At this year’s National Restaurant Association Show, some of the industry’s leading executives stopped by FSR and QSR magazine’s booth to chat about the landscape—what they’re seeing, hearing, and what might be next. We asked everybody the same three questions: One on tariffs and consumer sentiment; their thoughts on value; and lastly, to separate myth from reality with restaurant technology. In the days and weeks to come, we’ll share their answers.
Next up is Protein Bar & Kitchen CEO Jeff Drake. And keep the conversations going at this year’s QSR Evolution Conference. Registration is now open.
Other interviews:
Freddy’s Coeli Arthur and Rick Petralia
Cheba Hut’s SVP of operations Brian Witte
Sunny Street president Mike Stasko
Give us your thoughts on the state of the consumer, and maybe tariffs, if there’s any clarity to that ongoing mystery.
The consumer is cautious and they’re leaning into things that are familiar. I think there’s less interest in finding new brands or new ideas. At Protein Bar we’re fortunate that we haven’t felt the overall macroeconomics of the restaurant space—it’s been bumpy with the consumer, right? We haven’t felt that. In fact, we’ve seen higher velocity of our loyal customers through our data, where they’re using us more frequently, which has been a huge win.
We’ve done some things with menu innovation that have driven that as well. But the consumer is definitely very conscious of price. There’s a little bit of uncertainty around that and just reading the information that’s available on the marketplace, you can see what the consumer is saying. For Protein Bar, we’re a legacy brand. Chicago is our hometown. We’ve been here a long time. And we recently entered airports. That business has been great because finding something that’s better for you in an airport environment is kind of a new idea. So both of those things have been good.
On the tariff side, I wish someone would tell me what’s going to happen. I get asked the question all the time—what impact is this going to be to your business? I say, what’s the percentage point going to be? Almost all of our stuff is domestic on the produce side. And with the trade agreements already existing with Mexico, we’re in good shape on that one. We do have some stuff in menu packaging that’s coming from overseas. We’re good with our inventory management and purchasing through October. Hopefully, everything will be resolved well in advance of that. Long term, the answer is, I’m not quite sure where the tariffs are going to end up. If you could tell me that, I could give you a straight answer.
Going back to the consumer, in the better-for-you space, fast casual is kind of the bottom of our consumers’ trade. Then they trade up to casual dining, polished casual, and then fine dining. I think we’re getting more traffic from our base consumers who are trading down a little bit and using us more frequently. Particularly, we’re seeing it at dinner and breakfast. Breakfast has been great. It’s hot for everyone. We’ve always had a strong program. I feel like we’re positioned with our consumer where if they’re uncertain, they’re going to trade down to us and use us more often. We’re certainly seeing a little bit of that.
What does value mean to the Protein Bar customer?
The first step is hospitality and delivering a great customer experience. The dollars and cents of the menu, we’re priced at the lower end of better-for-you fast casual. We have that value proposition built into our model. But it starts with the guest having a frictionless experience. If it’s a digital experience that they’re going to use, make sure that order accuracy is correct; food is prepared correctly, and the driver is getting there at the promised time. For in-store transactions, it’s all about recognition of the guest, making sure the guest feels valued in that experience. Giving great hospitality.
The team at Protein Bar really takes that point very seriously. So that’s where we start with value. Then, we look at ways to bring options for the guest. Here are a couple of examples: We added the opportunity to add any shake or smoothie to any entrée for $5. Our shakes and smoothies are priced between $8–$10. It’s a nice value. Interestingly, for our business, we find a lot of customers use us only for a bowl or salad or only for a shake or smoothie. So we’re seeing some guests take that option of getting a smoothie and adding an entrée and earning a value there.
The other thing that we did that was a lot of fun for us and our team is we have what we call “Thirsty Thursdays,” where every shake on the menu is $5. It gives customers a chance to try something they might not have otherwise. Say they’re a PB&J customer and on this Thirsty Thursday we’re introducing a new shake, and that shake is $5, it gives them an option to try something else with a little bit of a value attachment. It enables them to be adventuresome without spending the full amount.
For me, the start of value begins with hospitality and making sure the guest experience, whatever their expectation is, is exceeded. We’re not interested in discounting. We’re not interested in getting into couponing. In my opinion, once you start that, turning it off [becomes difficult]. The customer learns that’s how to use you. You become a discount brand and we’re totally against that. We believe we deliver a value in really great ways.
OK, tech trends. Myths and realities.
There is a lot of opportunity in AI. Do I think that AI is going to replace the person-to-person connection in the restaurant business? Absolutely not. I think there are customers who are driven for community. At Protein Bar, when you order, we make your food and we give it to you. We take your name and call it out. It’s a great way for our employees to learn our customers’ names. So, if somebody comes in, they’ll say, hey Jeff, what’s going on? Do you want your PB&? They get that connection in the hospitality industry.
There are some things in the back of the house that aren’t customer facing that AI can help us with. Inventory management. Purchasing management. Preparation management. But AI removing that employee-team member connection to the guest? I don’t believe that will ever go away. I think we have to make sure that we’re being really discipled and understand what the benefits of AI are, as opposed to getting all the way in on it.
One of the things that happened with the pandemic was digital adoption was exponentially influenced. Everyone had to learn how to order from a restaurant on a website or an app, because they were forced to since you couldn’t go into the restaurant for a period of time. I think continuing to find ways to meet the customer where they are and how they want to order from you and delivering great hospitality, be it on a website, be it on a third party, be it on an app, be it on a kiosk—we put some of those in restaurants—is key.
On kiosks, we will have the cashier for people who have never been there before. We want them to talk to an employee. But Northwestern Hospital, the doctors and nurses have been going to Protein Bar for 11 years. They know exactly what they want. They can go to the kiosk. They can use our app. They can get their food and it’s seamless for them. A patient who is visiting the hospital and has never been to Protein Bar, we want them to be able to talk to an employee and get their order in.
So I think continuing to find ways to deliver great hospitality in a digital environment is going to be something that will grow and flourish in this space.
