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

March 16, 2017

By Becky Krystal
https://www.washingtonpost.com/news/going-out-guide/wp/2017/03/11/why-chipotles-southeast-asian-chain-couldnt-make-it-work/?utm_term=.7c03019833f5

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.


10 Nuggets For $1.49? Here’s Why Fast Food Is Ridiculously Cheap Right Now

April 1, 2016

Venessa Wong
Buzzfeed News
Feb 29, 2016
http://www.buzzfeed.com/venessawong/why-fast-food-is-ridiculously-cheap-right-now#.gnYqPoN15

enhanced-mid-31676-1456426625-2

The country’s largest fast food chains have been showering customers with deals after years of losing out to newer, higher-end chains. And now, in a battle for customers who remain loyal to old-school fast food, the big chains are engaged in a brutal price war.
Fast food companies have always targeted lower-income consumers. What’s different now is that these customers are expected to benefit from lower gas prices, falling unemployment, and rising minimum wages, according to research by investment bank Cowen and Company. And as low-income consumers find more money in their wallets, commodity prices are no longer shooting upward as they did in recent years.
As “forecasts for key restaurant commodities including beef, chicken, pork, dairy and wheat are in-line to below long term averages,” restaurants are particularly eager now to take advantage of the lower costs to boost traffic to stores, said Cowen’s report.
McDonald’s announced that starting Feb. 29, customers could pick two of four “iconic menu items” — a Big Mac, a 10-piece order of Chicken McNuggets, Filet-O-Fish or a Quarter Pounder with Cheese — for $5. This deal replaces the even lower-priced McPick 2 deal launched in January, in which customers could get two items — McChicken, McDouble, mozzarella sticks, or small french fries — for $2.
Meanwhile, Wendy’s has been offering a four for $4 deal. Value monger Burger King has an even cheaper five for $4 promotion, as well as an ongoing two for $5 sandwich deal, and 10 chicken nuggets for $1.49. Even Pizza Hut has a $5 “flavor menu.”
“All the major chains have jumped on the dollar pricing in an effort to maintain share against competitors,” said Darren Tristano, president at restaurant consultancy Technomic.


Panda Express Branches Into Pizza, Salads

February 16, 2016
by Leslie Patton
Bloomberg Business
February 11, 2016 — 4:00 AM CST
http://www.bloomberg.com/news/articles/2016-02-11/u-s-chinese-food-king-panda-express-branches-into-pizza-salads

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.”


The chips are down for Chipotle, but not for long

February 11, 2016

by Todd Wasserman
Campaign
http://www.campaignlive.com/article/chips-down-chipotle-not-long/1383083

In 2013, Chipotle released a haunting animated video featuring a scarecrow that observes the horrors of automated farming. Set to Fiona Apple’s rendition of “Pure Imagination,” the ad went on to win CAA Marketing a Grand Prix at Cannes the following year.

Before the Cannes judges weighed in, though, Funny or Die did with a damning parody changing the tune to “Pure Manipulation” and offering a cynical analysis of Chipotle’s marketing. “We can say what we want. In our world of pure imagination,” went the lyrics. “Just pretend we’re your friends. It’s what we want you to believe.”

Funny or Die’s blistering critique did little to hurt Chipotle’s appeal. Instead, several incidents of food-borne illnesses over the past few months have exposed the chasm between the chain’s brand promise and the realities of running a large-scale restaurant operation. It’s safe to say, at least, that Chipotle won’t be trumpeting its “food with integrity” mantra for a while or criticizing rivals for their factory farming practices.

Because of its healthy financials and sheer size — the company’s market cap is around $14 billion — few expect Chipotle to go the way of Chi-Chi’s, another Mexican chain that closed its doors in 2004 after it unknowingly perpetuated a hepatitis A outbreak that killed four people.

That prognosis for Chipotle, however, assumes that the worst of the crisis is over. Going forward, Chipotle will source more of its food from major suppliers, mooting a prime differentiator from other fast-food chains. The company is also planning to launch a new branding and PR campaign to woo back its Millennial base. Already, a burrito giveaway designed to appease customers after the chain closed its doors briefly Monday for companywide safety meeting has overshadowed concerns about food-borne illnesses, at least on social media. (Reps from Chipotle and agency GSD&M could not be reached for comment.)  Experts predict that Chipotle will likely end up in the clear.

The damage so far
Almost 500 people have gotten sick from Chipotle food since last June, 20 of whom were ill enough to be hospitalized. One such customer, Chris Collins of Portland, Ore., experienced bloody stools and excruciating pain after ingesting E. coli 026 from one of Chipotle’s chicken bowls. At one point, his doctors feared kidney failure. Though that never came to pass, Collins was still weak and “emotionally shaky” in December, according to a cover story in Bloomberg Businessweek.

Such stories have hurt Chipotle’s bottom line and brand image. In early February, the chain said sales at established restaurants fell by a third in January. That news followed a 15% drop in the fourth quarter of 2015. At this writing, the company’s stock price was down about 42% from its 52-week high.

On the brand side, Chipotle’s image has gone from positive to negative. YouGov’s BrandIndex, which surveys 5,000 consumers online every day, rates brands on a buzz score that ranges from -100 to +100, with zero being a neutral position. For most of 2015, Chipotle’s buzz score was around +10, but in January, that sunk to -29 and was at -27 at this writing.

“Chipotle has been playing catch up on this crisis from the start,” says Ted Marzilli, CEO of BrandIndex. “The brand was slow to respond to the initial incident. [It has] just not been able to get out ahead of this crisis, and fairly or unfairly, is paying the price in both public perception and decreased sales.”

The six-month rule
Despite the challenges though, few people see this as a fatal blow to the chain. In a research note to clients, Wells Fargo analyst Jeff Farmer cited previous incidents of food-borne illnesses at other national chains to demonstrate same-store sale declines can be cut in half six months after the incidents occur (assuming that there are no more incidents). Farmer added that same-store sales of such affected companies can also rise 12-15 months after the incident.

In an interview with Campaign, Darren Tristano, president of Technomic, food industry consultancy, cited the same rule. “Our research indicates that in six months, most consumers forget about these food-poisoning issues that come up,” he said.

The Blue Bell Effect
In Chipotle’s case, that’s a pretty safe bet. Jonathan Bernstein, a crisis PR expert, says that Chipotle has built up so much good will with its branding efforts that it can withstand this major PR setback. He compared Chipotle to Blue Bell, the ice cream brand that is so beloved by its fans that many were able to overlook a recent outbreak of listeria linked to the brand.

“Customers’ loyalty to a brand can make a huge difference in overcoming even food illness-related crises and people really stuck with Blue Bell a long time after many would have done the same — given a choice of other ice creams,” he said. “With Chipotle, they created such good will before these problems that although that’s been eroded, it’s not terminal at this point.”

Rebeca Arbona, executive director at Interbrand, unconsciously echoing Funny or Die’s critique, noted that brand loyalty is based on a relationship that mimics real friendship. “You have many impressions and interactions,” she said. “That works in your brain like knowing a person. If you know a person really well and you like them, you’re going to forgive them a lot.” Arbona said that she was surprised, for instance, that Toyota not only weathered its 2009-2010 slew of recalls — issues that were linked to the deaths of some consumers — but has nearly doubled its brand value since then.

That said, Tristano said that it’s likely that some customers will never return to Chipotle. Most will though. “Younger customers will return,” he said. “They tend to be more trusting and more brand loyal. If we look at this, it is clearly a setback for a brand that has had nothing but success in the industry.” The fact that this happened to a brand whose credo is “food with integrity” is ironic, Tristano said, but won’t prompt the masses to label it hypocritical.

Fixing the brand
As Marzilli noted, Chipotle didn’t deal with the crisis effectively at first. Though the company closed 43 restaurants in the Northwest after the E. coli outbreak that affected Chris Collins became public, some 234 customers and employees contracted norovirus at a Simi Valley, Calif., location in August. That same month, some 64 people in Minnesota fell ill from salmonella-tainted tomatoes.

It wasn’t until Dec. 10 that Chipotle CEO and founder Steve Ells appeared on the “Today” show to apologize to customers who had gotten sick from eating at the chain. On the operations side, Chipotle hiredMansour Samadpour, head of IEH Laboratories & Consulting Group in Seattle, to overhaul the company’s food safety efforts. Among the changes: More food will be prepared at commissaries, rather than on site, undercutting Chipotle’s “food with integrity” mantra since often the food won’t be local and fresh. Food will also be given high-resolution DNA-based tests, a measure that will weed out smaller suppliers who can’t afford that expense. On the PR side, Arbona said closing all the stores for a few hours was a good move. “It was a symbolic act,” she said. “They were hitting reset.”

Allen Adamson, a branding consultant, said that Chipotle will have to ditch its previous brand communication, which struck a lighthearted tone and presented a somewhat holier-than-thou image related to food quality. “You want to see the CEO on screen talking about what they’re doing, not an actor saying ‘Trust us,’ ” Adamson said.

Bernstein said Chipotle should focus on transparency, training its personnel in the new food safety protocol and setting realistic expectations “that they’ll do their best to prevent illness, but particularly with norovirus, it’s not always possible.”

What might be fatal, aside from more outbreaks, is any communication that smacks of arrogance. As we’ve seen in recent years, consumers will overlook safety issues, even ones that result in deaths, as long as the company doesn’t talk down to them. As a counter example, Arthur Andersen, the financial consultant, was drummed out of existence after it got caught up in the Enron scandal in 2002. While that was a huge blow, execs at the company exacerbated the damage by behaving arrogantly during a Justice Department grilling. “They got tried in the court of public opinion,” Bernstein said.

Chipotle is unlikely to make the same mistake. “Ultimately it comes down to humility,” Bernstein said. “If they can express sufficient humility, people will forgive them.”

Read more at http://www.campaignlive.com/article/chips-down-chipotle-not-long/1383083#AVGB4yq6reisiIhh.99


Go Greek

February 10, 2016

Restaurant executive Nick Vojnovic joined Tampa-based Little Greek Fresh Grill in 2011. Photo by Mark Wemple

Restaurant executive Nick Vojnovic found a novel way to beat back a mid-life crisis after he moved on from a decade-long gig running sports pub chain Beef ‘O’ Brady’s.

Forget the convertible or the Harley. Vojnovic went back to school. He enrolled at University of South Florida, where he earned an M.B.A. in about 18 months, mostly in weekend classes. At 51, and already with a degree from Cornell University’s famed hospitality school, Vojnovic says he learned a lot from the experience — both in life and academically. “It was humbling,” says Vojnovic. “My 13-year-old daughter had to show me how to make up a power point presentation.”

Five years later, Vojnovic, 56, is back in his comfort zone, helping upstart restaurant franchise operators go from the toddler stage to something more mature. Vojnovic is doing that with Tampa-based Little Greek Fresh Grill. The concept, founded by entrepreneur Sigrid Bratic in 2005, is authentic Greek food in a fast-casual setting.

Little Greek is on a big run under Vojnovic. It has gone from four locations in 2011, when Vojnovic partnered with Bratic, to 25 by the end of last year. And system-wide sales have nearly doubled since 2013, from $7.4 million to $14 million in 2015.

The chain also recently picked up some national industry notoriety. Restaurant News named it a breakout brand, and more recently, national foodservice research firm Technomic named Little Greek one of its six franchises to watch in 2016. “Little Greek Fresh Grill is a fast-growing concept in an under penetrated fast-casual Mediterranean growth segment,” Technomic President Darren Tristano says in a statement. “The experience and knowledge of its leadership team, speed to market and accelerated success put Little Greek in a strong position to be a category leader.”

Vojnovic, with his M.B.A. and his on-the-job leadership experience at Beef’s and Famous Dave’s barbecue chain, is more cautious than the complements. That’s because growing too fast is one of his biggest takeaway lessons from Beef’s. The chain grew from 30 locations and $16 million in annual sales to 270 chains doing $250 million a year in sales during his 12 years at the helm, from 1998-2010. The downside to that fast growth is it led to a litany of issues, from poor store openings to underprepared staff to back-office slowdowns.

The goal is to open up to seven Little Greek stores in 2016. Locations include Lakewood Ranch in east Manatee County, Riverview in Hillsborough County and Kennesaw, Ga. Vojnovic says he intends to make sure every location focuses on all of the company’s five core values, which include passion, integrity and constant improvement.

On continuous improvement, Vojnovic has many items on his to-do list. It includes better training systems so employees can be more efficient; streamlining food purchasing and other costs to lower expenses; and instituting a process of audit and store visits to bring uniformed quality control to the chain.

Vojnovic also addressed an external challenge: Greek food has a certain turn-off level to people who don’t know the culture and flavors. One step there was to put the American version of the food first on the menu followed by the Greek words, such as spinach pie (spanakopita.) “People can be intimidated by gyros and souvlaki,” says Vojnovic. “We Americanized the menu.”

Going back to his Beef’s lessons, Vojnovic does more to share financial metrics with franchisees and managers. For example, each franchisee has access to daily sales data so he can spot trends quickly. And all franchisees share profit and loss figures on a regular basis, to come up with ideas and get in front of problems.

“I’m a big believer in constantly trying to improve yourself,” says Vojnovic. “(But) I’m working harder at this than I thought I would. We still have a long way to go.”

By the numbers
Little Greek Fresh Grill
Year Revenues Percent Growth
2013 $7.47 million
2014 $10.47 million 40%
2015 $14 million 33.7%


Consumers pick top restaurant chains

January 28, 2016
635886546846667948-papam.jpg6 a.m. CST January 19, 2016
http://www.argusleader.com/story/news/business-journal/2016/01/19/consumers-pick-top-restaurant-chains/78945800/

Some restaurants with a presence in Sioux Falls were among the winners of the Consumers’ Choice Awards from industry research firm Technomic.

It surveyed consumers about 138 restaurant chains and 60 attributes.

“It’s important to point out that it’s the consumers who rated the chains and selected the winners,” said Darren Tristano, president of Technomic. “In essence, the award is from the customers themselves.”

The winners are:

• Food quality, quick-service category: Papa Murphy’s Take ‘N’ Bake Pizza

• Food quality, fast-casual category: Firehouse Subs

• Food quality, full-service restaurants: Bonefish Grill

• Intent to return, quick-service: In-N-Out Burger

• Intent to return, fast-casual: Rubio’s

• Intent to return, full-service: Cheddar’s Scratch Kitchen

• Provides value through service, quick-service: Chick-fil-A

• Provides value through service, fast-casual: Jimmy John’s Gourmet Sandwiches

• Provides value through service, full-service: Cracker Barrel Old Country Store

• Socially responsible, quick-service: Ben & Jerry’s

• Socially responsible, fast-casual, Chipotle Mexican Grill

• Socially responsible, full-service: Seasons 52


Long John Silver’s plans reboot just in time for Lenten fish fries

January 26, 2016

Christmas comes in February for seafood restaurant chain Long John Silver’s, which is launching a reboot of the iconic brand in 2016.

Pittsburgh is front and center for the new Long John Silver’s because of the region’s large Catholic population, the third largest nationwide, according to CEO James O’Reilly. Lent, the 40-day season of penance and avoiding meat at meals, starts Feb. 10, bringing with it boom sales for the privately held, Louisville, Ky.-based company.

“There will always be ups and downs in the restaurant industry, but it’s all about delivering consistency to customers,” the 49-year-old Mr. O’Reilly said. “The time of Lent for us is what Christmas is to retailers.”

Pittsburgh and the surrounding five counties have between 500,000 and 600,000 Catholics, according to Pittsburgh Catholic editor William Cone. The newspaper is preparing to publish its annual list of parish fish fries Jan. 29 in preparation for the start of Lent.

“It’s probably one of our most popular issues,” Mr. Cone said. “People wait for it all year.”

Mr. O’Reilly was in Monroeville Thursday for a daylong meeting with about 50 operators of its 17 corporately owned stores in the Pittsburgh area and some franchisees from outside the region. He planned to discuss the staffing increases at the restaurants — 300 new jobs are planned — and improvements to stores and parking lots.

One thing that won’t change much is Long John Silver’s menu, which has been criticized in recent years as unhealthy for its fat and sodium content. National Public Radio once called Long John Silver’s food a “heart attack on a hook,” but some meals have since been discontinued, as was the use of trans fats.

Baked fish options have always been available from the chain and one dinner has just 600 calories, Mr. O’Reilly said. What’s more, consumers can build meals with even lower calorie counts.

Having healthier options is key, said Darren Tristano, president of Chicago-based marketing research outfit Technomic Inc. But consumers aren’t thinking of healthy eating when eating out.

“Quite frankly, consumers are looking for fried food,” he said. “Indulgence away from home is what they’re looking for and it’s also often very affordable.”

Mr. O’Reilly, who came to Long John Silver’s in March 2015 from hamburger chain Sonic Corp., takes over the reins at a difficult time as consumers have been shunning traditional fast food in favor of restaurants selling healthier fare. Long John Silver’s, which has about 1,300 stores nationwide, also has had changes in leadership.

Mr. O’Reilly replaced Mike Kern, who served as CEO for three years. Mr. Kern was part of investor group LJS Partners LLC that bought the restaurant chain from Yum! Brands Inc. in 2011. The company was founded in 1969 and did not disclose sales figures or the cost of the store upgrades, which are being carried out nationally as well.

Consumers will continue to seek out Long John Silver’s food, partly because there are few other places that focus on fried fish, said Warren Solochek, president of the food service practice at Port Washington, N.Y.-based NPD Group Inc. New paint, lighting and other planned store improvements aside, the challenge for Mr. O’Reilly will be to keep the restaurant name in the consumer’s mind.

“What are they going to do to be top of mind?” Mr. Solochek said. “And he may have a plan to do that.”


A few Tampa Bay Chick-fil-A’s offer Mom’s Valet service that went viral

January 22, 2016

Chick-fil-A knows parents are busy.

And it isn’t easy to grab a meal on the go when you’ve got young children in the back seat.

A number of Chick-fil-A restaurants across the nation are offer a service called “Mom’s Valet” in which parents can order meals from the drive-through, then park. By the time they’ve got the kids out of the car, a table is waiting for them with their food and high chairs inside.

Not all Chick-fil-A restaurants in Tampa Bay offer the service, but the ones on St. Pete Beach and on Gulf to Bay Boulevard in Clearwater do. Another one on Waters Avenue in Tampa will start offering it next week.

The program started at one Chick-fil-A a while ago, said company spokeswoman Bekki Poelker, and has since grown to more than 100 of the company’s 1,900-plus U.S. locations.

The service is free. Parents who want to use it just need to say so when they place an order at the drive-through. An employee will be waiting for them inside to serve their food.

“We’ve seen some services in fast food, like White Castle, which sometimes takes reservations and dresses up tables on Valentine’s Day, but for the most part, you don’t see a lot of this,” said Darren Tristano, executive vice president of Technomic, a Chicago-based food research firm. “It’s a great accommodation for parents, and from the Chick-fil-A brand standpoint, it fits well with their very specific philosophy with religion and family.”

The service received national attention earlier this month when a franchisee-owned restaurant posted about it on Facebook and it went viral.

“Our hope is that with ongoing improvements to our mobile ordering app, all customers will have access to this level of convenience at their fingertips in all locations in the future,” Poelker said.

Similar to Publix or Nordstrom, Chick-fil-A is a brand that has a cult-like following. When new stores open, fans camp in the parking lot for a chance to win free Chick-fil-A for a year.

In October, the Chick-fil-A on St. Pete Beach hosted an all-you-can-eat chicken nugget promotion, which received hundreds of thousands of shares and likes on social media.

In 2015, Chick-fil-A was named the No. 1 restaurant based on customer satisfaction by the American Customer Satisfaction Index. Chipotle was a close second.


How 10 Food Trends for 2016 Will Transform Restaurants

November 2, 2015

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

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

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

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

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

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

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

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

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

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

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

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

Let them eat kale stems!

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

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


Gone Fishing

July 27, 2015

July15-Food-Trends---Sharky's-Tacos

Copyright © 2015 Journalistic Inc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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