5 Reasons Burger King Wins with Tim Hortons Beyond the Tax Inversion

August 25, 2014

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Yesterday Burger King announced plans to acquire Canadian coffee-café chain Tim Hortons, which would enable the burger chain to relocate its headquarters to Canada. The move would lower its tax obligations, a fact the media has latched onto. But even without the so-called tax inversion, Burger King could win with the deal. Here’s how.

  1. Burger King continues to compete in the breakfast daypart, and coffee is essential to attracting patrons. Although Burger King has integrated Seattle’s Best coffee into its breakfast offering, replacing it with Tim Hortons’ premium-blend 100% Arabica bean could be a more financially advantageous opportunity on coffee purchasing.
  1. With increased emphasis on global brand growth, a combined Burger King/Tim Hortons provides strong growth opportunity through co-branding. Giving potential licensees the opportunity to offer a strong breakfast/lunch offering from Tim’s and lunch/dinner offering from Burger King maximizes rents and revenues.
  1. Competing with McDonald’s has become a challenge for larger brands. Since both Tim’s and Burger King compete with the global burger giant, Burger King should get a leg up in the competition. With greater opportunities to fine tune their Canadian operations, Tim’s knowledge of the market should support BK’s strategy and planning in Canada and create stronger competition with McDonald’s stores overall.
  1. Consumer loyalty and sentiment toward Burger King would likely improve with the Tim Hortons marriage. As the majority of Tim Hortons’ customers are brand fans, the strong emotional connection could carry over to Burger King with the new relationship. Emotional connections are important to younger Millennial consumer, and the connection could help strengthen brand perceptions.
  1. Out-of-the-bun thinking is becoming increasingly important to consumers. Menu innovation, limited-time offerings and the need to build what’s new and what’s next on the menu is important for consumers to maintain relevance to restaurant operators. The crossover of Tim Hortons’ and Burger King’s insight and development teams can provide some new perspective and ideally leverage staff experience and skills to support ongoing development programs.

Final Thoughts: Although this investment makes strong financial sense, the post-investment reality will be on leveraging synergies that exist and maximizing the relationship with new emphasis on overall brand growth objectives. How quickly each brand accepts the new realities and bands together culturally will determine the expected success.


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.


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.


Cold Fusion

January 9, 2014

2014-01-09_1101In an exercise that captured the attention of category managers attending CSP’s Cold Vault Summit, consultant and former retailer Casey McKenzie of Lexington, Ky.-based Impact 21 Group asked the retailers to consider where they would place products in a fictional convenience store.

While the specific results didn’t matter—“There is no right or wrong answer,” McKenzie said— the real message was in the variety of answers.

While one group placed beer in the back-corner cold-vault doors across from a beef-jerky endcap, another put dairy in the same corner doors with bread and other grocery basics nearby. “We imagined our store was in the Northeast, where c-stores really evolved out of the dairy business,” explained the team’s leader, Nancy Knott, category manager of alcohol for La Palma, Calif.-based BP ampm. In that region, she reasoned, consumers are still drawn by bread, milk and eggs.

“That’s it!” McKenzie said. “This exercise is not just about product placement and adjacencies; it’s about what your marketing objectives are. Much of it is driven by who your customers are and what you want to be. But it can’t all be pie-in-the-sky stuff; there has to be some science behind it.”

For three days, 35 retailers from across the country put on their proverbial lab coats to consider the science and the data driving beverage sales today. Their scientific method started with a big picture: the economy and,
perhaps more important, how consumers view it.

“I think the economy is in a lot better shape than [most] people do,” said analyst Nik Modi, who follows beverage and tobacco stocks for RBC Capital Markets. Modi said the housing market is improving, U.S. gross-domestic product is growing again and the job picture is showing some progress.

Despite that, 10 of 12 major beverage categories are slowing and the majority of food categories are declining, according to Modi.

This is a matter of psychology and how consumers think about their purchases. “The internal consumer is being squeezed,” forcing them to be more disciplined in their spending, meaning less discretionary spending
on things such as beverages and fast food, he said. “Consumers are making choices.”

Also, as spending on cars and housing have increased this year, retail sales have declined.

Calorie Concerns
Meanwhile, the continuing trend toward healthier eating also has taken a toll in more ways than one.

First, there’s the move away from products—full-calorie sodas and juices—viewed as adding to the obesity epidemic in the United States.

But the real surprise is that even diet drinks, particularly low-calorie carbonated soft drinks, are hurting, indicating the next phase in the continuing move away from the CSD category.

“It comes down to health and wellness,” Modi said. Consumers are hearing a lot of negative news about low-calorie sweeteners, particularly aspartame, that’s turning them away from the category.

“Just as consumer interest in aspartame peaked (in the first quarter of 2013), diet CSD trends began to worsen, while regular CSD trends remained,” he said. “There are a lot of companies out there chasing the lowcalorie trend. I’m not sure it’s as important today as it used to be.”

For c-stores, those more indulgent beverages are still an area of growth. “Seventy percent of what I sell in my stores have nothing to do with health and wellness,” said retailer Lundy Edwards of Forward Corp., Standish, Mich.

Still, Modi and others pointed out, the trend suggests these full-calorie categories are falling out of favor with the public.

Ivan Alvarado, director of category management for Plano, Texas-based Dr Pepper Snapple Group, acknowledged that in just the past year, the average CSD set has shrunk from 14 shelves to nine in c-stores, most of it claimed by energy drinks and bottled water. “Some of this is related to health and wellness, and some of it is self-infl icted,” he said, citing beverage makers’ hesitance to innovate, and that “CSDs have not been able to communicate with millennials. New tactics are needed to reach these consumers.”

Added Clinton McKinney, group director category advisory for Atlantabased Coca-Cola North America, “If you want to be known as one of the retailers who embraces innovation, you’ve got to go all the way and let the
consumer know that’s your play with signage and other messaging.”

“It’s all about interrupting that autopilot behavior that consumers have in the store,” Alvarado said.

One challenge for retailers is the latest generation—those 21 to 35—coming of age. These millennials are less trusting of big business, making a warning message about the industry’s oldest artifi cial sweetener resonate all the more.

“They have a very low level of trust for institution,” Modi said. Instead, millennial consumers rely on their friends for recommendations, whether it’s a co-worker they see every day or a distant but respected acquaintance they  communicate with only through Facebook.

“It’s when recommendations start coming in on social media that sales really begin to improve,” Modi said.

To that end, Alvarado encouraged retailers to call out soda makers to turn things around. “Challenge us,” he said. “Every time we walk in your stores, ask us: What are you doing to sell more in my store?”

Energy’s Boost
One of the most active beverage categories on social media is energy drinks. With sponsorships of extreme-sport athletes and unique events, such as Red Bull’s Flugtag competition and Monster’s sponsorship of skating, surfi ng and snow events, the suppliers are keeping their brands in front of their key demographics’ eyes.

“Think about all the things that Red Bull does that make someone think, ‘Oh, I’ve got to post that [on Facebook],’ ” Modi said.

Still, energy-drink sales trends are slowing. The young category overall is growing by about 5% today, compared to the double-digit (up to 20%) growth of past years. The category is maturing, and consumers have taken notice of the headlines surrounding energy drinks and the pending lawsuits that claim the drinks are dangerous. Still, Modi doesn’t think that has had much of an effect on sales.

Energy-drink sales grew 8.6% in c-stores for the 52-week period ending Aug. 10, 2013, according to Nielsen data presented by James Ford, head of category and shopper insights for Red Bull North America, Santa Monica, Calif.

“The convenience channel is driving energy-drink growth,” he said. “And energy drinks will continue to be the biggest growth contributor to the beverage category through 2017 and beyond.”

C-store retailers attending the Cold Vault Summit generally agreed that energy drinks are still a bright spot in the cooler, bringing a high-margin ring to the checkout as the major energydrink makers—Monster, Rockstar and Red Bull—maintain a busy newproduct introduction pace to keep the category fresh.

The Wonders of Water
Bottled water is also gaining space in the cold vault as the subcategory continues its march toward becoming the No. 1 beverage in the United States.

The growth comes as usage occasions expand and variety increases, said Chelsea Allen, senior manager, category and shopper solutions, for Nestle Waters North America, Stamford, Conn.

“Bottled water outsells sodas in 13 U.S. markets today,” she said. “It will be the No. 1 beverage in the country in 2016.”

The opportunity for retailers is to grab as much share as possible of the category while it’s still growing.

“Smartwater is the fastest-growing brand, and private-label [water] is growing on distribution gains,” Allen said. “But … we know that brands bring people into your stores. In fact, 44% of all bottled-water households will only buy branded bottled water.”

To improve water sales, Allen encouraged retailers to offer single-serve packaging for the three main water segments: premium, popular and value waters. She also urged retailers to stock 12- and 24-packs of water. “Nearly 6 million shoppers shop in convenience stores and buy case pack water,” she said. “But only 1% of households buy case water in c-stores. It’s a real opportunity.”

Favoring Flavor
Millennials are helping change another aspect of the beverage landscape: They’re more willing to experiment with new flavors. They join the growing Hispanic demographic in a desire to sample bolder flavors. When you add millennials’ $1.7 trillion in spending power to Hispanics’ $1.2 trillion, the result is a “structural change” to the country’s palate.

“It’s the blending of America,” Modi said. “The white consumer is taking culinary cues from Hispanic, Asian and African-American consumers.”

This led Modi to suggest beverage manufacturers should focus less on low-calorie products and more on new flavors that appeal to this new desire for stronger flavors.

“We’re at a point in the United States where companies are taking ingredients out of their products” to make them seem more natural, Modi said. “Instead, there’s not enough flavor.”

The most obvious and successful evidence of this trend is in the beer and wine categories. One reason: By 2018, 80 million millennials will be of legal drinking age, and 20% of millennials are also Hispanic, according to Darren Tristano, executive vice president of Chicago-based Technomic Inc.

For wine, the move has been toward mixing varietals to create new flavors and indulging the millennial consumers’ sweet tooth.

“The millennial doesn’t want to drink what their parents drink,” said George Ubing, national director of the convenience channel for E. & J. Gallo Winery, Modesto, Calif. For Gallo, the goal of turning wine into a more refreshing beverage has prompted innovation. Leading the way are Barefoot’s lighter, more thirst-quenching line extensions Refresh, Moscato and Bubbly; and a Liberty Creek wine packaged in a Tetra Pak to target on-the-go lifestyles.

Beer’s story has been told many times: The growth is in “better beers”—imports, crafts, higher-end brews from major brewers—as consumers seek more flavor and diversity, even at greater expense.

“There’s a definite shift away from domestic beers,” said Tristano. “Today, it’s craft beers, cider and imports that are growing. When they become too popular, that’s when millennials say, ‘Wait a minute. I want to try something different.’ ”

That, to Modi, is an opportunity. Their willingness to experiment and try new flavors gives retailers permission to “reduce the SKU capacity, but supply newness,” he said. That is, don’t feel the need to stock every variation on a subcategory; instead, stock the most popular and the newest to maintain the fastest-selling brands while providing customers the ability to experiment.

This theory is backed by research that shows a balanced beer portfolio is the most successful way to grow overall beer sales, as outlined by Dean Zurliene, St. Louis-based Anheuser-Busch’s senior director of category management.

“There’s a lot of shifting in the beer mix today,” Zurliene said. “When retailers manage it from a balanced approach—emphasizing both premium beers and crafts—they win 93% of the time.” One reason is the beer buyer’s likelihood to buy both craft and premium beers or spend money on both segments.

“More often than not, someone who drinks craft beer also drinks premium beer, also drinks value beer, and also drinks import beer,” he said. “The craftbeer shopper only spends 32% of their beer money on craft beer.”

This data falls in line with research on the millennial consumer, too. “Millennials are not the most brand-loyal consumers,” said Adrienne Nadeau, senior researcher for Technomic. “They crave variety.”

And providing that variety can be a long-term win for retailers, Tristano agreed. “It’s not loyalty to millennials; it’s frequency,” he said. “If you build the frequency, the habit with this generation, you can grow with them.”


February 14, 2013

header_fcpc

darren_tristano_formal_web

Foodservice Interchange 2013

March 4, 2013
Allstream Centre, Toronto

Meet One of Our Speakers

Darren Tristano, Executive Vice President, Technomic, Inc. will share key insights into the evolution of foodservice trends. Learn about trends migrating from the US and Internationally into Canada as well as some home grown Canadian influences making an impact elsewhere.  You won’t want to miss learning about the newest trends for 2013 and what these could mean for your business:

  1. Snacking, small plates and sharing blur traditional dayparts. Changing dining habits are impacting all dayparts. Consumers want their meals and snacks when and where it’s convenient. Expect chefs to get more creative by paring down traditional entrées into creative small plates, looking to street trucks for snacking inspiration, and incorporating more ethnic flavours and ingredients into sharing dishes.
  2. Taking chicken to new heights. The better-burger trend has spread like wildfire across Canada. Building off the burger trend, chefs will turn to the humble chicken as the next workaday food primed for a gourmet update. Look for increasing use of high-quality birds raised locally, naturally and humanely.
  3. Veggies find more prominence on the plate. Expect to see not just more locally sourced, in-season fresh veggies siding up to proteins, but more vegetarian entrées as well.
  4. Asian breaks out. From the burgeoning ramen scene in Toronto to Japanese tapas restaurants in Vancouver, expect to see interest in the multitude of food cultures that Asia has to offer. This includes not just up-and-coming Southeast Asian dishes from Vietnam, Singapore and Malaysia, but regional Chinese and Japanese fusion as well.
  5. Specialty approach to beverages. Artisan preparation and ethnic flavours are not just hot food trends—chefs are exercising their creativity beyond the plate with beverage innovation too. Restaurants are now crafting everything from craveable small-batch sodas to exotic refreshers like South American aguas frescas. Consumers are also seeking more authenticity at restaurants, particularly when it comes to ethnic dining. We’ll see more and more food-and-beverage pairings that complete an ethnic dining experience.

Date: March 4, 2013
Registration and Networking Breakfast: 7:45 a.m. – 8:30 a.m.
Conference: 8:30 a.m. – 1:30 p.m.
register_now
For complete details: contact FCPC – Heather Spencer, heathers@fcpc.ca or 416-510-9050


Harkening to the “Health Halo

January 16, 2013

Bionic BeveragesNatural sweeteners. No high-fructose corn syrup. Hormone-free. “Health-halo” attributes of beverages matter to consumers and can influence their purchasing decisions.

In its just-released “Beverage Consumer Trend Report,” Technomic asked consumers about select health-halo terms attached to beverages. Consumers are most apt to buy a beverage featuring the descriptor “fresh-brewed” at restaurants. Some 71% of consumers say they’d be more likely to purchase a beverage carrying this label at restaurants—a far greater percentage than for any other descriptor measured. Just 34% of them look for this attribute at grocery stores.

Another descriptor, “100% fruit juice,” holds more sway at grocery stores. Nearly three in four consumers (72%) say they’d be more inclined to buy a beverage labeled as “100% fruit juice” from a grocery store; a lower—but still significant percentage (52%)—would do the same at restaurants.

Consumers attach different degrees of importance to health-halo descriptors, depending on whether they’re in a foodservice or retail setting. For example, more than two fifths of consumers say “hormone-free,” “antibiotic-free” and “organic” labels could sway their purchasing decisions at grocery stores; roughly a quarter say that could happen at restaurants. It’s worth pointing out that restaurant percentages, although lower, are still significant.

Descriptors that speak to a product’s natural properties, namely “naturally sweetened” and “all-natural,” influence roughly half of restaurant-goers’ drink purchases. A few examples of how restaurants are incorporating popular descriptors into their menus:

• Orange juice—100% pure, fresh orange juice (Au Bon Pain).

• Fruit-flavored teas and lemonades—all-natural fruit purées with freshly brewed iced teas in strawberry or mango flavors (Beef ‘O’ Brady’s).

• Herbal teas—a selection of hot, organic herbal teas (First Watch).

Despite these restaurant examples, retail examples are often more numerous. For instance, Technomic found just 27 mentions of “corn syrup” on leading restaurant menus. In comparison, countless beverage brands, including Boylan’s Sodas, Jones Pure Cane Soda, Nantucket Nectars and Sierra Mist Natural, promote their disuse of high-fructose corn syrup (HFCS).

Technomic has consistently found that consumers tend to eat more healthfully at home and generally see restaurant visits as a time to indulge, which helps explain the lower health-attribute ratings at restaurants. Some health-minded drink manufacturers are attempting to overcome this by making a single product line available in both channels.

Organic bottled-tea company Honest Tea recently made its fresh-brewed, iced tea system available to foodservice retailers. The initiative presents a viable way for a retail processor to break into the foodservice market. It also ensures that both production methods and ingredients that form the cornerstone of its beverage business are conveyed to new customers.

Health-halo claims influence a sizeable percentage of beverage consumers, but to different degrees, depending on where they’re buying their drinks. As more beverages touting ingredients (or lack of ingredients) make their way into restaurants, consumers may be even more influenced by such claims.

Darren Tristano is executive vice president of Technomic Inc., a Chicago-based foodservice consultancy and research firm. Since 1993, he has led the development of Technomic’s Information Services division and directed multiple aspects of the firm’s operations. For more information or to order the “2011 Burger Foodservice Consumer Trend Report,” visit www.technomic.com.


Chipotle takes on craft beer with addition of 5 Rabbit

January 14, 2013

CT  biz-5-rabbits-cover 1030 kmFor years, Chicago’s Chipotle restaurants have offered the beers you might expect at a Mexican fast-food place, including Corona, Pacifico and, to satisfy the most American of palates, Miller Lite.

However, in an experiment that could reveal just how far craft beer has moved into the mainstream, a small Chicago craft brewery with a Latin theme is being added to the roster.

Fifteen Chicago Chipotles will carry two beers from 5 Rabbit brewery in the coming week: a simple golden ale called 5 Rabbit that is reminiscent of Corona, and 5 Vulture, a dark ale brewed with chiles and spices that is akin to Negra Modelo.

If sales are brisk, Chipotle said, it could expand 5 Rabbit to its approximately 75 Chicagoland stores, as well as add other craft brands. Chipotle’s foray into craft beer underscores a growing mainstream interest in the craft industry that was perhaps best highlighted by Anheuser-Busch’s 2010 acquisition of Goose Island.

That sale came more than 20 years after Goose Island started as a small brew pub on Clybourn Avenue and spent years building its name and reputation. With interest and sales in craft beer booming, small breweries needn’t wait so long to jump into the mainstream anymore.

 Darren Tristano, executive vice president with Chicago-based research firm Technomic, Inc., said that’s because matchups such as 5 Rabbit and Chipotle have become easy wins for both parties. For 5 Rabbit, the deal means an expanded audience, while Chipotle solidifies its position as an upscale casual restaurant with an edgy product, Tristano said.

 “Craft beer has become a pretty big driver, and especially for a more affluent crowd,” he said. “It’s very well in their customer base to add these beverages.”

Chipotle and 5 Rabbit are a natural fit in several ways: Founded by a Mexican and Costa Rican who moved to Chicago, 5 Rabbit has positioned itself as the nation’s first Latin-themed craft brewery. For the last 18 months, its beer has been made under contract at six breweries in Illinois, Wisconsin and Michigan. But sales were so brisk that 5 Rabbit sped up construction of its brewery in Bedford Park, which should be in production by year’s end. It produced about 2,000 barrels in its first year and aims to make about 6,000 in 2013.

Chipotle will present the small brewery with its largest and most mainstream audience yet. With the added production from the new facility, brewery co-founder Isaac Showaki said they will have no problem keeping up with demand.

Showaki said he spent eight months trying to get the deal done, highlighted by a meeting in mid-July with a company executive at a downtown Chipotle for which Showaki arrived with bottles of 5 Rabbit to pair with the food. He said he was confident going into the meeting — “They spend all this money on liquor licenses, but the stuff on the shelves is boring. Why not bring in more exciting stuff?” — but also amazed to get the attention of a large chain.

“At a place like McDonald’s, it would be almost impossible,” Showaki said. “The first people they would talk to is Anheuser-Busch and Miller.”

That said, Showaki said, “They want to see results. It’s a go, but it’s a trial period.”

Scott Robinson, a Chipotle marketing strategist for national events, said Chipotle restaurants have carried regional craft beer, but that 5 Rabbit will be the first in Chicago.

“I was impressed with their non-traditional approach of taking these Mexican-style beers and adding a whole lot of personality to them,” Robinson said. “We think the downtown Chicago folks will recognize the beers, and that it will bring some excitement.”

Julia Herz, of the Colorado-based Brewers Association, noted that “in the recent past most craft brewers have not had the interest of the chains.”

“It’s a wonderful sign of the times that businesses update their models to include local brands beyond the mass produced,” she said by email.

Showaki said he has no concerns about being perceived as a “sellout” for taking his beer mainstream.

“To go mainstream is nothing negative,” he said. “We embrace it. The more people that enjoy your product, the better for everyone.”

Laura Blasingame, owner of The Map Room who was an early champion of 5 Rabbit, agreed.

“It says a lot when a big firm like Chipotle knows well enough to serve a good beer with its supposedly good food,” she said. “I think it says they’re waking up and the American palate is changing.”

Blasingame said she has no concerns about pouring the same product available at a fast-food Mexican restaurant. In fact, she said, a keg of 5 Rabbit beer sits in The Map Room cooler, waiting to be tapped.


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