What Obesity Problem Burger King’s Low-Calorie Satisfries Are a Total Flop

August 29, 2014

pictureThe fast-food chain plans to discontinue the healthier fried chunks of potato in most of its U.S. restaurants.

By Liz Dwyer

Americans may seriously tip the obesity scales, but when it comes to chowing down on fried wedges of potato, apparently we want full fat or nothing at all. At least, that’s what the demise of Burger King’s line of Satisfries seems to reveal. The fast-food giant announced on Wednesday that because of a lack of customer demand, it is discontinuing the relatively healthier french fry product.

“Earlier this week, franchisees in North America were given the option to continue offering Satisfries in markets where this game-changing product continues to perform well,” the company announced in a statement, according to Bloomberg Businessweek. Two-thirds of restaurants chose to ditch the product.

The fries were first made available last September as part of Burger King’s effort to appeal to folks who might be on the hunt for healthier menu options. Satisfries were marketed as “great tasting crinkle-cut french fries with 40 percent less fat and 40 percent fewer calories” than McDonald’s french fries.

Consumers might have been a bit confused by the product. At $1.89 for a small container, Satisfries were more expensive than their full-fat, full-calorie counterpart, which are $1.59. A small box of Satisfries racked up 270 calories, 11 grams of fat, and 300 milligrams of sodium—not much less than the 340 calories, 15 grams of fat, and 480 milligrams of sodium found in the same-size traditional fries.

There’s also the tiny detail that when customers walk into a Burger King, they’re not usually on the hunt for a healthier food choice. “They go to fast food restaurants like Burger King for indulgence,” Darren Tristano, executive vice president of food industry consultant Technomic Inc., told NBC News.

So what do Americans want instead? This week Burger King also announced that because of grassroots demand on Twitter and Facebook, its previously discontinued Chicken Fries are back. As one fan enthused on Facebook about the fat-, sodium-, and calorie-packed product, “When you guys got rid of these I stopped going there my one to two times a week and only went a couple times a year after that. So time to kick back into gear and get my chicken fries on!”


Brisket Channel proves to be ultimate reality TV

August 27, 2014

Article by: David Phelps, Star Tribune

© 2014 Star Tribune

Remember the Brisket Channel on Duluth TV?

It was on for 13 hours and five minutes over the Memorial Day weekend.

It turned out to be quite a hit, once reruns made it to YouTube. Nearly 400,000 viewers tuned into the Internet version of the smoked brisket marathon developed for Arby’s by the Minneapolis ad agency Fallon.

So popular was the website that each unique visitor spent an average of 38 minutes on the site, watching a brisket slow cook in the same manner that Arby’s prepares brisket for its customers. It also helped that visitors had a chance to win one of $20,000 in prizes that included a 10-gallon hat, lasso and beef-scented candles.

“We were blown away by that,” said Matt Heath, Fallon creative director, of the viewership.

And the client was pleased. “Thirty-eight minutes is longer than a lot of TV shows,” said Jeff Baker, Arby’s senior brand experience director. “It was a great idea based on simplicity.”

Besides setting a Guinness record for the longest TV commercial, the brisket show and limited brisket sandwich offer set the stage for Arby’s new “we have the meats” advertising campaign that Fallon launched earlier this month.

Results for the fledging ad campaign so far are inconclusive. But Rocky Novak, Fallon’s managing director, said: “We’re seeing a lot of social media love.” Arby’s said it does not release sales figures. But when it first made the brisket sandwich limited-time-offer available in October of 2013, “we declared it the most successful [limited-time offer] in the brand’s 50-year history,’’ said a spokesman Wednesday.

Gone as Arby’s pitchman is Bo Dietl, the former New York City police detective who was the face and voice of Arby’s for nearly two years. To quote Dietl from a commercial for Arby’s fish sandwich, “Really?” Yeah, really.

In fact, the new Arby’s commercials are faceless. The only human element seen by viewers is of a person from the shoulders down wearing a chef’s jacket. A roast beef or turkey or corned beef sandwich is the star of the commercial.

“The LSR [limited service restaurant or fast food] industry is not hyper-focused on food. There are a lot of entertainment factors,” said Heath. “We wanted to see how close we could get to the food. We didn’t want to put a face in there. It’s about the finished product.”

Among the tag lines used for the new set of Arby’s commercials are “this is meatcraft,” “fear not the meats,” “meats crafted with a heavy hand” and “it will change you.”

“We feel like we have an incredible heritage of meats and that presenting them in a simple way was the best way,” Baker said in an interview earlier this week.

Brand overhaul

Arby’s new advertising campaign will be accompanied by a new branding campaign that the Atlanta-based company announced in June. The branding effort includes remodeled exteriors, revitalized interiors and staff training.

Based on some consumer testing, Arby’s message and image could use a little retooling.

According to the food industry consulting firm Technomic, sales and market share at Arby’s have declined in each of the last two years, placing the roast beef king a distant second behind Subway in the non-hamburger sandwich sector and ahead of a hard-charging Jimmy John’s.

“Arby’s is considered to be unique because its about roast beef, not hamburgers, not chicken. We’re talking about an older, nostalgic brand,” said Darren Tristano, executive vice president for Chicago-based Technomic. “Clearly there are some advertising opportunities and some innovative opportunities.”

Novak said the new Arby’s advertising campaign is all about what goes between a bun or two pieces of bread in the Arby’s kitchen.

“The main takeaway first and foremost is that this is about the meat that is put in the sandwich,” Novak said.

Tristano said Arby’s scores well with consumers on a number of metrics, including service, decor and “craveability.” But it doesn’t score so well on prices, healthy options and “advertising that makes me hungry.”

“By focusing on what differentiates you, that creates memorable and creative advertising,” Tristano said. “Freshness gives you a stronger feel of healthiness.”

And credit for a new Arby’s feel may come down to a Texas-smoked brisket that took 13 hours to cook and five minutes to carve.


Wahoo’s Grows Up

August 26, 2014

Ray-wahoosgrowsup-OCBJ-599x1024Paul Hughes

Orange County Business Journal

© 2014 Orange County Business Journal. Provided by ProQuest Information and Learning. All Rights Reserved.

Chain Gets Past Downturn, Puts Corporate Vet in Kitchen

Wahoo’s Fish Taco wants to keep it casual for customers even as it tightens up the way the 61-restaurant chain goes about its business.

That’s a shift for a company with laid-back Orange County roots-its dining rooms are monuments to surf and skate culture, with stickers for various brands dominating the decor.

It also is a response to some bruises sustained during the recent recession.

“Like everyone else, we’ve had a rough couple years,” said Wing Lam, a cofounder who is the chain’s public face.

The recession left behind a new catch phrase for established restaurant chains, he said: “Flat is the new up.”

It’s been up and down for Wahoo’s, according to Lam, with a dip last year. The Santa Ana-based chain’s 61 restaurants-34 company-owned and 27 run by franchisees-accounted for sales of $52 million, a 4% drop.

The chain is back on a growth track this year, according to Lam.

“We’ve had growth every month through July compared to the last two years,” he said.

Most of the restaurants are seeing revenue growth between 2% to 8%, he said.

The aim now is to establish a new approach that provides more structure to a lot of the processes that go into getting food to customers.

Lam and his brothers Ed Lee and Mingo Lee cofounded Wahoo’s with Steve Karfaridis, the company’s chief operating officer, in 1988. It grew into a small roster of restaurants and began franchising in 1993, often to the founders’ friends.

By 2010, it had 54 locations, including 21 franchises in California, Hawaii, Colorado and Texas, and was aiming for 70 in early 2013.

The push for expansion through franchising led to the 2010 hire of Tom Orbe as a vice president, an early step toward a more formal approach for the chain. Orbe was a franchisee himself and still operates a Wahoo’s in Temecula and another in Huntington Beach.

Trying to grow through the economic downturn produced mixed results.

Wahoo’s didn’t make it to 70 restaurants it has closed three since 2012, including one in New York, its first on the East Coast.

Deals in Arizona and Rhode Island also haven’t panned out.

The chain is adjusting, with plans to open a restaurant in Philadelphia in November. It’s rethinking its bid in New York, where the initial location was in Manhattan. It’s now eyeing suburban Westchester and Long Island for another try.

Wahoo’s added a location in Japan last year, and the chain wants more overseas.

It also has a big project in the works in its backyard: a restaurant at the Honda Center.

“Good Hard Look”

The strong start this year hasn’t deterred Wahoo’s from longer-term strategies.

“We’re taking a good hard look at systems and putting most of our resources there,” said Karfaridis.

He said Wahoo’s will bring point-of-sale, labor management and accounting to cloud based hosting.

Wahoo’s also plans to add ordering to its smartphone app, he said.

Another big effort is focused on supplier relationships, a key to containing costs and saving time.

A roasted salsa, for example, is shipped almost ready to Wahoo’s restaurants by a supplier working from one of the chain’s proprietary recipes.

“They create the base, and we finish it,” Karfaridis said.

Another supplier starts the teriyaki sauce, but each location completes it. A meat vendor pre-slices came asada-something that used to be done by Wahoo’s staff in the restaurants.

“As you grow, you come to a decision point,” Karfaridis said. “How do you preserve the spirit of the food while growing? How do you scale Wahoo’s without compromising quality?”

Balancing Act

It’s a balancing act for a chain that’s facing new levels of competition, said Darren Tristano, executive vice president of Chicagobased restaurant industry researcher Technomic Inc.

“They have to build on the menu and flavors without straying too far from the core tastes,” Tristano said. “The fish taco made them popular, but fish tacos are everywhere now.”

Karfaridis said customers often guided menus at individual restaurants.

“They’d say, T want my Maui bowl in a burrito,’ so we created the Banzai Burrito,” he said.

That produced good relations but inconsistent results across the chain.

Karfaridis said Wahoo’s wants to keep the close-up feel of the chain but streamline the process.

Wahoo’s brought on Raymond Martin in January to work on the menu.

He had stints at Huntington Beach-based BJ’s Restaurants Inc. and Calabasas Hillsbased Cheesecake Factory Inc.

Less Complexity

His mandate is to reduce complexity and costs in food preparation and presentation while maintaining or improving taste and service.

“You don’t want to waste steps or product, and customers are looking for new flavors,” Martin said.

He said he got a better price and more consistent product on tortillas through a new deal with Irving, Texas-based Mission Foods, a major supplier.

He focused on fewer ingredients with strong flavors-ginger, garlic and onions for its teriyaki sauce.

Martin cut the cooking time on came asada to retain more meat and juice. The beef continues to cook as it comes hot off the grill, ensuring its still cooked properly when it reaches the customer.

“You keep more meat, use less sauce and get the same amount of product,” Martin said.

He added a table salsa by tweaking Wahoo’s legendary pico de gallo-which is also still available-and is testing a spicy ketchup, a southwestern ranch sauce, smashed beans and seasoned onion rings.

Don’t expect sweeping changes-Lam said fish is still king.

Nearly half of Wahoo’s customers are going to eat something with fish in it, he said.

“You can get a chicken burrito from anyone,” Lam said. “But there’s only so much fish out there, and we have a great relationship with our suppliers.”

Honda Center

Martin estimated 80% of the menu has been improved in some big or small way.

Tristano said Technomic’s research on Wahoo’s consistently reveals high levels of consumer loyalty.

That meets the benchmark set out by the chain’s owners.

“Nothing will be compromised,” Karfaridis said. “We’re adding scalability and leaving the core qualities intact.”

Back in 2010, when Wahoo’s brought Orbe to boost franchising, he said the chain could grow to 400 or 500 locations but didn’t want to do it in “cookie-cutter” style.

Lam used the same term last year to describe what he intends to guard against in the latest push for growth.

“While Chef Ray is working, I’m out there gallivanting in the Wahoo’s (food) truck testing the theories,” Lam said. “Then he and I compare notes.”

Lam said not all of his ideas translate into good-or cost-effective-products on the wider scale that Martin’s been hired to oversee.

“He’s about process and presentation, and I’m about convenience and flavor, and we meet in the middle,” Lam said.

The results of the collaboration will get a showcase when Wahoo’s opens in the Honda Center this fall.

Success there could lead to another growth push and more hires for Wahoo’s management team, Karfaridis said.

“We can bring in people to do that,” he said. “This has been four guys doing all of it on the run for a long time.”

Wahoo’s Fish Taco wants to keep it casual for customers even as it tightens up the way the 61-restaurant chain goes about its business. A roasted salsa, for example, is shipped almost ready to Wahoo’s restaurants by a supplier working from one of the chain’s proprietary recipes. How do you scale Wahoo’s without compromising quality?” Balancing Act It’s a balancing act for a chain that’s facing new levels of competition, said Darren Tristano, executive vice president of Chicagobased restaurant industry researcher Technomic Inc. “They have to build on the menu and flavors without straying too far from the core tastes,” Tristano said.


Craft Soda Maker Cool Mountain is Hot

August 12, 2014

MONICA GINSBURG

Crain’s Chicago Business

(c) 2014 Crain Communications, Inc.

Untitled-1As a kid in the 1970s, Bill Daker recalls frequent outings to Lasser’s Beverages, a now-defunct soft-drink company on the North Side, where he and his brothers would swig a 32-ounce bottle of black cherry, blue raspberry or cream soda for 50 cents. Today, Mr. Daker is president of Cool Mountain Beverage Inc., a throwback line of neon-colored sodas he launched in 1997 with his brother John.

“The old pop-shop flavors, the glass bottles—it’s all memories of what we had when we were kids,” he says.

The kings of carbonated beverages may be suffering as consumers cut back on everything from Diet Coke and Diet Pepsi to Fanta and Mountain Dew. But for Des Plaines-based Cool Mountain and other little guys such as Jones Soda Co. of Seattle and New York’s Brooklyn Soda Works, these are the good old days.

 

Cool Mountain’s revenue is up 30 percent this year from 2013 and the company booked its first profit last year, though Mr. Daker declines to provide financial figures. Its soft drinks are available in 21 states, including Illinois since Aug. 1, and Canada, Britain and Singapore.

 

“The continuation of the artisan and crafted trend is moving into soda,” says Darren Tristano, executive vice president of Technomic Inc., a Chicago-based research company. “It’s like craft beer, where consumers, especially younger consumers, are willing to pay more for what they perceive as better quality and a bolder taste.”

 

The test, says Mr. Tristano, will be what happens when consumers get a thirst for something else. “Like most trends, there’s a short-term growth phase that gradually declines as consumers shift to something new,” he says. “Fifteen years ago, consumers traded up from Baskin-Robbins ice cream to Cold Stone Creamery, only to shift to frozen yogurt a few years later.”

 

Mr. Daker, 47, has survived one bust already. In 2003, as fuel prices spiked, 10 of Cool Mountain’s distributors went out of business, leaving him holding $150,000 in unpaid receivables. “It was our worst year,” he says. “It almost took me out. But by then I had so much money invested, I had to keep it going.”

 

PREMIUM PRICING

 

Cool Mountain’s sodas come in seven flavors—the top sellers are black cherry and strawberry. Like other craft bottlers, it uses 100 percent cane sugar and no high-fructose corn syrup. A 12-ounce bottle sells for $1.50. By comparison, Walgreens in mid-July was selling a six-pack of 16-ounce bottles of Coca-Cola for $2.50.

 

The brothers cooked up the business in 1995 after Mr. Daker was laid off as an electrician at Chicago-based Montgomery Ward & Co. They spent two years working with three private-label beverage companies to capture the flavors of their youth, financed with $150,000 from personal savings, family loans and credit cards. John, 48, left the business in 1999 and does maintenance work in Arizona. Another brother, Jim, 63, remains a minority owner.

 

In the early days, Mr. Daker admits, he had little knowledge of the beverage business and was blindsided when Jones Soda expanded just as the brothers were rolling out Cool Mountain. “From the start, we were competing for distributors and we were the runner-up to Jones,” he says. “The soda business is about volume, and the ones who have volume win the race.”

 

Better times came in 1999, when Mr. Daker stopped manufacturing Cool Mountain’s sodas with two Chicago co-packers and instead began to license its recipes to other manufacturers, which would either handle distribution or sell to other distributors.

 

Today Cool Mountain works primarily with Dr. Pepper Snapple Bottling Group Inc. in West Jefferson, North Carolina, and Real Soda Ltd. in Gardena, California. Mr. Daker’s largest customer, Ingels Markets Inc., a chain of 200 supermarkets in the Southeast, accounts for 10 to 15 percent of business.

 

That sales are growing at all in 2014 says something about Cool Mountain’s cachet. Total volume of carbonated soft drinks fell 3 percent in 2013, the ninth straight year of decline and the lowest since 1995, according to Beverage Digest LLC, an industry tracker in Bedford Hills, New York.

 

And while Cool Mountain just has begun selling in Illinois—it had been blocked by exclusivity clauses with some distributors—Mr. Daker launched another brand, Chicago Root Beer, here in 2011. It’s made in Chicago and sold in kegs. Chicago Root Beer makes up 20 percent of the company’s revenue, with a quarter-barrel selling for $45. Horseshoe Casino in Hammond, Indiana, is the largest customer.


In breakfast wars

August 7, 2014

Taco Bells boldmarketing pays off with big sales

Maureen Morrison

(c) 2014 Crain Communications, Inc. All rights reserved.

IS TACO BELL’S BREAKFAST giving McDonald’s a wake-up call?

The Yum chain’s launch in late March went directly after McDonald’s with marketing that aggressively framed the Golden Arches as hopelessly outdated, and trumpeted Taco Bell as the next generation of fast-food breakfast. Its cheeky TV ads used real-life Ronald McDonalds proclaiming their love for Taco Bell’s morning fare.

The first clue to whether this audacious play is paying off came during Yum’s second-quarter earnings. Yum Brands CEO David Novak said breakfast comprised around 7% of sales in the quarter and that the company expects it will add anywhere from $70,000 to $120,000 in annual sales per restaurant.

Projecting sales using those numbers, Taco Bell could stand to reap an estimated $375 million to $641.5 million in first-year sales from breakfast.

“McDonald’s does more breakfast sales in the U.S. than Taco Bell does total sales globally,” said Darren Tristano, exec VP at Technomic. Even so, “McDonald’s has to pay attention,” he said.


Healthy Hoagies Subbing In

August 6, 2014

getimageCanadians crave quality ingredients, ethnic twists on beloved meal of the masses, study suggests

Vancouver Sun

Copyright © 2014 Vancouver Sun

Almost everyone in Canada – a whopping 94 per cent of us – eats at least one sandwich a week, with 35 per cent eating a sandwich at least every other day.

But according to a new report by Technomic Inc. – a research and consulting firm focused on the food industry – healthy options are more important than ever.

The Canadian Sandwich Consumer Trend Report found today’s shoppers place more importance than ever on the quality of the sandwich, from the bread to the meat, cheese and condiments.

The majority of us say healthy sandwich options are a priority at lunch (57 per cent) and dinner (56 per cent).

And just 44 per cent say they’re satisfied with the “healthfulness of sandwiches away from home.” Which, in a way, is good news for all those café owners out there: there’s room for growth. “Operators need to focus on the quality of their sandwiches to help drive traffic and steal share,” Darren Tristano, executive vice-president of Technomic Inc., said in a release. “Certain concepts can emphasize sandwich quality and improve health perceptions at the same time through better-foryou sandwich claims, such as fresh, artisan or made-from-scratch.” A growing number of shoppers also say they like to try new or unique flavours on sandwiches: 27 per cent, up from 21 per cent in 2012.

 

HERE’S WHAT ELSE THE REPORT FOUND:

Canadians eat, on average, 3.3 sandwiches per week

35 per cent of Canadians eat a sandwich at least every other day

39 per cent of the sandwiches we eat are not made at home, but purchased elsewhere

60 per cent of the sandwiches we buy are takeout meals

48 per cent of us buy grab-andgo sandwiches

44 per cent would like healthier sides with our sandwiches

21 per cent of us – and 32 per cent of 25- to 34-year-olds – would like more ethnic sandwich options at restaurants

 

WHAT WE’RE EATING

Top 5 on the menu

Sandwich/wrap Appearances

Chicken 834

Veggie 406

Steak 204

Mixed protein 181

Pork 179

Source: Technomic MenuMonitor survey of 4,747 menu items in Q2 2014

 

How many of us order a sandwich away from home once a month or more for the following:

Our Top 3 lunch sandwiches

Burger: 23%

Sub/hoagie/hero: 19%

Deli: 10%

Our Top 4 dinner sandwiches

Burger: 32%

Sub/hoagie/hero: 22%

Chicken-breast sandwich: 7%

Deli: 7%

Fastest-growing condiments/sauces

Honey 55%

Tartar sauce 25%

Jam 22.2%

Caesar 20.3%

Tomato sauce 20%

Marinara 16.7%

Sauerkraut 15%

Pico de gallo 12.5%

Horseradish

mayonnaise 12.5%

Mango salsa 11.1%

Source: Technomic MenuMonitor survey of 2,058 menu items from Q2 2013 to Q2 2014


Juice Craze May Be Next to Tank, Analyst Says

July 22, 2014

As the demise of Crumbs Bake Shop, and its cupcake kingdom, roils the food industry, one analyst is already predicting the next hot trend that is likely to cool off: Juices.

That’s the word from Darren Tristano, executive vice president of restaurant research company Technomic.

In a blog this week, food guru Tristano wrote that juice concepts, while “all the rage today,” are at risk of over-saturation and too much competition. The Westfield Garden State Plaza in Paramus is now home to Jamba Juice and Freshu Grill and Juice Bar.

“With health and wellness getting more play from affluent and millennial consumers, it’s clear the cold-pressed juice concepts will be pushing hard to expand,” Tristano wrote.

“Even though these concepts have price points over $10 in major markets like Los Angeles and New York, it’s clear that Hollywood-starlet impact on our country with juice cleanses is evident. Juice specialists will likely expand quickly as the fad continues but the trend will settle into concepts that represent reasonable prices for the mainstream consumer.”

He predicted that big brands such as Starbucks’ Evolution Juice and Juice It Up will have an edge in this competition.

“But ultimately, the ‘craze’ will settle down and many restaurants will likely see declines in sales that make it difficult to continue their operations,” Tristano wrote.


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