Competition | December 2010 | By Staff

2010 in Review

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44. Paciugo Gelato and Caffè’s Unusual Flavors

Bob Blumer of the Food Network’s Glutton for Punishment joined culinary forces with Cristiana Ginatta, cofounder of Paciugo Gelato & Caffè, to add to the more than 30 flavor combinations handmade daily by Paciugo staff. Mutually inspiring, Ginatta put her signature twist on Blumer’s creative and slightly kooky genius, resulting in four new gelato flavors: Maple Bacon Crunch, Chocolate Chipotle Butter Pecan, Roasted Banana Cashew Heath Crunch, and Durian. —LZ

45. Return of the Deal

2010 marked the return of big financial deals in the restaurant industry, as several large and mid-sized quick-service chains changed hands.

The activity was a function of improved access to capital, pressure on private-investment funds to put their clients’ money to work, and a belief that restaurant sales would increase as the nation’s economic recovery takes hold.

“Private equity has been sitting on the sidelines during the recession and investors are saying, ‘You are doing nothing with my money,’” says Gary Levy, partner and hospitality industry practice director for J.H. Cohn, a New York–based auditing and accounting firm.

“Now everybody has put their toe back in the water, so more deals get done.” —BW

46. SBUX Pulls Drinks from Drive Thru

Starbucks dropped its 12-ounce tall drink from drive-thru menus, while simultaneously adding images of newer items. Although the Seattle-based coffee giant contends the change was aimed at limiting customer confusion, many believe the redesigned drive-thru menu anticipates the federally mandated calorie information chain restaurants must display in 2011, a proactive practice many others might test as well in the coming months. —DS

47. Phillips Seafood Leads Asian Seafood Conservation

Half way around the world from where the three generations before him fished, Steve Phillips, president and CEO of Phillips Seafood Restaurants, a chain of six quick-service and 11 full-service locations, is helping save ecosystems from following the same destructive path as his beloved Chesapeake Bay.

“My grandfather on my mother’s side was a Chesapeake Bay waterman, so he was a crabber in the summer and a fisherman in the winter,” Phillips says. “As a young kid, I used to go out with him to catch oysters. The Chesapeake Bay was a tremendous bounty of seafood with the oysters, fish, and crab. As a young boy, I never thought that would run out.”

Unfortunately, as most know, Phillips’ childhood prediction did not come true. A combination of overfishing, lack of governmental protection of the area, and overdevelopment along its coasts nearly destroyed the fragile body of water and the ecosystems it housed.

As a result, Phillips was forced 20 years ago to source his seafood elsewhere. The company turned to Asia and quickly began witnessing history repeat itself as competition swarmed the fragile ecosystems and began destroying the seafood industry. Armed with the company’s experience with the dwindling resources in the Chesapeake a quarter century before, Phillips and Ed Rhodes, the company’s U.S. director of aquaculture and sustainability, went to work organizing the disjointed economy of seafood producers in Asia.

In 2010 alone, the company initiated talks with the World Wildlife Fund on crab sustainability in Vietnam, led the formation of crab producer associations in Thailand, and helped provide funding to improve crab fisheries in the region.

“We have to do something about it before it’s too late, because on the Chesapeake Bay I’ve seen it happen in my lifetime, and in Asia I’m seeing it happening now,” Phillips says. —BC

48. Unusual Bedfellows

Competition is leading companies to move into atypical venues. Ruby Tuesday inked a deal to take Florida fast-casual chain Fresh Lime Mexican Grill national, while Johnny Rockets and Halsted Street Deli will open fast-casual restaurants in Chicago.

“You see this trend of moving out of your own traditional space for growth,” says Dennis Lombardi, executive vice president, foodservice strategies for global design firm WD Partners, based in Columbus, Ohio. “Everyone is looking over their fence to see if the grass is greener on the other side.” —BW

49. Angus Beef

When McDonald’s and Burger King introduce a new ingredient onto menus, you know it’s a trend, Mintel’s Dornblaser says. And both added Angus beef to their offerings in 2010.

“It’s something that might be a little more expensive for consumers to buy at home just to try, so getting it at a quick serve is an easy way for them to experiment and see if they like the ingredient,” she says. —RVT

50. Energy, Labor Costs Turn Favorable

Restaurant operators received a little help this year from weaker energy markets. Natural gas and oil prices were lower, which dampened electrical and cooling costs and meant that it wouldn’t cost more for consumers to hop in their cars and head out to a restaurant.

And the labor market remains weak, keeping employment costs relatively low. Although the unemployment rate has moved downward, the job market is tight enough that few workers are jumping to other jobs, giving operators a stable, experienced work force. —BW

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