On behalf of the entire DMA team, we wish you a happy new year! The past few years have been rife with challenges and opportunities, and we hope to help you as you meet your business goals in the coming year. We wish nothing but health and happiness for you and yours in 2022.
Breakfast, Brunch Making Big Comebacks
Here's an eye-opener: Even as the pandemic continues, breakfast visits to
restaurants rose significantly.
In the three months ending in November, online and physical visits to restaurants
for breakfast increased 11% year over year, according to new data from The
NPD Group. Breakfast is now at roughly the same level as it was in Fall
Meanwhile, morning snacking visits saw a 6% uptick in the last quarter.
NPD noted that employees returning to workplaces no doubt aided restaurants
last fall. Lunch, for instance, improved by 4% in the reported period compared
to a year ago, when visits during that daypart were down 11%.
Visits to dine-in at breakfast increased by 51% in September through November
in 2021, compared to the same period in 2020, when on-premises traffic was
down 55%, according to NPD research. Morning snacking also increased dine-in
visits by 51%, compared to the reported period last year when on-premises
traffic declined by 48%.
"The increased mobility this fall contributed to year-over-year gains
at key restaurant dayparts," said David Portalatin, NPD's food industry
advisor, in a statement. "We're in a steady state for the next several
months, perhaps with a bump up or down here and there, but we expect to lag
pre-pandemic traffic levels through 2022 slightly."
Investment Interest Up
During a November webinar hosted by The Food Institute, industry leaders
noted top restaurant investment trends. Mark Leavitt, co-founder of Enlightened
Hospitality Investments, said he's "dying" to invest in restaurants
that focus on breakfast and brunch these days, due to one main factor:
"In one labor shift you can get three or four turns," Leavitt said
of such restaurants. "At 7 in the morning you get the old [customers]
that are up, then at 8:30 or 9 o'clock you get people that are working. Then,
at 10 o'clock, you get the drinking crowd that's coming in."
Meanwhile, Andrew K. Smith, the managing director of the Mercato Partners
Savory Fund, said the breakfast/brunch space is ripe for innovation and
investment in new concepts, like a "boozy brunch" during which alcohol
is sold. Food
Plant-Based Alternatives Push Further into Fast-Food
Plant-based offerings continue to expand across restaurant menus, as major
players like Impossible Foods and Beyond Meat broaden their
partnerships with fast-food chains.
McDonald's recently announced plans for a major U.S. expansion of
its plant-based burger the "McPlant" with Beyond, following in the
footsteps of Burger King's Impossible Whopper, which launched in 2019.
The companies began testing the alternative patty in eight locations in November
and sold enough McPlants — as many as 70 per day at some locations — to warrant
an expansion of the trial, reported Reuters (Dec 14). Full
Notably, the locations were in small and mid-tier markets where one would
not expect to find a high volume of early adopter plant-based consumers, Mission:
Plant founder and managing director David Benzaquen told The Food Institute.
"Increased availability of [the McPlant] not only helps McDonald's but
also normalizes the idea that eating plant-based meatless products can be
a part of everyone's life," said Benzaquen. "Just like the success
of both Coca-Cola and Pepsi in the "cola wars," this
expansion is sure to benefit McDonald's and Burger King."
According to McDonald's website, the McPlant is topped with traditional veggies
and condiments — including lettuce, tomato, onions, and pickle — along with
dairy-based mayo and American cheese. The patty is also cooked on the same
grill as beef products, making the final burger neither vegan nor 100% vegetarian.
Accordingly, the McPlant is expected to appeal more to flexitarian consumers,
Marie Molde, a registered dietician at Datassential, told The Food
"Flexitarians don't want to eliminate meat from their diets but simply
eat less meat and more plant-based foods," said Molde. "This represents
about 25% of the population and includes a consumer who may visit McDonald's
for a quarter-pounder one day, and a McPlant the next."
The environmental benefits are also a key selling point.
"A majority of consumers believe plant-based foods are better for the
planet than meat," said Molde. "Millennials especially believe that
reducing meat and increasing plant-based consumption is better for our environment."
While the Beyond/McPlant trial performance drew parallels to the Impossible
Whopper, Molde views the rollout less as a competition and more a reflection
on consumers' growing expectation for more plant-based options on restaurant
"Today, 71% of Americans have tried at least one type of plant-based
meat alternative and Impossible and Beyond have paved the way," said
However, for some consumers, there are nutritional differences that could
make one plant-based brand more attractive than the other.
"Impossible was not gluten free until a reformulation in 2019, and Impossible
is still made with soy which can be an ingredient of concern for some,"
Categories to Watch
Plant-based meat has come a long way since David Chang added the first Impossible
Burger to his menu at Momofuku in 2016, said Molde. Alternatives keep
popping up in new categories — from seafood to cured meats like pepperoni
and corned beef.
Although consumers eat cold cut sandwiches much more often than burgers,
Benzaquen notes that plant-based innovation has largely overlooked deli meats.
"In the U.S., there are nearly 24,000 Subway sandwich shops,
but only 21,000 locations of Burger King and McDonald's combined," said
Benzaquen. "I expect [plant-based cold cuts] to be a huge market in the
coming 12 to 24 months."
Plant-based chicken has considerable potential as well, added Molde. "Chicken
is found on 95% of restaurant menus, is America's most consumed food — according
to Datassential's FLAVOR database — and is globally popular."
KFC began piloting plant-based fried chicken with Beyond in 2019,
well ahead of the company's formation of a global strategic partnership with
Yum! Brands in early 2021. In October, Burger King became the first
quick-service restaurant to test Impossible Food's chicken nuggets.
"I'm also excited about innovation with whole food plant-based foods,
like fruits, vegetables, seeds and legumes," said Molde. "These
are the items that consumers most want to increase in their diet and operators
are responding with innovations like mushroom shawarma and beet burgers."
Is the Fast-Food Industry Ripe for Unionization?
Multiple Starbucks locations have examined unionizing of late, which
begs the question: Is this a harbinger of things to come in the fast-food
Fast-food workers have pushed for a $15 minimum wage, and the pandemic with
its attendant worker shortages intensified the pressure on restaurant owners.
So, with the headline-grabbing vote to unionize by Starbucks employees at
a Buffalo, New York, coffeehouse, will efforts to organize workers across
the sector take off?
"We see unionizing as a fundamental and necessary way to participate
in Starbucks and its future," four workers wrote in a letter to CEO Kevin
Key Issues at Play
Starbucks Executive Vice President Rossann Williams wrote in a letter to
employees the company doesn't think unionization is the proper path, indicating
it would be a wedge between Starbucks and its employees. At the same time,
she said the company would bargain in good faith with the Buffalo store workers.
Starbucks, which refers to its employees as "partners," already
offers more benefits and higher wages than other fast-food outlets and may
be a unique case. There are more than 15,000 locations in the U.S., 8,857
of which are corporately owned. The rest are owned by franchisees. By comparison,
McDonald's corporately owns fewer than 3,000 of the nearly 38,000 U.S.
restaurants, for example.
"A high percentage of fast-food chains outlets are franchisee-owned.
Unionization on a larger scale will be possible only if restaurants are company-owned,
and today, more than 90% of popular brands restaurants are franchises,"
Johnny Hartin of EffectsBusiness.com, which evaluates franchise opportunities,
told The Food Institute.
Employees Hold the Hammer
Nick Kalm, president of the public relations firm Reputation Partners, said
organizations like the Service Employees International Union have been targeting
the quick-serve industry, pushing for the $15 minimum wage and positioning
themselves to take advantage of situations where franchise owners have had
to cut back hours or close locations because of a dearth of workers.
"Until recently, employers could rely on a combination of high employee
turnover, a never-ending supply of workers willing to work for minimum wage
(or a bit more) and, for the well-funded company, automation to keep employee
numbers down and the unions at bay," Kalm said. "What's different
now is that employees have been seeing how much their employers need them.
They are seeing employers struggling to fill roles – even with higher wages
that have reached and even exceeded the $15 an hour goal."
The number of unionized workers in the United States has been declining for
decades but there was an uptick in membership last year and an increase in
job actions this year.
A Long Time Coming
Carla Diaz, a former food-service worker who founded the internet provider
evaluation firm, Broadband Search, said unionization has been a long
time coming and could lead to a more stable labor supply in the sector.
"One of the main reasons many decide to leave [the food-service industry]
is because they aren't guaranteed a stable position or a stable salary. A
lot of servers and others depend on tips to get by, and in many cases, restaurants
often protect themselves and leave their employees with little protection.
"There are two ways this can go: with larger chain restaurants giving
in as their employees unionize, or in which they will begin to set restrictions
for those who hope to join a union. With smaller family owned or casual diners
or restaurants, this will probably not be the case," she said. Food
Analysis: Four Top Consumer Delivery Trends from 2021
Since the outset of the pandemic, foodservice delivery companies have become
a consumer staple. And while they simply offered a lifeline to hungry consumers
earlier in the pandemic, the industry has evolved in truly unique ways.
With Lyft announcing its plans to join the foodservice delivery space
recently, let's examine which trends competitors DoorDash, Uber
Eats, and GrubHub witnessed in 2021.
French Fries Reign Supreme
On both DoorDash and Uber Eats, the top-ordered item of 2021 was French fries.
Uber Eats also noted the popularity of the ubiquitous French fry, but with
a twist. Uber Eats noted orders of cheese fries rose 1,234% when compared
to pre-pandemic levels.
DoorDash also reported increased purchases of these modified fries, with
cilantro lime fries (+341%), waffle fires (+178%), and garlic fries (+127%)
all jumping from the prior year.
Regular French fries weren't left in the cold, though, with DoorDash reporting
orders of plain French fries rising 130%.
Foodservice Delivery Turns to Grocery
While DoorDash and Uber Eats both began as foodservice delivery services,
forays into the grocery delivery space seem to be paying off for both companies.
Interestingly, both companies noted weekends were the most popular days to
order grocery delivery. Uber Eats said the 5-7 p.m. timeframe was most popular
on the weekends, while DoorDash said dinner time on Saturdays is the most
Even GrubHub was looking to the grocery delivery vertical, highlighting a
partnership it made with Instacart to extend two months of Instacart Express
to existing GrubHub diners.
Well, That's Convenient
Grocery stores weren't the only retail sector to align with the delivery
trend, with pharmacy chains, convenience stores, and even floral shops getting
in on the action. Uber Eats noted partnerships with national operators like
Walgreens, CVS, and 7-Eleven, and FTD allowed folks to order everything from
Slurpees to COVID-19 antibody tests.
DoorDash saw c-store orders focused on snacks and drinks, with chocolate
chip cookie dough ice cream, lemon-lime soda, mac and cheese bites, peanut
butter cups, and energy drinks constituting the top ordered items in the convenience
GrubHub reported year-over-year gains for the top five most ordered convenience
items on its platform, with 2% milk (+190%), toilet paper (+190%) and instant
ramen (+143%) posting strong growth from the 2020 reference period.
Alcohol a Big Hit
All three major delivery platforms boasted of increased alcohol deliveries
in 2021, with Tito's vodka an especially big hit with DoorDash and Uber Eats
DoorDash and GrubHub also signaled out margaritas as a popular delivery choice,
with orders on the GrubHub platform rising 240% from the prior year.
Cabernet Sauvignon was a winner in the wine category. Uber Eats noted Josh
Cellars' version was a hit with customers, while the variety made DoorDash's
top-three list and orders rose 106% on GrubHub. Food
Taco Bell announced new recruitment and retention strategies,
including increasing the average minimum wage to $15 an hour across company-owned
restaurants by mid-year 2024, reported Forbes (Dec. 14, 2021). Full
Mountain Mike's Pizza will open five locations in Idaho. Full
Firehouse Subs debuted its community design concept with a new
location in New Iberia, Louisiana. Full
Chipotle is opening a new location in Cuyahoga Falls, Ohio, that
eliminates the dining room and in-person ordering, forcing customers to
only order ahead through its app or website. The restaurant will also have
a drive-thru and a walk-up window for order pickups and a small patio section
where customers can eat their meals, reported CNN (Dec. 16). Full
Aramark acquired Wilson Vale, a U.K.-based foodservice
company that will operate under existing leadership as an autonomous brand.
McDonald's will sell Dynamic Yield Ltd. to Mastercard.
Dynamic Yield, which provides retailers with personalized digital promotions
to consumers, was acquired by McDonald's in 2019, reported The Wall Street
Journal (Dec. 21). Full
Olive Garden executives have hinted that the chain's Never-Ending
Pasta Bowl promotion may be gone for good. Incoming Darden Restaurants
CEO Rick Cardenas noted recently that the Italian chain hasn't offered the
promotion for two years, yet its recent same-store sales were up 5% for
the quarter ending November 28, compared to two years ago, reported mashed
(Dec. 22). Full
Twin Peaks inked a deal to open 24 locations in Mexico. Full
BurgerFi will launch in-car ordering for 5G-enabled vehicles in
partnership with Mavi.io, allowing consumers to order in their cars
via voice or through the vehicle's dashboard. PYMNTS' How We Eat Playbook
noted the current share of people using car-based ordering technologies
was small, but that the technology could connect to an untapped source of
demand, reported PYMNTS.com (Dec. 21) Full
Clean Juice, aiming for a presence in all 50 states, recently
opened locations in Connecticut, West Virginia, Kentucky, and Montana and
will open a store in Washington in mid-2022. Full
Starbucks will require U.S. employees to be vaccinated against
COVID-19 or submit to regular testing and give workers until Feb. 9 to get
vaccinated. Employees who opt for testing will need a pharmacist or doctor
to administer the test rather than taking one at home, and employees will
be responsible for obtaining and covering costs for any testing, reported
The Wall Street Journal (Jan. 3). Full
Meanwhile, the Starbucks unionization movement continues to snowball
with more than a dozen additional stores across the country filing to hold
elections, reported Fast Company (Jan. 12). Full
Koibito Poke signed a franchise sales agreement with True Capital
Partners LLC, which has committed to sell a minimum of 300 locations
in eight states over the next five years. Full
Burger King franchisee Carrols Restaurant Group is giving
out bonuses of up to six figures to top executives, citing "significant
and unforeseen challenges" like supply chain and labor issues, reported
Restaurant Business (Jan. 5). Full
Bojangles plans to bring approximately 50 new restaurants to the
greater Austin, Dallas, Houston and San Antonio markets in the coming years.
Subway is trying a new franchising strategy by seeking bigger
operators. The sandwich chain grew into a prolific franchise initially by
using small-scale operators, but now it wants franchisees with more locations,
reported Restaurant Business (Jan. 5). Full
Papa John's has signed a deal with FountainVest Partners
to develop 1,350 locations in China by 2040, reported Restaurant Business
(Jan. 7). Full
Executives on the Move:
Wingstop appointed Donnie Upshaw as its first chief people officer.
Golden Corral named Skip Hanke as chief marketing officer. Full
Beyond Meat named Jorg Oostdam general manager, Europe. Full
Papa John's promoted Anne Fischer to chief marketing and digital
Krystal has announced David Krisher as chief financial officer.
SUPPLY CHAIN NEWS
New Vaccine Mandates for Truckers Could Impact U.S.-Canada Trade
Although the U.S. Supreme Court blocked a vaccine mandate for large employers,
truckers driving between the U.S. and Canada will still need to be fully vaccinated
by the end of the month.
Canada began requiring all foreign truckers entering the country to be fully
vaccinated as of Jan. 15, with the U.S. set to enact similar rules starting
Jan. 22, reported The Wall Street Journal (Jan. 13). Full
Although tourist travel has been limited, cross-border trade between the
U.S. and Canada has been unimpeded since the onset of the pandemic.
It remains to be seen how the new mandate will affect commerce but trucking
and manufacturing trade groups are already warning of further supply chain
"We believe these mandates will only serve to push drivers out of the
industry or away from these routes, further straining the supply chain between
the U.S. and our biggest trading partner," Bob Costello, chief economist
of the American Trucking Associations (ATA), told The Wall Street
Stressing An Already-Stressed Workforce
Overcoming limited trucking capacity will be a major hurdle as the U.S. looks
for ways out of the current supply chain crisis, with ATA estimating the nation
was running short nearly 80,000 truckers in late October 2021. The group attributed
the record-high shortage to historic demand for moving freight.
Costello noted the shortage could surpass 160,000 by 2030 when considering
current driver demographic trends and projected freight growth over the next
"A thing to note about the shortage is that before the pandemic, we
were adding drivers to the industry – even though we had a shortage, more
people were entering the industry," Costello said in a press release.
"The issue is that new entrants into the industry didn't keep up with
demand for goods."
RBC Capital Markets indicated the current shortage could stretch as
high as 85,000 truckers, according to an e-mail viewed by The Food Institute.
RBC noted demand for conventional van trailers were 5.8 times oversubscribed
in 2021, compared to 2 times oversubscribed in 2019. Refrigerated truckloads
were three times as in demand when compared to pre-pandemic levels.
Attracting Younger Drivers
One of the major challenges affecting the trucking industry is a federal
requirement that drivers be at least 21 years of age, but that could soon
be changing. The Federal Motor Carrier Safety Administration (FMCSA)
issued a Federal Register notice Jan. 13 about a pilot a program allowing
drivers as young as 18 to drive for interstate commerce.
The pilot program, authorized by the Infrastructure Investment and Jobs Act,
will allow the younger drivers to gain experience via 120-hour and 280-hour
An experienced driver will need to remain in the passenger seat for these
periods, and trucks for use in the program will be equipped with electronic
braking crash mitigation systems and forward-facing video systems. Food
Restaurant Sales Growth Slows Amid Omicron
Restaurant sales growth was improving the week ending Jan. 2 but remained
much lower than the first half of December, according to Black Box Intelligence,
which noted rising COVID-19 cases could be causing some concern among diners.
Average check growth posted its highest growth rate in a decade, but traffic
continued to deteriorate and was at its lowest rate since March 2021. Full
New data from IPSOS found Black Box's presumption was largely correct:
57% of Americans social distanced during the first week of the new year, matching
a rate last seen in early May 2021. The number of Americans who went out to
eat during the period (46%) represented a level not seen since early spring
Meanwhile, a recent survey illustrates just how much the labor shortage is
hurting restaurants. Popmenu research found that 71% of restaurant
operators estimate they lose $5,000 or more per month due to the worker deficit,
and 37% of operators are losing $10,000 or more per month. Full
Darden Restaurants reported quarterly results that topped
analysts' expectations, leading the company to raise its sales and earnings
forecast for the rest of fiscal 2022. Net salesrose
37% to $2.27 billion, topping expectations of $2.23 billion. The Olive
Garden parent also announced that CEO Gene Lee will retire May 29 and
the board elected Chief Operating Officer Rick Cardenas as its next chief
executive, reported CNBC (Dec. 17).Full
Domino's Pizza is expecting "unprecedented" food-cost
increases in 2022. The company is forecasting an 8% to 10% jump in its food
basket costs – three to four times the inflation for a typical year, CEO
Ritch Allison told attendees of the virtual ICR Conference, reported CNBC
(Jan. 11). Full
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