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Global Food Prices Hit Six-Year High
Global food prices are the highest they've been in six
years, with the price of agricultural commodities traded on the global stage
rising 50% since the middle of 2020, according to economists at Rabobank.
Additionally, global food demand is projected to rise
anywhere between 59% to 98% by 2050 and food prices are soaring faster than
inflation and incomes.
With food prices surging, here's a look at the factors at
Import Demand is Up
As countries seek to build up their domestic stocks of
commodities such as wheat, corn, and soybeans, import demand is rising,
reported Australian Broadcasting Corporation (March 10). Full
The highest among that group is China, whose economy is
Major exporters are also holding stocks back. For example,
Russia introduced export taxes on wheat and Argentina placed quotas on corn
exports. Some publicly listed food companies are also increasing the amount of
stock they hold in warehouses to avoid COVID-related disruptions.
In wealthier countries, governments are focusing more on
self-sufficiency than price controls, reported Bloomberg (Feb. 28). Full
France is planning to boost output of high-protein crops to
cut reliance on soybean imports, while Singapore became the first country to
approve sales of lab-grown meat as it pushes to boost domestic food capacity.
Pressure from Market Speculators
According to Rabobank senior commodity analyst Charles
Clack, market speculators are playing a role in the upward trend.
"While more fundamental things like weather and demand are
the trigger for prices rising, it's without doubt speculation by non-commercial
players in the market that exaggerate the move," he said in the Australian
Broadcasting Company report.
Other factors playing a role in rising food prices include:
weakening U.S. currency
shortage of truck drivers and shipping containers
rising price of oil
Additionally, low interest rates are drawing money away
from government bonds and into commodity markets as they look for higher
Plant-based Meat Trend Continues to Grow Among
Major Industry Players
Plant-based companies are finding a home in fast food, as
demand for meat-free options grows among consumers.
About one-third of consumers said their consumption of
various meat alternatives has increased over the past year, according to a
Datassential survey conducted in January. The figures are similar for those who
say they plan to increase their consumption of plant-based meat alternatives in
the coming year, reported SmartBrief (Feb. 4). Full
Beyond Meat Strikes Deals with Fast Food
Beyond Meat recently signed
partnerships with fast-food giants McDonald's and Yum
Brands, as noted in a report by CNBC (Feb. 25). Full
Under the agreements Beyond will be the preferred patty
supplier for the McPlant burger and work with McDonald's to develop new
substitutes for pork, chicken, and egg.
The company will also work with Yum to make exclusive menu
items for KFC, Taco Bell and Pizza
Financial terms for both partnerships were not disclosed. However, Beyond Meat
CEO Ethan Brown told analysts that the impact of the deals in 2021 is expected
to be "fairly modest."
"These deals are enormous," Brown told CNBC. "They
are the biggest deals you could possibly put together in food in our sector.
And we don't want people to get ahead of themselves."
Brown also noted the company will release two updated
versions of its meatless patties this spring, claiming them to be its "juiciest
burgers yet." One will have 55% less saturated fat than a traditional 80/20
beef patty, while the other will contain 35% less, which is consistent with its
Meanwhile, the company said fiscal fourth-quarter net sales
rose 3.5% to $101.9 million, missing average analyst forecasts of $103.2
Good Catch Bring Plant-based Fish to Bareburger
makers of Good Catch plant-based seafood,
announced a foodservice partnership with Bareburger, an organic and
clean-comfort food restaurant. For a limited time, Bareburger will
add two new fish-free burgers to the menu featuring Good Catch's Plant-Based
Classic Fish Burger. Full
The partnership marks Good Catch's first foodservice
partnership for its produce, which is part of its existing line of frozen
appetizers and entrees. The partnership comes at a time when consumers are
becoming more open to plant-based seafood.
A majority, 59%, of frequent seafood consumers say they are
likely to try plant-based seafood analogs, according to the Power of Seafood
2021 report from FMI. The report also noted a high
correlation of interest in plant-based fish and nutritious eating, while
sustainability also has a major impact with 62% of consumers naming it the top
factor in their decision to try plant-based foods. Food Institute Focus
Viability of Virtual Restaurant Brands
On February 18, DMA, in
conjunction with the Food Institute, hosted a webinar that examined the recent
explosion of ghost kitchens and virtual brands. The event, which featured
executives from Denny's, Kitchen United, and Lettuce Entertain
You, also reviewed the prospects for virtual brands and tips for restaurant
operators interested in launching such programs.
After all, delivery-centric
concepts are popping up with minimal initial capital investment, such as Mr.
Beast Burger, which launched in December with over 300 locations. According to Chowly,
as of August 2020 there were approximately 100,000 virtual concepts on third-party
"I think what [operators]
like about virtual brands is it's cheap to test," noted Joy Lai, the COO of
Kitchen United, which aids restaurant brands in off-premises dining. "So, they
can turn something on, see if the consumers like it, get the feedback, and
tweak where needed."
A Closer Look at
Virtual restaurant brands –
brands that have a full menu, but don't exist in their own space and typically
share kitchens with other businesses – have been well-received by customers due
to third-party delivery options and the variety of food available from ghost
kitchens. Denny's CEO John Miller said younger generations are especially
receptive of delivery-centric virtual brands like his company's new Burger
Virtual brands aren't without
logistical hurdles, though. They require a thorough understanding of a
restaurant's trade area and demand, panelists said.
"Another very important
element is: can you achieve that level of consistency frequently, as you get
busier and busier," said Scott Barton, partner with Lettuce Entertain You, a
company behind dozens of restaurant brands. "It takes a little time to work
through, especially when you're rolling out a new concept."
Keys to Virtual
Panelists offered the
following tips to help ensure the successful launch of a virtual restaurant
Be straightforward with your brand name by
including your main product in it (example: Mr. Beast Burger)
Be clear and descriptive with menu items
Use social media for marketing
The speakers also addressed
skepticism about the long-term prospects for virtual restaurant brands,
acknowledging that some industry peers feel the concept's popularity will
dissipate as the pandemic fades. Lai acknowledged that many consumers will
eagerly return to brick-and-mortar restaurants once indoor dining restrictions
"I think some of those
brands may go away. You would expect that with the brand-development cycle,"
That said, she still sees
growth opportunities for many virtual brands.
"For a lot of our existing
brands, when they have a primary brand where they have a brick-and-mortar store
as well, when they launch a secondary, virtual brand, we've seen it bump their
revenues anywhere from 30 to 50 percent," Lai noted. "For smaller operators...maybe a good [virtual] brand is doing $5,000 a week. And, when you compound
that with three or four brands, you get meaningful revenue." Food Institute Focus
Executives on the Move:
The Great Greek
named Nick Della Penna brand president. Full Story
Subway appointed Steve Rafferty SVP of
development. Full Story
Oneida Hospitality Group named Scott McDaniel CEO. Full Story
IHOP named Kieran Donahue chief
marketing officer. Full
BurgerFi appointed Jim Esposito as
Meanwhile, BurgerFi named Michael Rabinovitch as CFO. Full
Little Caesar's named
Paula Vissing as COO. Full
Twin Peaks named Glenn Moon VP of
franchise development and John Brisco VP of international franchise
WaBa Grill named Andrew Kim
president and CEO. Full
Wendy's announced Beverly Stallings-Johnson as chief
diversity, equity & inclusion officer. Full Story
Burger King appointed Tom Curtis
as COO. Full
lower prices will give it an edge in the chicken-sandwich wars. McDonald's new
Crispy Chicken Sandwich will slightly undercut its main rivals, with a price as
low as $3,49 at some locations – and that strategy could help boost same-store
sales by as much as 4%, reported CNBC (Feb. 12). Full Story
Meanwhile, McDonald's said
it is tying 15% of executives' bonuses to meeting targets including diversity
and inclusion and began disclosing data on the racial makeup of its workforce,
major steps by one of the largest U.S. companies to better reflect the
population, reported Bloomberg (Feb. 18).Full Story
Chipotle Mexican Grill said
that executive compensation will now be linked to hitting targets tied to the
company's environmental and diversity goals, reported CNBC (March 4). Full
Taco Bell will test a crispy chicken sandwich taco starting March 11. The
test, to be conducted in the Nashville and Charlotte markets, will feature
all-white-meat crispy chicken marinated in jalapeno buttermilk, seasoned with
Mexican spices and rolled in a crunchy tortilla chip coating, reported Forbes
(Feb. 22). Full Story
Texas Roadhouse plans to
franchise its fast-casual concept, Jaggers. There are currently just
three Jaggers locations in the U.S., but its parent company has plans to open
several more in 2022, reported Restaurant Business (Feb.
19). Full Story
consolidating its menu. The chicken chain will remove bagels and decaf coffee
from its menu this spring and downsize portions of items like kids chicken
nugget meals, milkshakes, and ice cream cones, reported Delish (Feb.
22). Full Story
Seventy Midwest Jack in the
Box locations are going bankrupt. While the burger chain recently
posted its highest sales in nearly three decades, Missouri Jack, a franchisee
in Missouri and Illinois, has filed for bankruptcy on account of its
significant debt, reported Eat This, Not That (Feb. 22). Full
Virtual brand MrBeast
Burger has sold one million sandwiches after barely two months in
business. The delivery-only add-on for established kitchens debuted Dec.
19 by YouTuber MrBeast, who has nearly 54 million subscribers, reported tubefilter
(Feb. 22). Full Story
California ordered Burgerim to
pay nearly $4 million in fines and refund franchise fees to more than 1,500
people after finding that the company violated several state franchise
regulations, reported Restaurant Business (Feb. 23). Full Story
Meanwhile, Burgerim is preparing to offer franchisees the
ability to opt out of their franchise agreement as well as a settlement to pay
operators refunds over time to comply with a recent order from the state of
California, a company official told operators. But franchisees shouldn't expect
much. Greg Becker, a franchisee who said he was hired to run the chain's
day-to-day operations last year, told franchisees that there are no assets to
pay $50 million or more in refunded franchise fees, reported Restaurant Business (March 5). Full Story
Recent winter storms haveimpacted
Cracker Barrel'ssales after anarctic cold snap forced
the restaurant chain to close 126 of its locations across the U.S. South,
reported Restaurant Business (Feb. 23). Full Story
TravelCenters of America plans
to sell the Quaker Steak & Lube chain for about $5 million after
deciding the brand doesn't fit within its long-term strategy, reported CS
News (Feb. 26). Full
Freddy's Frozen Custard has been
sold to private equity firm Thompson Street Capital Partners. The
fast-casual, Kansas-based burger chain has grown to nearly 400 locations in
more than 30 states, reported Restaurant Business (March 3).Full Story
Popeyes announced new food
quality commitments for the next five years as part of the Restaurant
Brands for Good sustainability plan. The commitments are part of the brand's
work to serve responsibly sourced, high quality food while continuously working
to reduce its environmental footprint. Full
Mountain Mike's will
open 30 stores in Utah over the next decade. Full
Another Broken Egg will
open 10 locations throughout Ohio. Full
Ruby Tuesday emerged from Chapter 11
bankruptcy after shedding liabilities, including leases from closed locations
significantly impacted by the pandemic. Full
Zaxby's is joining the chicken
sandwich wars with the national rollout of its signature sandwich. The chicken
sandwich will be available at all 909 locations across the brand's 17-state
footprint after launching in test markets in October 2020. Full
IHOP plans to
launch a new restaurant brand this year. The new grab-and-go breakfast
concept, called Flip'd, will roll out in urban areas after the pandemic
delayed its previously planned Atlanta launch, reported Eat This, Not
That (March 3). Full Story
Golden Corral is
testing drive-thrus and other changes as it reinvents operations during the
pandemic. The buffet chain is also testing a la carte menus and a virtual
concept specializing in comfort foods, reported Restaurant Business (Feb.
24). Full Story
The Melting Pot is looking to expand into Alabama, Louisiana, Mississippi,
Tennessee, and Texas, with 17 restaurants in development. The company currently
has 97 locations in 31 states, reported AL.com (March 10). Full Story
Hoots Wings will open 60 locations
in the Dallas-Fort Worth Metroplex and Austin, Texas markets. Full
sweetgreen committed to becoming carbon neutral by
2027. Full Story
Quizno's is rolling out a new brand
identity that includes new store designs and menu categories. Full
Culver's has named Rick Silva its new CEO, reported Restaurant
Business (Feb. 25). Full Story
Decadent Coffee, Cakes, Dessert Bar will
open 15 locations in Florida and southern Georgia.Full
Triple O's will open 30
restaurants in Ontario, Canada over the next five years. Full
Steak n Shake will open 12
restaurants by end of the first quarter of 2021. Full
MOOYAH Burgers, Fries, & Shakes is
scouting locations and plans to open its first two to three drive-thru
locations this year. Full
Panda Express is testing a new
off-premises-focused fulfillment location for app and online orders in San Francisco. Full
SUPPLY CHAIN NEWS
No Safe Harbor: West Coast Port Backups
Impacting Food Trade
Imports and exports may be slowing at West Coast ports, but
that's not due to a lack of demand: logjams are complicating efforts by U.S.
agricultural companies looking to export their products. Meanwhile, retailers
are reporting shortages of key food items as container ships vie for access to
the nation's ports.
Washington State Farm Exports Stuck
Before the pandemic, Wenatchee, Washington-based tree fruit
exporter Stemilt Growers would typically ship 15 containers of fruit per
week to Taiwan. In a recent week, the company shipped exactly zero, according
to export sales manager Dave Martin, reported CBS News (March 10). Full
Shipping companies are finding it more profitable to ship
empty containers back to Asia quickly rather than filling them up with U.S.
agricultural goods. This rapid movement is helping to sate import demand
stemming from increased online spending in the U.S. since the start of the
"My biggest worry is that suddenly what seemed like a blip
in exports and a temporary problem becomes, well, now China is going elsewhere
for their apples and their cherries and their hay," said state Rep. Kim
Schrier, who wants the government to address the increasing number of empty
shipping containers leaving the country.
Disruptions Across the Country
While Midwest agricultural producers sounded the alarm
months ago, the entire West Coast seemed to slow down more recently, according
to Tom Greene, president of Bainbridge Island, Washington-based Interpack
Northwest Frozen Foods.
Greene, who also worked with shipper K-Line earlier
in his career, noted these disruptions rippled throughout the food industry,
with processors, importers, exporters, and growers working on uncertain
timelines as ships wait to reach ports. He argued it was more profitable for
the cargo companies to ship the empty containers right back to China than to
pay to ship the containers out to the Midwest for lower-cost agricultural
Greene said his company first noticed the issue when
imports of pineapples were delayed. However, now the issue is affecting exports
of frozen fruit products, too. He said imports of frozen apple juice
concentrate, dark sweet cherries, pear juice, and more were incredibly
difficult to source.
"It started as an issue with inbound containers, but now we
are having an issue sending them out. We're having trouble getting export
containers, even for our highest-revenue products," he said.
Demand from China on the Rise
Demand for U.S. agricultural products remains strong,
particularly in China, which is reviving its relationship with the U.S.
following a three-year trade war. The country is working to import U.S. grains
to feed its rebounding hog herd, which was impacted by outbreaks of African
swine fever in recent years.
Despite the country's plans to increase domestic pork
production, USDA expected China's pork production to remain below
pre-ASF levels, indicating a stronger market for imports in 2021. Pork imports
are expected to reach 4.5 million-lbs. during the year.
Sourcing of Imported Products an Issue
Costco is one retailer reporting
issues stemming from the congestion at the ports, saying it is having
difficulty stocking imported cheeses due to the bottlenecks, reported AZ
Central (March 10). Full
Additionally, the retailer said it was having difficulty
sourcing imported seafood and olive oil, alongside other non-food items. CFO
Richard Galanti said port delays and container shortages remained an issue,
causing timing delays for specific import categories.
"We expect these pressures to ease in the coming months,
but it's impacting everyone, of course," Galanti said. Food Institute Focus
Severe weather in many parts of the country in February
hampered the softening of customer transaction declines at major U.S.
restaurant chains reported in the last few months of 2020 and this January,
according to The NPD Group. Major restaurant chain customer transactions
declined by 13% versus year ago, compared to a 9% decline in January. Full
Jack in the Box reported a same-store sales
increase of 13% in its quarter ended Jan. 17, compared with 1.7% in the prior
year. The company said operating costs and expenses increased 5% from the prior
year to $249.6 million, reported MarketWatch (Feb. 17). Full Story
Wingstop saw record growth in
2020, reporting systemwide sales growth of 28.8%. The chicken wing brand saw
same-store sales climb 21.4% for the year, and the chain had 153 net new store
openings – a unit count bump of 11%, reported Restaurant Business (Feb.
17). Full Story
Papa John's reported global same-store sales jumped 15.5% in its fiscal
fourth quarter, while North American same-store sales jumped 13.5%. The company
cited higher food costs, a new corporate office, and employee bonuses as
headwinds that weighed on profits, reported CNBC (Feb. 25). Full Story
Domino's Pizza said global retail sales rose 21.7% in the fourth quarter and U.S.
same store sales increased 11.2%. Full Story
Datassential Takes the Guesswork Out of Menu Innovation
If the success of Wendy’s nationwide breakfast roll out in the midst of a worldwide pandemic is any indicator, menu innovation matters more than ever. Considering the disruption to morning school and work routines, this growth is a testament to the love consumers have for restaurants and the draw of new items.
Developing the ‘next big thing’ is an art that can be optimized by data. SCORES, Datassential’s menu concept testing platform, can simplify your innovation process. Quickly screen concepts with a sample of 1,000 consumers to understand key performance indicators like purchase intent and uniqueness. We are pleased to offer a special DMA Partner Rate for testing.
Coming Soon! Tork Odor Control Soap: A
Gamechanger for the Food Service Industry Working
with food brings unique challenges such as the need to manage food-related
odors. Ordinary washroom soaps don't adequately meet the specific needs of the
kitchen. The new Tork Odor-Control Handwashing Liquid Soap is anything but
ordinary! The new liquid soap has been specially developed for professional
kitchens to help control odors on hands that have touched foods with strong
scents like garlic and fish. This latest Tork innovation also helps remove food
fats from hands and is suitable for frequent use. It's also available in manual
or touch-free dispensing! Contact your Essity representative to learn how to
broaden your skincare assortment!
Takeout Packaging Matters to Customers
Did you know 84% of consumers consider packaging when making meal decisions?
The right packaging:
Against Cross Contamination
Work with R3 Redistribution to find the solution that's
right for you. Visit www.R3Redistribution.comor
read this brochure to learn more.
An Obsession with Flavor Since 1941 Ken's
is a family-owned, flavor-obsessed company founded in 1941. What began as a
single, family recipe has grown into an unbeatable lineup of hundreds of
delicious dressings and sauces, in every pack size and shape imaginable.
Including #1 Sweet Baby Ray's barbecue and wing sauces, and Kogi L.A. Street
Ken's has full-scale production facilities strategically
located in Massachusetts, Georgia, Nevada and Indiana. So, we can deliver
flavor to your doorstep in no time flat.
Decadent Desserts Available from General Mills General
Mills launched individually-wrapped triple-layer dessert bars and single-serve
brownies under its Pillsbury brand. Check out the brochures for each
product, visit generalmillscf.com, or call 1-800-243-5687 to learn more.
For regional chains looking to grow quickly and selectively across the US, DMA Offers the one national network that can be customized specifically to your needs to serve your long term expansion plans.