‘The Founder’ Offers Nostalgia, Inspiration For A McDonald’s That’s Come A Ways Since ‘Super Size Me’

January 25, 2017

 

http://www.forbes.com/sites/darrentristano/2017/01/20/the-founder-offers-nostalgia-and-inspiration-for-a-mcdonalds-thats-come-a-long-way-since-super-size-me/#58d92d12634f

I am proud to say that the late longtime McDonald’s CEO Ray Kroc and I were both born in Chicagoland in Oak Park and graduated from Oak Park and River Forest High School. But while Kroc spent his life building a global mega-burger brand, I’ve spent mine eating his burgers, French fries and drinking his shakes.

Kroc is legendary in the foodservice business. His passion, energy and determination fueled his competitive spirit and has served as an inspiration for many of today’s successful brands.

Today’s consumer may not understand the importance of fast food and its place in history. Kroc redefined the term convenience through the expansion of the McDonald brothers’ Speedee service system and gave Americans a consistent, affordable and fast option to dine away from home. The chain’s efficient systems in the back-of-house and focused customer service not only served billions but created millions of jobs. Through innovation and drive, this founder invested in a business that has stood the test of time.

This story, as told in the new movie The Founder, is a classic representation of the American dream as realized by an ambitious and aggressive salesman risking everything to invest in a blue sky idea. Choosing hard working franchisees and gaining the insight of a few smart people along the way, he was able to navigate obstacles that stood in the way of his success. The portrayal of Ray Kroc by Michael Keaton gives the audience a taste of his persistent, aggressive and ruthless tactics that allowed a businessman in the 1950s to achieve his goals and build a food service empire.

So how could the portrait of the company in this movie impact visits to McDonald’s restaurants? Will consumers leave the theater with their own renewed sense of personal ambition and strong sense of respect for an American institution or will they continue to see fast food giants in an increasingly negative light?

After spending the last 24 years doing research at food service consultancy Technomic, I believe the movie will meet with a favorable reaction from consumers. Younger generations who grew up with the brand will be able to better relate to the story and begin to emotionally connect to a brand they are familiar with but perhaps outgrew as they aged beyond happy meals, play places and fun characters like Grimace, The Hamburglar and Mayor McCheese. Millennial consumers who grew up eating at McDonald’s and often finding their first employment at there will reconnect with a brand that served them convenient breakfasts, café beverages and affordable dollar menu items. Older Gen X and Boomer generations will reminisce by finding their way back to McDonald’s for a nostalgic signature Big Mac or Quarter Pounder. They will remember the legendary jingle “two all-beef patties, special sauce, lettuce cheese, pickles, onions on a sesame seed bun” as they sink their teeth into a fresh Big Mac which can now be customized into three different sizes for any appetite.

It wasn’t that long ago that Super Size Me hit the big screen and outraged Americans. But since 2003, McDonald’s has dropped super sizing, focused on improving the quality of their ingredients, enhanced their supply chain practices supporting animal welfare and worked hard to maintain convenience, affordability and consistency across their 14,000-plus U.S. restaurants and global locations. Although this movie likely won’t have a significant effect on traffic to the stores, it’s more likely that moviegoers will consider McDonald’s a bit more in the short term and patronize a business that has been a pillar of our post-war culture.

I enjoyed the movie with my son and then we stopped in to our local McDonald’s for a couple of Big Macs and apple pies. McDonald’s has always been a part of my life and I don’t ever think the day will come that I won’t drive through or stop in for a fast food bite of nostalgia and some great family memories from my parents and with my children.

 


Leading Culinary Predictions & Trends 2016: What’s in the Hunt?

August 4, 2016

Morrocan.jpg

By Barbara L. Vergetis Lundin, Assistant Editor
http://www.foodabletv.com/blog/leading-culinary-predictions-and-trends-2016-whats-in-the-hunt

A survey of chefs conducted by the National Restaurant Association predicted 20 trends for 2016. The chefs are obviously on top of their game, as all of the trends have come to fruition in some form or fashion. Which ones are in the hunt?

“True trends evolve over time, especially when it comes to lifestyle-based choices that extend into other areas of our everyday life,” said Hudson Riehle, senior vice president of research for the National Restaurant Association, in a statement. “Chefs and restaurateurs are in tune with over-arching consumer trends when it comes to menu planning, but add their own twist of culinary creativity to drive those trends in new directions. No one has a better view into the window of the future of food trends than the culinary professionals who lead our industry.”

Some of the predictions are “fully inundating top restaurant chains,” according to Darren Tristano, president of Technomic, a Winsight Company.

Farthest along are natural ingredients, ethnic condiments/spices, authentic ethnic (think Middle Eastern and African spices like sumac and dukkah), ancient grains, ethnic-inspired breakfast items like coconut milk pancakes, and street foods, as a multitude of top chains are embracing these trends in one way or another, he said.

“In my opinion, the two biggest headliners of this year have been natural ingredients and ethnic condiments/spices,” Tristano said. “They’re showing up in all restaurant segments and cuisine types in so many different ways.”

Natural Ingredients

When it comes to using natural ingredients, Panera is setting a high standard. Not only does Panera stress clean ingredients, but the chain has a “no-no” list of ingredients that they have committed to removing from their food by the end of 2016, including artificial flavors and colors; artificial sweeteners like aspartame; partially hydrogenated oils and artificial trans fat; fat substitutes like sucrose polyester and micro-particulated whey protein concentrate; lard; high fructose corn syrup; sucralose; maltodextrin; added nitrates, nitrites, and sulfites; and added caffeine.

California Pizza Kitchen (CPK) recently announced its intention to use more local, natural ingredients. For example, it will source vegetables like lettuce, kale, and arugula from local and regional farms whenever possible. Not only are the ingredients being used this summer at California Pizza Kitchen natural, they are simple – as evidenced by new seasonal dishes like California fields salad (with fresh field greens and baby kale, strawberries, watermelon, basil, California pistachios, feta, and champagne vinaigrette), strawberry shortcake featuring house-made candied lemon zest, strawberry lime margaritas, and strawberry mango coolers.

“It’s been a long, cold winter for many and we are happy to welcome the warmer weather by offering a taste of the season’s freshest ingredients throughout our menu,” said Brian Sullivan, senior vice president of Culinary Development for California Pizza Kitchen, said in a statement. “Tender, leafy greens are a key component to many of our dishes and we’re also giving fresh strawberries special emphasis this season…We love summer at California Pizza Kitchen when some of our favorite produce, like sweet strawberries and watermelon, are at their freshest and juiciest.”

Even McDonald’s has jumped on the natural ingredient bandwagon with a new line of summer salads that are moving from traditional iceberg lettuce to red leaf lettuce, romaine, baby spinach, and baby kale peppered with vibrantly colored vegetables.

McDonald’s culinary and supply chain teams have even traveled to some of the chain’s lettuce suppliers, learning, right in the field, how the leaves are harvested and how suppliers maintain consistent growing techniques.

Further, McDonald’s has committed to fully transition to cage-free eggs over the next 10 years. Annually, McDonald’s purchases approximately two billion eggs in the U.S. and 120 million eggs in Canada.

Ethnic Condiments and Spices

American consumers are seemingly pretty adventurous when it comes to food. In fact, 80 percent of those consumers surveyed by the National Restaurant Association in 2015 consume at least one ethnic cuisine per month; 17 percent eat seven or more monthly.

Further, two-thirds are trying a wider variety of ethnic cuisine than they were five years ago, according to NRA research. Restaurants were found to be the main way consumers get access to ethnic food.

“Americans generally are more willing to try new food than they were only a decade or so ago – especially in restaurants – underscoring that the typical consumer today is becoming more adventurous and sophisticated when it comes to different cuisines and flavors,” said Annika Stensson, director of Research Communications for the National Restaurant Association, in a statement. “Ethnic cuisines are a long-term trend on restaurant menus, with some being so common that they’re hardly considered ethnic anymore, while others are still relatively unknown. However, our research shows that consumers are exploring a range of international dishes these days.”

The research revealed that, not surprisingly, Italian, Mexican, and Chinese are the most familiar, while consumers are least familiar with Ethiopian, Brazilian/Argentinian and Korean cuisines. However, condiments and spices with these origins are popping up on familiar menus.

Lizzy Freier, menu analysis managing editor with Technomic has been tracking the up and coming trends in spices and has found that berbere (a staple spice mixture in Ethiopian cooking) and other African influences are making their way onto North American menus. In particular, True Food Kitchen serves a Moroccan Chicken with chickpea, olive, spinach, and chermoula (a North African marinade); BLT Steak features a rack of lamb with a spicy North African merguez sausage; Veggie Grill has unveiled a super green salad featuring hummus and harissa (Tunisian hot chili pepper paste); and Modern Market’s eggplant goat sandwich offers a spicy helping of harissa tahini.

Nando’s chicken chain has made peri peri (also called piri piri) famous, if not infamous. The Portuguese seasoning, which is prevalent in South Africa, contains crushed chiles, citrus peel, pepper, salt, onion, lemon juice, basil, oregano, tarragon, lemon juice, pimento, paprika, and bay leaves (although Nando’s recipe is a secret). A chain similar to Nando’s, albeit much smaller, Boneheads Grilled Fish & Piri Piri Chicken also capitalizes on the South Africa influence.

Noodles & Company has incorporated a similar, more exotic version of sriracha into its menu. Called gochujang, it plays heavily in the fast-casual restaurant’s new dish Korean BBQ meatballs with gochujang sauce – making Noodles & Co. the first national restaurant chain to feature gochujang on its menu. Sriracha is also a popular condiment at Noodles & Company, as well as other chains like Subway.

Ghost peppers, the world’s spiciest pepper, are a hot menu item, as evidenced by Wendy’s ghost pepper fries and Quaker Steak & Lube’s dusted ghost pepper flavor which is available for a limited time as a wing sauce.

Brazilian-influenced brands include Texas de Brazil Churrascaria, Fogo de Chao, and Tucanos Brazilian Grill. Plus, these kinds of ethnic influences are also appearing on non-ethnic restaurant menus. For example, Yogurtland offered a limited-time Argentinian Dulce de Leche Cookie frozen yogurt flavor at the end of April.

Argentinian Chimichurri sauce has been popular at national brands, particularly paired with shrimp (Taco John’s, Fuzzy’s Taco Shop, and Red Lobster).

Early Stage Trends and Laggards

On the opposite end of the spectrum, many trends – like hyper-local sourcing, artisan ice cream and butchery, and house-made sausages – are in their early stages, appearing in mostly independent restaurants.

“[These trends] are really tough for large restaurant chains to do on a national level…because it’s expensive and equipment can be tough to source,” Tristano said.

Some of these trends do well in non-commercial as opposed to commercial.

“Hyper-local sourcing and food waste reduction/management are both well-developed at college and university foodservice,” said Tristano. “Applying these to the mainstream could be tougher, though some chains like Sweetgreen and Shake Shack have approached trends like food waste in interesting ways by repurposing food scraps.”

For example, for a limited time, Sweetgreen and Shake Shack featured a burger created by Chef Dan Barber (the wastED juice pulp cheeseburger), which used leftover vegetable pulp, leftover cheese trimming, and bruised beets for ketchup, atop a repurposed bun made from stale rye bread.

While other trends, are making progress, it has been significantly limited. For example, chains like True Food Kitchen and Top 500 chain Sweetgreen feature sustainable sea bass and sustainably farmed trout, respectively, but many other large chains aren’t quite there yet.

While pickling has been a huge trend in recent years, even making it onto menus like Red Robin which recently unveiled a Battered Broccoli with house-made pickled jalapeno aioli, there hasn’t been a significant surge on other top menus.


The Brass Tap to Open a Microbrewery in Carrollwood Bar

June 16, 2015

0435873611_15361234_8colJustine Griffin
Copyright 2015 Times Publishing Company. All Rights Reserved.
http://www.tampabay.com/news/business/retail/the-brass-tap-to-open-a-microbrewery-in-carrollwood-bar/2232977

The Brass Tapknows its customers can go just about anywhere to find a good beer these days.

In an effort to offer a more authentic experience beyond sampling the hundreds of beers it sells on tap and in bottles, the chain is opening its own microbrewery inside its bar on N Dale Mabry Highway in Carrollwood. The move to brew its own beer comes about a year after the chain abruptly closed its downtown St. Petersburg bar next to Rococo Steak. Despite the closure, the chain is still expanding aggressively, with four franchise locations poised to open in Florida this year and five others in the works in Texas, North Carolina and California.

“If you’re going to be a part of the craft beer movement, you have to be a destination,” said Darren Tristano, executive vice president with Technomic, a Chicago-based restaurant research firm. “You have to be more exclusive. By brewing beer in-house, the Brass Tap is driving more credit to its brand.”

And with more competitors saturating the market, such as World of Beer and the Yard House craft beer and restaurant chain, you have to stand out.

“It’s amazing how many people want to open a brewery,” Tristano said.

Microbreweries are sprouting in record numbers in Tampa Bay and across the country. The industry recorded a 127 percent spike in the number of breweries that opened in 2014 compared with 2012, according to the Brewers Association trade group. More than 600 breweries opened in the United States last year, including Coppertail Brewing Co. in Tampa. In St. Petersburg, 3 Daughters Brewing opened in December 2013, and a half dozen others, such as 7venth Sun Brewery in Dunedin and Big Storm Brewing Co. in Odessa, opened in 2012.

Rory Malloy, the Brass Tap’s new brewing operations manager, will brew beer from a two-barrel “nano” system in a small brewery marked off by a glass wall from the rest of the Carrollwood bar. The beer will be offered for sale at the bar, and customers can watch and ask questions while Malloy brews. He hopes to brew his first beer by the end of the month.

“We’ve always used this location to train franchisee owners and test new products,” said Chris Elliott, CEO of Beef ‘O’ Brady’s, which purchased the Brass Tap in 2012. “The microbrewery is a test for us. Our customers already love craft beer and many of them are interested in the process. Now they can learn more about it here in our bar.”

The concept has been in the works for nearly two years, Elliott said. The Brass Tap worked with Cigar City Brewing CEO Joey Redner on the concept. Cigar City will be among the first of many local breweries invited to brew a guest batch of beer at the Brass Tap microbrewery, Elliott said.

The chain hopes to partner with many of Tampa Bay’s local breweries, and some national ones too, such as Samuel Adams and Founders.

The idea isn’t to compete with breweries for customers. It’s to partner with them.

“There are so many breweries opening within a 5-mile radius of us,” Malloy said. “We can all share our resources.”

The Brass Tap may offer home-brewing courses at the microbrewery.

“The craft beer segment started getting hot in the ’90s, when a lot of guys were trying to do brewpubs that offered food and beer. The overhead was huge and the audience just wasn’t there,” said Brian Connors of Connors Davis Hospitality, a global food and beverage consulting firm based in Fort Lauderdale. “One of the best things to happen to the craft beer movement is the millennial generation. They’re willing to pay more for something of quality that’s made locally.”


The Gourmet Appeal of Sea Salt

May 20, 2015

https://cargillsaltinperspective.com/the-gourmet-appeal-of-sea-salt/SeaSalt3-1080x390

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.”


Uno Chain Putting Pizza First Again

March 2, 2015

tlumacki_pizzeriauno_business375-001Pizza First ; Uno, once deemed the healthiest chain restaurant in America, ditches its nutritionist and goes back to its high-calorie roots to stand out from its rivals

By Taryn Luna Globe Correspondent
http://www.bostonglobe.com/business/2015/02/27/uno-chain-putting-pizza-first-again/Idbh31HEj5KahzIpPxZk7I/story.html
© 2015 The Boston Globe. Provided by ProQuest Information and Learning. All Rights Reserved.

Uno Pizzeria and Grill, the deep-dish pizza restaurant chain that switched years ago to a menu emphasizing pages of healthy food, is returning to its cheesy roots. Calorie counters beware.

In 2008, the West Roxbury company had happily embraced a new title, bestowed by Health magazine: healthiest restaurant chain in America.

Now Uno’s traditional fare — including its 2,300-calorie Chicago Classic individual pizza — is back near the front of the menu.

Said Dee Hadley, chief marketing officer at Uno:

“If you came into our restaurant and tried to find pizza on our menu, you would have had a hard time because we hid it in the back. It’s about going back to what made the brand great to begin with.”

Hadley and a new team of executives have spent more than $10 million to remodel dozens of restaurants and start a rebranding campaign. The goal is to emphasize Uno’s pizza heritage, a way to stand out in a waning casual dining business teeming with big competitors like Applebee’s, Chili’s, Ruby Tuesday, TGI Friday’s, and Red Robin.

Uno was founded in Chicago in 1943, serving thick-crust pizza that curved up the sides of its deep metal pan. The pizza was so unusual that the original owners, Ike Sewell and Ric Riccardo, gave away samples to entice people to try it, Chicago historian Tim Samuelson said.

It paid off, and the restaurant became wildly popular.

In 1979, a Boston restaurateur, Aaron Spencer, became the first franchisee and opened an Uno on Boylston Street. Spencer continued to expand the chain in Boston and beyond. Over time, Uno grew to more than 200 restaurants.

But the company began to distance itself from its pizza roots in the early 2000s. Like many other casual restaurant chains, it expanded the menu to appeal to as many customers as possible, said Darren Tristano, an executive vice president at the food industry research firm Technomic in Chicago.

In an increasingly health-conscious time, people weren’t flocking to Uno for pizza that often topped 1,700 calories for an individual serving. Every restaurant, from McDonald’s to Applebee’s, looked for ways to cut calories.

Around 2005, Uno began a campaign to cultivate a healthier image. The brand, which had already changed its name to Uno Chicago Grill from Pizzeria Uno, eliminated trans fats from the menu and listed ingredients and calories on touch-screen kiosks. The new menu featured pages of salads.

Uno hired a full-time nutritionist and started a nutrition advisory board, which included a cardiologist from Brigham and Women’s Hospital.

“Creating a menu with delicious health-conscious options is one of our priorities,” Frank W. Guidara, then Uno’s chief executive, said a few years into the process. In an April 2006 Boston Globe article, Guidara said sales were up almost 2 percent because of the changes.

But the menu changes turned Uno into another Applebee’s, with a broad range of dishes and no emphasis on anything, Tristano said. At one point, the menu stretched to 22 pages. The restaurant’s deep dish pizzas appeared on page 18.

“They really changed the menu and mimicked what other casual restaurants were doing,” Tristano said. “Today we’ve learned that menus are too big, and casual dining brands are too ubiquitous.”

Uno discovered that the hard way. The company faced heavy debt and declining sales during the recession, when people ate out less frequently. Uno suffered net losses of $22 million in 2009 and filed for bankruptcy protection the following year.

Now, a new team of executives is trying to move forward with more than a nod to the past. The main objective: Give customers what they want.

Hadley said that when she joined in May 2013, the company went back through consumer studies for the prior five years to understand what people liked about Uno. Not surprisingly, the answer was deep dish pizza.

“We’ve really made a commitment to send a message to our consumer base that we’re bringing back the soul of the brand that we’ve lost,” Hadley said.

The first step was to rename the restaurant Uno Pizzeria and Grill, followed by a redesign of the restaurants. About 40 of the chain’s 82 corporate-owned restaurants have been remodeled, starting last year, at a cost of $100,000 to $200,000 per eatery, Hadley said.

At an updated restaurant in Braintree, the yellow and white checkered tablecloths and Tiffany pendants that dangled from the ceiling have been replaced with wood tables and modern light fixtures. Construction crews removed a wall in the bar and took down glass partitions in the dining room for a more open-concept feel. The restaurant added a new bar top and high tables, doubling the size of the bar.

Daily specials are written on chalkboards, and simple art adorns the walls with phrases like “We owe it all to a man and his pan.”

Uno says the remodeling is starting to pay off. Updated restaurants have experienced a 10 percent sales growth, she said.

The timing isn’t ideal for a return to high-calorie pizza fare, however. The federal government will require chains to list calorie counts on their menus by the end of this year.

Some diners won’t care. But others may choose smaller portions or different dishes when they realize the high calorie count of a favorite item.

“The calories on the menu will be really an eye-opener to the consumer,” said Joan Salge Black, a professor in the nutrition program at Boston University.

While gluten-free and low-fat items haven’t disappeared from the Uno menu, the nutrition advisory board isn’t active, and Uno no longer employs a nutritionist.

“We want to make sure healthy choices are available, but if you’re looking for those things you’re not thinking about us,” Hadley said. “Strong brands have to stand for something that is different from the rest of the pack. Our heritage is deep dish pizza.”


Shake Shack, Born in a Park, Goes Public With Big Dreams

February 6, 2015

SHAKE-tmagArticleBy Michael J. de la Merced and Kim Severson

The New York Times

Copyright 2015 The New York Times Company. All Rights Reserved.

http://dealbook.nytimes.com/2015/01/29/shake-shack-born-in-a-park-goes-public-with-big-dreams/?_r=0

Nearly 14 years ago, on something of a lark, the restaurateur Danny Meyer opened a Chicago-style hot dog cart in Manhattan’s Madison Square Park, hoping to draw crowds to the park and give summer jobs to the staff at one of his nearby high-end restaurants.

That stand has morphed into Shake Shack, a burger-and-crinkle-fries empire with outposts in London, Dubai, Istanbul and Las Vegas. On Friday, it will begin trading on the New York Stock Exchange with a valuation of about $745 million, and will increase Mr. Meyer’s net worth by about $155 million.

Conceived as a homage to the friendly Midwestern fast-food joints of Mr. Meyer’s childhood, Shake Shack has become one of the most prominent purveyors of fast-casual food. That sector, dominated by the likes of Chipotle, has fundamentally reshaped the fast-food industry with its emphasis on using fresh ingredients. In short, Americans seem willing to pay more for fast food made better, so long as they are still served quickly.

The success of Mr. Meyer’s chain stands in stark contrast to McDonald’s, the global behemoth suffering from its worst slump in more than a decade. The golden-arched restaurant chain announced a change in leadership this week facing sagging sales and a flat stock price, as it struggles to adjust its well-worn menu for modern tastes.

Mr. Meyer, 56, and his team have had no such trouble. Shake Shack has resonated with consumers who grew up on fast food but are both wary and weary of it. Burgers have been enjoying a makeover that began in the late 1990s, as younger eaters have flocked to a new generation of burger chains like Shake Shack, Five Guys and Smashburger.

Mr. Meyer’s chain is part of a new crop of fast-casual restaurants that promote the authenticity of ingredients. Many have since gone public, stirring up investors’ appetites: Shares in Zoës Kitchen have doubled from the chain’s public debut, while those in El Pollo Loco are up 76 percent. The shares of another chain, Habit Restaurants, have risen more than 80 percent since their November debut.

Yet the fast-casual dining sector has become crowded, with a host of new entrants in an already competitive restaurant business. Shake Shack has tripled its store count in just two years, with 63 branches, and now Mr. Meyer and his team must prove they can manage their chain’s explosive growth and weather the public’s fickle tastes.

Shake Shack is rooted in Mr. Meyer’s own culinary experiences. Its origins lie in St. Louis, where he grew up on straightforward food served with Midwestern friendliness at restaurants like the German restaurant Schneithorst’s and Steak ‘n Shake, itself now a 500-restaurant chain.

He also came to love the frozen custard at Ted Drewes, which began selling Christmas trees and frozen custard in the 1930s. That restaurant introduced the concrete, a shake as thick as ice cream with a raft of mix-ins, in 1959; it is now a signature item at Shake Shack.

So integral is the frozen treat to the company’s identity that Mr. Meyer nearly named the hot dog cart ”Custard’s First Stand.” He acknowledges in the stock sale’s prospectus that the name was ”pretty bad.”

But Shake Shack also draws on the lessons Mr. Meyer has learned in his three decades as one of New York’s most successful restaurateurs. His career began in 1985 when, at age 27, he opened the Union Square Cafe as a kind of antithesis to New York restaurants of the time that cultivated exclusivity and excess. The restaurant’s mix of warm service, dishes made with produce bought at the nearby Greenmarket and top-notch food served more casually was groundbreaking.

Since then, hospitality has been the calling card for his empire, which has expanded to what are now fixtures of the New York dining scene: Gramercy Tavern, Blue Smoke and Maialino among them. (Those restaurants are part of a separate company, the Union Square Hospitality Group, that will remain privately held.) The restaurateur has even written a best-selling book, ”Setting the Table,” a primer on customer service.

Even in its prospectus, Shake Shack refers to its customers as ”guests.”

”The thing I learned growing up in St. Louis,” he told St. Louis magazine in 2007, ”was the power of hospitality. The enormously warm feelings of loyalty that come from feeling welcome and being recognized and having the sense that the restaurant is happy to see you.”

That combination of quality ingredients and warm service has proved profitable, though the company is still a relative minnow. Shake Shack reported $5.4 million in net income in 2013 on $82.5 million in sales. Chipotle, by contrast, reported about $327 million in net income on $3.2 billion in sales in the same year.

Still, its success has helped bolster the fortunes of Shake Shack’s owners and close partners. Beyond Mr. Meyer, the top shareholder is Leonard Green & Partners, a Los Angeles private equity firm that invested in the company in 2012. The firm’s partner now on Shake Shack’s board, Jonathan D. Sokoloff, was introduced to Mr. Meyer through top executives at Whole Foods, in which Leonard Green once held a stake. They initially met over dinner at Gramercy Tavern.

Responsible for helping propel the growth of Shake Shack, Leonard Green’s holding in the company is now valued at roughly $193 million.

Shake Shack has even helped transform Pat LaFrieda, which manufactures the company’s secret burger blend, from a local artisanal butcher into a nationally lauded purveyor of quality beef.

But Shake Shack’s ambitious expansion plans — the chain plans to open at least 10 company-owned restaurants in the United States each fiscal year — may threaten the high level of hospitality the company is known for.

Mr. Meyer’s original network of restaurants was opened within a tight radius within New York City, so that the restaurateur could walk between them and ensure that each was up to par. That hasn’t been possible with Shake Shack for some time, and its increasingly far-flung locations risk eroding that quality of service.

Already, its Manhattan-based locations are more profitable than its other branches, reporting 31 percent operating profit margins compared with 21 percent for non-Manhattan restaurants.

Another potential problem is that the so-called ”better burger” slice of the fast-casual market is getting crowded, according to Darren Tristano, an analyst at the research firm Technomic. While the market may grow from $3 billion to $5 billion, he argued, it won’t grow much more — and consumers may slowly lose their hunger for burgers.

”I wouldn’t necessarily call them unique or the best, but they are a very well-positioned burger concept with good service,” Mr. Tristano said. ”They’re not that much different from regional players.”

But Shake Shack is wagering that hungry customers will beg to differ.

”When Shake Shack opened up a block from my house,” the chef Anthony Bourdain said in 2011, ”I dropped to my knees and wept with gratitude.”

This is a more complete version of the story than the one that appeared in print.


Shake Shack IPO Filing Comes Amid a Hunger for Premium Burgers

January 14, 2015

Passersby walk in front of the Shake Shack restaurant in the Manhattan borough of New YorkCopyright 2015 Thomson Reuters. All Rights Reserved.
By Anjali Athavaley

NEW YORK, Jan 2 (Reuters) – Shake Shack Inc’s filing this week for an initial public offering underscores a question for investors and foodies alike: How hungry are U.S. consumers for another burger chain?

A key part of Shake Shack’s growth strategy involves expanding its locations beyond its New York base, and investors and analysts are bullish on its prospects.

They say there is room for more “fast casual” restaurants that offer higher quality burgers, a variety of toppings and in some cases, beer and wine. Shake Shack’s burgers are described in its preliminary prospectus as all-natural and hormone- and antibiotic-free.

To be sure, there are skeptics who say the excitement over Shake Shack is overblown.

“Consumers love it and it will be well greeted in the market – and then probably fizzle out,” said Doug Kass, president of Seabreeze Partners Management in Palm Beach, Florida, and a noted short-seller.

“That a company of such a small size can get a valuation is symptomatic of the silliness … that develops in a period of zero interest rates,” he said.

A Shake Shack spokeswoman declined to comment.

Still, several factors appear to be working in Shake Shack’s favor. First, 2014 was a solid year for restaurant IPOs, particularly of the fast casual variety.

Burger chain Habit Restaurants Inc’s shares have risen 3 percent since its $30 Nasdaq debut on Nov. 20, based on Friday’s prices, and Zoe’s Kitchen was up 12 percent from its April market debut at $28.72 on Friday. Shares of El Pollo Loco, another fast casual company, were up 5.5 percent Friday from their $19 market debut in July.

Second, premium burger chains are outperforming the burger category as a whole, thanks to demand from younger, more affluent consumers. Sales at such chains including Five Guys and Smashburger rose 9 percent in 2013, according to restaurant consultancy Technomic Inc, while overall sales at all burger chains including fast food restaurants such as McDonald’s Corp were down 1 percent.

“The better burger space has been a pretty disruptive force for McDonald’s and other players,” said Darren Tristano, executive vice president at Technomic.

NEW YORK AND BEYOND

Shake Shack has developed a fervent following since it was founded by restaurateur Danny Meyer in 2001, but the challenge will be to replicate the success it has found in New York in the rest of the United States and overseas. The company has 31 company-operated and five licensed locations in 10 states and Washington, D.C., and 27 locations abroad.

The chain believes it has the potential to increase the number of domestic company-operated Shacks to at least 450 and analysts say that finding new locations with affluent consumers is critical.

Consumers such as Leticia Garza, 33, a middle school teacher in Austin, Texas, help illustrate the brand’s potential in other parts of the country, but also the challenges. Garza says she is excited to hear that Shake Shack planned to expand to Austin.

Still, she notes that she has many similar options. “There’s definitely going to be some competition because we have recently gotten an In-N-Out, and a couple of local versions that are similar to In-N-Out: P. Terry’s and Mighty Fine.” She adds: “We have Smashburger, too.”

Indeed, the market may be just a few years away from being saturated with too many fancy burger places, some analysts say. Furthermore, premium burger chains are not the only ones offering more personalized options: McDonald’s is rolling out a new “Create Your Taste” program this year that will give customers a choice of sandwich toppings.

In December, the world’s biggest fast food chain, which has not had a monthly gain in sales at its established U.S. restaurants since October 2013, said it also planned to cut the number of items on its U.S. menus. It also plans to use fewer ingredients in food, in an effort to reach consumers who want simpler, more natural choices.

McDonald’s is cheaper than Shack Shack and competes for a less affluent consumer. Still, industry watchers say such efforts could put pressure on premium burgers.

“We’re always looking for the latest version,” said Harry Balzer, an analyst at NPD Group, a market research company. But, he said, “there’s a limit to the burgers we’re going to eat.” (Additional reporting by Sinead Carew; Editing by Eric Effron and Tomasz Janowski)


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

December 15, 2014

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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.


Local Sourcing, Quality Ingredients Take Center Stage

November 26, 2014

featureimagestephanieizardAmericans are voicing increased concerns about the foods they put in their bodies, a message that is being heard — and responded to — by chefs and restaurateurs across the country.
Menumakers are striving to render the dining experience more transparent by addressing such consumer queries as where does their food come from, what’s in it and how is it made. At the same time, many are modifying their menus and purchasing strategies, and stepping up the use of ingredients that are of superior quality, locally sourced, pristinely fresh, free of additives and generally perceived as being more healthful.

Industry experts regard this intensifying focus on ingredients and sourcing as the direction many more restaurateurs will be taking in the future. “It’s not a fad, it’s a long-term trend,” says Dennis Lombardi, executive vice president-foodservice strategies for WD Partners in Columbus, Ohio. “We will continue to see [the use of] better ingredients and more transparency as to where these ingredients come from.”

Local ingredient sourcing — which also encompasses the burgeoning farm-to-table movement — is gaining traction throughout the industry. Many chefs and restaurateurs are purchasing their produce, meats, dairy products, seafood and alcoholic beverages from area farmers and other local suppliers, often emphasizing the provenance of such foods and beverages on their menus or via their serving staff. A growing number of consumers have come to associate the trend with the serving of fresher, more wholesome and authentic ingredients, and now expect to find it in certain dining experiences, most notably in higher end restaurants.

“It’s increasingly important,” says Darren Tristano, executive vice president of Technomic Inc. in Chicago, “especially to the Millennial generation.”

Technomic cited “micro-local” as being one of 10 foodservice trends to look forward to in 2015, while “locally sourced meats and seafood” and “locally grown produce” ranked in first and second place, respectively, in the National Restaurant Association’s Top 20 trends for 2014. Hyper-local sourcing — such as from restaurant gardens — was No. 6 and farm/estate branded items was No. 10.

Datassential also finds that Americans are warming to the idea of local sourcing and the focus on better-quality products. The research firm says 84 percent of consumers believe it is increasingly important for chains to offer fresh, local, organic, and/or natural ingredients. “Instead of basics, we’re seeing more premium, interesting ingredients and flavors showing up on menus,” says Datassential senior director Jana Mann.

However, Technomic’s Tristano maintains that the local sourcing trend must gain yet even more traction before it seriously impacts most consumers’ ordering behavior. “It’s important now, but when it comes down to changing the behavior of the majority of Americans, it’s not quite there yet,” he says. “Only 40 percent of consumers indicate that local sourcing influences their behavior. It’s three to five years off before local goes from a ‘nice-to-do’ to a ‘must-do.’

“But, yes,” he adds, “we expect to see more of it.”

The trend — whose influence varies depending upon the type of restaurant — is being fueled by an increasingly food-savvy public that wants to know more about what is being served to them and is prompting chefs and restaurateurs to trade up to better-quality ingredients.

As part of the movement, some chefs have aligned themselves closely with suppliers and products they believe reflect their restaurant’s philosophy and commitment to quality food preparation. Restaurants like Savory Maine in Damariscotta, Maine, and Farmhouse Tavern in Chicago make local products the stars of their menus. Savory Maine, for instance, says 90 percent of its products are state-sourced, while FarmHouse Tavern sources its ingredients from farmers, brewers and suppliers in states along the Lake Michigan shoreline, including Michigan, Wisconsin, Indiana and Illinois.

Stephanie Izard, executive chef and co-owner of Girl & The Goat and Little Goat Diner in Chicago, is a long-time advocate of farm-to-table dishes. She has partnered with Kraft Foodservice’s Philadelphia Cream Cheese and showcases the versatile dairy product in a range of sweet and savory dishes. Izard won a James Beard Award in 2013 as “Best New Chef: Great Lakes,” and is the winner of the fourth season of Top Chef, Bravo’s cooking competition show.

While local sourcing and the trend toward menuing authentic ingredients has already spread throughout the higher end restaurant community, it also is making itself felt among chain operators as well. Ype Von Hengst, co-founder, executive chef and vice president culinary operations of Silver Diner, the 15-unit regional casual-dining concept based in Rockville, Md., says he makes his menu as local as possible.

“It supports the local economy, creates jobs and often gives me a fresher, better product,” he says.

Von Hengst purchases produce and fruit from nearby suppliers in Maryland, Delaware and New Jersey, dairy products from Pennsylvania, flat iron steaks from Maryland and Virginia, and fresh lamb burgers from Pennsylvania. Since Silver Diner began emphasizing better-quality local ingredients, Von Hengst says the concept has enjoyed 57 months of increasing sales. “That tells you the consumer appreciates what we’ve done with local products,” he says.

He says the public’s growing knowledge of food also is impacting the trend toward the use of “real” ingredients. “People don’t want to see food additives or artificial chemicals or flavorings,” he says. “So our goal is to make food as pure and wholesome as possible.”

One of Silver Diner’s top-selling dishes is a roasted vegetable salad with champagne dressing that showcases such local produce as butternut squash, Brussels sprouts and beets. “People know about better ingredients and are switching to healthier foods,” he says.

For some operators, local sourcing and the use of higher caliber, “real” ingredients can fulfill another role in a restaurant’s mission. Walter Staib, chef-proprietor of historic City Tavern in Philadelphia, says the farm-to-table movement forms an integral component in the 240-year-old restaurant’s effort to recreate authentic dishes from the American Colonial period.

“Whenever we can buy from Amish farms in Lancaster County or farms in New Jersey or other local vendors, we do,” Staib says. “Freshness and quality are very important to us.”

So is historical verisimilitude, he adds, noting that the Tavern tries to use only ingredients that might have been served in Philadelphia in the 18th and 19th centuries. For example, Staib says the restaurant uses many pounds of cream cheese, which was introduced into the region by the area’s original German settlers. In addition to being featured in such desserts as cheesecake, City Tavern offers savory dishes like smoked salmon roulade with cream cheese and knishes with cream cheese and basil.

“We’re a restaurant that relies on our reputation,” Staib says, “so for us it has always been this way. I believe that the best ingredients give you the best results … and I think the consumer is aware of that, too. We always try to use fresh products and foods that are authentic. Our reputation depends on it.”


Should Domino’s and Papa John’s Fear Pizza Hut’s Big Menu Changes?

November 21, 2014

Until now the differences between Yum! Brands (NYSE: YUM) Pizza Hut, Domino’s (NYSE: DPZ), and Papa John’s (NASDAQ: PZZA) have been mostly a matter of personal preference. Aside from the occasional special offer or novelty pie, all three chains offer a basic take on pizza.

That has changed as Pizza Hut, the lagging member of this trio of mediocre national pizza purveyors, has radically overhauled its menu. The company, which in recent years has resorted to stuffing cheese into its crusts, has added a wealth of new choices built on the idea that customers want customization. It’s pizza on the Chipotle model with choices including 10 different crust flavors, six sauces, and a variety of new toppings.

Favorites like the Meat Lover’s Pizza will remain, but customers will now be able to order it with a variety of enhancements. So, for people who want their pepperoni and sausage with honey Sriracha sauce and “Ginger Boom Boom” or “Curried Away” crust, Pizza Hut will have it for them.

Why is Pizza Hut doing this?
Pizza Hut has reported sales declines for each of the last eight quarters and this new menu is an attempt to turn things around. “This is the biggest change we’ve ever made,” Chief Marketing Officer Carrie Walsh told USA TODAY. “We’re redefining the category.”

Pizza Hut needed to do something; as it has struggled, Domino’s and Papa John’s have been chugging along nicely. In the third quarter Domino’s posted 7.7% domestic same-store sales growth year over year and growth of 7.1% internationally, marking the 83rd consecutive quarter of international same-store sales growth. In its third quarter, Papa John’s posted a 7.4% gain in its North American stores while gaining 5.5% internationally.

Will it work?
One industry analyst told USA Today the chain might be trying to do too much too fast. “It would appear that the brand that has lost touch with the consumer is trying to change too much overnight,” Darren Tristano, executive vice president at Technomic, was quoted as saying.

Pizza Hut might be aiming to please customers with a shift to Chipotle-like customization, but it’s going to be a challenge for a Yum! Brands property to gain a similar reputation. Chipotle has succeeded not just because it offers customization, but because it has a well-known commitment to quality food. Neither Pizza Hut nor sister chains Taco Bell and KFC have reputations based on offering good food. Pizza Hut may find that simply adding trendy flavors like Sriracha may not be enough to win quality-conscious millennials.

On the plus side, the chain will be adding new toppings including banana peppers, cherry peppers, and spinach. On the negative, filed under “please don’t insult our intelligence,” the pizza purveyor will be renaming a number of its standard toppings, ostensibly to make them more appealing. The customer who cares where Chipotle sources its beef from may not be fooled by Pizza Hut renaming black olives as “Mediterranean black olives” or red onions being dubbed “fresh red onions,” even though nothing has changed.

Can Pizza Hut be reinvented?
While Domino’s rebuilt its brand by revamping its pizza a few years ago, the company just improved its recipe, it did not radically change its menu. What Pizza Hut is doing amounts to a massive change in direction, an attempt to differentiate itself from its two major competitors.

Pizza Hut’s moves might even send some of its customers running for its rivals. Though the chain will still be selling “normal” pizzas, it runs the risk of confusing people who just want a plain old pepperoni pie and do not want to have to wade through a wealth of options. Those customers may well switch to Domino’s or Papa Johns.

The potential gain however is not in stealing traditional, undiscerning pizza eaters from its rivals, it’s a bigger growth strategy of winning over fast-casual diners not necessarily looking for pizza. Domino’s and Papa John’s have largely penned themselves in to a specific audience — people who want familiar pizzas cheaply.
Pizza Hut is looking to break the mold and widen its potential customer base — a move that could push it ahead of its rivals. That is a huge risk because the company could scare away its existing customers while failing to win new ones. For this to work the brand has to win customers not just from its pizza rivals, but from fast-casual restaurants including Chipotle, which have a higher perceived quality.

To do that, Pizza Hut needs to up its game. It’s one thing to offer more choice, but a lousy salted caramel organic beet pizza with an artisanal cheese crust won’t be successful just because it has a lot of trendy words attached to it.

To make this new offering, which rolls out Nov. 19, work, the company is going to need to actually deliver quality pizza that people want to come back for. Fancily named olives and balsamic drizzles won’t be able to disguise a mediocre pie.