Wendy’s to Look Into Dropping Antibiotics

July 31, 2015

wendys-chickenJD Malone
(c) 2015 Columbus Dispatch. All Rights Reserved.
http://www.dispatch.com/content/stories/business/2015/07/30/wendys-to-look-into-dropping-antibiotics.html

Instead of a spicy rub or a slice of artisanal cheese, Wendy’s latest chicken sandwich is getting attention for what it won’t have.

The Dublin-based chain is poised to begin testing antibiotic-free chicken in several cities as it tests both consumer response and its supply chain.

Wendy’s plans to test a new chicken sandwich in mid-August in seven markets, and antibiotic-free chicken in four of those seven — Orlando, Fla., Gainesville, Fla., Kansas City, Mo., and Austin, Texas.

Central Ohio won’t see the new chicken unless it goes nationwide. That move is pretty likely as long as there is enough antibiotic-free chicken available, analysts say.

Further details on Wendy’s plans were not forthcoming.

Still, analysts think it’s the right move to swim with other chains doing similar things. McDonalds, Chipotle and Chick-fil-A have all pledged to remove antibiotics from their chicken. Big producers including Tyson and Perdue also have announced a pivot away from using antibiotics unless medically necessary.

“On the list of bad words, antibiotic had definitely moved up,” said Darren Tristano, vice president at Technomic, a Chicago-based food-service analysis and consulting firm. “The overall trend is taking things (thought to be) harmful out of the supply chain. Consumers want this.”

“The time is ripe,” said Tim Powell, principal of Think Marketing, a Dublin-based food-service consultant. “Today’s consumer is far better-educated on where their food is coming from, and they have shown they will pay more for it.”

The new chicken will also be used in salads and other menu items featuring grilled chicken.

Wendy’s has been looking to tweak its menu lately.

Earlier this year, the chain tested a black bean veggie burger in Columbus and received a lot of attention for trying a nonmeat sandwich. There’s no word on whether that sandwich will join the chain’s menu permanently, but it’s part of a bigger strategy among quick-service chains to keep up with fast-casual restaurants such as Chipotle.

They have to speak the same language to lure similar customers.

“You have to do things like this,” Tristano said. “You don’t want to be one of the last. You want to be one of the first.”


Dunkin’ Donuts Slams New York Regulators Over Wage Increase

July 28, 2015

1200x-1

Juliana LabiancaFreeman Klopott
http://www.bloomberg.com/news/articles/2015-07-23/dunkin-donuts-lashes-out-at-new-york-regulators-over-wage-hike

Dunkin’ Brands Group Inc., the owner of Dunkin’ Donuts, upbraided New York regulators over a plan to boost fast-food wages to $15 an hour, a move the company said could lead to price increases.

A wage board formed by Governor Andrew Cuomo arrived at the decision without involvement from the restaurant industry, Dunkin’ Chief Executive Officer Nigel Travis said on a conference call Thursday.

“We’re deeply disappointed that the governor chose to skirt the legislative process by appointing a wage board, which did not even include a representative from our industry,” he said. “Our franchisees, and in fact other company’s franchisees, were denied the chance to fairly express their concerns.”

The board recommended on Wednesday that the minimum wage for fast-food workers be raised to $15 by 2018 in New York City and three years later in the rest of the state. Cuomo has indicated that his labor commissioner, who has final say, will follow the board’s advice, though adjustments may be possible. The increase, which will be phased in annually, applies to fast-food chains with 30 or more locations.

Dunkin’ is contemplating ways to adjust to the pay increase, Travis said. One option is boosting prices, he said.

Unfair Attention?

Travis complained that the fast-food industry was singled out by regulators, a concern echoed by McDonald’s Corp. Chief Financial Officer Kevin Ozan during a conference call Thursday. McDonald’s wants minimum-wage increases to “deal with all industries similarly,” he said. Ozan didn’t discuss New York City’s wage hike specifically.

Picking on fast food alone will put those businesses at a competitive disadvantage, said Randy Mastro, an attorney hired by a group of New York franchisees. The proposal, he said, targets business owners who are “already struggling to survive on low margins and cannot afford this 66 percent increase in labor costs for their entry-level workers.”

Restaurant companies have come under increasing pressure to boost pay over the past year. Large chains have a corporate social responsibility to pay a fair wage, said Darren Tristano, executive vice president at research firm Technomic Inc.

“If you’re a chain, it may feel like you’re being targeted, that it’s making it harder to be successful,” he said. “But it’s the right thing to do.”

In response to Dunkin’ complaints, Cuomo spokeswoman Dani Lever referred to comments the governor made at a rally in New York City. At the event, he said higher wages are needed for workers to live a decent life.

“You cannot live and support a family on $18,000 a year in the state of New York,” Cuomo said. “That’s why we have to raise the minimum wage.”


Gone Fishing

July 27, 2015

July15-Food-Trends---Sharky's-Tacos

Copyright © 2015 Journalistic Inc.

http://www.qsrmagazine.com/menu-innovations/gone-fishin?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20QSRmagazine%20%28QSR%20magazine%29

Seafood gives operators a versatile protein that has a sustainable, healthful halo.

There’s nothing fishy about the seafood at limited-service restaurants today. Operators are focused on meeting consumers’ demands for seafood that is creative, healthful, and sustainable, from grilled fish fillets to upscale lobster rolls.

“There’s a little oversaturation in chicken, burgers, and pizza,” says Andrew Gruel, founder of Slapfish, a seven-unit southern California seafood chain. “People are eating more seafood now that they realize how healthy and accessible it is.”

According to Chicago-based market research firm Technomic Inc., 64 percent of the nation’s quick-service and fast-casual restaurants offer a seafood item, whether it’s fish tacos, shrimp fried rice, or anchovies on pizza. The number of seafood items on regular limited-service menus is virtually unchanged from a year ago, with 54 percent featured at quick serves and 46 percent at fast casuals.

The most offered seafood, according to Technomic’s MenuMonitor database, is shrimp. It’s in a variety of dishes, part of many ethnic menus, and a popular add-on protein at restaurants as diverse as Noodles & Co. and Pei Wei Asian Diner.
Even Atlanta-based wings chain Wing Zone serves a shrimp dish. “Almost all of our food items are fried, so having fried shrimp is easy on the operation,” says Dan Corrigan, director of marketing. “We actually changed our shrimp recently to more of a jumbo breaded shrimp, and that’s doing well.” The shrimp is served with a dipping sauce. It’s only 3 percent of the sales, Corrigan adds, but when Wing Zone tested removing the item from one restaurant, guests wanted it back.
One reason fast casuals make up a big percentage of limited-service eateries serving seafood is its premium price, says Technomic executive vice president Darren Tristano.

“That’s harder to translate to quick service,” he says. “Seafood’s price points are more full service or fast casual.” Nonetheless, many big limited-service restaurant operators offer at least one seafood menu item, such as the Filet-O-Fish at McDonald’s or Tuna Sandwich at Subway.

Keeping seafood sustainable is more important to Americans today than ever before.

“Customers are increasingly asking where their food comes from, how is it produced, is it safe, and are there any environmental issues when it’s produced,” says James Baros, aquaculture and sustainability coordinator at provider National Fish and Seafood of Glouchester, Massachusetts. He points to Atlantic cod and some tuna species as examples of how industrial fishing nearly obliterated stocks. “It was an important lesson to learn,” he says.

Half of U.S. seafood is caught wild, while the other half is farmed. That’s up from 15 percent farmed three decades ago. “We’re seeing a big transition to aquaculture,” Baros says. “Fish is the last major food we go out and catch. You don’t hear of catching cows in the wild.”

Salmon, shrimp, and tilapia are the most popular farm-raised seafood varieties for Americans. But wild caught still has a certain cachet for diners, and many restaurants point out that their fish is wild caught. That includes the largest quick-service seafood operator, Long John Silver’s, where the classic battered and fried Fish and Chips remains the biggest seller.

“Our two main types of fish are Alaskan pollock and cod. Both are wild caught and sustainable,” says chief executive James O’Reilly. “It takes a lot of commitment to maintain a sustainable supply.”

The fried fish is usually pollock, while cod is available either fried or baked. Shrimp, mostly farm-raised in South America, can be baked or fried, and Long John Silver’s also sells fried crab cakes and clams, with langoustine bites offered as a seasonal item.

“Our seafood menu has evolved,” O’Reilly says, adding that the brand has increased its healthier options while also adding more portable items, including fish tacos, seafood-salad sandwiches, and fish strips. These steps are helping the Louisville, Kentucky–based company maintain its seafood leadership, O’Reilly says. “I believe that growth will be fueled by the addition of Millennials concerned with quality and sustainability,” he says.

Battered fried fish is also the No. 1 item at Captain D’s, which has positioned itself as a fast-casual seafood dining experience. While about two-thirds of the menu is fried, the biggest growth is in grilled items, says Jason Henderson, vice president of product innovation for the Nashville, Tennessee–based chain. Double-digit growth pushed grilled food to about 10 percent of sales in 2014.

The grilled menu includes Alaska salmon and pollock, tilapia, and shrimp, while the fried fish is pollock. The chain also features breaded flounder and catfish, a nod to its Southern roots, as well as fried shrimp and stuffed crab shells.
Most diners don’t ask about the food’s source, Henderson says, but the menu often makes it quite clear, particularly with Alaskan fish.

“We’ve worked with a long list of accounts to increase the visibility of Alaska seafood,” says Claudia Hogue, foodservice director at the Alaska Seafood Marketing Institute. The state produces 53 percent of America’s seafood harvest.

In addition to white fish—cod, halibut, and pollock—Alaska is known for its wild salmon. Some salmon varieties are available year-round, but for most, the season kicked off in May and runs through the summer. There are also Alaska Dungeness and other crab varieties, along with scallops and prawns.

“We encourage people to use the Alaska name because we know customers more and more want to know the origin of their fish,” Hogue says. Studies commissioned by the institute indicate consumers feel better about buying Alaska-brand seafood.

Southern California–based Sharky’s Woodfired Mexican Grill makes a point that fish served in its tacos, burritos, bowls, and other items are wild caught, and varieties like salmon and cod are from Alaska.

“We’re a lifestyle brand, and many who visit us recognize the benefits of wild-caught seafood,” says David Goldstein, chief operating officer of the two-dozen-unit chain.

The most popular seafood item is Charbroiled Fish Tacos featuring salmon or wahoo. Fish tacos are $4.29, versus $2.99 for chicken and $3.99 for steak. Other favorites are the Salmon Power Plate, Salmon Burrito, and Tempura Cod Tacos.
Sharky’s also features mahi mahi, pollock, and shrimp, and all these offerings provide “a real point of differentiation for us,” Goldstein says. Seafood has grown to 11 percent of sales, twice what it was a few years ago.

At Ivar’s Seafood Bars in and around Seattle, fish (Alaska cod) and chips is the big draw. “We ride the up-and-down tides on price points,” says Carl Taylor, director of operations at the regional favorite. “It’s a premium product we serve.”

The majority of the menu is fried. In addition to cod, there’s fried halibut, salmon, clams, scallops, big and small prawns, and oysters. The menu also has several chowders, grilled halibut and salmon, Dungeness crab, and salads with different seafood varieties.

“Within the past three years, we expanded the grilled items and added fresh fish,” Taylor says. “We sell it as long as the run is going.” The two-piece Fresh Halibut Platter, with cole slaw, wild rice, and cornbread, sells for $15.99.

Ivar’s oysters are from the Washington and Oregon coasts. The Alaska Dungeness ($9.29) is higher in terms of price, he says, but worth every penny. “I could go out and get rock crab and mix it with the Dungeness to lower the price, but we don’t.”

Just as consumers equate wild salmon with Alaska, they link lobsters with Maine. That’s the draw at New York–based Luke’s Lobster, which has 17 fast-casual “shacks” in Mid-Atlantic coast cities and recently expanded to Chicago.

“We are exporting the experience of the Maine lobster shack,” says founder and president Luke Holden, whose father has been in the seafood industry for years and built up well-established relationships with fishermen across the Northeast coast.
The $15 fresh lobster rolls are made to order in the traditional Maine style, with a quarter pound of chilled lobster meat in a top-split bun—the sides are shaved to toast better—plus a slick of mayonnaise, Holden’s secret seasoning, and lemon butter.

“All the meat is from the claws and the knuckles; the knuckle tends to be the most delicious part,” Holden says, adding that the tail is considered premium, but not for lobster rolls. “You would have a tug of war with a warm bun and a chewy tail.”

The shacks also offer crab and shrimp rolls, Jonah crab claws, and New England clam chowder. Crab is purchased from fishermen from Maine to Rhode Island, while the shrimp is wild from Canada.

Lobsters were sustainably caught long before it became a trend, says Matt Jacobson, executive director of the Maine Lobster Marketing Collaborative. Some rules governing trapping date from the 1870s. Today, lobsters must be males between 3.5 and 5 inches in body length. Others are tossed back—smaller ones to grow, and females and bigger males to breed.

While many consumers consider lobsters a center-of-plate item served whole, there are many other uses for the meat, Jacobson says, including in salads, pasta, and Asian dishes. Lobster rolls are also growing in popularity nationwide.

Lobster rolls and fish tacos are the two top sellers at Slapfish. “Lobster is incredibly indulgent, and the growth in our lobster rolls has been 100 percent due to Instagram and social media,” Gruel says. “People see them online and want them.”

The fish tacos are available with grilled or fried fish, largely wild-caught species ranging from Pacific cod to Maine’s Acadian redfish, depending on the season. The tacos include cabbage, avocado purée, and pickled onions.

“The key is the balance,” he says. “You want a good amount of cabbage to provide that great crunch, and the acidity to cut through the richness of the fish.”

Slapfish’s limited entrée menu also includes the Crabster Grilled Cheese sandwich with lobster and crab, and a Surf ‘n Turf Lobster Burger smothered in lobster and caramelized onions. There’s also fish and chips, chowder, chowder on fries, and shrimp.

A taste of the Hawaiian Islands is part of the draw at Coconut’s Fish Café. The four-unit chain began in Maui, Hawaii, and has since moved to the mainland. It features mahi mahi, ono—the Hawaiian name for wahoo—and ahi.

“They are all wild, and they are line caught,” says Dan Oney, chief operating officer. “The people we buy from are able to track the fish to the boat. It’s the concept of taking care of the earth and taking care of our customers.”

Most of the fish is grilled, and the ahi tuna is seared rare and served with wasabi. “We have big, beautiful, 6-ounce fillets of fish that if you go to a sit-down restaurant, you would pay $30 or $40,” Oney says. Coconut’s platters start at $10.99.
Mahi mahi and ono are in the seafood pasta, as well as the fish tacos that include family-recipe coleslaw and tomato and mango salsas. There’s also a fish sandwich and other fried items—fish and chips, shrimp, calamari, and coconut shrimp—on the menu.


Subway is Making a Huge Mistake That Could Undermine its Business

July 21, 2015

jared-fogle-subway-5Ashley Lutz
http://www.businessinsider.com/subways-rapid-expansion-could-hurt-business-2015-7

Subway’s biggest problem has nothing to do with shamed former spokesman Jared Fogle.

The company dismissed its weight-loss pitchman last week after his house was searched in an FBI investigation and one woman accused him of making inappropriate comments about middle-school girls.

While the scandal with Fogle will pass, the company’s rapid expansion plan is a bigger issue that could hurt business, according to Jonathan Maze at Nation’s Restaurant News.

“It’s really been a victim of its own success,” David Henkes, from the consulting firm Technomic, told Bloomberg. “It’s really saturated the market. It’s got over 27,000 (US) locations now. The unit economics are very tough. Competitors have really come in and provided some alternatives to consumers that have caused Subway to suffer some sales losses.”‘

Subway has 44,000 restaurants worldwide, more than McDonald’s. Executives say the company eventually plans to reach 100,000 locations.

Subway’s US sales last year fell by 3%, the biggest fall for any of the top 25 fast-food chains, Drew Harwell reports at The Washington Post.

Subway also fell two spots to become the third-most-popular fast-food restaurant for the first time in seven years.

The expansion plan is backfiring, according to The Post.

“More people have money to spend, and they’re choosing to spend a little bit more on better concepts where they get a better product,” Darren Tristano at Technomic told The Post. “Subway’s strategy has only been to open more stores, and ultimately those stores just cannibalize each other.”

In other words, Subway is so ubiquitous that customers leave one restaurant to go to a closer one.

Tristano also told Bloomberg that “if your goal is to have the most versus the best, you’ll eventually run into trouble.”

Subway should focus on innovating its menu instead, Maze said.

With its vegetables and lower calorie counts, Subway arguably invented the idea of “fresh” fast food two decades ago.

But while Subway stayed the same, better competitors got into the space.

Chipotle offers food that is raised without fillers or antibiotics and is prepared fresh in stores. Firehouse Subs and Potbelly offer elevated ingredients and side dishes such as gourmet kettle chips and potato salad.

Americans who once praised Subway’s low-fat offerings are now concerned the chain’s lunch meats and sauces are overly processed with fillers and additives.

“What Americans see as healthy has evolved,” Harwell writes. “Subway hasn’t.”


Romano’s Macaroni Grill Has a New Twist to Dining Options

July 10, 2015

pictureMike D. Smith
Copyright 2015. Hearst Communications, Inc. All Rights Reserved. Distributed by NewsBank Inc.
http://www.pressreader.com/usa/houston-chronicle/20150709/281973196325188/TextView

As chain with 147 locations adjusts to desires of millennials, it adds a walk-up express line to its traditional sit-down table service

Fans of Romano’s Macaroni Grill can still walk in, take a seat and wait to order from a familiar-looking Italian-American menu. But diners seeking quicker, cheaper meals now can turn toward a walk-up express line and order from “Romano’s Kitchen Counter.”

The addition of this “fast-casual” option, with lower-priced and easier-to-prepare items, represents the latest shake-up for a chain that has seen its value plummet since 2008. Macaroni Grill’s newest owners are hoping to attract more of the typically younger customers drawn to places like Chipotle, Panera Bread and Zoës Kitchen, while not abandoning the full-table service it has provided for 27 years.

“We decided to play in both spaces,” CEO John Gilbert said recently at the Macaroni Grill at 5802 Westheimer Road.

The makeover comes amid an industrywide shift as restaurants struggle to keep pace with demographic changes, diners’ ever-evolving moods and a post-recession dining landscape that favors new, fresh, quality and quick.

Gilbert took over earlier this year after the sale of the company by Houston-based Ignite Restaurant Group for just $8 million. Ignite had paid $55 million for the properties two years ago, taking them off the hands of a California private equity firm that had given Dallas-based Brinker International $88 million in 2008.

The number of restaurants in the chain dropped as well, to 147 today from 200 at the time of the Brinker sale.

Those 147 locations churn out annual sales of about $350 million, serving about 20 million meals each year.

However, Gilbert saw much room for improvement.

The restaurants had undergone only one makeover once since 1992. That is a far longer interval than the seven years that Gilbert said is ideal.

As the restaurant chain’s brand aged, so did its core customer.

Part of the formula for Mac Grill’s turnaround is a remodel. The dimly lit interiors will undergo changes to make better use of each restaurant’s ample space. The exteriors are being studied for more eye-grabbing details that can capture passing traffic.

Those changes are to complement the most noticeable shift – the mix of express and casual service, cashing in on what Gilbert said is an undeniable industry change toward express service.

Dual-concept mode

The company first tested the dual-concept model in a Cleveland, Ohio, restaurant.

First came express lunch. Customers order at the counter from a different menu more suitable for quicker service, with more “handhelds,” like sandwiches, plus calzones, pastas and spaghetti. Express customers get a number and take a seat.

The chain took its express lunch national in October, then added a dinner express menu in February with a seven-minute guarantee for the $7 lunch and nine minutes for the $9 dinner.

“In the aggregate, it’s working,” Gilbert said, adding that he measures success through dining traffic. “Are we getting more people in our restaurants than we did before? I think, absolutely, that’s true.”

A growing segment

Of the 61 billion American restaurant visits in the year ending in May, fast casual accounted for 5 percent of the market, said Bonnie Riggs, a restaurant industry analyst with NPD Group.

Still, it’s the segment everyone’s talking about. In 2009 and 2010, during the recession, overall restaurant industry growth was negative two years in a row for the first time.

Overall growth has been flat since. The segment bucking that trend is fast casual, which has posted 7 to 8 percent quarterly growth.

All of this is happening as the restaurant industry now features more options for ready-to-eat, fresh food – think, supermarkets and enhanced convenience stores – and sees, increasingly among millennials, more cooking at home.

“It’s been a real battle for market share, and with this one segment growing, everyone is seeming to try and emulate it,” Riggs said of fast casual.

While mixing fast casual with casual is attractive, Darren Tristano, executive vice president of food service consulting firm Technomic, says it can have its pitfalls.

One challenge is the potential for customer confusion. Those who know a restaurant’s brand will expect full service, and there can be a learning curve for others.

There’s also the risk of alienating core customers.

“I think that the mistake many of these concepts are making trying to compete with fast casual is they are losing sight of consumers coming to them for a particular reason, what they’re known for,” Riggs said. “You really have to do your homework and understand what your customers’ needs are. They can go to a fast-casual restaurant if they want fast-casual.”

Some brands have created offshoots to tap the express service market. Examples include Pizza Inn’s Pie Five and Red Robin’s Burger Works. Other brands have tried and failed.

The best use of a hybrid model is to boost lunch sales with more value, convenience and service, Tristano said.

Gilbert said that is happening with Macaroni Grill’s changes to date. Lunch sales, which represent about 30 percent of the chain’s business, have increased by about 20 percent.

Lunch express, so far, is more lucrative than express dinner.

Interior remodeling

Customers will begin to see the other changes soon. A Houston location will undergo the first interior remodel within a few months.

The company continues to explore additional express-service menu items, a new pizza-menu lineup, steakhouse items, additional salads and seafood. The dozen new express-menu items are being evaluated for their popularity, with such items as parmesan truffle fries and brunch offerings being explored.

There also are plans to test a “wine-on-tap” system and an express-only version of the restaurant – all part of the effort to retain its loyal customers and appeal to younger diners.

“The bigger risk is not doing anything,” Gilbert said.

Gilbert said, too, that he admits the chain has to catch up to its competitors.

“There are customers who like us truly because we’re not busy,” he said. “That’s not healthy for us.”


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.”


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.”


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