Thursday, October 28, 2010

No cake in the face

Being written into the script of a hit network show is the sort of luck that usually involves an ancient bottle and three wishes. But when the show is the edgy “30 Rock,” your genie can turn out to be a member of the “Jackass 3D” cast.

Indeed, things could’ve been a lot worse for Carvel, the revered soft ice cream concept that figured large in last week’s episode of the NBC sitcom.

Yes, the chain’s frozen cakes were used for a flimflam. A key character in the show is given a card entitling her to free Carvel ice cream for life, a reward for dancing (albeit suggestively) on the chain’s Thanksgiving Day Parade float.

She and another character hit on the idea of using the card for a free cake that they asked a store’s two crewmembers to decorate with a purposefully misspelled word. Then they’d bring it back to another worker in the store, complaining about the error and demanding their money back. The other employee, never suspecting that an ice-cream-for-life card had been used, handed over the cash each and every time.

Okay, not the greatest association for you product. But Carvel was introduced into the plot as a treat for the staff. That’s at worst a left-handed compliment.

And the product always appeared attractive—clean pink boxes, a signature of the chain, and cakes that could’ve been food-styled for a photo shoot. The show might’ve stirred some yearnings for those of us who grew up with Carvel.

Then again, when the scam is finally discovered, the worker at fault blurts in a huff that she’s resuming her position as a cut-rate streetwalker.

But what’s a brand to do? It’s free publicity, albeit with a few associations you probably wouldn’t choose for your name. Do you object? Take steps to counter any potential negatives that might or might not be remembered a day later? Or do you do nothing?

Kudos to Focus Brands, Carvel’s franchisor, for turning the situation decidedly in the brand’s favor. It sent a Carvel cake to the “30 Rock” staff as a thank you, with a heartfelt and absolutely perfect inscription on the frosting.

See it for yourself here at Ashley Swann’s blog.

Tuesday, October 26, 2010

Post-Ice Age green

I've spent much of the past week getting reacquainted with that one-time staple of a restaurant writer's life, the announcement of a chain's newest addition. Once the gnats of my in-box, those media alerts all but disappeared during the credit freeze, following conventions like fully staffed restaurants into cryogenic suspension.

They've just recently come back in a flurry, signaling that the glacial ice is finally cracking. It’s no coincidence that the industry had its first IPO in ages during the same week, or that the expanding brands include such woolly mammoths as Arthur Treacher's and Houlihan’s. Money is being invested in restaurants again, and not just the fetching young darlings.

Strangely, most of the announcements could have begun with “Here ye! Hear ye!,” because they read like antiquities in one key respect. I’ve scouted them thoroughly, and rare was the release that cited green touches to the newly opened stores.

I’d taken that as a huge positive at first. Eco-friendly features had become so common that publicists no longer bothered to point them out! Yeah, that must be it! It’d be like bragging that the new place used forks.

But, sadly, that’s not the case. Rather, restaurants had been so hard-pressed for expansion funds that many were loath to expend precious dollars on green features.

You can’t blame them. A starving person isn’t going to ensure that his first relief meal is heart-healthy.

Sadly, they’re going to learn how shortsighted that approach is. Conserving energy and water can have an appreciable impact on profits, while efforts like using recycled construction materials, or recycling and composting garbage, can profoundly raise the top line. We’re fast approaching the point where customers and staff are going to demand a commitment to the environment as the price of their entry.

The operator of Houlihan’s newest store certainly appreciates how the world has changed. The unit features a full composting program, as well as a geothermal HVAC system.

Ditto for the latest Carl’s Jr./Green Burrito combo store, in Anaheim, Calif. It sports an extensive array of energy and water-saving features and equipment.

Certainly not all new restaurants can afford those sorts of green enhancements. But there are plenty of steps that require neither loaned dollars, time or adjustments to a design—actions like using low-flow pre-rinse valves, or posting a local bus schedule in the employee break room, so staffers have the option of taking public transportation instead of relying on a car.

No doubt a new unit has an easier time of being green than one dating back to less eco-conscious times. Opportunities will soon abound for the industry to exercise its commitment to the environment. But first it has to melt its Ice Age attitudes.

Thursday, October 21, 2010

Kudos to the natty queen Cole

One of the best presentations I saw in 30 year of attending industry conferences was an amusing account by Claire Babrowski of her climb through the ranks of McDonalds. She did a wonderful job at the podium of conveying both the warmth and the challenges of that career path, which brought her just one level away from the presidency of McDonald’s USA.

If I had a recording of her speech to the Women’s Foodservice Forum, I’d run off a copy and overnight it to Kat Cole, who yesterday was named chief operating officer of the Cinnabon bakery chain. If you don’t know who Kat is, you haven’t seen any of the restaurant trade magazines in the last five years, or attended any of the major industry conferences, or served on an association board. She even appeared on the reality TV show, Undercover Boss.

As head of Hooter’s human resources efforts, she achieved a notoriety that’s exceptionally rare for someone on the personnel side of the business. With the exception of Roz Mallet, a former Caribou Coffee CEO who now heads a franchise operating company, there’s no else I can recall who moved from the HR department to the big C-suite offices.

Cole is no doubt rounding out her executive experience, a bit of prep work that will ease her ascent one day to a chain president or CEO post.

Hence my regret that I don’t have a copy of Babrowki’s speech to share. The longtime McDonald’s official recounted such experiences as worrying she’d trigger a worldwide sesame-seed shortage by minutely altering the specs for McDonald’s hamburger buns. Or the over-her-head sensation of hearing Carolina franchisees literally cry because the first Iraqi war had yanked their customer base overseas, leaving the mom-and-pop operators fretful about surviving.

Best of all was her thumbnail recount of gaining operational experience: No more manicured nails, no more choosing footwear for style rather than comfort, and no more days without aching legs and feet.

It was a striking travelogue of the journey Cole is about to take. Granted, 800-store Cinnabon isn’t McDonald’s. No doubt like Babrowski, she’s destined for great things. I for one wish her well.

I’m also eager to cross paths with her soon because she’s in a position now to answer the question many of us have harbored about her career to date. Cole is a zealous defender of the employment opportunities afforded by Hooters, a chain known for its wings and waitresses in revealing T-shirts. Indeed, she started as what the chain calls a Hooters Girl.

She’s also extremely active in the Women’s Foodservice Forum, a group devoted to fostering executive opportunities for women. Some of us have had trouble reconciling that extra-career activity with what Cole did for the bulk of her week.

Now of course, it’s academic. She’s on her way to becoming even more of a star in the business.

Babrowski eventually left the industry because she didn’t get the top domestic job at McDonald’s. We’re fortunate that Cole is still in the business, making her mark.

Tuesday, October 19, 2010

Domino's spotlights a farm connection

Who’d have thought Domino’s would jump ahead of the big-chain pack in embracing the local-agriculture aspect of sustainability?

Cheese from Wisconsin is hardly local when it tops a pizza sold by a Domino’s in Alabama, California or Massachusetts. Still, the delivery giant is breaking new ground with the just-introduced Wisconsin 6 Cheese pie and the commercial supporting it.

At the very least, the Michigan-based chain is specifying where a main ingredient was sourced. That’s a marked departure from the usual chain pronouncement that Ingredient X is wholesome, fresh and delicious. In this day and age, those bromides are taken to mean the item is factory-produced, unnaturally consistent and perfect-looking, and muted sufficiently in taste to displease no one.

Domino’s is promising that the cheese on the new pie actually comes from farms, and it’ll even tell you where they are. There’s an implied direct connection between the multinational chain and the mom-and-pop dairy producers of farmland America.

Indeed, the commercial suggests that Domino’s isn’t ashamed of anything it puts on the pies, and is willing to specify where each component was produced.

Perhaps more important, the franchisor has pledged to start a website, “Behind the Pizza,” where consumers can meet the farmers who produce 10 of the ingredients that go into Domino’s products. Visitors will learn about the trip from farm row to delivery box.

Sure, there’s some hype to the promotion. The Associated Press has reported that not all the cheese used on the new Wisconsin pie is actually from that state. And a buyer from Domino’s isn’t toodling down a dirt road in his dirt-caked pick-up, buying a block of cheddar or mozzarella from a guy in overalls named Clem.

Truth be told, the buy-local/sustainability movement is a multi-layered phenomenon. Ideally it’s serving what was produced a turnip’s throw away from the restaurant and picked that morning. If that’s not feasible, the next best thing is serving something seasonal and fresh, regardless of where it’s from. And if that’s not do-able, it’s providing food with a narrative of where it came from and how it got there.

At least Domino’s is addressing the mega-trend of the moment.
We’re in the midst of a cultural revolution that’s reshaping the way America eats—and lives. The shift to local foods holds profound implications for parties ranging from the local café to grade schools, parents, banquet managers, community planners, even residential developers.

It’s nice to see that chain restaurants aren’t sitting apart, idly watching truckloads of farm-fresh produce roll past.

Thursday, October 14, 2010

A game-changer named Abe Gustin

The restaurant industry lost one of its revolutionaries last week, though it’s strange to apply that label to an arch capitalist like Abe Gustin.

He’ll be remembered as the person who founded Applebee’s, even though the concept was actually the brainchild of Bill Palmer, now of Up The Creek Without a Paddle. What Gustin truly founded was a simpler, far more effective approach to franchising, with the principle of partnership elevated to an art form.

Plenty of franchisors pledged to make their relationship with franchisees a symbiotic one, but Gustin had learned how empty those words could be. As he would candidly recount in interviews, being a franchisee of Taco Bell in the mid-1980s had taught him how subordinate the licensee could be. He felt the home office was dictating the terms and controlling franchisees’ growth, instead of working in tandem.

Gustin said he tried to set up Applebee’s franchisee programs to be just the opposite. For one thing, he limited the number of franchisees to a few dozen, so the field-level operators wouldn’t be competing with one another for turf, sales or employees.

And they were given a firm say in what they served, and not only through the advisory council that virtually all chains set up to give franchisees a voice in shaping menus. Long before local specialties were given the spotlight they get today, Applebee’s franchisees were invited to fill out their menus with regional specialties. The home office set about 80% of the listing, and the field operators chose the rest.

More important, franchisees attested that the home office heard what they said—maybe not all the time, but enough to make them feel they had a strong influence on the brand’s direction.

When franchisees felt their territories were running out of room for more Applebee’s restaurants, the home office went out and bought a second franchise concept, Rio Bravo. Since it, too, was developed in part by Palmer, headquarters figured it was the right means for franchisees to keep opening outlets.

It was wrong, as franchisees and investors soon let management know. Rio Bravo didn’t work for the system, so the brand was divested. Everyone went back to expanding the Applebee’s chain again, using smaller prototypes and smarter siting strategies.

The proof of Gustin’s approach to franchising was Applebee’s phenomenal growth. Before he controlled the brand, it was owned by W.R. Grace, which treated it like a glorified lemonade stand. It grew to 42 stores, if memory serves me correctly, which made it a miniscule part of the chemical giant’s portfolio. Its other restaurant holdings, just to put it in perspective, were Del Taco and Houlihan’s.

When Grace decided to exit the restaurant business and sell those brands, no one seemed to even notice Applebee’s. Houlihan’s was the plum. With barely any notice taken, Gustin was able to secure what would become casual dining’s longest string of restaurants.

It would grow to far more than 1,000 restaurants, a size more befitting a fast-food chain than a group of full-service places. But Gustin and his lieutenants—some might say disciples—made it happen.

The fuel was franchisees’ capital. Gustin kept the fire stoked.

The industry shall miss him for sure.

Saturday, October 9, 2010

Ruby Tuesday's new seafood concept

As if Ruby Tuesday didn’t have enough choices on its menu of development options, the casual-dining giant is prepping one more type of restaurant it can use to replace weak namesake stores. The company alerted investors earlier this week that it will open a “seafood health concept” later this year.

Management didn’t divulge the name or many particulars about the venture, saying only that it would be one more option for salvaging underperforming Ruby Tuesday sites. Executives lumped it together with the two replacement concepts that were identified earlier, Jim ‘n Nicks and Truffles.

Like those, they explained, the seafood restaurant could replace a played-out Ruby Tuesday at a cost of under $500,000, and generate annual revenues of more than $1 million.

CEO Sandy Beall explained that 23% of a Ruby Tuesday’s guests, or roughly one in four, already order seafood. “It’ll just be a more seafood-oriented Ruby Tuesday, really,” he said during the conference call with analysts. “And it’s very relevant based on what people are eating and their health and so forth.”

The big benefit, he said, would be differentiation from all the other so-called grill-and-bar concepts, like Chili’s, T.G.I. Friday’s and Applebee’s

An analyst voiced his concern that Ruby Tuesday would be entering a sector where even long-established brands are facing considerable challenges. “We can all think of the biggest fish in the sea who is struggling with difficult trends,” said Robert Derrington, the restaurant analyst for Morgan, Keegan. He didn’t name that brand, Red Lobster, by name.

He noted, however, that Ruby Tuesday had experience with seafood restaurants.

Yes, said Beall. The company ran the L&N Seafood Grill chain when both casual-dining brands were part of Morrison, a large contract-feeding company.

Investors also heard the Ruby’s plan to use several young concepts as its expansion vehicles. It recently secured rights to develop units of Lime Fresh Mexican Grill, a fast-casual chain that currently has six stores open.

“As far as the economics go, it's really very, very similar to Chipotle,” said chief marketing officer Mark Young.

Wok Hay, a fast-casual brand that Ruby’s acquired several years ago and subsequently upgraded into a full-service operation, wasn’t mentioned. Ruby had cited it several months ago as a possible replacement concept for tired Ruby Tuesday outlets. It also cited it at that time as a restaurant that could be built on new sites.

Meanwhile, management noted that the first Jim ‘n Nicks is open and generating sales that should top $1.5 million on an annual basis.

They said Ruby’s first Truffles, an upscale casual format, would open next month.

Friday, October 8, 2010

The food industry's future, in high def

In the course of covering the restaurant business, I routinely hear savants proclaim what sorts of places and foods will catch the industry’s fancy in the months and years ahead. The future they’re sketching bears little resemblance to the one young kitchen talents are already setting out to build.

I say that after listening for three days to the business plans of 21 would-be graduates from the Institute of Culinary Education in New York City. As a final exam of sorts, the students develop an idea for a business and pitch it to the class. Invited to attend are three industry veterans who act as if they’re prospective investors, asking questions, providing feedback and generally helping the students sharpen their presentations. I was one of the industry elders tapped to play constructive critic.

The students had spent the six-month semester developing their business concepts, and it showed. The lot were brilliant—creative, finely detailed to demonstrate their viability, and decidedly real world, reflecting what the students had learned in the field as well as the classroom.

I won’t divulge any of the ideas because this is an industry of thieves. Then again, most of the restaurateurs I know would have trouble copycatting concepts that pivot on marshmallow, faro, free shots, egg creams, cowgirls, German sailors, and broke hipsters. (If you want an explanation of those elements, contact me and I’ll either pass you along to the student or shed as much light as I can without giving away the idea.)

Indeed, if restaurateurs were looking for ideas to pinch, they’d have found few suitable for their world. The presentations left little doubt that tomorrow’s chefs are choosing food shops, not restaurants, as the galleries for their arts.

More than a third of the pitches I heard dealt with retailing in some way. Several of the concepts were out-and-out storefronts, selling everything from flasks and coffee to Romanian vintages for wine virgins.

Other students aired their intention to sell a retail product via food or specialty shops. One already had an operation lined up to carry her product. Another brought in a gift basket of her wares.

The class’ instructor, the former restaurateur Alan Someck, explained to me that the students had witnessed the rigors of running a restaurant or a high-volume kitchen during their internships and work in the industry. That lifestyle might not hold the appeal it once did for youngsters aspiring to earn lots of green in whites. They were clearly more open to alternative paths, like the food and restaurant-focused web site that one student planned to open.

But the students also seemed to lack the black-and-white attitude of yesterday’s restaurant industry, which saw itself as a world apart from food retailing. The ones who planned to open a restaurant after graduation almost to a person included a retail component in their brainchild. Those stations would sell everything from meat to customized gifts.

Along the same lines, a goodly number of the plans broke out sales projections for catering, even when their signature product wasn’t something you’d associate with that sort of service—drink flights, for example.

And quite a few presenters said they intended to use trucks, carts and stands to offer their products where would-be customers are likely to be, a further departure from the dining-room mindset of past generations.

I have absolutely no doubt that many of the students whose plans I evaluated will be extremely successful in their ventures. They’re going to be tomorrow’s stars, albeit in a much different industry than the one we see today.

Sunday, October 3, 2010

What Wendy's has learned about salads

Wendy’s held a virtual press conference last week to underscore the health benefits of its new mix-and-match menu program, Pick 2. As far as I know it was the first time a restaurant giant has held a communications event expressly for bloggers.

The resurging burger chain clearly hoped we’d pass along information about the new $4.99 deal to prospective customers. But in explaining the offer, executives divulged information that should be of interest to any restaurateur who wants to appease salad-hunting patrons.

When Wendy’s decided to revamp its salads, it discussed the prospects with consumers, explained communications director Kitty Munger. They told the chain that there are a few things that bug them about a bowl of greens.

For instance, they don’t like the lettuce in their salads to be wet. As a result, said Munger, Wendy’s has outfitted every unit with a salad spinner.

Patrons also stressed they don’t like gnawing on big hunks of lettuce or ingredients. They want the components of a salad to be cut into smaller, bite-sized pieces. Wendy’s is obliging them, Munger said, by providing everything in its new salad line in fork-able pieces.

The feedback revealed that Wendy’s targeted customers want additional textures in their salad, particularly croutons and pieces of tortilla. Wendy’s has obliged them.

Finally, Munger recounted, Wendy’s learned that consumers want what she termed “flavor excitement.” She explained that Wendy’s tried to be a little adventurous with the new salad line by using ingredients like cayenne pepper and pecans kicked up with sea salt.

As I’ve noted in an earlier post, I’ve tried the new salads. They’re a true advance for fast food. Little did I know how much research had gone into the line.