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DMA Honors Distributor Members
at Awards Ceremony
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DMA
celebrated its customers and distributors last week, Big Easy style in New
Orleans. The two-day industry event closed with an awards ceremony honoring
multiple winners from DMA’s national network. What started with nine founding
members in 1988 has grown and evolved into today’s integrated national network
supported by eleven distributors. The conference served as an opportunity for DMA’s
Superior Operator Partners to recognize distributor members who have gone above
and beyond in 2024.
The Large
DC of the Year field faced stiff competition. There were more DCs in this category, more votes per
DC and tighter scores at the top. In fact, there were three in a very close
race. The two runners-up were Nicholas Salt Lake and Ben E. Keith Missouri.
Both received incredibly high scores and are certainly very appreciated by
their customers.
The
winner of the Large DC category was Ben E. Keith Fort Worth. This distribution center received
the highest score in any category and was a runner up in last year’s
competition, as well. Ben E. Keith Fort Worth received more #1 votes than any
other DC and one of the highest scores for commercial support, which was ranked
as the most important area of focus by customers. One customer commented that
Ben E. Keith Fort Worth’s strength was “the ability to provide excellent
customer service and operational support, characterized by quick resolutions
and strong communication, especially during challenging times.”
In the
category of medium sized distribution centers, this year’s race featured two honorable mentions,
GFS Kannapolis and Martin Bros. The Martin Bros. DC actually had nearly
identical scores in the performance criteria as the winner, but just a couple
fewer #1 ranking votes than the DC receiving the award. The winning DC was
DiCarlo Foodservice. DiCarlo is a first-time winner, just edging out the
runners up in this category but with strong scores in account and commercial
support.
The final DC
award was presented to one of the up-and-coming centers – because they’re
usually just getting started in the DMA network. There were fewer candidates
considered in this category compared to last year, which is a sign of growth
within the network. The two runners-up in this category were Ben E. Keith
Florida and Shamrock New Mexico, both of whom we will be keeping an eye on next
year!
The
winner of the small DC category was BiRite. Their top score in “ability to support the brand and
never disappoint a guest” made the difference in this group.
The
Distribution Center awards have evolved over the years, but the criteria has
been consistent – each customer rates each distribution center on seven
different categories of service. Those results are then compared to similarly
sized DCs throughout the national network. It’s important to note that “size”
of the DC is relative to the scale of the DMA business that particular house
serves. The criteria for award winners focused on the average score of those
questions. However, improvement versus the prior year score, as well as the
number/size of responding customers, was also considered.
DMA also
recognizes performance above and beyond the norm by one of the distributor
customer team members.
The votes are cast by the DMA team and consider all aspects of the role. This
year’s winner received more first-place votes than anyone in the past two years
but was closely followed by one of last year’s finalists. That honorable
mention goes to Shamrock’s Jo Hart, who moved up to second place from last
year’s third-place ranking. Another honorable mention goes to Derek Taylor from
Ben E. Keith as a new finalist, moving into the top three from last year’s top
five finish. It’s worth noting that 28 different reps received votes across the
membership, indicating broad support and great relationships.
Troy
Leatherman from Gordon Food Service took home the prize for Account Manager of
the Year. Comments
about Troy included, “… a DMA Advocate with a balanced approach to account
management; always available when needed; aligns with DMA’s values and is a
true advocate.” Additionally, he was recognized for, “leadership and approach …
a great partner for DMA and our customers!” Full Story
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Restaurant
Operators Optimistic About Year Ahead
A
much-needed dose of relief, U.S.-based independent restaurant operators found
stable ground in 2024 and are optimistic about the year ahead. Approximately
63% of leaders even indicate accelerated profits, according to a recent report
from point-of-sale platform Toast.
On the other
hand, only 4% posted declines, signaling a strong year ahead.
In the 2024 Voice
of the Restaurant Industry Survey, which fielded responses from over 755
industry stakeholders earlier this year, businesses look forward to a
moderating economy and streamlined processes resulting from artificial
intelligence integration.
While
inflation is still one of the most cited pain points, slightly fewer
restaurants are affected by its impact, instead preoccupied with the
optimization of their cost of goods sold (COGS) and management of their
suppliers or vendors.
Restaurant
owners took a calculated approach to inflationary pressures this year which
likely helped these businesses navigate stubborn price spikes. This is no doubt
the result of weathering years of economic uncertainty. They participated in
the following cost-saving practices to ensure profitability:
• Adjusted
their food suppliers (37%)
• Tracked
ingredient prices (36%)
• Managed a
leaner inventory (32%)
• Reduced
their menu sizes (26%)
• Increased
menu prices (34%)
Compared to
last year, eight percentage points fewer operators passed price increases to
their consumers, found the report. Instead, businesses opted for other
cost-saving measures like ingredient and inventory price management that can
keep the burden of inflation from reaching the consumer.
Anticipating
a Market Boom
These
practices have given restaurants a moment’s reprieve, creating the space for
smaller-footprint quick-service and full-service restaurants to ramp up
expansion.
Within the
next six months, 24% of those surveyed said they’re likely to open a new
location in 2024, compared to 13% in 2022.
These
operators are also enamored by the promise of AI integration to drive
profitability. This year, 26% plan to leverage new technologies to run their
business, compared to only 19% who felt the same in 2023.
When asked
about how likely stakeholders will leverage AI strategies across the store,
they noted the following key areas:
• Menu
performance optimization (40%)
• Customer
recommendations (39%)
• Benchmarking
(38%)
• Overall
pricing optimization (38%)
• Business
performance analysis (38%)
Roughly 70%
of operators say they’re either very interested or extremely interested in
dynamic pricing – the practice of modifying prices in response to market
conditions.
That pricing
strategy, however, can be tricky for restaurants to implement as major conglomerates,
including Stub Hub and Wendy’s, continue to face scrutiny for
these tactics.
Earlier this
year, Wendy’s was compelled to clarify that their dynamic pricing was focused
more on discounts aimed at slower periods rather than increasing prices in the
face of surging demand. The Toast report warned of the implicit risk
behind demand-based premiums.
“It’s
unclear how many restaurants will implement dynamic pricing that results in
higher prices at certain hours, which could hurt their relationship with their
guests and turn them off from the restaurant altogether,” said Toast in a
statement.
Only 7% of
operators said they currently leverage some form of dynamic pricing and tend to
gear them towards lower-priced lunch promotions, and happy hour discounts.
All
in all, foodservice appears primed for a year of solid growth. Food Institute Focus
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New
‘Kidult’ on the Block: Grownup Happy Meals, Halloween Deals
Wendy’s recently revived its seasonal Boo!
Bag meal featuring a Dave’s Single, small Hot & Crispy Fry, small Frosty,
glow-in-the-dark Bone Chiller Frosty figurine, and coupon book.
While the
promotion originally targeted kids, the chain has set its sights on another
type of consumer – the kidult, which Cambridge defines as “an adult who
likes doing or buying things that are typically intended for children” like
collecting toys or going trick-or-treating without actual children present.
And this
year, it’s happening more than ever.
A
Kidult in a Candy Store
In a recent
survey by Ferrero, 40% of (adult) respondents said Halloween is their
favorite holiday.
What’s more,
67% of adults with kids plan to keep a secret candy stash for themselves, 58%
will decorate their homes for Halloween, and 47% plan to wear costumes.
It helps
that brands ranging from Chipotle Mexican Grill and Dunkin’ to
Cinnabon and Auntie Anne’s are providing plenty of fodder for
costume inspiration.
Redefining
Adulthood
While
grownups with childlike interests have gotten a bad rap in the past, modern
psychologists assert that play can improve mental health, boost creativity, and
relieve stress for adults – as long as it’s balanced with responsibilities, of
course.
As for when adulthood
begins, opinions vary among generations. For Gen Z, it’s apparently age 27, as
even the traditional markers of adulthood like buying homes and having children
remain unaffordable for the young demographic.
Millennials
have grappled beneath economic constraints for over a decade, with many
attempting to balance crushing student loan debt with high housing costs and
stagnant wages. Their number one vice? Nostalgia.
“Millennials
often feel a heightened sense of nostalgia, fondly remembering childhood as a
simpler time,” said Vicki Breon, Brand + CX Strategist/Designer at Priority
Designs, a product development and innovation firm that’s collaborated with
the likes of Nestle.
“Purchase
decisions are overwhelmingly emotional, and Millennials tend to over-index on
food and beverage spending compared to previous generations,” Breon told FI.
“By offering
products that call back to nostalgia and childhood memories, people can easily
justify a ‘little treat’ to bring them back to the past,” she added.
And Wendy’s
isn’t the only brand that’s aware of this phenomenon.
Kidult-Friendly
Dining
McDonald’s
Spain just launched
a Happy Meal for adults to celebrate the 30th anniversary of Friends, which
includes a figurine of a main character.
Taco Bell is also capitalizing on cravings for
simpler times with its “new” Decades Menu of classics like the ’80s Meximelt and
‘00s Caramel Apple Empanada — and with all items priced under $3, the menu
appeals to the value-conscious crowd as well.
Kidulting is
old news for the casual-dining sector, which has seen a slew of barcades and
restaurants with kidult themes in the last few decades, including the Cartoon
Kitchen, Hello Kitty Café, Pokemon Café, and Comicx.
Kidult-Friendly
Retail
On the
retail side, brands have launched everything from Lunchables Uploaded and lunch
boxes for adults to Nesquik Protein Powder and craft beers that taste like
cereal.
Smartmouth
Brewing revived its
Saturday Morning Marshmallow in March for the sixth consecutive year, which it
claims inspired the “beereal craze.”
That said,
Colorado’s Black Bottle Brewery made headlines in 2014 for buying up all
of the area’s Count Chocula cereal boxes for its Cerealiously series.
The true
source of the flavor trend, it appears, is Momofuku’s former pastry chef
Christina Tosi, who debuted a Cereal Milk Soft Serve in 2006 that put
her Milk Bar brand on the national map.
These
examples signal that while “Adultoween” is about to end, kidadulting is a
year-round phenomenon that’s likely here to stay. Food Institute Focus
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Restaurant
Industry Faces New Crisis with Surge in Bankruptcies
The pandemic
may be over officially, but the restaurant industry is still suffering from
some of its symptoms, including supply chain issues and labor shortages – and
that’s before taking inflation into consideration.
This year’s
list of recent bankruptcies is long: Red Lobster, Hawkers Asian
Street Food, Tijuana Flats, Roti, Rubio’s Coastal Grill
– and the year’s not over.
“You have
locations that just aren’t viable. You have the COVID hangover, labor costs.
There’s multiple problems,” Jeff Crivello, president of Trew Capital
Management, which bought Rubio’s out of bankruptcy in August, told The
Wall Street Journal.
Inflation
has taken a toll on consumer pocketbooks, forcing many to pull back on dining
out.
“There’s
going to be pain for a while,” said Morgan McClure, managing director
for Fortress Investment Group, which has a stake in Red Lobster.
But chains
are only part of the story. Small, independent restaurants are especially
vulnerable to economic conditions.
“Without the
buying power, vendor partnerships, and economies of scale that larger franchise
systems enjoy – such as contract pricing, data-driven menu price adjustments,
stronger talent attraction due to brand recognition, and property ownership
shielding them from rising rents – they struggle to navigate these challenges,”
Amanda Kahalehoe, COO of Vicious Biscuit, told The Food
Institute.
“Many
smaller establishments are at risk of closure, while larger chains, though
experiencing fluctuations in customer traffic, are better equipped to weather
economic shifts.”
Alignable’s Revenue & Rent Report found
43% of independent restaurants had rent delinquencies in September, an
improvement from the 45% who were in arrears in August and the 52% who were
behind in April.
Some 3,700
new eateries have opened every month so far this year even though traffic is
down 3.3% overall and 4.5% in the fast-casual sector from last year, Black
Box Intelligence reported.
About 60% of
new restaurants fail in their first year. The figure moves to 80% within five
years, industry statistics show. Competition, labor costs, food prices
increases and overall economic conditions often are cited as reasons, along
with the chunk eaten by services such as DoorDash and UberEats.
Nevertheless,
2024 sales expect to top $1 trillion for the first time, with total employment
reaching 15.7 million, even as operations rely more on technology than ever
before.
Kevin
Hart of Upside
told FI that to thrive, “Consistency and quality always win.”
“Restaurants
should take a cue from Chili’s: Focus on what you do best,” he added.
“Like a great recipe, stick to your core ingredients, refine your approach, and
avoid overcomplicating things.”
Consistency
and quality always win in the restaurant industry, leaders told FI.
“Trying to
be everything to everyone only dilutes your brand and confuses customers,” Hart
added. “Stay true to what makes you unique.” Food Institute Focus
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Store
News: Wendy’s will close 140 low-performing
locations by the end of 2024 to boost future growth. The QSR chain said it will
mostly target U.S. locations with low revenue and profitability, reported Restaurant
Business (Oct. 31). Full Story
Taco Bell
brought back nostalgic menu items from its first 50 years of operation. The Decades Menu will revive the
'60s Tostada, '70s Green Sauce Burrito, '80s Meximelt, '90s Gordita Supreme,
and ‘00s Caramel Apple Empanada, each priced under $3. Full Story
Texas
Roadhouse is
acquiring 13 of its own locations from a major U.S. franchisee as part of a
growth strategy that has reportedly driven consistent sales gains. The
transaction is expected to close in early 2025, reported Restaurant Business
(Oct. 25). Full Story
BurgerFi and Anthony’s Pizza were
acquired by TREW Capital Management in a $44 million bankruptcy deal.
Trew previously provided the companies with $3.5 million in Chapter 11
financing, reported Bloomberg Law. Full Story
TGI
Fridays Inc. filed
for Ch. 11 bankruptcy. The struggling casual-dining chain aims to use the time
and legal protections available through the restructuring process to explore
alternative strategies that can hopefully ensure its long-term viability. Full Story
Smoothie
King recently
debuted a GLP-1 Support Menu to help consumers taking GLP-1 medications achieve
their weight management goals. The new menu includes five offerings that are
rich in protein and fiber but contain no added sugars. Full Story
Chipotle
Mexican Grill is
bolstering its global expansion efforts with new franchises in Kuwait and Dubai
with the Alshaya Group. The fast-casual chain is also eyeing growth
opportunities in Asia and Latin America, reported Restaurant Business
(Oct. 29). Full Story
Starbucks
unveiled plans to
discontinue its lineup of olive oil drinks in Nov. as it aims to simplify its
“complex” menu. Its new CEO Brian Niccol is looking to make baristas’ jobs
easier, reported Bloomberg (Oct. 29). Full Story
Meanwhile,
Starbucks said it will not increase its U.S. prices in 2025
following customer complaints of long wait times and high drink prices. The
chain will also bring back its condiment bars as it recalibrates its approach
after three consecutive quarters of same-store sales declines, reported The
Wall Street Journal (Oct. 30). Full Story
The
Cheesecake Factory
announced it will retain its smaller brands North Italia, Flower
Child, and Culinary Dropout despite pressure to sell them from an
activist investor. The chain says this strategy will allow the three brands to
grow their resources, buy commodities at bulk prices, and secure more
competitive third-party delivery rates, reported Restaurant Business
(Oct. 30). Full Story
Taco
John’s CEO Heather
Neary plans to modernize the Mexican QSR chain’s operations by
incorporating technology like voice-activated AI. She also plans to host vendor
webinars in the near future, reported Restaurant Business (Oct. 25). Full Story
El Pollo
Loco launched a $5
Taco Tuesday deal to attract value-seekers after a 7.6% drop in Q3 traffic,
reported Restaurant Business (Nov. 1). Full Story
Applebee's and IHOP are launching the
first U.S. co-branded restaurant in Texas, enabling customers to enjoy pancakes
and margaritas in one location. The parent company Dine Brands says the
combined concept has succeeded abroad and could boost U.S. growth for both
chains, reported MSN (Nov. 8). Full Story
Subway unveiled its latest restaurant
design, "Fresh Forward 2.0," which is aimed at enhancing its customer
experience with vibrant decor, improved lighting, and advanced technology. The
new prototype includes self-ordering kiosks and upgraded kitchen displays to
streamline ordering and boost digital sales. Full Story
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Executives
on the Move:
Red
Lobster’s new CEO,
Damola Adamolekun, is aiming to revive the struggling chain by increasing
its appeal with his own generation – Millennials. The 35-year-old executive
announced a new menu on Nov. 11 that introduces nine new items and brings back
several old favorites like hush puppies, reported CNBC (Nov. 11). Full Story
Meanwhile,
Red Lobster appointed Nichole Robillard as its new CMO. Full Story
Chipotle Mexican
Grill made interim
boss Scott Boatwright its permanent CEO on Nov. 11. Last month, the
burrito chain missed market expectations for Q3 same-store sales growth while
maintaining its growth target for annual comparable restaurant sales, reported Reuters
(Nov. 11). Full Story
New Starbucks
CEO Brian Niccol reportedly began showing up to a Los Angeles-area store
to quiz baristas before assuming the role. Niccol noted that the company needs
to reprioritize delivering quality coffee quickly, accurately, and with
friendly service in the mornings, reported MSN (Nov. 6). Full Story
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Purée
Play: Restaurants Boost Profits with Purées
The culinary
industry remains in a state of flux – with rising food costs, shifting tastes
of consumers, and new competitors. This has made it challenging for restaurant
operators to not only attract customers but to retain their existing clientele,
too.
And this
competition is only slated to grow. According to the National Restaurant Association,
45% of restaurant operators expect competition to intensify this year.
Fortunately, by crafting new and exciting dishes – featuring cost-effective
elements like fruit purées – can help restaurants remain competitive.
Why
Fruit Purées?
Why adapt and
evolve by using wholesale fruit purées? Consumers love fresh food. Almost
two-thirds would pay a premium for fresh food!
Need more
convincing? A jaw-dropping 89% of consumers like or love fresh fruit. They’re
also attracted to revolutionary cuisine, which fruit purée lays the foundation
for. It’s a surprisingly flexible ingredient that offers endless opportunities
for chef creativity.
New flavors.
Fresh plating methods. Modern culinary experiences. Let’s take a closer look at
the versatility of fruit purées.
• Fruity
cocktails & mocktails: Fruit purées add freshness and complexity to restaurant menus. And since
they’re ready to use, they make it easy for mixologists to flex their
creativity. Break away from traditional mimosas with tropical fruit purées like
mango.
• Fresh
salad dressings:
Fruit purées bring a depth of flavor and a pop of color to salads, making for a
beautiful presentation. You can create sweet or savory dressings. Combine a
berry purée with extra virgin olive oil, vinegar, and spices for the
vinaigrette of a spinach and berry salad.
• Ice
creams & sorbets:
Fruity sorbets and ice creams tend to be refreshing. Get creative with
pairings. Raspberry and mint. Apple and cloves. Coconut and lime. The best
pairings are often unexpected.
Another benefit
of fruit purées? They allow restaurants to skip the preparation stage –
peeling, chopping, cooking, and reducing fruit – of sorbet recipes.
Fruit purées
make creating bold, fruity flavors in baked goods simple. Elevate current
desserts or surprise customers with trendy or modern creations. Examples
include lemon raspberry breads and cakes, ginger-peach muffins, or a New York
cheesecake with a black currant fruit purée swirl.
Savory
Sauces
Operators
could go the less-conventional route and use purées for savory sauces and
glazes.
Fruit purée-based sauces go particularly well with roasted chicken,
pork chops, and salmon. Try one of these pairings: • Chicken: berry, orange, or mango purée
• Salmon:
tropical fruit (like
mango or pineapple) or citrus (lemon or orange) purée
• Pork: apple, cranberry, or peach purée
• Beef: sweeter fruit purées like mango,
apricot, or plum
The
Impact of Seasonal Fruit Purées on Menus
Dishes made
with seasonal fruit purées are excellent for creating a sense of urgency among
customers, especially considering their limited availability. They also give
chefs and restaurants the opportunity to experiment with new flavors and
attract customers with a fresh, modern dining experience.
How else do
seasonal fruit purées impact restaurants?
• Lower
food costs:
Restaurants have been faced with increasing food costs for years, prompting
measures like switching suppliers and adjusting portion sizes. Relying on
products like a seasonal fruit purée is a great way to keep costs down and menus
fresh. This is because it eliminates the need to import out-of-season produce.
• Less
food waste: Fresh
fruit can lead to significant food waste. Overripe fruit may turn bad too
quickly, for example. Conversely, unripe fruit often is thrown away because it
cannot be used for specific dishes, even if cooked. Seasonal fruit purées
provide fresh, consistent quality because fruits were picked at their peak.
• Dishes
kept fresh: Consider
your menu from a long-time customer’s perspective. They’ve likely tried the
bulk of your dishes. Seasonal fruit purées break up the monotony and get them
excited about trying something new.
Fresh
ingredients can also spark inspiration within restaurant staffs. Chefs and
cooks become bored with menus, just like customers. Switching up menus with
seasonal fruit purées allows them to flex their creative muscles and reignite
their passion about food – and customers will be able to taste the difference. Food Institute Focus
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Time to Stock Up with P&G's Clean and Save Rewards |
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Signs of
Recovery for Restaurants After Challenging Summer
Comparable
sales increased 0.4% in September despite a 2.7% decline in comparable traffic,
according to Black Box Intelligence. The group noted comparable traffic
had begun to improve from January of 2024, when it was down 7.1%.
Black Box
argued that some data showed the industry was on an upswing, and that it was
coming early as many expected growth to begin in the fourth quarter. However, enthusiasm
may need to be tempered due to Hurricane Helene and Hurricane Milton.
Black Box
estimated South Carolina, Georgia, Tennessee, Florida, Virginia, and North
Carolina would be impacted by recent hurricanes for weeks as communities recovered,
which would likely lead to comparable traffic dips. Full Story
Selected
Results:
Chipotle
Mexican Grill missed
its third-quarter expectations, as higher menu prices have hampered demand and
same-store sales growth. The increased prices, particularly for beef, dairy,
and avocados, have purportedly stretched their already thin margins, reported Reuters
(Oct. 29). Full Story
Wingstop reported strong growth in the third
quarter, noting a 20.9% increase in domestic same-store sales that was primarily
driven by a rise in customer traffic. Though slightly below its second-quarter increase
of 28.7%, the chain still expects a 20% increase in same-store growth for 2024,
reported Restaurant Business (Oct. 30). Full Story
Shake
Shack announced its third-quarter
sales grew 4.4% following its 6% menu-price increase and a slight rise in
customer traffic. CEO Rob Lynch says faster service has become a key
focus for the chain as it leverages AI for staffing and tracking wait times,
reported Restaurant Business (Oct. 30). Full Story
Yum
Brands posted a 5%
decline in U.S. same-store sales for its KFC brand as international
sales remained choppy. However, Taco Bell posted a 4% sales increase,
marking its 11th consecutive quarter with rising sales, reported Reuters (Nov.
5). Full Story
Cava posted a third-quarter same-store
sales increase of 18.1%. According to Placer.ai, the fast-casual chain
also posted a 28.4% increase in traffic until Sept. 2024. Full Story
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