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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US Demand for Ethnic Flavors

January 7, 2015 by Leave a Comment

The US foodservice market is very attractive to international operators looking to expand globally. According to the National Restaurant Association, restaurant industry sales last year surpassed $680 billion, with the limited-service sector accounting for a third of the total. Due to the rise of importance of the millennial generation, ethnic flavors have become more in demand than they ever have before, which is causing international brands to be able to boom and grow their brands across the US.

As the popularity of the global fast casual concepts grows, chains from Brazil, Asia, Europe and South Africa are jumping into the US foodservice space to compete and expand their concepts. For example, London-based Pret A Manger is thriving by marketing their healthy and fresh products in urban areas with a high pedestrian traffic count. Lauren Hallow, associate editor of news and concept analysis for research firm Technomic states that Pret “really lets people know they use natural, preservative-free ingredients, so the fresh factor is still there. They do have a higher price point, and I think that’s why they’re sticking to these urban areas with affluent consumers.”

Le Pain Quotidian is another chain, from Belgium, that has grown exponentially in the US last year. Aside from the fresh, healthy menu items, what has made LPQ attractive in large urban areas which can at times feel lonely, is their store layout which always includes a large communal table. CEO Vincent Herbert was excited by the challenge of breaking into the US market and was confident they would succeed given their strong core values of enjoying the hospitality aspect and not just the service aspect. LPQ faced higher rent terms than accustomed to in Europe, so Herbert explains that the chain had to ensure that each location would yield high profits quickly, and that their success really came from the brand’s ability to not look like a chain.

Giraffas, a Brazilian steak and burger brand also chose to take on a challenge and enter the US market, but before doing so realized they needed a fast casual makeover to succeed. João Barbosa, CEO of Giraffes, says that the key to keeping the food costs low lays in the cut of the beef known in Brazil as a ‘piranha,’ which is relatively inexpensive in the US and has become popular in their first locations in Florida. The brand is looking to target more urban areas this year such as New York and Boston which will serve as a gateway to these expand westward and eventually franchise.

To read more about international concepts that aim to expand their brands in the US market due to an increased demand for global flavors, click here

 

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New FDA Menu-Labeling Regulations

November 26, 2014 by Leave a Comment

Ever since the Affordable Care Act was passed, menu-labeling rules have been under development. The Food and Drug Administration is now ready to go forth with some new menu-labeling rules that have an as underlying intention to send reminders to the consumers that certain foods are unhealthy: as of November 2015 all restaurants with at least 20 locations will be required to post calorie counts, with other information such as fat and carbs available upon request.

These new FDA rules will also apply to coffee shops, bakeries, movie theaters, grocery stores, convenience stores, and even vending-machine operators, who will all have two years to get their act together to comply. Units that are exempt include airlines, trains and multi-unit food trucks. Some exceptions will be made for large chains such as Pizza Hut who will be able to post calorie counts by the slice rather than by the pie given that the menu can extend to over 2 billion possible combinations. Seasonal menu items and condiments are also exempt from the new rule.

To read more about the new FDA menu-labeling rules that will be put into action in a years time, click here

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Healthful Tips for Kid’s Menus

September 3, 2014 by Leave a Comment

Designing a great kid’s menu for your establishment that includes nutritious and tasty options that appeal to children and parents alike will lead to a growth in sales. The National Restaurant Association’s Kids LiveWell program focused on how to develop stellar kid’s menus and a few participants, including Applebee’s and Arby’s, shared their best practices and successes. Here below are a few tips from the experts:

-The menu should change at the same pace that kids’ tastes change:  Darin Dugan, senior vice president of marketing and culinary at Applebee’s states, “We approached the new menu by asking what kids and parents wanted and let that steer our development..the result has been very encouraging.”

Be aware of consumer demands: Listen to the guests be it children or adults, and use the feedback to create a menu that can meet their needs. In the case of Applebee’s, they studied preferences through focus groups, surveys and in-restaurant testing.

Find a balance between what parents want their children eating and what their children will eat:  Arby’s also conducted focus groups to find out what the demand was. According to Debbie Domer, Director of Brand Marketing for Arby’s, Arby’s found out that parents weren’t necessarily watching calories for their children, but were more so looking for wholesome options to choose from.

Make the offerings familiar: Kids will respond to offerings they are familiar with from home or school such as juice boxes or applesauce.

Increase brand awareness: Carrie Martin, Vice President of Operations bd’s Mongolian Grill is collaborating with Kids LiveWell, and has stated, “We’ve learned our brands support each other …we’re just now learning how to use the partnership to its fullest to get brand awareness going. We want to send the message that healthful eating can be fun.”

To read more tips on how to successfully re-engineer a kid’s menu to increase sales, click here

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Protecting Restaurant Intellectual Property

August 7, 2014 by Leave a Comment

With the rise of digital and social media platforms being used for advertising, it is crucial for restaurants owners to protect their rightful intellectual property. It takes a great deal of creativity to grow a business, so the National Restaurant Association has come up with seven ways to protect this intellectual property in order to strengthen the restaurant brand and help to avert competitors.

  1. Names: It is recommended to consider names that won’t be difficult to protect. For instance, naming a restaurant after a family name will be difficult as chances are it already exists, however an arbitrary yet distinctive name with unspecified value will be easier to trademark; a little trademark research could come in handy. For local restaurants it is advisable to choose names that do not resemble those of competitors in the slightest, and for nationwide restaurant chains it is important to note that a strong trademark with a federal registration is obligatory.
  2. Menus:  Signature dishes should come with creative signature names as well. Opt for special names rather than non-specific descriptives.  Unique names can be protected as trademarks and help to build value for the restaurant. If the restaurant menu incorporates  illustrations, images, or photographs in a creative manner, these elements can also be protected and trademarked. By doing so, if a restaurant owner stumbles upon another restaurant that has copied the menu layout or names, he or she can use copyright law to stop the infringement.
  3. Recipes: Just as non-disclosures and non-competes are included in employee contracts, the actual restaurant recipes should also be protected. Not having protected recipes could result in the loss of a trade secret. Patent protection for unique and distinctive recipes is also highly recommended.
  4. Back-of-house: Many QSR have patented their methods of doing business such as their assembly lines for food preparation and even food-frying methods! .
  5. Take-home items: Signature products that are sold in restaurants  such as coffee, preserves, spices or condiments, apparel and dish ware for in-home use should seek trademark protection .  in expanded classes of goods as you are extending your brand beyond the confines of the restaurant.
  6. Décor:  Restaurant floor plans, layout and interior/exterior décor can be protected so long as it’s unique. Certain common layout/décor combinations cannot be protected, such as chianti bottled candles and red and white checkered linens in Italian restaurants, but if an operator consistently employs the same combination of unique and distinctive elements it can be protected.
  7. Websites and social media: Web pages can be protected under copyright law, as can it’s content such as the photographs and layout arrangements. Social media outlets should be consistent with themes similar to the website. The thing to look out for in the web sphere is to ensure that the content is not in violation of advertising laws as this can actually weaken the owner’s intellectual property.

The NRA has provided this helpful information to help out whether you are starting a new restaurant, opening a second location, or developing a franchise. Using intellectual property law to set your brand apart from others in an industry that is so competitive is a smart move. To read more about these seven steps, click here

 

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NRA Launches Improved TrendMapper Website

June 20, 2014 by Leave a Comment

The National Restaurant Association has launched the updated version of their TrendMapper service which was first created in 2002. This online resource, which requires a subscription, features NRA research, data analysis and forecasts that are continually being updated. The Chief Economist of the NRA, Bruce Grindy, stated in a news release, “The service provides running analysis of key industry indicators that are crucial for tracking trends and planning strategically for the future.”

The Restaurant TrendMapper includes insights into sales, capital expenditures, food menu price inflation and employment amongst other indicators. It also analyzes current data from government sources such as the U.S. Census Bureau and Bureau of Labor Statistics. The information is presented in chart and text formats and features downloadable data files that can be used offline. This online resource is also the sole source for aggregated data from the NRA’s Restaurant Performance Index and Industry Tracking Survey.

To read more about additional topics that are covered by the Restaurant TrendMapper click here

 

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