https://campaign-image.com/zohocampaigns/133052000002474026_zc_v6_artboard_1.png
Want More Chain Insights from DMA?
https://campaign-image.com/zohocampaigns/739223000019319004_zc_v13_1660649633628_justin.jpg

There are two NEW weekly offerings for you!


DMA now publishes the Weekly Brief and Supply Chain Headlines four times per month to keep you up to date on the very latest chain restaurant data and news.

  • DMA Weekly Brief is currently available to customers and members with proprietary insights from industry leaders such as Technomic, Datassential, Placer.ai and others
  • DMA Supply Chain Headlines are also distributed weekly to customers and members covering supply chain issues across sectors beyond restaurants

Want to see a sample issue or subscribe to these proprietary publications? Just send Charley an email and ask to be added to the distribution list.

Shed Light on Ineffective
Cleaning and Sanitizing

Is There a Better Way to Sanitize?

Are you still using a red bucket and reusable cloths in your establishment? This may not be as effective as you may think. At GOJO Industries, we conducted a series of demonstrations to visualize the limitations of this traditional cleaning method. Check out “The Milkshake Demo” and see for yourself why it may be time to reevaluate this outdated approach to turning tables. Revealing UV light photography shows an icky reality: streaky residue left behind on surfaces that were supposed to be clean.

INDUSTRY NEWS

Research Shows Gen Z Welcomes Loyalty Programs, Sharing Data

Gen Z and millennials may be coming into their own, but those aged 18-43 differ markedly from both Gen Xers and baby boomers when it comes to restaurant habits, and attitudes toward loyalty programs.


A recent survey of 2,000 adults conducted by OnePoll indicates 41% of Gen Zers and millennials suffer "menu anxiety" when ordering from a restaurant compared to 15% of Gen Xer and baby boomers.


Meanwhile, an incogni survey of 1,000 adults indicates Gen Zers are more into loyalty programs than their elders, believing they save significantly through such offers.


Gen Z's Unique Characteristics

McKinsey Quarterly noted Gen Z will make up more than a quarter of the global workforce by 2025 and members of this cohort have different ideas about compensation, career development, workplace flexibility and purpose than employers encountered with earlier generations.


Gen Z is far more concerned about hostile work environments, mental health, access to transportation, physical health, the inability to show who they truly are and an easy commute. They also don't want to just fit in, willing to spend on luxury items if that will make them stand out. The cohort puts much more stock in social media than other types of influence even though it has taken a toll on mental health.


Talker.news noted that OnePoll's survey found nearly half of younger Americans (47%) often wait for others to place their restaurant orders so they can see what the meal looks like and nearly a quarter (24%) said they always check the menu before going to a restaurant.


Taste and cost were the most important factors in meal selection, followed by time needed for preparation, whether the meal would be messy and the environmental impact, the last of major concern to a fifth of Gen Z and millennials. The "vegan" and "vegetarian" labels were a big draw for younger Americans (39% and 34%, respectively) compared to 15% and 17% of Gen X and baby boomers.


Looking for Loyalty

Some 90% of businesses currently offer loyalty programs and reap the benefits of gathering user data, which then is sold to third parties, incogni noted. Of three of the 12 loyalty programs examined — McDonald's, Starbucks and H&M – McDonald's was the best deal for consumers, offering a 20% return, while Starbucks returned 4.6 cents for every dollar spent and H&M returned $2.50 in store credit.

Perception, however, is everything.


"There seems to be a disconnect between how much people think they save versus how much they actually do. The bottom line: Consumers think they save $56 [average] but would really have to spend hundreds — sometimes thousands — of dollars a month to reach such savings," incogni said in a blog post.


incogni estimates you would need to spend $1,200 at Starbucks and $281 at McDonald's to save $56 a month. Gen Z respondents thought they saved $58.90 a month while millennials thought they saved $57.10.


Gen Z and millennials were most comfortable with sharing their personal data, including sensitive personal information, geolocation, biometrics, electronic network activity and identifiers. Food Institute Focus


Spice It Up: Burritos and Hot Chicken Are on Fire

Restaurant chains specializing in spicy offerings are gathering steam in 2023.


Case in point: Dave's Hot Chicken, which grew from two locations to 118 over the past few years, saw May 2023 visits increase 126.6% year over year. Bubbakoo's Burritos, a New Jersey-based Tex-Mex chain, saw its May 2023 visits grow nearly 8% year over year.


"Spicy chains like Bubbakoo's Burritos and Dave's Hot Chicken are winning over customers by leveraging the addicting nature of spiciness," Stephan Peng, CEO of hot sauce company Redbloom, told The Food Institute. "As the world becomes more interconnected, people are becoming more adventurous and exploring global cuisines that are inherently spicy."


Flavors like Thai, Sichuan, and Mexican appear to be as popular as ever, judging by data from Placer.ai's recent report on five fast-growing dining chains. Bubbakoo's Burritos, which blends Asian and Mexican flavors, proves as much. The nearly 15-year-old chain, which is enjoying continued expansion on America's East Coast, has seen its foot traffic increase in a year-over-year comparison every month of 2023 so far.


The ascent of Dave's Hot Chicken has been nothing short of meteoric. Its founders started the chain in a California parking lot in 2017 with little more than $900, according to Placer.ai. One of the chain's backers includes accomplished Hollywood producer John Davis (of Dr. Dolittle and Predator 2 fame). Seizing on consumers' growing demand for spicy chicken, Dave's has 70 new locations planned for this year.


Other brands listed among the fast-growing chains included Cooper's Hawk Winery & Restaurant, Killer Burger, and Jinya Ramen Bar. But, above all else, Placer.ai's research showed that America's desire for spicy dishes shows no signs of slowing.


"When you eat spicy food, your body responds to the heat caused by capsaicin – the compound that makes peppers hot," Peng said. "This prompts the brain to release endorphins, which are natural painkillers that give us feelings of pleasure. This endorphin rush can be addictive, leading people to seek out the experience again and again." Food Institute Focus


Analysis: Are "Virtual Brands" at Death's Door?

The recent struggles of MrBeast Burger – currently available at more than 2,000 restaurants – could be an ominous sign for all virtual brands.


Ubiquitous YouTuber MrBeast, aka Jimmy Donaldson, wrote multiple statements in frustration late last week, claiming he is "moving on" from MrBeast Burger, the delivery-only restaurant brand he created with Virtual Dining Concepts.


"The problem with virtual brands, and ghost kitchens specifically, is that it's harder to keep a level of consistency with the quality of the product across multiple sites," Kay Gowrinath, CEO at Xquisite Productions, told The Food Institute.


Donaldson posted on Twitter that he'd prefer to focus more on his snack brand, Feastables, as noted by Restaurant Business. The statements appear to leave MrBeast Burger with a rather murky outlook. The virtual brand launched in 2020, promptly went viral thanks to MrBeast's millions of online followers, and made $100 million in revenue from its inception in December 2020 through July 2022. Yet, MrBeast Burger often suffered from negative reviews that complained of salty, overcooked, or soggy food, reported nrn.com.


Last week Donaldson said he'd like to shut down MrBeast Burger "but the company I partnered with won't let me stop even though it's terrible for my brand."


"Ghost kitchens like MrBeast Burger have caused significant disruptions in the traditional restaurant industry by leveraging technology and delivery platforms to create virtual-only brands operating out of shared commercial kitchen spaces," Gowrinath noted. "Virtual brands cater to evolving [consumer] demands by providing a wide variety of food options, affordable pricing, and quick delivery."


MrBeast Burger is distributed by several different restaurants that are licensed to cook and sell its food for delivery or pickup only. The concept allows those restaurants to use the additional online storefront to generate extra revenue, as noted by Restaurant Business.


But quality control (along with waning consumer demand for delivery) has become worrisome for virtual brands. Nextbite, one of the leaders of delivery-only concepts, sold itself earlier this month, shortly after laying off many of its staff, according to multiple reports.


"The biggest downfall of virtual-only brands," Gowrinath said, "is logistical difficulties – and for virtual brands that rely on physical product delivery, logistics can pose a significant challenge.


"Managing online platforms, logistics, order fulfillment, and customer service in the digital realm requires efficient systems and processes," the branding and marketing expert added, "meaning virtual brands need to invest in robust technology infrastructure, customer support capabilities, and effective supply chain management to ensure smooth operations." Food Institute Focus

Dawn Professional Heavy Duty: The 5-Star Reviews Are In!
P&G Professional's newest addition, Dawn Professional Heavy Duty Manual Pot & Pat detergent, is our strongest pot and pan detergent yet, and commercial kitchen dishwashers love it. "Takes off hard stuck-on grease so easily. Big pots and pans that need to be hand washed don't stand a chance against this." 

Dawn Professional Heavy Duty is formulated to reduce scrubbing by 50% when compared to Dawn non-concentrated. P&G Professional is committed to developing innovations that help you achieve a high standard of clean. See the new Dawn Professional Heavy Duty in action.

Store News:

After a memorable meltdown, Ample Hills Creamery plans to rise again. The Brooklyn-based ice cream chain once boomed with the help of Oprah and Disney, then went bust. But the couple behind it are opening new shops and thinking smaller, reported The New York Times (June 16). Full Story


Starbird has revamped its chicken sandwich line with the 4-oz. "Starbird 2.0" sandwich, a new Seoul Star sandwich (Korean), and the Cali Bacon Sandwich with thicker bacon and a larger fillet, reported Restaurant Business (June 21). Full Story


Starbucks is creating a sustainability and innovation lab. The lab is being built in Costa Rica near its old research and development headquarters and is designed to help develop sustainable product practices, reported Restaurant Business (June 22). Full Story


As it nears sale, Subway is touting its robust international recovery. Over the past two years, the sandwich juggernaut has signed deals for more than 9,000 new units, helping fuel a turnaround once thought impossible, reported Restaurant Business (June 30). Full Story


At Salt & Straw, a Portland, Oregon-based ice cream chain, previously wasted food is transformed into unique upcycled flavors. Shops from the Pacific Northwest to Miami now feature flavors like "Cacao Pulp & Chocolate Stracciatella Gelato," which is made from leftover cacao pulp from chocolate production that otherwise would have gone to waste, reported ABC News. Full Story


Yum Brands is going to start collecting more data on customers. The owner of KFC, Pizza Hut, and Taco Bell is working with data platform Treasure Data to garner a more centralized view of customer data across all brands to improve diners' digital experiences and encourage more frequent return customers, reported Restaurant Business. Full Story


Officials with the MOD Pizza chain claim that eliminating background checks for entry-level jobs has helped it significantly eliminate barriers to employment. The decision is part of the QSR's effort to have an inclusive culture that includes working with justice-involved individuals and those with intellectual and developmental disabilities, reported HR Brew (May 5). Full Story


Firehouse Subs has opened its first location outside of North America, in Zurich. Plus, the chain has a development deal in Mexico, reported Restaurant Business (June 22). Full Story


Taco Bell, the country's fourth-largest fast-food chain, believes there's "no reason" it can't grow as large as McDonald's. Robust unit development and rising in-store sales motivate Chris Turner, CFO of parent company Yum Brands, who cited Taco Bell's 196 new locations in 2022 (2.8% unit growth), reported Restaurant Business (June 27). Full Story


Chipotle is testing a pilot program for robots named AutoCado that can make guacamole faster. It takes almost an hour for the chain to prep its guac while the larger industry struggles to find reliable workers amid rising labor costs. Chipotle announced its $50 million venture arm, Cultivate Next, is investing in Vebu, the company making the robots, reported CNBC (July 12). Full Story


Meanwhile, Chipotle has signed an agreement with Kuwait-based Alshaya Group, its first-ever franchise partner, to open Chipotle sites in the Middle East next year. CEO Brian Niccol said the initial plan calls for two locations each in Kuwait and Dubai, reported CNBC (July 18). Full Story


Gen Restaurant Group raised over $43 million in its IPO. The operator of Gen Korean BBQ priced its shares at the high end of their range ($12) and the company's stock soared more than 40% in early trading on June 28. Gen Korean is a regional chain with 34 units in seven states in the western U.S., reported Restaurant Business (June 28). Full Story


Del Taco and Carl's Jr. are the latest fast-food restaurants to test out drive-thru AI chatbots. Presto Automation Inc., which makes the drive-thru chatbot, said the system uses artificial intelligence to improve the responses over time, reported Bloomberg (July 10). Full Story


Domino's Pizza partnered with Uber to allow customers to order Domino's products through the Uber food delivery ecosystem. In April, Domino's warned of a slowdown in its delivery business as customers turned towards cooking cheaper meals at home, reported Reuters (July 12). Full Story


Donatos Pizza is launching a pizza vending machine. The chain and its sister companies Agape Automation and the Grote Co. are working together with robotics firm Appetronix to create a fully autonomous restaurant that will debut in Donatos' hometown of Columbus, Ohio. An opening date has not been set, reported Restaurant Business (July 13). Full Story


Darden Restaurants beat its fourth-quarter earning estimates. Fueled by strong LongHorn Steakhouse sales, the above-expected results do not even account for its acquisition of Ruth's Chris Steak House, reported CNBC (June 22). Full Story


Executives on the Move:

DMA announced recently that President and CEO Pat Mulhern will leave the company later this year. Mulhern is leaving to re-engage in strategy, advisory, and investment work.


Dutch Bros has named Tana Davila as its chief marketing officer. Davila comes to Dutch Bros from her role as top marketing executive at CKE Restaurant Holdings. Full Story


Sean Tresvant will take over as Taco Bell's CEO on January 1. The chain's chief brand and strategy officer will take over the top job for Mark King. Full Story

SUPPLY CHAIN NEWS

Report: AI Poised to be Business Boon

We haven't quite hit the promise of HAL in "2001," but generative artificial intelligence is poised to revolutionize nearly all aspects of business, including the food industry.


A recent report from McKinsey & Co. predicts major increases in productivity and threats to the livelihoods of workers in 850 occupations, including customer operations, marketing and sales, software engineering, and research and development, Bloomberg recently reported.


The report estimates coming advances will be worth $4.4 trillion, or 4.4% of the global economy.


In the food industry, these changes are expected to streamline everything from the way food is produced on the farm to the way it is presented in the grocery store and delivered to restaurant diners.


The good news for those whose jobs are impacted is that unlike earlier waves of automation, workers likely will find themselves shifted into different functions or different professions.


Categories Impacted Most

The report found middle managers at the most risk of displacement by AI. The McKinsey report noted:

"Current generative AI and other technologies have the potential to automate work activities that absorb 60% to 70% of employees' time today."


The report also noted that "the acceleration in the potential for technical automation is largely due to generative AI's increased ability to understand natural language, which is required for work activities that account for 25% of total work time."


Max Zats, chief technology officer of Craftable, told The Food Institute AI will be incorporated into everything from automating invoicing to business intelligence solutions.


"We're now seeing how we're able to do some incredibly complex functionality and deliver it in a simple way: creating optimal schedules, real-time staffing and shift changes, and powerful budgeting and sales forecasting tools," Zats said.


Other experts told The Food Institute farm operations will be incorporating robots for planting and monitoring growing conditions, as well as optimizing water and fertilizer use. From there smart labeling and packaging is expected to allow consumers to better judge the freshness and safety of products. AI also can estimate consumer demand, optimize inventory management and minimize losses, as well as create personalized diet plans.


Restaurant Industry Revolutionized

As much as 35% of the multibillion-dollar restaurant industry goes to labor costs.


Kam Talebi of Butcher's Tale expects to see food vending machines and robots replacing people manning the counters and doing the cooking in the fast-food sector and predicted:


"A human employee will only show up [at QSRs] for maintenance or repair," Talebi said, adding, it's unlikely, however, that will spread to casual dining.


Anthony Buzzetta, CEO of tech company G TIER, said the shift toward AI may force some small companies out, unable to compete on a cost basis with their larger competitors that can afford the technology investment.


Lareina Yee, a senior partner at McKinsey and chair of technology, said in the report business leaders "need to understand which activities can be changed and how they want to rethink that. That is a leadership choice, and it's also execution." Food Institute Focus

ECONOMIC PULSE

Accelerated Check Growth Boosts Restaurant Results

Same-store sales rose 1.9% in May when compared to the prior year as comparable traffic slowed by 3.5%, according to GuestXM by Black Box Intelligence. The group noted a softening in sales tracing back to January.


"The comparison to Q1 performance is tricky because the favorable Omicron lap created unusually strong growth rates during the first months of this year. But what is clear is restaurant sales growth is not as strong as it was during the last months of last year, immediately before the Omicron boost came into effect. As a comparison, restaurant same-store sales growth averaged 4.4% for the months included in Q4 2022," the report read. Full Story

https://campaign-image.com/zohocampaigns/739223000019319004_zc_v5_1615489685094_mufsobackground.png
 

For regional chains looking to grow quickly and selectively across the US, DMA Offers the one national network that can be customized specifically to your needs to serve your long term expansion plans.

DMA Delivers