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.”


World of Beer to open taverns in China this year, India and the Philippines are next

February 17, 2016
Justine Griffin, Times Staff Writer
Tampa Bay Times
Thursday, February 11, 2016
http://www.tampabay.com/news/business/retail/world-of-beer-to-open-taverns-in-china-this-year-india-and-the-philippines/2265064

Paul Avery, CEO of Tampa-based World of Beer, is pushing the craft beer tavern chain into new international markets this year. 
[Photo courtesy of World of Beer]World of Beer is about to become an international brand.

This year the Tampa-based tavern chain known for its extensive craft beer offerings will open its first overseas bar in Shanghai, CEO Paul Avery said. After that, World of Beer is headed to India and the Philippines. For Avery, a 20-year veteran of the Outback Steakhouse chain, the move to open franchisee-owned taverns overseas is the next logical step for the brand’s growth.

“I am very confident that World of Beer will do well in international markets,” Avery said. “Craft beer is already there. But no one out there offers what we do.”

Americans like to think that beer is solely a yellow, bubbly beverage born in the United States, thanks to brands like Budweiser and Coors, said Brian Connors with Connors Davis Hospitality, a global food and beverage consulting firm in Fort Lauderdale. But every country has a beer culture, he said.

“What you’re seeing is this globalization of American concepts that are flourishing overseas. World of Beer isn’t the first, but it’s part of this wave of fast casual restaurants and gastropubs that are popping up in new markets,” Connors said. “Beer is globally accepted. It’s a good move.”

Avery, 56, joined World of Beer as the company’s CEO in January 2013 when he bought a controlling interest for an undisclosed price. In just three years, World of Beer hardly looks like it did when it launched in 2007. The bar now offers an array of craft cocktails. The footprint is nearly double in size. And most of the taverns serve food.

The 6,000-square-foot World of Beer that opened in September on Fowler Avenue near the University of South Florida offers an open-air bar atmosphere and its own kitchen. It represents what many World of Beer locations will look like soon, Avery said. And when the World of Beer in West Shore’s Avion Park opens in May, it will have a two-story patio called “the flight deck.”

“The taverns that don’t have kitchens yet will get them soon. We’re working on converting all of them,” he said.

Just don’t call World of Beer a restaurant.

“The focus is still on craft beer,” Avery said. “But we knew we had to expand what we offered in order for this to be sustainable. We think the new food menu and craft cocktails only broaden our appeal.”

Restaurant analysts agree.

“The pub experience is one for social gathering that just so happens to have great food and great cocktails,” Connors said. “It’s a smart move by World of Beer, and I think a lot of what’s behind it is millennial-driven. Even at a chain, consumers look for that authentic beer and food experience these days.”

There’s a lot competition, too, in the craft beer market. In Tampa Bay alone, World of Beer competes directly with another craft beer bar chain, the Brass Tap; local brewpubs; and a slew of restaurants that sell craft and locally brewed beer. That’s not to mention the dozens of local breweries that have started up on both sides of the bay.

“As high-quality craft beer has grown and can be found in most bars and restaurants, competition is heating up and the pressure to deliver a better and more unique experience is more pressing,” said Darren Tristano, president of Technomic, a Chicago food research firm. “Their strategy appears to be putting them on track to satisfying a more broad-based consumer occasion set by expanding to food and cocktails.”

World of Beer has 77 locations in 19 states, including taverns in Manhattan and Kentucky, which opened last year. Of those, 14 are company owned and the rest are owned by franchisees. Avery said World of Beer will open 35 new restaurants this year, including at least one of the three planned for overseas in Shanghai.

The goal is to grow the number of company-owned stores to 30 percent, Avery said.

“It’s a great investment for our shareholders, and it makes us a better franchiser when we know what the day-to-day operations are like,” he said.


McDonald’s reaps the benefit of all day breakfasts and table service

February 9, 2016

McDonald's signature rangeEven though we’re only into its second month, 2016 been rather a good year for Steve Easterbrook, McDonald’s chief executive. His football team, Watford, is enjoying its best season in years and much the same can be said for the US fast-food giant.

The company surprised analysts with its latest quarterly results last week, with sales up 5.7pc in the US – nearly twice as much as had been predicted. Global sales are up by 5pc.

It has taken a Briton – albeit one steeped in McDonald’s corporate culture – to revive the most American of institutions, which was in danger of being left behind by rather nimbler competitors in the fast food industry.

From introducing all-day breakfasts throughout the US to testing waiter service at some of its outlets, including in the UK, Easterbrook has overhauled how the company operates at a bewildering pace.

The chain was in something of a mess when Easterbrook took over as chief executive in March 2015. Last August, for the first time in more than 45 years, McDonald’s announced that it was closing more outlets than it was opening.

European sales had dropped by 1.4pc, between 2008-14. In the US, the decline was 3.3pc and in Asia, the Middle East and Africa, once considered a growth region, a rather frightening 9.9pc.

It was not just the dire figures which suggested that McDonald’s was in need of a cultural shift. The company was facing competition from not only its traditional rivals, such as Burger King and Wendy’s, but also from hipper new competitors entering the market, such as Honest, Byron, Five Guys and Shake Shack.

It was pretty clear that the golden arches had lost their sparkle. Within weeks of taking over the reins, Easterbrook appeared on CBS’s This Morning television progamme in the US to signal that the 60-year-old company was in for a radical overhaul.

“We really want to assert McDonald’s as a modern burger company. To do that you have to make meaningful changes in the business,” he said. “The pace of change outside McDonald’s has been a little quicker than the pace of change within. You act your way to success, you can’t talk your way to success.”

For once, this was not empty corporate-speak. All-day breakfasts were tested in San Diego in April, and within months were available at all the company’s 16,000 US restaurants. This has brought back customers who might have gone elsewhere and even tempted in newcomers.

Other changes have seen the introduction of a “McPick menu” where US customers can have two items for only $2, despite the wafer-thin profit margin the deal provides.

The range of burgers has also been increased to include Pico Guacamole and Buffalo Bacon, and diners are now being allowed to customise their burgers. McDonald’s has also launched its first loyalty programme for people who register their details, offering, for example, a free cup of coffee for every five bought at one of its restaurants.

Easterbrook has also done something to improve McDonald’s corporate image, announcing a 10pc pay rise for the 90,000 people who work in outlets directly owned by the company in the US. This has taken their hourly minimum wage to $9.90 an hour – increasing to more than $10 this year – considerably higher than the legal minimum of $7.95.

The one caveat, however, was that the pay rise was limited to those staff who work for the 10pc of restaurants which are owned by the company rather than franchisees. Even the white packaging is being ditched after more than a decade. Instead, food now comes in brown paper bags which, in theory, are seen as more environmentally friendly.

According to a company spokesman, the change is “consistent with our vision to be a modern and progressive burger company” –a phrase now something of a corporate mantra.

“One of the things Easterbrook has done is create a sense of urgency in the the McDonald’s business culture,” said Mark Kalinowski, a restaurant analyst at Nomura in New York. “When the company started trialling the all-day breakfast in San Diego county in April, it only took until October before it went nationwide.

“He doesn’t want to waste time, he operates on speed to market and saw it was clearly something customers wanted.

“For McDonald’s, that is rather quick. Although it can be innovative, the company is traditionally slow- moving. I think it’s a reflection on its sheer size.” Even though Easterbrook has spent much of his career with McDonald’s, having joined in 1993, he also spent time with the rather more upmarket Wagamama and Pizza Express chains. He returned to McDonald’s in 2013 as chief brand officer, having held previous roles including its head of Europe.

“Most of the presidents and chief executives at McDonald’s we have seen have been promoted from within. Having somebody with an outside perspective is exactly what the company needed” said Darren Tristano, president of Technomic, a Chicago-based company specialising in the food industry.

Tristano believes that Easterbrook’s strategy has been shrewd. “He has aggressively marketed the all-day breakfast, which has put McDonald’s back at the top of the mind of consumers.

“The price point appeals to lower and middle-income consumers who are looking for something which is less expensive than the dinner menu. This has helped McDonald’s get back some of the market share which it had been losing to rivals.”

McDonald’s has also been helped by the rehabilitation of the egg in the mind of the consumer, Tristano added.

“If you go back a few years, eggs were seen as high-cholesterol. Now they are seen as high-protein and eggs are a key part of breakfast.

“The sales growth on a year over year basis is over a few years of weak sales performance, so the numbers are good but we should expect to see sustainable growth and especially year over year, fourth quarter 2016 would signal McDonald’s is officially back.

“McDonald’s appears to be listening to their customers and staying more true to their brand under Easterbrook.”

The consensus appears to that Easterbrook has enabled McDonald’s to regain its mojo. “He has brought a sense of strategic clarity, said John Quelch, professor of marketing at Harvard Business School.

“There is a tendency when a company gets into trouble to sling products at the wall and see what sticks. All that does is adds complexity. If you reach a point when you can’t explain to an employee or a franchisee what the point of a product is, then how can you expect them to explain that to a customer?

“The bench strength of McDonald’s is enormously good. It is no surprise that they were able to find somebody like him to step up,” added Quelch.