Tim Hortons Expands to China

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“Tim Hortons has arrived in China, joining the high-stakes battle to sell coffee in a massive country that mostly drinks tea.

The Canadian coffee-and-doughnut chain, run by Burger King-owner Restaurant Brands International Inc., plans to focus on “everyday value” as it muscles up against the ambitious plans of local and foreign players such as Starbucks Corp. Its also debuting at a tricky time as a diplomatic row brews between China and Canada (…).

GEOPOLITICAL ISSUES

Besides joining a crowded field that includes Dunkin’ Brands Group Inc., Coca-Cola Co.’s newly acquired Costa Coffee and local startup Luckin Coffee, Tim Hortons faces a slowing Chinese economy and complicated geopolitical situation.

Its origins as a beloved Canadian brand may run into some nationalistic consumers, given the political tensions underway currently.

Chinese firm Huawei Technologies Co.’s chief financial officer Meng Wanzhou has been held in Canada at U.S.’ request since last December. The Canadian government said in January that 13 citizens have been detained in China since Wanzhou’s arrest.

Many Chinese consumers, however, seem unfazed. Canada Goose Holdings Inc., which opened its flagship store in Beijing in December amid calls for boycott of Canadian goods, downplayed the backlash fears earlier this month after it saw shoppers line up outside its store.

Tim Hortons has struggled to build a following outside its home country. The chain, named for a Canadian hockey star, is opening its first Chinese shop on Tuesday in People’s Square, in Huangpu, Shanghai and is banking on a growing middle class keen to try Western inventions like its honey cruller donuts.

“Tim Hortons will need to offer not just something unique that Chinese consumers can’t find at other chains, but also spend heavily on marketing to build awareness of the brand,” said Jason Yu, Shanghai-based general manager of Kantar Worldpanel in Greater China.”

Read more here.

Instant Tortillas Are Worth $100,000, According to Kickstarter

flatev.0.0.jpgDubbed by many as “The Keurig of Tortillas,” the Flatev calls itself an “artisan tortilla maker,” and the people of Kickstarter want in.

The Flatev is a machine that makes one thing and one thing only – fresh corn tortillas from small pods of dough (all in under 90 seconds). It’s not the first oddly specific cooking device, and it definitely won’t be the last, but with Kickstarter funding of more than $100,000, they’ve already surpassed their own goals. As Eater points out, there is a certain precedent for Kickstarter projects like this to go awry, bringing in huge amounts of money without ever delivering. The “Coolest Cooler” was one of the best funded products on the site, but has yet to deliver to any backers. Hopefully fresh tortillas are easier to deliver than a cooler/blender/bluetooth speaker combo.

To read more, click here.

Restaurant Chains are Taking Over America

Screen Shot 2015-08-05 at 10.15.53 AMThe majority of America’s restaurants have always been independently run. NPD Group’s last count indicated that non-chains accounted for 54 percent of U.S restaurants, but with the current trend with Restaurants chains, the majority won’t last but another year or two. Over the past year, NPD has recorded that the total number of restaurants in America shrunk by one percent despite the openings of thousands of chain restaurants like Chipotle, and Starbucks. This indicates the decrease in the number of businesses that are not chain affiliates.

The biggest threat to independently run restaurants are the high rent prices. Diners and bodegas cannot afford the hike in rent and with recent cities where minimum wages has increased, a bigger cost can potentially occur to these independently run restaurants than it would towards chains like McDonald’s. New York City, for example, has had the decade’s biggest increase in chain stores. However, the number of bodegas have been decreasing. The expensive rent within the city has pushed many independent stores and restaurants out of business, where they no longer can afford the increased rent prices. Many chains like Rite Aid, and Key Foods has been driving bodega businesses uptown out of business.

To read more, click here.

Data-Enhanced Pricing Strategies

Small nuances and discrepancies in like-item prices are very common in the foodservice industry; this is often the result of two pricing models: cost-plus and value-based. These strategies, which have been used for years across the industry, do not fully allow for the integration of consumer behavior data that is now so much more accessible to operators and so relevant to pricing menu items. While the old methods are by no means incorrect, it is important to stay ahead of the curve and innovate at the same pace as the industry; not taking massive amount of data into consideration may be causing operators to miss out on opportunities to increase check averages.

Systems can be built to leverage large amounts of data and new technology to understand purchase behavior. Amazon has created algorithmic systems that alter millions of prices multiple times throughout the day based on e-commerce purchase behavior based off of region, time of day, aggregate consumer behavior and individual consumer behavior. Amazon is an example of how sophisticated pricing systems can be, and while the foodservice industry might not need as extreme of systems, it could definitely use an update that could borrow similar strategies.

QSR Magazine will be publishing a series of articles that explore alternative pricing strategies that can be applied to the industry using hypothetical restaurants with menu items and prices. The goal by the end of the series is to “determine quality inputs, analyze the data, optimize prices based off that data, and then do it all over again with a different set of inputs.” To read more about enhancing pricing strategies and to follow the series, click here

 

Webinar: Trends in Retail Food Marketplace

On Wednesday October 15th the National Restaurant Association is hosting a panel discussion webinar event that will touch upon the current trends in the retail food marketplace. This will include discussing the growing threat of ready made foods commonly sold by traditional grocery and convenience stores. The panel discussion will help you learn about the competition and consumer behavior driving this move, overall trends and strategies for competing in this new food marketplace.

Time will be allocated for questions directed to the panelists where you can get answers for issues relevant to your business. To register free for the webinar event, “The Grocerants are Eating Your Lunch: How Grocery Stores, C-Stores, Drug Stores & Home Delivery are Taking Away Market Share,” online click here. The event will take place from 4PM-5PM EST.

Breaking into the Breakfast Business

Breakfast is probably one of the more routinized aspects of our daily lives. According to CivicScience.Inc, 61% of consumers eat breakfast at home, but rather than attempting to convert this group, establishments should jump on the opportunity to offer breakfast-on-the-go. Starbucks and McDonald’s have mastered this area, especially given the convenience of the drive-thru which fast casual establishments simply do not have. Therefore, in order to be successful when launching into a breakfast venture, the consumer must feel it is worth spending a little extra time out of their morning in your establishment. A few ways to help achieve this is by introducing original menu items with new flavors and packaging, serving a great quality cup of coffee, ensuring a timely speed of service, and overall delivering on the consumer’s breakfast desires and expectations.

 

To read more about tips on how to tackle the breakfast opportunity, click here

 

10 Food Terms that Have Lost Meaning

Huffington Post compiled a list of food terms that have become void of meaning. This is in large part from commercial companies throwing around terms for marketing purposes without considering their actual meanings— like the word “natural” which has no formally recognized definition. It’s also because these adjectives have become omnipresent in general, so consumers have stopped questioning their significance. The list includes:

  1. Artisan/Artisanal
  2. Local
  3. Natural
  4. Farm-To-Table
  5. Authentic
  6. Gourmet
  7. New American
  8. Modern
  9. Fusion
  10. Sustainable