Labor shortages have slowed the post-pandemic
foodservice renaissance. Restaurants ranging from fine dining to quick serve
are looking at approaches to combat the dearth of workers.
DMA brought together four industry leaders to
discuss strategies for recruiting employees. Panelists included Gail Sharps
Myers of Denny's, Lewis Rudd of Ezell's Famous Chicken and Kelli
Valade of Black Box Intelligence. Gerry Fernandez of the Multicultural
Foodservice & Hospitality Alliance (MFHA) moderated the discussion.
Susannah Sellers-Ryan offered the supplier perspective from PepsiCo's Dig
In program to partner with Black restaurant owners.
Black Box's Valade opened with observations about
the current state of the industry. She said that customers know that
restaurants are short-staffed but they don't care. "People expect to be treated
well now that they are back. They are not forgiving," she said. Valade shared a
quote from Brene Brown, "Everyone wants to know why customer service has gone
to hell in a handbasket. I want to know why customer behavior has gone to hell
in a handbasket."
The main drivers keeping employees away are:
57%: Higher pay through
20%: Better quality of
life in other industries
14%: Higher pay in other
Hire Them Young
Myers and Rudd addressed the challenges. Both
said that the inability to recruit at the high school level has hurt. Myers
said that many Denny's franchisees had previously created a relationship with
high schools near the restaurants and shared success stories of high school
students who got a job at Denny's and stayed. Rudd said that he has always
visited high schools to share his story of starting as a teenager at a chicken
restaurant in Texas, and now owning 12 stores with 325 employees, including a
location on the Microsoft campus.
Rudd has also spoken at local penitentiaries. He
said, "people change and you need to be open to allowing people an opportunity
to better their lives."
Many Denny's franchisees do on-the-spot hiring,
bringing people in before a background check is completed. They go through two
or three days of training and are given customer-facing jobs after passing the
background check. In program to partner with Black restaurant owners.
Denny's also informs potential employees of its
supplier diversity program, among the most respected in the industry. The theme
is "I belong. You belong. We belong here together."
Fernandez noted that the restaurant industry
"teaches people how to work" and that employees will learn invaluable life
skills. He believes that companies must tell their stories more effectively
through social media, even assigning somebody as an "Instagram captain." All
agreed that grass roots efforts are the way to overcome the labor shortage. Food Institute Focus
DMA Welcomes Quorn Foods as a Partner Brand
DMA (Distribution Market Advantage) is pleased to announce the addition of Quorn Foods to its family of partner brands. Quorn Foods is a leading nationally-branded marketer of meatless proteins with expertise in the area of chicken replacement. Quorn has mastered the perfect taste and texture that foodservice patrons would expect while enjoying meatless wings, meatless sandwiches, and meatless tacos. All non-GMO, soy-free, and low saturated fat.
“We are extremely excited to partner with DMA to provide great-tasting meatless options for their customers and members.” States Rick Guiney, Foodservice Business Manager. “What’s more, our incredible sustainability story leads the industry in making our planet better for the future.”
Ghost Kitchen Expansion Could Create ‘New
Reality' for QSRs
Many fast-food chains, including Chick-fil-A,
Wendy's, and Burger King, continue to expand their ghost kitchen
operations and lean further into the delivery space.
But with dining restrictions easing and restaurant
traffic on rise — why now?
"It's far cheaper and faster to service customers
through virtual or ghost kitchens," Dan Rowe, CEO of Fransmart, told The
Food Institute. "In the context of a third-party facility making food for
lots of different concepts, ghost kitchens specialize in prep and delivery and
most restaurant chains —QSR, fast casual or full serve — don't."
Chick-fil-A is developing a virtual concept
called "Little Blue Menu," which will utilize ghost kitchens to prepare food
for a new chain of delivery-only restaurants, reported Business Insider (May 12).
The concept, tentatively trademarked "Outfox
Wings," will offer wings and roasted chicken, along with other classic menu
items, and is slated to launch in Nashville in late 2021.
Wendy's is utilizing ghost kitchens in a
concentrated effort to expand its global footprint to 8,000 restaurants by
2025. The company plans to take 30% of its 1,200 new locations beyond the
four-wall drive-thru model to penetrate bigger markets and fill gaps between
its traditional restaurants. Virtual unit locations include military bases,
universities, hospitals, and zoos, reported QSR Magazine (May 13).
Burger King is also trialing delivery-only
restaurants in the U.K. For its first location in London, the chain partnered
with commissary kitchen company FoodStars. Customers will be able to order
meals for delivery via third-party service Deliveroo, reported The Spoon(May 17).
Rowe believes that due to the sheer volume of
ghost kitchens — many of which are funded by amateur investors trying to buy
market share — approximately 80% will disappear. "Many of these will fade the
same way most food halls, while a good idea, simply did not match supply and
demand," Rowe said.
Meanwhile, the other 20% will "make a killing and
create a new reality, like Uber or Airbnb," Rowe said. "People are still brand
conscious so [ghost kitchens] will never take the place of traditional brick
and mortar. But a "bricks and clicks" strategy allows for greater penetration
and faster, cheaper access to incremental customer bases."
"My longer-term prediction is that most of those
20% will try to replace as many outside branded concepts in their portfolio
with their own concepts to avoid paying the fees," Rowe said. Food Institute Focus
Can Differentiate Themselves and Grow with Plant-Based Foods
consumers return to restaurants, operators should embrace plant-based foods to
differentiate themselves and boost business in the new world of post-pandemic
A recent DMA
webinar presented by The Food Institute detailed research showing why
foodservice operators should look toward plant-based options, and showcased
products that could be easily adapted to expand menu offerings.
account executive at Datassential, noted that while 69% of U.S.
consumers define themselves as "meat eaters" and just 6% as "vegan," there is
huge opportunity in the "flexitarian" segment (people who will occasionally eat
meat but prefer plant-based products). Currently, 14% of U.S. consumers are
"flexitarian" but that number will increase to 22% in the next three years, she
said that 58% of consumers want to increase their intake of plant-based foods.
Seventy percent cite health reasons and 62% believe plant-based foods are
better for the environment. With that, climate-based food options are beginning
to show up on menus, particularly in fast casual restaurants such as Panera
and Just Salad.
consumer demand, many foodservice operators are giving consumers a choice
between traditional meat and plant-based options. Ruby Tuesday sells the
Sweet Earth Awesome Burger and Rubio's Coastal Grill has an Impossible
Taco Salad. McDonalds is even experimenting with a PLT sandwich.
Corporate Executive Chef Matthew Jordan inspired viewers to develop plant-based
food that will encourage social network sharing while bringing in dollars and
profits. His Sweet Earth Avocado Toast combined avocadoes, Mindful Chicken,
onions and a wealth of tasty ingredients to create a knife-and-fork toast that
would sell for $10 a plate at a fast casual restaurant. His Mindful Chicken
Fried Rice combines napa cabbage, green onions, rice and plant-based chicken to
create an entrée that will please consumers looking for poultry alternatives.
Priyanka Naik created a Crispy Stuffed Poblano large enough to feed a family of
four. She noted that her Indian culinary heritage has always relied on
plant-based foods and that her style of cuisine is being embraced by her Gen Z
foodservice darling is the chicken sandwich with fries. But with all the
innovation surrounding meat alternatives, tomorrow's might be a plant-based
chicken sandwich with a three-bean salad. Food Institute Focus
Panera Bread is the latest restaurant chain to announce a
new design inspired by changes in consumer behavior during the pandemic.
Its new layout looks to transform the soup and sandwich chain into a local
neighborhood bakery — just with a little bit more tech savvy, reported CNBC (May
IHOP will launch its fast-casual spinoff, Flip'd by IHOP,
in July — more than a year after initially planned, reported CNBC (May
Noodles & Company is testing its first ghost
kitchen in Chicago. Full
Little Caesars is looking to award up to 10 new
development agreements across the New Orleans market between now and 2024. Full
Bojangles announced plans to add 40 locations over the next
seven years, including 15 stores in the Orlando, Florida area, reported The
Charlotte Observer (May 4). Full Story
Auntie Anne's has opened its first drive-thru location in Wylie,
Texas, reported Restaurant Business (May 17). Full Story
Delight Restaurant Group acquired 44 Wendy's
stores on Long Island and will build several new locations in that market. Full
SPB Hospitality launched the Ember Smoked BBQ
virtual brand available from Logan's Roadhouse in 19 states. Full
McDonald's is testing automated drive-thru ordering using artificial
intelligence at 10 Chicago locations, reported CNBC (June
2). Full Story
Dickey's Barbecue Pit launched the Big Deal Burger delivery-only brand, which has
45 locations and will add five more this month. Full
Kitchen United signed a licensing deal to launch Camile
Thai, an international ghost kitchen brand, in the U.S. and operate it in
Kitchen United MIX locations. The rollout will begin in Chicago. Full Story
Starbucks is running short in some stores on basics
including cups and coffee syrups, baristas said, as the chain grinds back to
full operations in the wake of the Covid-19 pandemic. Cake pops, cup stoppers
and mocha flavoring are among the items that have run out in places at times,
reported The Wall Street Journal (June 9).Full
Chuck E. Cheese has signed a franchise development agreement with EWAS
Management Solutions to bring Chuck E. Cheese locations to Romania. Full
on the Move:
Church's Chicken / Texas Chicken promoted Russ
Sumrall to SVP international strategic development. Full
Bojangles appointed Byron Chandler chief
development officer and Jose Costa chief growth officer. Full Story
Lamb Weston promoted Bernadette Madarieta to SVP
and CFO to replace the retiring Robert McNutt. Full Story
Blaze Pizza named Johnny Jones SVP of Development. Full
Aramark named Debbie Albert SVP of corporate
communications. Full Story
Beyond Meat named Phil Hardin as CFO, Deanna
Jurgens as chief growth officer, and Margaret Trask as chief people officer. Full
QDOBA appointed Jim Sullivan to chief development
Black Bear Diner named Chad Corrigan VP of
franchise sales and development. Full
Shake Shake appointed Katherine Fogertey CFO. Full Story
Pieology named Bijan Sami chief operations and
information officer. Full
SUPPLY CHAIN NEWS
Effect' Felt Through Industry as Restaurants Ramp Back Up
to normalcy has created problems for restaurants, bars and other venues as demand
outstrips supplies, resulting in shortages of food and other commodities.
with difficulty in finding workers in the wake of massive layoffs earlier in
the pandemic, and you have what experts call the bullwhip effect – companies
that cut back rapidly are finding it difficult to ramp back up.
industry has long suffered from the bullwhip effect, where a plus or
minus 5% change in consumer demand impacts upstream suppliers by as much as 40%
in either direction," Are Traasdahl, CEO of Crisp, told The Food
Institute in an email.
senior vice president and consulting group leader at enVista, noted the
food industry has seen dramatic shifts in the last year and pent-up demand
among consumers now is exploding.
eating out and enjoying the social experience," Rosier said.
difficulties are nothing new. Sanderson Farms Inc., the nation's third
largest poultry producer, said May 19 before the BMO Capital Markets
Farm to Market Conference it was trying to find a way of increasing production
without raising costs.
many food distributors are grappling with labor shortages amid supply
constraints and increasing freight costs, reported The Wall Street Journal (May 7).
Walmart threatened suppliers last fall with
a 3% penalty for failing to supply 98% of orders on time, the Journal
reported. Sysco took a similar stance.
chief executive of the International Foodservice Distributors Association,
told the Journal(May 21) part of the problem is suppliers shifted much
of their operations toward groceries to meet pandemic demands and now shifting
focus to institutional foodservice and restaurants is proving difficult.
Edwards, director of opportunity, planning and development at We Pack, told The
Food Institute he's not optimistic about a quick turnaround, saying:
the options are fairly limited for a quick recovery for those operations that scaled
back. Companies that decided to put their world on pause may very well be left
with few ways to restart their supply chains."
Some of the
strain could be alleviated, in part, with better data collection and analysis,
experts told The Food Institute.
cause of the bullwhip effect is a lack of accurate information sharing across
the food supply chain. By adopting a new approach, called programmatic
commerce, food manufacturers and retailers can use real-time data to stay ahead
of rapidly evolving consumer behavior, identify potential supply chain
disruptions, predict store and online traffic, track inventory and product
performance, understand store conditions and replenish both virtual and
in-store shelves," Crisp's Traasdahl said.
any supply chain snafus ... distributors, suppliers and manufacturers need to be
properly equipped to meet changing consumer demands," said Mike Edgett, U.S.
product marketing director, medium segment, at Sage.
of the food and beverage industry leaves manufacturers and distributors dealing
with huge cost pressures and thin margins. As a result, many are turning to
tools that can provide better data and analytics to help inform their
operations. By implementing modern technology, like industry specific
enterprise resource planning systems, distributors can better forecast and
report on their operations, leading to improved real-time decision making and
increased agility." Food Institute Focus
restaurant sales were up 5.43% in May when compared to May 2019 even though
comparable traffic declined 5.27% in the period, according to Black Box
Intelligence. However, sales results dropped 1.6 percentage points from
April. Full Story
U.S. restaurant industry is showing signs of recovery even if certain
locales are lagging 2019 figures, according to OpenTable. Florida,
Texas, Nevada, and Virginia all saw at least a 10% increase in bookings for
Memorial Day, but New York state remained 34% below Memorial Day 2019,
reported New York Post (June 2). Full Story
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Join Cleveland Research later this summer when we host our annual Foodservice Forum.
We’ve curated a virtual program that will bring foodservice focused insights for manufacturers, distributors, and operators. If you’re looking for actionable intelligence and fresh ideas to consider for your business, CRC’s interactive event will offer that and spotlight what you should hone in on to make better, smarter, and more profitable business decisions over the next 1-2 years.
Attendees can expect robust dialogue, high-level thought leadership, and ground-level action items to prepare foodservice professionals for the post-COVID world. Sessions will include: macroeconomic overview, restaurant industry, convenience store food & beverage, foodservice distribution, non-commercial foodservice, top consumer trends, and more.
The PURELL Off-Premise
program helps restaurants reassure guests that they adhere to the highest
standards in cleanliness and sanitization, and that they care about the safety
of customers and employees by providing the most recognized and trusted brand:
PURELL. Since customers cannot see visual signs of cleanliness when using an
off-premise option--carry-out, drive-thru, or delivery--this program signals
that operators are committed to keeping their guests and employees safe.
Core of the
PURELL Hand Sanitizing Wipe(s) with each off-premise order (complimentary or as
an ad-on item)
of PURELL Hand Sanitizer to employees and 3rd party delivery drivers to use
before delivering food to customers, and for guests when picking up carry-out
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.