Campbell Soup to Invest $20M Into Ferndale Operation

July 2, 2015

Sherri Welch; swelch@crain.com
(c) 2015 Crain Communications, Inc. All rights reserved.
http://www.crainsdetroit.com/assets/PDF/CD100051614.PDF

Campbell Soup Co. plans to invest $20 million in the Garden Fresh Gourmet Ferndale facilities as part of its commitment to keep the company’s operations in Michigan, said Garden Fresh Founder and CEO Jack Aronson.

Camden, N.J.-based Campbell (NYSE: CPB) plans to add production space through expansions of the current Garden Fresh manufacturing facilities in Ferndale, which include a 25,000-square-foot salsa plant and a 28,000-square-foot site that produces hummus under the Garden Fresh and other brands.

Also on tap for the plants: new product lines and other modernization of the facilities, Aronson said.

Campbell confirmed it plans to invest in the business but declined to discuss specifics, saying it is still developing plans.

Though companies including T. Marzetti Co., PepsiCo Inc. and Nestle USAhad approached Garden Fresh about acquiring the company previously, none of them felt right, Aronson said. “We weren’t for sale.”

But the Bolthouse plant in Bakersfield, Calif., was “the first culture we ever found that mirrored ours.”

“You know if you go through a plant if people are happy (by) the way they talk to management,” he said. “If we were going to sell, it was going to be to these guys.”

What sealed the deal, Aronson said, was the fact that Campbell said it was going to keep the company’s operations in Michigan, retain the current workforce of over 450 people and make investments.

“It was a great opportunity for our team, the city of Ferndale and our state,” he said.

It also helped lay to rest the couple’s biggest fear: that they would have to lay off employees. Given the debt the company had taken on to accommodate its growth, “if there would have been a catastrophe of any kind, we would have had to lay people off because we didn’t have a pot of cash,” Aronson said.

Aronson will remain an adviser to Bolthouse/Garden Fresh, helping to work on new recipes for existing product lines which include salsa, chips, hummus and dips and developing them for new products.

As for the recipes he developed to this point: Campbell’s President and CEO Denise Morrison, “said they’d never change a (Garden Fresh) recipe without our approval,” Aronson said.

Big business

Though Garden Fresh has the leading U.S. market share among fresh salsas, it’s only sold in about 25 percent of the grocery and big box (like Costco) stores across the country, Aronson said.

Overall, the industry of making salsa is considered a mature market worth more than $900 million in the U.S., according to a February report by Australian research firm IBISWorld Inc.

But revenue growth potential has driven the large players to expansion, including manufacturing efficiencies, increased domestic production and acquisitions. Discretional spending is also increasing abroad, improving export conditions for U.S. salsa makers.

As for the Garden Fresh brand under new ownership, it will have access to a much larger distribution network as a part of the Campbell Fresh division, Bolthouse Farms and a team of 26 or more national sales people selling it vs. three, Aronson said.

“With the clout that Campbell’s and its international partners bring, Garden Fresh will get the attention of markets and new consumers never imagined in the past, said Ken Nisch, chairman of the Southfield-based retail consulting firm JGA Inc., in an email.

With Michigan’s agricultural capacity, hopefully, there will be opportunities to not only keep but also expand food manufacturing and processing in Michigan as Campbell’s increases distribution and develops other products under the Garden Fresh brand, he said.

The Garden Fresh brand is about fresh and from the garden, said Darren Tristano, executive vice president of Chicago-based food research and consulting firm Technomic Inc. “It has a health halo around it (and) is a really strong place to start if you’re Campbell,” trying to break further into the fresh market.

“If they want to leverage this brand…they really need to build the story behind it, communicate to the customer what it is, what it’s representing,” he said.


Fogo Sizzles in IPO

July 1, 2015

NB_13HALLCOSER_5_19746449Karen Robinson-Jacobs
Copyright 2015 The Dallas Morning News. All Rights Reserved.
http://www.dallasnews.com/business/restaurants-hotels/20150619-dallas-fogo-de-chao-restaurant-sizzles-in-wall-street-debut.ece

Wall Street’s hunger for new restaurant stocks pushed another North Texas brand beyond its initial public offering price.

Dallas-based Fogo de Chão Inc., a Brazilian-themed full-service restaurant chain, debuted Friday on the Nasdaq after pricing late Thursday at $20 a share. The initial price was above the earlier stated range of $16 to $18 a share.

The stock closed at $25.75, up nearly 30 percent.

Fogo de Chão is the second North Texas restaurant chain to go public in a week. Last Friday, stock in Dallas-based Wingstop soared in that company’s first trading day, gaining 61 percent from the initial offering price of $19 a share. Before that pricing, the high end of that company’s range was $14.

Fogo chief executive Larry Johnson thinks consumers are drawn to his chain because of the value proposition, the ability to have an affordable “white tablecloth experience.” That in turn “resonates with investors,” he said as the stock price continued its day-one climb.

Johnson said he thinks investors will take note of the brand’s growing popularity and acceptance by different age groups.

The company’s 26 U.S. locations, which range in size from about 7,500 square feet to 10,000 square feet, bring in about $8 million each annually on average.

‘Concept travels well’

The company expects the store count to grow by at least 10 percent each year, with Fogo eventually launching at least 100 U.S. locations. Johnson offered no timetable for the full buildout.

“We are comfortable that the concept travels well,” he said of the chain’s popularity in different markets across the country. “When you put all that together, I’m confident investors are going to get the story and are going to reward us for our performance.”

No new locations are planned for North Texas this year, but next year Fogo plans to appeal to carnivores in Uptown, which already is home to several popular steakhouses including Morton’s and Perry’s Steakhouse & Grille.

The company, which is owned by affiliates of Thomas H. Lee Partners, sold 4.41 million shares in the IPO. Lee Partners retains control of the company.

Fogo de Chão, which came to the U.S. in 1996, is the latest restaurant chain to whet Wall Street’s appetite.

PrivCo, which provides financial data on privately held companies, listed four restaurant IPOs this year, each of which posted a significant first-day pop. Each one – Shake Shack, Bojangles, Wingstop and Fogo – was priced at about $20 a share.

Burger joint Shake Shack closed at about $46 during its market bow, and jumped to more than $92 in May.

Fast casual

Many investors are trying to find the next Chipotle. The Mexican-themed fast-casual chain went public in 2006 at $22 a share and closed the first day at $44 a share. The stock closed Friday at $614.22.

Unlike most of those chains, Fogo de Chão is a full-service restaurant, rather than fast food or the current industry darling, fast casual.

Johnson noted that his chain’s average sales per location are much higher than those for a fast-casual concept.

The flip side, noted Sam Hamadeh, founder and chief executive of PrivCo, is that expenses are higher at a large full-service restaurant.

“That’s something [for investors] to keep in mind,” he said. “That’s a very expensive operation. That could be a problem at the first sign of a slowdown.”

Darren Tristano, executive vice president of Chicago-based Technomic Inc., a restaurant research firm, thinks the success of fast-casual IPOs is helping fuel growth of other restaurant stocks.

“Fast-casual restaurant chains continue to dominate growth,” said Tristano. “Technomic’s forecast five-year compound growth for fast casual is greater than 10 percent. As analysts and consumer investors look toward continued patronage and success of fast-casual restaurant brands, IPOs have been and are likely to continue to be strong going forward. This success will likely positively impact other major restaurant brands with IPOs.”


Analysts: Tia ‘Blew It’ Passing Up Outback

June 30, 2015

0411750336_15422277_8colJustine Griffin
Copyright 2015 Times Publishing Company. All Rights Reserved.
http://www.tampabay.com/news/business/retail/analysts-tampa-airport-blew-it-by-leaving-out-outback-steakhouse-bonefish/2234374

With ubiquitous chains like Outback Steakhouse, Bonefish Grill, Carrabba’s Italian Grill and Fleming’s Prime Steakhouse, Tampa-based Bloomin’ Brands is the most muscular restaurant company in Tampa Bay.

It employs nearly 95,000 people in its 1,500 restaurants worldwide. It had $4.4 billion in revenue last year. It sponsors the Outback Bowl, one of Tampa Bay’s signature sporting events.

Earlier this year, Bloomin’ put in a bid to be a concessionaire at Tampa International Airport as part of a $953 million renovation there. Bloomin’ has had a Carrabba’s at the airport since 2008.

But airport staff rejected Bloomin’s bid, as did the Hillsborough Aviation Authority on June 4 when it voted to accept Guy Harvey RumFish Grill, the Cafe by Mise en Place and Four Green Fields instead, as it sought to make the airport’s restaurants feel more local. One board member, Hillsborough County Commissioner Victor Crist, said Bloomin’s success worked against it – “Sometimes when you get too big, you lose your local identity,” he said.

But industry experts scoff at that notion and say the airport botched an opportunity to not only highlight a restaurant chain that has represented the Tampa Bay area as well as anyone, but to give travelers a familiar local restaurant brand to patronize.

“Frankly, if anyone is local to Tampa, it’s Outback,” said Malcolm Knapp, a restaurant economist in New York. “I think the airport authority just blew it. This decision is not the best for the traveling public.”

Officials with Bloomin’ Brands declined to comment for this story.

Tampa Bay has long had a reputation for being the home of chain restaurants. Hooter’s, Beef ‘O’ Brady’s and Checkers all have headquarters here. Bloomin’ was among the first. It opened in Tampa in 1988 with just one Australian-themed steakhouse.

“It’s a disadvantage to the airport, and disrespectful not to consider a brand whose roots come from that very community,” said Darren Tristano, executive vice president with Technomic, a restaurant research firm in Chicago. “Bloomin’ Brands helps drive the local economy and provides local employment. The airport’s decision seems shortsighted.”

The Carrabba’s in the airport’s main terminal will be replaced by a P.F. Chang’s, an Asian-themed international restaurant chain with no ties to Tampa Bay other than a few locations here. It is one of several national chains included in the mix of new airport restaurants including Wendy’s, Hard Rock Cafe and Chick-fil-A.

“We had a committee in place to evaluate the bid proposals and choose which ones would be best,” said airport spokeswoman Janet Zink. “There were lots of great concepts proposed that didn’t get picked.”

Bloomin’ had hoped to add an Outback Steakhouse and a Bonefish Grillat the airport.

“The average restaurant-goer doesn’t know that Bloomin’ Brands is from Tampa, or even what Bloomin’ Brands is,” said Brian Connors of Connors DavisHospitality, a global food and beverage consulting firm in Fort Lauderdale. “But they know what Outback is or what Carrabba’s is. No one is winning on either side here. There will be local restaurants and there will be other chain restaurants. Why the airport didn’t choose the chain that is from there, I don’t know.”

That brand recognition that Bloomin’ has makes it a natural fit for an airport, Knapp said.

More than 40 percent of shoppers prefer to dine at national chains in airports, according to a 2013 survey by the Airports Council International, whereas 36 percent of travelers will try restaurants unique to that region.

“People who are traveling are going to gravitate toward brands they’re comfortable with and what they know,” Knapp said. “They don’t want to take any chances when they know they’re in a rush. That’s why too many local options doesn’t serve the total population of the airport well.”


New TIA Restaurant Lineup Represents Wave of the Future

June 18, 2015

screen-shot-2015-06-08-at-12602-pm-750xx1143-643-0-0Eric Snider
© 2015 American City Business Journals, Inc. All rights reserved.
http://www.bizjournals.com/tampabay/news/2015/06/08/new-tia-restaurant-lineup-represents-wave-of-the.html

“We’re building an airport for tomorrow, not yesterday,” says Maryann Ferenc, who is part of a team that landed a food-and-beverage concessions contract at Tampa International Airport.

The TIA board recently finalized its sweeping Concessions Redevelopment Program, part of a $940 million facility expansion.

The airport of tomorrow relies heavily on homegrown restaurants and bars. That’s particularly true for TIA, whose exhaustive bid and selection process forged a brand mix that will be roughly half local and half national/international when it’s fully rolled out in 2017.

The days of major airports housing predominantly familiar chain restaurants are waning, say experts in the field.

“The consumer has become more interested in supporting independent restaurants, and younger consumers particularly align with smaller brands,” says Darren Tristano, executive vice president of Technomic, a Chicago-based food industry research firm. “In Chicago, when they got rid of chains and put a [local institution] Billy Goat Tavern in O’Hare, we heard nothing but positive response.”

Today’s travelers are increasingly interested in their destination’s sense of place, and that includes airports, which can serve as introductions to the larger community experience.

But some factions are concerned that too much emphasis on local brands might alienate hurried and harried travelers. Does a young family of four heading to the Midwest want to grab a nosh at Chili’s or take a chance on Tampa-founded Ducky’s Sports Lounge?

If revenue is the key objective, the naysayers contend, familiar offerings make more sense.

Bloomin’ Brands joined major airport concessionaire HMS Host in a bid to put an Outback Steakhouse and a Bonefish Grill at TIA. After ranking second to TPA Hospitality — led locally by Ferenc, who owns Mise en Place — HMS Host/Bloomin’ Brands filed an official protest to the airport.

As part of its argument, Bloomin’ told TBBJ of an anonymous, third-party survey it conducted. The results, said spokeswoman Elizabeth Watts, showed that travelers were 2.6 times more likely to visit Outback, Bonefish and Edison Food + Drink Lab (the third brand in the package, based in Tampa) than the roster posed by TPA Hospitality.

The TIA board rejected the protest, and the airport will get TPA’s all-local Rumfish Grill, Four Green Fields and The Café by Mise en Place.

The chain-vs.-local argument will play out most vividly in TIA’s Airside C. Exclusive to Southwest Airlines, it accounts for the highest passenger traffic of any airside: 35.3 percent of visitors, 6.1 million of them in fiscal year 2014. Currently, the Chili’s there — which will be phased out when the existing concessions contract ends this year — is the top-grossing restaurant at the airport.

When the new program is fully operational, Airside C will feature an almost exclusively local lineup:

Casual restaurants Cigar City Brewing, Rumfish Grill, PDQ, and Burger 21. A market concept that includes Bavaro’s, Louis Pappas Fresh Greek, Goody Goody burgers, Café Con Leche, Ulele Bar and Fitlife Foods. The only international brand is Starbucks Coffee.

Will that collection generate proportionately weaker sales than that of the main terminal, with its national/global brands Hard Rock Café, P.F. Chang’s, Qdoba Mexican Grill, Chick-Fil-A and Wendy’s?

We should have a fairly clear answer by 2020.

Big-picture thinkers contend that the TIA concessions program of the future should not solely be focused on the bottom line.

“The airport will be key in establishing Tampa Bay’s brand with visitors,” says Ferenc, who is a member of the federal Travel and Tourism Advisory Board. “When you think about where it puts us in drawing our share of the market that’s coming to Florida, it bolsters Tampa as an authentic place to go. Tourism-wise, our airport will be able to tell our story better than Orlando and Miami, and further define what Tampa is among Florida cities.”


App May Offer Doughnuts on Demand ; Dunkin’ is Exploring a Delivery Service

June 17, 2015

8849e1f883b10fbaf86357823c2ecf69Taryn Luna
© 2015 The Boston Globe. Provided by ProQuest Information and Learning. All Rights Reserved.
http://www.betaboston.com/news/2015/06/09/dunkin-donuts-app-may-offer-doughnuts-on-demand/

At a time when a consumer can use an app on a smartphone to have a bottle of whiskey or an iPad Air delivered to the door in an hour, an instant order of munchkins and a Box O’ Joe might not be far behind.

Dunkin’ Donuts is the latest quick-service restaurant chain to wade into the so-called on-demand economy, acknowledging Monday that it is evaluating delivery services in conjunction with new mobile ordering technology the coffee-and-doughnuts chain is developing.

Dunkin’ is following in the footsteps of two rivals, Starbucks Corp. and McDonald’s Corp., both of which are testing deliveries to homes and offices this year.

Nigel Travis, chief executive of Dunkin’ Brands Group, the parent company, called delivery a “big opportunity” in an interview with CNBC.

The company said delivery might be built into an application currently in development. The app, which Dunkin’ began testing last year, would allow customers to order and purchase coffee and food on a smartphone and pick it up at a store.

Dunkin’ declined to provide details about how a delivery service would work and said it has not begun to test the system.

Dunkin’ Donuts and other fast-food chains face a particular challenge in delivering products: keeping their hot food and drinks at the right temperatures, said Darren Tristano, an executive vice president at Technomic Inc., a Chicago food industry research firm. While things like pizza and Chinese food retain heat during transport, Tristano said, some fast-food products don’t survive as well.

“It might reflect negatively on the brand,” Tristano said. “There’s great risk along with the opportunities.”

Food chains are quickly trying to catch up with the explosive popularity of on-demand delivery services such as Postmates and GrubHub, which can provide nearly anything consumers want, whenever they want it. The chains also hope deliveries will increase sales in a relatively stagnant quick-service industry.

Dunkin’ Donuts’ same-store sales in the United States increased 1.6 percent in fiscal 2014, compared with 3.4 percent the year before. Meanwhile, McDonald’s comparable sales declined 2.1 percent in 2014. Starbucks, the leading coffee and bakery chain in the country, reported a 6 percent jump during the same period.

Earlier this year, Starbucks and McDonald’s said they both planned to work with Postmates, the San Francisco-based 24-hour service, to deliver in select markets. Customers place orders on the Postmates app or website and local couriers pick up the goods from restaurants and stores. An order of a Big Mac and medium fries from McDonald’s, which includes a $5 delivery fee, costs about $11.

Although many consumers already can order a Big Mac or a Frappuccino through the Postmates system, the partnerships allow companies to integrate the ordering process into the food chains’ own mobile applications, control the transaction, and track consumer interests, Tristano said.

Starbucks said it will launch a “Green Apron” program with actual baristas delivering coffee in New York later this year.

Dunkin’s delivery and mobile ordering initiatives are being led by Scott Hudler, global vice president of consumer engagement.

The company said he was not available for an interview.

Tristano said Dunkin’s delivery service would probably increase sales modestly as existing customers shift to delivery. He said the service would appeal to consumers who are physically unable to visit a store, don’t have a car, don’t want to deal with parking, or “are just lazy and don’t want to get up and go.”


The Brass Tap to Open a Microbrewery in Carrollwood Bar

June 16, 2015

0435873611_15361234_8colJustine Griffin
Copyright 2015 Times Publishing Company. All Rights Reserved.
http://www.tampabay.com/news/business/retail/the-brass-tap-to-open-a-microbrewery-in-carrollwood-bar/2232977

The Brass Tapknows its customers can go just about anywhere to find a good beer these days.

In an effort to offer a more authentic experience beyond sampling the hundreds of beers it sells on tap and in bottles, the chain is opening its own microbrewery inside its bar on N Dale Mabry Highway in Carrollwood. The move to brew its own beer comes about a year after the chain abruptly closed its downtown St. Petersburg bar next to Rococo Steak. Despite the closure, the chain is still expanding aggressively, with four franchise locations poised to open in Florida this year and five others in the works in Texas, North Carolina and California.

“If you’re going to be a part of the craft beer movement, you have to be a destination,” said Darren Tristano, executive vice president with Technomic, a Chicago-based restaurant research firm. “You have to be more exclusive. By brewing beer in-house, the Brass Tap is driving more credit to its brand.”

And with more competitors saturating the market, such as World of Beer and the Yard House craft beer and restaurant chain, you have to stand out.

“It’s amazing how many people want to open a brewery,” Tristano said.

Microbreweries are sprouting in record numbers in Tampa Bay and across the country. The industry recorded a 127 percent spike in the number of breweries that opened in 2014 compared with 2012, according to the Brewers Association trade group. More than 600 breweries opened in the United States last year, including Coppertail Brewing Co. in Tampa. In St. Petersburg, 3 Daughters Brewing opened in December 2013, and a half dozen others, such as 7venth Sun Brewery in Dunedin and Big Storm Brewing Co. in Odessa, opened in 2012.

Rory Malloy, the Brass Tap’s new brewing operations manager, will brew beer from a two-barrel “nano” system in a small brewery marked off by a glass wall from the rest of the Carrollwood bar. The beer will be offered for sale at the bar, and customers can watch and ask questions while Malloy brews. He hopes to brew his first beer by the end of the month.

“We’ve always used this location to train franchisee owners and test new products,” said Chris Elliott, CEO of Beef ‘O’ Brady’s, which purchased the Brass Tap in 2012. “The microbrewery is a test for us. Our customers already love craft beer and many of them are interested in the process. Now they can learn more about it here in our bar.”

The concept has been in the works for nearly two years, Elliott said. The Brass Tap worked with Cigar City Brewing CEO Joey Redner on the concept. Cigar City will be among the first of many local breweries invited to brew a guest batch of beer at the Brass Tap microbrewery, Elliott said.

The chain hopes to partner with many of Tampa Bay’s local breweries, and some national ones too, such as Samuel Adams and Founders.

The idea isn’t to compete with breweries for customers. It’s to partner with them.

“There are so many breweries opening within a 5-mile radius of us,” Malloy said. “We can all share our resources.”

The Brass Tap may offer home-brewing courses at the microbrewery.

“The craft beer segment started getting hot in the ’90s, when a lot of guys were trying to do brewpubs that offered food and beer. The overhead was huge and the audience just wasn’t there,” said Brian Connors of Connors Davis Hospitality, a global food and beverage consulting firm based in Fort Lauderdale. “One of the best things to happen to the craft beer movement is the millennial generation. They’re willing to pay more for something of quality that’s made locally.”


Just Top it With a Hot Dog? One Surprising New Trend

June 15, 2015

102751830-hot-dog-bites-pizza.530x298Katie Little
http://www.cnbc.com/id/102752349

Ketchup, mustard or both?

The most difficult part of preparing a hot dog used to be picking the toppings. But in today’s mashup-loving food world, the hot dog is the topping.

On Thursday, Pizza Hut plans to debut a new spin on the summer staple—a pizza with 28 bite-sized hot dogs baked into the crust and served with a side of mustard.

“I think people love hot dogs. In our case, people love pizza, and they’re willing to mash up foods more than ever,” public relations director Doug Terfehr said in a phone interview.

Pizza Hut is hardly alone at finding new ways to incorporate hot dogs into their menu. In the burger world, Carl’s Jr. and Hardee’s are selling what they call the “most American burger ever.” It’s a Black Angus beef patty topped with a split hot dog and potato chips.

In October, Wayback Burgers debuted the limited time Frank-N-Burger, which included two beef patties, a hot dog, American cheese and barbecue chips on top.

Abroad, KFC released the Double Down Dog, a hot dog wrapped with a fried chicken bun, in the Philippines earlier this year.

Even at the baseball field, where the hot dog is practically an institution, the humble frank is getting revamped. A minor league team in Delaware came up with its own spin on the meat—a hot dog sandwiched between two Krispy Kreme doughnuts and topped with bacon and drizzled with raspberry jam.

While these wacky creations are still few in number, they come amid signs the hot dog market is warming up.

Between 2013 and 2015, the appearance of hot dog entrees on menus rose 5 percent, according to Technomic’s MenuMonitor, while the number of hot dogs served at restaurants rose nearly 3 percent in the two years ended in March, according to market research firm NPD Group.

So what’s driving restaurants to release these wacky hot dog mashups?

“These products do not have to be profitable for them to be successful,” said Darren Tristano, executive vice president at Technomic.

Instead, they are meant to capitalize on buzz marketing and spur people to think about the restaurant and then visit, he added. They also play off two broader themes in the food space: an overarching mashup trend and more interest in the hot dog.

At Carl’s Jr. and Hardee’s, the idea of a burger topped with a dog has been in the works for about a decade.

“It’s kind of a Fourth of July picnic on a bun,” said Brad Haley, Carl’s Jr. and Hardee’s chief marketing officer.

“We’re not into doing burgers just for kind of the buzz factor. They have to taste good and sell well—otherwise we wouldn’t do them.”

If that is the case, expect more hot dog mashups on to pop up on menus.

“I think this is an industry where if something is successful, it becomes a trial for other brands,” Tristano said.


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