Pinkberry Flirts With Self-Serve in Two Southern California Shops

May 27, 2015

By Nancy Luna/Staff Writer

For several months, Pinkberry has been quietly testing self-serve machines in at least two Southern California locations.

Pinkberry, credited for launching the modern-day frozen yogurt craze, is testing self-serve machines in two Southern California locations.

The do-it-yourself experiment has been ongoing for months at shops in Brea and Burbank. A Pinkberry official played down the test, which comes a few years after Chief Executive Ron Graves said he would never play the self-serve card.

“Leapfrogging the competition requires you to know and be true to your brand as well as deeply understand your competition,” Pinkberry spokeswoman Laura Jakobsen told the Register this week. “This is research – you can only learn so much by observing.”

At the Pinkberry on Imperial Highway in Brea, the store offers 10 flavors at 49 cents an ounce. The front counter has a bar, where customers can choose from an assortment of fruit and candy toppings.

By comparison, a nearby Yogurtland in Brea had a menu of 16 different flavors at 41 cents an ounce.

In Burbank, the self-serve option has been around a year, while Brea converted in December. Jakobsen said Pinkberry has no plans to convert more shops.

“We opened the self-serve stores to gain insights from both a consumer and operational perspective,” Jakobsen said. “We are not considering converting more locations.”

Darren Tristano, a restaurant consultant for market research firm Technomic, said five years ago that premium frozen yogurt chains like Pinkberry “would have great competition from self-serve fro-yo brands” in a post-recession economy.

“There is no surprise that Pinkberry would test and consider replacing or adding self serve to their concept,” Tristano said. “The affordable price points of weigh-and-pay as well as the labor savings is a strong driver for change within the market.”

Though brands such as Golden Spoon Frozen Yogurt have been around for more than 30 years, Pinkberry is considered a pioneer in the category.

When Pinkberry debuted 10 years ago, it elevated the frozen yogurt category with its slick presentation and tart-heavy fruit flavors. Pinkberry now has 250 shops in 21 countries.

Copycat brands have since saturated the market, including Yogurtland, Tutti Frutti and Cherry on Top. To differentiate themselves, many adopted the self-serve model. Their popularity soared among consumers who enjoy controlling how their food is prepared.

“The trend in consumer control demonstrated by build-your-own formats is the next generation of customization,” Tristano said.

Irvine-based Yogurtland launched its first self-serve store in Fullerton in 2006. It now has about 300 stores in the U.S., Australia, Guam, Thailand, Venezuela and Dubai.

When asked in 2012 about the popularity of self-serve froyo, Pinkberry’s Graves told Inc. magazine that he refused to “go self-serve.”

“Why? Because that would be letting the competition define us,” he said.

History shows it could also be brand suicide.

In 2012, Rancho Santa Margarita-based Golden Spoon tested self-serve in a handful of Southern California stores. At the time, the chain said it would eventually convert at least 40 locations to the trendier do-it-yourself shops.

But after its loyal customers balked at the messiness of self-serve, the chain halted those plans.

“Sanitation was a key issue,” Chief executive Roger Clawson told the Register in 2013. “Our core customer demands full service.”

‘Better Burger’ Segment Trending in Baton Rouge

May 22, 2015

Timothy Boone  picture

Copyright 2015, Capital City Press, All Rights Reserved. Distributed by NewsBank Inc.

Smashburger, which was named as the top fast-casual restaurant chain in the country, opened its first Baton Rouge location Wednesday, the latest so-called “better burger” eatery to enter the market.

Better burger restaurants offer a premium product, with patties made from fresh, never-frozen beef and a wide range of toppings. Generally, the burgers sell for a few dollars more than the offerings at McDonald’s, Burger King or Wendy’s.

“The better burger market has grown up in the past five or six years,” said John A. Gordon, principal of Pacific Management Consulting Group, a San Diego-based group that works with restaurants. “Honestly, some of the traditional quick-service burger players got really bad.”

In recent months, Baton Rouge has seen growth in the better burger segment. There’s the Smashburger on Corporate Boulevard. Red Robin, one of the originators of the trend, re-entered the market after a decadelong absence with a restaurant that opened at the Mall of Louisiana just before Christmas. Lafayette-based Burgersmith will open its second local restaurant on Siegen Lane in early summer and a Juban Crossing location will be open by the end of the year.

Chuck Kerr, who has the local franchise rights for Mooyah Burgers Fries & Shakes with his wife, Denise, said he’s looking at opening a second Baton Rouge-area restaurant and is eyeing a Millerville Road location. Officials with Dallas-based Mooyah said the Kerr’s Siegen Lane location has been one of the chain’s top-performing restaurants in terms of sales.

Kerr credits his restaurant’s success to offering a high-quality product and consistently good customer service. “We have a simple menu, yet it’s complex,” he said. While he just sells beef, turkey or veggie patties, there are a wide range of toppings and sauces — so many that the chain boasts there are 1.2 million different ways to make a Mooyah burger.

“The neatest part about the whole thing is that the customer is benefiting from capitalism,” he said. “They’re getting more choices and better choices.” Kerr said he expects the major fast-food chains, such as McDonald’s, will take their resources and revamp their menus so they can compete with the better burger restaurants.

The better burger segment accounted for $3.5 billion in sales in 2014, said Darren Tristano, executive vice president of Technomic, a food industry research and consulting firm based in Chicago.

Tristano said he’s forecasting about 10 percent growth for the better burger chains over the next five years, thanks to the performance of such popular chains as Five Guys Burgers and Fries and Smashburger.

Robert Barbour, part of the franchise group that owns the Baton Rouge Smashburger, said customers are willing to pay an extra dollar or two for a quality hamburger. “People are demanding a better burger and better choices in their fast-casual dining,” Barbour said.

Smashburger was named the top chain by Fast Casual magazine in 2014. In seven years, the Denver-based company has grown to 325 locations. Smashburger gets its name from the preparation technique, which uses a custom-made, five-sided tool to smash balls of raw meat into the grill. This sears the bottom of the patty and allows the burgers to cook in their own juices.

Barbour said his franchise group plans to open 10 to 15 restaurants in their territory, which stretches from Lafayette through Mississippi to Memphis, Tennessee.

“Hamburgers are incredibly popular and a canvas for innovation and creativity,” Tristano said. “They’re a great familiar product that’s affordable and consumers continue to eat them.”

How Growth Through Unique Concepts is Orlando’s Recipe for Success

May 21, 2015

Megan Ribbens new-dsc8239-750xx4928-2786-0-338
© 2015 American City Business Journals, Inc. All rights reserved.

Orlando foodies may be ready for a second helping of their favorite restaurants, but local chefs say the key to growing Orlando’s restaurant industry isn’t about expanding existing concepts. Rather, it’s about bringing something unique to the table.

Not only does this philosophy help steer clear of the chain restaurant stigma Orlando has come to be known for, but it also appeals to a larger pool of visitors who have a growing appetite for new concepts.

“From an Orlando point of view, having independent restaurants that aren’t an early start of a chain creates a better image of Orlando as a restaurant destination,” said restaurant analyst Darren Tristano, vice president of Technomic Inc. “Ideally, if the independent restaurants are good and have potential to win awards, that’s going to help, too. Today, independent restaurants are outperforming chains because they can adapt to changes and be more innovative with their menus more rapidly than chains that have to do that in multiple locations around the country. It contributes to a better destination and food city.”

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Independent restaurants also can contribute to economic development efforts, said downtown developer Craig Ustler, who also is the principal of the Citrus, Soco and Cityfish restaurants in Orlando. “I would make the argument that chefs like The Rusty Spoon’s Kathleen Blake are just as valuable as a tech startup, and for some reason, I don’t think the community thinks that way about food. Other cities have built an image around food, and we haven’t yet gotten that message.”

He also believes the restaurant industry aligns well with the Orlando Economic Development Commission’s “You Don’t Know the Half of It” branding campaign — designed to highlight the fact that Orlando is more than just tourism — not only as a way to better highlight the city’s food scene, but also a way to better align Orlando with people who travel for food.

“People are planning vacations around where to eat or thinking about what restaurants to go to. When visitors are in Orlando, they’re thinking of attractions. We’re the tourism capital, and we need to understand how to tie in restaurants, how to capture a better market share of the 60 million-plus people who come here. If, on average, 3 million-5 million tourists are in town, and if you got 1 percent to come downtown, that’s like 30,000 people.”

As Chef Kevin Fonzo of K Restaurant said, Orlando is like the tale of two cities. Tourists visit Walt Disney World and International Drive, and many never venture farther to where the locals live and dine to experience the true Orlando.

While the city has emerged as a competitive marketplace for large chains, that reputation has thwarted its efforts to be known as a food destination.

Tristano believes it’s an opportunity for the city to support the growth of new independent concepts. “Orlando has to encourage a higher level of more fine-dining restaurants and even more upscale casual restaurants focused on redefining Orlando as more of a restaurant city. The city has to decide it wants independents and have supporting benefits and development of space for it.”

While there are some risks in restaurant owners having two different concepts, Tristano said there are plenty of advantages over opening a second location of your existing brand, including:

* You may cannibalize sales by creating a second location instead of a new concept.

* The perception of having two locations may mislead the customer to think it’s a chain, so you lose the independent feel.

* Having another concept gives you a different appeal to the marketplace and, ultimately, if one is better than the other or one struggles, you have an opportunity later to transform the other into the more successful concept.

* Foodies and affluent consumers look for more differentiation.

* The Food & Drug Administration requires restaurants with 20 or more units under the same name to put calorie and nutritional counts on their menu. So independents and smaller chains don’t have to label their menus.

Meanwhile, Bob Amick, president and owner of Atlanta-based Concentrics restaurants, has watched Orlando’s culinary scene evolve during the past 10 years.

Amick, who does independent restaurant concepts across the U.S., helped open local concepts like Luma on Park and Prato in Winter Park, and now is working with Unicorp National Developments Inc. on the new Slate restaurant in Dr. Phillips and with Tavistock on a new eatery in Lake Nona.

Thanks to its theme parks, the visitors Orlando attracts aren’t the typical customer who drives the up-and-coming restaurant industry, he said. So, instead, Orlando needs to attract and develop more restaurateurs and chefs who are willing to take risks.

“Restaurant cities really are driven by local chefs who are mentoring young up-and-coming chefs, like a feeder system,” Amick said. “The town grows from that from a culinary standpoint. It’s harder for Orlando with the outsourcing of theme parks and international chains around I-Drive.”

And just as Amick has watched Orlando develop a mix of local chefs and restaurateurs, he said the next step is to continue growing downtown Orlando. “If people get out and enjoy all aspects of Orlando, continue to bring more life to downtown, that will do more for Orlando than anything, in my opinion. The great restaurant towns in America have great downtowns.”

Total number of restaurants in Orlando

Fiscal 2010: 457

Fiscal 2011: 511

Fiscal 2012: 568

Fiscal 2013: 661

Fiscal 2014: 754

Number of restaurant openings in Orlando

Fiscal 2010: 48

Fiscal 2011: 4 1

Fiscal 2012: 76

Fiscal 2013: 67

Fiscal 2014: 107

Number of restaurant closures in Orlando

Fiscal 2010: 3

Fiscal 2011: 2

Fiscal 2012: 9

Fiscal 2013: 6

Fiscal 2014: 36

By the numbers

$36.4B: Projected 2015 sales at Florida’s restaurants

943,600: Restaurant jobs in Florida in 2015

The Gourmet Appeal of Sea Salt

May 20, 2015

A look at why sea salt continues to make its way into everyday meals.

Sea salt continues to gain momentum as more products with sea salt flavor or sea salt in the ingredient list, pop up on grocery shelves. The desire for sea salt has likely been buoyed by its perceived health halo, and its presence has increased across everyday meal occasions.

Julian Mellentin, director at New Nutrition Business states, “I think it’s partly that sea salt benefits from a more “natural” and “naturally healthy” image, which results in positive media coverage.” Mellentin points out the visually appealing branding of many sea salts, which often features handsome packaging, use of words like ‘premium,’ and ‘authentic,’ and inclusion of information about the place of origin.

Higher perceived quality may be a driving factor behind the trend. “Consumers want better quality ingredients, and they believe that sea salt is a better ingredient than regular table salt,” says Darren Tristano, executive vice president at Technomic. Tristano notes that some restaurants are placing sea salt in tiny bowls with salt spoons at the table, and gourmet sea salt may be served tableside with a specific appetizer. “Use of sea salt is growing in every restaurant segment, but especially in fast casual, which is where we see a lot of trends begin,” notes Maeve Webster, senior director at Datassential.

Sea salt continues to make its way into everyday meals. Reviewing the company’s MenuTrends database of nearly 5,000 menus, Webster notes that the use of sea salt at breakfast has increased by 80 percent over the past four years. Webster points out that “Breakfast is the only daypart that’s growing in the industry now, so operators figure if an ingredient is popular in one place, why it can’t work at breakfast?”

For food processors, the current clamor for sea salt may continue to inspire an increase in variations on an ever-expanding theme, including the addition of flavoring or smoking, and traditional blends. Webster predicts that the trend could create an opening for exotic spice blends such as shichimi tōgarashi, known as seven-flavor chili pepper in Japan, and duqqah, a Middle Eastern blend of herbs, hazelnuts and spices.

“Even for the risk averse, sea salts are a fun way to discover new foods,” says Laurie Demeritt, chief executive officer at The Hartman Group. “We picture the place it came from, and we imagine unique taste or attributes. It’s like a special version of an everyday food.”

What McDonald’s Learned From Burger King’s Turnaround

May 13, 2015

Devin Leonard picture

McDonald’s chief executive officer, Steve Easterbrook, unveiled his turnaround plan for America’s biggest burger chain, making a big deal out of an initiative to carve up his company into four geographic segments and put them under new management. “It will spread insight faster, it will enable quicker decision making, it will eliminate mistakes, reduce costs, and unlock growth,” he said in a videotaped presentation this week. He also touted the promise of McDonald’s sleeker operations in Australia.

What Easterbrook neglected to mention was even more intriguing: McDonald is following the lead of Burger King, its second-largest competitor. Burger King seemed to have lost its way until 3G, the Brazilian private equity group, took it private in 2010 as part of a $4 billion billion leverage buyout. The new owner rejuvenated the troubled chain with young leadership and a restructuring plan that was highly controversial at the time.

Some in the fast-food business believe that burger chains need to own a significant number of their stores to truly understand the market. That has been McDonald’s philosophy. The Brazilian private equity crew had different ideas. Arguing that franchisees would run them better, 3G sold off all but 52 of the 12,174 restaurants owned by Burger King around the world. Instead of falling on its face, Burger King’s overall sales in the U.S. rose 1.6 percent last year, outstripping both McDonald’s (-1.1 percent) and Wendy’s (-0.4 percent), according to Technomic, a Chicago-based restaurant consultancy.

Not surprisingly, Easterbrook’s turnaround blueprint for McDonald’s includes a plan to sell 3,500 of his company’s stores to franchisees. When the disposal process is over in 2018, McDonald’s will own only 10 percent of its stores, compared with 19 percent today. No, Easterbrook’s plan isn’t as radical as the one 3G put into place at Burger King, but it’s a validation of the private equity firm’s strategy.

Dave Henkes, a Technomic vice president, believes McDonald’s proposed selloff makes sense. “Franchisees tend to perform better,” he says. “They are driven, motivated owners who are more innovative and think outside of the box.” McDonald’s specific numbers in the U.S. last year bear this out. Henkes says sales at McDonald’s company-owned stores in the U.S. fell 3.6 percent last year. By contrast, its franchisee-owned ones suffered a decline of only 0.8 percent.

Even so, McDonald’s shares fell after Easterbrook made his announcement. Perhaps he hasn’t been bold enough. When 3G bought Burger King in 2010, the chain still owned 11 percent of its stores worldwide. The new owner got rid of nearly all of them as fast as it could. Based on McDonald’s recent numbers, Easterbrook needs to do the same. Why wait until after 2018?

McDonald’s Putting Itself on a Diet

May 11, 2015 

McDonald’s putting itself on a diet. It’s out with a desperately needed new strategy that includes cutting $300 million in costs.

Says McDonald’s CEO Steve Easterbrook: “The message is clear. We are not on our game.”

McDonald’s will sell 3,500 restaurants to franchisees by 2018, boosting global franchisee ownership from 81 percent to 90 percent.

The company will also re-organize into 4 units. The U.S., its largest segment with 40 percent of the company’s operating income.

International Lead Markets – established markets like Australia, Canada, and parts of Europe. High Growth Markets – ones with more room to grow, like China and Russia. and Foundational Markets, which will cover the remaining markets along with corporate activities.

McDonald’s also plans to return between $8 and $9 billion to shareholders this year. But investors didn’t like the taste of it all, the stock falling on Monday.

The strategy was criticized for its lack of details.

Dave Henkes of restaurant consulting firm Technomic says: “There wasn’t any talk about, you know, these announcements about breakfast, for example, or about, you know, menu innovation. There is a lot of franchisee disgruntlement, I think is a good word for it, about what they are going through. And I didn’t really hear about how they are going to reach out, and sort of fix those relationships.”

Separately, McDonald’s also announced the launch of a delivery service in New York City, a move, Henkes says, is one in the right direction.