Financial Management

financial analysis, financial projections, budgeting, profit and loss statement review, profitability solutions

Commodity Costs Start Helping Restaurants

Posted on by Food Innovation Factory

Food costs have been on something of a roller coaster in the post-recessionary environment. Unfortunately for restaurants, so have sales. And the coasters have largely coincided. So if sales were up, so were costs. When costs fell, sales fell too.

That has changed this year. Costs have started coming down at the same time that sales improved for the first time since 2006.

Consider the third quarter of this year. According to the latest benchmarking report from the consulting firm BDO, prime restaurant costs fell 0.4 percent in the quarter, to 59.1 percent of sales from 59.5 percent. Restaurant same-store sales in the period averaged 3.4 percent and increased for every sector.

Food costs have started to ease, and beef costs in particular have started to decline after years of skyrocketing prices. Beef costs fell 5 percent on average in the third quarter, according to the benchmarking report. They rose nearly 24 percent in 2014.

Labor costs, the big fear at the moment in the industry, have yet to appear as a major problem on chains’ profit and loss statements.

“We’ve been waiting for commodities to come down,” said Dustin Minton, a partner with BDO. “And beef was huge.”

To be sure, traffic remains a problem in the industry. Plenty of chains saw their sales grow, but traffic decline, suggesting that perhaps consumers are turned off by higher prices.

“The consumer is only going to take so much,” Minton said. “At some point, do you just shift where you spend your money?”

But for the most part, restaurants managed to see improving sales at a time when costs are down.

The benchmarking report compiles operating results from publicly traded restaurant chains, and uses the averages to give companies an indication of sales as well as labor and other costs.

Cost of sales averaged 29.3 percent of revenues for chains, down 0.5 percent on average from 29.8 percent in the third quarter last year, according to BDO. Cost of sales ranged from 25.9 percent for pizza chains to 31.2 percent for quick-service concepts.

All sectors saw decreases in cost of sales except for fast casual, where costs increased 0.2 percent.

At the same time, labor costs aren’t going up, at least not yet. Labor costs were largely flat, increasing only slightly to 29.9 percent of revenues from 29.8 percent. Much of that increase can be attributed to Domino’s Pizza Inc., which handed out performance bonuses this year.

Companies have effectively managed labor costs. “Different companies are doing a nice job of keeping it stable,” Minton said. “They’ve had very effective labor management.”

While traffic remains hit or miss, sales were still good, on average. Same-store sales increased 3.4 percent in the third quarter. Pizza (up 6.7 percent) and fast casual (up 5.6 percent) were the top performers. Casual dining (up 2.4 percent) and upscale (up 2.2 percent) were at the bottom. Sales improved for every sector.

* Abridged from an article by Jonathan Maze, On the Margin blog

Fast Casual Taps Sales Opportunity With Self-Service Beer

Posted on by Food Innovation Factory

Zpizza International Inc. may have cracked the code on boosting alcohol sales in the fast-casual segment by putting bartending in the hands of customers.

The Irvine, Calif.-based chain is one of a growing number of fast-casual concepts experimenting with self-service beer technology. Other concepts on the West Coast include gourmet hot dog purveyors Dog Haus and Brätworks, as well as Blast 825 Pizza.

The model is based on relatively new technology that some contend could be a game changer in attracting craft-beer-loving Millennials.

Many fast-casual chains carry craft beer and wine in bottles and cans, but the limited-service model can inherently hinder alcohol sales beyond one drink. Customers are less likely to get back in line for a second drink, and workers are often too young to handle alcohol, or are not trained to upsell. As a result, few concepts within the segment have put much effort into alcohol sales.

Zpizza, however, has transformed three units into Zpizza “tap rooms,” which feature a beer wall with 10 to 20 taps. Each restaurant offers a unique collection of local craft brews on draft, said Chris Bright, president of Zpizza.

After their IDs are scanned, customers can open a digital tab and pour their own draft, paying by the fluid ounce. That allows them to taste an ounce or two of different options before they settle on a “long pour.” If they want a second drink, they can get it themselves without having to wait for a server or table runner.

Some traditional Zpizza units offer beer and wine in cans and bottles, as is relatively common in fast casual. But those units typically see only about 2 percent of sales from alcohol, Bright said.

“It’s very difficult to generate liquor sales in a fast-casual environment because consumers are reluctant get in line again to order a second glass of wine or beer,” Bright said.

The self-service format eliminates that obstacle, he said.

At tap room locations with the beer wall, alcohol sales have reached as high as 20 percent, Bright said. “It’s a big winner in that sense.”

And where traditional Zpizza locations do about 75 percent of sales in takeout and delivery, tap room units see 75 percent to 80 percent of sales from dine-in business, he added.

The 95-unit Zpizza has three tap room locations and six more in development. “It’s our growth platform,” Bright said. “Going forward, our focus will be on building tap rooms only.”

The tap room concept has given the brand a jolt of growth at a time when build-your-own pizza concepts with flash-baking ovens are stealing the fast-casual limelight, Bright said.

Zpizza has long offered healthful pizzas, pastas, salads and sandwiches with all-natural and preservative-free meats, organic tomato sauce and mozzarella made with milk from grass-fed cows. Customers order at the counter, but the chain uses deck ovens that cook pizzas in about eight minutes, slower than the new build-your-own-pizza upstarts.

But now the extra time is beneficial, as it gives Zpizza customers a chance to explore the beer wall. In some locations, wine on tap will also be an option.

Zpizza uses the iPourIt system, but there are a growing number of self-service beer options for restaurant operators.

At a recent National Restaurant Association conference on technology, Josh Halpern, vice president of national retail sales, on-premise and military, for Anheuser-Busch in the U.S. said his company is going after the fast-casual segment in a “big way” with self-service equipment.

Anheuser-Busch partner DraftServ is working with sports arenas and cruise ship companies around the country to install self-serve taps.

Full-service restaurants are adopting the technology as well, but the trend is particularly ideal for fast casual, where concepts have limited square footage, and consumers embrace the opportunity to control their dining experience, said Joseph McCarthy, co-founder of iPourIt.

How it Works ?

Self-service beer offers a revenue boost without the need for more labor, McCarthy said.

With iPourIt, once a customer gets their ID checked, they can open a tab tied to a credit card. Typically, users must preload a certain amount to get started, and they can add to their tab as they go. Customers then receive a wristband or card that uses radio frequency to recognize them at the tap and measure their pour. They can try as many beers as they like, and they only pay for what they pour.

Since the iPourIt system is digital, McCarthy said there is a huge opportunity for collecting data about customers, their age and purchase habits. There is also an opportunity to link with loyalty programs to let users know what’s on tap at their local unit.

Fundamentally, the trend is being driven by the explosion in craft beer, which represented close to $20 billion in beer sales in 2014, McCarthy said.

“There are now over 4,000 craft brewers in the U.S., the highest point ever, and there has been a huge explosion in the products and styles of beer available,” he said.

At Dog Haus, the wide craft beer selection was a perfect match for its gourmet hot dogs, said Quasim Riaz, a partner in the Pasadena, Calif.-based chain.

“Beer goes so well with our food. It’s great that we can take our beer as seriously,” Riaz said.

Two units within the 11-unit chain have the iPourIt system, and franchisees are watching to see how it goes.

The first location with the system opened in Santa Ana, Calif., about six months ago. The second, in Fullerton, Calif., opened in early November, so it’s relatively new, he said.

Traditional locations offer beer and wines in cans or bottles. Some pour draft beer in the back of the house, he said.

But the self-service model offers the potential for improved throughput, with customers pouring their own beer as they would a soda.

The model also has a built-in opportunity for upselling, Riaz said.

As customers try three or four options, those tastes offer incremental sales opportunities that inevitably lead to the selection of a higher-priced product. Customers are more likely to buy a more expensive beer that they know they like rather than taking a risk on an unknown, he said.

“Having a happy customer is something we all strive for in this industry, and if the consumer is able to sample a beer and decide if they want it, they’re happier,” he said.

One consideration: In addition to the investment in the system, which for iPourIt is about $1,200 per tap, operators are required to pay a fee of 1 cent per ounce to iPourIt, which amounts to about 16 cents per 16-ounce beer, cutting into margins.

No Tipping

Tobi Miller, co-founder of the Brätworks build-your-own hot dog chain, said customers like the fact that they don’t have to tip at self-service beer concepts.

Brätworks is opening a unit in Redlands, Calif., with a 12-tap craft beer wall this winter. The original Brätworks opened in San Bernardino, Calif., with beer in bottles and cans, and two more units are in development in Southern California, Miller said.

Miller, who is also a franchise operator of Yogurtland, the self-serve frozen yogurt concept, said he loved the fact that self-service beer allows him to get just the amount he wants, even if it’s just a taste.

The Redlands location will be the brand’s first standalone unit, and a bit larger, at 2,500 square feet. The company is in the process of launching a franchising program, so self-serve beer could become a component that could attract potential operators, Miller said.

For Blast 825, a fast-casual pizza concept operated by Fresno, Calif.-based Milano Restaurants International Corp., self-service beer is also in test.

The company is scheduled to open a new Blast 825 Tap Room prototype in the coming weeks in San Luis Obispo, Calif., with about 20 taps of craft beer, along with four or five wines on tap.

“We have to evaluate it,” said John Ferdinandi, CEO of Milano Restaurants International. “But we think it will enhance the overall experience for the customer.”

Ferdinandi said the key will be whether the model will work in a setting with faster service, where table turns are vital to unit economics.

“We have to balance the idea of sitting and enjoying a few beers, maybe while watching a game, with patrons who are in to get a quick pizza,” he said.

One benefit Ferdinandi sees is that the onus of a bad pour is on the customer.

“If you have a server that isn’t pouring correctly or wastes beer, that’s on the owner’s side to absorb,” he said. “But if the customer doesn’t pour it correctly, it’s on them.”

Bright of Zpizza said they give customers who pour incorrectly, with too much foam, an opportunity to top off.

Zpizza’s first tap room location opened in Sacramento, Calif., about a year ago. So far, customers love the interactive nature of the beer wall, he said.

“It’s a very communal environment, where people come together and talk about what they’re tasting,” he said. “That really keeps them coming back to the beer wall, as opposed to the somewhat mundane act of going up to the counter.”

Will self-service beer and wine become as ubiquitous as self-serve soda fountains?

Bright said it depends on the concept.

“I don’t know that fast casual will go to that format in droves. There has to be a culture around craft beer that fits with the concept. It can’t be an afterthought,” he said. “You have to be committed.”

*Abridged from an article by Lisa Jennings at lisa.jennings@penton.com.

Boosting Sales With Beverages

Posted on by Food Innovation Factory

With competition continuing to heat up across the foodservice landscape, operators increasingly are turning to beverage-focused strategies to help boost customer traffic and build loyalty.

In addition to gathering pertinent information about the consumer groups they’re looking to target, operators are employing such tools as special promotions, menuing of specialty beverages, the use of distinctive packaging, order customization and enhanced customer service.

Foodservice executives took the opportunity to discuss those and other marketing tactics during a beverage marketing roundtable sponsored by Whirley-DrinkWorks!, a designer and manufacturer of high quality food and beverage containers. The roundtable was convened during the National Restaurant Association Hotel-Motel and Restaurant Show in Chicago in May.

While roundtable participants underscored the importance of devising effective beverage promotions, they all agreed that it was critical to first understand the customer base they hope to attract.

Knowledge: “You have to start with understanding what the customer wants,” said roundtable participant Peter Zilper, vice president of operational excellence and food and beverage for Aramark’s Sport and Entertainment.

A few years ago Philadelphia-based Aramark conducted a study of customers at its major league baseball venues. Among its findings, the company discovered that sports fans who attend events most often tend to spend more. And beyond the beer options, they found younger customers — millennials, the generation born after 1990 — were interested in cocktails and food pairings with alcoholic beverages, such as a pork sandwich and a cucumber cooler.

At college campuses operated by onsite feeder Sodexo, students want less sugary drinks and more healthful options, said Jeff Pente, senior director of brand development for Sodexo. In response, Sodexo-run dining areas have “hydration stations” that offer fresh fruits like watermelon or cucumber to flavor carbonated or still water.

Other trends in the beverage arena include energy drinks, according to James Park, vice president of marketing and research and development for Which Wich, the Dallas-based sandwich brand. The chain has experimented with adding caffeine to food and drinks.

“We do believe there’s a big component in energy,” Park told roundtable participants. “Every day there’s more and more fatigue. There’s a lot more information than there ever was before, a lot less time to consume that information. We need something to give us a boost in energy.”

The late afternoon daypart can be a good time to promote energy drinks and caffeinated beverages, the executives said.

McAlister CupPackaging. The packaging of a beverage also can help an operator boost sales. For example, every 18 months or so, McAlister’s Deli introduces a new tumbler for its popular handcrafted sweet tea, said Donna Josephson, chief marketing officer for the Alpharetta, Ga.-based fast-casual chain.

“It’s something, too, that the guest expects; in fact, they actually demand that we provide the new cups and the tumblers,” Josephson said. “They see them as collectables.”

At Sodexo-run State University of New York at Binghamton, students can participate in a prepaid refill mug program that allows them to use the same mugs for drinks throughout the semester. The mugs, produced by Whirley-DrinkWorks! sister company ValidFill, feature RFID tags that can be scanned so students who only want a beverage can skip the cash register lines, Pente said. The mug also meets student demand for sustainable drink container options.

Souvenirs and re-useable mugs and cups labeled with a company name and logo also helps reinforce a brand, said Tom Minella, national director of business development for Whirley-DrinkWorks! Having the cup within arm’s reach in their car, office, or home increases the likelihood consumers will return to that establishment.

“It keeps the operator’s brand front and center,” he said.

Restaurants and foodservice operators also can identify returning customers by using refillable brand cups and mugs in promotions, Minella said.

“When an operator offers a refillable mug promotion and their guests bring the mug back for a refill, it’s a way to identify your loyal customers,” he said. “Here is Jim or Sally back with a mug versus a new customer. When you see them on a regular basis, you can learn their names and call them by their name. It’s a way to surprise and delight the customer.”

Customization: Just as today’s consumers — millennials, in particular — like to customize their food by adding or subtracting ingredients, they also want the same freedom or ability to personalize their drink options.

Firehouse Subs was one of the first to test Coca-Cola’s Freestyle soda machines, which offer more than 100 drink combinations — and even more than that at Firehouse, which had its proprietary cherry limeade drink added to the machines, said Doug Reifschneider, vice president of marketing for the Jacksonville, Fla.-based chain.

Meanwhile, Quiznos is able to offer a good variety of beverage options for customers by working with Pepsi and using coolers and bottled drinks, said Jonathan Tress, senior vice president of marketing at the sandwich specialist headquartered in Denver.

Smashburger, the fast-casual burger brand, promotes local brewers and suggests beer and burger pairings to also give customers variety and personalize their dining experience, said Josh Kern chief marketing officer of the Denver-based chain.

Special promotions. Concepts must be able to tailor promotions to fit the brand’s message and image. For example, McAlister’s Deli’s sweet tea outsells carbonated drinks in the chain’s restaurants. The tea is freshly brewed multiple times a day and made with cane sugar. Because of its popularity, the company’s annual Free Tea Day has become a highly anticipated event, Josephson said. Last year the company gave out some 350,000 glasses of tea.

“Obviously for McAlister’s, beverage inspires the loyalty,” she said. “We do that giant event once a year as a gift back to our guests.”

Hospitality: But no matter how great the quality of the food, the uniqueness of the cup or the customizable options operators provide, the customer’s experience remains the best traffic generator, executives said. Roundtable participants agreed that experience depends on having well-trained, hospitable employees.

“It isn’t about getting a free soda or coffee,” said Aramark’s Zilper. “You want to feel cared for. You nourished me. You cared. You gave. Inherently, I think that’s the answer here. Figure out hospitality. People embrace that and come back.”

For the most part, though, operators have access to many tools to help drive visits, restaurant executives agreed.

Knowing the customer’s likes and dislikes can help operators shape successful promotions. In addition, enabling guests to customize their drinks, providing high-quality ingredients, using well-made sustainable containers that can be branded with the company logo, and offering personalized and friendly service are all steps to using beverages to increase visit frequency and build greater brand loyalty.

*Abridged from an article in Nations Restaurant News, NRN.COM 

 

Study: Restaurant Dine-In Traffic Rises

Posted on by Food Innovation Factory

According to the latest research from The NPD Group, dine-in, or on-premises, visits to restaurants grew 2 percent in 2014, in addition to 1-percent growth in 2013. Meanwhile, takeout, or off-premises, traffic declined 1 percent for each of the last two years. The new research was presented at NPD’s Foodservice Summit 2015 Get Growing Again—Inspiring Consumer Visits, held in Chicago on April 15.

Although the growth in dine-in traffic is small, the opportunity for restaurants is huge, officials at Port Washington, N.Y.-based NPD said.

Takeout has been the growth driver for years,” NPD analyst Bonnie Riggs said. “To see dine-in grow, it’s quite a turn.”

It’s better for the bottom line when consumers dine in, NPD found. Dine-in visits account for 39 percent of industry traffic and generate more than $233 billion dollars a year, compared with take-out occasions, which account for 61 percent of traffic but only bring in $200 billion dollars a year.

“We want to get more of that dine-in business. It’s more profitable,” Riggs said. “When you dine in the restaurant sales are much higher, you order more items.”

Quick-service restaurants experienced the largest growth in dine-in traffic, increasing dine-in visits by 5 percent in the year ended December 2014. Dine-in visits at casual-dining restaurants have been holding steady for the last year following years of decline.

No matter the segment, Riggs said the improved economy is driving consumers to dine in more.

“We want to be out and about,” Riggs said. “That’s not just young people.”

According to NPD’s Foodservice Summit Dine-in Study, consumers of all ages are eating out to get out. For some consumers, dining in is a chance to get out and be social. For others, it’s a chance to spend time with family. Younger consumers want the convenience of avoiding meal cleanup, while those over 50 seek the pleasantries of eating away from home, including not being rushed.

Of all the segments, consumers surveyed ranked casual-dining restaurants strongest when it comes to meeting the dine-in demands of good tasting food, good service and convenience.

While there’s a big opportunity for growth in dine-in traffic in casual dining, operators’ responses to consumers’ new dine-in needs has been varied, ranging from some brands that have made minor menu tweaks or begun offering a heavy rotation of combo deals, to others that have completely evolved the restaurant experience.

*Abridged from an article by Fern Glazer, nrnews.com

 

Energy-Efficient Restaurant Trends

Posted on by Food Innovation Factory

The fact that energy-efficient equipment reduces energy costs is a given, but it can also improve food quality and consistency, according to equipment experts who shared their insights on a webcast entitled, “Amp Up Productivity, Turn-Down Energy Costs: Cooking Equipment Technology Revisited.”

In the presentation, hosted by Nation’s Restaurant News and Restaurant Hospitality, and sponsored by Vulcan Equipment, featured speakers — Ann Lovecik, foodservice energy efficiency consultant for CenterPoint Energy in Minneapolis, and Richard Young, senior engineer and director of education for PG&E Food Service Technology Center in San Ramon, Calif. — discussed the variety of ways energy-efficient equipment can save money despite the higher initial cost.

Lovecik said combination ovens — which combine the abilities of a convection oven and a steamer — are among her favorite types of kitchen equipment. Developed in Europe, where space is tighter, these ovens arrived in the United States in the 1980s and were mostly used for institutional cooking, but are becoming more widespread in restaurants. With their ability to bake, steam or cook with moist heat, these multitaskers take up less space in the kitchen. That means restaurants can install smaller ventilation hoods, which on average cost around $1,800 per linear foot.

Lovecik said that modern combination ovens also can be labor savers, because multi-step cooking instructions can be programmed into them, adjusting the temperature and steam ratio over the course of the cooking, allowing, for example, for a quick sear followed by low-and-slow cooking.

“It speeds up cook time and allows for retention of juice and less shrinkage of proteins,” she said.

They also can be programmed to roast meats overnight and then hold them at a safe temperature for use in the day. Most of them have probes that can be inserted into the meat so they can be cooked to a precise internal temperature, she added.

Many of them also record cooking times that can be transferred via their USB ports to computers for easier food safety HACCP documentation.

Young noted that modern Energy Star convection ovens and combination ovens can reduce operating costs by nearly 50 percent.

Lovecik also noted that high efficiency fryers with heat exchange baffles recover lost heat faster, making them more productive and also improving the quality of the fried food, which ends up spending less time in the oil.

Demand control ventilation systems were discussed as well. Unlike typical hoods, which turn on at full power whenever any equipment is turned on, Lovecik said these systems have sensors that monitor equipment use and ramp up or slow down exhaust as needed, resulting in less energy use. That is particularly important with ventilation systems, since they generally account for about 20 percent of all energy use in a kitchen.

Young looked at how some classic equipment has evolved. Broilers, for example, traditionally are just grates over flames.

“They’re not thermostatic — they’re like your backyard grill,” he said. “You turn them on and they run all day with very limited controls.” They’re such energy guzzlers that one year of operating them can be equal to their purchase price, he said.

However, after a decade of development, better designed lidded broilers are available with lower input rates and radiant heating that make them more energy-efficient.

Griddles, too, now have infrared burners that transfer heat better and result in savings. Young noted that even simple advances such as finned-bottom pots increase energy efficiency and can reducing cooking times for items like pasta, because water comes to a boil faster in them.

Young noted that energy efficient equipment can be a lot more expensive to begin with: an inexpensive, but also inefficient fryer, can cost around $800, while a high efficiency one will be closer to $1,500. High efficiency fryers recover their heat faster, which means they’re better for high-volume environments, and oil in them also tends to last longer than in conventional fryers.

He said that, assuming a fryer is used 12 hours per day and that 125 pounds of food is cooked in it each day, a high efficiency fryer will save more than $13,000 over the course of five years in energy and oil costs.

Lovecik addressed the benefits of energy efficient conveyor ovens, which have conveyor belts that run food through a heated cavity at a set pace.

Lovecik said new versions have sensors on the belts that slow the belts down and lower the temperatures during times of no activity.

Although it’s common knowledge that energy will be saved if ovens are turned down when they’re not being used, it’s difficult to follow through on that, especially since you want the ovens to be hot as soon as your restaurant gets busy. The new conveyor ovens take care of that automatically, which Lovecik said can result in a 40 percent reduction in energy use.

Young said there also are new cold preparation tables that are kept cold using chilled liquid rather than chilled air. The result is more even temperature and 20 percent energy savings.

Similarly, better griddles with more uniform heating can result in faster cooking times, easier use and lower energy use.

* Abridged from NRN, Bret Thorn at bret.thorn@penton.com.

 

Waste Not, Want Not, Profit More

Posted on by Food Innovation Factory

It’s a simple fact of human behavior: People don’t want you to see their mistakes.

This is especially true in the food service business where mistakes become waste and lost profits. In our business, every morsel has been bought and paid for, and its value lies in its resale, not its position at the bottom of a trash can.

That is why waste is so very bad for restaurants. So, what happens when food prep doesn’t go as planned? What happens when you are not getting the maximum yields? Where does that money go?

It goes down the drain. According to some estimates, Americans waste 40 percent of the food that is produced. Restaurants may only account for a small portion of that waste due to better management. But in restaurants, every bit of food should reap a gain.

What is the cost of burning a steak? Overcooking the vegetables? Forgetting to rotate the sauces? Or not following recipes correctly? Management and employees need to be aware of inappropriate waste. How can we control the waste if it is human nature not to look bad?

It can be simple:

Remove all garbage disposals. No garbage disposal, no way to hide mistakes. Plus, no clogged drains.
Substitute those black garbage bags with transparent ones, and use a metal frame bag holder. If waste can be seen there will be more care in handling and cooking.
Put all food waste into a clear tub and then have it approved before it gets thrown out.
There are many new technologies to help with waste. Whatever your system, be sure track your food consumption-to-sales in order to get the yield you expect. Profit in the restaurant industry is thin and built on running the appropriate food cost so that diners get value, and management receives a return on their investment.

In my many years consulting on operations, without a doubt, most of the conversations center on what distributors charge versus the yield extracted from raw materials. It is ironic that management looks to get the last penny out of their vendors, yet fail to see the nickels and dimes they throw in the garbage. No operation is perfect, and while waste may be a necessary part of your costs, you must find consistent ways to expose it, track it and account for it.

* Abridged from an article by John Krebs, www.fastcasual.com

Boosting Cocktail Sales With Simpler Menus

Posted on by Food Innovation Factory

It’s a common belief that unique signature cocktails can help drive sales, but Omni Hotels & Resorts found benefits in scaling back creativity in the 60-unit hotel chain’s bar program.

A couple of years ago, David Morgan, the company’s vice president of food and beverage, came up with what he thought was an incredible cocktail menu, with all the complex flavor combinations and flourishes in presentation that have become popular. But there was a problem: “They took forever to make, so the bartenders didn’t want to sell them,” he said.

So he went back to basics and worked with beverage consultant Kim Hassarud to rehabilitate classic cocktails. The result: Cocktail sales rose 20 percent.

“When you’re developing your signature cocktails, you have to know who your customers are, and who your servers are,” Morgan said. He found that his customers wanted friendly bartenders who made good, consistent drinks.

That means detailed training manuals were developed that not only had precise measurements, but also the back story behind the ingredients that were being used, so bartenders can explain that the rye-based Polish vodka in the Ultimate Martini, which is made with Lillet instead of vermouth and is garnished with an orange peel, has subtle notes of vanilla, rye and lemon peel. The manual also explains that the drink is to be stirred (not shaken, which is why 007 had to specifically request that his martini be shaken) for 20 seconds.

The Dry Martini, on the other hand, is made with vermouth and a French vodka with an “elegant floral citrus aroma.”

Two gin martinis are on offer as well, as well as four Manhattans, each with a different whiskey and unique combinations of vermouth and bitters, and four margaritas — three made with different tequilas and one, the Smoky Margarita, made with mezcal.

The trendy but nonetheless classic Moscow Mule — vodka, ginger beer and lime — is also on the menu, as well as lesser-known classics such as the Knickerbocker and the Strawberry Basil Smash.

Morgan said the detailed instructions gave bartenders and servers the confidence to sell them. “The fact that they were easily made and had to be done correctly gave them a comfort level to sell them,” he said.

The customers like them, too. “When you look at the perfect Manhattan and use the proper bitters and the right vermouth and cherries, our customers seem to be happier,” Morgan noted.

Sales reflect different regional preferences, however. Martinis are the top-selling cocktails in the Northeast, while margaritas dominate in Texas and the Southeast. Meanwhile, in the West, brown spirits are hot.

“We do recognize the fact that the expectations of a customer in New York may be different from a customer in Texas,” Morgan said.

Because of that, Hassarud also developed four signature cocktails each for five regions: Northeast, Southeast, Midwest, Texas and the West. Each region has its own version of the gimlet, traditionally made with gin or vodka and sweetened lime juice. In the Northeast it’s a Salted Gin Gimlet, it’s a Basil Peach Gimlet in the Southeast, a Lemon Poppy Gimlet in the Midwest, a Salted Tequila Gimlet in Texas and a Passion Fruit Gimlet in the West.

The Old Fashioned — sweetened bitters with a brown spirit and sometimes fruit — has black walnut in the Northeast, Tiki fruits in the Southeast, hops in the Midwest, mole in Texas and figs in the West.

Whether the classics or the regional variations sell best varies from one property to the next, Morgan said.

* Abridged from an article by Bret Thorn at bret.thorn@penton.com.

 

2014 – A Tough Year For Commodity Prices

Posted on by Food Innovation Factory

At the end of last year, commodity watchers thought 2014 would be a year of benign price fluctuations — predictable and nothing too radical.

But food prices have been anything but predictable, with climate change, disease and rising global demand affecting the price of cheese, coffee, beef, pork and other items.

Lime prices are currently around 10 times what they normally are due to drought in California and unrest in Mexico, but those prices are expected to drop before long. But other commodities that affect broader swaths of foodservice are likely to stay high for months or even years, which could require operators to explore other purchasing options.

Commodities expert John Barone, president of Market Vision Inc. and a Nation’s Restaurant News columnist, said four factors in particular are affecting commodities this year.

Global demand

Demand is driving up the cost of many commodities, particularly cheeses.

“U.S. exports are way up so far this year,” Barone said.

Chicago Mercantile Exchange block cheddar cheese prices, a key figure, have hit record highs of more than $2.40 per pound; the price is typically below $2, according to data from the University of Wisconsin. The spike does not appear to be due to drought in California, where milk production is up, according to purchasing cooperative SpenDifference.

Drought in Brazil

A drought in the South American country has resulted in spikes in the prices of coffee, sugar and soy products, Barone said.

Commodity coffee futures prices are currently hovering around $2 per pound, but coffee trader Kevin Flaherty said they could go above $3 if the August Brazil harvest is bad.

Damaged coffee beans suffering from a drought condition known as Coraçao Negro, or “black heart” — which makes the normally green beans black and shriveled — have been found in drier, northern areas of the country’s coffee-growing region, he said. Although actual wholesale coffee prices will likely stay relatively flat through 2014, it might take years for prices to recover if the drought is severe.

PED virus

Also called PEDv, the virus “came out of nowhere to drive pork prices to record highs,” Barone said.

“The Easter ham market was running more than double year-ago levels,” he said.

Adding to that, bacon prices are 35 percent higher than a year ago and could be up to 50 percent higher this summer, he said.

PEDv kills whole litters of piglets, which grow to slaughter weight in about six months. The disease will start affecting pork inventory from June at least through September, Barone said, further driving up prices. If the disease is not contained soon, the high prices would likely last longer.

Drought in California

A drought in the state is not affecting milk prices but is raising the price of feed and motivating beef and dairy producers to slaughter their cattle rather than pay to feed them, according to Barone.

The Los Angeles Times reports that cattle supply is at its lowest level since 1951 and that prices are at record highs.

Operators should get used to those prices. Barone said beef prices are not likely to fall significantly until 2016 at the earliest since it takes up to two years to bring steer up to slaughter weight. Dairy prices are likely to drop in the second half of 2014, he said.

It’s shaping up to be a very tough year.

* Abridged from article by John T. Barone, NRN and at jbarone@mktvsn.com.

Why Restaurants Are Investing in Mobile Payments & Marketing

Posted on by Food Innovation Factory

From restaurant chains like Starbucks, Panera and Wendy’s announcing mobile payment rollouts to smaller restaurant players getting on board with payment apps like Cover, the restaurant world is abuzz with mobile app news. But how widespread is the trend?

A new infographic, produced by mobile payment summit CONNECT 2014 and mobile payment startup Isis, illustrates the huge opportunity for restaurants to use mobile technologies to increase sales. Leveraging data from Google Shopper Marketing Council, Technomic, the National Restaurant Association and other sources, the graphic shares some fascinating statistics.

For example, 83 percent of smartphone users surveyed use their phones to make dining decisions while traveling, and 46 percent have tried a new menu item based on a mobile ad. People are also increasing interested in paying for meals electronically. Of those surveyed, 40 percent say they would like to for quick service meals via a mobile or wireless device, and 55 percent say they want mobile payments.

And restaurants are slowly but surely starting to catch on. Currently, 95 percent of independent restaurants do not have a mobile site and only 16 percent of restaurants have mobile apps. But 50 percent of limited-service restaurants say they plan to invest more resources in customer-facing technologies, like tablets and smartphone apps. Which is smart since, according to the infographic, mobile payment users spend twice as much through digital channels.

Looks like it’s time for restaurants small and large to start exploring the expanding mobile app ecosystem.

*Abridged from an article by Nina Meijers, foodtechconnect.com 

 

Millennials will Drive the New Wine Culture in 2014

Posted on by Food Innovation Factory

Whisper it, but in the speakeasies, new wave wine bars, Sherry-led oases and other achingly hip watering holes that are inhabited by Millennials, wine is becoming increasingly cool with the influencers and trend setters of a whole new generation.

And it’s a fashion that looks set to continue, but very much on the terms of these wine enthusiasts themselves. These are imbibers who prefer the adventurous to the atrophied, want individuality in their drinks mix and take their cues from broader lifestyle and cultural references rather than listening to old school wine trade jargon. As such, they are changing the rules of engagement.

Witness the stampede for tickets for Wines of Argentina’s (WoA) Cambalache event in London’s Dalston last year, where the wine was woven into a festival of Argentine street life and culture, and which returns to both Brooklyn’s Williamsburg and east London this year. “It’s all about putting wine in an environment where people like to go and in east London people are going out every night of the week,” says WoA’s UK & European head, Andrew Maidment. “And this means fitting wine in to their daily lives rather than expecting them to change their daily lives and put themselves out to come to wine.”

With a new generation of imaginative, unstuffy independent merchants, restaurants and bars helping to fuel a scene that is thriving on pop up wine events communicated via blogs and wider social media, the hipsters and happenings will continue to imbue wine with a dash of much needed cool.

* Abridged from an article by Andrew Catchpole, Top Wine Trends for 2014