May 2009 Archives

I am, like I believe many others, still trying to get my arms, hands, mind around social media and how it fits into the larger media landscape and as a restaurant company, where do I place my marketing resources. I hear things like, let's drive fans to Facebook. Great. What does that get me? I do know that when we show up on the evening news or a morning news segment or on the pages of QSR Magazine, potential franchisees call, consumers come through our doors. I get that, but I also know you can't buy that or expect it every day because it's a third party endorsement. This Facebook, Twitter phenom though, that's often going right to the source ... The customer or the potential franchisee. I do get it on the surface, but it's the programming nature of it ... As it relates to our restaurant/f&b industry that's ...perplexing to me.

So on my way to work this morning, I was intrigued by the segment on NPR talking about Jim Cramer's Mad Money program. Apparently two professors form Northeastern U did a study that looked at the stock market, comparing Cramer's "risky" picks against the S&P, etc. NPR asked Cramer to be on the show. Cramer said no so NPR calls him out on the show, saying not only did he refuse to appear, but that his picks deserve an asterisk, like Barry Bonds' home run record. Then they took it a step further and placed the story on the NPR website and took a clip from Cramer's show where he eventually addressed the study from his point of view. Now you can respond via the blog about whether you think Cramer is right or good or deserves the asterisk. And of course, now I'm blogging about it. Let's summarize. One story on NPR moves from radio to the web, to cable, to branded blogs and likely now to Twitter and on and on. I know a great many people would like life to be simple again ... remember the days of three channels. But as restaurant marketers, if we are not planning and executing in more progressive and aggressive ways with compelling offers and content, we will not survive based on having the best products. So Tweet on that!

I was recently at the International Council of Shopping Centers annual convention in Las Vegas.  Where this is usually the premier event for retail real estate in the entire world, this year seemed more like photos from Mars at times.  Attendance, my best guess, was probably down by at least 50% from the previous year.  However, you should know that 2008 had a record 55,000 attendees.  With roughly 25,000 people in about 1,000,000 square feet of convention space, it was clear to most that the market is recovering and people are trying to once again find their footing. 

For me, I thought it was a great show.  With the thinning of the heard, there was more opportunity to actually speak to people directly.  Believe it or not, I actually had the time to walk the entire convention floor and see what new developments are occurring and, most importantly, what tenants were still in the market. 

What I was able to deduce, tenants have the upper hand these days.  The most populated area of the convention floor was the retailer's area where developers, owners and the like were courting QSR concepts, dollar stores and anyone else that could fill their vacancies.  Last year, the retailers were on the other end of the convention space and the roles were reversed. 

All in all, a great barometer of the economy as a whole and the dynamics that are currently driving the markets.

 

For the last several years, it has been our practice to send clients wine around the holidays.  We gave it thought and put real muscle into it, tasting and selecting a wine, then stripping its label (heck, we already paid for it) to replace it with our own customized label that would tell the story of our firm that year.  It beat the not so trendy $1.39 holiday card.  

Or rather, off to NRA I went.  I did attend the National Restaurant Association Show this year, which makes it the 12th for me by my calculations.  I can definitely relate to workshops, walking the show, more educational sessions, blogging, networking, eating and those killer 16 hour days. 

But this year was different for me and I experienced some sort of revitalization, which, honestly, was totally unexpected.  We have a tendency to get jaded after attending trade shows for many years, working the booths, selling to prospects and ignoring the bigger picture.  The educational sessions are "nice" but we never seem to have time to attend.  The awards dinners are talked about as if they're worse than a jail sentence.  Try asking a colleague if they're going to the Gold and Silver Plate Awards, the Faces of Diversity Reception or the Ivy Awards and watch their faces.  You'll see a "not without a court order I don't" expression. 

Unfortunately I was one of those until this year.  I'm not saying I won't revert to my charming, jaded self by next May.  But, for now, I'm reveling in the fact that I allowed myself to be inspired by the people in this business.  Times couldn't be tougher financially, especially for independents, but I never sensed an atmosphere of doom and gloom at this year's show.  Perhaps that's because I refused to, but I don't think that's it entirely. 

What I saw was people there to work, network and enjoy each other's company, yes, but getting down to brass tacks and getting work done.  Attendance may have seemed down, but here's my take.  Companies aren't sending a team of 10 people to stay 6 days.  They're sending 2 people, staying 2 days and, let me tell you, they're all business.  But business was definitely taking place at the show. 

Now back to inspiration.  This show was a lesson in connections for me.  The importance of reaching out and actively listening to what your peers are saying.  What are they doing differently to buffer the economic downturn?  What's working for them?  And what's not?  I connected at all levels, from DSRs to manufacturers to operators in most commercial, and some noncommercial, segments at this show.  I'm blown away by the passion we have in our industry.  And those who are leading the pack have an unwavering focus on service - getting close to their customers, truly listening to what they have to say, and implementing changes to make things better.

For me, it boils down to that attitude of service.  Some people have it and thrive on it, others don't.  And they stick out like sore thumbs.  I can honestly say that I left this year's NRA Show inspired to be better both professionally and personally.  Can I ask for anything more?  Perhaps, but I'll be happy with what I've got. 

I must say, I did not make it to the NRA Show this year and to be quite honest, there are several reasons why. I hate to be the naysayer here, but my organization has struggled in year's past to justify the cost benefit associated with the NRA Show. By nature of our business, we do a lot of traveling and on-site work. Other than that, we operate on a shoestring travel budget and this trip just didn't make the cut, but not necessarily due to the dismal economy. While we don't deny the NRA Show can be a lot fun, it just doesn't serve the purposes that are important to our business anymore.
 
One of the biggest reasons I used to like to attend the NRA Show was for the networking benefit. Amongst the sea of bobbling heads walking the trade show floor, I was bound to run into 5, 10, 20 people I had worked with over the years. It was always nice to reconnect with old colleagues, refresh my network. But in the day and age of social networking sites such as Linked In, I find this need to be met. Same goes for getting in on the hottest new trends in the food and beverage industry. By way of blogs and virtual tours, I've been there and seen that before the show is even over.  
 
In terms of the party factor, well, the parties are great, and Chicago is great. But picture this, the next NRA Show taking place in Jackson, MS. Does anyone else foresee an even greater slump in attendance here? The point is that in my opinion, if you take the Chicago out of the show, there is no show. Technology has robbed the NRA Show and other trade shows of the exclusivity that makes them of real value to companies. Trade shows are now being seen as more of a vacation by attendees than as a mandatory event for companies to survive. I hate to say it, but trade shows need to reinvent themselves­. And better do it quick before they become a thing of the past.

Usually we have a presence at the annual NRA Show.  We think it continues to
be an important venue to see the latest innovations and trends.  We are
particularly interested in green innovations because we know that the green
movement is here to stay and only gaining in traction with our customers.
Additionally, we like to see in-store technologies that streamline front of
the house and back of the house because that's an important means of
improving the customer experience.

Most important, we get a fresh look at product development, trends in
beverage and concepts.  All I can say is we have seen enough, heard enough
and read enough in recent months to have identified some important
opportunities, gaps in the marketplace.  NRA, even with lower numbers this
year, reinforces the idea that there are better days ahead for our industry.
Thanks Sherri for the download from the floor.

  

 

Frito Lay's SunChips line is getting smarter. Yesterday on my way home from work, I sat at a stoplight adjacent from a SunChips delivery truck. Spacing out, waiting for the light to turn, I noticed this statement on the side of the truck: "This truck uses less gasoline to reduce harmful impact to the environment." Good to know, I thought to myself--I like SunChips.

That evening, I came across a brief article in Food Business News. Frito Lay is rolling out fully compostable packaging for its earth friendly SunChips. New bags will be made from plant-based renewable materials and will only take 14 weeks to fully decompose in a compost pile or bin. Socially responsible, environmentally friendly and letting everyone know!

Is it any coincidence that I had two very positive experiences with the SunChips brand in one day?  I think they're on to something here. So far, I have yet to hear of any other snack foods that can deliver these types of priceless benefits to consumers on such large scale. Consumers know they should be recycling, but most are not. This is a clever way to allow consumers to do something good for the environment while also driving sales. Now when I'm buying a bag of SunChips, I will feel no guilt. Who has time to feel guilty about buying a bag of chips when so much good will come from it? It will be interesting to see if this trend catches with other snack food companies--Hippie Chips are you listening? This gig is definitely for you.

 

 

The great thing about communication these days ... Twitter, Facebook, E-Communications, LinkedIn, Social Networks ... is that you don't have to go to events like the NRA Show because you get real time downloads from the field.  Thanks for all that content Sherri.  

Two panels, six parties, ten meetings--and one day left to go. Despite the reduced number of attendees at this year's event, surviving the National Restaurant Association's Hotel-Motel Show is a test of stamina.  Mine is failing.  Free samples of sugary treats and caffeine-infused drinks are all that is keeping me on my feet.

If you've been following our tweets, you've experienced the show along with me. But I'll provide a quick overview for those who have yet to join the flock.

• Participated in the NRAEF Top Industry Trends panel and shared insights regarding sustainability, Millennials, card check, menu labeling, and more with 100+ hospitality educators.

• Sent countless number of attendees to sample the sublime goodness of Paciugo's Mediterranean Sea Salt and Caramel gelato.

• Talked social engineering marketing w/ Stacy Kane, director of marketing for California Tortilla, while riding, via limo, to the Surlean Foods party.

• Learned a back-of-the-house version of Coke's Freestyle machine is in the works, possibly slated for a fall roll out.

• Discussed with Gerry Fernandez ways that QSR might partner with the MFHA to develop strong minority franchisees.
  

• Discovered a more efficient way to dice bell peppers thanks to a demo by a Share Our Strength Operation Frontline chef.
  

• Walked away with a better understanding of the CIO role and how it pertains to hospitality. (Interesting fact: IT is not happy to be responsible for payment function. It is a task better suited to accounting, they say.)

• Tasted a true fusion of East and West in the form of a kimchi quesadilla

In addition to the fun, insidery stuff, our team also engaged in some hard work, such as interviewing Hudson Riehle, the National Restaurant Association's senior vice president of research and information. You can read the fruits of our labor online.

So that's my 2009 show experience in brief. My question to my fellow bloggers is this: Did you attend the show, too? If not, why?

I read the coverage on the recent FRANdata study indicating a 40-percent decline in franchise lending this year, due to the recession and credit crunch.  And I understand the study says for for every $1 million of lending obtained by franchise small businesses, 34 jobs are created and $3.6 million in annual economic output is realized.  So without credit, apparently to the tune of $8.4 billion in financing, interested franchise wannabes will go without capital to franchise their dreams.

There's nothing pretty about that, but where's the study that talks about the unprecedented number of available deals in the market.  I'll bet it wouldn't take long to find a franchisor who doesn't have a few stores in his or her back pocket, already built out stores that can opened with minimal, minimal capital by the right engaged franchisee.  It's possible that many of those franchisors are somewhat quiet or stealth about how they communicate those opportunities.  It's unlikely you will see them broadcasted on a billboard, for example, for fear of showing brand weakness.  The reality is, there's not a franchise brand out there whose franchisees are not feeling the impact of the recession.  In most situations, that's not a reflection of the concept's viability in the marketplace, but a long list of unforeseen challenges.  So I say, if you have those deals of the century, get vocal about it. And you might find a few good franchisees. 

 

American Airlines announced today that it will enhance its current food offerings through a partnership with Boston Market.  I hear a collective sigh of relief from the thousands of air travelers who have thoroughly enjoyed the trail mix, nuts and cheese for purchase, but are ready for more adventurous food options. 

The airline will offer a variety of salads and sandwiches on select flights, expanding to additional flights in the coming weeks.  One benefit of living in the Midwest is that it's generally not that long of a flight to most major cities, although those trips to the west coast can drag on. 

Being 6'6", it's really not an option to fold down the tray table and seriously work - either on the computer or otherwise.  If only I could put the legs in my overhead compartment, but alas that's not an option.  So I'm left to be entertained by the news weeklies and the food-for-purchase on the plane.  I wonder if the price point will give travelers pause - at $10, it's quite a step above the $4 for nuts and cheese, but certainly cheaper than a first class ticket. 

I love Boston Market's food, so I'm sure it will be worth it, especially on those longer flights for which there simply aren't enough celebrity gossip weeklies to occupy the entire trip.  Honesly, I say bravo to American for finding a way to serve better food, knowing they face enormous challenges in staying profitable. 

In recent days, the media has been having a field day--starting with a previous Oprah endorsement--regarding the world's use and abuse of the miracle Acai Berry, harvested in growing numbers in the Amazon.  The locals claim that efforts to boost production to meet demand have had little success because of the difficulty in obtaining land alongside riverbeds.     

The new Coke Freestyle will no doubt be a buzz worthy topic among people of all ages when it hits the mainstream. Admittedly, the Freestyle is quite fascinating; it's a futuristic version of an old way of life. But Coke says it's better. I say not so fast. While I don't disagree with the fact that the Freestyle offers some sellable benefits, namely its form and the novelty of its function, I think this machine in its current state is a pipe dream. I'm not sold.

Recall, the Suicide. The most fun, worst tasting beverage you've ever paid money for. Sure, we may be grown up now and realize that the Suicide was not as fun to drink as it was to make, but as unique and individualistic as we all might like to think we are--we simply are not. Consumers need to be led, directed and coddled (especially when you are leaving the fate of their dining (or drinking) experience in their own hands).

And yes, Sherri, I can imagine pulling into my local drive thru and being able to customize my own drink. The only problem with that is that everyone else in the line gets to customize their drink too. And with over 100 options for each person to choose from, I think sitting in that drive-thru line could easily turn into a very long nightmare come true.

To Coke I say, let us not forget the Jerk behind the counter. Yes, he had "control" over the ratios of ingredients, but he could also suggest combinations that would or would not taste good. Looking back, I now realize that I was not so much at the mercy of him to get what I wanted, but he was at mine. I doubt this machine has been programmed to not dispense horrible tasting combinations. In my opinion, solely depending on the consumer to make the right choice here is simply the wrong answer.

I, too, get jaded sometimes when it comes to new products.  We all definitely experience a great deal of Choice Choke when it comes to the plethora of products introduced each year.  For those of us working in the industry, it's easy to become overwhelmed at the number of choices - and we long for those standouts that really grab our attention. 

Sounds like that's exactly what happened when Editor Sherri Daye Scott tried the Coca-Cola Freestyle beverage dispenser.  It most definitely looks enticing, it's contemporary, simple to use, and the flavor combinations are outstanding.  I've not tried this particular dispensing technology, but I had the same reaction at the North American Association of Food Equipment Manufacturers meeting in Orlando this February.  Manitowoc Foodservice featured one of its Servend branded beverage dispensers which allowed customization of beverages with a variety of on-trend flavors.

I found myself enthralled at the different combinations I could make on my own - and Sherri's right, this type of technology takes beverage dispensing to a whole new level.  Patrons/customers are gonna love it because it puts control squarely back in their courts.  Kids will love it - and I'd wager operators will be quite fond of it, too, knowing how essential and profitable beverage programs can be. 

Not much is better than taking that first sip of a cold coke on a hot day.  I always say to myself, "those people are geniuses."  However, the new dispenser only makes things that much cooler. 

 

I equate it to a Slurpee Machine at 7-Eleven.  Part of the fun of getting a Slurpee is sliding the handle to either side, watching it come out (either slow or fast) and moving the cup around so you can fit as much Slurpee as possible into one container. 

 

Coke has made getting a drink fun and exciting but in a much different way than this.  I know I would pay just to use the machine and the extra bonus would actually be getting a drink.  I think it's a homerun concept and I can't wait for the experience; and my drink too.

 

I love it.  Can I get one of these in my home?  It has both form and function, a great brand name that leaves it open to any environment.  That really is brilliance and as Sherri suggests, its future applications could have a real shift in the retail business.  As Coca-Cola continues to expand its brand portfolio, this machine is really a strategic engine (I did see it was built by an Italian automaker) for volume and efficiency, two areas that are critical for restaurant operators.

 

I also like the potential green advantages of moving from all that plastic to green cups, something I know is important to The Coca-Cola Company.  So

kudos for innovation.    

 

After almost eight years in this industry, very little wows me when it comes to equipment. I appreciate and respect the engineering and science behind the slight tweaks that make one machine more efficient or another more durable. But it's been some time since I saw a piece of equipment and thought to myself, "This one is a game changer."

Or it had been until last week when I finally had an opportunity to play with Coca-Cola's Freestyle. Coca-Cola is testing the self-service dispenser this summer in Orange County, California and in Atlanta. It just so happens that a Willy's Mexicana Grill up Georgia 400 from our Atlanta offices has one of the machines.

It's one thing to read a press release about an innovation or even see it displayed at a tradeshow. It's quite another to have a tactile experience. That's what I experienced at Willy's--an ephiphany, a fountain drink that tasted as crisp and vibrant as a bottled soda.

Flavor aside, the machine is just plain cool. It operates on the same Windows CE system used in smart phones. Its body is inspired by Italian auto design and its touchscreen akin to something you might find on iPhone. The Freestyle I used is capable of creating 90 unique drinks from 20 SKUs, yet its supplies require 40 percent less storage. More importantly, the Willy's I visited has seen beverage business increase in the double digits since the machine appeared.

What really has me excited though is Freestyle's potential at the drive-thru. Coke theorizes  this machine might be the push the industry needs to move to touchscreen ordering at the loop. Can you imagine pulling into your local drive-thru and customizing not only your meal, but also your beverage. I suggest the Orange Creamsicle Coke when the time comes.

Perhaps no one knows better than I (since I'm in the business of conducting taste tests...) that giving away free food is a seemingly fail proof plan for success. But you'd be surprised how quickly those warm, fuzzy feelings brought forth by the words "free food" are forgotten--in about the same time it takes to consume a piece of chicken.

And hey, just because it's free doesn't mean you have to appreciate it. Which begs the question: does offering free food ultimately decrease the perceived value and taste of that food?

Take IHOP and Denny's for example. Both companies offering free breakfasts, both claiming to have the best breakfast in town, but at the end of the day all the customer remembers is that it was free.

That said, I think holding a nationwide consumer taste test on consecutive days was a brilliant marketing tactic, but at what cost? If EPL wants something that's going to stick, a claim they can stand behind, then their going to have to do more than just bribe the consumer.

EPL gave away two pieces of chicken, two tortillas and free salsa vs. KFC's one skimpy piece of chicken. Which one would taste better to you? Walking away with a full belly or like a dog that's been teased?

The franchise industry has often thought of the retailing of product as a cannibalization of their revenue stream.  I have long disagreed with that notion, believing that retailing lends itself to brand mindshare and loyalty.  Today, the word on the street is that retailing is becoming an important revenue filler during a sick economic time.

 

Mainstays -- California Pizza Kitchen, TGI Friday's and Wolfgang Puck -- continue to expand their retail presence while Starbucks and Steak n Shake are rejuvenating their lines.  Starbucks most recently struck a deal with Unilever to bring back a new and improved ice cream line.  I think it's smart, particularly if you are selling a product that complements your brand, but isn't necessarily going to thrive in your store environment.  Few consumers are heading to Starbucks for a latte and a pint of ice cream.  It will melt before your venti becomes a grande.  Of course, there are franchisees and operators who believe that consumers are driving around with coolers full of ice for that very occasion.

 

Recently Tony Roma starting selling ribs in grocery much to the disappointment or concern of its franchisees.  Ken Myres, COO says, "We've done market studies and found that it's a positive correlation.  If they buy it and they enjoy it, it creates a favorable impression."  They report an increase in grocery sales four times over the previous year.

 

Now I would argue that certain products, particularly those that represent your core business, should stay inside your four walls for fear that the grocer and the consumer will fail to deliver on taste and flavor.  However, the complementary products like sauces, snacks, bottled drinks -- they can keep your brand front and center with your consumer or more important, expose you to new customers. 

 

 

 

I'm confident that innovation will save the economy.  Let's just say that for every four people now out of work, at least one of them has taken to their garage to invent something new or reinvent something old that's in need of second generation.  So according to The New York Times today, in April 539,000 people or if my calculations are correct, approximately 134,250 people can now be found in their garage or the garage of a friend inventing ....  Now factor in all those brilliant minds who chose to avoid the ax, the cut, the reduction, the downsize.  They simply had a dream, a vision, an inkling about a solution that one day would be in demand.  Add them to the garages that line America's suburban neighborhoods and well, we've got an economic recovery.    

Imitation is the fondest form of flattery, right?  Isn't that the saying or some version of it?  Adding a little innovation or a twist to it like grilling chicken without a flame, well, that's just plain smart if at the end of the day, the product tastes good.  If there's a category where you could pull it off, it's quick service.  This is the one segment where theatre doesn't have a roll in the dining experience.  Get em in, get em out.  In fact, if you don't want to come in at all, let them drive right through.  From fast casual to fine dining, theatre is more important.  

Of course, you can spend a boatload of money with television spots to feature chicken bouncing around on perfectly manicured flames to wet consumers' appetites, but I think we are beyond the influence of traditional television advertising.  In fact, I'm waiting for the sequel of "Mad Men," called Viral Men that showcases the next generation in marketing.  I do applaud El Pollo Loco's efforts to counter the move by KFC.  The taste test, while not a new idea, can be a bold one but ....  Look at Dunkin who aggressively goes after Starbucks with its taste testing.  They may win a few customers, but I don't think Dunkin completely understands that the core audience of Starbucks isn't going to Starbucks because they think it's the best coffee.  They go because it's the third place ... Home, work, Starbucks (community, neighborhood, music, coffee first).

I'm rooting for El Pollo Loco because I'm a fan of the underdog and the competitor who fights for their turf.   

Growing up in South Philadelphia, I remember recess so vividly at St. Barnabas.  Two things come to mind.  The soft pretzel guy who sold the absolute best salted, long shaped, soft Philly pretzels with simple yellow, un-pouponed, horseradish-less mustard.  They were five cents.  

Sorry, I couldn't resist with the headline, but I'm with Sherri Daye Scott when it comes to the "chicken wars."  I'm thankful we're able to have some fun with my favorite protein (don't let the pet cow I had growing up find out). 

The argument over what constitutes "grilled" reminds me of a project many years ago in which we profiled different types of barbecue sauce.  Quickly I learned how passionate people are in the barbecue realm - and rightly so - and so it seems with grilling as well. 

I got into more spirited discussions about the nuances of Texas versus Memphis versus Kansas City barbecues than I can remember.  But they were all good, each in its own way.  I definitely have my favorite, but that's for another blog. 

I'm also sensitive to the challenges regional operators face trying to compete with national chains.  Bigger budgets, national/corporate support, product development - it can seem daunting.  But in the end, it boils down to whether people are buying your food - and understanding the reasons behind that preference - and working to build it even more. 

What I know is that we all stand to benefit in the form of being able to sample everything - and make up our own minds as to what we believe constitutes the real thing - whatever that thing may be.  And so it will be with this challenge as well - the patrons will ultimately decide which they like best.  And who knows?  There may be room for everyone. 

El Pollo Loco isn't the only voice questioning the authenticity of KFC's grilled chicken claims. But it is the only chicken chain to directly take the Colonel on. First CEO Steve Carley and crew challenged KGC to a taste test. Then, when KFC headquarters failed to respond, El Pollo issued a release calling its new competition "chicken".

El Pollo Loco's posturing might not mean much to those of us based east of the Mississippi, (say in Louisville, Kentucky, perhaps) but in the chain's home state of California, the Taste the Fire challenge is akin to fighting words. In fact, the free chicken giveways offered by both chains sparked some interesting debate among SoCal fast-foodies.

There are some who think El Pollo Loco is over-reacting. But I say kudos to both chains. People are talking about and purchasing from both brands. If I were on the marketing team at Church's, Popeyes, Bojangles, Mrs. Winners--and especially Pollo Tropical and Pollo Campero, I'd be working overtime trying to insert my chain into the fray. Actually, perhaps that was what  Harsha Agadi's much publicized conference call was all about last week.

*I couldn't resist the pun, but did manage to restrain from using fowl". 

Why is it that the Flu Influenza (I'm not even going to use the "S" word because at this point it has no business being a part of any discussion) has everyone on the edge of their seats with panic and concern about their health ... all of a sudden.  I watch the news.  I read the newspaper.  I go online.  I'm looking at a great many people wearing masks who, based on what I can see, don't seem to take the issue of personal health all that seriously.  

Granted I can't say first hand that these folks don't exercise three to four times a week or don't get some fruit, vegetables and maybe even some super foods like acai and probiotics.  But the statistics tell us that Americans are not taking care of themselves.   And if that's not bad enough for us adults, take a look at what we are feeding our children, from school lunches to fast food drive bys.  Maybe school closings right now aren't such a bad thing.  At least our kids will get a reprieve from cafeterias.