Learn how the pandemic is shaping restaurant opportunities from two industry-leading firms. Technomic's Wade Hanson will discuss the prospects for industry innovation and growth, while Kinetic 12’s Bruce Reinstein and Tim Hand provide insights into the restaurants of the future.
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Where are menus heading in 2021?
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What is next for restaurant design?
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How will the industry perform?
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What will stay (and what won't) by the end of the year?
Leverage expert analysis and take advantage of opportunities in this tumultuous market!
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DMA Partners with ECRM on Foodservice Program
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DMA has partnered with ECRM on their upcoming Foodservice Program. This is a free virtual opportunity for operators to meet one-on-one with food, beverage, grab & go, supply and equipment vendors.
How does it work?
- A pre-determined meeting schedule is tailored to align with your company capabilities and objectives.
- 10- or 20-minute appointments are conducted back-to-back for 3 to 4 hours each day, for 3 days. ECRM coordinates and facilitates it all!
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Meetings are executed virtually through ECRM Connect, a customized meeting technology solution that features video conferencing, meeting management and documentation including notes and product selections.
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Demand for Cold Storage Continues Higher on Strength of Food and Pharmaceuticals
The global cold storage industry has been strong for some time, fueled by the popularity of online grocery sales and subscription meal services, consumer preferences for fresh and perishable goods, and the growth of pharmaceutical products that require specialized storage.
The pandemic also added an additional layer of industry support, forcing producers to abandon just-in-time inventory models, make significant changes to processes, and incorporate cold storage into their operations.
- The total capacity of refrigerated warehouses worldwide was 719 million cubic meters in 2020, 16.7% higher than 2018.
- North America and China accounted for most of the increase in reported capacity since 2018.
- The United States, at 156 million cubic meters, was the single largest country market, followed by India at 150 million cubic meters.
- Canada, the United States, Brazil, and the Netherlands all had average warehouse size of more than 100,000 cubic meters.
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The top three global players are Lineage Logistics, Americold Logistic, and United States Cold Storage.
- Mexico, Brazil and China have the largest unmet need for refrigerated warehouse space.
- Worldwide, the average 2020 cold storage capacity per urban resident was 0.15 cubic meters.
Against this backdrop, the cold storage market was valued at $89.32 billion in 2018 and is projected to reach $217.59 billion by 2026, growing at a compound annual growth rate of 11.71% from 2019 to 2026.
Obstacles Ahead
One significant challenge for the industry is that demand for cold storage is outpacing supply. In the U.S., for example, the supply of cold storage facilities is outdated and construction of modern facilities lags demand, according to JLL Research. And more than 78% of cold storage buildings in the U.S. were built before 2000, indicating they often lack the resources of modern cold operations.
With that, businesses are faced with the challenge of securing cold storage for both the short and long term. In addition to new construction efforts, there has been considerable acquisition activity, retrofitting of older warehouses to accommodate demand, and the implementation of innovative strategies to expand, reduce waste and transport temperature-sensitive products.
Lineage Logistics, the world’s largest operator, added more than 70 locations spanning over 230 million cubic feet in six countries in 2020. And the company picked up right where it left off earlier this month.
The cold storage specialist acquired Cryo-Trans, an owner of refrigerated and insulated railcars, to capture an additional leg of the food and beverage supply chain. The transaction values Reisterstown, Maryland-based Cryo-Trans at more than $500 million.
“A move into rail is part of our effort to be a one-stop-shop for our customers and eliminate waste within the food supply chain,” Lineage CEO Greg Lehmkuhl said in an interview. By replacing some trucking capacity with rail, customers may reduce transport costs by 15% to 40%, depending on the shipment size and distance traveled, he estimated.
According to Bloomberg News, roughly 90% of Cryo-Trans customers are already part of Lineage’s network, and Lineage will seek to partner with its existing customers so that, for example, rail cars transporting French fries from the Pacific Northwest to Southeastern states are packed with poultry for the return trip.
Last month, Lineage’s top rival, Americold, closed its $1.74 billion purchase of Agro Merchants Group, the fourth largest temperature-controlled warehouse company. The deal expands Americold’s strategic footprint into Europe, with established access to the European food logistics network, and positions the company to more effectively serve multinational customers on a global scale.
Innovation Pushing the Market Forward
The pandemic also pushed operators to innovate and invest in new distribution strategies like increased automation, contactless technologies and blockchain solutions.
“By some estimates, we’re already seeing, or will see, accelerated adoption of some trends to take place in a mere 10 weeks when they could have otherwise taken 10 years,” a group of Cushman & Wakefield executives wrote in the company’s The Zone magazine.
As demand for cold storage increases and operators continue to innovate, the market is poised for growth for years to come. Food Institute Focus
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2020 Will Also Be Remembered as the Year of Chicken and Pizza
If 2020 proved anything, it’s that Americans simply can’t get enough hot chicken and pizza and pandemic lockdowns only strengthen the country’s demand for the two delivery staples.
With many consumers preferring to eat at home for fear of contracting the coronavirus, delivery platforms have thrived. Delivery platform DoorDash handled nearly 543 million orders between January and September, representing a three-fold increase from usual figures.
“Consumers who had never ordered from delivery platforms have adopted the convenience,” said a spokesperson from ghost-kitchen operator Nextbite, in a recent interview with Global Times.
And, in 2020, restaurants serving chicken and pizza were prime beneficiaries of the pandemic’s restrictions.
The Wing’s the Thing
Even though the COVID-19 pandemic brought periodic halts to in-restaurant dining, restaurants specializing in chicken thrived in 2020, led by chain Wingstop, which saw sales rise 32.8% in the third quarter. Even chains without a track record for selling hot wings turned a larger focus to selling the menu item; Domino’s, for example, redesigned their wings to improve their taste and texture, and expanded its sauce options.
Casual-dining chains like Applebee’s are getting in on the hot-wing craze as well, as it’s testing a “Neighborhood Wings” concept in 700 units.
Sandwiches’ Success
Meanwhile, spicy chicken sandwiches were the most-ordered item of the year according to delivery platform GrubHub, reported Restaurant Business. All told, fried chicken sandwich sales grew 318%, year over year.
Factors such as the fact fried chicken sandwiches are fairly easy to execute have touched off a fierce competition among fast-food chains. Chick-fil-A is currently testing a Honey Pimento Chicken Sandwich, and competitors like KFC, Church’s and Zaxby’s all expanded their sandwich offerings in recent months.
Most chains’ sandwiches include similar elements: a crispy chicken fillet, pickles, and a premium bun. And with many fast-food competitors joining the chicken sandwich competition – including the likes of BurgerFi and Golden Chick – the battle appears destined to continue into the new year.
Pizza Chains Push On
Few restaurants were as well-equipped to withstand the challenges of the COVID-19 pandemic as pizza chains. And, as a result, companies like Domino’s and Papa John’s enjoyed a surge in business (which no doubt factored in to those chains doling out employee bonuses that added up to $9.6 million and $2.5 million, respectively, according to Louisville Business First).
To get in on consumers’ increasing demand for pizza in recent months, some fast-casual brands, like Panera Bread, began offering the popular menu item for the first time.
Other more established pizza restaurants altered their offerings to adapt to increased demand for delivery. Blaze Pizza, for instance, added a version with a thicker crust, which aids heat retention. The impetus behind the decision: Blaze aimed to secure a larger portion of dinner business from those sheltering at home. Food Institute Focus
Impossible Foods Cuts Wholesale Prices to Better Compete with Traditional Ground Beef
Impossible Foods is cutting foodservice distributor prices for the second time in a year as part of its push to better compete with traditional ground beef.
The maker of soy-based meat alternatives is dropping prices by an average of 15% in the U.S. as demand for plant-based products continues to rise. Alternative meat sales were up 61% in December from a year ago, year, while overall meat saw an increase of 17%, according to data from Nielsen.
Impossible Foods products are currently available in the U.S., Canada, Hong Kong, Macau, and Singapore, and there is plenty of room for the global expansion. For example, the number of vegans in the UK increased by 419,000 (62%) over the past 12 months alone, according to a survey by finder.com.
The new price cuts make Impossible Foods’ meat less expensive than premium, grass-fed, organic beef for the first time, company spokesperson Rachel Konrad told New York Post. “We experienced skyrocketing growth in 2020, which allowed us to go into high production and to cut our per unit costs,” Konrad said.
Konrad noted that the company is planning on more price cuts this year, but that distributors and restaurants will control whether or not consumers will see the lower prices.
While Impossible Foods products used to be hard to find, they are now available at major fast-food chains, such as Starbucks and Burger King, as well as 17,000 supermarkets. Food Institute Focus
Plant-Based Seafood Coming Ashore in 2021
While plant-based beef held center stage in 2020, vegan-friendly seafood appears to be waiting in the wings for its big moment.
Veganism is as popular as ever, according to Google data showing vegan-related searches were up 47% in 2020. The movement is also almost twice as popular as it was just five years ago, reported Chef’s Pencil.
And as more people turn to the vegan lifestyle, plant-based seafood is poised for growth.
New Wave Foods
Manufacturer of 100% plant-based shellfish products New Wave Foods recently completed an $18 million series A financing round. The company will initially focus on selling its plant-based shrimp, which is made of sustainable seaweed and plant proteins, to restaurants and foodservice locations.
Shrimp is the most consumed seafood in the U.S. with Americans eating an estimated 1.5 billion pounds annually—twice as much as salmon or tuna—with 80% consumed at foodservice locations.
“Our focus is on offering customers a new, innovative, plant-based shellfish, beginning with the introduction of our plant-based shrimp. Along with a delicious tasting product, we aim to address the environmental issues that come with shrimp farming and overfishing,” said New Wave Foods CEO Mary McGovern in a press release.
The company also plans to expand into plant-based lobster, scallops, and crab following the rollout of its shrimp product.
Hooked Foods
Swedish plant-based seafood manufacturer Hooked Foods has also secured funding of about $600,000 ahead of the rollout of its vegan tuna, reported The Spoon (Dec. 16, 2020).
“Toona” is made from ingredients including soybeans, sunflower oil, and algae. The product also contains a high protein content with Omega 3 fatty acids. It will be available in major Swedish restaurant chains in the spring.
Google data also found that Sweden is one of the top vegan countries, so Toona will likely resonate with consumers. Following an initial launch in Sweden, the company plans to expand globally later this year. Food Institute Focus
Booming Online Chipotle Sales Open the Door for New Growth Areas
Chipotle’s online business soared during 2020, making up more than half of sales. With that, the digital boom is likely leading the company to consider more drive thrus and introduce breakfast options.
Drive Thrus Could Lead to Breakfast Rollout
Chipotle opened its first “Chipotlanes” in 2018 as part of its push into digital ordering. The drive-thru lanes are only for digital order pickup to cut down on the chain’s indoor lines and speed up service.
According to a BTIG analyst note, Chipotlanes could help the company get into the breakfast business, reported MarketWatch. “We estimate this format could reach more than 1,000 units over the next five years, allowing the company to expand its operating hours (late-night) with limited incremental costs and potentially open the door for new dayparts like breakfast,” BTIG said. “We view Chipotlane as the next generation drive-thru experience that should serve as a cornerstone of future unit growth.”
BTIG said that restaurants with Chipotlanes generate 10% higher sales than those without one, and it expects further expansion as digital adoption and consumer awareness increases. Chipotle could potentially offer a digital-only breakfast menu that is handled by three-to-four employees for several hours in drive-thru locations with dining rooms closed.
BTIG, which recently raised Chipotle’s price target to $1,600 from $1,450, also said Chipotle’s investment in drive-thru restaurants will allow the company to unlock greater menu innovation and strengthen new unit returns. Analyst Peter Saleh said this format could reach more than 1,000 units over the next five years.
Boost in Chipotle Hiring Activity
To keep up with exploding digital sales, Chipotle is also going on a hiring spree. The company is holding a nationwide hiring event on Jan. 14 where it aims to fill 15,000 roles to further expand operations, reported Fox Business.
The company also promoted nearly 11,000 employees during 2020. “We are fortunate to be experiencing growth during this unique time and want to safely provide an opportunity for purpose-driven individuals to join us on our mission of cultivating a better world,” said Marissa Andrada, Chipotle chief diversity, inclusion, and people officer.
Back in May of last year, the company began a campaign to drive hiring, resulting in about 8,000 new employees, reported CNBC. A few months later in July, it again pledged to hire 10,000 more workers. Food Institute Focus
Executives on the Move:
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Darden Restaurants named CEO Gene Lee as Chairman of the Board, reported QSR Magazine (Dec. 18, 2020). Full Story
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Potbelly named Adiya Dixon chief legal officer and secretary. Full Story
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Tim Hortons named Tallis Voakes its top chef to elevate the chain’s menu items, reported Meat + Poultry (Dec. 31, 2020). Full Story
Store News:
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Dave’s Hot Chicken inked a franchise agreement with DHC Tarrent County, LLC to open 12 locations, reported QSR Magazine (Dec. 21, 2020). Full Story
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Bubbakoo’s Burritos signed a 10-store development agreement with franchise group O-Burritos, reported QSR Magazine (Dec. 21, 2020). Full Story
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Saladworks parent company Centre Lane Partners acquired Garbanzo Mediterranean Fresh and Frutta Bowl. Centre Lane Partners is also changing its name to WOWorks. Full Story
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Legal Sea Foods, operator of more than 25 restaurants along the East Coast, will be sold to PPX Hospitality Brand. After the deal closes, PPX will own and operate all restaurant concepts under the Legal Sea Foods banner, reported MassLive.com (Dec. 22). Full Story
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Shake Shack paid employees nearly $6 million more in 2020, including a $250-$400 holiday bonus for all hourly team members, reported QSR Magazine (Dec. 22, 2020). Full Story
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Dickey’s Barbecue Pit opened ghost kitchens in Chicago, IL, Orlando, FL, and Oakland, CA. Full Story
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Wahlburgers plans at least 15 locations across Australia, reported Daily Mail (Jan. 4). Full Story
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A Peak Rock Capital affiliate acquired Shipley Franchise Co. and Shipley Do-nut & Supply Co. Shipley has over 300 locations in nine states, with a strong reputation for donuts, kolaches, beverages, and guest service. Full Story
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McDonald's plans to launch three versions of a crispy chicken sandwich Feb. 24. The products, available in classic, deluxe, and spicy versions, will feature a new crispy white meat chicken fillet served with pickles on a potato roll, reported New York Post (Jan. 4). Full Story
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Black Angus Steakhouse has temporarily closed most California locations due to COVID-19 restrictions and has given no hint as to when they will reopen, reported SiliconValley.com (Jan. 5). Full Story
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Wendy’s and Flynn Restaurant Group agreed to terms on NPC’s bankruptcy sale. Flynn will buy half of the 393 Wendy’s locations being sold by the bankrupt operator, along with all its 900 Pizza Huts, reported Restaurant Business (Jan 7). Full Story
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Burger King introduced its first rebrand in over two decades. The rebrand includes a throwback logo; a move towards removing artificial colors, flavors, and preservatives in all products by the end of 2021; and a "Restaurant of Tomorrow" model which features two drive-thru lanes and dedicated spaces for curbside pick-up, reported Forbes (Jan. 7). Full Story
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Johnny Rockets opened 12 locations across Brazil, Chile, Italy, Peru, and Spain. Full Story
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Checkers Drive-In Restaurants Inc. received a $20 million capital injection from Oak Hill Capital Partners IV. The capital will be used to fund Checkers & Rally's five-year growth plan. Full Story
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Taco Bell will bring back cheesy fiesta potatoes and the spicy potato soft taco on March 11, reported Richmond Times-Dispatch (Jan. 14). Full Story
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Same-store sales dropped 13.26% in December 2020 when compared to December 2019, according to Black Box Intelligence. The drop represented the second consecutive month where same-store sales growth fell by more than 3percentage points. Black Box noted an increase in COVID-19 cases and winter weather hindered dining demand. Same-store traffic growth dropped 18.62%, a full three percentage points below November’s growth rate. Full Story
Meanwhile, restaurants and bars lost their place as the largest employment category tracked by the Labor Department in 2020, according to Wall Street Journal analysis. Meanwhile, warehouse positions and courier and messenger jobs have increased during the pandemic. Full Story
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Datassential Takes the Guesswork Out of Menu Innovation
If the success of Wendy’s nationwide breakfast roll out in the midst of a worldwide pandemic is any indicator, menu innovation matters more than ever. Considering the disruption to morning school and work routines, this growth is a testament to the love consumers have for restaurants and the draw of new items.
Developing the ‘next big thing’ is an art that can be optimized by data. SCORES, Datassential’s menu concept testing platform, can simplify your innovation process. Quickly screen concepts with a sample of 1,000 consumers to understand key performance indicators like purchase intent and uniqueness. We are pleased to offer a special DMA Partner Rate for testing.
Contact Kelley Fechner to learn more about this limited time partner rate, and take your menu development to the next level or click here to learn more.
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Superior Performance for One Less Thing to Worry About
At P&G Professional, we believe Every Experience Counts. With years of innovation and product development to our name, our cleaning products and programs feature well-known and trusted brands. Let us help you develop and deliver a Best-in-Class Cleaning Program to ensure every Experience counts for both your employee’s and customers.
While most foodservice professionals and operators are familiar with Dawn, Comet, and Spic N Span , please see the attached link on new and innovative Safeguard and Microban products which provide added protection against COVID-19 and other harmful bacteria and pathogens. Additionally, take a look at an overview of our complete Total Food Service Solution and offerings, featuring Cascade Professional, Dish machine Equipment and 24/7 Service & support. Learn more via this brochure.
Feel free to contact us to learn more. Please contact James Kennedy (kennedy.jh@pg.com) , Bruce Bykowski (bykowski.bd@pg.com) or Taft Sales (sales.tl@pg.com) to learn more about the Total Foodservice Solutions program from P&G Professional... delivered by DMA!
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Trusted Partners, Committed to Delivering the High-Quality Products You Need
The PURELL brand understands the importance of making sure that restaurants have access to the highest quality formulations of hand sanitizer. And to make that happen we are making investments in our facilities and team, and overcoming many supply challenges to meet demand. Watch this video on Our Commitment to you and your customers, and learn more about our efforts to ensure you have the products you need.
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1515 East Woodfield Road, Suite 820
Schaumburg, IL 60173
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