supply" was a key theme as suppliers and chain operators convened to discuss
the challenges ahead in foodservice. The first session featured Frances Allen,
CEO of Checker's/Rally's, who shared the company's approach to simply "just
spend extra money" when needed to assure restaurant supplies.
re-emerged when DMA's own Pat Mulhern and Chris Lewis took the stage for the
next panel, along with Dot Foods's Eleni Tsaloufis and General Mills' Garren
In the face
of volatile demand swings, dramatically increasing costs are still the top
issue facing the supply chain today. "Labor is getting better, but is still not
100%," Hamby said. Lewis then reminded the record audience of more than 500
attendees, "fuel is the next major issue and it's going to be with us for some
"Dot is also
still at a driver deficit," Tsaloufis said, "and fill rates are not yet
improving across our 1,000+ suppliers." Lewis, who serves as senior vice
president of corporate accounts at Ben E. Keith Foods (BEK), echoed that sentiment
and shared that BEK has had to take aggressive action on both fronts.
"We are adding trading partners like never before to assure customers' supply
across all categories. And money does not fully meet driver needs, so we are
making changes that impact their quality of life such as shuttling trucks to
them closer to home."
panelists added that automation - in partnership with human work – is key.
Hybrid solutions should make work simpler, easier, and less dangerous. For
example, both Dot and BEK are implementing automation to assist employees
stocking freezers to limit the need for them to work in subzero temperatures.
"Help us help
you" was the closing recommendation shared by panelists. General Mills'
approach to joint business planning focuses on empathy and understanding: "Tell
us when things just aren't working for you. Our job as your partner is to find
a way to make it work." Dot's similar approach requires a frank and flexible
"just tell me how it is" response and a reliance on increased reporting and
Could Give Full-Service Chains New Opportunities for Growth
drive-thru lane is no longer exclusive to fast-food chains.
recently revealed it would be "aggressively" leaning into drive-thrus as it
gets back to new unit growth, reported Forbes (March 3). Full Story
will soon open its third location that includes a drive-thru pickup window and
there could be about 15 models by the end of this year.
is certainly growing across the restaurant industry. The NPD Group found that
drive-thru accounted for 42% of all traffic in November 2021, compared to 26%
in February 2020.
With that, The
Food Institute took a closer look at how adding drive-thrus could impact
Drive-Thrus Effective for Boosting Sales?
changing industry, drive-thrus give full-service chains a new opportunity to
you need to feed people what they want, how they want it, where they want it,
and when they want it," Dan Rowe, founder and CEO of Fransmart, told The
Food Institute. "Drive-thru used to be only for QSR with food waiting under the
heat lamps but nowadays, and especially because of COVID, it's become
Church, managing director and co-head of food & beverage at HSBC Bank, said
that fast and family casual restaurants disrupted by the pandemic can leverage
drive-thrus to better manage future disruptions, labor constraints and spending
associated with dining room maintenance.
managing principal at Technomic, agrees that drive-thrus can be an effective
strategy for full-service chains to boost sales. However, he believes that it
needs to take on a different model than that of fast-food.
speed of service is key in drive-thrus, ordering at time of arrival is not
something that would work for casual dining as meal prep takes longer in casual
dining," Pawlak explained to The Food Institute. "Rather, drive-thrus
could work very well for pre-orders, for when orders are made available at
designated times for a consumer just to drive up and pick it up."
consumers always looking for convenient options, there is a demand for
for instance, do more through drive-thru than dine in so you know the
preference," said Rowe. "Customers feel safe and in control in a drive-thru,
especially through COVID. Everyone is on the go and customers want
convenience...without a drive-thru, these customers wouldn't normally think about
believes that drive-thrus have the potential to make Applebee's interesting and
relevant again and could add 20% or more to sales.
"Consumers are looking for convenience any way they can get it,"
added Pawlak. "If this means that a consumer doesn't need to get out
of their cars to get their pickup orders from full-service restaurants, I
think they'd be all for it."
Blurring the Lines Between QSRs, Fast Casuals, and Full-Service
advent of delivery and the adoption of drive-thrus, the lines seem to be
blurring between segments in the restaurant industry, with Rowe highlighting
ghost kitchens as an example.
the whole thesis for ghost kitchens was the narrative that fast casual and full
service weren't equipped for off premise. Since COVID, most fast-casual and
full services have become quite good at off premise, drive-thru is just the
next natural extension," he said. Food Institute Focus
Restaurants Become the Focus at Malls?
For much of
the 1980s and ‘90s, American malls were where seminal moments occurred in the
lives of adolescents. They bought puppies at the basement pet store. They
rented tuxedos for proms. And they socialized in mall food courts while dining
on personal pan pizzas, egg rolls, or frozen yogurt.
consumer habits began pushing malls to the wayside. A 2020 report by Coresight
Research estimated that 25% of America's roughly 1,000 malls would close by
however, American malls may be mounting a comeback, with restaurants playing a
critical part in the resurgence.
malls are seeing exponential traffic growth," Cedric Teboul, a South
Florida-based strategic real estate advisor, told The Food Institute.
to see continued investments by brands and owners to upgrade existing
restaurants" in and around malls, said Jaime Bettencourt, an executive at
marketing company Mood Media, "just as property owners of malls are investing
in their own refresh. [And], restaurant brands and owners who have seen growth
– in some instances record growth – will certainly continue with new brick and
mortar in and around populated shopping areas."
2020 CNBC report noted that, prior to the pandemic, mall developers had
been courting establishments like Dave & Buster's and The Cheesecake
Factory, to lessen their dependence on shrinking retailers (though these
businesses eventually struggled, too, during the era of social distancing.) Full Story
though, ghost kitchen company Kitchen United is coming to more malls
after securing a deal with the Simon Property Group. Kitchen
United will appear at food courts at two additional malls this year, in Los
Angeles and Long Island, and the move could help reinvent the American mall,
making the retail centers food delivery hubs, of sorts, as reported by Restaurant
Business (Feb. 3). Full Story
Brands plans to add more concepts to its restaurant portfolio following a
record-breaking year for shopping mall heavyweights like Auntie Anne's
and Cinnabon. Company CEO Jim Holthouser recently told Forbes
that, in 2021, it wasn't uncommon for Focus' mall-based brands to see 30% daily
comps growth year-over-year. Full Story
report suggested America's red-hot housing market is about to kick start the
great commercial building boom, as more structures like shopping centers are
investment relative to GDP has rarely been lower over the past three decades
and, as a result, eventually this pent-up need for more commercial buildings is
going to reach a tipping point, leading to a boom in construction, reported Business
Insider (Feb. 3). Full Story
Malls of the Future
malls drive and reinforce an innate characteristic of human beings – a desire
to be around other people," Bettencourt said. "As a result, the malls of the
future will continue to incorporate a shop, eat, play, and entertainment
brand restaurants that can provide entertainment and experiential dining could
thrive in and around malls moving forward, Teboul said.
there will be no room for individual, or small, mom-and-pop stores," the real
estate advisor said. "Malls are becoming more difficult to work with, as they
require a lot more documentation, funds, and proof of income before even
opening a store. There's no room for mistakes, and malls like to work with big
operations that have proven to be successful." Food Institute Focus
vs. Weight Loss: Consumers Shifting Away from Diet Culture
consumer attitudes about health and wellness are shifting.
stopped focusing on diets and "can't haves" and are instead paying attention to
whole-body health and lifestyle changes they feel will be long-lasting,
according to findings from the The NPD Group. Full Story
eating trends can be cyclical in nature, as seen with reiterations of low-carb
trends from years past," Cara Harbstreet of Street Smart Nutrition, told
The Food Institute. "But this shift is different in several notable
ways, primarily in that many chronic dieters are starting to opt out of dieting
causing this shift?
vs. Weight Loss
definition of ‘healthy' is almost constantly changing," Marie Molde, a
registered dietician at Datassential, told The Food Institute.
Today, eating healthy is about more than just weight loss.
consumers are shifting from diets because they've learned that quick-fix
approaches to health and wellness rarely or never work, and health and wellness
is impacted by more than just what we eat," said Molde.
that health should be addressed in a holistic way, "not just what we eat today
but what we eat over several days, months and years matters, and even if we're
eating perfectly, if we're not sleeping or managing stress, there will still be
a missing link."
dietitian practicing with a weight-inclusive lens, Harbstreet has also noticed
"I've seen a
significant increase in the number of clients who seek support in healing their
relationship with food after previously trying every diet under the sun," she
She added that,
as people realize their repeated attempts at weight loss haven't yielded better
health, they naturally start to look for alternatives.
the goal of health has become synonymous with dieting for weight loss, and our
culture at large has conflated [weight and health] for many years," Harbstreet
continued. "However, we know there are numerous evidence-based practices and
behavior change frameworks that can support better health without a
disproportionate focus on the scale."
Of note, KeyBanc
Capital Markets recently downgraded WW (formerly Weight Watchers),
noting that the company has been faced with this shifting perception of dieting
and body image among younger consumers in particular, reported MarketWatch
(Jan. 20). Full Story
anti-diet movement is gaining steam and there has been a shift in diet culture
among Gen Z and millennials, with a greater focus on body inclusivity," KeyBanc
analysts wrote in a report looking ahead to internet retail in 2022. Food Institute Focus
McDonald's will temporarily close all
restaurants in Russia and pause operations in its Russian market. Starbucks,
Coca-Cola and PepsiCo followed shortly after, bowing to growing
criticism over silence on the conflict even as other multinational companies
severed ties with the nation, reported Yahoo! Finance (March 8). Full Story
White Castle plans to put Miso Robotics' Flippy machines in 100
more restaurants, after more than a year of testing the robots yielded better
operations and staff productivity. It appears to be the largest adoption of
such technology yet by a U.S. restaurant chain, reported Restaurant Business
(Feb. 15). Full Story
King will take the
Whopper off its discount menu as parent company Restaurant Brands
International prepares to increase prices to offset higher costs, reported Reuters
(Feb. 15). Full Story
Jamba and Blendid have expanded a
pilot launch of autonomous, robotic smoothie kiosks to colleges and
universities, adding locations at Georgia College and Kennesaw State
University. Jamba and Blendid plan to explore more opportunities to open
kiosks in non-traditional venues, including gyms, hospitals, airports, and
more. Full Story
restaurant chain Dig is testing the four-day workweek with its hourly
kitchen staff, giving them the option to work full-time hours compressed into
four days, reported Fast Company (Feb. 17). Full Story
IHOP launched a new digitally-enabled
loyalty program called "International Bank of Pancakes," which offers guests
the opportunity to earn digital tokens, called PanCoins, that can be used to
buy more food, reported Forbes (March 9). Full Story
McDonald's expects to source 85 to 90% of its
U.S. pork from pigs not housed in gestation crates during pregnancy by the end
of this year, following pressure from activist investor Carl Icahn, reported ABC
News (Feb. 20). Full Story
Kreme is planning
delivery-only shops in the U.S and Mexico. The doughnut chain is planning to
expand its utilization of "dark shops" for delivery orders this year, after
testing the concept in the U.K., reported PYMNTS.com (Feb. 22). Full Story
Brands properties KFC
and Pizza Hut are taking technology in a new direction — making
restaurants run more efficiently by automating tasks that humans aren't needed
for — as they try to catch up to McDonald's innovations, reported The Street
(Feb. 25). Full Story
Wendy's said it has acquired 93
franchise-operated restaurants in Florida for $128 million. The purchase gave
the burger chain 408 of the system's nearly 7,000 global restaurants. Wendy's,
which in past years had typically sold restaurants it acquired back to other
franchisees, instead plans to keep these restaurants as part of a "system
optimization initiative" in which it keeps 5% of its total restaurant count,
reported Restaurant Business (March 1). Full Story
believes it can increase breakfast sales another 10% to 20% this year, which
would add as much as $182,000 in sales per store on an annualized basis,
reported Restaurant Business (March 1). Full Story
several years of paring down its system to prioritize well-performing
restaurants and better compete in a saturated casual dining segment, Applebee's
is positioned for net new unit growth again as soon as next year, reported Forbes
(March 3). Full Story
on the Move:
Corral CEO Lance
Trenary has been named chair of the National Restaurant Association
Board of Directors. Full Story
Subs has named Mike
Hancock its new COO, reported QSR Magazine (Feb. 23). Full Story
Coast Wings + Grill promoted
Whitney Mann to Executive Vice President of Operations. Full Story
Pizza announced the
promotions of Joe Jordan to the role of President, U.S. & Global Services
and Art D'Elia to the role of Executive Vice President – International,
effective May 1, 2022. Full Story
Sales Improve Following January Slump
consecutive months of traffic gains, the U.S. restaurant industry's recovery
slowed in January, according to The NPD Group.
things are looking up.
Slow Down in January
The surge of
the COVID-19 Omicron variant had an impact on restaurant traffic in January.
Group found that physical and online visits to U.S. restaurants were down 2% in
January compared to an 8% decline in January 2021, with total restaurant
traffic – online and physical – down 10% from the pre-pandemic level in January
dine-in traffic increased by 40% in January, the jump compares to a 61% decline
in January 2021. On-premises visits this January were down 46% from the
pre-pandemic level in January 2020, while off-premises orders were down 10% in
the month compared to a 22% increase in January 2021.
"No one ever
said the road to recovery would be smooth and steady. Right now, we're
experiencing a dip in the road due to the omicron variant and stimulus money
expiring," said David Portalatin, NPD food industry advisor, in a press
online and physical visits to quick service restaurants, which represent the
bulk of industry traffic and historically have led the industry out of
challenging times, also declined by 3% in the month compared to a year ago. On
the other hand, full-service restaurant traffic actually increased by 2% in
January, over a 22% decline from 2021.
sales growth jumped significantly during the week ending February 20, posting
the industry's second-best sales growth rate in over two years, according to Black
the first three weeks of the month showed an improvement over January's sales
growth and return the industry into positive growth territory. However, a
significant slowdown from the average growth experienced between June and
November of 2021 persists.
ahead, we should expect volatility. February restaurant numbers will be
compared to a rough February last year because of extreme weather," said
Portalatin. "My advice is don't get too discouraged by January or too elated if
February seems great. Just stay the course because we're on a steady path of gradual
improvement." Food Institute Focus
first-quarter revenue below Wall Street estimates, saying the omicron variant
has kept diners away from its restaurants and led to some temporary closures.
The company also said it would increase prices by 3% to 3.5% in March, reported
Reuters. Full Story
Subway's unit volumes hit an eight-year high
in 2021. For the top 75% of the sandwich chain's locations, same-store sales
were up 7.5% over 2019 levels, reported Restaurant Business (Feb. 22). Full Story
Wingstop is on a roll despite rising chicken
wing prices.By keeping its menu simple and focusing on off-premises
sales, the restaurant chain grew its number of locations by 12.5% last year,
reported Forbes (Feb. 24). Full Story
Wendy's reported fourth quarter total
revenue of $473.2 million and projected 2022 global systemwide sales growth of
6% to 8%. Full Story
fourth-quarter earnings and revenue that fell short of analysts' expectations
and announced that CEO Ritch Allison plans to retire. Net sales dropped 1% to
$1.34 billion, missing expectations of $1.38 billion, reported CNBC
(March 1). Full Story
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