts to come in, and we can serve them?”

Cardenas also emphasized that $50,000-income consumers make up just a portion of Olive Garden. The brand is performing well with guests above $100,000 as it benefits from trade-down.

“Let’s not read into it that we’re seeing a huge, huge reduction in that consumer. We’re seeing a little bit of change in the behavior from that consumer, but not huge,” Cardenas explained. “We don’t want to change what we do just to capture a segment of the population. We want to continue to focus in on what we’ve been doing at Olive Garden—earn one more visit from a loyal guest. And our loyal guest spans a lot of income levels, and so anything we do is going to help drive more loyalty from our existing guests.”

As for Darden’s other brands, same-store sales rose 7.6 percent for the other business segment (Bahama Breeze, Yard House, Cheddar’s Scratch Kitchen, and Seasons 52), and the fine-dining segment (Eddie V’s and Capital Grille). At LongHorn Steakhouse, comps rose 4.2 percent. Cardenas noted that each of the categories has benefited from growth in the higher-income guest.

“We have a portfolio of brands that kind of run the spectrum of the consumer,” the chief executive said. “And so when one segment of the population isn’t doing as well, the other segment is, then we are still OK. And then if it flips the other way, we’re OK. And so right now, there’s just one segment of the population that’s being hurt a little bit more by inflation than others. And the good news is we’ve got brands that aren’t impacted by that.”

Vennam agreed, saying the lower-income erosion isn’t meaningful enough to say there’s been pushback on pricing. In Q1, Darden saw 9.5 percent inflation and carried 6.5 percent pricing, an almost 300-basis-point gap. Significantly pricing below inflation pressured the P&L and cut margins and profit. However, the company believes the gap between pricing and inflation peaked in the first quarter.

The expectation is that inflation will moderate throughout the fiscal year and pricing should catch up. Because of this movement, margins are projected to decline less in Q2 and grow year-over-year in the back half of the fiscal year. It’s important to note, Olive Garden doesn’t see a big difference in profitability between the dining room and takeout, so mix changes don’t have a material impact. To-go accounted for 24 percent of sales at Olive Garden in the first quarter. For Darden overall, digital transactions represented 62 percent of off-premises orders and 10 percent of total orders.

Compared to the rest of the industry, Darden is in an even better position. Over a three-year stretch, Olive Garden’s prices have risen 10 percent, versus 17.5 percent across casual dining, Vennam said.

“That is the way we believe to build back that guest,” Vennam said. “And Rick [Cardenas] mentioned getting that one extra visit from our loyal guest. We think this is a sustainable, durable way to really get our guests back. It’s going to take time. It’s not one magic, let’s drive people in today or tomorrow. It’s just going to happen over time. And I would argue that we’re starting to see the fruit of some of that, but it takes time.”

Cardenas said Olive Garden’s guest satisfaction metrics are near all-time highs, and a big part of that has been improved staffing levels. Thanks to a new talent management system that allows applicants to automatically schedule interviews, some restaurants are actually looking to reduce application flow. Management retention is much closer to pre-COVID levels and above the industry average, the CEO said. Team member retention is above the industry average, as well, but not quite back to pre-pandemic marks.

Olive Garden’s average weekly sales per restaurant were $98,222, 1.4 percent better than pre-COVID. LongHorn’s was $84,916, 26 percent growth; fine dining was $157,834, 20.2 percent growth; and all other brands were $116,702, 8.8 percent growth.

Darden’s total sales increased 6.1 percent to $2.4 billion in the first quarter and opened 34 net new restaurants. Olive Garden finished Q1 with 887 locations, followed by LongHorn (549), Cheddar’s (174), Yard House (85), The Capital Grille (61), Seasons 52 (45), Bahama Breeze (42), Eddie V’s (29), and The Capital Burger (three).

The company’s fiscal 2023 projections remain the same—total sales of $10.2 billion to $10.4 billion, same-store sales growth of 4 to 6 percent, 55 to 60 restaurant openings, capital spending of $500 to $600 million, and inflation of roughly 6 percent. – Source: FSR.

 

Texas Roadhouse is selling candles that smell like honey cinnamon butter . . . .

The candles are part of the steakhouse chain’s new online merch store, where superfans can buy shirts, hats, and other items.

Texas Roadhouse is turning one of its most beloved menu items into a candle.

The steakhouse chain is now selling Honey Cinnamon Butter candles, with a scent inspired by the sweet butter it serves with its fresh-baked rolls. (And no, it’s not edible.) The 13-ounce candles cost $12 and are the headlining item of the chain’s new online merch store, which also sells T-shirts, sweatshirts, hats, tumblers, and more.

Customers have apparently been asking for Texas Roadhouse merchandise for years, said CEO Jerry Morgan in a statement.

“What better way to launch our retail efforts than a Honey Cinnamon Butter Candle, so guests can enjoy a little Texas Roadhouse at their own house,” he said.

The shop also includes grill-at-home steaks, which the chain launched last year.

Roadhouse joins a number of other restaurant brands that have begun selling merch as a new way to engage with guests. Chili’s, P.F. Chang’s, Dunkin’ and Taco Bell have all sold apparel online, often in limited quantities that quickly sell out.

Quirky candles and other scented products have been popular and tend to generate buzz online. Chipotle last month rolled out a “water cup candle” that smells like lemonade, a jab at guests who abuse the chain’s free water cup policy. And KFC’s herbs-and-spices-scented fire log has become a holiday staple. – Source Restaurant Business.

 

Chicago’s Outdoor Dining May Stick Around For Good

The Coronavirus pandemic changed how we do almost everything, but there have been a few (very faint) silver linings. Nobody really enjoyed wearing masks, but NPR notes that they momentarily turned schools and businesses into flu-free zones. Early pandemic restrictions and social distancing fears almost took restaurants down initially, but the Nation’s Restaurant News reports that savvy eatery owners assuaged patron’s worries by providing outdoor dining.

Gordon Ramsay Was Not The Same After Hell’s Kitchen. Here’s Why Stay Creating a welcoming space for outdoor dining on the fly came with its own set of challenges for restaurateurs and their staff. Restaurant owners benefited from increased capacity that allowed for more business but also had to purchase the equipment to keep diners safe from weather and traffic. Waiters grappled with an increased workload and had to figure out how to streamline their beverage and menu options while providing the level of service that patrons expected. Despite the pandemic-induced growing pains, restaurants began to see that outdoor dining was becoming wildly popular.

 

According to The National Restaurant Association, 43% of adults tried dining at an outdoor “streetery” during the height of the pandemic. Outdoor diners covered the generational gamut, with everyone from Gen Z to baby boomers giving restaurants extended to sidewalks, streets, and makeshift patios a go. Dining outside was in, and 84% of adults said they wanted it to stick around (via National Restaurant Association).

Chicago establishes permanent outdoor dining program Antwon McMullen/Shutterstock Outdoor dining has been the surprise hit of the pandemic. While it’s not popular with everyone, even restaurateurs in cities where the weather is a challenge saw patrons brave the elements to enjoy socializing over good food. The City of Chicago took note of outdoor dining’s ongoing popularity and, after two temporary extensions, has decided to propose a long-term Expanded Outdoor Dining (EOD) program.

The permanent EOD program proposed by Chicago Mayor Lori E. Lightfoot in conjunction with city government transportation, business affairs, and consumer protection departments will allow qualifying restaurants to operate eateries extended to the sidewalks and streets just outside their doors. Expanding the dining program would increase accessibility by allowing eateries to use curb lanes and closed portions of the road in areas with multiple restaurants. The city would issue annual permits to establishments responsibly operating an outdoor dining extension to support local hospitality and dining industries.

Chicago city government agencies recognized the restaurant industry as a vital part of positive neighborhood culture, changing once-empty city streets and sidewalks into vibrant areas for social gatherings. By helping restaurants create inviting public spaces, Windy City hopes to benefit small businesses, neighborhoods, and residents through the permanent extension of outdoor dining. – Source: Tasting able.

 

Despite signs of a cooling job market, they can’t compete with big companies for workers; ‘We’re not feeling it yet’ . . . .

Small Businesses Get Creative as They Still Struggle With Hiring

Despite signs of a cooling job market,they can’t compete with big companies for workers; ‘We’re not feeling it yet.’ By Ruth Simon Follow | Photographs by Kendrick Brinson for The Wall Street Journal Sept. 26, 2022, 5:33 am ET The economy is weakening, big companies from Ford Motor Co. to Facebook’s parent are cutting jobs or freezing hiring and inflation is eating into household budgets. Yet for many small-business owners, finding workers is as difficult as ever. The challenges are prompting some entrepreneurs to seek more creative ways to fill labor shortages at a time when they might have expected hiring to get easier. Lindsay Goodson, owner of Keith McDonald Plumbing in Milledgeville, Ga., hasn’t been able to find enough experienced plumbers. So she spent $700 to build a camera system that lets junior plumbers live to stream their work while Ms. Goodson or another more-experienced plumber supervises from the office. “It will be a step-by-step, start-to-finish training from afar,” said Ms. Goodson, who tried out the system for the first time in early September and said it would allow the 20-person business to take on more clients. More than one-third of small businesses said hiring challenges had worsened in the three months ended Sept. 1, according to a Goldman Sachs survey of nearly 1,500 small-business owners. Forty-seven percent of them said finding and retaining qualified employees was the most significant problem small businesses faced, up from 43% in the survey released in June. F -5.87% ▼ 9/29/22, 9:23 AM Small Businesses Get Creative as They Still Struggle With Hiring – WSJ https://www.wsj.com/articles/small-businesses-get-creative-as-they-still-struggle-with-hiring-11664184781 2/6 The data suggest a cooling labor market isn’t having the same impact on small firms that it is on big U.S. companies, some of which have reported that hiring has gradually gotten easier. Government data show the tight U.S. job market loosened a bit in August, with employers adding fewer workers and more people seeking work. “Even though the news is talking about the labor market opening up, we’re not feeling it yet,” said Wendy MacKenzie Pease, owner of Rapport International, a Boston-based provider of translation services. Ms. Pease and other small-business owners say they are having a harder time matching the salary and benefit increases that big companies are offering. Rapport, which has seven full-time and five part-time employees as well as hundreds of contractors, hasn’t been able to fill two full-time openings even though it boosted wages by about 10% this year, Ms. Pease said. She looked into adding health insurance coverage but concluded she couldn’t afford it. 9/29/22, 9:23 AM Small Businesses Get Creative as They Still Struggle With Hiring – WSJ https://www.wsj.com/articles/small-businesses-get-creative-as-they-still-struggle-with-hiring-11664184781 3/6 Nearly 60% of small companies report that worker shortages are affecting their ability to operate at full capacity, according to a September survey of more than 725 small-business owners by Vistage Worldwide Inc., a business coaching and peer advisory firm. Southeast Constructors Inc. in Des Moines, Iowa, is addressing the labor shortage by creating its own training school. The new academy, set to open early next year, will offer three months of instruction in construction basics such as how to hang drywall, paint and drive a Bobcat. The heavy-construction firm hopes to hire some graduates of the program, which is expected to start with 50 students. “During Covid, it was really hard as far as hiring. After Covid, it was even harder,” said Perlla Deluca, president of the 22-year-old company, which specializes in bridges, roads, parking lots, and other government projects.

 

Cinnabon Expands Grocery Portfolio

Retail franchise Cinnabon is expanding its grocery distribution and releasing eight new ready-to-bake and ready-to-heat desserts at Walmart stores nationwide to celebrate National Cinnamon Roll Day.

The new products will roll out in two phases, with the first launch on Oct. 1 and the second launch on Nov. 1.

Included in the first phase are the four following desserts:

Cinnabon Bakery Inspired Cinnamon Roll Cookie Dough: ready-to-bake cinnamon and cream cheese frosting chip cookie dough.

Cinnabon Bakery Inspired Salted Caramel Chocolate Cookie Dough: ready-to-bake salted caramel and chocolate chunk cookie dough.

Cinnabon Bakery Inspired Frosted Mini Bites: ready-to-heat mini cinnamon rolls with cream cheese icing packets for an optional topping.

Cinnabon Bakery Inspired Cinnamon Coffee Cake: ready-to-heat cinnamon coffee cake topped with streusel crumble and cream cheese icing.

The second phase will include the four following desserts:

Cinnabon Bakery Inspired Chocolate Chip Cookie Dough: ready-to-bake chocolate chip cookie dough.

Cinnabon Bakery Inspired Sugar Cookie Dough: ready-to-bake sugar cookie dough.

Cinnabon Bakery Inspired Chocolate Chip Brownie: ready-to-heat brownie with a chocolate chip center.

Cinnabon Bakery Inspired Red Velvet Cake: red velvet cake topped with a vanilla streusel crumb topping, chocolate chips and cream cheese icing.

“We are always looking for new ways to deliver indulgent bakery-inspired experiences through craveable Cinnabon treats,” said Dave Mikita, president of global channels. “Just in time for National Cinnamon Roll Day, these new premium ready-to-bake cookie doughs and ready-to-heat desserts showcase our hunger for innovation and provide another way for fans to get their hands on the Cinnabon taste they know and love.” All eight new Cinnabon retail desserts will be available at the suggested retail price of $4.98 per box.  –Source: Food Business News.

 

Cracker Barrel is turning back the clock, at least when it comes to customers . . .

Cracker Barrel’s Push for Youthful Traffic is Working While the chain has experienced a lower visitation from guests 65 and older for months now, the company saw increased traffic from younger customers in the fourth quarter (ending July 29), especially millennials between 25 and 34 and customers between 44 and 55.

“Although it will take time to move from an over-indexed position of visitation by guests who are over 65 to one that is more balanced, we believe the things that we are doing to appeal to younger guests and families are working,” CEO Sandy Cochran told analysts during the chain’s Q4 earnings call.

Cracker Barrel has worked toward this for years. In 2020, the chain added beer and wine for the first time in its 51-year history. In February, the program was in roughly 550 of 663 restaurants and making progress toward a 2 percent mix. The restaurant offers multiple beer varieties, sparkling and white wines, orange and strawberry mimosas, and sangria for $6.79 and lower. Earlier this year the brand added Roscato wine and a Jack Daniel’s spiked lemonade. CMO Jennifer Tate said the chain is seeing strong retention of overall beverage incidents with younger consumers.

The brand then struck a chord with its new breakfast launch in June. Cracker Barrel added a Build Your Own Homestyle Breakfast option in which customers start with two eggs cooked any way, their choice of meat and a side, and biscuits n’ gravy, all starting at $8.99. The chain also tacked on Impossible sausage as an alternative, appealing to the rise of flexitarians among the millennial and Gen Z age brackets. Tate said the build-your-own section is mixing above expectations because of the younger generation’s appreciation for customization.

“We rate really high in terms of food, value, and just the environment,” Tate said. “I think a lot of these folks are in that stage of their life where they’re starting to have families. And so what Cracker Barrel represents is very appealing for them. Our menu innovation, our breakfast news, Build-Your-Own Breakfast, Strawberry Cheesecake Pancakes, a lot of the items that we launched in the fourth quarter were particularly intended for this group.”

Cracker Barrel is building this young customer base through digital means. This year, the chain rolled out pay at the table via QR code, Apple Pay, and Google Pay. The next objective is to release a loyalty program, which should launch by the end of the year. This should improve an off-premises channel that mixed 18 percent in the fourth quarter—in line with long-term expectations. Catering in particular is expected to grow by 25 percent in fiscal 2023 and top $100 million.

“We are taking the time to get it right as we believe the [loyalty] program needs to be compelling and well-developed before we launch it,” Cochran said.

Same-store sales lifted 6.1 percent year-over-year, driven mostly by 7 percent pricing (3 percent carryover from a Q1 increase and 4 percent carryover from a Q3 increase). It’s a noticeable slowdown from the 10.9 percent rise in the third quarter. Food inflation came in at the high end of what Cracker Barrel expected, with restaurant costs of goods sold coming in at 28.7 percent, up from 25.1 percent in the prior year. The 360-basis-point rise was driven by commodity inflation of 18 percent. That includes soaring inflation for poultry (35 percent), oils (76 percent), and grains (27 percent). Labor expenses were 35.5 percent, an increase from 34.2 percent last year, fueled by wage inflation and lower productivity levels.

Amid the inflationary noise, Cracker Barrel isn’t losing low-income customers, but it’s still seeing decreases in the 65-plus consumer. And the increased frequency from millennials hasn’t been enough to offset negative traffic from older customers.

The chain believes inflation will ease in the back half of fiscal 2023, so it decided to pass on much—but not all—of the cost impact through pricing. Using industry data, Cracker Barrel found that its gap versus competitors increased on almost every value metric compared to last year.

“We believe this was the right decision to maintain our strong value proposition with our guests, especially in the face of a potential recession,” Cochran said.

In fiscal 2023, Cracker Barrel expects 8 percent pricing. Typically, the brand implements two big increases per year, but recently it’s moved toward frequent, smaller jumps that are closely monitored from several sources to check for trade-down or traffic drops. The company already took its August pricing action, which should be the largest of the year. The chain holds the option to not take pricing in the back half of 2023 if it sees negative trends.

The concept projects commodity and wage inflation of 8 and 5 percent in 2023, respectively. Total revenue should grow 7-8 percent, including the opening of three to four Cracker Barrel stores and 15-20 Maple Street Biscuit Company restaurants. The brand wants to spend $125 million in capital expenditures, $30 million of which is related to new store development. – Source: FSR.

 

MTY Food Group Completes Acquisition of BBQ Holdings

MTY Food Group Inc. announced that it has completed the acquisition of BBQ Holdings, Inc. through the consummation of a merger of its wholly-owned subsidiary, Grill Merger Sub, Inc., with and into BBQ Holdings without a vote of the BBQ Holdings stockholders in accordance with Section 302A.613(4) of the Minnesota Business Corporation Act (the “MBCA”).

In the merger, each share of BBQ Holdings’ common stock outstanding immediately prior to the effective time of the merger (other than any shares held in the treasury of BBQ Holdings, owned by MTY or any of its respective subsidiaries or held by any BBQ Holdings’ shareholder who has validly exercised its dissenter’s rights under the MBCA) has been converted into the right to receive the US $17.25 per share, net to the seller in cash, without interest and subject to any tax withholdings. As a result of the merger, BBQ Holdings became an indirect wholly-owned subsidiary of MTY. BBQ Holdings’ support center will continue to be located and operated in Minnetonka, Minnesota.

As a result of the acquisition, shares of common stock of BBQ Holdings ceased trading prior to the opening of the market on September 28, 2022, and will no longer be listed on the Nasdaq Stock Market.

National Bank Financial Inc. acted as sole financial advisor to MTY, and Morrison & Foerster LLP acted as its legal advisor. Kroll, LLC acted as financial advisor to BBQ Holdings, and Dentons Sirote PC and Lathrop GPM LLP acted as BBQ Holdings’ legal advisors.

In connection with the consummation of the merger, Bryan Wolff, Charles Davidson, Peter Haeg, and Rachel Maga, resigned from the Board of Directors of the company (the “Board”) and from the board of directors of any subsidiary of the company and from all committees thereof on which such directors served, effective as of the Effective Time.

The MoFo team advising MTY on the transaction was led by San Diego corporate partners Shai Kalansky and Steve Rowles, together with San Diego associates Andrew Dixon, Patrick Boyle, Carey Hughes, and Brooke Maker. The wider team included New York executive compensation partner Joshua Lerner, San Francisco securities enforcement partner Robert May, San Francisco technology transactions partner Justin Haan, Washington, D.C. antitrust partner Vishal Mehta, and New York tax partner Dave Sturgeon.

On September 27, 2022, pursuant to the Merger Agreement, and in connection with the consummation of the Merger, the directors of Merger Sub became the directors of the company. The new members of the company’s Board are Eric Lefebvre, Renee St-Onge and Jeff Smit. In addition to the directors of Merger Sub, Parent has appointed Jeffery Crivello to the Board, effective as of the Effective Time. Following the completion of the Merger, the Board appointed the following new officers of the Company: Eric Lefebvre, as President and Chief Executive Officer, Renee St-Onge as Treasurer and Chief Financial Officer, Jeff Smit as Vice President, and Jenny Moody as Secretary. In addition, the Board appointed the Company’s former Chief Executive Officer, Jeffery Crivello, as Co-Chief Operating Officer and the Company’s former Chief Operating Officer, Albert Hank, as Co-Chief Operating Officer. – Source FSR.

 

Three CEOs forecast the future of retail

Bringing back the “theater of retail” is a priority for Jason Buechel, the new chief executive officer of Whole Foods Market, Austin, Texas, a business unit of Amazon.com, Inc., who spoke at the Groceryshop conference held Sept. 19-22 in Las Vegas. He assumed leadership of the supermarket chain from founding CEO John Mackey on Sept. 1.

Mr. Buechel plans to have Whole Foods stores return to a pre-pandemic engaging experience. Stores will rely on suppliers to assist through product innovation, as well as providing products that Whole Foods can put its “Sourced for Good” seal.

The Sourced for Good seal is a third-party certification program to support responsible sourcing. Launched in April 2021, it is intended to help shoppers easily identify products that meet the sourcing standards required by the program.

“A key reason customers come to our stores is our quality standards,” Mr. Buechel said. “They seek us out because we do the homework for them.”

He referred to the more than 500 ingredients banned by the company. He also noted the importance of supporting local communities.

we’ve increased the number of local offerings by 30%,” Mr. Buechel said. “We currently have over 3,000 unique local products on our shelves, and this is not only important for our customers as they seek out unique differentiation, but we also think it’s an important role for us in the communities we serve.”

The in-store experience that is so important to Mr. Buechel is different from what John Furner, president, and CEO, of Walmart US, Bentonville, Ark., sees in the future. He also said Walmart is still trying to figure out the new normal.

While the two retailers have historically catered to consumers of different income levels, Mr. Furner said during these recessionary times, Walmart is attracting higher-income households. Mr. Furner plans to keep them through the store’s valued-added delivery program Walmart+, among other platforms.

“(The program) takes time and friction away,” Mr. Furner said. “We bring deliveries to your door, into your home, and even into your refrigerator.”

Another strategy to attract higher-income shoppers is to invest in innovations that speak to their social priorities. One such investment began in January when the company invested in Plenty Unlimited Inc., South San Francisco, Calif., an indoor vertical farming company. The investment is part of a broader strategic partnership to use Plenty’s indoor vertical farming technology platform to deliver fresh produce to Walmart retail stores.

In August, Walmart invested in Sustainable Beef LLC, North Platte, Neb., a rancher-owned company. The investment will enable Walmart to source Angus beef from Sustainable Beef’s new processing facility which is expected to open by late 2024.

Drone deliveries also are part of Walmart’s strategy to get its urban-area customers items quickly. By the end of this year, the company’s DroneUp delivery network will expand to 34 sites, providing the potential to reach four million US households across six states, including Arizona, Arkansas, Florida, Texas, Utah and Virginia.

Mr. Furner said the retailer initially thought customers would use the service for emergency items, but it is turning out to be more for convenience, such as a quick fix for a weeknight meal.

“The top-selling item at one of our current hubs is Hamburger Helper,” he said.

Nick Green, co-founder, and CEO, of Thrive Market, Los Angeles, said the growth strategy for his company’s online membership-based retail business founded in 2015 is to sell accessible, unique and healthy products. Today, its products include more than 500 private-label products.

“They’re the best-selling, most re-ordered products on the site,” Mr. Green said. “Last year we did over $100 million in sales just from the Thrive Market brand.”

The Thrive Market site offers a limited number of brands, as compared to a brick-and-mortar retailer.

“We have a very high bar for letting new products onto the site, but we also work really collaboratively with new brands,” Mr. Green said. “About half of the products on Thrive Market, even under the Thrive Market brand, are launching for the first time. We can use our data to look at not only what people are buying right now, but what they want or can’t find. We’ll launch products or brands that take some risk that other retailers might not be able to take.” – Source: Food Business News.

 

Additions are pairing sweet with savory . . . .

New Products from Krispy Kreme, Auntie Anne’s, and Baskin-Robbins With foodservice brands leaning into fall flavors, recent menu Krispy Kreme launched its fall-inspired Autumn Orchard Collection, which features five donuts, including a salted caramel brownie donut. The sweet-and-salty donut is topped with salted caramel brownie batter flavored frosting, a salted caramel drizzle, and brownie bits. Also included in the collection is an apple fritter, a maple pecan cheesecake donut, a spiced apple-filled donut, and a pumpkin spice cake donut.

“Fall brings a bounty of apples and pecans and flavors of maple and pumpkin spice for us to enjoy,” said Dave Skena, global chief brand officer for Krispy Kreme.

Soft pretzel company Auntie Anne’s, a business unit of Focus Brands, is also launching a salty and sweet combination this fall, with the debut of the salted caramel chocolate frost. After initially launching a dragonfruit mango frost over the summer, Auntie Anne’s is adding the flavor in time for cooler weather.

“It can be hard to say goodbye to summer, so Auntie Anne’s is making the start of fall sweeter than ever with the new Salted Caramel Chocolate Frost – another new beverage innovation from Auntie Anne’s as we continue to expand our premium beverage offerings,” said Cynthia Liu, vice president of marketing at Auntie Anne’s.

The salted caramel chocolate frost has layers of caramel mixed with Hershey’s frozen chocolate, on top of whipped cream, and topped with a sea salt caramel drizzle.

Instead of going in the sweet-and-salty direction, Baskin-Robbins is going with sweet and spicy for its seasonal flavor.

The ice cream maker debuted its October flavor of the month: Spicy ‘n Spooky.

The Spicy ‘n Spooky flavor features white chocolate ghost pepper-flavored ice cream, dark chocolate ice cream, and spicy blood orange flakes.

“We’re excited to evoke the spookiness that comes with the season, using flavor elements we’ve never offered before in an ice cream, and we’re looking forward to guests’ reactions for those who are brave enough to try Spicy ‘n Spooky,” said Jeanne Bolger, director of research and development for Baskin-Robbins.  – Source: Food Business News Daily.

 

Grupo Carolo to debut Mexico City concept with Rockets + Pineapples

Eureka backers plan to import La Popular to California, Nevada, and Texas . . . .

Mexico City-based Grupo Carolo and the backers of the Eureka casual-dining concept plan to bring the upscale La Popular to the United States, with plans for California this year and Nevada and Texas next.

The first U.S. La Popular is scheduled to open in Roseville, Calif., in November with openings planned for Las Vegas, Nev., in February and Austin, Texas, in March, the company said. The Roseville location will cover 3,760 square feet with a 1,490-square-foot patio. It will seat 191, including 20 bar seats and 72 on the patio.

Grupo Carolo is a family-owned, multi-unit operator with 27 restaurants throughout Mexico City, including Aromas, Blanco Colima, Blanco Castelar, Cachava, Carolo, and Farina. Carolo acquired an interest in Eureka Restaurant Group in early 2020 from private-equity firm KarpReilly.

Hawthorne, Calif.-based Rockets + Pineapples LLC is the hospitality group behind 26 Eureka restaurants in California, Idaho, Nevada, Texas, and Washington.

La Popular’s menu will be overseen by Cesar de la Parra Coghlan, the executive chef who also oversees Eureka’s menu, and will showcase traditional Mexican dishes, the company said. The concept will also offer a cocktail program with a selection of 80 tequilas and mezcals, overseen by Trevor Tyler, the vice president of beverage operations.

“We are excited to introduce a vibrant, authentic home-grown Mexican restaurant to the United States,” said Paul Frederick, founder of Eureka Restaurant Group and Rockets + Pineapples, in a statement. “With its approachable menu and vibrant atmosphere, we hope that La Popular will become a community gathering destination for friends and families alike.”

Rockets + Pineapples is also working on other concepts expected to open in 2023, including The Amalfi Llama and Electric Pickle, which will emphasize pickleball.

“To me, Mexican cuisine is so much more than food; it encompasses the country’s sense of community and place,” said Eduardo Gomez, CEO of Grupo Carolo and Rockets + Pineapples.  – Source: NRN.

 

Florida-based bowl concept also plans expansion to Virginia in September . . . .

Bolay to Open First Drive-thru Unit in Tampa, Fla.

Bolay Fresh Bold Kitchen, known for its gluten-free signature bowls or “bols,” plans to open its first drive-thru location in Tampa, Fla., and to expand to Virginia in September, the company said.

Wellington, Fla.-based Bolay was created in 2016 by Chris Gannon and his father Tim Gannon, a co-founder of Outback Steakhouse.

The Tampa drive-thru will be the brand’s 24th location. It will debut on Sept. 1 with several grand-opening events.

“The South Tampa opening marks more than one exciting milestone for Bolay as we open our first drive-thru and expand our reach to bring fresh and bold flavors to communities across Florida and state borders,” said Chris Gannon, Bolay’s CEO, in a statement.

“We’re proud to not only provide healthy options that make our guests feel good,” Gannon said, “but [to] introduce a drive-thru offering that empowers us to meet their needs with elevated hospitality.”

The South Tampa location covers 2,815 square feet in a stand-alone location that accommodates the drive-thru. It seats 45, a spokesperson said. Earlier Bolay locations range from 2,500 to 2,700 square feet with a couple of nearly 3,000-square-foot locations. – Source: NRN.

 

When Inflation is a Challenge, it May Help to Look Under Couch Cushions

With declines in customer traffic, fewer dining-out occasions, and “trading down” to cheaper alternative meals, owners and operators may need to dig deep to uncover additional top-line sales opportunities.

 

By now, you’ve tried online ordering, 3rd-party delivery, in-house takeout, curbside-to-go, catering, or all of the above. Now is the time to review what’s worked (or hasn’t) for your concept, your operation, and your staffing model—and adjust your strategies accordingly.

 

Use pricing strategically

With the consumer price index up around 8% this year, customers are seeing increased prices in every part of their lives. They may find it easier to accept raised prices in restaurants when input costs, fuel surcharges, and product scarcity are driving the change.

 

Pricing is an art and a science. It might make sense to take a “broad brush” approach, raising all prices by a certain percentage but perhaps do it in smaller increments and on a quarterly basis. It might even make sense to take an additional price increase going into the fall—especially if your restaurant has typically higher sales in the fourth quarter due to holiday celebrations or snowbirds.

 

Make use of loyalty programs

Loyalty programs can attract new customers to your restaurant, build the frequency of dining occasions with your existing customers, and show customers they’re special guests and are getting access to special privileges. These programs can also allow you to build closer relationships with your guests.

 

Build checks with upselling

Beyond delivery methods, consider growth opportunities in the dining room and with your menu. Adequately train servers to “upsell” and suggest appetizers, soups, salads, extra sides, and desserts. Some restaurants find that trimming down their portion sizes could lead a customer to order an extra item or dessert because they have room for more. This can be a great check-builder opportunity.

 

Focus on your social media presence

Many potential customers, especially the younger generations, check out your restaurant online before they walk in the door or make a reservation. They rely on reviews and pictures of your food to help them decide.

 

Use search engine optimization techniques so your brand or restaurant gets noticed by web browsers. Reward visitors to your social media pages with some fun early-week offerings such as BOGO or discounts on Monday, Tuesday, or Wednesday to drive traffic on those days. Discounts for online orders can be offset by customers who tend to order more items online than they would if dining in your restaurant.

 

Look for cost savings opportunities

In the restaurant industry, it’s necessary to measure metrics including what’s ordered, what’s consumed, time worked, and supplies or utilities used. The following ideas may help improve the profitability and sustainability of your restaurant, protect against inflationary pressures, and potentially lower costs.

 

Improve food cost management

Take regular inventories of your top 10 – 20 items to verify what you’re buying is turning over in a reasonable time. Verify that the usage in a week is in line with your sales reports for those ingredients. Secure high-dollar items like liquor and wine in locked cabinets, and carefully order expensive meats and seafood based on recent demand.

 

Keep and review waste logs to identify food-prep training opportunities, supplier issues, or where a recipe’s volume might need some tweaking. Call your suppliers to see what they can do for you in terms of larger bulk shipments. Compare the prices in your contract or order guide with recent invoices and discuss the possibility of substituting items that might be a close alternative at a reduced price.

 

Additionally, consider investing in a food-cost-management tool that can provide helpful information on your top items, supplier volume, and pricing changes.

 

Apply menu engineering

Menu engineering makes it easier for the guest to enjoy your concept and what you’re known for. Understand your guests and which menu items they crave—and which ones don’t have the wow factor. Study your POS reports to assess your 10 most popular items, which entrees generate the highest guest check average and those that yield the highest sales per labor hour.

 

Some menus are overly complex and can make it harder for guests to order. Use food photography sparingly and consider a “build-your-own” section that allows the guest to personalize their experience with different sauces or preparation styles. Check out your competitors to see how their menus are organized and priced for similar items.

 

Improve labor cost management

Today’s labor challenges—scarcity of workers, demands for benefits or higher pay, retention and turnover issues, and lack of restaurant experience—can make it difficult to get more value from your workforce.

 

Focus on retaining your “star” employees and offer bonuses, benefits, perks, or discounts to help retain them and give them a career path in your establishment. Continuous training is a key way to help your workforce achieve higher sales, attain consistent operational performance, and improve the culture of your concept.

 

Look at what you can afford to pay, shop the competition, and make sure you’re getting the performance you need for the pay you’re providing. Consider implementing a 3% – 5% service charge on every guest check to help pay for a new benefit for your employees.

 

Controlling labor costs requires daily diligence and should be done in real-time as much as possible. Creating a weekly schedule is important, but just as important is reviewing the labor costs incurred to deliver the sales volume achieved. Evaluate the productivity of your labor force by creating a baseline labor model (what it takes to open the doors) including multiple models for different seasons. Learn from variances where there is excess labor and where labor was not adequate.

 

If your analysis of the actual vs. budgeted/scheduled labor consistently shows large variances and you are incurring significant overtime, consider various operating practices including tasks that can be assumed by the guest—pay at the table, order kiosk—and those that can remove back-of-house labor, such as pre-prepped items.

 

Explore financing options

The Federal Reserve is raising interest rates as a tool to help dampen inflation rates, but it comes at a cost for variable-rate debt holders. Debt is getting more expensive, so what do you do? Now is the time to refinance outstanding debt if you believe you can qualify for a lower rate or lock in a fixed rate.

 

Squirrel away as much cash as possible for the coming leaner months. Look at all operating costs, including loans and lease agreements—try to renegotiate these contracts and extend terms in exchange for lower rates. If that isn’t providing enough capital to get through lean times, working with local Small Business Administration lenders and community banks can help provide capital at a reasonable rate. For larger restaurant groups, a line of credit can help smooth out seasonal fluctuations in sales and inflationary cost pressures. – Source: CLAconnect/NATIONAL RESTAURANT ASSOCIATION.

 

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