If you didn’t attend the Restaurant Leadership Conference last week, you missed a three-day version of restaurant-executive grad school, sans the textbooks, tests and beer pong. Well, two out of three, anyway. Books and exams aren’t needed when even a slab of granite would’ve left the conference with new ideas.
But, of course, our invited guests were far from blockheads—nearly 1,000 in total, handpicked to make the event an intellectual Woodstock. You can get a taste of what they learned from our extensive coverage here.
But speakers were only part of the group-think. The magic of our conference is the networking, where attendees can exchange views on problems, opportunities and the business’ future. Here are a few of the currents that arose in those discussions:
From dearth to data deluge. Not long ago, restaurant execs were bemoaning the lack of granular data about their operations. They longed for the trove of information their supermarket and retailer counterparts could get from scanner data.
Now it appears the pendulum has swung too far in the opposite direction. As one speaker remarked, you can now quantify and benchmark everything from guest satisfaction to employee productivity and food waste. But it’s overwhelming some operators. They want less data, and they want it presented in a way that requires no interpretation.
One researcher recounted how a client asked that a considerable download, chockfull of insights, be pared down to just eight key takeaways.
Other data providers showed how they’re responding to the keep-it-simple mandate. One uses letter grades so clients have an instant read of how they’re being perceived by customers on specific criteria. Another uses arrows that show whether an attribute has trended up or down.
The phenomenon was also evident in some of the presentations at RLC. C3, the family marketing specialist, teamed up with Technomic to provide new data on how households choose restaurants. Instead of downloading numbers, representatives presented the S.A.F.E. Wheel, a circle composed proportionately of the four dynamics that figure into a choice (Service, Atmosphere, Food, Entertainment). Service, at 32%, was the biggest wedge on the Wheel.
Concept development is revving up. It’s not unusual at an industry meeting to swap recommendations of new concepts to see. But seldom have I heard so many advisories, or to be asked so often about such and such a concept.
Virtually all were in the fast-casual market, and most were likened in one way or another to Chipotle.
The volume underscores the new imperative within the quick-service market to provide value in the form of quality rather than price. It also speaks to the greater availability of capital, along with the number of chain veterans who are ready to do something on their own, away from meddling investors and franchisees who don’t want to invest in the evolution of their concept.
Among the emerging concepts I was asked about or advised to see: Mendocino Farms, Little Greek, Daphne’s California Greek, Veggie Grill, Babalu Tacos & Tapas, Zinburger, Extreme Pita and Pita Express.
Wendy’s as a touchstone…of what to do right—and wrong. There were actually three Wendy’s discussed during the conference: The brainchild of Dave Thomas and Jim Near, which put a near-lethal hurt on McDonald’s, according to former USA CEO Ed Rensi; the Wendy’s that lost its way and screwed up Baja Fresh in the process, according to the opinions of several outspoken attendees; and the new, resurgent brand, which drew high praise on stage and off for trying to right itself.
So as not to leave you hanging about Rensi’s comment:
“There were two ad campaigns that almost killed McDonald’s,” Rensi said during a keynote addres. “One was, Fresh not frozen,” a breakthrough claim from Day One for Wendy’s, and ironically a competitive advantage it touted right after the show, to underscore that it’s never used “pink slime” beef.
(The other near-death experience for McDonald’s, according to Rensi: Burger King’s Broiled, Not Fried commercials.)
Savory bits that defy categorization. I’m going to try anyway.
Scariest thought. National Restaurant Association chairman Roz Mallet, on the healthcare plan currently being challenged before the U.S. Supreme Court: “Our industry research has shown that our cost will become our largest expense by 2014.” Another presenter quantified that expense at roughly $2 per employee per hour.
Best quip. Ed Rensi, on the state of the restaurant industry: “If it wasn't for customers, suppliers and employees, the restaurant industry would be really good.”
Most suprising appearance. Ray Kroc, at least in audio form. MonkeyMedia’s Erle Dardick worked a recording of McDonald’s godfather into an introduction that included a dream sequence, an unabashed pitch for Dardick’s breakout session, and even a speaker introduction. It worked, very well.
Scariest thought, take 2. We’re already deep into the planning for the 2013 Restaurant Leadership Conference. The dates are April 21-24, if you want to mark your calendar.
Showing posts with label McDonald's. Show all posts
Showing posts with label McDonald's. Show all posts
Monday, April 2, 2012
Thursday, March 8, 2012
Signs the Apocalypse is upon restaurants
Exhibit A: A Nebraska woman posted an offer on eBay to sell a Chicken McNugget she’d saved from three years ago because it looked exactly like George Washington in profile. The deep-fried presidential lookalike fetched a winning bid of $8,100. But the winner backed out. Now, according to media reports, the seller is considering whether to accept the second-highest bid, a mere $8,000, or to put it on the block again.
Exhibit B: McDonald’s says sales at U.S. restaurants open for at least 12 months increased year-over-year by an average of 11.1% in February, and that worldwide comps jumped 7.5%. That prompted stock traders to sell their shares, citing the disappointing results.
The clincher: A food writer for the Grand Forks (N.D.) Herald touched off an online firestorm by reviewing the town’s new Olive Garden. Urbanites (no doubt dressed all in black) posted it on various article-sharing sites so fellow elitists could share the hilarity of a mass-market chain concept being the subject of a serious restaurant review. Some posed the possibility in feedback forums of the review actually being a put-on from The Onion.
But as the reviewer pointed out, with more tact and class than her snobby disparagers deserved, Grand Forks doesn’t abound in restaurants, and locals wonder where they should eat. The 86-year-old writer, Marilyn Hagerty, should get the last laugh. Her well-written and useful column drew 107,000 views in a town of fewer than 55,000 residents. She may not eat at David Chang’s or Grant Achatz’s places every week, but she’s serving her audience.
Exhibit B: McDonald’s says sales at U.S. restaurants open for at least 12 months increased year-over-year by an average of 11.1% in February, and that worldwide comps jumped 7.5%. That prompted stock traders to sell their shares, citing the disappointing results.
The clincher: A food writer for the Grand Forks (N.D.) Herald touched off an online firestorm by reviewing the town’s new Olive Garden. Urbanites (no doubt dressed all in black) posted it on various article-sharing sites so fellow elitists could share the hilarity of a mass-market chain concept being the subject of a serious restaurant review. Some posed the possibility in feedback forums of the review actually being a put-on from The Onion.
But as the reviewer pointed out, with more tact and class than her snobby disparagers deserved, Grand Forks doesn’t abound in restaurants, and locals wonder where they should eat. The 86-year-old writer, Marilyn Hagerty, should get the last laugh. Her well-written and useful column drew 107,000 views in a town of fewer than 55,000 residents. She may not eat at David Chang’s or Grant Achatz’s places every week, but she’s serving her audience.
New restaurant-speak
Two new restaurant expressions are cropping up in insiders’ conversations and outsiders’ coverage of the business. So grab your glossaries and a pencil, because both terms have the ring of possible additions to the lingo.
Fast fruit. You’d see that expression used today, for instance, on a headline about Burger King’s newest burger for the Japanese market, the BK Ringo. The sandwich’s point of difference is the flame-broiled slice of apple that garnishes the burger patty.
But the term could become the broadly applied label for products here in the States that provide a halo of health to familiar fast-food meals—truly a prime objective of chains large and small. Consider, for instance, the apple slices that are now offered by a number of limited-service players as a healthier alternative to French fries. Mandarin orange sections are serving the same purpose for Wendy’s.
And strawberries will no doubt be in the promotional limelight when they come into season in a few months.
Our handicapping of whether this will work its way into widespread usage: 6 on a scale of 1 to 10. But it’ll take considerable time.
Zipper. This is the bet-your-house option because it’s so dead-on as a descriptor for the new generation of drive-thrus.
If you haven’t seen them, they work sort of like the toll booths of highways, though with far fewer lanes. When you drive onto the restaurant pad, you can choose one of several drive-up ordering stations. Then the lanes are meshed into a single queue for the pay station, like the teeth of a zipper.
Our handicap: An 8 on this one.
Fast fruit. You’d see that expression used today, for instance, on a headline about Burger King’s newest burger for the Japanese market, the BK Ringo. The sandwich’s point of difference is the flame-broiled slice of apple that garnishes the burger patty.
But the term could become the broadly applied label for products here in the States that provide a halo of health to familiar fast-food meals—truly a prime objective of chains large and small. Consider, for instance, the apple slices that are now offered by a number of limited-service players as a healthier alternative to French fries. Mandarin orange sections are serving the same purpose for Wendy’s.
And strawberries will no doubt be in the promotional limelight when they come into season in a few months.
Our handicapping of whether this will work its way into widespread usage: 6 on a scale of 1 to 10. But it’ll take considerable time.
Zipper. This is the bet-your-house option because it’s so dead-on as a descriptor for the new generation of drive-thrus.
If you haven’t seen them, they work sort of like the toll booths of highways, though with far fewer lanes. When you drive onto the restaurant pad, you can choose one of several drive-up ordering stations. Then the lanes are meshed into a single queue for the pay station, like the teeth of a zipper.
Our handicap: An 8 on this one.
Thursday, March 1, 2012
Didn't I hear that somewhere before?
Reading Emil Brolick’s plan to revitalize Wendy’s, I kept getting my chains confused. The strategy has been code-named Recipe to Win, which sounds conspicuously to me like McDonald’s Plan to Win.
Ditto for Recipe to Win’s Six P’s component, which calls for an intense focus on people, product, price, promotion, place and performance. It’s just one P more than McDonald’s five P’s, a cornerstone of the Plan to Win (performance is the only P missing from McD’s pod.)
I’m a big fan of Brolick’s and the work he did for Yum! Brands and, in an earlier stint, Wendy’s. But it sounds as if he’s liberally borrowing at least the rubric from the Golden Arches playbook. Granted, Big Mac’s battle plan has been inarguably the most successful restaurant-company strategy of the last decade. Still, you have to wonder if the ultimate mass feeder and a much smaller brand, claiming product superiority, can truly share the same scheme for besting the other.
It wasn’t a surprise, given the attention Wendy’s is devoting to McDonald’s, that Brolick’s charge will all but challenge the bigger burgermeister in ads that air this month. Commercials will focus on Wendy’s premium sandwiches in what Brolick likened to the “Apple vs. PC” commercials the former aired to great success.
“The spot is much more directly competitive against the Big Mac. Now it never mentioned the Big Mac by name, but it's pretty obvious of what we're talking about,” he said.
Among the other tidbits that were revealed during Wendy’s conference call with financial analysts (as reported in a SeekingAlpha.com transcript):
--Each Wendy’s remodel will cost $750,000 to $850,000, with a forecast 15% return on investment, Brolick said. He noted that 10 test sites were given a facelift last year, and 50 will be updated in 2012.
--What may be the industry’s longest-ever menu test, Wendy’s trial run of breakfast, will be expanded to a Northeastern market this year for more learning, Brolick said. He didn’t reveal the market, but noted that the Northeast is one of the nation’s most intense battlegrounds for morning customers.
Ditto for Recipe to Win’s Six P’s component, which calls for an intense focus on people, product, price, promotion, place and performance. It’s just one P more than McDonald’s five P’s, a cornerstone of the Plan to Win (performance is the only P missing from McD’s pod.)
I’m a big fan of Brolick’s and the work he did for Yum! Brands and, in an earlier stint, Wendy’s. But it sounds as if he’s liberally borrowing at least the rubric from the Golden Arches playbook. Granted, Big Mac’s battle plan has been inarguably the most successful restaurant-company strategy of the last decade. Still, you have to wonder if the ultimate mass feeder and a much smaller brand, claiming product superiority, can truly share the same scheme for besting the other.
It wasn’t a surprise, given the attention Wendy’s is devoting to McDonald’s, that Brolick’s charge will all but challenge the bigger burgermeister in ads that air this month. Commercials will focus on Wendy’s premium sandwiches in what Brolick likened to the “Apple vs. PC” commercials the former aired to great success.
“The spot is much more directly competitive against the Big Mac. Now it never mentioned the Big Mac by name, but it's pretty obvious of what we're talking about,” he said.
Among the other tidbits that were revealed during Wendy’s conference call with financial analysts (as reported in a SeekingAlpha.com transcript):
--Each Wendy’s remodel will cost $750,000 to $850,000, with a forecast 15% return on investment, Brolick said. He noted that 10 test sites were given a facelift last year, and 50 will be updated in 2012.
--What may be the industry’s longest-ever menu test, Wendy’s trial run of breakfast, will be expanded to a Northeastern market this year for more learning, Brolick said. He didn’t reveal the market, but noted that the Northeast is one of the nation’s most intense battlegrounds for morning customers.
Thursday, February 23, 2012
They're ba-a-ck
If you still think chain restaurants are a career path for losers who can’t make it in a legitimate field, here’s a news flash: The world’s not flat, you can teach old dogs new tricks, and some white people have exceptional rhythm. Not only is the business the chosen route to success for people of considerable talent, but it’s an industry that few people abandon once they’ve tasted its rewards.
Exhibit A: Claire Babrowski, until recently the exception that proved the rule. When she was passed over for the top jobs at McDonald’s, she baled for retailing, becoming acting CEO and COO of Radio Shack (and reporting, ironically, to one of the few restaurant-chain executives who left for good, one-time Arby’s and Shoney’s chief Len Roberts).
I interviewed her when she headed operations for McDonald’s at a critical point for the chain. It was clear that she was a person of exceptional ability, vision and leadership. I figured I was meeting the next CEO of the Golden Arches or perhaps a cagey competitor.
Then McDonald's secret sauce soured, some of its bolder initiatives were questioned, and the company adopted a back-to-basics mindset. Futuristic notions like Made For You, a costly kitchen re-do for delivering customized orders in a flash, was suddenly downplayed.
Insiders reported that Babrowski was frustrated and ready to test herself elsewhere. After a lull, she resurfaced at Radio Shack, selling answering machines instead of burgers. She later moved to Toys “R” Us, where she served as COO until she was fired in May 2010.
Now she's once again in the restaurant business, albeit as a director rather than an executive. She was just named a member of Quiznos' new board, a role that should be familiar to her, given that she served once as a director for Chipotle Mexican Grill.
Her new affiliation, Quiznos, was teetering on the brink of bankruptcy around the beginning of the year. Now it boasts an all-star board studded with such industry elders as Doug Benham, a key figure in Arby's best years, and Kip Knight, a one-time marketing leader for KFC and Taco Bell. Apparently they can’t stay away from the business, either.
Babrowski is the latest example of what was once a rare breed: A expatriate from McDonald's. Lately that group has been growing. Former president Mike Roberts has a new fast-casual concept called LYFE Kitchen. One-time U.S. CEO Ed Rensi has a winner upstart in the gourmet burger concept Tom & Eddie's (hear him in a few weeks at the Restaurant Leadership Conference). Kevin Reddy runs Noodles & Co.
And then there's Jack Greenberg, the onetime corporate CEO who was at the helm when business went awry for McDonald's in the mid-2000s. He had made the mistake of accepting the bleak view that domestic growth prospects for the brand were dimming. He led a diversification effort that saw McDonald's buy into such concepts as Boston Market, Fazoli's, Chipotle, Pret a Manger, and Aroma, a coffee specialist.
Those brands were gone almost as soon as Greenberg retired.
But now he, too, is back in the business, though in a distant capacity. Chicago mayor Rahm Emanuel has nominated Greenberg to head the operation that runs the Windy City's McCormick Place, home of the National Restaurant Association's annual mega-convention.
It's merely a big toe stuck back in the pool. But who knows what could happen? One of the NRA Show's benefits is the networking opportunities it affords.
Exhibit A: Claire Babrowski, until recently the exception that proved the rule. When she was passed over for the top jobs at McDonald’s, she baled for retailing, becoming acting CEO and COO of Radio Shack (and reporting, ironically, to one of the few restaurant-chain executives who left for good, one-time Arby’s and Shoney’s chief Len Roberts).
I interviewed her when she headed operations for McDonald’s at a critical point for the chain. It was clear that she was a person of exceptional ability, vision and leadership. I figured I was meeting the next CEO of the Golden Arches or perhaps a cagey competitor.
Then McDonald's secret sauce soured, some of its bolder initiatives were questioned, and the company adopted a back-to-basics mindset. Futuristic notions like Made For You, a costly kitchen re-do for delivering customized orders in a flash, was suddenly downplayed.
Insiders reported that Babrowski was frustrated and ready to test herself elsewhere. After a lull, she resurfaced at Radio Shack, selling answering machines instead of burgers. She later moved to Toys “R” Us, where she served as COO until she was fired in May 2010.
Now she's once again in the restaurant business, albeit as a director rather than an executive. She was just named a member of Quiznos' new board, a role that should be familiar to her, given that she served once as a director for Chipotle Mexican Grill.
Her new affiliation, Quiznos, was teetering on the brink of bankruptcy around the beginning of the year. Now it boasts an all-star board studded with such industry elders as Doug Benham, a key figure in Arby's best years, and Kip Knight, a one-time marketing leader for KFC and Taco Bell. Apparently they can’t stay away from the business, either.
Babrowski is the latest example of what was once a rare breed: A expatriate from McDonald's. Lately that group has been growing. Former president Mike Roberts has a new fast-casual concept called LYFE Kitchen. One-time U.S. CEO Ed Rensi has a winner upstart in the gourmet burger concept Tom & Eddie's (hear him in a few weeks at the Restaurant Leadership Conference). Kevin Reddy runs Noodles & Co.
And then there's Jack Greenberg, the onetime corporate CEO who was at the helm when business went awry for McDonald's in the mid-2000s. He had made the mistake of accepting the bleak view that domestic growth prospects for the brand were dimming. He led a diversification effort that saw McDonald's buy into such concepts as Boston Market, Fazoli's, Chipotle, Pret a Manger, and Aroma, a coffee specialist.
Those brands were gone almost as soon as Greenberg retired.
But now he, too, is back in the business, though in a distant capacity. Chicago mayor Rahm Emanuel has nominated Greenberg to head the operation that runs the Windy City's McCormick Place, home of the National Restaurant Association's annual mega-convention.
It's merely a big toe stuck back in the pool. But who knows what could happen? One of the NRA Show's benefits is the networking opportunities it affords.
Wednesday, January 11, 2012
Presidential hopefuls & the restaurant business
Everyone knows that Herman Cain honed his leadership style in the restaurant business, first at Burger King, then Godfather’s, and finally the National Restaurant Association. But his departure from the presidential campaign hasn’t left the industry without an associate in the race.
With the exceptions of Ron Paul and Rick Santorum, all of the major candidates have a connection of some sort. Here’s a quick review of those sometimes scandalous ties:
Mitt Romney: The biggest check ever signed by the private-equity pioneer was a $1 billion pay-out to Tom Monaghan for Domino’s Pizza, which Romney’s employer, Bain Capital, would own for a number of years. The company subsequently purchased a piece of such industry giants as Dunkin’ Donuts and Outback Steakhouse. Bain earned a significant return from Domino's and Dunkin' through their respective stock offerings.
Newt Gingrich: An early scandal for the former House Speaker centered on his second career as educator. The restaurant business caught a little mud in that flap, too.
The fiery polemicist was accused of taking sizeable contributions from lobbyists who allegedly wanted him to air the views of their clients to the business students he was instructing at the undergraduate level. News reports identified one of those contributors as the Employment Policies Institute, a group formed by S&A Restaurants alumnus Rick Berman in part to protect the interests of several major casual-dining chains.
According to the allegations, the EPI wanted Gingrich to present minimum-wage employers in an attractive light. The group never commented on the assertions, and Gingrich denied that he skewed his lectures to accommodate its interests. But one of the documents that came to light at the time included a note from Berman to Gingrich, thanking him for his help.
Jon Huntsman: His connection is on the supply side of the restaurant business. Huntsman’s father, Jon Sr., was the founder of a chemical company called Hunstman Corp., which invented the clamshell burger box. Its major customer: McDonald’s, which spec’d the new container for the Big Mac.
The elder Huntsman later founded a private equity firm, HuntsmanGay, whose investments include a stake in a company that sells Mama Rosa’s pizza through convenience stores. Mama Rosa’s also supplies pizzerias with dough balls and pizza crusts.
I’ve yet to find a connection between the restaurant industry and Rick Santorum, the former Pennsylvania senator, though I first learned of him and some industry-aligned views from the then-director of the Pennsylvania Restaurant Association.
Similarly, there’s yet to be a direct tie revealed with Ron Paul, the libertarian candidate. But he does share the name of perhaps our industry’s best-known researcher.
With the exceptions of Ron Paul and Rick Santorum, all of the major candidates have a connection of some sort. Here’s a quick review of those sometimes scandalous ties:
Mitt Romney: The biggest check ever signed by the private-equity pioneer was a $1 billion pay-out to Tom Monaghan for Domino’s Pizza, which Romney’s employer, Bain Capital, would own for a number of years. The company subsequently purchased a piece of such industry giants as Dunkin’ Donuts and Outback Steakhouse. Bain earned a significant return from Domino's and Dunkin' through their respective stock offerings.
Newt Gingrich: An early scandal for the former House Speaker centered on his second career as educator. The restaurant business caught a little mud in that flap, too.
The fiery polemicist was accused of taking sizeable contributions from lobbyists who allegedly wanted him to air the views of their clients to the business students he was instructing at the undergraduate level. News reports identified one of those contributors as the Employment Policies Institute, a group formed by S&A Restaurants alumnus Rick Berman in part to protect the interests of several major casual-dining chains.
According to the allegations, the EPI wanted Gingrich to present minimum-wage employers in an attractive light. The group never commented on the assertions, and Gingrich denied that he skewed his lectures to accommodate its interests. But one of the documents that came to light at the time included a note from Berman to Gingrich, thanking him for his help.
Jon Huntsman: His connection is on the supply side of the restaurant business. Huntsman’s father, Jon Sr., was the founder of a chemical company called Hunstman Corp., which invented the clamshell burger box. Its major customer: McDonald’s, which spec’d the new container for the Big Mac.
The elder Huntsman later founded a private equity firm, HuntsmanGay, whose investments include a stake in a company that sells Mama Rosa’s pizza through convenience stores. Mama Rosa’s also supplies pizzerias with dough balls and pizza crusts.
I’ve yet to find a connection between the restaurant industry and Rick Santorum, the former Pennsylvania senator, though I first learned of him and some industry-aligned views from the then-director of the Pennsylvania Restaurant Association.
Similarly, there’s yet to be a direct tie revealed with Ron Paul, the libertarian candidate. But he does share the name of perhaps our industry’s best-known researcher.
Tuesday, November 8, 2011
Keeping up with BK's test kitchen
Burger King’s test kitchen has been such a hive of activity that it’s hard to recollect all the new or newly revised products that have recently moved beyond the test phase. Carrols Restaurant Group, the chain’s largest franchisee, provided a recap to its investors yesterday. Here are the highlights:
--A new, thicker cut French fry that’s being quietly rolled out. Quality Restaurants, another large franchisee, switched to the new sides a few weeks earlier. Carrols adopted the thicker cut in late October.
--Better bacon. The coarser-cut strips are delivered raw to stores and cooked on the premises so they’re a fresher garnish or breakfast side.
--The Chef’s Choice, a one-third-plus (5.5-ounce) premium burger with a price to match: $4.99. Although Carrols officials didn’t say it, the sandwich appears to be Burger King’s answer to McDonald’s one-third-pound Angus line.
--BK Toppers, a line of garnished, 3.2-ounce burgers priced as a middle option, at $1.99. The array fills the gap between the new BK Minis, the sliders that were introduced earlier this year, and the Chef’s Choice and Whopper.
--Soft-serve ice cream, introduced this summer as a loss leader (buy a meal, get one free; Carrols said it provided 100 free cones a day during the warmer weather.)
--Smoothies, which appear to be still in the refinement stage.
Carrols said it’s encouraged by the performance of the products it’s recently adopted. “We are optimistic and hopeful that as we move forward, Burger King will begin to regain market share, expand its customer base and experience sustainable traction in its performance,” said president/COO Dan Accordino, who’ll be taking over the burger operation when longtime CEO Alan Vituli retires at the end of the year.
Accordino didn’t acknowledge the menu change that made headlines this week, the rollout of new kids meals that bring back the chain’s giveaway crown, once a BK signature. The meals are available with apple slices instead of French fries, a counter to the health-oriented option that McDonald’s is currently adopting.
--A new, thicker cut French fry that’s being quietly rolled out. Quality Restaurants, another large franchisee, switched to the new sides a few weeks earlier. Carrols adopted the thicker cut in late October.
--Better bacon. The coarser-cut strips are delivered raw to stores and cooked on the premises so they’re a fresher garnish or breakfast side.
--The Chef’s Choice, a one-third-plus (5.5-ounce) premium burger with a price to match: $4.99. Although Carrols officials didn’t say it, the sandwich appears to be Burger King’s answer to McDonald’s one-third-pound Angus line.
--BK Toppers, a line of garnished, 3.2-ounce burgers priced as a middle option, at $1.99. The array fills the gap between the new BK Minis, the sliders that were introduced earlier this year, and the Chef’s Choice and Whopper.
--Soft-serve ice cream, introduced this summer as a loss leader (buy a meal, get one free; Carrols said it provided 100 free cones a day during the warmer weather.)
--Smoothies, which appear to be still in the refinement stage.
Carrols said it’s encouraged by the performance of the products it’s recently adopted. “We are optimistic and hopeful that as we move forward, Burger King will begin to regain market share, expand its customer base and experience sustainable traction in its performance,” said president/COO Dan Accordino, who’ll be taking over the burger operation when longtime CEO Alan Vituli retires at the end of the year.
Accordino didn’t acknowledge the menu change that made headlines this week, the rollout of new kids meals that bring back the chain’s giveaway crown, once a BK signature. The meals are available with apple slices instead of French fries, a counter to the health-oriented option that McDonald’s is currently adopting.
Tuesday, October 25, 2011
Only yawning over new products is coming from the R&D team
Here’s a link that restaurant chains might want to check out for the well being of their menu development staffs. It’s an eBay listing for army cots. Clearly R&D teams have little time to swap chef’s whites for PJs when they’re cooking up new customer draws at the current pace.
Oh, and don’t forget to visit this site, too. It’s an online pharmacy that extends a price break on big tranquilizer orders. The products coming from the big brands’ test kitchens have typically been make-or-break products. Did the team come up with a new menu milestone, or will their handiwork be remembered as the new New Coke?
Burger chains are changing their burgers, pizza chains are reformulating their pizza, coffee chains are re-percolating their core coffee line, Mexican chains are rethinking what they put in a tortilla.
Think about it: With McDonald’s about to add a new chicken finger food called McBites, and Burger King introducing the Chef’s Choice this week as its new premium burger, almost all of the major fast-food chains are fiddling with their menu signatures.
What’s more, the alterations are introduced with direct or implied criticisms of the versions they replaced. Domino’s has made the most noise on that front, all but asking customers, “How could you have eaten what we formerly sold you?”
But Wendy’s isn’t much more discrete in its push of new French fries and burgers. Ditto with KFC and Kentucky Grilled Chicken. The only one showing subtlety is Taco Bell, which is quietly taking some salt out of its signatures.
McDonald’s hasn’t revealed what sort of noise it’ll make about McBites, a chicken version of popcorn shrimp (essentially deep-fried pieces of chicken meat, like the popcorn selections that have long been on the menus of KFC and Popeyes.) You can bet it won’t knock Chicken McNuggets or Chicken Selects in the introduction, but you have to wonder if customers will nonetheless regard McBites as an obvious alternative to McNuggets.
We’ll find out when McDonald’s rolls the new product next year.
The remake of fast-food signatures won’t end there. As RestaurantRealityCheck noted last week, Burger King is trying a new, thicker fry. Its stated goal of appealing to more women and children portends even more changes in products.
Might there even be some riffs on the Whopper?
This isn't the first time that such a thing has happened. In the mid-1980s, BK indeed changed the specs on its holiest of signatures, revamping the size of the Whopper's patty.
McDonald's tried to rejigger its bigger burgers so they could be garnished with lettuce and a tomato slice that wouldn't be rendered unpleasant by the heat of the patty they topped. Later, KFC introduced a bone-in roasted chicken, and Taco Bell tried reduced-calorie versions of its main items.
They all joined the Edsel in the annals of product failures.
But there are different dynamics--and learnings from those misfires--in play this time. Technomic noted in releasing some research yesterday that the fast-casual sector is influencing restaurants of all stripes. No where is that impact more obvious than in the traditional quick-service market, which has the most to lose from fast-casual's rise. Is it really a surprise that former Wendy's CEO Roland Smith publicly compared the chain's new burger line to what's available at Five Guys?
Talk amongst yourselves about it. But try to keep the noise down. The R&D teams need to catch up on their sleep.
Oh, and don’t forget to visit this site, too. It’s an online pharmacy that extends a price break on big tranquilizer orders. The products coming from the big brands’ test kitchens have typically been make-or-break products. Did the team come up with a new menu milestone, or will their handiwork be remembered as the new New Coke?
Burger chains are changing their burgers, pizza chains are reformulating their pizza, coffee chains are re-percolating their core coffee line, Mexican chains are rethinking what they put in a tortilla.
Think about it: With McDonald’s about to add a new chicken finger food called McBites, and Burger King introducing the Chef’s Choice this week as its new premium burger, almost all of the major fast-food chains are fiddling with their menu signatures.
What’s more, the alterations are introduced with direct or implied criticisms of the versions they replaced. Domino’s has made the most noise on that front, all but asking customers, “How could you have eaten what we formerly sold you?”
But Wendy’s isn’t much more discrete in its push of new French fries and burgers. Ditto with KFC and Kentucky Grilled Chicken. The only one showing subtlety is Taco Bell, which is quietly taking some salt out of its signatures.
McDonald’s hasn’t revealed what sort of noise it’ll make about McBites, a chicken version of popcorn shrimp (essentially deep-fried pieces of chicken meat, like the popcorn selections that have long been on the menus of KFC and Popeyes.) You can bet it won’t knock Chicken McNuggets or Chicken Selects in the introduction, but you have to wonder if customers will nonetheless regard McBites as an obvious alternative to McNuggets.
We’ll find out when McDonald’s rolls the new product next year.
The remake of fast-food signatures won’t end there. As RestaurantRealityCheck noted last week, Burger King is trying a new, thicker fry. Its stated goal of appealing to more women and children portends even more changes in products.
Might there even be some riffs on the Whopper?
This isn't the first time that such a thing has happened. In the mid-1980s, BK indeed changed the specs on its holiest of signatures, revamping the size of the Whopper's patty.
McDonald's tried to rejigger its bigger burgers so they could be garnished with lettuce and a tomato slice that wouldn't be rendered unpleasant by the heat of the patty they topped. Later, KFC introduced a bone-in roasted chicken, and Taco Bell tried reduced-calorie versions of its main items.
They all joined the Edsel in the annals of product failures.
But there are different dynamics--and learnings from those misfires--in play this time. Technomic noted in releasing some research yesterday that the fast-casual sector is influencing restaurants of all stripes. No where is that impact more obvious than in the traditional quick-service market, which has the most to lose from fast-casual's rise. Is it really a surprise that former Wendy's CEO Roland Smith publicly compared the chain's new burger line to what's available at Five Guys?
Talk amongst yourselves about it. But try to keep the noise down. The R&D teams need to catch up on their sleep.
Monday, July 25, 2011
McCafe on a bun?
This should sound familiar: Restaurant upstarts take a commodity product you’d find on any menu, raise the quality and price, and cultivate a cult-like following.
After Starbucks did it with coffee, McDonald’s eventually responded with McCafe, a line-up that promises quality beverages at a much lower price. By all accounts, it’s been a smash.
So Big Mac isn’t waiting as long to employ the same defense against upscale burger purveyors like Five Guys, Smashburger and Bobby Flay. The rise of the so-called premium burger segment is providing McDonald’s with the cover to slide higher quality choices into its mix and trump the newcomers on price, COO Don Thompson explained last week.
“Frankly, I think it’s good for us,” he told investors. “It's a benefit because those premium burgers have higher margin and we've got some of those same premium burgers.”
Translation: It’s McCafe on a bun.
Thompson noted that the tack is already working with McD’s Angus one-third-pound burgers. Expect to see more choices in that price and quality strata, he advised during the analysts conference call.
Thompson noted that those new choices could be imported from McDonald’s operations in Europe, including the 1955, a burger the chain is marketing in Germany with a fictional pedigree. Commercials suggest the oversized bacon burger was invented by a housewife in Chicago, whose recipe was just recently discovered by a McDonald’s crewmember in Deutschland.
“Europe has already tested the 1955 very successfully,” Thompson observed.
He also mentioned the Big Tasty, another premium choice that McDonald’s started offering in Europe, with and without bacon, around the start of 2011.
Thompson didn’t mention the Pub Style Burger, a product that drew considerable attention from bloggers after word leaked of its test in the Midwest. But he did note that many of the analysts on the call were aware of some U.S. initiatives featuring premium burgers.
“I'm really looking forward to us having even more premium burgers,” he commented.
Price-wise, the entries will be positioned as a value relative to burgers of comparable quality. Thompson said McDonald’s can afford to undercut the competition because of “our supply chain and the efficacy of it.”
He also noted that the premium play will extend to chicken. Some U.S. markets are already offering premium chicken sandwiches.
After Starbucks did it with coffee, McDonald’s eventually responded with McCafe, a line-up that promises quality beverages at a much lower price. By all accounts, it’s been a smash.
So Big Mac isn’t waiting as long to employ the same defense against upscale burger purveyors like Five Guys, Smashburger and Bobby Flay. The rise of the so-called premium burger segment is providing McDonald’s with the cover to slide higher quality choices into its mix and trump the newcomers on price, COO Don Thompson explained last week.
“Frankly, I think it’s good for us,” he told investors. “It's a benefit because those premium burgers have higher margin and we've got some of those same premium burgers.”
Translation: It’s McCafe on a bun.
Thompson noted that the tack is already working with McD’s Angus one-third-pound burgers. Expect to see more choices in that price and quality strata, he advised during the analysts conference call.
Thompson noted that those new choices could be imported from McDonald’s operations in Europe, including the 1955, a burger the chain is marketing in Germany with a fictional pedigree. Commercials suggest the oversized bacon burger was invented by a housewife in Chicago, whose recipe was just recently discovered by a McDonald’s crewmember in Deutschland.
“Europe has already tested the 1955 very successfully,” Thompson observed.
He also mentioned the Big Tasty, another premium choice that McDonald’s started offering in Europe, with and without bacon, around the start of 2011.
Thompson didn’t mention the Pub Style Burger, a product that drew considerable attention from bloggers after word leaked of its test in the Midwest. But he did note that many of the analysts on the call were aware of some U.S. initiatives featuring premium burgers.
“I'm really looking forward to us having even more premium burgers,” he commented.
Price-wise, the entries will be positioned as a value relative to burgers of comparable quality. Thompson said McDonald’s can afford to undercut the competition because of “our supply chain and the efficacy of it.”
He also noted that the premium play will extend to chicken. Some U.S. markets are already offering premium chicken sandwiches.
Friday, June 24, 2011
The caped designer
Restaurant chains tend to cycle through their superstars. If one of the brands uncorks a hot ad campaign, the whole pack is soon howling for a marketing Moses to lead them out of a sales slump. Six months later, a headquarters mob is chasing that hero out the door, and the wistful speak of a tall, dashing CFO on horseback to turn the battle.
And so it goes, through ops wizards, menu-development masters, even high-charisma CEOs.
These days, the plea to X-Men headquarters is for a definite type of restaurant mastermind. The dude or dudette most in demand has nothing to do with food, service, training or finance. Typically they won’t even be part of the company, and their weapons of choice included cloth swaths, artist renderings and schematics.
Welcome to the age of the caped designer.
We don’t even know who these restaurant heroes are. But we’ll soon see their work. With few exceptions, the major fast-food chains are set to undergo what once-heralded marketers call a design upgrade.
Here’s just a partial list of who’s taking the plunge: McDonald’s, Wendy’s, Chick-fil-A, Jack in the Box, Burger King (though some questions have been raised on that one), Subway, Pizza Inn, Fazoli’s, Starbucks.
The stated goal of each is to add some sophistication to the brand and to encourage customers to feel more comfortable. Several go a step further and profess that they want patrons to linger for awhile, perhaps while sipping a high-margin beverage (ca-ching!) or watching a new entertainment network for which they’re compensated.
Observes say it’s part of an overall effort to capture customers from a higher demographic, as once-exalted CFOs might’ve put it.
Cynics are more pointed: The chains want to draw people who have a job and can afford to spend a little more. No surprisingly, those targets prefer nicer appointments than retina-singing fluorescents, industrial flooring, and garish-colored seats that might’ve been designed by the folks who gave us water boarding.
A warmer, comfier setting might not only be worth a few more cents per transaction, but might prompt them to linger longer and keep buying beverages or snacks.
So let us pay homage to that nameless hero behind a major trend remaking the quick-service sector, cape-wearing designer. He or she is literally changing the face—and possibly the fortunes—of the grab-and-go world.
And so it goes, through ops wizards, menu-development masters, even high-charisma CEOs.
These days, the plea to X-Men headquarters is for a definite type of restaurant mastermind. The dude or dudette most in demand has nothing to do with food, service, training or finance. Typically they won’t even be part of the company, and their weapons of choice included cloth swaths, artist renderings and schematics.
Welcome to the age of the caped designer.
We don’t even know who these restaurant heroes are. But we’ll soon see their work. With few exceptions, the major fast-food chains are set to undergo what once-heralded marketers call a design upgrade.
Here’s just a partial list of who’s taking the plunge: McDonald’s, Wendy’s, Chick-fil-A, Jack in the Box, Burger King (though some questions have been raised on that one), Subway, Pizza Inn, Fazoli’s, Starbucks.
The stated goal of each is to add some sophistication to the brand and to encourage customers to feel more comfortable. Several go a step further and profess that they want patrons to linger for awhile, perhaps while sipping a high-margin beverage (ca-ching!) or watching a new entertainment network for which they’re compensated.
Observes say it’s part of an overall effort to capture customers from a higher demographic, as once-exalted CFOs might’ve put it.
Cynics are more pointed: The chains want to draw people who have a job and can afford to spend a little more. No surprisingly, those targets prefer nicer appointments than retina-singing fluorescents, industrial flooring, and garish-colored seats that might’ve been designed by the folks who gave us water boarding.
A warmer, comfier setting might not only be worth a few more cents per transaction, but might prompt them to linger longer and keep buying beverages or snacks.
So let us pay homage to that nameless hero behind a major trend remaking the quick-service sector, cape-wearing designer. He or she is literally changing the face—and possibly the fortunes—of the grab-and-go world.
Wednesday, June 22, 2011
Say wha?
This could be a breakout week for chiropractors. With heads snapping left and right to catch the extraordinary restaurant news, we’re probably one neck strain away from a whiplash epidemic.
Consider, for instance, how many crania swiveled like desk chairs to make catch the incredible story that arose from France. After working hard for years, a brasserie there was awarded a coveted star from the Michelin guide. It’d be the equivalent of a U.S. restaurant getting a “semi-orgasmic” rating in every Zagat category.
But ears were cocked because this wasn’t a little-restaurant-that-could story. A one-star rating assumes that a place maintains a certain level of service, even if traffic rises. Le Lisita staffed accordingly and realized it had to raise prices to temper the wallop to margins.
Instead, the restaurant decided to cede the star.
I vaguely remember a restaurateur saying that a star in a Michelin-like rating system can bring an additional $40,000 in business. This place publicly attested that it wanted to keep prices at a level that wouldn’t give loyal patrons a case of sticker shock.
But that’s only the start of the week’s Ripley’s news. You may well have seen the results of a new survey that found Subway to be the top choice by far of quick-service consumers who want to dine more healthfully. That, to be honest, is a yawner of a data point.
Far more interesting is what brand finished second: McDonald’s. Not Chipotle or its fresh-ingredient brethren in the burrito sector. Not Panera or the other New Generation sandwich concepts. A brand once synonymous in many minds with unhealthy eating has become a viable option to the careful-dining crowd.
Finally, consider how much latte must’ve been spitted by New York Times readers when they came to the end of a recent story about Robert Gates, the outgoing U.S. Secretary of Defense. The longtime public figure (and onetime director of Brinker International) was asked what he’d do immediately after his retirement was official. “Go to Burger King,” he said.
Give that man a crown.
Consider, for instance, how many crania swiveled like desk chairs to make catch the incredible story that arose from France. After working hard for years, a brasserie there was awarded a coveted star from the Michelin guide. It’d be the equivalent of a U.S. restaurant getting a “semi-orgasmic” rating in every Zagat category.
But ears were cocked because this wasn’t a little-restaurant-that-could story. A one-star rating assumes that a place maintains a certain level of service, even if traffic rises. Le Lisita staffed accordingly and realized it had to raise prices to temper the wallop to margins.
Instead, the restaurant decided to cede the star.
I vaguely remember a restaurateur saying that a star in a Michelin-like rating system can bring an additional $40,000 in business. This place publicly attested that it wanted to keep prices at a level that wouldn’t give loyal patrons a case of sticker shock.
But that’s only the start of the week’s Ripley’s news. You may well have seen the results of a new survey that found Subway to be the top choice by far of quick-service consumers who want to dine more healthfully. That, to be honest, is a yawner of a data point.
Far more interesting is what brand finished second: McDonald’s. Not Chipotle or its fresh-ingredient brethren in the burrito sector. Not Panera or the other New Generation sandwich concepts. A brand once synonymous in many minds with unhealthy eating has become a viable option to the careful-dining crowd.
Finally, consider how much latte must’ve been spitted by New York Times readers when they came to the end of a recent story about Robert Gates, the outgoing U.S. Secretary of Defense. The longtime public figure (and onetime director of Brinker International) was asked what he’d do immediately after his retirement was official. “Go to Burger King,” he said.
Give that man a crown.
Tuesday, May 31, 2011
Bad time to be a mascot
Think your job is less than secure? Try working as a fast-food mascot.
Groups have used petitions and newspaper ads to call for the firing of Ronald McDonald, who was getting less camera time in commercials as it was. But at least headquarters publicly reassured the clown he’d always have a place at McDonald’s headquarters to park his oversized red shoes.
Not so for the Burger King figurehead, who, rumor has it, was studying Portuguese to get in good with the new Brazilian owner. Today brought a blockbuster news report from the Miami Herald about a reimaging campaign for the Number Two burger chain. As part of the facelift, the wooden-faced King will be downgraded from everyday star to the old guy who’ll be kept on the bench for pinch-hitting situations.
The chain has realized that the King resonates too well with young blue-collar males, the so-called super heavy users of fast-food restaurants. It wants to broaden the Home of the Whopper's scope to include more women and families.
Reports that the King is now moonlighting as the recurring killer in direct-to-video horror movies could not be confirmed. It just seems certain he may be logging some bench time, maybe down in the dungeon.
I guess we should look at the bright side. Jack, of Jack in the Box fame, is routinely picked as the mascot whose head is most likely to roll, though that speaks more to the shape of his noggin than any concerns about job performance. He also has a front-office position as chairman.
And let’s not forget the Jollibee bumblebee. Despite the decimation of honeybees, the mascot continues to buzz along, drawing customers to his Filipino chain.
Maybe the King could fill in for vacations.
Groups have used petitions and newspaper ads to call for the firing of Ronald McDonald, who was getting less camera time in commercials as it was. But at least headquarters publicly reassured the clown he’d always have a place at McDonald’s headquarters to park his oversized red shoes.
Not so for the Burger King figurehead, who, rumor has it, was studying Portuguese to get in good with the new Brazilian owner. Today brought a blockbuster news report from the Miami Herald about a reimaging campaign for the Number Two burger chain. As part of the facelift, the wooden-faced King will be downgraded from everyday star to the old guy who’ll be kept on the bench for pinch-hitting situations.
The chain has realized that the King resonates too well with young blue-collar males, the so-called super heavy users of fast-food restaurants. It wants to broaden the Home of the Whopper's scope to include more women and families.
Reports that the King is now moonlighting as the recurring killer in direct-to-video horror movies could not be confirmed. It just seems certain he may be logging some bench time, maybe down in the dungeon.
I guess we should look at the bright side. Jack, of Jack in the Box fame, is routinely picked as the mascot whose head is most likely to roll, though that speaks more to the shape of his noggin than any concerns about job performance. He also has a front-office position as chairman.
And let’s not forget the Jollibee bumblebee. Despite the decimation of honeybees, the mascot continues to buzz along, drawing customers to his Filipino chain.
Maybe the King could fill in for vacations.
Friday, May 13, 2011
A kick to fast food's buns
The quest for better burgers isn’t leaving the bun behind.
The sandwich upgrades underway at several major fast-food brands focus as much on the bread as what’s between it. The perfect example: Wendy’s, whose buns are about to be buttered.
And toasted, stressed Roland Smith, CEO of the chain and its parent company, Wendy’s/Arby’s Restaurant Group. The chain’s new Dave’s Hot ‘n Juicy cheeseburger line will be served on a toasted, buttered bun, Smith explained to financial analysts during a conference call this week. That twist will make the burgers better than the ones sold by Five Guys and In N Out, he asserted.
Indeed, he made that boast at least three times to the investors participating in the call.
Because the chain will install toasters for the burgers, it can also use a buttered, toasted foundation for its new chicken sandwich line, or what Smith called the Gold line.
The sandwiches will also feature what he described as a better fillet, a better marinade, and better breading. Still, he stressed the importance of the new bun in setting the offering apart.
A better bun is also one of the selling points for McDonald’s new premium chicken sandwich. It features what the chain calls a honey wheat bakery-style roll, and is also toasted.
It’s the latest step in McDonald’s march toward better bread. Its premium Angus burger line is similarly served on a bakery-style roll.
Jack in the Box is similarly using what it calls a bakery-style roll for its sirloin burger.
Clearly the fast-food sector isn’t living by the patty alone.
The sandwich upgrades underway at several major fast-food brands focus as much on the bread as what’s between it. The perfect example: Wendy’s, whose buns are about to be buttered.
And toasted, stressed Roland Smith, CEO of the chain and its parent company, Wendy’s/Arby’s Restaurant Group. The chain’s new Dave’s Hot ‘n Juicy cheeseburger line will be served on a toasted, buttered bun, Smith explained to financial analysts during a conference call this week. That twist will make the burgers better than the ones sold by Five Guys and In N Out, he asserted.
Indeed, he made that boast at least three times to the investors participating in the call.
Because the chain will install toasters for the burgers, it can also use a buttered, toasted foundation for its new chicken sandwich line, or what Smith called the Gold line.
The sandwiches will also feature what he described as a better fillet, a better marinade, and better breading. Still, he stressed the importance of the new bun in setting the offering apart.
A better bun is also one of the selling points for McDonald’s new premium chicken sandwich. It features what the chain calls a honey wheat bakery-style roll, and is also toasted.
It’s the latest step in McDonald’s march toward better bread. Its premium Angus burger line is similarly served on a bakery-style roll.
Jack in the Box is similarly using what it calls a bakery-style roll for its sirloin burger.
Clearly the fast-food sector isn’t living by the patty alone.
Monday, April 25, 2011
McDonald's quietly adopts handhelds
The proliferation of iPad-based menus and wine lists is generating buzz, but far more interesting is the quiet adoption of hand-held ordering devices by several quick-service giants.
McDonald’s revealed to investors last week that one advantage of its new POS system is adaptability to handhelds, “which we're beginning to implement more and more [in] the restaurants,” commented president Don Thompson. He also noted that the new POS system is compatible with dual drive-thrus.
mcDonald's is updating its sales technology in large part because the next generation requires less user input. Franchisees say an order can be input with fewer keystrokes and screens, speeding up service during crunch periods.
The operators have groused a little about the cost, which they have to absorb after investing in equipment to produce coffees, frappes and other high-ticket beverages.
Meanwhile, I can attest firsthand that Chipowithin using handhelds at some stores, including the one near Restaurant Business' headquartersb in the Wall Street area of New York. A staffer was using one recently to take orders from the queue of 35 or so people. You placed your order and payed. Then, when you got to the serving area, less info had to be provided, and the line did move faster.
The revelation about McDonald's use of handhelds came during a conference call on Friday with financial analysts. During the call executives also offered these news nuggets:
--The January offer of a 20-piece serving size of Chicken McNuggets led to a double-digit increase in sales of the product.
--McDonald's sales of hot coffee rose 17% year-over-year during the just-concluded winter.
--A frozen strawberry lemonade will be introduced in May, a part of the chain's efforts to match new drinks with the season. Thompson noted that a new smoothie flavor is also in the works.
McDonald’s revealed to investors last week that one advantage of its new POS system is adaptability to handhelds, “which we're beginning to implement more and more [in] the restaurants,” commented president Don Thompson. He also noted that the new POS system is compatible with dual drive-thrus.
mcDonald's is updating its sales technology in large part because the next generation requires less user input. Franchisees say an order can be input with fewer keystrokes and screens, speeding up service during crunch periods.
The operators have groused a little about the cost, which they have to absorb after investing in equipment to produce coffees, frappes and other high-ticket beverages.
Meanwhile, I can attest firsthand that Chipowithin using handhelds at some stores, including the one near Restaurant Business' headquartersb in the Wall Street area of New York. A staffer was using one recently to take orders from the queue of 35 or so people. You placed your order and payed. Then, when you got to the serving area, less info had to be provided, and the line did move faster.
The revelation about McDonald's use of handhelds came during a conference call on Friday with financial analysts. During the call executives also offered these news nuggets:
--The January offer of a 20-piece serving size of Chicken McNuggets led to a double-digit increase in sales of the product.
--McDonald's sales of hot coffee rose 17% year-over-year during the just-concluded winter.
--A frozen strawberry lemonade will be introduced in May, a part of the chain's efforts to match new drinks with the season. Thompson noted that a new smoothie flavor is also in the works.
Tuesday, April 19, 2011
This just in from the courts
Chipotle’s design draws fire…
Chipotle may have to reconsider its standard design after the U.S. Supreme Court let stand a lower court’s ruling that customers in wheelchairs can’t be denied the experience of seeing their meals prepared.
Customers who walk through the serving line interact with the prep staffers on the other side of a glass partition, specifying what they want in their burrito and watching as the elements are added. The experience was cited in court actions as an essential part of the Chipotle experience.
But a barrier by the serving line prevents wheelchair-bound patrons from being able to see their meals being assembled.
In 2005, a California resident in a wheelchair sued Chipotle, asserting that he was the victim of discrimination because of his disability.
Chipotle had countered that the plaintiff, Maurizio Antoninetti, had sued a number of businesses because of alleged inaccessibility. Antoninetti is described in an online bio as a teaching associate at San Diego State University and a former “accessibility consultant,” with a degree in architecture.
The chain had also argued that it accommodated patrons who couldn’t walk the line. Staffers would in effect bring the assembly process to them, holding spoonfuls of ingredients and assembling the burrito so they could watch.
The lower court had decided that the remedy wasn’t fair to Antoninetti. The Supreme Court refused to hear the appeal, letting that ruling stand.
Chipotle has yet to issue any public statement about how it intends to respond to the action.
…while McD’s argues parents are the bosses
Meanwhile, McDonald’s is arguing that a lawsuit challenging its use of toys as kids-meal giveaways should be dismissed because the plaintiff acknowledges she wasn’t conned by the offer.
Monet Parham, a California mother of two, has admitted she knew exactly what was offered in the Happy Meals her children desired, and often refused their pleas to buy the bundled meals. McDonald’s asserted in court that the advertising was straightforward, and that a purchase wasn’t based on any misleading information from the chain.
Parham is represented in the suit by the Center for Science in the Public Interest.
An attorney for the plaintiff countered that McDonald’s was making Parham the victim because she couldn’t always counter the brainwashing that McDonald’s does with its advertising.
McDonald’s was still awaiting a reaction from the federal court as of this writing.
Chipotle may have to reconsider its standard design after the U.S. Supreme Court let stand a lower court’s ruling that customers in wheelchairs can’t be denied the experience of seeing their meals prepared.
Customers who walk through the serving line interact with the prep staffers on the other side of a glass partition, specifying what they want in their burrito and watching as the elements are added. The experience was cited in court actions as an essential part of the Chipotle experience.
But a barrier by the serving line prevents wheelchair-bound patrons from being able to see their meals being assembled.
In 2005, a California resident in a wheelchair sued Chipotle, asserting that he was the victim of discrimination because of his disability.
Chipotle had countered that the plaintiff, Maurizio Antoninetti, had sued a number of businesses because of alleged inaccessibility. Antoninetti is described in an online bio as a teaching associate at San Diego State University and a former “accessibility consultant,” with a degree in architecture.
The chain had also argued that it accommodated patrons who couldn’t walk the line. Staffers would in effect bring the assembly process to them, holding spoonfuls of ingredients and assembling the burrito so they could watch.
The lower court had decided that the remedy wasn’t fair to Antoninetti. The Supreme Court refused to hear the appeal, letting that ruling stand.
Chipotle has yet to issue any public statement about how it intends to respond to the action.
…while McD’s argues parents are the bosses
Meanwhile, McDonald’s is arguing that a lawsuit challenging its use of toys as kids-meal giveaways should be dismissed because the plaintiff acknowledges she wasn’t conned by the offer.
Monet Parham, a California mother of two, has admitted she knew exactly what was offered in the Happy Meals her children desired, and often refused their pleas to buy the bundled meals. McDonald’s asserted in court that the advertising was straightforward, and that a purchase wasn’t based on any misleading information from the chain.
Parham is represented in the suit by the Center for Science in the Public Interest.
An attorney for the plaintiff countered that McDonald’s was making Parham the victim because she couldn’t always counter the brainwashing that McDonald’s does with its advertising.
McDonald’s was still awaiting a reaction from the federal court as of this writing.
Sunday, April 3, 2011
Thursday, March 24, 2011
Chinese check-in
A high-level conference on Asian opportunities drew plenty of investors, bankers, portfolio managers and other financial experts to New York yesterday morning. Too bad there wasn’t a restaurant-chain executive among them.
Today, that lone soul would understand the profound economic changes afoot for China, undeniably the restaurant market of choice right now. When the dislocation hits, and peers scramble in panic, the attendee could sit back, pour another cup of coffee, and relish knowing the downturn might not be so bad for the foodservice business.
Any U.S. chain with a presence in China has probably heard the dire predictions that were explored in depth yesterday. There’s a consensus that China’s torrid economic growth can’t be sustained. At the very least, there’s the risk of steeper inflation. There’s also the not-so-little matter of pushing the environment past the point of recovery. And other nations will surely look to curb unfair advantages like the lax enforcement of intellectual-property rights, or what one speaker euphemistically deemed “the migration of ideas.” Counterfeiting is huge there, and corruption is still a common practice in some areas, as one panel noted.
But the real sand in the gears, several speakers noted during the Asian Century Forum, is the unique imbalance of China’s economy. Here in the States, most of our economic activity takes the form of consumption—people, businesses or governments buying things.
In China, most of the Gross Domestic Product is generated by investment—the capitalization of factories and other means of producing products. Consumption accounts for less than 40% of China’s GDP, as one speaker noted.
The reason, Asian authority Michael Pettis explained, is the low buying power of Chinese workers. Output has exceeded wage growth, yielding more and more goods and services, but insufficient wealth to buy them. And it’s all the result of a government-controlled economy.
Pettis, a professor of finance for the Guanghua School of Management at Peking University, said the strange situation will probably prevail for some time to come. He expects a new five-year growth plan to revealed by the government next month, and doubts there’ll be any component to boost consumption.
The nation can’t stay on that course without risking social and political upheaval, other speakers suggested. More emphasis will have to shift to consumption and growing household income at one point or another.
Before the imbalance is righted, Pettis said, the economy will gag more than hiccup. “We should be prepared for a growth rate in China of three 5%. The days of a 10% growth rate are over,” he predicted, dropping what may have been the conference’s biggest bombshell.
A slowdown in the economy would no doubt be chilling for chains like Starbucks and McDonald’s, who have factored a penetration of China’s emerging consumer market into their near-, mid-, and long-term growth strategies.
I bet that Yum! Brands, parent of KFC and Pizza Hut, wouldn’t mind selling those brands’ U.S. presence to focus more resources on their expansion in China, where both are market titans with a jetpack on their backs. The franchisor already has a brand that operates only in China, East Dawning, and has an investment in a second, Little Sheep Hot Pot.
Halving China’s economic growth would have to be a serious worry to big U.S. operators like those. But, as attendees learned yesterday, the drop-off would be the price for shifting more of China’s economy to a consumption base. The emphasis would be on raising workers’ wages and household income, fostering a larger middle class.
For restaurants, that means putting more money in the pockets of consumers with a hunger for American culture, including its fast food. It’s a silver lining that was mentioned repeatedly yesterday.
Too bad no one from the industry was there to hear it.
Full disclosure here, as per the FCC’s blogging regulations: I was paid to live-blog and tweet from yesterday’s Forum, which was co-sponsored by the Paul Hastings lawfirm and the Financial Times. You can review the highlights here.
Today, that lone soul would understand the profound economic changes afoot for China, undeniably the restaurant market of choice right now. When the dislocation hits, and peers scramble in panic, the attendee could sit back, pour another cup of coffee, and relish knowing the downturn might not be so bad for the foodservice business.
Any U.S. chain with a presence in China has probably heard the dire predictions that were explored in depth yesterday. There’s a consensus that China’s torrid economic growth can’t be sustained. At the very least, there’s the risk of steeper inflation. There’s also the not-so-little matter of pushing the environment past the point of recovery. And other nations will surely look to curb unfair advantages like the lax enforcement of intellectual-property rights, or what one speaker euphemistically deemed “the migration of ideas.” Counterfeiting is huge there, and corruption is still a common practice in some areas, as one panel noted.
But the real sand in the gears, several speakers noted during the Asian Century Forum, is the unique imbalance of China’s economy. Here in the States, most of our economic activity takes the form of consumption—people, businesses or governments buying things.
In China, most of the Gross Domestic Product is generated by investment—the capitalization of factories and other means of producing products. Consumption accounts for less than 40% of China’s GDP, as one speaker noted.
The reason, Asian authority Michael Pettis explained, is the low buying power of Chinese workers. Output has exceeded wage growth, yielding more and more goods and services, but insufficient wealth to buy them. And it’s all the result of a government-controlled economy.
Pettis, a professor of finance for the Guanghua School of Management at Peking University, said the strange situation will probably prevail for some time to come. He expects a new five-year growth plan to revealed by the government next month, and doubts there’ll be any component to boost consumption.
The nation can’t stay on that course without risking social and political upheaval, other speakers suggested. More emphasis will have to shift to consumption and growing household income at one point or another.
Before the imbalance is righted, Pettis said, the economy will gag more than hiccup. “We should be prepared for a growth rate in China of three 5%. The days of a 10% growth rate are over,” he predicted, dropping what may have been the conference’s biggest bombshell.
A slowdown in the economy would no doubt be chilling for chains like Starbucks and McDonald’s, who have factored a penetration of China’s emerging consumer market into their near-, mid-, and long-term growth strategies.
I bet that Yum! Brands, parent of KFC and Pizza Hut, wouldn’t mind selling those brands’ U.S. presence to focus more resources on their expansion in China, where both are market titans with a jetpack on their backs. The franchisor already has a brand that operates only in China, East Dawning, and has an investment in a second, Little Sheep Hot Pot.
Halving China’s economic growth would have to be a serious worry to big U.S. operators like those. But, as attendees learned yesterday, the drop-off would be the price for shifting more of China’s economy to a consumption base. The emphasis would be on raising workers’ wages and household income, fostering a larger middle class.
For restaurants, that means putting more money in the pockets of consumers with a hunger for American culture, including its fast food. It’s a silver lining that was mentioned repeatedly yesterday.
Too bad no one from the industry was there to hear it.
Full disclosure here, as per the FCC’s blogging regulations: I was paid to live-blog and tweet from yesterday’s Forum, which was co-sponsored by the Paul Hastings lawfirm and the Financial Times. You can review the highlights here.
Friday, March 11, 2011
McDonald's big green move
A posting for every foodservice supplier’s Facebook wall: McDonald’s is quietly up-ending what and how you’ll be selling to restaurants in the foreseeable future.
The changeover may actually be overdue. Pressure for an overhaul of what the supplier community peddles has been building in the upscale and independent sectors for some time. The message might’ve been ignored, but it was hard to miss: Sustainability is a consideration that’s increasingly going to shape a final decision on a product, particularly food and packaging.
The game-changer is McDonald’s announcement earlier this week that it will require suppliers using agricultural materials to have their source farms certified as sustainable, or having no harmful impact on the environment. That extends to the beef in McDonald’s hamburgers, the pork in its Egg McMuffin, and the corn that sweetens its soft drinks.
A former colleague once recounted how he’d worked for a fish supplier several decades ago, when seafood consumption was expected to soar because of health concerns. The firm opened a huge factory in anticipation, only to discover the demand amounted to a few cartons of breaded sticks and filets a week.
Then it landed a contract to produce the patties for the Filet-O-Fish, a small part of McDonald’s sales mix. Within days, the place was running 24/7 and thinking about expanding.
Today, McDonald’s is about three times the size it was then. An executive once remarked that she could create a worldwide sesame-seed shortage by adding a few more to the spec for a McDonald’s hamburger bun. McDonald’s may be the world’s largest purchaser of consumer food items.
Its pledge will have powerful repercussions. First, its suppliers will have to abide. You don’t antagonize a customer of that size.
But the scale of the adjustment will benefit many more buyers than McDonald’s. For one thing, the volume of production will ensure the price of sustainable fare declines. No longer will it be a specialty in limited supply.
Then there are the marketing pressures. If McDonald’s can boast about an all-sustainable menu, every other mainstream restaurateur will have to address the issue. It may well be the tipping point.
Before you suppliers start hyperventilating into a paper bag, note that McDonald’s didn’t say the changeover would be instantaneous. Indeed, it didn’t set a timeframe at all, save for its purchase of palm oil (it committed to an all-sustainable deadline of 2015).
Instead, it said the mandate would be phased in “over time.”
But the activity is already starting. McDonald’s noted in the announcement that it’s funding a three-year study of the carbon output of 350 cattle farms in the United Kingdom and Ireland. It’s presumably a first step to identifying best practices that could be adopted worldwide.
One of McDonald’s challenges on the green front is convincing eco-proponents that it’s sincere about changing. Wednesday’s announcement snagged relatively little attention outside of the environmentalist community.
But it should be big news to anyone who’s concerned about reducing the restaurant industry’s input, particularly restaurateurs themselves.
The changeover may actually be overdue. Pressure for an overhaul of what the supplier community peddles has been building in the upscale and independent sectors for some time. The message might’ve been ignored, but it was hard to miss: Sustainability is a consideration that’s increasingly going to shape a final decision on a product, particularly food and packaging.
The game-changer is McDonald’s announcement earlier this week that it will require suppliers using agricultural materials to have their source farms certified as sustainable, or having no harmful impact on the environment. That extends to the beef in McDonald’s hamburgers, the pork in its Egg McMuffin, and the corn that sweetens its soft drinks.
A former colleague once recounted how he’d worked for a fish supplier several decades ago, when seafood consumption was expected to soar because of health concerns. The firm opened a huge factory in anticipation, only to discover the demand amounted to a few cartons of breaded sticks and filets a week.
Then it landed a contract to produce the patties for the Filet-O-Fish, a small part of McDonald’s sales mix. Within days, the place was running 24/7 and thinking about expanding.
Today, McDonald’s is about three times the size it was then. An executive once remarked that she could create a worldwide sesame-seed shortage by adding a few more to the spec for a McDonald’s hamburger bun. McDonald’s may be the world’s largest purchaser of consumer food items.
Its pledge will have powerful repercussions. First, its suppliers will have to abide. You don’t antagonize a customer of that size.
But the scale of the adjustment will benefit many more buyers than McDonald’s. For one thing, the volume of production will ensure the price of sustainable fare declines. No longer will it be a specialty in limited supply.
Then there are the marketing pressures. If McDonald’s can boast about an all-sustainable menu, every other mainstream restaurateur will have to address the issue. It may well be the tipping point.
Before you suppliers start hyperventilating into a paper bag, note that McDonald’s didn’t say the changeover would be instantaneous. Indeed, it didn’t set a timeframe at all, save for its purchase of palm oil (it committed to an all-sustainable deadline of 2015).
Instead, it said the mandate would be phased in “over time.”
But the activity is already starting. McDonald’s noted in the announcement that it’s funding a three-year study of the carbon output of 350 cattle farms in the United Kingdom and Ireland. It’s presumably a first step to identifying best practices that could be adopted worldwide.
One of McDonald’s challenges on the green front is convincing eco-proponents that it’s sincere about changing. Wednesday’s announcement snagged relatively little attention outside of the environmentalist community.
But it should be big news to anyone who’s concerned about reducing the restaurant industry’s input, particularly restaurateurs themselves.
Wednesday, March 2, 2011
A second look at LYFE
The big-leaguers crafting the LYFE fast-casual concept have invested a year already in the quest to develop healthful dishes that won’t fail a blindfold test.
Take some of the public’s favorite foods, put them next to LYFE’s reformulated versions, and give the would-be customer a fork. If she can’t tell the difference, the LYFE recipe gets a thumbs-up from the chefs and former McDonald’s execs molding the Fast Food 2.0 upstart for a late-summer debut.
“If a truck driver decides he wants a classic burger with cheese and his wife wants a burger made of garden protein, neither will have to sacrifice taste to get something under 600 calories,” says Mike Donahue, one of the McDonald’s alumni behind the new venture.
Other specialties will likely include corn chowder that uses cashews instead of dairy products to make the soup rich and flavorful, he says. LYFE expects it to be a takeout signature, based on how many people have already asked chef Tal Ronnen if they can take home a pint or quart for the family.
Donahue also mentions a line of flatbreads that’ll hit the concept’s dual targets of taste and guiltlessness.
LYFE’s intended audience, he says, are women aged 19 to 49—the moms, sisters and significant others of the men usually targeted by traditional fast food places.
Mindful of new consumer sensibilities, the LYFE (“Love Your Food Everyday”) team is striving to make the concept as eco-friendly as it can be. That includes kicking the tires of alternative delivery vehicles like Smart cars and electric scooters, and shopping for uniforms and takeout materials made from sustainable materials, says Donahue.
A major thrust of that effort is using local, seasonal and sustainable foods whenever possible.
Tal Ronnen, one of the country’s most renowned vegetarian chefs, will be joined in crafting the menu by Art Smith, a favorite chef of the Obamas and a leader in teaching children how to grow their food and eat more healthfully.
On the business side are Mike Roberts, the former president of McDonald’s, and Stephen Sidwell, head of a boutique investment firm.
The prototype is slated for Palo Alto, Calif., in the heart of California’s high-tech corridor. The team will focus on building out the Palo Alto market before it begins expansion, said Donahue, who’s serving as chief communications officer.
He notes that social media will be LYFE’s major marketing channel.
Take some of the public’s favorite foods, put them next to LYFE’s reformulated versions, and give the would-be customer a fork. If she can’t tell the difference, the LYFE recipe gets a thumbs-up from the chefs and former McDonald’s execs molding the Fast Food 2.0 upstart for a late-summer debut.
“If a truck driver decides he wants a classic burger with cheese and his wife wants a burger made of garden protein, neither will have to sacrifice taste to get something under 600 calories,” says Mike Donahue, one of the McDonald’s alumni behind the new venture.
Other specialties will likely include corn chowder that uses cashews instead of dairy products to make the soup rich and flavorful, he says. LYFE expects it to be a takeout signature, based on how many people have already asked chef Tal Ronnen if they can take home a pint or quart for the family.
Donahue also mentions a line of flatbreads that’ll hit the concept’s dual targets of taste and guiltlessness.
LYFE’s intended audience, he says, are women aged 19 to 49—the moms, sisters and significant others of the men usually targeted by traditional fast food places.
Mindful of new consumer sensibilities, the LYFE (“Love Your Food Everyday”) team is striving to make the concept as eco-friendly as it can be. That includes kicking the tires of alternative delivery vehicles like Smart cars and electric scooters, and shopping for uniforms and takeout materials made from sustainable materials, says Donahue.
A major thrust of that effort is using local, seasonal and sustainable foods whenever possible.
Tal Ronnen, one of the country’s most renowned vegetarian chefs, will be joined in crafting the menu by Art Smith, a favorite chef of the Obamas and a leader in teaching children how to grow their food and eat more healthfully.
On the business side are Mike Roberts, the former president of McDonald’s, and Stephen Sidwell, head of a boutique investment firm.
The prototype is slated for Palo Alto, Calif., in the heart of California’s high-tech corridor. The team will focus on building out the Palo Alto market before it begins expansion, said Donahue, who’s serving as chief communications officer.
He notes that social media will be LYFE’s major marketing channel.
Tuesday, February 22, 2011
Life (and LYFE) after McDonald's
Once upon a time, ex-McDonald’s executives were harder to find than a Chicago Cubs World Series ring. It was a grill-cook-to-grave sort of company.
But times change. You can’t run an organization of McDonald’s size without some displacement of talent, whatever the reasons.
Fortunately for those of us who cover the business, the depart-ees can’t shake their unique McDonald’s upbringing—what some alumni call the special sauce. Apply that restaurant acumen to the white-boarding process and you end up with some of the industry’s most intriguing new concepts.
Consider Tom and Eddie’s, the fast-food time machine opened by “retired” McD’s USA president Ed Rensi and one-time exec VP Of operations Tom Dentice. The burgers-and-shakes place is drawing attention from far beyond its suburban Illinois market. The Fast Casual Industry Council made a point of stopping there as one of its dine-arounds in the Chicago area.
Rensi and Dentice have updated the drive-in format, just as the McDonald’s brothers did in the mid-1950s. Then, the breakthrough was a systemization that lowered the price of burgers to 15 cents. Now the innovation is using all-natural fresh ingredients, combined by hand and cooked with care and precision. They’ve tried to put the art back into the business.
But only restaurant geeks or hardcore foodies would appreciate those points. The buzz is because of the food. A longtime industry veteran told me the milkshakes were the best he’d ever tasted, and he downs enough in the course of his field work to affect milk futures.
Now comes word that another former McDonald’s president, former worldwide chief Mike Roberts, is also hatching a fast-casual entrant. The menu is being drafted by Tal Ronnen, a well-known vegetarian chef with a celebrity clientele (Ellen DeGeneres, Arianna Huffington), and Art Smith, the restaurateur (Chicago’s Table Fifty-Two, Washington’s Art and Soul) who formerly served as personal chef to Oprah Wynfrey.
Like Tom & Eddie’s, their LYFE (“Love Your Food Everyday”) will feature food that calls to mind farms, not factories. The team is pledging to use locally sourced materials and to keep all dishes’ calorie count below 600.
The prototype, under construction in Palo Alto, Calif., will feature breakfast, lunch and dinner. Its creators have promised to use eco-friendly building materials. Ditto for the food wrappers and containers.
But times change. You can’t run an organization of McDonald’s size without some displacement of talent, whatever the reasons.
Fortunately for those of us who cover the business, the depart-ees can’t shake their unique McDonald’s upbringing—what some alumni call the special sauce. Apply that restaurant acumen to the white-boarding process and you end up with some of the industry’s most intriguing new concepts.
Consider Tom and Eddie’s, the fast-food time machine opened by “retired” McD’s USA president Ed Rensi and one-time exec VP Of operations Tom Dentice. The burgers-and-shakes place is drawing attention from far beyond its suburban Illinois market. The Fast Casual Industry Council made a point of stopping there as one of its dine-arounds in the Chicago area.
Rensi and Dentice have updated the drive-in format, just as the McDonald’s brothers did in the mid-1950s. Then, the breakthrough was a systemization that lowered the price of burgers to 15 cents. Now the innovation is using all-natural fresh ingredients, combined by hand and cooked with care and precision. They’ve tried to put the art back into the business.
But only restaurant geeks or hardcore foodies would appreciate those points. The buzz is because of the food. A longtime industry veteran told me the milkshakes were the best he’d ever tasted, and he downs enough in the course of his field work to affect milk futures.
Now comes word that another former McDonald’s president, former worldwide chief Mike Roberts, is also hatching a fast-casual entrant. The menu is being drafted by Tal Ronnen, a well-known vegetarian chef with a celebrity clientele (Ellen DeGeneres, Arianna Huffington), and Art Smith, the restaurateur (Chicago’s Table Fifty-Two, Washington’s Art and Soul) who formerly served as personal chef to Oprah Wynfrey.
Like Tom & Eddie’s, their LYFE (“Love Your Food Everyday”) will feature food that calls to mind farms, not factories. The team is pledging to use locally sourced materials and to keep all dishes’ calorie count below 600.
The prototype, under construction in Palo Alto, Calif., will feature breakfast, lunch and dinner. Its creators have promised to use eco-friendly building materials. Ditto for the food wrappers and containers.
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