Fast Casual Segment Heads into Q1 with new Store Openings

February 28, 2012

Fast Casual

Fast Casual Segment Heads into Q1 with new Store Openings

Fast casual chains such as Baja Fresh, Fuddruckers and MOOYAH are among several concepts starting the New Year with new openings across the United States. The openings symbolize the continued success of the fast casual segment, which saw unit growth of 5 percent during the 2011 fourth quarter. In Fall 2010, fast casual chains tracked by market research firm NPD Group, accounted for 13,364 locations. In Fall 2011, the number of fast casual restaurants grew to 14,031.

“Strong performance and above-average unit economics have provided increasing appeal and investment by entrepreneurs in this part of the restaurant industry,” said Darren Tristano, vice president at research firm Technomic. “Consumer demand for better quality food served, a contemporary experience and reasonable price points have fueled unit growth activity as many emerging chains continue to strive for a dominant leadership position within each fast casual menu category.”

Domestic growth is a positive sign of things to come for the segment this year, as several chains used 2011 to embark on international expansion plans.

To start off the year stateside, Baja Fresh has announced a new opening in Los Gatos, Calif., that also will unveil a new “Guest Choice” store prototype that encompasses the chain’s latest restaurant design, service and customizable menu.

A new interior design includes the use of natural wood, stone and warm colors, in addition to a more accommodating seating plan. Additionally, the menu has been designed to incorporate more customization and healthier options, such as wheat tortillas. Finally the guest will experience a new service style with entrees delivered tableside.

While the chain is not unveiling a new design, Freebirds World Burrito will spend 2012 expanding its presence in California. To do this, the company has announced a Jan. 12 opening in Temecula, which will bring the total number of locations in the state to 10.

Sara Barker, marketing and communications representative for Freebirds parent company, Tavistock Restaurants, said the company plans to open 20 locations in 2012, primarily in the Sunshine State.

“In California, we are looking all around the state, with planned openings (leases executed) in Temecula, Folsom, Foster City, Huntington Beach and San Jose,” she said.

Meanwhile, the chain also will continue with its expansion plan in Texas and is looking to open this year in the markets of Houston, Rosenberg, Conroe, Fort Worth and San Angelo.

Burger business

The better burger category has been one of tremendous growth for the segment, with concepts opening or expanding among the likes of Fuddrucker’s, MOOYAH, Five Guys, Tom & Eddie’s, The Habit and Smashburger.

After several years of slumping sales and an acquisition, Fuddrucker’s is back on the growth track.

The concept opened in Del Rio, Texas, in a location previously occupied by Luby’s Cafeteria. Fuddrucker’s was acquired by Luby’s in June 2010 for an estimated $63 million.

The acquisition created several growth opportunities for both brands and the new restaurant represents the second Fuddruckers location for franchisee MCM Restaurants Del Rio LLC, which also owns and operates the nearest store in Eagle Pass, Texas.

MOOYAH saw record growth in 2011 through the expansion out of its home state of Texas into California, Connecticut and Tennessee. However, it rings in 2012 with development contracts and agreements in place for more than 300 units. This year, the brand plans to nearly double the number of existing units, adding locations in Alabama, Arkansas, Florida, Kansas, Louisiana, Oklahoma, Virginia, Maryland and Washington D.C.

“We are super excited about the year ahead,” said MOOYAH president Alan Hixon. “A number of challenges do still exist in the world today but some of the best opportunities arise during challenging times if you are prepared to capitalize on them. We are coming right out of the gate with 14 new locations in Q1. Game on!”

View the full article on Fast Casual

Restaurant Analyst Does Competitive Eating on the Side

February 27, 2012

Restaurant Analyst

Restaurant analyst does competitive eating on the side

Writing about restaurants as much as I do, it’s a good thing I like to eat.

I’ll watch competitive eating contests and TV shows, but I don’t think I would ever take part in one.

But in talking to Darren Tristano with Chicago-based research firm Technomic Inc., for a story in last week’s print edition about Izzy’s, I learned that restaurants and food are more than just work for him.

Tristano serves as a restaurant industry analyst and specializes in major national restaurant chain concept and menu development and smaller, emerging chains.

But he also enjoys a food challenge.

He’s eaten the 2-pound burger at Heart Attack Grill in Las Vegas, called the Quadruple Bypass Burger.

“They even wheel you to your car in a wheelchair,” Tristano said.

Now, he’s interested in tackling Izzy’s 110 Reuben. After discussing the attention an appearance on a show like “Man v. Food Nation” can have on a restaurant, Tristano asked me to send him a link to the Izzy’s challenge.

Based in Chicago, it’s kind of a long trip to get to Cincinnati to try the monster reuben and potato pancake sandwich. But, Tristano said he was going to be in Toledo soon, so a trip down Interstate 75 wouldn’t be too bad.

View the full article on Cincinnati Business Courier Online

Taco Bell Jumps into the Breakfast Market

February 24, 2012

Taco Bell

Taco Bell Jumps into the Breakfast Market

It’s getting a little crowded in the breakfast nook.

Fast food chain Taco Bell announced Thursday that it’s entering the breakfast fray. It joins larger rivals such as McDonald’s, Wendy’s and Subway in a market saturated with breakfast options including specialty coffees to lure in addicts who’ll buy a breakfast sandwich along with that daily cup of joe.

Irvine, Calif.-based Taco Bell, which is known for its low price points and late night hours, is introducing a breakfast menu at nearly 800 restaurants across 10 Western states, including California and Arizona.

“This is a very important launch for our brand,” said Brian Niccol, Taco Bell’s chief marketing and innovation officer, in a statement. “While we’re beginning in the West, where people grew up with breakfast burritos, we plan to reach a national audience in the future, becoming a part of their morning routine, and truly opening people’s minds and taste buds as they begin to open their eyes and take on the day.”

Notably, Taco Bell’s breakfast offerings include well-known brands like Tropicana, Cinnabon, and Seattle’s Best Coffee, which may serve to alleviate customer concerns about food quality following a 2011 lawsuit in which the contents of Taco Bell’s beef were called into question.

“It helps with one of the issues that they need to content with, which is quality,” said David Morris, an analyst for consumer goods research firm Packaged Facts. “That’s a smart move.”

The chain plans to open its drive-through locations an hour earlier than normal for breakfast, generally around 8 a.m. or 9 a.m., and will offer breakfast until 11 a.m. It aims to roll out its breakfast menu on the East Coast in 2013, and will begin experimenting with offering breakfast foods during late-night hours in late 2012.

Fast food breakfast has turned into one of the swiftest growing areas in the entire restaurant industry, and Taco Bell competitors like McDonald’s, Wendy’s and Subway have already successfully rolled out breakfast menus. A 2010 report from NPD Group found that breakfast accounted for 60 percent of the restaurant industry’s growth over the last five years, with breakfast traffic increasing by an average of 2 percent per year. Lunch traffic, was largely flat, while dinner traffic decreased by an average of 2 percent per year during the same five-year period.

Despite the already-crowded market for breakfast, Taco Bell’s low price points and its Mexican food-tinged variation on the traditional breakfast offering should serve it well in the battle over breakfast, experts say.

“Taco Bell has done a great job at being an industry leader in that category,” said Darren Tristano, executive vice president of Technomic, a food and beverage industry research firm. “If you have a good coffee offering like many of the successful chains have, you can then provide a differentiated product because of the Mexican food offering.”

He added, “Younger Americans, specifically millenials, are looking for not only spiciness at breakfast, but also the cheaper price point.”

Taco Bell has some catching up to do, however. McDonald’s is already raking in a hefty 27 percent of its $33 billion in annual sales at breakfast, according to Tristano.

It could serve as a slightly cheaper alternative to some of its competitors. Among Taco Bell’s new breakfast offerings are sausage or bacon and egg burritos for $1.49, grand skillet burritos for $2.79, and $3.99 combo meals containing a breakfast item with a drink and hash browns. That’s slightly less than breakfast combo meals elsewhere, which tend to approach $5 and up.

Another plus for Taco Bell that stands to help it capture part of the breakfast market is its already-established drive-thru presence, as well as its decision to sell Seattle’s Best Coffee, which Packaged Facts’ Morris says is one of the major reasons for the growth of sales in the breakfast category. “The magic of coffee is that it’s been one of the few products that people have been willing to pay more for both before the recession and after,” he said.

Taco Bell later opening hours versus competitors could be a problem, though. “A coffee drinker is going to go elsewhere if they [Taco Bell] don’t open early enough,” Morris said. “They’ll need to contend with that in order to compete with more established limited-service breakfast players.”

View the full article on MSNBC

New Foodservice Meals Bundled Up

February 22, 2012

New Foodservice

New Foodservice Meals Bundled Up

New bundled meal deals in foodservice departments offer restaurant-quality food at a competitive price. To compete with local quick-service or casual-dining restaurants, retailers have put together meal combinations with new dishes and varying portion sizes.

“Bundling is a great way to reinforce that [Retailer Meal Solutions] can be a complete meal solution, not just a component,” said Jenny Anderson, director of the RMS monitor program for Technomic, a foodservice consulting firm in Chicago.

“And retailers are in such a better position to do it now than they were in the past, because so many have enhanced their overall variety and can offer a few different choices for sides in addition to the entrée.”

Schenectady, N.Y.-based Price Chopper Supermarkets alternates among 25 or so different dishes for its popular Wednesday meal deal.

“The best combination bundle that we have — it’s pretty much changed our life here — is the Wednesday meal deal. That is the bundle. I put different meal combinations together for four people and that’s around $10,” said John Mazzacco, foodservice manager at Price Chopper.

He said customers like the combination meal because of the variety of different foods; on any given week, entrées could be turkey, pot roast, Asian cuisine, shepherd’s pie, meat loaf or a KFC Chicken style bowl.

“Now we’re looking at that whether we should raise the retail because we’ve been $10 for two years now,” Mazzacco said, noting that commodity prices have gone up.

The Wednesday meal deal has proved so popular that Mazzacco is looking into a way to offer shoppers a standard meal deal every day, possibly starting in late spring.

It’s not just foodservice departments that are enticing shoppers with family-size packaged meals. Darren Tristano, executive vice president at Technomic, said he’s been seeing more restaurants getting in on the family bundling.

For an example of a newcomer to the family bundle arena, Tristano pointed to Burger King’s family meal campaign. For $9.99, the BK Bundle includes a Whopper sandwich, a Whopper Jr. sandwich, 10 chicken tenders, three small French fries, three small drinks and two pies, according to a Burger King representative.

While restaurants like Boston Market have offered family packages for a long time, Tristano said he’s hasn’t seen much of it in the quick-service restaurant segment before.

There’s also been a continuation of value pricing with bundling, as seen in chain meal deals like Chili’s $20 Dinner for Two that includes an appetizer and two entrées, Tristano said.

These two-for meals have become a big draw for casual-dining restaurants, with Applebee’s and TGI Friday’s each offering their own variations.

Price Chopper takes advantage of chain restaurants’ marketing power to highlight the value of its own meal combos, according to Mazzacco.

Subway has widely promoted its selected $5 foot-long subs, so customers know the value of Price Chopper’s $5 complete sandwich meal when they see it.

“I have the same thing with soup and sandwich or a sandwich and a kettle chip we fry in-house and a fountain drink,” said Mazzacco, who said Price Chopper puts more meat on its subs than Subway.

Because checks generally average at $12 to $13 at casual-dining locations, Tristano said a $10 priced meal is what resonates value to consumers.

Depending on the product and the location, bundled meals in deli and prepared food departments often remain lower or close to the $10 mark.

“In the last couple years, several of the upscale retailers have focused on bundled meals with an entrée and sides from their chef case areas to reinforce value,” Anderson explained. “Establishing and promoting a set price (often lower than a comparable restaurant alternative) is such a clear message for reinforcing that.”

Wegmans Food Markets, Rochester, N.Y., keeps its entrée-and-two-sides bundled meals at price points of $6, $8 and $10, depending on which items are selected.

Wegmans’ Meal Planner

A meal planner application on Wegmans’ website allows customers to plan ahead, showing different meal combinations with cost, calories and cups of vegetables.

The many current entrées on the meal planner include inventive items like bronzed salmon with Creole sauce and chicken Florentine with lemon butter sauce, or modernized upscale classics like pot roast with matchstick carrots and braising liquid. Using the app, customers can note their meal decisions on a virtual list, email it, or shared it on Facebook or Twitter.

Taking a different approach, Wooster, Ohio-based Buehler’s Fresh Foods, which has full-service restaurants in most of its 13 locations, captures the spirit of bundled meals with all-you-can-eat weekday specials. On Thursdays, Buehler’s has an all-you-care-to-eat pasta with a tossed salad and garlic bread for $7.99, and on Fridays, an all-you-care-to-eat fried fish dish complete with a side, buttered roll and side salad for $9.99. An endless soup and salad bowl are available everyday for under $10.

A staple of foodservice cuisine, homestyle and comfort food plays an active roll in many retailer bundled combinations.

Several of Supervalu’s Jewel-Osco bundled meals cater to shoppers looking for quick comfort food.

“Customers can purchase eight-piece fried and grilled chicken meals with rolls and two sides. Their side dish options include potato salad, macaroni salad and coleslaw,” said Jewel-Osco’s External Communications Manager Karen May. “We also offer rotisserie chicken meals and rotisserie turkey breast meals with these same side dish options and rolls.”

With the “Pick 3 Express Meal” added last November, Jewel-Osco allows customers to choose between different chicken cuts and preparations for an entrée and choose two side options from salads, potato wedges and rolls.

Bundling eliminates meal-planning stress, because choices are right in front of the shopper; it also gives the shopper the ability to mix and match, which satisfies shopper desire for customization and control, according to Anderson.

Some bundled meal varieties that catch on with customers are surprising. Mazzacco had such little faith in a pork roast entrée that was part of a Price Chopper Wednesday meal deal that he went as far to send his kitchens a pulled pork recipe to utilize the leftovers.

“And then I never needed to use the recipe. It just took off, ” Mazzacco said.

Desserts and refrigerated meals are the newest additions to these all inclusive meals, Anderson said.

Middletown, N.J.-based Food Circus has brought both cold items and desserts into meal deals, putting together bundles with products from different departments.

“It’s more or less a complete meal, and we bundle it all together in one place. And it’s almost always under $10, ” said Food Circus Fresh Foods Director James Conroy.

An upcoming bundle at Food Circus has a cold-pack pizza, an eight piece order of chicken wings, a dessert and a drink, Conroy said.

Considering location and time of year when putting together meal combinations can allow for new sales opportunities.

During summer months, Food Circus offers almost exclusively sandwich, dessert, chips and soda combos that fare very well for Food Circus stores located near the beach. On their way to Sandy Hook, N.J., beach-goers will purchase several sandwich combos at a time, Conroy said.

Reaching out to the elusive breakfast consumer, Food Circus has just recently begun serving a breakfast bundle, which Conroy said has gotten a mixed response so far.

In addition to focusing on product quality and price for bundles, retailers stressed the importance of keeping consistent schedules and advertising widely.

At Food Circus, meals change monthly in order to allow the store to do a lot of promotions through in-store signs and circulars, Conroy said.

Although Price Chopper initially got the word out about its Wednesday meal deal only through email, the addition of in-store signage and information in print ads has proved important in reaching different customers

“If you don’t draw attention to it and they don’t know about it, it’s like a best kept secret in town that you can get a deal for that [price],” said Mazzacco.

View the full article on Supermarket News

Wendy’s Expected to Dethrone Burger King With Higher Sales

February 8, 2012

Watch the video on FOX Business

Steak ‘n Shake Hits Broadway

February 3, 2012

Steak 'n Shake

Steak ‘n Shake Hits Broadway

Steak ‘n Shake opened its first New York City restaurant on January 12, and the chain used the opportunity to debut its new Steak ‘n Shake Signature counter-service prototype.

The new design is a leaner outfit that does away with the all-night schedule, some menu items, and table service. Customers will instead find a small, 22-seat, counter-service-only Steak ‘n Shake that offers a new organic beef hamburger, a high-tech drink machine, hand-cut fries, and beer and wine.

“The time was right [to open in New York],” says Jim Flaniken, senior vice president of marketing at Indianapolis-based Steak ‘n Shake, which is owned by San Antonio–based Biglari Holdings. “It’s the first of hopefully many to come in New York.”

Just north of Times Square on Broadway, next door to the famed Ed Sullivan Theater, the new unit is bright and sleek, with the company’s signature red as the dominant color. Bold graphic elements and dramatic lighting, including a yellow strip light that runs across the ceiling and down one wall, complement the décor.

The interior, which gives off a ’50s-hamburger-joint effect, is the brainchild of president and CEO Sardar Biglari, says vice president of operations Richard Scanlan. “This was really the CEO’s vision,” he says.

The Steak ‘n Shake Signature was designed for retail environments like strip centers, Flaniken says, not as stand-alone stores like the company’s classic outlets. It also comes with a lower point of entry for potential franchisees, at a base of $460,000.

“New concepts allow us to have franchisees come in with a lower investment,” he says. “This allows us to get into real estate we might not otherwise get into.”

Flaniken says the location of the first Signature will help make up for that fact that it does not include a drive thru like many traditional outlets.

“It’s a great area in terms of foot traffic,” Flaniken says.

“New concepts allow us to have franchisees come in with a lower investment. This allows us to get into real estate we might not otherwise get into.”New Yorkers won’t be able to enjoy some of the Steak ‘n Shake menu items that are available for customers in other markets. Missing from the store’s menu are breakfast, salads, and sandwiches. Instead, the minimal menu focuses on the company’s core products: steakburgers and milkshakes. The leaner menu was designed with simple and speedy in mind and also to meet Americans’ increasing demand for organic options. The new Signature Steakburger is made from 6 ounces of 100 percent USDA-certified organic beef.

Customers will also have access to the Coca-Cola Freestyle machine, along with a selection of wine and bottled beer, plus a local brew, Brooklyn Lager, on tap.

Although New York is notorious for its high prices, the Signature’s prices are the same as at Steak ‘n Shake outlets across the country. Biglari made a commitment to keep menu prices as they are across the system in 2012.

“When you’re pushing a new concept, it’s pretty important to start with a lower price point, and ultimately you may see those increasing over time,” says Darren Tristano, executive vice president of food industry consultant Technomic. “But price will determine who uses the brand, and then ultimately execution and quality determines whether they come back.”

David Kincheloe, president of Golden, Colorado–based National Restaurant Consultants, says he’s not surprised Steak ‘n Shake is taking the opportunity in New York to launch a new prototype. Consumers expect change, Kincheloe says, and are always looking for something new to try along with familiar comfort food menu items.

“We encourage even successful clients to reinvent and improve their concepts,” he says. “Every four to seven years is prime.”

The timing on the new market and new prototype may especially be strong for Steak ‘n Shake, Tristano says, because the economy is rebounding and customers are increasingly interested in higher quality fast food.

“Considering their history, positioning, and price point, they’ve got as good a chance as any to succeed in the New York market,” he says.

While there has been plenty of interest in the new concept, Flaniken says, there are no firm plans for the next Steak ‘n Shake Signature. But the company sees the prototype as an opportunity to expand not just in New York, but also in markets across the country.

“We will be building Signatures in areas with classical Steak ‘n Shakes,” Flaniken says.

View the full article on QSR Magazine