New FDA Definition of “Gluten-Free”

According to the researcher Packaged Facts, the gluten-free food market in the USA will grown from $4.2 billion in 2012 to $6.6 by 2017. Although less than 1% of Americans have the disorder that would require a completely gluten-free diet, close to 1 in 3 people will abstain from gluten according to the trend watcher NDP Group. An analyst at Rabobank, a Dutch bank that is a global leader in Food and Agri-financing, has commented that, “Consumers, rightly or wrongly, have made a connection between gluten-free and healthy..Grain companies are hoping this trend crashes and burns sooner rather than later. But any trend is a marketing opportunity.”

Up until now an official definition of what qualifies a food item as gluten-free hasn’t existed. The Food and Drug Administration has now created an official definition to make those suffering from celiac disease and others who try to abstain from gluten products easier to identify. Packaged foods will be considered gluten-free if they contain less than 20 parts of the protein per million per kilogram; this is the smallest quantity that can be measured reliably and the FDA claims 95% of food that is labeled as such meets this criterion. This rule, however, does not apply to alcohol or beer, nor does it apply to restaurants but the FDA is trying to encourage more and more restaurant chains to meet the specific standards of a public-health service.

There is no new logo or FDA label for the gluten-free products that manufacturers have to use, it suffices that a variation of the words “gluten-free” appear on the FDA approved package. To read more about how the new FDA definition of gluten-free products will impact manufacturers and consumers alike, click here

 

Burger King’s New Menu Strategy

Over the past year Burger King has attempted to change its menu not by creating new items that require new ingredients, but rather by creating new items that use ingredients that already exist on hand in the kitchen. Burger King has said that this approach to menu innovation is working in their favor; Daniel Schwartz, Burger King Chief Executive Officer has stated that the third consecutive quarter of growth was “driven by our strategy of launching fewer, more impactful products and by the continued popularity of our core offerings.”

In the last quarter Burger King launched five new items, less than it has in past quarters, which were all essentially versions of existing burgers with small adjustments. For instance, the new Chicken Big King is a Big King with a chicken patty that replace the beef patty. Similarly, the new BBQ Bacon Whopper is essentially a Whopper that has bacon and sauce added to it, and the Extra Long BBQ Cheeseburger utilizes the same hoagie bun that is currently used for the chicken sandwich and inserts two beef patties, cheese, BBQ sauce and onion rings.

In the past Burger King has launched seasonal new items which caused complications in the kitchen, which led to this more modest menu innovation strategy. McDonald’s is also attempting to simplify the menu in order to increase speed and efficiency at its restaurant locations. The ordering and execution will be more streamlined with simpler menu items that do not require too many ingredients or a complicated time-consuming assembly process. Burger King’s President for North America, Alexandre Macedo, has stated that this new menu strategy that tweaks original menu items without adding new products or ingredients will enable the company to focus spending in certain high-impact areas and will also allow Burger King to be more consistent across the board in its marketing efforts.

To read more about Burger King’s menu strategy, click here

Growing Off-Premise Profitability Through Technology

 

Erle Dardick has been in the catering business for fifteen years and is known as the expert when it comes to helping multi-unit restaurants create successful catering revenue channels. Erle also founded a software, MonkeyMedia Software, that provides catering solutions to multi-unit restaurant operators.  The use of online and mobile ordering technology is the strongest sales and marketing tool to grow a business. Research shows that the average ticket is 30% higher on online ordering platforms than it is in-stores. In order to have a successful online ordering platform that is quick, easy and efficient in order to meet customers’ demands, a solid strategy must be put in place to promote the platform. Below are Erle Dardicks’s five marketing methods to promote an online catering platform:

1. Make your platform user friendly. The online and mobile ordering platforms should be very customer friendly and intuitive. It should be set up in a way that satisfies the needs of the customer in a user-friendly manner.

2. Determine the best way to drive frequency. Promotional offers and/or discounts on group orders over are a good way to increase ordering frequency. Rewards and loyalty programs are also a great tool to promote the online platform.

3. Drive in-store traffic to your online and mobile ordering platforms. Good signage in-stores that promote the catering program and online/mobile ordering platforms will increase awareness. Staff should also be trained to redirect callers who call in to place an order from the store to the online/mobile ordering platform (they could also offer a promotional code for a first time use of the service).

4. Reward first-time users.  Incentivizing first-time users of the online/mobile ordering platforms is of utmost importance. Research shows that consumers find it easier to redeem coupons and promotions online or through mobile devices, and will do so when prompted. This means that restaurant operators have an increased opportunity to promote their off-premise program through promotional offers that will drive online and mobile ordering, increasing sales as a result. The follow-up with these first-time users will prove useful as it is an opportunity to gather important information about their experience.

 

5. Follow-up about the customer experience. Feedback about the online and mobile ordering process and experience is important because it allows you to discover what customers like and what they believe has some room for improvement. It is as important to really ask the correct questions; ie. Were there any concerns after placing an order? Was everything to their satisfaction?

 

To read more about the way the proper technology tools can grow off-premise profitability, click here

Lessons For Launching a Startup Concept

Tom Jednorowicz, Founder and CEO of Meatheads in Chicago, has had 20-plus years experience with fast casual early-stage high-growth restaurant concepts. While launching his own startup concept he learned a few lessons and is sharing these along with a few tips for any startup concept.

1. Any startup business plan needs to be flexible.The startup business plan should prepare for short term financial viability; it should not be interpreted too literally as it can create tension in the decision-making process which can stifle growth because it does not allow for adaptations to changes in the marketplace. Growth should not be defined solely by the business plan.

2. Execution: Create an atmosphere of winning for both employees and customers.It is crucial to implement training programs for employees in both front and back of house positions to make sure the guests are enjoying their experience. It is important to make sure this experience is consistent in order to ensure repeat clientele. Employees who excel at providing opportunities for growth within the company should be rewarded as it will result in a high employee retention rate.

3. Take care of every customer.
A guest experience is not solely based on the food but on the service in general and how it all ties in together as a whole. This is why it is important to ensure each customer is having an enjoyable experience by anticipating guests’ needs and going above and beyond to rectify minor mistakes when handling customer complaints.

4. Branding: It’s okay to modify your brand and target audience.
Embrace the changes that can be observed after opening whether it means having a different clientele than anticipated or different brand priorities. Make changes to further adapt with the updated business plan by for example, changing the logo, adding new menu items, changing the ambiance and/or physical decor, and generally finding methods to gain customer loyalty as it will drive success.

5. Community: Hyperlocal connections will help your business establish roots.
“Connect with customers in your restaurant’s backyard first, then expand your reach.” Give the community an opportunity to learn about your brand and what it represents by having a soft opening. The importance of being accepted in the local community should not be understated.

To read more advice from Tom Jednorowicz on opening a restaurant startup, click here

Demand For Fresh Ingredients Driving Growth

The restaurant trend to advertise locally sourced ingredients on the menu has now caused consumers to expect it. This demand is now beginning to be met in less expensive fast-casual restaurant chains. Guests are willing to pay extra for locally sourced fresh ingredients as is the case at Sweetgreen, Tortas Fronteras by Rick Bayless, Salata and Mad Greens. Marley Hodgson, cofounder of Colorado-based Mad Greens has states that, ” the plan is to have a dedicated portion of the menu that’s local specific.” As the chain begins to expand outside of Colorado, the availability of local produce and other ingredients will be an important determining factor for whether or not to install a new unit. For locations in markets that do not have long growing seasons the emphasis will be shifted to other ingredients that are produced in all seasons such as dairy.

Pricing structures in a fast casual business are not straightforward and the business models do not allow for much wiggle room, however, certain chains are coming up with ways around the structures in order to incorporate more locally sourced ingredients into the menu. Hodgson stresses that guests are willing to pay extra for local foods and believes that, “it’s a much more important trend than organic, but there’s a bifurcated customer base and you have to give them a choice. If you force them all to pay a higher price for local, that’s problematic, because there’s a portion that won’t pay. But there’s a large segment saying ‘yeah, I’m totally willing to pay more.’”

Salata, a franchise company operating in Texas, California and Chicago also sources local products and ingredients. Both Salata and Mad Greens are very transparent with their guests about where their food is coming from, which has proven to be much appreciated.

To read more about adding more locally produced foods to restaurant and fast casual chains’ menus and how it is helping to drive business growth, click here

 

DineEquity Inc. Developing Strategies to Drive Traffic

DineEquity Inc., AppleBee’s parent company, has been focusing on specific guest’s emotional connections to the brand in order to develop strategies that will drive traffic. The company’s second quarter results that were released this week showed a same-store sales increase of 3.2% systemwide for the quarter ended June 30; DineEquity Inc stated that this showed positive sales across all the dayparts. The results for this quarter proved to be the fifth consecutive quarter with same-store sales increases following the revamping of the chains’  menus that aimed to entice guests to order more appetizers and higher priced main dishes.

The company’s main objective is still to consistently drive traffic and have overall positive performances. Following an extensive research study on Applebee’s target audience, the company has been working towards developing strategies which include solutions for speed, growth, and building guest loyalty. The research differentiates consumers by their opinions on casual dining in general rather than by more socioeconomic indicators such as income levels or other demographics.

Julia Stewart. DineEquity Inc. chair and chief executive states that,“it’s less about age and generational. It’s more about an emotional attune to how they think about restaurants and casual dining and us, in particular, and what it will take to get them to come more often…they’re very clear about what they want us to do differently, and we have to find our sweet spot, especially in competing against fast casual.”

Based on the results of this research DineEquity Inc is developing a loyalist program for Applebee’s and sister company IHOP in order to satisfy the customers desire to have a more customizable experience. Another area that is being improved based on this consumer-specific research is the bar business which customers have expressed that a more ‘relevant’ and ‘contemporary’ business would be appreciated. To read more about the changes being made throughout DineEquity Inc. chains, click here

Darden Restaurants Inc. CEO Steps Down

This past Monday Darden Restaurants Inc. stated that Clarence Otis Jr, chief executive and chairman of the casual-dining operator, would be stepping down from these two roles. Otis will continue to serve as chief executive until a successor is declared, or until the end of the year depending on which comes first to facilitate a smooth transition. Otis has served as the company’s chief executive for the past ten years and originally joined in 1995. Beginning November 2005 Otis also became chairman for the company.

Before becoming a part of the Darden team, Otis spent 11 years working as managing director and manager or public finance in investment banking for Chemical Securities Inc,. (currently known as JP Morgan Securities Inc.). During Otis’ time at the company it grew from 1.381 restaurants with $5.2 billion in annual sales to over 2,200 restaurants with over $8.7 billion sales by the end of the 2014 fiscal year. Otis states, ” I am confident that they, under the leadership of our board and management team, will continue to make progress on the actions we are taking to reinvigorate restaurant performance and further enhance shareholder value.”

The company will begin its search for Otis’ successor as chief executive officer considering both internal and external candidates. Darden is proud of the years he spent at Darden Restaurants Inc and is confident the company will continue to profit and have many successes in its future. To read more about Clarence Otis Jr stepping down as chief executive or Darden restaurants Inc, click here

Kellogg’s Consumer Segmentation Study Shows Evolving Breakfast Trends

The breakfast daypart has become increasingly more popular amongst QSRs and coffee shops over the past few years. Breakfast continues to be a meal that the majority of people consume within their own homes, however millions of people do purchase their morning meal on the go. The choices for breakfast on the go are vast, and there are many variables that influence how the consumer will choose their first meal of the day including a very large variety of available foods at different types of locations (fast casual, convenience stores, coffee shops, etc.), clear demographic groups (urban/suburban, employed/retired,business travelers/stay-at-homes), and a general shift in the attitude towards what constitutes a breakfast meal; some will consider breakfast to be a long sit down meal whilst others will be completely satisfied with a cup of coffee and granola bar.

These changes in eating behaviors have had a significant effect on the food industry, which is why Kellogg’s decided to study the motivations behind those who eat breakfast away from home. The study, “Away From Home A.M. Segmentation Study,” examines when, where and what people are eating for breakfast and what factors are influencing these decisions. The study provides extensive demographic breakdowns as well as the attitudes towards food choices in each of these demographic categories. These eating habits and behaviors were broken down into five distinct segments to assist operators in evaluating their current breakfast menus and pointing out opportunities to increase traffic and sales by adjusting their offerings to fulfill the needs of these distinct segments.

To read more about the Kellogg’s segmentation study and how it can help operators increase sales in the breakfast daypart, click here

Tips to Promote Allergen Awareness

Many legislative measures have been taken at both state and municipal levels to improve allergen awareness in the food industry. Betsy Craig, a spokesperson for the labeling company MenuTrinfo, LLC, is committed to bringing more awareness to both customers and staff and is launching her new company, Kitchens with Confidence, LLC which is fueled by this desire. After having spent years teaching the importance of allergen awareness through the AllerTrain certification courses, Betsy has offered some helpful insights and steps for staff to protect the health and safety of restaurant diners:

  • Print recipes and make them readily available to the staff. Educate the staff on each of the ingredients in a particular recipe or dish and show what could be changed or substituted for customers with allergens.
  • Learn the alternate names of the big 8 allergens developed by Food Allergy Research & Education.
  • Create a policy that described how each staff member (both front and back of house) should handle and react to allergen related questions about the menu.
  • Make a disclaimer visible in the restaurant that explains to guests that they must alert the servers if they have a food allergy. Post the same disclaimer on the paper menus, online, and on menu boards. The disclaimer will reassure the guests that your restaurant has made strong efforts to accommodate special dietary needs.
  • Always use sanitized cloths to wipe down surfaces after a first wipe with soapy water.
  • Identify allergen-free dishes on the menu with either special icons, or different font/colors.
  • Label tools and plates in the kitchen used for allergen-free dishes. Purple is the most common color now used in the kitchen to identify allergy-friendly foods.

To read more about how to ensure the health and safety of diners and the protection of staff regarding safe serving, click here

 

Starbucks’ Food Sales Increase Average Check

Starbucks completed a very successful third quarter with a $513 million net income  (23% gain compared to the year prior), and a 6% growth in global same-store sales. The coffee shop credits its non-beverage sales for the increase in traffic and average check. The sales of the new breakfast sandwiches that were launched in March increased by 40% during the quarter. Same-store sales increased 7% during the quarter with the new food items being responsible for 2% of that growth. The new hand-crafted Fizzio sodas and Teavana Oprah Chai and shaken iced-teas were also big contributors to the sales increase in the quarter.

This news came in sharp contrast to its competitor, Dunkin Donuts, who released a more disappointing quarterly report. Dunkin’ Brands adjusted their expectation of a 3-4% increase in same-store sales to being in between 2-3%. Nigel Travis, Dunkin’ Brands’ chief executive and chairman stated, “Our performance in the second quarter was disappointing, both domestically and internationally.” Dunkin’ Brands mentioned that the increased competition during the breakfast daypart (TacoBell now increasing breakfast offerings) combined with challenging macroeconomic factors (including a harsh Spring climate) all contributed to the disappointing 2Q. The brand now expects a revenue growth between 5-7% compared to the 6-8% projection set earlier in the year.

Food sales at Starbucks are allowing the chain to increase traffic during what would usually be considered the slower day parts for coffee establishments such as evenings and afternoons. Howard Schultz, Starbucks Chief Executive Officer and chair, has hinted that the company is working on making the lunch hour at Starbucks look different soon. Starbucks is also hinting at solutions for paying in advance and picking up using new mobile technologies. Schultz states, ” It’s clear to us in our research that express order and pay is a big, big idea.”

Overall Starbucks has plans for down the pipeline that include more food offerings and new mobile payment technologies which have already proven to increase average check and traffic. To read more about Starbucks’ success with improved food offerings, click here