Random thoughts II

Two weeks ago I gave a presentation on restaurant concepts to a class at the Institute of Culinary Education in New York City. It was the second time I’ve guest-lectured at the facility, which is one of the under-appreciated gems of the New York culinary scene.

Like last time, the students seemed obsessed with Chipotle, particularly its distinction as a sizeable chain that didn’t make them cluck in disapproval.

Unlike last time, I was asked during this guest lecture for my opinion of what chains are leading the pack in their green efforts. I cited Starbucks, Burgerville and McDonald’s. Interestingly, the mention of McDonald’s drew nods of agreement, not dumbfounded surprise.

Chipotle: 'Natural' may not be the hook it thought

Say it ain’t so, Steve. Chipotle’s use of natural ingredients was the example everyone cited to prove the consumer mainstream cared about more-wholesome foods. If a chain of more than 800 units could do it, and make a fortune in the process, couldn’t others? It was the reason chain execs across the spectrum were yelping out a “Yes I can!,” as if they were at a tent revival meeting.

But the spirit didn’t move customers as much as everyone might have thought, Chipotle co-CEO and founder Steve Ells admitted to financial analysts Wednesday evening. Consumers would hear the chain’s Food with Integrity marketing promise and fail to see the light.

“One of the things that we found in our research is that we have not been getting credit for the Food with Integrity initiative,” Ells explained. “People understand that Chipotle food tastes better. They don't necessarily associate higher quality ingredients, sustainably raised ingredients, with Food with Integrity…These kinds of things are important, we think, in how we source our food, but our customers tell us this is not the kinds of things that are important to them."

So, he said, the chain will downplay the integrity boast in a new campaign that breaks next month, themed “My Chipotle.” Ells explained that the campaign will tout variety, customization and flavor, with the latter attributed in part to “great quality raw ingredients.” He did not give any indication that the chain would actually downplay its use of natural foodstuffs, just the crowing about it.

The heart of the My Chipotle campaign, Ells said, will be a new website, MyChipotle.com, where patrons can testify about their love for the food. Customers will be invited to post pictures, videos and audio clips about their favorite items on the menu. Some of that material may then be used in television, radio or print ads, he said.

Among the other gems served up during the quarterly conference call was a quantification of culture’s impact on Chipotle’s finances. Co-CEO Monty Moran observed that a typical outlet of the chain employed a crew of 22 people in 2006, when unit sales average $1.5 million. Today, he said, the headcount is down to 19 staffers, but the per-store mean has jumped to $1.75 million.

The cause, he said, was a carefully cultivated culture that aims to put “our highest performers in the highest impact positions.” In the past year, Moran added, favorable customer comments have doubled, while complaints have fallen.

A thank-you to SeekingAlpha.com for posting a transcript of yesterday’s call.

What you won't read in the papers

Last week delivered a few indications the restaurant industry may be entering a recovery. Relief couldn't come too soon, given how the trade appears to be one moon howl away from snapping. A bunch of places have even forgotten they're supposed to charge for food instead of doling it out for a reminder of what customers look like.

In all the craziness, some urban myths have clearly taken hold. Here, as a public service, is a delineation of fact and fiction:

• There’s absolutely no truth to reports that T.G.I. Friday’s is giving away a restaurant franchise with every appetizer ordered this week. You have to buy an entrée, too, though they’re down to $1.


• Michelle Obama has not challenged Alice Waters to go hoe-to-hoe over who has the best organic string beans. Nor will Bo the Dog be trained to bite Waters in the onions. Or not as long as she shuts up about a First Garden.


• It’s a complete myth that restaurants’ latest promotion is giving customers the keys and asking them to lock up when they’re done gorging for free. Denny’s, however, declined to comment.


• Tao, pegged by Restaurants & Institutions as having sales in excess of $68 million a year, is not buying General Motors to replace valet parking with a car giveaway program.


• Steve Wynn is not relocating the state of Rhode Island into his restaurant-studded Encore casino as an entertainment feature. However, the governor of Maryland commented that he’s constitutionally obliged to do what’s financially best for constituents.


• Gordon Ramsay has not been serially watching “The Wrestler” in hopes of aping Mickey Rourke’s career comeback.


• Police discount reports that hundreds of seders were wrecked when college-aged participants insisted that Chipotle’s Steve Ells is really the prophet Elijah. They also wanted to know where the bitter herbs had been grown.

More blurring of retail/restaurant line

The resilience of the fast-food market during these perilous times hasn’t gone unnoticed by BJ’s, the regional club store chain. Executives told investors the warehouse membership chain expects revenues to rise by 4 to 6% during 2009, driven by increased sales at in-store food courts. And that’s after a 4% rise in revenues during the last three months of ’08, which they attributed to only two factors: food courts and propane sales.

Understandably, the retailer cited food courts as a primary strategic focus for 2009, along with product demos, a signature of arch-rival Costco.

Costco, meanwhile, says its food court business is also going strong, though officials did not divulge figures during their conference call with investors. They did note, however, that sales of take-home items like pizza have soared "dramatically." Costco's signature deal is a quarter-pound hot dog and a 24-oz. soda, sold as a meal for $1.50.

BJ's execs attributed the improved performance of that chain’s food courts to an emphasis on quality and the addition of such brands as Uno’s, Ben & Jerry’s and Green Mountain Coffee. BJ’s currently has 180 stores in 15 states.

The officials noted that sales of prepared meals were strong during the fourth quarter of 2008, but did not break out figures.

Meanwhile, they said, stores’ frozen-food departments saw “very strong sales” of products affiliated with restaurant chains, including The Cheesecake Factory, the Fresh City fast-casual chain, Panera Bread Co., Legal Sea Foods and Boston Market. The retailer also now stocks products licensed by Todd English, the famed chef.

Another point likely of interest to restaurateurs: BJ’s sales of organic and natural foods soared 20%.

Mich. hospital's Rx for ill economy: New culinary slant

In Michigan, where unemployment has already topped 10%, chefs, culinary educators and a hospital are collaborating on a project the Obama Administration should unabashedly steal and duplicate. It creates jobs, bolsters health, provides a new career path for displaced blue-collar workers, and meets a demand that will undoubtedly soar as the Baby Boomers age. They’ve started the first culinary school that’s devoted to teaching students how to prepare healthy hospital fare.

This is no Birkenstock & Yogurt U. The center is an initiative of the Detroit area’s new Henry Ford West Bloomfield Hospital, which functions in part on the principle that food is essential to health. Left unasked is the question, Why doesn’t it get more attention from the healthcare industry?

The center, which is slated to open in March, will reportedly take such steps as providing healthy cooking classes to patients, with demos provided by chefs. The foodservice will be provided by local but nationally renowned restaurateur Matt Prentice. When I interviewed Prentice last year for a Nation’s Restaurant News story, he explained that he felt obliged to do something about healthcare feeding after a teenaged daughter was hospitalized. The food, he stressed, was abysmal.

Prentice told The Detroit News that his patient, staff and visitor feeding operations will feature organic and natural fare, without a fryer in the facility. He also noted that halal, kosher, gluten-free and vegetarian meals will be readily offered.

The News story notes that a culinary school, run in cooperation with Schoolcraft College in nearby Livonia, will be part of the 80-acre complex. “This will bring additional revenue to the area as students from across the country will come to spend a week learning about this new industry of healthy hospital food,” Gerard van Grinsven, the Ritz-Carlton Hotels alumnus who serves as Henry Ford CEO, told the News.

Other culinary schools might disagree, noting that their courses provided the know-how to provide healthy hospital fare. Many could likely cite alumni who now work in healthcare feeding.

But the Ford program may be the only one that focuses not only on hospital fare, but healthy hospital food.

And it’s certainly the only one that was conceived in part to help Michigan’s beat-down economy, where conditions have been recessionary since long before Washington, D.C., started thinking about bail-out packages.

It may be a much-needed bright spot in an otherwise grim situation.