Top 3 Food Trends 2017: Why These Foods Should be in Your Diet?

January 13, 2017

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Haircuts and clothes are not the only things going out of style each year. Food, of course, is no exception, though all predicted food trends 2017 may not usually take off. Both nutritionists and food experts saw through predictions about food trends 2017 and offer advice on which food should be included in your diet.

Food Trends 2017: Organic Food
There is no doubt that the new subsets of a broader food trend 2017 are the organic, antibiotic-free and hormone-free foods. According to The Sydney Morning Herald, consumers are now becoming more and more aware about what is really going on with their bodies, more especially with their kids’ bodies.

As a response to these needs, food chains and restaurants including Subway, Starbucks, and McDonald’s are starting to impose modifications on the way they source their eggs, meat and other ingredients. This is among the food trend 2017 that will continue throughout the year.

Food Trends 2017: Savory Yogurt
With different variations available, savory yogurts are increasingly becoming popular according to Consumer Reports. Although they are often lower in calories, savory yogurts are in fact a good source of protein and calcium.

You can also make some twist with your savory yogurt. A blend of cucumbers and chopped tomatoes, a sprinkle of the Middle Eastern herb blend za’atar and pitted black olives will definitely make you a perfect bowl of savory yogurt. This blend can also be a great substitute for fatty sour-cream dips.

Food Trends 2017: Poke
A Hawaiian specialty spreading fast across the U.S., poke is made of fresh octopus or tuna, cubed and mixed with sesame oil, green onions and soy sauce. Poke is served over rice.

President of Technomic, Darren Tristano, explained that the specialty food will have its eventual shift from fine dining restaurants to niche restaurants. He believed that people will begin seeing more around the poke trend, which is considered among the hottest food trends 2017 by the National Restaurant Association.

According to the National Restaurant Association’s senior vice-president, Hudson Riehle, today’s menu trends are gradually shifting from ingredient-based items to concept-based ideas. This shift actually reflects consumers’ overall lifestyle philosophies, including environmental sustainability and nutrition.

 


2017 Looking Bright for Restaurant Seafood Sales

January 10, 2017

surfnturf

By Christine Blank, Contributing Editor
© 2016 Diversified Communications. All rights reserved.
http://www.seafoodsource.com/news/foodservice-retail/2017-looking-bright-for-restaurant-seafood-sales

Seafood restaurants – and those that serve seafood – are expected to perform well in both the United States and the United Kingdom in 2017.

“Right now, consumers should be in a pretty good place, with regard to the economy. All of the indicators, including unemployment, are trending positive,” Darren Tristano, president of foodservice research and consulting firm Technomic, told SeafoodSource.

As a result, spending at higher-end restaurants that serve seafood will rise, Tristano said. In addition to an increase in consumer spending, United States businesses will have increased expense accounts and take clients out to dinner more.

Restaurant chains like Ruth’s Chris, Fleming’s and other upscale chains are expected to perform well, according to Tristano.

“Steakhouses will continue to pick up, and seafood will do well in the steakhouse format,” he said.

In addition, “more polished casual restaurants” such as Bonefish Grill and Legal Sea Foods will also thrive, Tristano said.

In the U.K., eating seafood in restaurants is also expected to rise, as consumers dine out more and seek healthy, sustainable seafood. Over the last year, seafood servings in U.K. restaurants increased 2.3 percent to 979 million, as restaurant visits also grew 1.5 percent, according to NPD Group – Crest in the U.K.

The biggest trend affecting seafood served in restaurants is sustainability, Tristano said. The health, ethical and environmental attributes of meals are increasingly important to consumers, according to one of NPD Crest’s top five foodservice trends for 2017.

Sustainability is here to stay – and it will continue to increase [in importance to consumers],” Tristano said.

Consumers will continue to seek out seafood for its health benefits, according to Tristano.

However, because of the inherently higher price of seafood versus other proteins, restaurant operators need to offer a mix of seafood species at various price points to “raise the appeal of the protein.”

“For example, you can have Chilean sea bass at one end and tilapia at the other end. Or, in addition to Chilean sea bass, you can add in bluegill and other types of striped bass. You can get it down to an area that is more affordable and approachable for consumers,” Tristano said.

Seafood at restaurants is already becoming more approachable, thanks to fast-casual restaurants that are performing well, such as Luke’s Lobster and Rubio’s Coastal Grill. Even quick service seafood chains such as Captain D’s are performing well, according to Tristano.

The types of seafood dishes that will perform well in 2017 include sushi, sushi burritos, poke and calamari, “a product that is becoming more approachable,” Tristano said.

“Poke is taking off across the nation,” he added. “We are seeing a lot more poke bowls and concepts that are getting into raw ahi and salmon.”

Up-and-coming sushi burrito restaurants in the U.S. include Sushiritto in New York and San Francisco, Chicago-based Sushi Burrito and SeoulSpice in Washington, D.C.

Meanwhile, the other top NPD Crest trends for foodservice operators in 2017 are:

  • Restaurants must provide different delivery options (potentially use a delivery aggregator) to complement the traditional sit down format.
  • To maintain sales growth and consumer engagement, outlets must deliver a great experience, with a choice of quality meal options.
  • Consumers are interested in buying locally-sourced food. However, they will not accept lower quality.
  • Consumers like variety but they do enjoy their traditional favorites with a fresh twist.

How 10 Food Trends for 2016 Will Transform Restaurants

November 2, 2015

2015 Forbes.com LLC™ All Rights Reserved
http://www.forbes.com/sites/darrentristano/2015/10/28/how-10-food-trends-for-2016-will-transform-restaurants/

At this point a couple years ago, if you asked a restaurant executive how she might user Uber to build sales, she might have guessed as a prefix for the name of her brand’s Oktoberfest-theme burger. But now, Uber and Postmates are just two of the sharing-economy apps rapidly transforming foodservice and shaking up consumers’ expectations everywhere.
Going into 2016, there are dozens of similar forces shifting the ground beneath restaurants, and most of them are far beyond what brands have the power to control. While they are hard to predict, even for a data-rich firm like Technomic, they are easy to identify and understand, because they all spring from evolving consumer demand. Major moves from the biggest restaurant companies—McDonald’s moving its food supply toward more cage-free eggs, for example—aren’t dictated solely by the bottom line. They’re dictated by what consumers need from foodservice brands.

Technomic just released its 10 major food trends for 2016 with this dynamic in mind. Because consumers are the impetus behind all the upheaval, take a look at each trend and see how many of them you’re driving with your own dining out preferences.

The Sriracha Effect: This hot sauce from Thailand will continue to grow in popularity, but the “effect” Technomic predicts is that chefs and chain restaurant executives will search for the next hot ethnic flavor to find lightning in a bottle again. Early indications are that this will drive more use of and consumer interest in ghost pepper from India, sambal from Southeast Asia, gochujang from Korea, and harissa, sumac and dukka from North Africa.

The Delivery Revolution: Popular apps that simplify online and mobile ordering making “dining in” even easier and, in some cases, “dining out” irrelevant. Delivery services like GrubHub are starting to proliferate far beyond urban centers, bringing the convenience of a restaurant meal home, where plenty of people are likely camping out in front of the TV to binge-watch a season or two on Netflix. Other services are muscling in, including the aforementioned Uber and Amazon, which is expanding its Prime Fresh memberships for grocery delivery.

One particular threat to restaurants could be app-only services like Munchery, which delivers restaurant-quality food from a commissary, cutting out brick-and-mortar restaurants completely.

Negative on GMOs: In some cases, consumers have made up their minds before scientists have reached consensus, but many restaurant customers are declaring genetically modified organisms to be nonstarters. Many diners will agree with calls for labels of GMOs on menus and food packaging; some will go further and gravitate toward restaurants that advertise a GMO-free menu. That will be a major issue for the nation’s food supply, since many crops—particularly soy fed to livestock and other animal feeds—have been modified to boost their yields and productivity.

Modernizing the Supply Chain: Speaking of the supply chain, it already has enough challenges to deal with, including climate destabilization, rising costs for transportation and shipping, and pests. These will cause frequent repeats of shortages similar to those witnessed in 2015, like the unseasonable freeze that decimated Florida’s orange crop or the egg shortage that resulted from avian flu. Those hurdles will proliferate while more and more consumers demand food that is “fresh,” “local,” or just free of additives and artificial ingredients. Every brand, from restaurants to grocery stores and convenience stores, will make big investments in supply chain management in 2016.

Year of the Worker: Restaurants will also contend with rising labor costs, because of new mandates to cover full-time staff with health insurance and because the minimum wage could increase sharply depending on the state or city where they’re located. Pressure groups will ratchet up their call for a $15-per-hour wage, and they could possibly succeed in more cities like they have in New York and Seattle. Don’t expect any changes to the federal wage floor of $7.25 per hour, because no cooperation between a Democratic White House and a Republican Congress is possible, especially in an election year.
How will restaurants respond? Most will raise their wages to either comply with a new law or to compete for the best staff—but that means menu prices are going up as well, everywhere from fast food to fine dining. Also, more brands will experiment with technology and automation in the kitchens and the dining rooms to do more with fewer employees.

Fast Food Refresh: Consumers gravitate to “better” quick-service restaurants, which has transformed the industry. That has created a subset of “QSR-Plus” concepts with fresher menus and more contemporary designs, which exploits a price threshold between fast food and fast casual. Culver’s, Chick-fil-A and In-N-Out Burger are examples of this. “Build-your-own” menus are springing up across the industry, and many quick-service brands are adding amenities like alcohol.
QSR-Plus also helps other restaurants clarify their positioning by giving up their attempt to go upscale in a piecemeal approach, and those chains instead are returning to their roots with simplified menus and lower prices.

Elevating Peasant Fare: The popularity of street foods and consumers’ demand for portability and affordability have put things like meatballs, sausages and even breads back in the spotlight. But this time, those meatballs might have a nouveau twist, such as a blend of fancier meats like duck or lamb. Multiethnic dumplings will also continue to grow in popularity, from Eastern European pierogi to Asian bao.

Trash to Treasure: Rising prices for proteins will raise the profile of underused cuts of meat, organ meats or “trash fish.” The “use it all” mindset has also moved beyond the center of the plate. Some restaurants will use carrot pulp from the juicer to make a veggie burger patty, and perhaps other chains will follow the lead of Sweetgreen, which last year partnered with celebrity chef Dan Barber to make the wastED Salad, an entrée that saves vegetable scraps like broccoli stalks and cabbage cores and combines them with upscale ingredients like shaved Parmesan and pesto vinaigrette.

Let them eat kale stems!

Burned: Smoke and fire are showing up everywhere on the menu—smoky is the new spicy. Look for more charred- or roasted-vegetable sides, desserts with charred fruits or burnt-sugar toppings, or cocktails featuring smoked salt, smoked ice or smoky syrups.

Bubbly: Effervescence makes light work of the trendiest beverages. Technomic expects rapid sales growth of Champagnes and Proseccos, Campari-and-soda aperitifs, and adults-only “hard” soft drinks like ginger ales and root beers. In the nonalcoholic space, sales will also increase for fruit-based artisanal soda and sparkling teas.


Snacking and Healthier Options are on the Rise

October 30, 2015

pictureSnacking is a growing trend and consumers are snacking more frequently. About half of today’s consumers (51 percent) say they eat snacks at least twice a day and 31 percent say they’re snacking more frequently than they were two years ago.

According to Technomic, Americans also are broadening their definition of a snack to encompass a wider range of foods and beverages.

Smoothies are they a snack or a meal? According to Vitamix and ORC International, 59 percent is snack, 25 percent is part of a meal and 18 percent meal.

“Snacking occasions represent a growth channel for restaurant operators. The retail market is aggressively promoting snacks, but there’s plenty of room for restaurants to expand their snack programs and grab share. By providing more innovative, healthy and easily portable snacks, and boosting variety, restaurants can position themselves to increase incremental traffic and sales –particularly among a younger customer base.” Darren Tristano, executive vice president of Technomic.

In an article by WholeFoods Magazine called “Healthy Snacking on the Rise in the US” this article reports that more Americans are snacking more than ever before – but are also make smarter snacking choices. In a recent survey taken, 33% of the survey population is snacking on healthier foods than they were last year. This number has steadily risen with time, and is something that only stands to increase with nearly a third of all parents surveyed mentioning that they are serving healthier snacks to their children.

What a great opportunity for any restaurant, café, juice or smoothie bar to take advantage of this growing trend. Now more than ever it is important to offer customers what they want and that is healthier options.

The healthy trend is also dominating menus. Gone are the days of serving only indulgent foods or offering calorie laden menu items. The most prominent industry buzzword over that last decade is healthy which appears in various forms on today’s menus. This change has been inspired by the growing public awareness of healthy attributes in food and consumers are leaning on restaurants to go beyond adding a side salad to create a healthy meal.


Wendy’s to Look Into Dropping Antibiotics

July 31, 2015

wendys-chickenJD Malone
(c) 2015 Columbus Dispatch. All Rights Reserved.
http://www.dispatch.com/content/stories/business/2015/07/30/wendys-to-look-into-dropping-antibiotics.html

Instead of a spicy rub or a slice of artisanal cheese, Wendy’s latest chicken sandwich is getting attention for what it won’t have.

The Dublin-based chain is poised to begin testing antibiotic-free chicken in several cities as it tests both consumer response and its supply chain.

Wendy’s plans to test a new chicken sandwich in mid-August in seven markets, and antibiotic-free chicken in four of those seven — Orlando, Fla., Gainesville, Fla., Kansas City, Mo., and Austin, Texas.

Central Ohio won’t see the new chicken unless it goes nationwide. That move is pretty likely as long as there is enough antibiotic-free chicken available, analysts say.

Further details on Wendy’s plans were not forthcoming.

Still, analysts think it’s the right move to swim with other chains doing similar things. McDonalds, Chipotle and Chick-fil-A have all pledged to remove antibiotics from their chicken. Big producers including Tyson and Perdue also have announced a pivot away from using antibiotics unless medically necessary.

“On the list of bad words, antibiotic had definitely moved up,” said Darren Tristano, vice president at Technomic, a Chicago-based food-service analysis and consulting firm. “The overall trend is taking things (thought to be) harmful out of the supply chain. Consumers want this.”

“The time is ripe,” said Tim Powell, principal of Think Marketing, a Dublin-based food-service consultant. “Today’s consumer is far better-educated on where their food is coming from, and they have shown they will pay more for it.”

The new chicken will also be used in salads and other menu items featuring grilled chicken.

Wendy’s has been looking to tweak its menu lately.

Earlier this year, the chain tested a black bean veggie burger in Columbus and received a lot of attention for trying a nonmeat sandwich. There’s no word on whether that sandwich will join the chain’s menu permanently, but it’s part of a bigger strategy among quick-service chains to keep up with fast-casual restaurants such as Chipotle.

They have to speak the same language to lure similar customers.

“You have to do things like this,” Tristano said. “You don’t want to be one of the last. You want to be one of the first.”


Gone Fishing

July 27, 2015

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Copyright © 2015 Journalistic Inc.

http://www.qsrmagazine.com/menu-innovations/gone-fishin?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A%20QSRmagazine%20%28QSR%20magazine%29

Seafood gives operators a versatile protein that has a sustainable, healthful halo.

There’s nothing fishy about the seafood at limited-service restaurants today. Operators are focused on meeting consumers’ demands for seafood that is creative, healthful, and sustainable, from grilled fish fillets to upscale lobster rolls.

“There’s a little oversaturation in chicken, burgers, and pizza,” says Andrew Gruel, founder of Slapfish, a seven-unit southern California seafood chain. “People are eating more seafood now that they realize how healthy and accessible it is.”

According to Chicago-based market research firm Technomic Inc., 64 percent of the nation’s quick-service and fast-casual restaurants offer a seafood item, whether it’s fish tacos, shrimp fried rice, or anchovies on pizza. The number of seafood items on regular limited-service menus is virtually unchanged from a year ago, with 54 percent featured at quick serves and 46 percent at fast casuals.

The most offered seafood, according to Technomic’s MenuMonitor database, is shrimp. It’s in a variety of dishes, part of many ethnic menus, and a popular add-on protein at restaurants as diverse as Noodles & Co. and Pei Wei Asian Diner.
Even Atlanta-based wings chain Wing Zone serves a shrimp dish. “Almost all of our food items are fried, so having fried shrimp is easy on the operation,” says Dan Corrigan, director of marketing. “We actually changed our shrimp recently to more of a jumbo breaded shrimp, and that’s doing well.” The shrimp is served with a dipping sauce. It’s only 3 percent of the sales, Corrigan adds, but when Wing Zone tested removing the item from one restaurant, guests wanted it back.
One reason fast casuals make up a big percentage of limited-service eateries serving seafood is its premium price, says Technomic executive vice president Darren Tristano.

“That’s harder to translate to quick service,” he says. “Seafood’s price points are more full service or fast casual.” Nonetheless, many big limited-service restaurant operators offer at least one seafood menu item, such as the Filet-O-Fish at McDonald’s or Tuna Sandwich at Subway.

Keeping seafood sustainable is more important to Americans today than ever before.

“Customers are increasingly asking where their food comes from, how is it produced, is it safe, and are there any environmental issues when it’s produced,” says James Baros, aquaculture and sustainability coordinator at provider National Fish and Seafood of Glouchester, Massachusetts. He points to Atlantic cod and some tuna species as examples of how industrial fishing nearly obliterated stocks. “It was an important lesson to learn,” he says.

Half of U.S. seafood is caught wild, while the other half is farmed. That’s up from 15 percent farmed three decades ago. “We’re seeing a big transition to aquaculture,” Baros says. “Fish is the last major food we go out and catch. You don’t hear of catching cows in the wild.”

Salmon, shrimp, and tilapia are the most popular farm-raised seafood varieties for Americans. But wild caught still has a certain cachet for diners, and many restaurants point out that their fish is wild caught. That includes the largest quick-service seafood operator, Long John Silver’s, where the classic battered and fried Fish and Chips remains the biggest seller.

“Our two main types of fish are Alaskan pollock and cod. Both are wild caught and sustainable,” says chief executive James O’Reilly. “It takes a lot of commitment to maintain a sustainable supply.”

The fried fish is usually pollock, while cod is available either fried or baked. Shrimp, mostly farm-raised in South America, can be baked or fried, and Long John Silver’s also sells fried crab cakes and clams, with langoustine bites offered as a seasonal item.

“Our seafood menu has evolved,” O’Reilly says, adding that the brand has increased its healthier options while also adding more portable items, including fish tacos, seafood-salad sandwiches, and fish strips. These steps are helping the Louisville, Kentucky–based company maintain its seafood leadership, O’Reilly says. “I believe that growth will be fueled by the addition of Millennials concerned with quality and sustainability,” he says.

Battered fried fish is also the No. 1 item at Captain D’s, which has positioned itself as a fast-casual seafood dining experience. While about two-thirds of the menu is fried, the biggest growth is in grilled items, says Jason Henderson, vice president of product innovation for the Nashville, Tennessee–based chain. Double-digit growth pushed grilled food to about 10 percent of sales in 2014.

The grilled menu includes Alaska salmon and pollock, tilapia, and shrimp, while the fried fish is pollock. The chain also features breaded flounder and catfish, a nod to its Southern roots, as well as fried shrimp and stuffed crab shells.
Most diners don’t ask about the food’s source, Henderson says, but the menu often makes it quite clear, particularly with Alaskan fish.

“We’ve worked with a long list of accounts to increase the visibility of Alaska seafood,” says Claudia Hogue, foodservice director at the Alaska Seafood Marketing Institute. The state produces 53 percent of America’s seafood harvest.

In addition to white fish—cod, halibut, and pollock—Alaska is known for its wild salmon. Some salmon varieties are available year-round, but for most, the season kicked off in May and runs through the summer. There are also Alaska Dungeness and other crab varieties, along with scallops and prawns.

“We encourage people to use the Alaska name because we know customers more and more want to know the origin of their fish,” Hogue says. Studies commissioned by the institute indicate consumers feel better about buying Alaska-brand seafood.

Southern California–based Sharky’s Woodfired Mexican Grill makes a point that fish served in its tacos, burritos, bowls, and other items are wild caught, and varieties like salmon and cod are from Alaska.

“We’re a lifestyle brand, and many who visit us recognize the benefits of wild-caught seafood,” says David Goldstein, chief operating officer of the two-dozen-unit chain.

The most popular seafood item is Charbroiled Fish Tacos featuring salmon or wahoo. Fish tacos are $4.29, versus $2.99 for chicken and $3.99 for steak. Other favorites are the Salmon Power Plate, Salmon Burrito, and Tempura Cod Tacos.
Sharky’s also features mahi mahi, pollock, and shrimp, and all these offerings provide “a real point of differentiation for us,” Goldstein says. Seafood has grown to 11 percent of sales, twice what it was a few years ago.

At Ivar’s Seafood Bars in and around Seattle, fish (Alaska cod) and chips is the big draw. “We ride the up-and-down tides on price points,” says Carl Taylor, director of operations at the regional favorite. “It’s a premium product we serve.”

The majority of the menu is fried. In addition to cod, there’s fried halibut, salmon, clams, scallops, big and small prawns, and oysters. The menu also has several chowders, grilled halibut and salmon, Dungeness crab, and salads with different seafood varieties.

“Within the past three years, we expanded the grilled items and added fresh fish,” Taylor says. “We sell it as long as the run is going.” The two-piece Fresh Halibut Platter, with cole slaw, wild rice, and cornbread, sells for $15.99.

Ivar’s oysters are from the Washington and Oregon coasts. The Alaska Dungeness ($9.29) is higher in terms of price, he says, but worth every penny. “I could go out and get rock crab and mix it with the Dungeness to lower the price, but we don’t.”

Just as consumers equate wild salmon with Alaska, they link lobsters with Maine. That’s the draw at New York–based Luke’s Lobster, which has 17 fast-casual “shacks” in Mid-Atlantic coast cities and recently expanded to Chicago.

“We are exporting the experience of the Maine lobster shack,” says founder and president Luke Holden, whose father has been in the seafood industry for years and built up well-established relationships with fishermen across the Northeast coast.
The $15 fresh lobster rolls are made to order in the traditional Maine style, with a quarter pound of chilled lobster meat in a top-split bun—the sides are shaved to toast better—plus a slick of mayonnaise, Holden’s secret seasoning, and lemon butter.

“All the meat is from the claws and the knuckles; the knuckle tends to be the most delicious part,” Holden says, adding that the tail is considered premium, but not for lobster rolls. “You would have a tug of war with a warm bun and a chewy tail.”

The shacks also offer crab and shrimp rolls, Jonah crab claws, and New England clam chowder. Crab is purchased from fishermen from Maine to Rhode Island, while the shrimp is wild from Canada.

Lobsters were sustainably caught long before it became a trend, says Matt Jacobson, executive director of the Maine Lobster Marketing Collaborative. Some rules governing trapping date from the 1870s. Today, lobsters must be males between 3.5 and 5 inches in body length. Others are tossed back—smaller ones to grow, and females and bigger males to breed.

While many consumers consider lobsters a center-of-plate item served whole, there are many other uses for the meat, Jacobson says, including in salads, pasta, and Asian dishes. Lobster rolls are also growing in popularity nationwide.

Lobster rolls and fish tacos are the two top sellers at Slapfish. “Lobster is incredibly indulgent, and the growth in our lobster rolls has been 100 percent due to Instagram and social media,” Gruel says. “People see them online and want them.”

The fish tacos are available with grilled or fried fish, largely wild-caught species ranging from Pacific cod to Maine’s Acadian redfish, depending on the season. The tacos include cabbage, avocado purée, and pickled onions.

“The key is the balance,” he says. “You want a good amount of cabbage to provide that great crunch, and the acidity to cut through the richness of the fish.”

Slapfish’s limited entrée menu also includes the Crabster Grilled Cheese sandwich with lobster and crab, and a Surf ‘n Turf Lobster Burger smothered in lobster and caramelized onions. There’s also fish and chips, chowder, chowder on fries, and shrimp.

A taste of the Hawaiian Islands is part of the draw at Coconut’s Fish Café. The four-unit chain began in Maui, Hawaii, and has since moved to the mainland. It features mahi mahi, ono—the Hawaiian name for wahoo—and ahi.

“They are all wild, and they are line caught,” says Dan Oney, chief operating officer. “The people we buy from are able to track the fish to the boat. It’s the concept of taking care of the earth and taking care of our customers.”

Most of the fish is grilled, and the ahi tuna is seared rare and served with wasabi. “We have big, beautiful, 6-ounce fillets of fish that if you go to a sit-down restaurant, you would pay $30 or $40,” Oney says. Coconut’s platters start at $10.99.
Mahi mahi and ono are in the seafood pasta, as well as the fish tacos that include family-recipe coleslaw and tomato and mango salsas. There’s also a fish sandwich and other fried items—fish and chips, shrimp, calamari, and coconut shrimp—on the menu.


Subway is Making a Huge Mistake That Could Undermine its Business

July 21, 2015

jared-fogle-subway-5Ashley Lutz
http://www.businessinsider.com/subways-rapid-expansion-could-hurt-business-2015-7

Subway’s biggest problem has nothing to do with shamed former spokesman Jared Fogle.

The company dismissed its weight-loss pitchman last week after his house was searched in an FBI investigation and one woman accused him of making inappropriate comments about middle-school girls.

While the scandal with Fogle will pass, the company’s rapid expansion plan is a bigger issue that could hurt business, according to Jonathan Maze at Nation’s Restaurant News.

“It’s really been a victim of its own success,” David Henkes, from the consulting firm Technomic, told Bloomberg. “It’s really saturated the market. It’s got over 27,000 (US) locations now. The unit economics are very tough. Competitors have really come in and provided some alternatives to consumers that have caused Subway to suffer some sales losses.”‘

Subway has 44,000 restaurants worldwide, more than McDonald’s. Executives say the company eventually plans to reach 100,000 locations.

Subway’s US sales last year fell by 3%, the biggest fall for any of the top 25 fast-food chains, Drew Harwell reports at The Washington Post.

Subway also fell two spots to become the third-most-popular fast-food restaurant for the first time in seven years.

The expansion plan is backfiring, according to The Post.

“More people have money to spend, and they’re choosing to spend a little bit more on better concepts where they get a better product,” Darren Tristano at Technomic told The Post. “Subway’s strategy has only been to open more stores, and ultimately those stores just cannibalize each other.”

In other words, Subway is so ubiquitous that customers leave one restaurant to go to a closer one.

Tristano also told Bloomberg that “if your goal is to have the most versus the best, you’ll eventually run into trouble.”

Subway should focus on innovating its menu instead, Maze said.

With its vegetables and lower calorie counts, Subway arguably invented the idea of “fresh” fast food two decades ago.

But while Subway stayed the same, better competitors got into the space.

Chipotle offers food that is raised without fillers or antibiotics and is prepared fresh in stores. Firehouse Subs and Potbelly offer elevated ingredients and side dishes such as gourmet kettle chips and potato salad.

Americans who once praised Subway’s low-fat offerings are now concerned the chain’s lunch meats and sauces are overly processed with fillers and additives.

“What Americans see as healthy has evolved,” Harwell writes. “Subway hasn’t.”