Analysts exchanged views on the state of the restaurant industry in a teleconference that preceded the ICR XChange, a restaurant and retail investment conference, last Friday in Orlando. Frigid weather and middle- and lower-income wage decreases intensified by the Affordable Care Act have been the recipe for first quarter restaurant industry struggles. Despite these obstacles, many restaurants are seeing better numbers this year. Managing Director for equity research at Raymond James, Bryan Elliot, believes that the casual dining and quick service segments will be forced to continue to focus on value until middle- and lower-income families see more purchasing power. Analysts predict that technology-use will soar this year for both operational and consumer purposes. “The biggest challenge is transitioning from TV to mobile and Internet marketing,” predicts Elliot. Other trends? Fast-casual pizza is the “category du jour” and tiered value menus will continue to snowball.
Coffee Bartering at Tonx: Starbucks Card for “Higher Quality” Coffee Beans
Coffee subscription company Tonx is offering dollar-for-dollar credit towards “better quality” coffee beans in exchange for your Starbucks gift card balance. Their philosophy: “We Source. We Roast. We Ship. You Brew.” The Tonx team comprises coffee mavens whose resumes boast high-end roasters Ritual, Intelligentsia and Stumptown.
Tonx’s homepage forces prospective subscribers question the value of a dollar through a compelling visual:
$38 at Starbucks = 8 frappucinos
or, 11 cappucinos
or, 17 drip coffees
or, 48 cups of “carefully sourced, expertly roasted, super fresh coffee.”
The website proceeds to highlight the company’s differentiation points— “highest quality beans, brew guides, affordable tools, one-on-one brew help, coffee ratings, weekly publications,” and most importantly, “happiness.”
Bare-Handed Food Contact in California is Prohibited
A new section (113961) of the California Retail Food Code bans restaurant workers in California from handling ready-to-eat food with bare hands. The code went into effect Jan. 1, however health officials have implemented a soft rollout for the initial six months in consideration of operators who would likely be unprepared to handle the sudden changes. The rules apply to any ready-to-eat food that will not be cooked or reheated, including sushi, bread, baked goods, salads and garnishes like parsley, lemon wedges and pickles. Foodservice employees must still wash hands with soap and warm water thoroughly before prepping food, putting on clean gloves and between glove changes.
The new law states:
(a) Food employees shall wash their hands in accordance with the provisions established in Section 113953.3.
(b) Except when washing fruits and vegetables, as specified in Section 113992 or as specified in subdivisions (e) and (f), food employees shall not contact exposed, ready-to-eat food with their bare hands and shall use suitable utensils such as deli tissue, spatulas, tongs, single-use gloves, or dispensing equipment.
Adult “Happy Meals” at Harlem Shake
Harlem Shake, the healthy neighborhood diner on 124th St and Lenox Ave., has recently introduced the “Happy Meal“— an adult-friendly take on the popular fast-food combo meal. Instead of a plastic toy and unhealthy fare, this Happy Meal pairs a glass of from Harlem Shake’s new wine list wine with all-natural, healthier renditions of classic American comfort food, like the Kale & Chickpea Salad or the Harlem Burger. There’s a Happy Meal to fulfill everyone’s cravings, whether customers’ New Years resolutions are to be a better penny pincher or to indulge themselves more, both financially and nutritionally.
Fast Casual Restaurants in Hospitals
Nation’s Restaurant News details the latest trend in healthcare— an elevated dining scene in hospitals. Hospitals are infamous for serving inedible cafeteria food that does anything but promote health, ironically. Patients’ higher expectations have led Northwestern Memorial Hospital in downtown Chicago to construct a 70,000-square-foot dining and retail space, “Shop & Dine Northwestern,” which includes local, relatively healthy fast-casual brands including GRK Greek Kitchen, Sopraffina Marketcaffe, Protein Bar, Saigon Sisters and Au Bon Pain.
Northwestern Memorial Hospital did not have to work hard to propose the concept to restaurant operators, as the proximity to Chicago’s “Magnificent Mile” and constant foot traffic are compelling enough reasons to open. Another obvious perk to opening fast casual restaurants inside hospitals is the 24-hour operations.
Operators are taking note of the success of fast casual concepts in urban hospitals nationwide. “The trend in restaurants is that folks are trying to cater menus to healthier, fresher options, and given that we’re in health care, it was important for us,” explained Gina Weldy, vice president of real estate for Northwestern Memorial. “In the work environment we’re in now, people eat three meals a day near the office. These concepts give us the ability to offer that.”
Bushwick’s Fine and Raw
Fine and Raw in Bushwick is concocting delicious, unsweetened hot chocolate with just the right consistency. At $4 for a standard cup and $5 for a large, this 72% organic Madagascar varietal is a healthier alternative to mainstream brands. Staff suggests adding cayenne pepper or sugar afterward and offers soy milk. For the more adventurous crowd, Fine & Raw serves Sea Salt and Espresso bars for $7 to $8.
2014 Food Trend Predictions
We’re just one day away from 2014, and that means it’s time to start thinking about changes in the dining industry. The Daily Meal compiled a list of their top food trend predictions for the new year. Amongst them are healthier in-flight options, “new” cuts of meat, Queens is the new Brooklyn and high-end counter dining. A few predictions seem like a bit of a stretch, like restaurants charging for bread, but others sound very plausible.
Manhattan’s First Dinner-and-a-Movie Hybrid to Open
Joining the ranks of Brooklyn’s Nitehawk Cinema is Manhattan’s first dinner-and-a-movie venue, a high-end movie theater with food and beverage service, founded by IPic. The 40,000 square foot outpost in the Fulton Marketplace will sell tickets between $14 and $28, depending on the time and service offered. Reclining seats, blankets, and personal call buttons are just a few of the probable amenities to be offered.
The menu at the Pasadena location includes popular munchie favorites like Buffalo chicken spring rolls and fish and chips.
The movie/dinner establishment is scheduled to open in 2015.
“Secret” Menus, or Not-So-Secret Menus…
Mark Wilson, contributing writer at Fast Co. Design, detailed the ins and outs of “secret” menus at restaurants including Chipotle, Starbucks and In-N-Out Burger. Chipotle’s “Quesarito,” Starbucks’ 170,000 customizable beverage permutations and In-N-Out’s “animal-style” fries are a few of the secret (or not-so-secret) menu options that add to these restaurants’ mystique and allure.
“I think of it as the customer’s the brand manager,” Chris Arnold, Chipotle’s Communication Director says. “The experience of the public is something different for everyone, like an iPod in a way. How many billions and billions of iPods are in circulation, and yet no two [playlists] are alike. You buy a burrito, I buy a burrito. We pay the same thing for it, and they’re two very different things.”
Read about Wilson’s comically relentless quest to order the arcane “Quesarito” at Chipotle, amongst his other classified culinary discoveries.
Restaurant Visits with Deals & Discounts Increase Across the Board
The NPD Group reports that restaurant visits at enterprises using a deal or discount increased across all segments during the first nine months of 2013. Non-deal customer traffic has been flat in 2013 after two years of positive growth. Discounted-price traffic in all sectors of the industry increased 4 percent, and deal-price 2 percent.
NPD restaurant analyst Bonnie Riggs offers insight as to why casual-dining chain traffic declined by 1 percent this year, “In my view, the industry tried to move away from heavy discounting last year but found it was just not feasible with consumers still closely watching their spending. It is deal-related traffic that is keeping the industry from registering traffic losses. Casual dining has really ramped up with its deals, but unfortunately it hasn’t stopped traffic declines, which may mean that its deal offers aren’t resonating with cost-conscious consumers.”
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