Welcome Back to Chicago for the 2022 Restaurant Show!
The DMA family is looking forward to gathering again for the first time since 2019! We'll be outdoors under the lights at a brand-new-to-NRA venue - the newly refurbished Old Post Office on Van Buren in the Loop. This will be an amazing chance to reconnect with the industry and celebrate the continued resurgence of foodservice! If you would like to join us on the rooftop, reply to Charley for more information.


Why Restaurants are Venturing into the Metaverse

Restaurant chains are entering the great unknown, taking bold leaps into the "metaverse." It's the latest endeavor by fast-food brands to reach potential customers where they're at.

The Food Institute investigated how the strategy works and why brands are entering this digital space.

What is the Metaverse?

The metaverse is a term used to describe a virtual environment in which people can use digital avatars to work, play, or shop, according to a report from The Wall Street Journal (April 5).

Wendy's recently revealed it was teaming up with Horizon Worlds, a virtual reality game from Meta, to open the Wendyverse. Visitors can't buy food there, but they can play a basketball-themed game located near the digital restaurant.

Chipotle has launched a somewhat similar initiative.

"We see our investment in the metaverse as an opportunity to create immersive experiences with our community," Tressie Lieberman, VP, digital and off-premise at Chipotle, told The Food Institute.

Chains' Main Motivation

"The full vision of the metaverse may be years away, but brands should start experimenting on what their metaverse presence will be now," said Vishal Shah, Meta's vice president of metaverse, in a press release.

Chipotle plans to introduce a game and new virtual restaurant in Roblox, an online game platform and storefront, which emulates the company's original location in Denver. The first 100,000 Roblox players to successfully roll a burrito in the game will earn Burrito Bucks which can be exchanged for an entrée code that can be used at a real-life Chipotle location.

"We've tapped into play-to-earn, an emerging engagement model in the metaverse, to launch our newest experience on Roblox," said Chief Marketing Officer Chris Brandt, in a statement.

Chipotle loyalty program members can also trade in reward points for Roblox gift cards. The company will also make a burrito available for ordering in its app that includes ingredients voted on by Roblox users and others in a Twitter poll.

What're the Biggest Benefits?

There are several reasons food brands are entering the digital world.

"Now that we've established our presence on Roblox, we're excited to continue activating on the platform and providing real value for Roblox users," Chipotle's Lieberman said. "Our presence on Roblox allows us to engage with our Gen Z fans who are spending a lot of time on the platform."

Prior to the launch of the Chipotle Boorito Maze last October, the chain noticed many users on the application were already creating Chipotle-themed experiences in virtual restaurants, making it a natural fit.

For Wendy's, entering the metaverse is another way of digitally connecting with consumers. The fast-food brand is already known for its social media presence, particularly on Twitter.

"For years we've been meeting our fans in unexpected ways and places with our unique approach to social media, gaming and engagement," said Wendy's Chief Marketing Officer Carl Loredo, in a press release.

Wendy's will track engagement metrics, such as how many people visit the virtual restaurant or post about it on social media, to gauge success, Loredo told The Wall Street Journal. Food Institute Focus

As Masks Come Off, Restaurant Industry Outlook Tempered by Labor Shortage

With masks coming off, restaurants are bracing for a surge in business, evidenced by increased job postings for servers, bartenders and a host of other rolls, reports PeopleReady, an on-demand labor company. Unfortunately, many of the workers who filled these jobs before the pandemic have moved on to other careers, seeking more stability, higher pay and regular shifts.

"With the rise of food delivery services and remote jobs, I think that all the people that were in the restaurant business just for the money, once presented the opportunity to change, decided to grab it immediately," Michael Cook, a former chef who has moved on to blogging at, told The Food Institute. "Working in the food industry is very stressful, time consuming, and the pay, as I have seen personally, is not really that high, even in the best restaurants."

PeopleReady said some restaurant job postings have seen the highest increases ever since mid-February:

  • Servers up 31%
  • Bartenders up 28%
  • Hosts and hostesses up 23%
  • Cooks up 29%
  • Fast-food workers up 17%
  • Food-preparation workers up 15%

"As industries like the restaurant industry continue their recovery, the demand for workers to help will only increase," said Taryn Owen, president and chief operating officer of PeopleReady and PeopleScout. "Rebounding amid the current staffing shortage is a significant barrier for many businesses, and staffing firms are proving a vital partner through this challenging time."

Steele Smiley, founder of Crisp & Green, said calling the situation a "staffing shortage" is misleading.

"It's a fictitious storyline for the McDonald's of the world, for these tired, legacy brands that are trying to keep people working there when those brands, for decades, have failed to advance the working conditions to live up to today's employees' expectations," Smiley said.

Surveys have indicated people are turning away from the restaurant business, not only because of low pay and unstable schedules, but due to an increase in the rudeness of customers. Nearly a quarter of people who left their jobs last year worked in the hotel and restaurant industries.

Carla Diaz, co-founder of Broadband Search, said in an email that people like the freedom they've gained from the gig worker economy.

"What the restaurant industry needs to do is to rework their policies so that they become more attractive to new workers or those returning," Diaz said.

"Business owners must find a way to make their business less stressful for their workers while balancing a customer centric approach as well. While customers are important to any operation, if you have no workers to help you run it, you have no business either way."

Another piece of the puzzle, said Sean Behr, CEO of the technology company Fountain, which provides fast-hire solutions, said the hiring process itself may be to blame.

"You need to reduce your time-to-hire from weeks to days — even to hours," Behr said. "If you take too long, there's a good chance your job candidate will go elsewhere." Food Institute Focus

Why Food Brands Should be Targeting Gamers

Gamers are proving to be an influential demographic in the food industry.

In fact, research from Wunderman Thompson Commerce's Future Shopper Report 2021 shows that globally, 84% of online shoppers are gamers.

With this in mind, The Food Institute explored what makes gamers such an influential purchase group and how brands should be targeting them:

Why are Gamers So Influential?

"What makes gamers so interesting is that there are so many of them," Naji El-Arifi, head of innovation at Wunderman Thompson Commerce, told The Food Institute.

Wunderman Thompson studied gamers in its Gaming Commerce report and found that 55% of those surveyed said that gaming was an integral part of their lives, with 51% having spent money on in-game items.

Other key stats included:

  • 56% of gamers are more likely to buy from a brand that features in their favorite game
  • 33% of gamers have bought something that their favorite streamer has recommended or used
  • 33% of gamers have discovered new brands while gaming

El-Arifi noted that gaming has always had a close relationship with food and drink, with massive sponsorships of events and streamers "happening all the time."

What Strategies Should Brands Use?

The report also found that 49% of gamers wish their favorite brands were in their games so they could purchase them for their avatar, a personalized character that represents the user in games.

"This data clearly shows us that, if this is how people feel now, before the eventual arrival of the metaverse, we can only expect these numbers to keep rising," said El-Arifi. "Which means brands need to start treating gaming as another channel that they can use to create experiences for their customer."

He added that brands should be experimenting with technology and talking to gaming companies to put plans in place for the future.

"For example, brands need to get better at creating 3D models of their products that can be used across augmented reality, virtual reality, and gaming," added El-Airfi. "It only stands to reason, that in time, we will be able to order our meals directly from inside a game and have it delivered to us."

Brands Ahead of the Game

Some big players in the food industry have already begun implementing marketing strategies around gamers:

Kellogg Company: Kellogg's Pringles brand brought a video game zombie to life in a Twitch livestream in Europe. The livestream featured "Frank the Gaming Zombie," a game character in the West of Dead video game.

"We are laser focused on understanding [gamer] behaviors and the role that culture can play in attracting and engaging them with our brands," Charisse Hughes, chief brand & advanced analytics officer, at the Kellogg Company, told The Food Institute. "Our data indicated that we could use gaming to engage the Gen Z audience, who over-index on snacking and also spend ample time on social media."

To interact with gamers, Frank took over the Twitter accounts of Pringles in the U.K. The campaign was one of the most talked about with 640K impressions and drove a 25% increase in Pringles sales.

Chipotle: Chipotle launched its gamer strategy in 2019 to connect with Gen Z consumers, CSP Daily News noted. The brand has taken part in in-person gaming events and has partnered with well-known gamers, in addition to establishing itself on platforms like Fortnite and Twitch.

Hellmann's: In December 2020, Hellmann's launched its own interactive island within Nintendo's Animal Crossing: New Horizons, reported The Grocer.

Wingstop: Wingstop released a commercial promoting its boneless wings that used the "boneless dance" popularized by Fortnite, an online battle royale game. Food Institute Focus

Store News:

  • Tim Hortons has secured a deal to add 300 locations in India over the next decade, reported (March 15). Full Story
  • McDonald's is bringing back Szechuan Sauce nationwide, exclusively on the McDonald's app. Full Story
  • Meanwhile, McDonald's McPlant burger test appears to be off to a tepid start, with poor reception by many consumers, reported Seeking Alpha (March 23). Full Story
  • Additionally, McDonald's shareholders will vote this spring on whether or not the company should conduct a civil-rights audit. The restaurant chain had previously asked the SEC to let it omit the proposal from its annual proxy, saying it would interfere with lawsuits brought by Black franchisees and employees, reported Bloomberg (April 6). Full Story
  • Lancaster Colony Corp. said it reached an agreement with Arby's Restaurant Group Inc. to be the sole supplier of its sauce and sauce products to U.S. and Canadian retailers, reported MarketWatch (Mach 21). Full Story
  • Restaurant Brands International has pledged to phase out its use of PFAS (perfluoroalkyl and polyfluoroalkyl) chemicals in food packaging, reported The Washington Post (March 23). Full Story
  • Dairy Queen is expanding its burger offerings with five burger flavors for U.S. customers, reported CNBC (March 29). Full Story
  • Chipotle Mexican Grill is relaunching Guac Mode, an exclusive benefit for Chipotle Rewards members. Full Story
  • Krystal plans to open its first franchise in Puerto Rico. Full Story
  • WaBa Grill continues its California expansion with 13-store development deal. Full Story
  • Taco Bell and Sweetgreen are among the latest chains to introduce or test subscription programs, betting that consumers will be interested in the chance to pay upfront for a taco a day or a discounted salad, reported The Wall Street Journal (March 30). Full Story
  • Papa John's entered a major refranchising agreement with Sun Holdings, in which Sun Holdings has assumed control of 90 Papa John's restaurants in Texas, reported Meat + Poultry. Full Story
  • Pizza Guys is further expanding its California presence by opening its newest location in San Carlos. Full Story
  • Rush Bowls is looking to continue its rapid national expansion and have 50 locations open by the end of 2022. Full Story
  • The latest push by Donatos to expand in Florida includes a 3-store deal in Fort Myers with Herwig Enterprises, with the first location slated to open later in 2022. Full Story
  • Cracker Barrel virtual brand Chicken n' Biscuits will now offer a new, exclusive Homestyle Chicken Sandwich at 400 locations nationwide via DoorDash, Uber Eats and Grubhub. Full Story
  • Panera Bread is piloting Miso Robotics' new automated coffee brewing system as it doubles down on its drink subscription program. It's part of a broader shift across the restaurant industry toward automation as many eateries struggle to find workers and labor costs rise, reported CNBC. Full Story

Executives on the Move:

  • Southern Classic Chicken promoted Tom Gerdes to vice president of operations. Full Story
  • Walk-On's announced the hiring of Sam Patterson as chief financial officer. Full Story
  • Red Lobster CEO Kelli Valade is leaving the seafood chain after less than a year and gave no reason for her departure, reported Restaurant Business (April 4). Full Story
  • Denny's CEO John Miller is retiring from the family-dining chain after more than a decade in charge, reported Restaurant Business (April 8). Full Story


Drone Deliveries to Take Flight by 2025 – at Steep Cost

We may not have George Jetson's flying car quite yet, but we're likely to get drone deliveries soon if Amazon and Chili's have their way.

Amazon has been talking up drone delivery for at least six years while Chili's is promoting the idea of delivering items like milkshakes to customers within five minutes.

Is that five-minute window realistic?

"Sure, if your house is next door to the restaurant," robopsychologist Tim Lynch, president of Psychsoftpc, told The Food Institute. "While drones can take a direct route to a destination and avoid streets and turns needed by cars, they don't instantly appear at the destination. Delivery time will be shorter than a person in a car, but it will still take time."

James Leslie, a senior sales engineer for Anra Technologies, developer of the SmartSkies Mission Manager drone operations solution, added that battery power may also be an issue, as well as the need to gain approval for beyond visual line of sight drone operations.

In 2019, Amazon unveiled a drone that can fly 15 miles and deliver packages of less than five pounds to customers in less than 30 minutes. The device can take off and land like a helicopter and is designed aerodynamically, like an airplane, the company said.

Costly Flights

Business Insider (April 7) reported that leaked company documents indicate Amazon is planning to deliver one million packages through its Prime Air service by 2025 at a cost of $63 per package, compared to $5.50 per package for its current delivery methods.

Amazon plans to roll out the service to 1,300 shoppers in Lockeford, California, and College Station, Texas, this fall, the Insider reported. Everything from beauty products to pharmaceuticals will be available. The company hopes for 12,000 test flights before Jan. 1 to enable it to obtain approval from the Federal Aviation Administration.

In Granbury, Texas, Israeli startup Flytrex is delivering milkshakes to people's backyards following a successful pilot program in Grand Forks, North Dakota, Retail Brew reported (March 31). The company also began testing drone delivery in North Carolina with Walmart and has FAA approval for deliveries to more than 2,000 homes.

FedEx is testing a hybrid-electric drone from Elroy Air that can go about 300 miles. The craft has a wingspan of 28 feet and can take off vertically. Retail Brew reported the company envisions shuttling packages as heavy as 500 pounds between sorting hubs.

Walmart, which began testing drone delivery in 2015, is also working with Zipline in Pea Ridge, Arkansas, The Verge reported (Nov. 18). The service covers a 50-mile radius, with the retail giant hoping to use drones to eliminate gaps in its delivery network.

Flight Plans

The Food Institute asked tech experts how they expect the nascent delivery method to develop in the next five years.

Leslie said he expects drone traffic to be monitored by ground control stations and the aircraft themselves will be equipped with collision avoidance systems.

Retail, he said, is just an afterthought.

"Drone delivery will be most useful for hospital, emergency services and industries that rely on helicopter services like oil and gas and renewables offshore. This will be especially beneficial in difficult-to-reach areas that are not easily accessible by traditional methods of transportation," he said.

Scott Moses, head of the grocery, pharmacy and restaurants group at investment bank Solomon Partners, said he sees drone delivery becoming "part of the rapidly evolving online grocery tapestry in the next few years. Amazon, Walmart and Kroger have all made material investments in the technology." Food Institute Focus


Restaurant Industry Bouncing Back After Omicron Blip

Restaurant sales growth improved in the week ending March 27, with a four-week streak of declining sales growth ending, according to Black Box Intelligence. Despite traffic growth, it was the third week in a row featuring negative year-over-year traffic growth. Dine-in sales were up across all industry segments. Full Story

Meanwhile, the U.S. restaurant recovery got back on track in February after January declines, according to The NPD Group. Online and physical restaurant traffic was up 2%, and consumer spending was up 8% in February compared to a year ago. Full Story

Selected Results:

  • Darden Restaurants Inc. reported fiscal third-quarter net income of $247 million. The Orlando, Florida-based company said it had profit of $1.93 per share, falling short of Wall Street expectations, reported CBS News (March 23). Full Story
  • Dutch Bros. Coffee raised its growth targets for 2022, projecting that the drive-thru chain will expand 23% by adding 125 stores. The company said it expects to focus its growth on Texas, Oklahoma, Tennessee, and Southern California, reported The Street (March 29). Full Story



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