Starbucks Introduces A New Breakfast Sandwich

February 20, 2015 by Leave a Comment

Starbucks is making a move towards the what Bloomberg is calling a ‘meat strategy.’  Starbucks shops in Orlando and San Diego are testing more protein focused food items. Some of these items include options such as chicken and artichoke sandwiches or barbecue brisket sandwiches. Another protein lunch (or breakfast) option being tested in these cities is the prosciutto and mozzarella Pinwheels Bistro Box. Along these lines, Starbucks is introducing a new breakfast sandwich, the Double-Smoked Bacon, Cheddar & Egg sandwich. This Starbucks version of a BEC will be prepared on a croissant-type bun.

Starbuck’s chief strategy officer explained that Starbucks is “no longer a one-trick pony … that era has long passed.” To read more about Starbucks’ strategy to rely less heavily on coffee sales alone, click here

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Shake Shack Expanding In Japan

February 19, 2015 by Leave a Comment

Shake Shack raised $105 million in its initial public offering last month and now plans to push the expansion overseas. Shake Shack’s largest presence is in New York with fifteen shops, but also has other shops within the US and a few overseas including London, Istanbul, Moscow and Dubai. The burger chain plans to open ten more and grow to roughly 450 shops.

Shake Shack signed a licensing agreement with a Japanese company, Sazaby League Ltd., which has opened Starbucks coffee shops in Japan in the past. The goal will be to open ten Shake Shack shops in Japan by 2020. A Tokyo restaurant is expected by next year. The Japanese Shake Shack restaurants will have the same Shake Shack menus with the same burgers, shakes and crinkly fries and their infamous frozen custards. For more information on Shake Shack’s expansion overseas in Japan, click here. 

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Chocolate Will Cost More This V-Day

February 13, 2015 by Leave a Comment

Cocoa prices increased significantly in the past year which will make this year’s Valentine’s Day chocolate gifts that much pricier. There has been in increase in demand for darker chocolates (mainly in Asian markets) which require more cocoa that could explain the cause of the spike in the commodity. Edward George, head of soft commodities research at EcoBank states,“What’s driving up the price, really, is rising demand for cocoa in Asia, though it also was pretty strong in North America and Europe.”

Environmental factors could also have been another factor affecting the rise; a dusty wind known as the harmattan began to sweep the big players in cocoa production this December (mostly West African countries) right at the beginning of the prime harvesting season. Many of the cocoa trees were also attacked by fungi that contributed to the decrease in production. Hershey’s has raised prices across all its products this year to offset the high cocoa prices. Sylvia Kälin, head of Lindt & Sprüngli’s corporate communications states,”L&S, like other companies in the chocolate industry, had to make occasional price adjustments on selected products in 2014 to absorb some of the raw material cost challenges — even if at first we always try to counter these challenges with increases in efficiency and volume.”

To read more about the rising cost of chocolate, click here, and on that note, Happy Valentine’s Day from TPG!

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Cracker Barrel To Work On Fast Casual Concept

February 6, 2015 by Leave a Comment

Cracker Barrel, the Tennessee-based restaurant chain, is working on transforming their concept into a new fast casual format as a strategy to extend the overall brand. Interestingly enough, there are few concepts that are similar to the Cracker Barrel brand of country cooking in the fast casual market space. The restaurant chain consists of a large barn-feel full service restaurant with an attached general stores selling everything from Adirondack chairs to clothing to toys.

The chain will be working on delivering a new approach to the guest experience. Currently the Cracker Barrel restaurants do $3.4 millions in sales, and the retail portion of the chain brings in another $900,000. Cracker Barrel will be keeping us guessing on what kind of menu they will be implementing in the fast casual concept, the service type and whether or not the Old Country Store will still be making an appearance. To read more about Cracker Barrel’s future plans to extend the brand, click here.

 

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New Microsoft/PayPal Mobile POS Options

February 5, 2015 by Leave a Comment

Microsoft 8.1 and PayPal have partnered up to enable PayPal Here to run on any Microsoft 8.1 product. Microsoft will now be able to sell Surface as an all-in-one mobile POS system to food enterprises. A new device powered by Microsoft 8.1 has also been debuted: the Panasonic’s Toughpad FZ-R1. The Toughpad device is unique in the sense that it’s design makes it sturdy enough to endure tough use in a restaurant setting and will have a significantly longer life than other consumer table models.

With this new Microsoft-PayPal partnership, merchants will be able to accept card payments with PayPal Here on any device that runs the Windows 8.1 operating system. PayPal used to be only compatible with iOS and Android devices, but now has released an SDK to enable software developers to create ancillary services such as inventory management and customer engagement programs such as loyalty that can be paired with PayPal Here on Windows. This could potentially open the doors for similar providers such as Amazon Local Register, Intuit GoPayment or Square, whose up until now have not been compatible with Windows devices.

Brad Brodigan, vice president of retail at PayPal states in Mobile Payments Today, “To me, the most important piece [of the mobile point-of-sale market] is to provide solutions that are flexible enough to meet the needs of all types of merchants, and that’s why this partnership with Microsoft is so important for us, not only are we providing the PayPal application on the Windows network, but we’re also providing the PayPal Here SDK to the developer network to create customized services.”

To read more about the new partnership between PayPal and Microsoft and the effects the all-in-one solution will have on enhancing customer engagement, click here

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Guest Data Analytics Solution

January 30, 2015 by Leave a Comment

Fishbowl, a inventory management software company, has launched its Guest Analytics solution. This will allow operators to structurally stream guest data from several sources and be analyzed and acted on in an integrated marketing eco-system. Data sources include POS (point-of-sales), loyalty, email, social, online ordering, reservations and guest satisfaction.

Fishbowl President & CEO Dev Genevan states, “Attracting and retaining loyal guests has never been more complex in the hyper-competitive restaurant space, increasingly, restaurants recognize the challenges posed by their silos of guest data and the need to turn that data into actionable insights to enhance the customer experience. Our next generation platform is built on leading edge technology that allows us to consume any form of data and apply industry-specific analytic applications to enable our clients to understand their guests at an in-depth level, regardless of touch point. Through the integration of Guest Analytics with our email, SMS, social, promotions management and guest acquisition solutions, we make it possible for our clients to efficiently act on those insights.”

For more information on the Fishbowl Guest Analytics platform and the different analytical modules, click here.

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2015 Restaurant Industry Forecast

January 28, 2015 by Leave a Comment

The National Restaurant Association has forecasted total restaurant industry sales of $709.2 billion for 2015. This is a 3.5 percent increase over 2014. According to the NRA, 2015 will also be the 16th consecutive year where employment in the industry will be accelerated compared to overall employment growth.  14 million individuals will be employed in the industry this year as the second-largest private sector employer, which represents about 10 percent of the total workforce in the nation.

NRA President and CEO Dawn Sweeney recently stated in a press release,”Our nation’s restaurants continue to be an essential part of Americans’ daily lives and play a vital role in every community across the country; although operators will continue to face a range of complex challenges in 2015, the restaurant and foodservice industry remains a fundamental driver of the nation’s economy, while providing valuable careers and opportunities to 14 million Americans.”

Below are a few opportunities and challenges for 2015 as seen by the National Restaurant Association:

  • Operators will continue to face challenges including food costs, building sales volume, the economy and recruiting and retaining employees.
  • Average wholesale food prices jumped more than 5 percent in 2014, which represented the fifth consecutive annual increase. During the last five years, average wholesale food prices rose roughly 25 percent. Operators can expect to get pricing relief on several of the major commodities in 2015, including dairy and pork.
  • With the economy steadily improving and the jobless rate decreasing, restaurant operators are finding that the competition for employees is intensifying.
  • Labor costs will remain a concern in 2015. Challenges with Affordable Care Act implementation and minimum wage increases have made a significant impact on restaurant bottom lines, as typically one-third of restaurant sales is spent on labor.
  • Consumers continue to have substantial pent-up demand for restaurant services: 38 percent of consumers say they are not eating on the premises of restaurants as frequently as they would like; 41 percent say they are not purchasing takeout or delivery as often as they would like.

Overall, the NRA 2015 forecast has a positive outlook. To read more about the challenges, opportunities, consumer trends and workforce outlook, click here.

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Ten Fast-Casual Challenges

January 27, 2015 by Leave a Comment

According to Nick Vojnovic, president of Little Greek Restaurant (a fast-casual, Greek-themed, multiunit concept with an American influence based in Tampa, Florida with 19 locations in Arkansas, Florida, and Texas), the fast-casual category will be seeing constant change and challenges in 2015. Below is a list of what Vojnovic considers to be the ten most challenging aspects the fast-casual industry will be facing in the year ahead.

1. Real estate. Real estate will be becoming tighter and tighter. Landlords are in a position where they have the upper hand; it is not a black-or-white scenario. “Will landlords kill the golden goose by charging more than operators can bear?” Strong negotiating skills will become a very important tool this year.

2. Technology arms race. New social media tools may emerge this year, and the existing ones are constantly changing. Social media has the potential to have a direct return on investment and sales. Fast-casual operators will have to closely monitor trends and be smart with allocating resources accordingly.

3.Private equity dollars. A good example is the growth in the fast-casual burger and pizza categories. “How many more of these concepts can the industry handle before it bottoms out?”

4. Obamacare. While there wasn’t a clear or strong impact in 2014, the impact it will have in 2015 is still unknown.

5. Fuel prices. Fuel prices have being going down significantly but we know they must start going back up at some point. As a positive for the industry, lower prices boost consumer disposable income. The Organization of the Petroleum Exporting Countries (OPEC) will have to jump in to protect pricing at some point which will have an impact on the industry.

6. External threats like terrorist attacks and natural disasters. “These are “black swan” scenarios and are all but impossible to predict.”

7. Labor costs and joint employer mandates. The possibility of returning to a tight labor market is real and it could occur throughout 2015. It could be influenced by the new immigration deal, or joint employer rulings could also take place with unpredictable consequences.

8. Credit card fees. Credit card fees take a pice of an establishment’s profits. Realistically, taking into account today’s technology, this will not change. While usage continues to dramatically increase, expenses are failing to drop. The industry will need to find a way to ‘bypass this draining.’

9. Commodity prices. This year we saw prices go up for shrimp, limes, avocados and beef. Other foods will also see climbing prices this year that operators cannot predict.

10. Shrinking margins. “As an already extremely tight business model gets squeezed, which chains will not survive 2015? Industry players will have to run, not walk, to survive.”

The way to take in these challenges is not to be skeptical or gloomy, but simply to emphasize that industry leaders shouldn’t take things for granted or take a back seat. No matter how successful the concept, there will always be challenges. The operators who adapt and watch for these obstacles will be the success stories in the coming year.

To read the full article about these challenges for the fast casual industry in 2015, click here

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Three Fast Casual Must-Haves

January 26, 2015 by Leave a Comment

During the past decade there has been a significant increase in the number of fast casual enterprises because of the changing habits of the consumer; this new generation of consumer values convenience above everything. The modern food consumer seeks out a smart balance of convenience, quality product, appealing aesthetics and of course, affordability. The guest wants an experience that is as close to a full-service experience as possibly, without the same price and time commitment. In order to distinctly differentiate themselves from their competition, fast casual enterprises need to offer 1) fresh ingredients, 2) five star customer service and 3) an inviting environment.

1. Fresh ingredients: The new generation of consumer values quality food, with a special emphasis on the choice of ingredients and how fresh they are. Consumers are also more aware about the cooking techniques and menu variety.

2. First-Rate Customer Service: Counter service should be available so that the guest can place an order quickly, and enjoy the experience longer. The consumer looks for an experience that is as close to full-service as possible, so the staff needs to meet this demand in as friendly of a manner as possible.

3. Inviting Atmosphere: Aside from looking aesthetically pleasing and modern, the staff needs to be as high-energy and outgoing with the guest as possible while still maintaining accuracy and speed.

To read more about the evolving nature of fast casual enterprises and how to keep up with the new consumer demands as well as some predictions for the future of fast casual, click here

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Loco’l Tackling Fast Food

January 23, 2015 by Leave a Comment

Chefs Roy Choi and Daniel Patterson are very close to launching Loco’l, a unique way of doing fast food that uses high-quality ingredients at low price points, and still pays workers a decent wage. Roy Choy states, “We’re not trying to be Fast Food Plus and that’s exactly why the cornerstone of Loco’l is that we want to make a 99 cent burger.” Tartine Bakery’s chef Chad Robertson has been brought on to the project by Roy and Daniel in order to craft a koji burger bun, and the chefs have a spot already in the San Francisco Tenderloin neighborhood. Loco’l is now focusing on raising more capital to cover the rest of the location’s build-out. Below are some of the values of Loco’l:

Loco’l is a team of innovative chefs.
Loco’l is locally sourced.
Loco’l is using quality ingredients.
Loco’l is providing fair wages.
Loco’l is leveraging state of the art technology.
Loco’l is community based.
Loco’l is crazy.

The campaign launched on Indiegogo has raised $12,000 so far of the $150,000 goal. To check out the Indiegogo campaign, click here.

Filed Under: Global Market Buzz, Openings
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