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3 Keys for Employee Retention in 2023

The past few years have presented numerous challenges to business owners, including an ongoing labor shortage. The hospitality industry certainly isn't immune to the struggles of employee retention.

“For a long time, the hospitality industry has relied on having an abundance of applicants even if some of those were not well-qualified. Now we see a problem with both the quality and quantity," said Amanda Belarmino, professor with University of Nevada, Las Vegas' College of Hospitality, in an interview with The Food Institute.

“With everyone talking about competitive pay, positive working environments, and flexible schedules to attract and maintain labor, the fact that restaurants aren't able to find workers is far too real for most operators today," said Sam Zietz, CEO of GRUBBRR.

“Baby boomers have left the workforce, birth rates are declining, and tight immigration policies have (left) a limited labor pool of candidates, leaving restaurant owners searching for answers."

When everyone is struggling with employee retention, it begs the question, what can be done to improve workplace atmospheres? Recently, the National Association of Food Equipment Manufacturers had a conference that addressed this issue. Here are a few tips that the conference provided, according to Restaurant Business.

Get Creative

Think of new and creative ways to find employees instead of sticking to help-wanted ads. One example was a company that joined a Facebook group that included people they'd like to work for them.

Support is Key

Employees want to feel like humans, not just workers. Treat your current employees with respect and find out what they need to be successful in order to retain them. Perhaps they want more flexibility in their hours or help with childcare, Restaurant Business noted.

Alleviate Stressors

There are certain tasks that can be outsourced through technology. Find out if there are any that are giving employees headaches or creating bottlenecks and take that burden away. Zietz suggests using self-ordering technology like kiosks and online ordering to help restaurants run with a smaller staff. This can benefit employees in multiple ways, Zietz said, including increased tips that can be split between fewer team members.

Belarmino offered additional tips to The Food Institute. She suggests looking at marketing and doing a better job of communicating your company's specific benefits in order to differentiate yourself from the competition.

The UNLV professor also suggested considering retirees who are looking to supplement their income.

“Finally, I would encourage employers to look beyond their own surveys for satisfaction and examine online review sites like Indeed and Glassdoor," Belarmino said, “to find out if there are issues they're not addressing that could help to retain their team members. Responses to these reviews also demonstrate to job seekers that this is a desirable workplace." Food Institute Focus

Breakfast Costs Continue to Climb

Americans may have to start rethinking breakfast as eggs flirt with $5 a dozen and with orange juice prices set to jump because of a poor Florida citrus crop and low cold storage stocks.

“Even at $5 per dozen (eggs) are a very cheap source of nutrient rich fat and protein. If anything changes at all, backyard chickens will become even more popular," Kam Talebi of the Butchers Tale catering company told The Food Institute.

Indeed. The New York Times recently reported demand for chicks that will grow into egg-laying hens has skyrocketed.

“Everybody wants the heavy layers," Ginger Stevenson, director of marketing at Murray McMurray Hatchery in Iowa, told the Times. Hatcheries are having a hard time keeping up and running low on some breeds, partly because they haven't expanded in three years due to the pandemic and partly because they're having trouble hiring workers.

Labor Costs, Bird Flu Key Factors

“One of our biggest cost increases is continuing to raise wages to compete," Jeff Smith, one of the owners of Cackle Hatchery in Missouri, told the Times. “I don't see the inflation going anywhere."

The agriculture department reported earlier this month that egg prices had fallen to about $3.40 a dozen. The cost doubled between 2021 and 2022. The huge increase was due in large part to the avian influenza epidemic, which led to the slaughter of more than 40 million egg-laying hens across the country.

But raising chickens is not easy and there's an initial upfront investment for the chicks themselves, and construction materials for a coop. Then there are the predators.

Restaurants Explore Options

Beyond the breakfast table, restaurants and bakeries also are feeling the impact and looking for ways around it: sourcing ingredients locally and changing recipes.

“If eggs are prohibitively expensive and would drive up costs which would inevitably have to be passed down to the consumers, then it's vital to pivot from the current menu and explore other options, Los Angeles registered dietitian nutritionist Yelena Wheeler told The Food Institute.

“Instead of pushing the typical eggs and bacon breakfast, maybe look at mixtures of potatoes, vegetables and cheese. For instance, a breakfast veggie quesadilla or fruit and yogurt parfait. Exploring other cultural breakfast staples that don't include eggs can also be helpful."

Meredith Marin, CEO of Vegan Hospitality, said eggs can be left out of just about any recipe, either by adding baking powder or egg substitutes.

“This works with pancakes, waffles, and many breads. ... The great news is, guests will love their meal just as much, and you may even choose to keep these new recipes on your menu. You'll save costs while opening up your menu to vegans and those with food sensitivities, as eggs are among the top eight allergens," Marin said.

Orange Juice Outlook

When it comes to washing down that alternative breakfast, consumers may need to look for an alternative to orange juice. The USDA's revised forecast said the Florida orange crop is likely to be the smallest since the 1935-36 season.

The projected harvest of 16 million boxes is the result of Hurricane Ian and a winter freeze. Groves also are suffering from two decades of greening disease, which produces fruits that are green, misshapen and bitter, making them unsuitable for sale as fresh fruit or for juice. Infected trees generally die within a few years.

Juice made from concentrate recently hit $6.27 a gallon; fresh-squeezed juice prices hit $10, The Wall Street Journal reported. Cold storage stocks of concentrate are extremely low. Food Institute Focus

Report: CAVA & Chicken Salad Chick Earn Rave Reviews

As inflation persists, it becomes more challenging for restaurants to lure customers. Nevertheless, new research shows a few chains are making strides when it comes to winning guests.

Merchant Centric, a data analytics and reputation management company, recently identified which restaurant chains are winning customers the most and found that Chicken Salad Chick, Tazikis, and CAVA are earning especially positive reviews these days.

“Guests are telling restaurant chains what is most important to them via their reviews – and not all brands are paying attention," Adam Leff, Merchant Centric's chief strategy officer, told The Food Institute. “Those that are listening and taking heed are getting high (customer-review) scores within their segments, growing sales and adding units."

Merchant Centric used proprietary Theme Performance Scores – which represent the ratio of positive mentions in online reviews for a theme (such as price/value, or loyalty/referral) relative to the negative mentions of the same theme – to calculate customer sentiment. A TPS score of 1.0 indicates that praise and complaints are equal, while TPS scores of 1.1+ indicate more praise than complaints.

Here's a look at chains that earned some of the highest TPS scores in the loyalty/referral category, per Merchant Centric:

· Chicken Salad Chick: 4.4

· Tazikis: 3.2

· CAVA: 2.7

· Skyline Chili: 2.4

Leff feels it's imperative for restaurant chains to analyze customer reviews and leverage that feedback to improve their businesses.

“Many brands talk about their brand promise, but how do they quantify the efficacy of that brand promise?" Leff asked.

“[Chains] need to listen to what guests are saying in their reviews so they can measure and understand if they're delivering on their brand promise and providing value over competitors. ... These are insights that will drive success when identified."

Chicken Salad Chick, which has grown to 286 locations since being founded in 2008, has earned praise predominantly for its customer service. The Alabama-based chain earned a 4.4 loyalty/referral score and a 1.8 in the price/value category.

Taziki's, another Alabama-based fast-casual chain with 90 locations in 16 states, earned an exemplary score (2.0) in terms of price/value.

Among the fast-casual chains highlighted by Merchant Centric's research, however, CAVA especially seems to be enjoying a moment of late. CAVA garnered positive reviews for its relatively healthy, Mediterranean-inspired menu featuring protein items ranging from chicken to falafel to meatballs, with a variety of greens, as well.

CAVA's solid performance scores, Leff said, “tell us guests feel CAVA is so well-priced for what guests receive that guests are, in turn, expressing high degrees of loyalty and referral. They also have high TPS scores for selection/availability (6.2), food (5.1), and quality/flavor (3.9), thus indicating that guests are very happy with the quality, selection, and general food offerings provided by the brand." Food Institute Focus

Store News:

· Red Lobster has closed eight locations in recent months that it deemed “no longer viable." The restaurants were primarily in the eastern half of the U.S., reported Restaurant Business (Jan. 23). Full Story

· Chipotle Mexican Grill is adding 15,000 jobs across its North American locations. The hiring push is meant to ensure the chain's more than 3,000 U.S. restaurants are fully staffed for the company's busiest season, which stretches from March to May, reported Bloomberg (Jan. 26). Full Story

Meanwhile, Chipotle has revealed the details of its new California-inspired fresh eatery, Farmesa. Focused on customizable bowls priced from about $12 to $17, Farmesa will also serve as a test and help position Chipotle for future growth, reported Restaurant Business (Feb. 15). Full Story

· McDonald's is testing strawless lids. The chain is testing lids that don't need straws in select U.S. markets as it aims to bolster sustainability, reported Restaurant Business (Jan. 25). Full Story

· TGI Fridays has unveiled a new 3-course meal deal as value wars intensify. Fridays is the latest full-service restaurant chain to add a bargain offer amid fears that inflation-weary customers are trading down, reported Restaurant Business (Jan. 25). Full Story

· Papa John's is testing a new store layout as its international prototype for increased flexibility, tailored to clients' specific needs. Made to accommodate indoor seating as well as takeout, the design highlights the chain's focus on premium ingredients. Despite flat growth in the U.S., Papa John's is thriving internationally and up 41% over the past five years, reported Restaurant Business (Jan. 27). Full Story

· Meanwhile, Papa Johns has launched a new Crispy Parm Pizza, which has a layer of parmesan and Romano cheese baked underneath the bottom crust, creating an extra-crisp exterior, reported Food & Wine (Jan. 31). Full Story

· Foodservice company Middleby has acquired Flavor Burst Innovation for beverage and soft serve. Flavor Burst's technology automates multi-flavor syrup dispensers, improving flavor consistency. Full Story

· The former CEO of Jimmy John's has launched a new platform for growing fast-casual brands. Gregg · Majewski partnered with FG Financial Group to create the new Craveworthy LLC, which is launching with four restaurant brands under its umbrella: Wing It On!; Krafted Burger + Tap; The Budlong Hot Chicken; and The Lucky Cat Poke Company, reported Restaurant Business (Jan. 27). Full Story

· Subway will add thousands of restaurants outside the U.S. After years of declining sales, CEO John Chidsey said the sandwich brand hopes to increase sales by 50% by adding about 25,000 stores over the next 10 years and increase annual sales from $16 billion to $25 billion, reported The Wall Street Journal (Feb. 2). Full Story

· Meanwhile, Subway has confirmed it is for sale. Doctor's Associates Inc., its owner, did not disclose a timeline but verified it is conducting a “sales exploration process." The sandwich chain's sales expectations rose in 2022; Subway counts 37,000 restaurants in 100 countries around the globe and plans to expand its non-traditional business segment, reported Food Business News (Feb. 14). Full Story

· Chili's is pushing its value and $10.99 meal deals in its first TV ads in three years. Parent company Brinker International said the marketing push is affordable due to improved restaurant economics after same-store sales growth of 8% last quarter, reported Restaurant Business (Feb. 1). Full Story

· KFC is adding Kentucky Fried Chicken Wraps for a limited time. The new menu items come in two options: the Classic Chicken Wrap, which features an extra-crispy tender, pickles, and mayo, and the Spicy Slaw Chicken Wrap, featuring a tender covered in KFC coleslaw and spicy sauce. Full Story

· Meanwhile, Taco Bell and KFC are using artificial intelligence (AI) to make their weekly supply orders, which is designed to increase accuracy and cut back on food waste, reported Restaurant Business (Feb. 10). Full Story

· Quiznos has brought back its Lemon-Herb Lobster Sub and Classic Lobster Sub for a limited time. Both sandwiches, priced at around $9, are made with a lobster and seafood salad featuring North Atlantic Lobster and Alaskan whitefish from King & Prince Seafood. Full Story

· Cava Group Inc. confidentially filed for an initial public offering with the Securities and Exchange Commission. The total number of shares to be offered and the price range remain undetermined, reported Reuters (Feb. 6). Full Story

· Chick-fil-A will test a plant-based sandwich at three locations. The fast food chain reportedly experimented with mushrooms and chickpeas before settling on breaded cauliflower, reported The Guardian (Feb. 9). Full Story

· Wendy's is making a significant climate action commitment. The burger chain claims it will reduce Scope 1, 2 and 3 greenhouse gas emissions by 47% by the end of this decade. Full Story

· Denny's has revamped its kitchens to expand its menu and diversify its customer base. On Monday, executives told investors that 98% of domestic Denny's restaurants had undergone the change; the new menu will debut in March, reported Restaurant Business (Feb. 14). Full Story

Executives on the Move:

· The National Restaurant Association has named Freddy's COO Scott Redler as the organization's chairman for 2023. Jeff Lobdell, founder of Restaurant Partners Management, will serve as vice chairman. Full Story

· Little Caesars has named former Wendy's CFO Leigh Burnside as its new CFO, reported Restaurant Business (Feb. 6). Full Story

· Red Robin has hired Brian Sullivan as its culinary chief. Sullivan had served as the longtime top chef at California Pizza Kitchen. Full Story

· Shula's Restaurant Group has named hotel executive Cody Plott its CEO. The casual-dining operator also named Jeremy Shelton to the role of executive corporate culinary director, reported FSR (Feb. 10). Full Story

· Whataburger has named Debbie Stroud its chief operating officer. Stroud previously worked with McDonald's and Starbucks, reported Restaurant Dive (Feb. 10). Full Story

· Restaurant Brands International has named Josh Kobza as its new CEO. The 11-year company veteran, who had been COO, will take over for Jose Cil starting March 1. Full Story


Precision Fermentation Promises a More Sustainable Future

Precision fermentation technology makes it possible to create alternative egg and milk proteins identical in taste, texture, and functionality to the traditional stuff—without using any animals.

By reimagining a foundational process that has existed for decades, food tech companies are using precision fermentation to produce animal-free proteins in pursuit of a more sustainable future.

The EVERY Company and Perfect Day Inc. are two such companies at the forefront of the animal-free protein industry.

How Does it Work?

“Similar to the process of making rennet for cheese (a protein ingredient found in 80-90% of store-bought cheeses), we produce animal-free proteins via fermentation," Nick Toriello, VP head of partnerships at EVERY told The Food Institute.

Unlike lab-grown meat, which requires harvesting stem cells from a living animal, precision fermentation uses DNA sequences as a protein recipe.

The DNA sequence serves as a set of genetic instructions that can be followed step-by-step and inserted into yeast. Then, “similar to the way beer and wine are brewed, we add sugar, and the yeast uses this energy to kick-start fermentation," Toriello explained.

“The end result is nature-equivalent protein made without using a single animal," he said.

This technology is still relatively new and just starting to scale, but there are already several different applications. Perfect Day has created real dairy milk that's animal-free, while EVERY is focused on egg white and pepsin proteins.

Rapid Growth

And as the technology improves, companies like EVERY and Perfect day are growing at a rapid clip. “We recently sprang forward from a seven-year R&D period to launch three novel proteins in 12 months," said Toriello.

In fact, companies using precision fermentation to create alternative proteins secured $1.7 billion in investments in 2021, nearly a threefold increase from the $600 million raised in 2020, according to The Good Food Institute.

On February 1st, EVERY announced that actress Anne Hathaway made her first B2B investment in the company. Simultaneously, EVERY is scaling up production in partnership with BioBrew from AB InBev, the world's largest fermentation company.

Perfect Day is also scaling to meet the “incredible demand" for their animal-free proteins, Nicki Briggs, VP of corporate communications at Perfect Day, told The Food Institute.

“Last year we increased our production by three times and we're only accelerating from there—on the path to produce tens of thousands of metric tons of protein in the next five years," said Briggs.

Sustainable Solutions

According to a study commissioned by Perfect Day, their whey milk protein is between 91% and 97% lower in greenhouse gas emissions than traditional milk. Figures like these have attracted attention from large food companies trying to reduce the climate impact of their supply chains.

Perfect Day has already collaborated with key players like Nestle SA and Starbucks, and Unilever is currently working on a dairy ice cream made from animal-free milk.

“The food industry is in a sustainable evolution—with solutions from traditional leaders, plant-based visionaries, and innovators like us," Briggs explained. “We believe that the future is one where contributions from and collaboration between all of these groups will create a more diverse, sustainable food system."

Both Briggs and Toriello spoke passionately about a “future food system" that could be made possible by animal-free proteins.

“For the first time, an animal-free protein is offering the same nutritional value and performance as the original. Unlike with plant-based alternatives, you don't have to sacrifice—the flavor, textures, and performance are there," explained Toriello.

“It's incredible," he said. Food Institute Focus 


Restaurant Sales Grow in December, but Pace is Starting to Slow

Although U.S. restaurant sales continued to grow at the end of 2022, Black Box Intelligence noted the pace of growth is starting to slow, which could be a prelude to impending challenges for the industry.

U.S. restaurant same-store sales increased 4.8% year-over-year in December 2022, representing a 1.5 percentage point increase compared to November's year-over-year results. That said, the two months were the weakest for sales growth since the industry began a rebound back in August 2022.

Guest counts continue to be a struggle for the industry, with comparable traffic down 3.5% in December when compared to the year before. Same-store traffic growth has been negative since March 2022. Full Story


Selected Results:

·  McDonald's quarterly profits beat expectations and were bolstered by new menu offerings despite price increases. Global sales rose 12.6% year-over-year and benefitted from novel (and returning) menu items such as the McRib, adult Happy Meals, and its partnership with Dunkin Donuts, reported The Wall Street Journal (Jan. 31). Full Story

·  Chipotle Mexican Grill falls short of expected earnings, revenue, and same-store sales. Fourth-quarter results were bleaker than expected for Chipotle, and CEO Brian Niccol says the company hasn't seen a negative response to higher-priced burrito bowls and tacos. Chipotle plans to open over 250 new locations in 2023 and wants to hire 15,000 workers, reported CNBC (Feb. 7). Full Story

·  Taco Bell's same-store sales rose 11% in the fourth quarter. Same-store sales grew 8% in the U.S. and 7% internationally. The brand continues to find success with the return of Mexican Pizza and improved breakfast sales with ads featuring comedian Pete Davidson, reported Restaurant Business (Feb. 8). Full Story

·  Texas Roadhouse has set a traffic record. Traffic is up 10% through seven weeks and same-store sales are up 15.8% during that time at the 697-unit chain, reported Restaurant Business (Feb. 16). Full Story

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