Cage-free eggs could boost Bloomin’ Brands’ bottom line

February 29, 2016

Ashley Gurbal Kritzer
Tampa Bay Business Journal
Feb 23, 2016
http://www.bizjournals.com/tampabay/blog/morning-edition/2016/02/cagefree-eggs-could-boost-bloomin-brands-bottom.html

Don’t count the cage-free eggs before they’re hatched, but Bloomin’ Brands Inc.’s latest supplier decision could boost its bottom line.outback-ft-myers-evening-750xx1800-1013-0-104

Tampa-based Bloomin’ (NASDAQ: BLMN) said Monday that it will transition to 100 percent cage-free eggs in its restaurants by 2025. Bloomin’ is the parent company of Outback Steakhouse, Carrabba’s Italian Grill, Bonefish Grill and Fleming’s Prime Steakhouse and Wine Bar.

“Our guests expect us to source and purchase wholesome ingredients responsibly,” Juan Guerrero, chief global supply chain officer, said in a statement. “We are working with our suppliers to ensure we meet or exceed this deadline.”

Committing to cage-free eggs is a popular move in the restaurant industry. In September, McDonald’s Corp. (NYSE: MCD) said it would shift to cage-free eggs, as is Dunkin’ Donuts (NASDAQ: DNKN) and Taco Bell, which is owned by Yum! Brands Inc. (NYSE: YUM).

Bloomin’ operates close to 1,500 restaurants throughout 48 states, Puerto Rico, Guam and 22 countries.

The cage-free move, Bloomin’ said, “reaffirms the company’s commitment to the humane treatment and handling of animals” — and that’s important to consumers, according to Technomic Inc., a Chicago-based food industry research and consulting firm.

“Cage-free is particularly important right now,” Darren Tristano, Technomic president, wrote in a Feb. 2 blog post. “Forty seven percent of consumers said they are more likely to order dishes made from cage-free eggs or poultry during breakfast dine-out occasions.”

“The preference ties into health and wellness concerns from consumers,” Tristano said.

“Consumers are increasingly concerned about transparency — what’s in their food and where it came from,” he wrote, “and operators and suppliers are feeling the heat.”


McDonald’s Moves Toward Antibiotic-Free Chicken: Too Little, Too Late?

March 10, 2015

Nancy Gagliardi
2015 Forbes.com LLC™ All Rights Reserved

http://www.forbes.com/sites/nancygagliardi/2015/03/04/mcdonalds-latest-move-toward-antibiotic-free-too-little-too-late/

Taking a cue from rival Chick-fil-A, McDonald’s announced Wednesday morning that it intends to stop buying chickens that have been treated with antibiotics that are also taken by humans, seeking to address consumers’ concerns about resistant “super-bugs” resulting from overuse of the drugs. According to the Centers for Disease Control and Prevention, every year super-bugs cause some 2 million illnesses and 23,000 deaths in the U.S., resulting in an estimated $20 billion in direct health care costs. McDonald’s also announced that its U.S. locations would sell milk products only from cows that are free of artificial growth hormones (specifically rbST), but added that it would continue to allow suppliers to “responsibly use” certain antibiotics (called ionophores) which are not used in humans.

The world’s largest fast food chain will spend the next two years working to phase in its news standards with its suppliers, including Tyson Foods which, according to reports, said it would comply with the company’s requests, adding that its chicken production had reduced it use of antibiotics by 84% since 2011. A company spokesperson also commented that it would phase out using antibiotics as early as in the hatchery phase of production (when chicks are injected while still in their shells).

While he may only (officially) be four days into his new role, CEO Steve Easterbrook (who recently said he viewed himself as the company’s “internal activist,” perhaps hoping to ward off the latest wave of activist investors targeting companies that haven’t performed as well as expected) gets to mark this antibiotic-free move under his watch.

But is this really a signal that it won’t be business as usual for the beleaguered fast food giant or is it too little too late?

“I don’t think it is. It’s what needs to happen to McDonald’s right now,” says Darren Tristano, a restaurant industry analyst at Technomic. “In our industry you can catch up very quickly, but if you don’t, doing nothing isn’t an answer or a solution. This clearly is a sign that McDonald’s is willing to improve.”

While the antibiotic ban is making big news here, McDonald’s is already sourcing drug-free chicken overseas. “There are a number of countries where it doesn’t have antibiotics or hormones in its chicken,” says Tristano, including the U.K., where Easterbrook comes from. “But this is a step for them to come back to the leadership position they used to have in this industry.”

While this most likely is the first of many steps by McDonald’s to reverse its recent slide (in interviews, Easterbrook has said it needs to become nimble to accommodate market needs), a comeback will take time. Says Tristano:

First, you have to qualify coming back. I think for McDonald’s that’s getting back to a level of growth that’s nominally keeping up with inflation. I’d expect to see it back to 2.5% to 3%, which puts it into a position where it isn’t losing share, and anything above that would put it in a position where it’s taking share. Look, it was the leader during the recession, driving a lot of the industry growth. While I wouldn’t expect that to reoccur, I think getting back to zero and building, and no longer losing share is important, and we may be looking at 2016 for that to happen. But if it can get back to even, that certainly helps the company grow again.


Carl’s Jr. Revolutionizes Fast Food with New All-Natural Burger

December 15, 2014

(c) 2014 Business Wire. All Rights Reserved.temp_image_445085_3

New All-Natural Burger features the first all-natural, no added hormones, no antibiotics, no steroids, grass-fed, free-range beef patty from a major fast food company

Today, Carl’s Jr.(R) announced the All-Natural Burger, featuring an all-natural, grass-fed, free-range beef patty that has no added hormones, antibiotics or steroids. With the introduction of the All-Natural Burger, Carl’s Jr. is the first major fast-food chain to offer an all-natural beef patty on the menu. The All-Natural Burger will be available in participating Carl’s Jr. locations beginning Wednesday, Dec. 17 and features the charbroiled, all-natural beef patty topped with a slice of natural cheddar cheese, vine-ripened tomatoes, red onion, lettuce, bread-and-butter pickles, ketchup, mustard and mayonnaise, all served on the brand’s signature Fresh Baked Buns.

The Carl’s Jr. All-Natural Burger features an all-natural, grass-fed, free-range beef patty that has no added hormones, antibiotics or steroids. With the introduction of the All-Natural Burger, Carl’s Jr. is the first major fast-food chain to offer an all-natural beef patty on the menu.

“We’ve seen a growing demand for ‘cleaner,’ more natural food, particularly among Millennials, and we’re proud to be the first major fast food chain to offer an all-natural beef patty burger on our menu,” said Brad Haley, chief marketing officer of Carl’s Jr. “Millennials include our target of ‘Young Hungry Guys’ and they are much more concerned about what goes into their bodies than previous generations. The new All-Natural Burger was developed specifically with them in mind. It features grass-fed, free-range beef that’s raised with no antibiotics, no steroids and no added hormones. The charbroiled All-Natural Burger also has a slice of natural cheddar cheese, vine-ripened tomatoes, lettuce, red onion, bread-and-butter pickles, the classic trio of condiments – ketchup, mustard and mayo – and it’s all served on one of our Fresh Baked Buns that we bake fresh inside our restaurants every day. Whether you’re into more natural foods or not, it’s simply a damn good burger.”

“Greater awareness for health and wellness is driving the growth in healthful menu items, yet our research indicates that the majority of consumers still opt for more indulgent food,” said Darren Tristano, EVP of Technomic Inc. “The push and pull between healthfulness and indulgence makes an All-Natural Burger on-trend. All-natural products also have a ‘health halo’ impact and often help consumers feel confident that they are getting a product better for them and from a source they can feel good about.”

The new All-Natural Burger is available as a single all-natural beef burger for $4.69, as a double burger for $6.99, and may be ordered in a combo meal with fries and a drink. Guests may also substitute the all-natural patty on any burger on the menu for an additional charge. Prices may vary by location. For a limited time, visit carlsjr.com/coupons to download a coupon for $1 off any All-Natural Burger combo meal, valid at participating locations.

The new burger will be supported by an advertising campaign created by Los Angeles- and Amsterdam-based creative agency, 72andSunny. The first of two TV spots will begin airing on Dec. 29 with an additional commercial to debut Feb. 2015 during the super big football game many will be watching.


Burger King scrambles for cage-free eggs

May 24, 2012

‘Humane’ is new trend

By Tim Devaney, The Washington Times, Sunday, April 29, 2012

 The nation’s fast-food giants are aggressively touting more humane ways of producing their menu offerings, but whether the kinder, gentler methods of serving up chicken nuggets and cheeseburgers can pay off at the cash register remains an open question.

Looking to trump moves by rivals McDonald’s Corp. and Wendy’s International Inc., industry No. 3 Burger King Corp. last week announced that it would take a more eco-friendly approach. By 2017, the company said, all the eggs and pork served to its customers will come from suppliers that don’t confine animals to cages or crates. It’s the first major fast-food burger chain to make a 100 percent “cage-free” commitment.

Jonathan Fitzpatrick, chief brand and operations officer at Burger King, called the move “the responsible thing to do” and one that “will allow us to leverage our purchasing power to ensure the appropriate and proper treatment of animals by our vendors and suppliers.”

Some say these moves, while well-intentioned, could backfire, leading to more animal deaths and environmental harm while taking bigger bites out of customers’ wallets.

“There are trade-offs with any decision,” said Charlie Arnot, CEO of the Center for Food Integrity. “So we’re encouraging them to consider these trade-offs before they simply respond to pressure from animal-interest groups.”

Although the more humane methods can generate positive headlines and enhance a brand’s reputation, the impact on the bottom line is less certain.

“I don’t think this will pay off from a financial standpoint,” Technomic restaurant analyst Darren Tristano said. “What typically happens is, you end up paying more. But you don’t do it because you expect to profit from it. You do it because it is good business sense. It shows good corporate social responsibility.”

Burger King announced its move just weeks after revealing that it would soon return to the New York Stock Exchange to trade its shares publicly. The last time the company’s shares were available for public sale was in 2010, when investment firm 3G Capital took it private for $3.3 billion. The company has announced an extensive revamping of its menu and a remodeling of its more than 12,000 outlets worldwide amid news that it had fallen to third place behind Wendy’s in the fast-food hierarchy.

Mr. Arnot said Burger King’s move could lead to higher prices on the menu, increase the restaurants’ environmental footprints and even harm the animals that the brand is trying to protect.

“If cage-free is the right direction for you, that’s fine, but think about the implications to the environment, to hen health and well-being, to worker health and safety, and to food affordability before you make that decision,” he said.

When the hens roam free, he said, they tend to cluster. This can lead to suffocation.

“You’re also likely to see an increase in hen mortality,” he said. “One of the reasons that the cage systems have been developed is to protect hens from pecking each other.”

Some critics say the government definitions of “free-range” and “cage-free” practices have been so diluted that the changes in animal welfare are minimal.

Listening to the customer

Fast-food restaurant officials said they are acting on feedback from patrons.

“We’re all listening to what our customers are telling us,” Wendy’s spokesman Denny Lynch said. “Consumers are more interested in their ingredients. They’re more interested in the sourcing and where the food is coming from, and they’re more interested in the humane treatment of the animals.”

But don’t expect these chains to go vegetarian anytime soon.

Wendy’s customers “do understand that these animals are raised for food,” Mr. Lynch said. “They’re not pets. We’re not going to be buying pillows for every animal.”

Burger King’s plan for cage-free eggs means the chickens that produce its breakfast-sandwich eggs will not be enclosed in tiny cages. Instead, they will be free to roam around the supplier’s barn.

Burger King was the first major restaurant chain to begin buying cage-free products in 2007. About 9 percent of its eggs and 20 percent of its pork are raised cage-free. The company said last week that it will shift completely to cage-free production over the next five years.

McDonald’s and Wendy’s have asked pork suppliers to develop plans to eliminate gestation crates, the small cages in which pregnant pigs are kept, but they have not set a timetable.

Dispatching chickens

Wendy’s has turned its focus to less-traumatic ways of killing chickens, Mr. Lynch said. The restaurant doesn’t compete as much in the breakfast market, so it uses fewer eggs than either McDonald’s or Burger King.

In an effort to improve animal welfare for the chickens it uses for sandwich meat, Wendy’s has been moving away from electric stunning of chickens before they are brought to the chopping block.

“We are active in identifying more humane methods of doing that,” Mr. Lynch said.

He said electric stunning has been an industry standard “for a long, long time” and that there is nothing unethical about it, but he added that his restaurant chain is simply trying to find better methods.

Wendy’s has considered “low atmospheric pressure systems,” or LAPS, to suffocate rather than stun chickens. Wendy’s has one top supplier that uses this “less invasive” method, Mr. Lynch said.

Explaining the process, he said, “When you get in an airplane and fly to high altitudes, you have to put on an air mask. So this process is what is used to treat the chickens, except they don’t get an air mask.”

Restaurants aren’t the only ones transitioning to cage-free food.

Retailers Wal-Mart Stores Inc. and Costco Wholesale Corp. have made the move with 100 percent of their private-label eggs. Unilever NV, which makes Hellmann’s mayonnaise using 350 million eggs a year, is in the process of doing so. Others in the food industry, such as Sonic Corp., Subway, Ruby Tuesday Inc. and Kraft Foods Inc., are taking similar steps.

McDonald’s has been a staunch user of cage-free food in Europe.

“I think they’re trying to get ahead of the curve and McDonald’s here,” said Mr. Tristano, the restaurant analyst. “If you’re Burger King, and you know McDonald’s is doing it in other countries, it’s a smart move.”

© Copyright 2012 The Washington Times, LLC. Click here for reprint permission.


Wendy’s to go easier on animals

April 17, 2012

Wendy’s Co. is changing the way it treats chickens and pigs used in its food in an effort to be more humane.

The Dublin-based fast-food company’s animal-welfare council said yesterday that one of its chicken suppliers, O.K. Foods Inc. of Fort Smith, Ark., has started using a low-atmospheric-pressure system that renders the chickens unconscious before the birds are handled by plant workers.

The process is criticized by some animal-welfare groups but replaces the industry standard practice of stunning chickens with electricity.

Wendy’s said it is the first quick-service restaurant chain to back the system, and urged other chicken producers to embrace the practice.

The company did not disclose what percentage of its chicken comes from O.K. Foods.

“We just think it’s a more humane way to go, a superior alternative to conventional electrical stunning,” Wendy’s spokesman Bob Bertini said.

The move is part of an ongoing trend, not just in animal welfare but in corporate responsibility,” said Darren Tristano, executive vice president of Technomic, a Chicago restaurant- and food-research group.Many major chains are re-evaluating the way animals are treated in the food-service supply chain.”

By treating animals better, restaurants give consumers a better feeling about their meals, Tristano said.We’re still putting them in our mouth, but we care how it gets there.”

The downside:It very likely will increase the price of products.”

Wendy’s also said that it is working with its U.S. and Canadian pork suppliers to eliminate the use of sow-gestation stalls over time. Animal-rights groups say the individual stalls are inhumane, but pork producers say the larger stalls increase labor and food costs.

However, several major pork producers have agreed to phase out gestation crates.

Major pork buyer McDonald’s Corp. announced in February that it would phase out crates that tightly confine pregnant sows in a move that was predicted to be a major shift for the industry.

“I don’t think it’s something that is trendy in the sense that it comes and (goes),” said restaurant broker Randy Sokol of Sokol & Associates. “It’s a way of life now, something that we Americans want.”

Wendy’s has been working toward eliminating the use of the gestation stalls since 2007, Bertini said. “Our suppliers have been making progress in that area, and we felt it important that all of our suppliers now move in that direction.”

The upgrades are part of continuing efforts by Wendy’s animal-welfare council, which has been in place since 2001, Bertini said. “A major part of the program has been the auditing process of our beef, poultry and pork suppliers throughout the U.S. and Canada, up to two times a year. If suppliers do not meet our standards, they are terminated.”

Although Bertini did not know how many suppliers have been dropped, “it has taken place over the last 11 years. They’re very stringent standards and cover all areas of treatment.”

Wendy’s, the second-largest burger chain in the U.S., operates more than 6,500 restaurants around the globe. The company is trying to rejuvenate its image as a higher-end fast-food chain by updating stores, revamping its menu and making other efforts to reinvent itself after a failed merger with the Arby’s chain.

Dispatch reporter Tim Feran contributed to this story.