Why Chipotle’s Southeast Asian chain couldn’t make it work

March 16, 2017

By Becky Krystal

All 15 locations of ShopHouse, the Southeast Asian fast-casual restaurant owned by Chipotle, will close on March 17. The closings, first reported by Nation’s Restaurant News on Thursday, left fans distraught.

But it was easy to see the move coming after Chipotle announced in October that it was halting investments in the brand. Instead, the burrito giant’s spinoff aspirations will focus on two other endeavors: Pizzeria Locale and Tasty Made, a pizza joint and a burger place, respectively. “We just didn’t believe that ShopHouse warranted continued investment,” Chris Arnold, a spokesperson for Chipotle, said in an email.

ShopHouse, which opened its first location in 2011 in Dupont Circle, offered customizable rice, noodle and salad bowls inspired by the cuisines of Thailand, Vietnam, Malaysia and Singapore. It represented a glimmer of hope for diners interested in something different and at least marginally more nutritious than what was served at most fast-casual chains.

But selling Southeast Asian cuisine proved to be a losing gamble in an industry dominated by burgers and sandwiches. The top 10 quick-service and fast-casual brands, as ranked by U.S. sales in 2016’s QSR 50, an annual list published by industry publication QSR magazine, don’t include any restaurants serving Asian cuisine. The list is topped by the likes of McDonald’s, Starbucks, Subway, Burger King and Taco Bell.

Even when QSR broke out supposed “ethnic” brands — the label is a bit of a stretch — the results aren’t that impressive. Taco Bell was ranked at No. 5; further down the list are Chipotle (12), Panda Express (22), Qdoba (34), Del Taco (37) and Moe’s Southwest Grill (43). Only one Asian concept made the top 50: Panda Express, a chain perhaps best known for its fried, sticky orange chicken, which is a far cry from ShopHouse’s grilled steak seasoned with fish sauce, or its sweet and sour tamarind vinaigrette.

Those Southeast Asian flavors were unfamiliar to many Americans. Darren Tristano, president of market research firm Technomic, said that when the brand launched, he believed the biggest challenge would be getting consumers to see that Southeast Asian cuisine wasn’t outside the norm. “When your core focus is on that, it just makes it very, very difficult,” he said. He points to Mexican, Italian and Chinese as the big three when it comes to popular international flavors, while Japanese and Greek make the cut to a lesser extent.

In an interview last year with The Post, ShopHouse brand director and co-founder Tim Wildin said he wanted to work with traditional Asian ingredients, noting that Thai flavors in particular had a universal appeal. He acknowledged there was a bit of a learning curve when customers complained the food was too spicy. But there wasn’t necessarily a need to “Americanize” the food, he said, just a need to communicate better.

ShopHouse probably could have improved its communication in at least one other way, said Sam Oches, editorial director of Food News Media, which produces QSR magazine. He said the brand didn’t do enough to promote itself as innovative and unique, which is ironic given the way Chipotle was able to establish a reputation as a trailblazer in the industry.

ShopHouse was “pretty ahead of the curve,” Oches said, adding that Asian fast-casual restaurants are now increasingly popular with millennials.

In the last five years, several have opened in Washington, including Buredo, SeoulSpice, Maki Shop and Four Sisters Grill. Had ShopHouse debuted now, or even just a few years later than it did, it would have entered a market still lacking immediate competitors but perhaps one more receptive to its food. Oches expects that 10 or 15 years from now, the top 10 quick-service brands may not look too different from today, but the rest of the list will likely include more concepts serving Asian cuisine, which are just now scaling up to compete.

ShopHouse may also have partially been a victim of Chipotle’s greater struggles. Following outbreaks of food-borne illness at its restaurants, the company has seen a sharp decline in sales. From 2015 to 2016, revenue dropped more than 13 percent, to $3.9 billion, according to the company’s most recent earnings report, released last month. The decrease in net income was staggering, from about $476 million in 2015 to around $23 million in 2016. “It’s startling how far their fall from grace has been,” Oches said of the brand he described as once being the most bankable restaurant company in America.

[A year after food safety scares, Chipotle has a new set of problems]

Jettisoning ShopHouse may be at least one way the burrito chain is attempting to trim the fat and refocus on its core business, especially considering that, at the time the company announced it was pulling back on ShopHouse, Chipotle chairman and chief executive Steve Ells said that the concept “was not able to attract sufficient customer loyalty and visit frequency to make it a viable growth strategy.”

While ShopHouse only launched a small family of locations, the expansion might have actually made success more difficult to achieve, Technomic’s Tristano said. ShopHouse may have worked best as a single location or limited regional chain, he said, especially as the fast-casual market matures, with possibly not enough customers to go around.

Instead, the brand was diluted between two coasts, with eight locations in the Washington area, five locations in California and another two around Chicago. Had it been able to establish itself as a major player with good recognition in one region, it could have performed better, Tristano said.

But the locations also speak to the demographics that prompted Wildin to pick Washington for the first ShopHouse: urban, diverse, young professionals. Limited appeal, in other words, was baked into the concept before it was barely off the ground.

The remarkable rise of the sushi burrito

March 7, 2016

By Becky Krystal
The Washington Post
March 4th, 2016


Has your sushi been a bit different lately? Maybe longer, pudgier and rolled up with rice, protein and vegetables? You know, kind of like a burrito?

Actually, let’s call a spade a spade. Your sushi isn’t just like a burrito. At an increasing number of eateries, it is, in fact, a burrito. The sushi burrito has officially joined the ranks of such culinary chimeras as the Cronut and the ramen burger, seducing both eager customers and the restaurateurs who want to feed them.

Even as diners eat fewer Chipotle burritos, sushi burritos are gaining traction around the country and in the Washington area. The latest purveyor joined the D.C. scene last week: Seoulspice in NoMa, which sells what it calls the Korrito, a Korean-style burrito wrapped in seaweed and filled with sushi-grade rice, plus a variety of meats, vegetables and sauces.

Eric Shin, a percussionist for the National Symphony Orchestra, said he hit upon the burrito concept almost by accident about two years ago. He’d originally planned to offer kimbap, Korean rolls sliced into bite-sized pieces. Unfortunately — or perhaps fortunately — the machine he bought to cut them destroyed the food. “It was a huge mess,” he said. Amid the disappointment, Shin’s wife was so hungry she just picked up an uncut roll and started eating it like a burrito.

“It just sort of stuck,” Shin said.

Darren Tristano would tell you that the popularity of the sushi burrito is no accident. The president of Technomic, a Chicago-based firm that specializes in food industry analysis, said a number of factors are at play. Primary among them is the form itself. Four years ago, a Technomic concept study predicted “burrito-inspired” would be a common industry trend. Good call.

Sushi burritos have also been propelled by the growth in fast-casual dining and its build-your-own mentality, Tristano said. And with sushi available at almost every grocery store these days, it’s become an accessible and familiar food.

Like so many food innovations, sushi burritos gained traction on the West Coast and are continuing their march across the country. Sushirrito, a five-location California chain that bills itself as “the original sushi burrito concept” debuted in San Francisco in 2011, the same year the Jogasaki food truck hit the streets of Los Angeles; the Kome truck peddles sushi burritos in San Francisco.

“The concept for Sushirrito came to be since we love sushi and wanted it to be more accessible and portable. Burrito-sizing sushi makes a lot of sense given the handheld aspect of it,” said Sushirrito founder Peter Yen. “We weren’t trying to start a trend. We simply wanted to create a new type of food that we like to eat. Hybrid foods only make sense when the foods belong together — just because you can do a mash-up, doesn’t mean you should.”

Even given the wave of sushi burritos in California, lifelong friends and first-time restaurateurs Mike Haddad and Travis Elton weren’t quite sure what to expect when they debuted Buredo in downtown D.C. last summer.

[There’s no way we couldn’t try Buredo’s burrito-size sushi rolls]

“We didn’t know how it would be perceived,” Haddad said. When the doors opened and curious diners snaked down the block, “I said, ‘I think we have something here.'” Something big enough that the duo is close to opening a second location, near Dupont Circle.

Haddad and Elton think they’ve hit on customers’ interest in food that is fresh and healthful.

Darren Norris knows he’s tapped into that market at his almost year-old Maki Shop on 14th Street NW, where evenings will see diners trickling in from CrossFit and other nearby gyms. The owner of the late Kushi in Mount Vernon Triangle — whose six-ounce maki fall somewhere between the size of smaller sushi and sushi burritos — said his “sushi hand rolls” are “a lifestlye product” for on-the-go diners. “I want to be that thing that you could eat three days a week and not feel guilty about it,” Norris said.

Kaz Okochi, the proprietor of Kaz Sushi Bistro near Foggy Bottom, said he thinks size is what attracts people to sushi burritos — “too much rice,” he opined — and worries that diners who eat them will come to his restaurant and wonder why his food isn’t bigger. “They might get disappointed,” the Japanese native said. (Okochi’s own fast-casual, design-your-own sushi endeavor, Oh Fish!, lasted about two years downtown.)

Their size and torpedo shape notwithstanding, sushi burritos have forced us to reconsider what we think of as sushi, especially when it comes to fillings. At Buredo, nori is wrapped around everything from yellowfin tuna or salmon sashimi to tofu and pulled pork shoulder. Seoulspice’s Korean-accented items include bulgogi beef, pickled radish and, of course, kimchi. At Burrito San in Miami, you can have your sushi burrito by way of the Philippines (braised pork, banana ketchup) or India (spiced chicken, potatoes, curry). Denver’s Komotodo not only sells rolls such as the Bee’s Knees (fried chicken, asparagus, bacon, Monterey Jack cheese) and Fish n’ Chips (white fish, slaw, potato chips), but also gives you the $2 option to have your burrito deep-fried. Really, the question these days is not what can you put in a sushi burrito, but what can’t you?

Okochi, though, doesn’t take umbrage with the burrito entrepreneurs’ use of the word “sushi.”

“I’m not saying burrito sushi isn’t true sushi. Sushi is vinegared rice,” he said. Sticklers could even contest whether Okochi’s food is “true” sushi, since the chef said he’s developed his own style at his restaurant.

As long as sushi burritos don’t take over the entire sushi market, he’s fine living side-by-side with them, he said.

In fact, self-professed sushi lovers Haddad and Elton view themselves as “introducing sushi to a new audience,” Elton said.

“It is definitely opening up people’s minds,” Haddad said.

Seoulspice’s Shin said he’d like his Korritos to similarly encourage diners to seek out the kind of traditional Korean food he grew up eating.

Even with more people like Haddad, Elton and Shin getting in on the sushi burrito game, Technomic’s Tristano said there’s still room to grow in the genre. He said reasons why sushi burrito establishments are still less common than their popularity might indicate include food safety issues with sourcing and serving raw fish (although many burritos rely on cooked, fried or even vegetarian fillings) and the fact that the concept is hard to replicate.

“A good sushi burrito can be tricky and sometimes challenging to get the flavors to blend together well in a larger roll,” said Mauricio Fraga-Rosenfeld of Rolls by U in Arlington, which opened in the fall with sushi “ritos” such as the Frida (with roast beef and kimchi) and the Van Gogh (a more traditional pairing of tuna and avocado). “Also, price point may play a part in why others don’t want to risk it. It’s cheaper to do tacos or Mexican burritos. It takes creativity and great quality in product and recipe to get it right, as well as extremely fresh ingredients.”

“I think it’s really difficult to pull off,” Shin said. “Most of the restaurants that open up are afraid to do something different.” Shin said he had to battle through questions and skepticism from his own family (his parents ran a Korean restaurant in Atlanta), some of whose recipes he’s using at Seoulspice. “I caught a lot of s— from my grandma,” he laughed.

When other sushi burrito spots do inevitably open, Shin won’t be too worried. “The more, the merrier,” he said. “I’m so proud of D.C. for embracing ethnic foods and creative ethnic foods in general.”

The Buredo duo was slightly more measured.

“Time,” Haddad said, “will tell on who will last.”

Correction: A previous version of this story misidentified the geographical origins of Jogasaki and the Kome truck. This version has been updated.

Panda Express Branches Into Pizza, Salads

February 16, 2016
by Leslie Patton
Bloomberg Business
February 11, 2016 — 4:00 AM CST

Grupo Gigante Buys Office Depot de Mexico for $690 MillionPanda Express, which built the largest Chinese-restaurant empire in the U.S. over the past three decades, is hedging its bet on Kung Pao chicken by buying stakes in companies that sell everything from pizza and salads to cheesecake.

Panda Restaurant Group Inc., a privately held company run by billionaires Peggy and Andrew Cherng, has started investing in small restaurant companies, recently taking stakes in Pieology Pizzeria and Just Salad. The two chains have 111 outlets combined — a fraction of the 1,757 Panda Express restaurants — which is one reason they gave the deeper-pocketed company a seat at the table.

Panda Express plans to make additional minority-stake investments in growing fast-casual and fast-food chains, according to Peggy Cherng, co-chief executive officer of the Rosemead, California-based company.

“We are able to share our experiences with a young restaurant chain, and we are able to help them grow,” she said in an interview. “Along the way, we’re also learning from them.”

Delivery Tips

From Just Salad, for instance, Panda Express picked up tips about delivering hot food swiftly to customers. The Chinese-food chain is testing the service in New York, Los Angeles, Chicago, Dallas and Houston, and will soon roll it out in San Francisco and Portland, Oregon.

Panda Express may not operate on anything close to the scale of McDonald’s or KFC, but in the world of fast or casual Asian food, it rules. U.S. sales climbed 15 percent in 2014 to $2.28 billion, outpacing rivals Noodles & Co. and Pei Wei Asian Diner, according to Technomic Inc., a food-service consulting firm. Its share of the domestic fast-food market increased to about 0.9 percent in 2014 from 0.4 percent in 2005, Euromonitor data show.

The company has succeeded with its Americanized version of Chinese fare by slowly but steadily adding stores over three decades, said Darren Tristano, Technomic’s president. Panda Express made the cuisine easily available — and familiar — by starting out with quick-serve outlets in shopping mall food courts, then expanding to stand-alone restaurants.

Beyond Malls

Now it has spaces in airports and supermarkets, too. The signature dish is orange chicken, and the company boasts that it sold 67.9 million pounds of the tangy boneless bites in 2014. Other popular menu items include grilled teriyaki chicken and broccoli beef.

Andrew Cherng, Peggy’s husband, opened the first Panda Express in the Los Angeles suburb of Glendale in 1983. Andrew, who was born in China, got started in the business a decade earlier, opening a Panda Inn restaurant in nearby Pasadena with his father. Peggy, meanwhile, is a native of Burma, now known as Myanmar. The Cherngs have a net worth of at least $2 billion, according to the Bloomberg Billionaires Index.

It makes sense for the Cherngs to spend some of their fortune on new ventures, said Malcolm Knapp, president of consulting firm Malcolm M. Knapp Inc. and founder of the Knapp-Track restaurant index.

“This is their world,” Knapp said. “They know how to evaluate restaurant concepts.”

Uncle Tetsu

Panda has also put money into chains outside the U.S., including Japan’s Uncle Tetsu and Ippudo. Uncle Tetsu, which sells cheesecake and other sweets, has a location in Canada and will open its first U.S. unit in March, in Honolulu. The first U.S. Ippudo, a ramen-noodle shop, is opening in Berkeley, California, in June.

For Pieology, where sales tripled in 2015 to about $100 million, the deal with Panda will “continue the acceleration of growth,” said founder and CEO Carl Chang. Neither company would disclose the terms. Pieology has 84 stores, aiming to open 137 this year and as many as 120 annually for the next five.

Just Salad, with 27 restaurants, sold Panda a stake of about 33 percent for an undisclosed amount. The chain opened its first Chicago location in 2015 and will have as many as five more by year-end, said Nick Kenner, the co-founder and CEO. Sales increased more than 30 percent in 2015, and his goal is to surpass $50 million this year.

“We weren’t looking for an investor to tell us what our menu should look like; we don’t need help with that,” Kenner said. “What we needed help on was developing a national infrastructure.”

The Cherngs, whose U.S. Panda Express units are 95 percent company-owned, can teach their new partners how to expand, Knapp said.

“They have a lot of knowledge,” he said. “The benefit for them is they make money.”

Asian Cuisine: The Fastest Growing Food in the World

February 10, 2015

Roberto A. Ferdman Washington Post
Copyright (c) 2015 The Hamilton Spectator.

WASHINGTON — In a matter of only 15 years, Asian cuisine has gone from being a niche food obsession to one of the most popular around the world.imrs

Global sales at Asian fast-food restaurants have grown by nearly 500 per cent since 1999, the fastest growth seen in any fast-food category around the world, according to data from market research firm Euromonitor. Fast food here is defined as any restaurant that gets less than half its sales from sit-down meals.

Asian food has grown by roughly the same amount as the next four fast-food categories – Middle Eastern, Chicken, Pizza, and Latin – combined.

The world’s fast growing appetite for Asian food has a lot to do with both population growth and economic development on the continent. Demand has soared in China, where GDP per capita has increased more than ten fold since 2000, and also in Vietnam, Thailand and Malaysia.

Asian food has also benefited from the emigration of Asians to other parts of the world, where people then fall in love with cuisines they might not have encountered otherwise. The United States, where the number of Asian immigrants has grown immensely, is perhaps the best example. Americans, especially younger ones, are deeply enamoured with Asian food (and hot sauce, for that matter).

“They’re looking for bolder and spicier flavours, and something different,” Darren Tristano, executive vice-president of Technomic, a restaurant-research firm, told QSR Magazine.

Sales at Asian fast-food restaurants have grown by 135 per cent since 1999, well outpacing the growth seen in any other segment.

Fast-food sales only tell part of the story, but they’re arguably one of the best indicators of global food trends.

Asian food in particular is unique in that the vast majority of fast-food restaurants that serve cuisine from the region, whether it’s Chinese, Thai, Vietnamese or Malaysian, aren’t chains but independent, small restaurants. Globally, only about 10 per cent of sales at Asian fast-food restaurants come from chains. The remaining 90 per cent (which amounts to more than $135 billion annually) comes from mom and pop restaurants.

In the United States, the story is a bit different, but no less striking. Roughly half of all sales at Asian fast-food restaurants came from chains in 2014. The viability of that model points to a certain level of demand. U.S. chains like Panda Express, which reached nearly $2 billion in sales last year, have proven that there’s a mass-market interest in Chinese food. Even Chipotle has responded to the demand with Shophouse, a fast-casual Thai noodle restaurant.

Asian food is so coveted that even restaurants that are centred on cuisines that aren’t remotely Asian – such as burgers, fried chicken and sandwiches – are increasingly offering Asian-inspired options. There are at least 550 items sold at fast-food restaurants around the United States with either Asian names or an overt Asian influence, according to market research firm Mintel.

Asian Concepts Poised for High Unit rowth this Year

November 25, 2014

New data from Technomic forecasts a 2.3-percent unit growth rate over 2013 among the 500 largest US restaurant chains.

According to a news release, this will be slightly higher than the 2.1-percent growth rate from 2012-13 and much higher than the 0.5 percent rate in 2009.

The unit growth is rising in both the full and limited-service segments. Technomic EVP Darren Tristano said fast casual concepts will continue to show high levels of unit growth, as well limited and full-service Asian concepts. Among full-service restaurant menu segments, Asian will increase units by 5.1 percent, followed by seafood (3.9 percent) and steak (3.4 percent).

Asian/noodle also leads the limited-service menu segments, increasing unit counts by 8 percent, while bakery cafes and coffee cafes will grow units by 5.2 and 4.2 percent, respectively.

Many full-service brands have positioned themselves to expand this past year. The largest growth has been at Buffalo Wild Wings, which will have added 65 units, Mellow Mushroom (32 units) and LongHorn Steakhouse (24 units), according to Technomic.

In limited service, Subway will add 908 units by year-end, followed by Starbucks (443), Jimmy Johns (350) and Dunkin Donuts (291).

Fast casual to continue double-digit sales bump
Additionally, limited-service restaurants are expected to gain a sales bump of 3.5 percent. Fast casual chains should experience a 10.8-percent increase in sales, while quick-service chains increase 2.3 percent.

Full-service restaurants will experience a 2.5 percent sales increase in 2014, similar to the 2.4 percent increase in 2013.

Fine dining is expected to continue its post-Recession rebound, with a 5.8-percent sales increase. Casual and midscale restaurant growth will be nominal, at 2.8 and 0.5 percent, respectively.

Q3 traffic gains at Mexican concepts
Additionally, research from The NPD Group analyzed Q3 consumer traffic at US restaurants, and shows an increase in the fast casual segment, as well as at coffee/donut/bagel concepts and Mexican concepts.

Fast casual restaurants posted an 8 percent gain in traffic across all dayparts compared to same quarter year ago. Visits to Mexican quick service and coffee/donut/bagel concepts grew by 5 percent, according to NPD’s foodservice market research.

Conversely, hamburger quick-service traffic, which represents the largest share of quick service visits at 23 percent, declined by 3 percent compared to same quarter year ago. Visits to both sandwich concepts and Asian quick-serve restaurants were down 1 percent.

Although total industry traffic was flat in the quarter, consumer spending rose 3 percent in the July/August/September quarter due to average eater check gains. Check and dollar gains are in line with food away-from-home inflation. Dealing/discounts are still supporting traffic with visits on a deal up 4 percent compared to a decline in non-deal visits.

“Although total traffic is flat, the visit growth in the fast casual, coffee/donut/bagel, and Mexican QSR shows that consumers still have an interest in going out to restaurants,” NPD analyst Bonnie Riggs said in a news release. “Those restaurant concepts that are meeting the needs of today’s foodservice consumers will win their visits.”

Asian food companies buy O.C. factory space

March 1, 2013

Their acquisitions help nourish county’s hot industrial real estate market.

Many Orange County residents enjoy wantons, azuki-filled pastries and other Asian foods. And that’s helping to fuel a rebound in the industrial real estate market.

Even as some traditional manufacturers have closed plants and moved out of the area in recent years, a number of large Asian food companies have purchased industrial properties in Orange County to expand their local operations. Among the growing companies are CJ America Inc., the South Korean maker of Annie Chun’s packaged food, which acquired industrial property in Fullerton, and Imuraya USA, a Japanese dessert company, which bought a plant in Irvine.

Allen Buchanan, a principal with Lee & Associates who helped broker the CJ America deal, sees a trend. “We have seen a few examples of food companies backfilling industrial buildings formerly occupied by companies that vacated O.C.”

Buchanan noted that the area’s large and growing Asian American population and the need for food production to be close to consumers are factors in the rising interest among Asian food companies for manufacturing space.

The vacancy rate in Orange County’s industrial market was below 4.7 percent at the end of 2012, down from nearly 6 percent two years earlier and among the lowest levels since the beginning of the recession, according to new data from Voit Real Estate Services in Newport Beach. Over that same span, average lease rates rose 6 percent to 57 cents per square foot and sale prices climbed 15 percent to about $149 per square foot.

“The numbers have been positive,” said Jerry Holdner, Voit’s vice president of market research. “The industrial market has performed very well since 2010.”

The vacancy rate increased slightly in the fourth quarter, but Holdner said that was partially due to a dwindling supply of choice properties in the local industrial market. Some companies that want to expand have struggled to find the space or land to do so.

CJ America, which was looking for a space that could accommodate growth, bought a 68,466-square-foot facility that sits on nearly 7 acres of land. The company paid $8.2 million for the property, a former commercial refrigeration manufacturing plant at 500 S. State College Blvd.

In July, a Taiwanese bakery chain called 85 [degrees]C cafe paid more than $5.6 million for a 70,492-square-foot property in Brea that will be a commercial kitchen supplying its growing operations. The company, which opened its first U.S. location in 2008, has three local stores and expects to open five this year.

“We have plans to continue our expansion,” said Stephanie Peng, project manager for 85 [degrees]C. “Ever since we opened the store in Irvine, there’s been a huge demand for our products.”

Peng said the company’s products have become more popular with non-Asian-American customers, which has helped accelerate the company’s growth.

Darren Tristano, executive vice president of food industry consulting firm Technomic, said many menus reflect a trend toward Asian-food flavors, which have become more popular among mainstream consumers in the United States.

“What’s happening is that American consumers, especially millennials, are developing more adventurous taste palates. You can see it in the emergence of Japanese, Korean and Vietnamese, in addition to Thai, restaurants,” he said. “Those organizations that already produce those products internationally are opening production facilities in the U.S.”

Robert Socci, an executive vice president with Voit who specializes in industrial properties, said he has noticed more interest from Asian food companies, but he said there are larger factors influencing the market’s rebound, including an improving economy and limited supply of space.

“It’s recovered very quickly,” he said. “Everybody’s looking for land, there’s a very big demand for sale product, prices are increasing very quickly … and business overall is doing better. It’s a convergence of a lot of different factors that are contributing to a very hot market.”

February 14, 2013



Foodservice Interchange 2013

March 4, 2013
Allstream Centre, Toronto

Meet One of Our Speakers

Darren Tristano, Executive Vice President, Technomic, Inc. will share key insights into the evolution of foodservice trends. Learn about trends migrating from the US and Internationally into Canada as well as some home grown Canadian influences making an impact elsewhere.  You won’t want to miss learning about the newest trends for 2013 and what these could mean for your business:

  1. Snacking, small plates and sharing blur traditional dayparts. Changing dining habits are impacting all dayparts. Consumers want their meals and snacks when and where it’s convenient. Expect chefs to get more creative by paring down traditional entrées into creative small plates, looking to street trucks for snacking inspiration, and incorporating more ethnic flavours and ingredients into sharing dishes.
  2. Taking chicken to new heights. The better-burger trend has spread like wildfire across Canada. Building off the burger trend, chefs will turn to the humble chicken as the next workaday food primed for a gourmet update. Look for increasing use of high-quality birds raised locally, naturally and humanely.
  3. Veggies find more prominence on the plate. Expect to see not just more locally sourced, in-season fresh veggies siding up to proteins, but more vegetarian entrées as well.
  4. Asian breaks out. From the burgeoning ramen scene in Toronto to Japanese tapas restaurants in Vancouver, expect to see interest in the multitude of food cultures that Asia has to offer. This includes not just up-and-coming Southeast Asian dishes from Vietnam, Singapore and Malaysia, but regional Chinese and Japanese fusion as well.
  5. Specialty approach to beverages. Artisan preparation and ethnic flavours are not just hot food trends—chefs are exercising their creativity beyond the plate with beverage innovation too. Restaurants are now crafting everything from craveable small-batch sodas to exotic refreshers like South American aguas frescas. Consumers are also seeking more authenticity at restaurants, particularly when it comes to ethnic dining. We’ll see more and more food-and-beverage pairings that complete an ethnic dining experience.

Date: March 4, 2013
Registration and Networking Breakfast: 7:45 a.m. – 8:30 a.m.
Conference: 8:30 a.m. – 1:30 p.m.
For complete details: contact FCPC – Heather Spencer, heathers@fcpc.ca or 416-510-9050

Sushi Takes on the Burger

January 17, 2013

Asian fast-food chains are growing swiftly as health consciousness helps soy, sashimi and sukiyaki gain footing in mainstream food courts

Americans can pop into a franchised restaurant for almost every kind of cuisine, from Mexican and Italian to Chinese and, of course, American. Soon, there will be something new for their food-court trays: sushi rolls and teriyaki. Japanese-food chains are spreading to shopping malls and strip-store centers across the U.S.

The rise reflects a change in American appetites. More people are trying to eat healthier foods, say restaurant executives and consultants, and Japanese food can be low-fat and fresh. Think sushi vs. deep-fried calamari. For today’s twentysomethings, Japanese food is both familiar—many have been eating it for years—while also unconventional.

Rising quickly

These trends—combined with low prices, despite the common conception that sushi is pricey—are helping make Asian food one of today’s hottest restaurant categories. At limited-service restaurants—places without wait personnel—Asian-food sales jumped 15% to 20% in 2006 following an 18% pop in 2005, tabulates Technomic, a restaurant consultancy in Chicago. That’s roughly three times the 6% growth rate of limited-service chains overall.

Yoshinoya probably is the most aggressive in its plans. The Tokyo-based fast-food company, which operates 1,010 outlets in its home country, counts more than 85 locations in and around its U.S. headquarters in Los Angeles, plus one each in Las Vegas and New York. And its recent move into franchising, says management, should lead to a doubling of its U.S. sites by 2010, mostly in the West. Entrees include bowls of grilled beef or chicken served over steamed rice for $3.07.

Another up-and-comer is Hibachi-San Japanese Grill. A subsidiary of Panda Restaurant Group of Rosemead, Calif., which also owns Chinese-food chains Panda Express and Panda Inn, Hibachi-San has 27 restaurants in 13 states. Among other quick-serve Japanese outfits are Maki of Japan, a 20-unit chain that is part of Food Systems Unlimited of Longwood, Fla., and Kyoto Bowl of Tempe, Ariz., with 17 stores.

Not just fast food

Japanese chains aren’t all confined to quick-serve, however. Benihana (BNHN), which operates 59 hibachi-style restaurants, recently expanded its Ra Sushi subsidiary to 14 sites in six states. Ra Sushi features table service and full bars, with dinner entrees such as chicken teriyaki for $14.50 or a sashimi assortment for $19.25.

Maki of Japan is one of five fast-food restaurants sharing the food court in an outlet mall in Aurora, Ill., 35 miles west of Chicago. Its menu includes beef sukiyaki for $5.29, with steamed rice or maki noodles, and an eight-piece sushi combo lunch for $5.99. Hot food is served on foam plates, while sushi comes in premade trays. There are plastic utensils at the cash register and, tellingly, no chopsticks.

On a recent weekday, John Riley sat across from his wife, Theresa, at this Maki of Japan. Both had a three-item chicken teriyaki lunch special on their trays and shopping bags at their feet. They had never eaten at Maki before. John, a real estate agent, said, “I hate fast-food places, to tell you the truth.” Theresa, also a real estate agent, added, “If we’re going to eat fast food, we’d rather eat something like this.” But they said they liked the food and thought the prices were about right.

Going mainstream

Compared with McDonald’s (MCD) or even Panda Express, which boasts more than 900 restaurants in 35 states and Puerto Rico, these Japanese-food chains are still small. And worries about eating raw fish will always be a turnoff for diners and restaurant operators alike. But Darren Tristano, an executive vice-president at Technomic, foresees continued double-digit increases in Asian-food sales. “There’s absolutely more potential for growth,” he says. “You’re starting to see the introduction of sushi into the mainstream.”

One reason is that restaurant companies are pushing Japanese food as an alternative to sandwiches and mass-marketed ethnic foods that no longer seem new. There’s demand-side pull, too. Beyond wanting food that’s better for them, Americans increasingly like bolder, more exotic foods. This is particularly true of Gen-Xers and their younger siblings who grew up eating sushi at independent eateries, or bowls of freeze-dried ramen noodles in their first apartments. “For younger people, sushi is what the burrito was 20 years ago,” notes Glenn Lunde, Panda Group’s chief marketing officer.

The shift is paying off for Benihana. Ra Sushi is the Miami-based company’s fastest-growing brand, with six-month sales through Oct. 8 up 57% from a year earlier. Its stock price, meantime, is up 40% over the past 12 months and has more than doubled in the last two years, outperforming the restaurant industry overall.

Now, even mainstream fast-food chains are flirting with Japanese flavors. Wendy’s (WEN) and Panera Bread (PNRA) offer Asian chicken salads, while California Pizza Kitchen (CPKI) has spring rolls and an appetizer of wok-seared chicken and shiitake mushrooms.

Indeed, if McDonald’s can sell Asian salads with edamame, a fast-food chain with udon noodles or tempura may be just what Middle America wants next.

Arndt is editor of BusinessWeek‘s innovation and design coverage, overseeing its Innovation channel as well as the magazine’s quarterly IN: Inside Innovation section.

Tis the Season to be “Thai”?

October 10, 2012

With the holiday season about to kick off, pumpkin, peppermint, gingerbread and eggnog are the obvious expectations.  So Panera recently launched their Roasted Turkey and Cranberry Panini.  Sounds like a good combination to get us ready for Thanksgiving and the holidays.

But what about the customers looking for new flavor profiles?  On the menu is a Thai Chopped SaladAll-natural, antibiotic-free chicken, romaine, Thai cashews, fire-roasted edamame, red peppers, carrots, fresh cilantro & wonton strips all tossed in low-fat Thai Chili Vinaigrette and drizzled with peanut sauce.

For customers who want a more portable option, you can find it in the new Thai Flatbread Sandwich.  Leveraging the flavors, sauces and ingredients of the Thai Chopped Salad, Panera has created the new flatbread to be more portable.  This option is a nice extension to the salad and provides a broader ethnic product.  But do consumers want Thai options today?

Although consumers generally see Japanese and Chinese as mainstream ethnic Asian flavors, Indian and Thai are considered by consumers as being in the upper threshold of Ethnic.  Over 90 percent of consumers polled in Technomic’s recent Ethnic Food & Beverage Consumer Trend Report indicated Thai to be Ethnic.  More importantly, 62 percent of those felt it was a mainstream ethnic cuisine with an additional 29 percent categorizing the cuisine to be emerging.  Demand for this cuisine and flavor appear very high on the consumers appeal and creating an ethnic flavor combination on a more familiar sandwich, salad or dish can drive sales and customer creaveability!

And has the industry responded to greater appeal and desire on the part of consumers?  Yes, menu incidence of the term “Thai” has increased consistently each year within Technomic’s MenuMonitor online program tracking over 1,000 menus in the US with a focus on chain, independent and innovative regional growth concepts.  Incidence has increased nearly 38 percent since 2009.

Like many others, Panera Bread seems to be part this trend and has found an effective way to integrate the term and the flavor into their menu providing customers with greater options while staying true to their brand.