Who would’ve picked Wendy’s as the better performer for its new parent? Yet the burger chain clearly left its sister, the Arby’s sandwich concept, getting cold under the heat lamps at the end of 2008.
The sandwich chain will attempt to close the gap this year with what could be dubbed the Jan Brady Defense, a.k.a. I’ll Show That Marcia: Hit your sibling with a putdown while trying to be just like her.
The putdown part is everywhere, from Sports Illustrated’s swimsuit issue to social-media sites like Twitter and gads of internet pages where moms share coupons for free stuff. The chain will be the sponsor latter this month of the NCAA March Madness playoff brackets showcased on Facebook. The promotional efforts all tout Arby’s new Roastburgers, “the burger done better.”
The next phase will be claiming the high ground in the sandwich segment, just as Wendy’s asserts it's the best in burgers. Slated for later this year are introductions of more premium sandwiches made with roasted meats, including turkey, ham, and one of Wendy’s staples, chicken.
But, like Wendy’s, Arby’s is trying to win bargain-hunters at the same time by studding its menu boards with a few head-turning deals. CEO Roland Smith said the sandwich chain has concluded tests of a dollar menu, a pick-four-for-$5 bundling deal, and $1.99 roast beef “patty melts.” The most successful of those trial items, he told investors yesterday, will be introduced later this year. But, of course, he didn’t say which of those it would be. The tease came after he'd attributed the chain’s drop in comparable sales at the end of 2008 to heavy discounting by other fast-food sandwich specialists.
Smith may have foreshadowed Arby’s discounting efforts by talking about Wendy’s roster of bargains, all priced at 99 cents. The line-up has been trimmed down, with such choices as chili, a baked potato and chicken nuggets shifted off that section of the menu and repriced at $1.19 to $1.39. A new ad campaign spotlights three of the remaining value lures, including a double burger.
That re-engineering has lowered the percentage of sales generated by the value menu to 15%, compared with 20% a year earlier. Smith called that mix “more in line with our peers.”
Smith suggested that Wendy’s margins might be helped by a plan to launch a purchasing co-op later this year.
Meanwhile, he revealed, the burger specialist will try to underscore its premium position by upgrading its sandwich buns, adding new premium chicken items, and developing a signature hamburger that commemorates the concept's 40th anniversary.
Tuesday, March 3, 2009
Monday, March 2, 2009
Is CSR the industry's next big issue?
Welcome to the new frontier for the restaurant industry, and its big players in particular. Of course you’d never know that from the turnout of foodservice concerns at this first-of-a-kind meeting, a conference on corporate social responsibility. Representation from the trade amounts to two companies: McDonald’s and Sodexo, the giant contract catering concern. And Sodexho was thwarted from attending today’s event, where I’m writing this, by the snowstorm that hit New York City.
Full disclosure: I was only there because my wife works on conferences for the Financial Times, the event’s presenter. Indeed, I kept stumbling over the topic. Corporate what? Isn’t that the same as being green? And how much social investing is actually being done? It can’t be a big deal, right? And if it is such a major emerging trend, wouldn’t the restaurant industry be aware of it?
My ignorance was promptly corrected, and not for the first time.
Corporate social responsibility, or CSR, is already a familiar term in plenty of other businesses. Not so within foodservice, or at least not yet. Yum! Brands, the parent of Taco Bell and Pizza Hut, generated headlines in the trade media when it issued a CSR report in December, detailing what it’s doing in areas ranging from sustainability to sourcing, transparency in governance, hiring practices, community involvement and fighting obesity.
As usual, McDonald’s is also taking a leadership position on the matter.
Once you get past a handful of forward-thinking concerns, there’s virtually no talk of CSR, just a discussion of two important components, sustainability and workforce diversity. That’s puzzling, given the industry’s pride in being part of the social fabric, a veritable cornerstone of the community and economy.
That inattention could be a problem. As speakers here at the conference repeatedly stressed, more and more investors are now evaluating CSR in deciding what companies get their money. A keener interest is also evident among consumers. Employees, too, especially the generations marching behind the Baby Boomers. Wal-Mart, for instance, now works with its employees to help them identify and pursue a personal sustainability program, a component of the retailing giant’s ambitious CSR effort, as a speaker explained from the podium.
Indeed, CSR seems to be of as much interest within the larger business community as sustainability currently is in foodservice. It’s only a matter of time until restaurant operators realize that CSR isn’t a hit TV series.
“It is not a genie that’s going back in the bottle. It’s part of the new world we’re facing,” said Tim Smith, a senior vice president of Walden Asset Management, a socially responsible investment firm that handles a $1.7 billion portfolio for institutions and wealthy individuals.
One speaker noted that New York City and Florida, among other jurisdictions, now have CSR questions on the forms all fund managers have to fill out when they hope to handle any of the government's institutional funds, like pensions. The forms ask about the managers' social-responsibility investment strategies--what criteria they use to pick the companies whose securities they're willing to buy. If a restaurant concern didn't meet those standards, it's out of consideration.
Because the topic encompasses so much, from sourcing to packaging to board composition, and preoccupies investors as well as staff and patrons, it promises to hit foodservice with a wallop. Part of the impact, I fear, will be sheer surprise.
Fortunately for the business, much of the content at the conference dealt with the fundamentals of CSR—sourcing with social responsibility in mind, what socially responsible investors look for, how CSR can be pushed forward, what coalitions should be formed, and what all stakeholders could do to promote social consciousness in business. Much of the content dealt with sustainability, an aspect familiar to restaurants.
But the conference left no doubt that more and more restaurant companies will be forced by the attention of Wall Street and Main Street to make CSR a part of their vocabularies.
“It not something that’s nice to have. It’s not a new philanthropy. It’s not something that falls by the wayside when times get tough,” remarked an executive of Merck & Co., the pharmaceutical giant. It’s a new business reality, she stressed.
Full disclosure: I was only there because my wife works on conferences for the Financial Times, the event’s presenter. Indeed, I kept stumbling over the topic. Corporate what? Isn’t that the same as being green? And how much social investing is actually being done? It can’t be a big deal, right? And if it is such a major emerging trend, wouldn’t the restaurant industry be aware of it?
My ignorance was promptly corrected, and not for the first time.
Corporate social responsibility, or CSR, is already a familiar term in plenty of other businesses. Not so within foodservice, or at least not yet. Yum! Brands, the parent of Taco Bell and Pizza Hut, generated headlines in the trade media when it issued a CSR report in December, detailing what it’s doing in areas ranging from sustainability to sourcing, transparency in governance, hiring practices, community involvement and fighting obesity.
As usual, McDonald’s is also taking a leadership position on the matter.
Once you get past a handful of forward-thinking concerns, there’s virtually no talk of CSR, just a discussion of two important components, sustainability and workforce diversity. That’s puzzling, given the industry’s pride in being part of the social fabric, a veritable cornerstone of the community and economy.
That inattention could be a problem. As speakers here at the conference repeatedly stressed, more and more investors are now evaluating CSR in deciding what companies get their money. A keener interest is also evident among consumers. Employees, too, especially the generations marching behind the Baby Boomers. Wal-Mart, for instance, now works with its employees to help them identify and pursue a personal sustainability program, a component of the retailing giant’s ambitious CSR effort, as a speaker explained from the podium.
Indeed, CSR seems to be of as much interest within the larger business community as sustainability currently is in foodservice. It’s only a matter of time until restaurant operators realize that CSR isn’t a hit TV series.
“It is not a genie that’s going back in the bottle. It’s part of the new world we’re facing,” said Tim Smith, a senior vice president of Walden Asset Management, a socially responsible investment firm that handles a $1.7 billion portfolio for institutions and wealthy individuals.
One speaker noted that New York City and Florida, among other jurisdictions, now have CSR questions on the forms all fund managers have to fill out when they hope to handle any of the government's institutional funds, like pensions. The forms ask about the managers' social-responsibility investment strategies--what criteria they use to pick the companies whose securities they're willing to buy. If a restaurant concern didn't meet those standards, it's out of consideration.
Because the topic encompasses so much, from sourcing to packaging to board composition, and preoccupies investors as well as staff and patrons, it promises to hit foodservice with a wallop. Part of the impact, I fear, will be sheer surprise.
Fortunately for the business, much of the content at the conference dealt with the fundamentals of CSR—sourcing with social responsibility in mind, what socially responsible investors look for, how CSR can be pushed forward, what coalitions should be formed, and what all stakeholders could do to promote social consciousness in business. Much of the content dealt with sustainability, an aspect familiar to restaurants.
But the conference left no doubt that more and more restaurant companies will be forced by the attention of Wall Street and Main Street to make CSR a part of their vocabularies.
“It not something that’s nice to have. It’s not a new philanthropy. It’s not something that falls by the wayside when times get tough,” remarked an executive of Merck & Co., the pharmaceutical giant. It’s a new business reality, she stressed.
Sunday, March 1, 2009
Caffeine capers on the rise?
It’s a weekday morning and you’re waiting for your chai latte with the other sleepy Starbucks customers crowding around the pick-up counter. Finally, the barista shouts, “John, chai latte.” A fellow a few yards over utters a “Right here!” and picks up the drink. A coincidence, sure, but not exactly one for Ripley’s.
So you wait and wait. Finally, you approach someone behind the counter. The drink was served up long ago, they explain. Someone else took it. And there’s not another chai latte for John on order.
That sequence of events has been happening frequently enough to prompt Starbucks outlets at the University of Tennessee to start checking a customer's receipt before handing over a drink, according to a website run by the school’s journalism program.
Given the economy, does anyone doubt it’s a mild scam that’ll soon be on the rise?
So you wait and wait. Finally, you approach someone behind the counter. The drink was served up long ago, they explain. Someone else took it. And there’s not another chai latte for John on order.
That sequence of events has been happening frequently enough to prompt Starbucks outlets at the University of Tennessee to start checking a customer's receipt before handing over a drink, according to a website run by the school’s journalism program.
Given the economy, does anyone doubt it’s a mild scam that’ll soon be on the rise?
California about to ban plastifoam?
California is "on the verge" of passing a statewide ban on Styrofoam, Michael Oshman, executive director of the Green Restaurant Association, told a thinly populated room of restaurateurs at the New York restaurant show.
Oshman also warned that legislation discouraging or banning the use of plastic bags is sweeping the nation.
Oshman was addressing why restaurateurs should consider making their operations and menus more environmentally friendly. One of the advantages of acting now, he stressed, was looking like a forward-thinker before green measures are mandated by law. "It's going to happen anyway. Why not look like a hero?" he said.
And rest assure, he addedr, green "legislation is going to shoot up even more than it has already."
Oshman noted that a number of municipalities in California have already banned plastifoam. They include several cities in the Bay Area. The next step would be rolling the ban across the state, and asserted the state government is already close to doing so.
Oshman also warned that legislation discouraging or banning the use of plastic bags is sweeping the nation.
Oshman was addressing why restaurateurs should consider making their operations and menus more environmentally friendly. One of the advantages of acting now, he stressed, was looking like a forward-thinker before green measures are mandated by law. "It's going to happen anyway. Why not look like a hero?" he said.
And rest assure, he addedr, green "legislation is going to shoot up even more than it has already."
Oshman noted that a number of municipalities in California have already banned plastifoam. They include several cities in the Bay Area. The next step would be rolling the ban across the state, and asserted the state government is already close to doing so.
Industry lobbyists look to walk a fine line
The restaurant industry will have to be careful as it contends with a legislative threat that arose last week on Capitol Hill. A provision introduced in the Senate would prohibit the 421 financial institutions receiving federal bailout assistance from holding parties, celebratory dinners or other entertainment-type events, according to Michael Kaufman, the current chairman of the National Restaurant Association.
“Think of the effects of that bill on the hospitality industry,” Kaufman said during a presentation at the New York restaurant show this afternoon in New York City.
Kaufman cited the initiative as an example of the legislative proposals the Association regularly monitors and attempts to temper or defeat.
Good luck this time around. Lynch mobs probably formed after word leaked out of lavish parties being held by some of the banks that received billions in aid from the U.S. Treasury Department. The NRA will have to move delicately as it tries to preserve a lucrative source of event business for restaurants. Otherwise, it’ll look as if the industry is an enabler for the banks’ lavish shenanigans.
During his presentation, Kaufman also revealed the NRA is in the later stages of developing a new healthcare insurance program for the industry. He noted that the Association’s current chief, Dawn Sweeney, joined the group about a year ago after helping AARP develop a breakthrough healthcare program for its members. That acumen, he suggested, is being applied to the industry’s longstanding quest for affordable insurance for the rank-and-file.
An NRA director in attendance said he believes the program under development could cut the healthcare bill for him and his wife by more than $3,000.
“Think of the effects of that bill on the hospitality industry,” Kaufman said during a presentation at the New York restaurant show this afternoon in New York City.
Kaufman cited the initiative as an example of the legislative proposals the Association regularly monitors and attempts to temper or defeat.
Good luck this time around. Lynch mobs probably formed after word leaked out of lavish parties being held by some of the banks that received billions in aid from the U.S. Treasury Department. The NRA will have to move delicately as it tries to preserve a lucrative source of event business for restaurants. Otherwise, it’ll look as if the industry is an enabler for the banks’ lavish shenanigans.
During his presentation, Kaufman also revealed the NRA is in the later stages of developing a new healthcare insurance program for the industry. He noted that the Association’s current chief, Dawn Sweeney, joined the group about a year ago after helping AARP develop a breakthrough healthcare program for its members. That acumen, he suggested, is being applied to the industry’s longstanding quest for affordable insurance for the rank-and-file.
An NRA director in attendance said he believes the program under development could cut the healthcare bill for him and his wife by more than $3,000.
What the Millenials are eating
Chef Robert Harbison, executive chef of Princeton University, provided a rundown during the New York show of Gen Y-ers’s dining preferences, as indicated by what his 7,000 customer-students want or don’t want to eat. Here are what he identified as the new favorites of that younger generation, along with a few comments:
--“The biggest trend right now? Authentic Indian cuisine is huge. It is taken off to the point where we’re having a hard time in keeping up.”
--“Flatbreads are the new pizzas. What’s good about it? It’s a very inexpensive product, much less expensive than a dough ball. My margins are great. You can’t put a lot of stuff on there because it has to cook fast. You put a little bit of stuff, with intense flavors.”
--Authentic street foods are big, he said, citing crepes in particular. The students went crazy when he tried them, Harbison recounted. “There again, the margins are great.”
--Noodle bars, despite the execution challenges.
--Sliders. “I do a lot of slider desserts. I’ll do a strawberry shortcake slider. A gelato ice-cream sandwich. I can get a pretty good dollar for these, and they cost us nothing.”
“We don’t use ‘tiny’ or ‘small,’ we use ‘flights,’ or ‘tapas.’ Or ‘sliders.’ We want to say this is something different,” not something that’s been trimmed or skimped down.
--“Functional food is hot right now, and will continue to be hot. But we’ll be looking at the origins of these foods. They’ll prefer to take foods with natural characteristics instead of artificial ones.”
--Aromatic herbs, not reductions, sauces and other flavor maskers.
--“They’re buying coffee at a younger age. It’s amazing to see someone who’s 12-years-old buying a mocciatta.”
“Why is this happening? They’re not drinking as much alcohol. Cigarettes aren’t as cool as they were for us, and they need their stimulants.”
-- “Wrapped over all of this, and I can’t stress this enough, is sustainability. We’re using local cheeses, local breads, using organic deli meats.”
He also provided a few heads-up about what the so-called Millenials don’t like:
--“Genetically modified organisms—that is a huge topic. It’s going to be a mess. That is a big can of worms. These kids today are pretty freaked out by it.”
--Reductions. “Kids don’t know what a reduction is.” If you have a good flavor in the basic ingredients, like the chicken you’re using, a sauce isn’t needed, he explained. The students are accustomed to those clean yet pronounced tastes.
--“The biggest trend right now? Authentic Indian cuisine is huge. It is taken off to the point where we’re having a hard time in keeping up.”
--“Flatbreads are the new pizzas. What’s good about it? It’s a very inexpensive product, much less expensive than a dough ball. My margins are great. You can’t put a lot of stuff on there because it has to cook fast. You put a little bit of stuff, with intense flavors.”
--Authentic street foods are big, he said, citing crepes in particular. The students went crazy when he tried them, Harbison recounted. “There again, the margins are great.”
--Noodle bars, despite the execution challenges.
--Sliders. “I do a lot of slider desserts. I’ll do a strawberry shortcake slider. A gelato ice-cream sandwich. I can get a pretty good dollar for these, and they cost us nothing.”
“We don’t use ‘tiny’ or ‘small,’ we use ‘flights,’ or ‘tapas.’ Or ‘sliders.’ We want to say this is something different,” not something that’s been trimmed or skimped down.
--“Functional food is hot right now, and will continue to be hot. But we’ll be looking at the origins of these foods. They’ll prefer to take foods with natural characteristics instead of artificial ones.”
--Aromatic herbs, not reductions, sauces and other flavor maskers.
--“They’re buying coffee at a younger age. It’s amazing to see someone who’s 12-years-old buying a mocciatta.”
“Why is this happening? They’re not drinking as much alcohol. Cigarettes aren’t as cool as they were for us, and they need their stimulants.”
-- “Wrapped over all of this, and I can’t stress this enough, is sustainability. We’re using local cheeses, local breads, using organic deli meats.”
He also provided a few heads-up about what the so-called Millenials don’t like:
--“Genetically modified organisms—that is a huge topic. It’s going to be a mess. That is a big can of worms. These kids today are pretty freaked out by it.”
--Reductions. “Kids don’t know what a reduction is.” If you have a good flavor in the basic ingredients, like the chicken you’re using, a sauce isn’t needed, he explained. The students are accustomed to those clean yet pronounced tastes.
Encouraging signs from the NY restaurant show
Today I’m attending the International Restaurant & Foodservice Show of New York, a regional gathering that has managed to draw bodies despite a dramatic drop-off in traffic at most industry meetings of recent years. Especially hard-hit have been the big national conferences, with local events like this one picking up some of the fall-out.
This year doesn’t appear to be an exception, despite the economic climate. The first educational session I attended, on the menu preferences of the so-called Millenial Generation, had a turnout that would be good in the best of times. We’re talking 11:30 on a cold, snowy Sunday. Yet there had to be at least 40 people there.
The same pleasant surprise was served up on the show floor. There was actually a back-up at the entry points as attendees tried to thread their way into the exhibit area. At midday, I couldn’t get down some aisles.
But that didn’t mean all booths were busy. Indeed, there were glimmers of a pattern. Artisan products like cheeses or desserts seemed to be drawing interest, whereas the booths of some well-known industry brands seemed to have far less traffic. New products, like micro-greens, had a throng. Not so some of the old familiar sorts of products.
Interestingly, the first session this morning was on the eating habits of Gen Y-ers. The hottest trend within that crop of tomorrow’s customers, according to presenter-slash-Princeton Executive chef Robert Harbison, is authentic Indian cuisine.
I wasn’t exactly tripping over booths hawking those sorts of products on the show floor.
This year doesn’t appear to be an exception, despite the economic climate. The first educational session I attended, on the menu preferences of the so-called Millenial Generation, had a turnout that would be good in the best of times. We’re talking 11:30 on a cold, snowy Sunday. Yet there had to be at least 40 people there.
The same pleasant surprise was served up on the show floor. There was actually a back-up at the entry points as attendees tried to thread their way into the exhibit area. At midday, I couldn’t get down some aisles.
But that didn’t mean all booths were busy. Indeed, there were glimmers of a pattern. Artisan products like cheeses or desserts seemed to be drawing interest, whereas the booths of some well-known industry brands seemed to have far less traffic. New products, like micro-greens, had a throng. Not so some of the old familiar sorts of products.
Interestingly, the first session this morning was on the eating habits of Gen Y-ers. The hottest trend within that crop of tomorrow’s customers, according to presenter-slash-Princeton Executive chef Robert Harbison, is authentic Indian cuisine.
I wasn’t exactly tripping over booths hawking those sorts of products on the show floor.
Subscribe to:
Posts (Atom)
Posts
