THE EXPLOSION OF GHOST KITCHENS
& VIRTUAL BRANDS
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DMA’s February virtual event features Joy Lai, COO at Kitchen United, Scott Barton, Partner at Lettuce Entertain You and John Miller, CEO at Denny’s. Moderated by Restaurant Business’ very own Jonathan Maze, this panel will explore the future of virtual brands and point out the pitfalls to avoid for other operators interested in launching a similar program. This is can’t-miss content for anyone not yet taking advantage of this hot trend!
The webinar is today, Feb. 18, at 1 p.m. CST - don't miss your chance!
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There is Nothing More Important
than Keeping Employees and Customers Safe
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There is nothing more important than keeping your employees and customers safe. Curbside pickup, drive thrus and deliver programs have become a necessity to operate during the pandemic. You have implemented strict food safety guidelines to ensure your customers feel safe. However, did you think about the potential for an employee workplace injury in your parking lot?
Parking lots are riskier than you think. Tens of thousands of crashes occur in parking lots annually, resulting in hundreds of deaths and thousands of injuries.
In a NSC public opinion poll, 66% of drivers nationwide said they would make phone calls while driving through parking lots. Respondents also said they would:
- Program GPS systems (63%)
- Text (56%)
- Use social media (52%)
- Send or receive emails (50%)
- Take photos or watch videos (49%)
- NSC found teens (59%) were more likely to engage in personal grooming than adults (53%) while driving in parking lots, but less likely to be on the phone (60% vs. 66%)
Kishigo (a DMA supplier partner) is helping retail food establishments execute their contactless & curbside pickup safety procedures with our enhanced visibility vests.
Their high-quality reflective vests ensure your employees are visible in parking lots -reducing the risk of a workplace accident. Using both fluorescent background, color and reflective material helps your employee stand out in a potentially dangerous environment. Reflective vests are perfect for night time, extreme weather, and dimly lit parking lots.
Operators can also choose from a variety of vest colors to coordinate with a branded uniform polo or t-shirt. Custom logos can be printed on the back or front of the vest. Customers easily identify your employees when approaching their vehicle providing added safety. If you are a foodservice operator or distributor and are interested in learning more about high-visibility vests and workplace safety, please contact Christina Stone – VP of Sales for Kishigo.
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Supply Chain Pain: Rising Freight Rates, Delivery Delays Frustrate Food Industry
Rising freight rates and delivery delays have led to a global backlash from companies frustrated about the mix of a deteriorating service and higher ocean shipping costs, reported Bloomberg (Feb. 4). Full Story
According to a January survey of Hong Kong-based Freightos users, 77% of small- to medium-sized importers reported supply chain difficulties over the past six months. And, of that group, 44% said they raised product prices as a result. Companies with less than $5 million in revenue suffered more and were likelier to pass costs along to customers.
What’s Causing Freight Costs to Increase?
Food piling up in the wrong places is mostly due to carriers hauling empty shipping containers, reported Bloomberg (Feb. 2). Full Story
China has ramped up its export economy as it recovers from COVID-19, and is paying huge premiums for containers -- making it more profitable to send them back to China empty than refilled.
However, some are also blaming industry consolidation. In 2017, about a dozen container lines that control 80% of the global market formed three main alliances which share ships, cooperate on routes, and try to limit excess capacity. Complaints about the alliances are on the rise and the U.S. National Retail Federation is communicating with regulators, lawmakers, and port authorities to address them.
What Are the Implications for Food Companies?
The cost of carrying goods from China to the U.S. is almost 10 times higher than the opposite journey.
Hershey CEO Michelle Buck noted on CNBC that the company has seen freight inflation become a big factor. “I think we’re hearing that across the industry,” she said. “So, that’s really the biggest piece that we’re seeing a big impact.”
Meanwhile, in India and Vietnam, the top exporters of sugar and robusta coffee beans, respectively, exports are much lower than a year ago.
Product shortages have also been an issue. “It’s been like that since December,” said Steve Kranig of IM-EX Global in the Bloomberg report. “You’re going to get not only a shortage of food but a shortage of everything. I would not be surprised to hear some beneficial cargo owners’ freight rates for 2021-2022 shipping season double from previous years.” Food Institute Focus
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Restaurant Loyalty Programs Growing in Popularity, Especially with Baby Boomers
Now, more than ever, food companies are leveraging loyalty programs to generate sales. At the same time, customers are demanding them.
Wade Hanson, Principal with Technomic Inc., said the Baby Boomer generation especially values loyalty programs like the Royal Perks initiative recently launched by Burger King.
“Boomers are going to be looking more and more for value and loyalty programs,” Hanson said, during a recent DMA webinar that examined consumers’ evolving demands.
Burger King launched its Royal Perks program in markets like Los Angeles, greater New York City, and Miami, rewarding loyal customers with occasional free items, upsized meal options, and online rewards, reported Forbes (Feb. 9). Full Story
McDonald’s, meanwhile, is currently expanding a similar loyalty program to locations in New England. Other chains have embraced the concept, too, including the following:
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White Castle added a “Craver Nation” loyalty program in September
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Wendy’s added a new rewards program in July
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Taco Bell announced a revamped loyalty program, also in July
All told, 12% of QSR operators have added a loyalty program in the past year, according to the National Restaurant Association’s 2021 State of the Industry report.
Kris McDonald, vice president of development at Checkers & Rally’s, said loyalty programs are currently a major initiative for most chains.
“We’ll continue to build both the app and our loyalty program,” McDonald told The Food Institute. “We’ve almost got the consumer expecting now that there’s going to be some sort of deal, promotion, or reward. We’ve kind of trained the consumer to expect that.”
Amid rising customer expectations for their dining experience, including online ordering, various delivery options, and the aforementioned rewards, restaurants must consider implementing loyalty programs to stay competitive.
“Customers demand loyalty programs, and for that to be expanded, to be heard as customers…if a restaurant won’t meet [those] demands, someone else will,” said Dan Rowe, CEO of Fransmart and a board member at the National Restaurant Association. Food Institute Focus
Are You Ready for 3D-Printed Steak?
Lab-grown meat is getting closer to reaching consumers, and it looks like the world’s first 3-D printed ribeye is up next.
Here’s a look at how we got to this point.
Israel: A Major Innovator in the Space
Several key players in the alternative-protein space have come out of Israel, which is a tech innovation hub. Food tech startup Aleph Farms has been working on growing meat cuts from beef cells using a 3-D tissue engineering platform since 2017.
Recently, the company and its research partner at the Faculty of Biomedical Engineering at the Technion – Israel Institute of Technology cultivated the world’s first slaughter-free ribeye steak using 3-D bioprinting technology and real cow cells. The 3-D bioprinting technology consists of printing living cells that are then incubated to grow, differentiate, and interact, to acquire the texture and qualities of a real steak.
Meanwhile, another Israeli company, Redefine Meat, recently attracted 600 customers to a small village in the country with its Alt-Meat, reported VegNews (Jan. 22). Full Story
An event called “There’s a new meat in town” featured a food truck that dished out 1,000 servings of 3-D printed vegan meat.
The company will be partnering with meat distributor Best Meister to distribute the alt-meat to high-end butcher shops and restaurants across Israel later this year.
Steak isn’t the only cell-based meat to recently make headlines. Here are some other examples:
What’s Next in Alt-Protein?
Like we saw in plant-based meat when more players entered the arena, lab-grown meat could become more widespread and production could start on a larger scale. As of last year, there were over 100 cultivated meat, seafood, and dairy companies across the globe working on cell-based foods and cell-based enabling technologies, reported Green Queen (Jan. 10). Full Story
British biotech company CellulaREvolution recently raised $1.37 million to further accelerate its cell culture technology, reported The Spoon (Feb. 1). Full Story
The company says it can make cell-culturing more efficient and affordable using products which include a synthetic peptide coating that allows for serum-free cell culturing and a bioreactor that can continuously produce cells in a serum-free environment in much smaller footprint.
The more companies that enter the space, the more likely we are to see cell-cultivated meat on consumers’ plates soon. Food Institute Focus
Food Tech Driving Down Price of Alt-Protein
As demand for alternative meat products grows, companies are cutting prices to keep up with competition and become more accessible to consumers.
Plant-Based Meat Reduces Retail Prices
Impossible Foods recently lowered its suggested retail price by 20%, reported CNBC (Feb. 2). Full Story
The recommended price for U.S. grocery stores is now $5.49 for patties and $6.99 for a 12-oz. package. The cut marks the first time the company has lowered its retail prices, but the third time over the last year it has permanently discounted products. In January, Impossible lowered food distributor prices by an average of 15% to better compete with traditional ground beef.
The number of supermarkets carrying Impossible’s products has increased by 113 times in the last year.
Competitor Beyond Meat has also been cutting prices to keep up with competition. Over the summer, the company sold frozen value packs of its meatless burger patties. The company recently announced a joint venture with PepsiCo to sell snacks and drinks made from plant-based protein, although it is still unclear what prices will look like for those products.
Cultured Meat Innovates to Cut Costs
Plant-based meat isn’t the only meat alternative that is lowering costs. Israel-based Future Meat Technologies reduced the production cost of its cultured chicken breast to $7.50.
The company also raised an additional $26.75 million in funding, enabling it to scale up its production. Future Meat plans to market its products to consumers and restaurants within 18 months, although Singapore is the only country so far to approve the sale of lab-grown meat.
“Cost-efficient production has been a critical focus area for the cultured meat industry,” noted CEO Rom Kshuk in a press release.
In theory, as costs for alternative proteins get cheaper, the barrier to entry is becoming lower, meaning more consumers just might be open to trying it. Food Institute Focus
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Executives on the Move:
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Long John Silver’s named Blain Shortreed CEO. Full Story
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Pizza Factory appointed Rob Searfus franchise business coach. Full Story
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Acosta named Derek Bowen president of marketing for North America, reported CS News (Feb. 1). Full Story
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Blaze Pizza appointed Chris Demery chief technology officer. Full Story
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The NPD Group named Edurne Uranga head of foodservice Spain. Full Story
Store News:
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McDonald’s is bringing back Spicy Chicken McNuggets for a limited time. Full Story
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Meanwhile, McDonald’s has begun testing a vegan McPlant burger. The plant-based burger is sourced via Beyond Meat and is currently being tested in the Danish and Swedish markets, reported Mashed (Feb. 2). Full Story
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Chicken Salad Chick will relocate its headquarters to Vinings, Georgia, from Auburn, Alabama. The effort will take place by the end of March, with 17 employees relocating by the end of May, reported AL.com (Feb. 10). Full Story
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Restaurant conglomerate Landry’s will go public following a merger. The Houston-based collection of restaurants, along with Golden Nugget casinos, has agreed to merge with blank-check company Fast Acquisition in a $6.6 billion deal, reported Restaurant Business (Feb. 1). Full Story
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Pizza Hut unveiled Detroit-Style pizza nationwide. Full Story
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Burger King will discontinue its current line of crispy chicken sandwiches as the company begins a soft launch of its new Hand-Breaded Crispy Chicken Sandwich, with a nationwide rollout expected by May, reported Chew boom (Jan. 31). Full Story
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Carl’s Jr. and Hardee’s have unveiled a “Fiery” menu that includes Spicy Chicken Tenders, reported Thrillist (Jan. 22). Full Story
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Chick-fil-A is offering the grilled spicy chicken deluxe for a limited time. Full Story
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Boston Market introduced a Nashville Hot menu, including a crispy chicken sandwich and rotisserie chicken, as well as several other limited-time offers. Full Story
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Firehouse Subs is offering the Everything Hook & Ladder sub for a limited time. Full Story
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Wow Bao’s partner kitchen program will expand from 150 locations to 1,100 by the end of 2021, reported The Spoon (Jan. 26). Full Story
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Fazoli’s will open seven locations across Florida, Virginia, and Pennsylvania. Full Story
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Starbucks is making plans to upgrade its drive-thru efficiency. The coffee chain will soon implement multiple process changes, including having employees walk drive-thru lines with handheld point-of-sale devices to take orders, reported FOX Business (Jan. 28). Full Story
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Steak N’ Shake has reportedly hired restructuring advisors to explore a bankruptcy filing or out-of-court restructuring. The chain has closed nearly 100 locations since the end of 2018, reported Restaurant Business (Jan. 20). Full Story
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Cici’s, the pizza buffet chain, has declared bankruptcy. The Texas-based company filed a Chapter 11 declaration and will sell to its primary lender, D&G Investors, reported Restaurant Business (Jan. 26). Full Story
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The restaurant industry reported its best sales in nearly a year during January, according to Black Box Intelligence. Comparable sales were down 4.91% year-over-year, while comparable traffic was down 12.16%. Full Story
Selected Results
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Starbucks said its U.S. same-store sales fell 5% during its fiscal first quarter after a surge of new COVID-19 cases led to harsher dining restrictions. The coffee giant reported net income of $622.2 million, or 53 cents per share, down from $885.7 million, or 74 cents per share, a year earlier, reported CNBC (Jan. 26). Full Story
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Chili’s has seen near-normal sales in January thanks to a new virtual brand. Executives say the chain should finish the month roughly five points below the pre-pandemic level of a year ago, thanks to the It’s Just Wings virtual concept, reported Restaurant Business (Jan. 27). Full Story
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Chipotle Mexican Grill reported fourth-quarter sales that trailed estimates amid a resurgence of COVID-19 infections in the U.S. Same-store sales advanced 5.7%, just below the average analyst projection of 5.9% growth, according to Consensus Metrix. Revenue, which was boosted by higher menu prices, was in line with projections, reported Bloomberg (Feb. 2). Full Story
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Restaurant Brands International reported same-store sales declines for three of its brands: Burger King (-7.9%), Popeyes (-5.8%), and Tim Horton's (-11%). The company said it ended 2020 with the same restaurant count as 2019, reported MarketWatch (Feb. 11). Full Story
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Formulation Counts
Our hand hygiene and surface formulations are the result of decades of scientific innovation. As a result, the PURELL® brand lets you take credit for all the things you do to maintain a clean, high-quality establishment that prioritizes the well-being of guests, customers, and employees. Learn more about how PURELL® is making well-being a priority through science and innovation.
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Time to Focus on What Matters
Navigate the new normal with a napkin dispenser system that saves time and promotes hygiene.
The compact Tork Xpressnap Fit® Napkin Dispenser System uses one-at-a-time dispensing, something traditional dispensers don’t, to control dispensing, cut waste, reduce refilling time, and promote hygiene, as guests touch only the napkins they take. Click here or visit Tork USA to learn more.
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1515 East Woodfield Road, Suite 820
Schaumburg, IL 60173
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