Archive for February, 2011

Jack in the Box Details Commodity Expectations

Monday, February 28th, 2011

Jack in the Box Inc. said commodity cost pressures look to be worse than expected this year, and that any resulting menu price increases would have to be “modest and targeted.”

In a call to investors on Thursday, following the company’s release Wednesday of better-than-expected first-quarter results, Jack in the Box said commodity cost increases for 2011 are now expected to be twice what had been previously projected.

In November, company officials had projected that commodity costs would increase between 1 percent and 2 percent in 2011. Now, Jack in the Box expects costs to increase between 3 percent and 4 percent.

Produce such as lettuce and tomatoes, which have been pressured by harsh winter weather in growing regions around the U.S. and Mexico, is expected to increase between 20 percent and 25 percent in the second quarter alone, the company cited as an example.

For the year, beef costs are expected to jump 9 percent and cheese will be up 13 percent, the company projected. Dairy costs will increase by 5 percent in 2011, but bakery products will likely decrease by 1.5 percent. The company does not expect any change in its outlook for chicken.

Linda Lang, Jack in the Box’s chair, chief executive and president, said the company does not reveal specifics on pricing strategies, but she said, “Our approach to pricing will be cautious. Whatever pricing we do take will be modest and targeted.”

Sales drivers

San Diego-based Jack in the Box has struggled with sales traction in recent years in part because its core locations are in Southern California, Texas and Arizona — all markets that have been hit hard by high unemployment levels.

During the quarterly conference call, Lang noted that California is now the company’s strongest performing market, and sales have also turned positive in Texas and Arizona. However, economic recovery in those regions is expected to be slow.

Lang said Jack in the Box remains committed to its strategy of promoting both premium and value-focused products.

Over the past year, the Jack in the Box chain has been upgrading core menu items, including its fries, tacos, coffee and ingredients like bacon, for example.

Lang said value-positioned promotions, such as the offer of two croissant sandwiches for $3, have successfully driven traffic, especially during the chain’s strong breakfast daypart. That promotion, first introduced last October, was so successful, the company is bringing it back next week, she said.

Other recent traffic drivers have included combination meals, such as the Jumbo Deal, including a Jumbo Jack burger, two tacos, a small order of fries and small drink for $3.99; as well as the All-American Jack Combo, including the new double-patty burger with small fries and a 20-ounce beverage for $4.99.

Read more: http://www.nrn.com/article/jack-box-details-commodity-expectations?ad=business#ixzz1FHcMJByu

Quick-Service Brands Get High Marks for Ease

Monday, February 28th, 2011

Quick-service chains dominated a recent study that measured which brands consumers say make their lives easier.

McDonald’s, Starbucks and Subway were among the top 10 brands on a new Global Brand Simplicity Index created by branding consultancy Siegel+Gale. The firm surveyed more than 6,000 consumers around the world for the index, which rated brands on such qualities as ease, transparency, innovation and communication. Click here to view the study.

The 10 brands with the highest scores on the Global Brand Simplicity Index:

1. McDonald’s
2. Nokia
3. Amazon.com
4. KFC
5. Burger King
6. Walmart
7. Pizza Hut
8. Starbucks
9. Boots
10. Subway

“Despite everything you might read in food magazines about the ‘slow food’ movement, people globally continue to value the benefit of being able to quickly pick up prepared food,” the authors of the study said.

“Brands like McDonald’s, Burger King, KFC, Pizza Hut, Starbucks and Subway not only make it easy for people to get food, but also communicate clearly what they offer,” they continued. “They are focused, don’t overwhelm you with choices and give you the sense that they are a good value within their particular niche. Locally customized menus also help.”

Restaurant brands also scored high in a simplicity index focused just on U.S. consumers, with Subway, McDonald’s, Dunkin’ Donuts, Burger King and Starbucks all making the top 10.

Simplicity may translate to sales, Siegel+Gale said. Survey findings suggest that between 7 percent and 17 percent of U.S. consumers would pay 5 percent more for simpler products, experiences and interactions within the restaurant and entertainment industries.

To support the notion of simplicity resulting in greater perceived value to consumers, Siegel+Gale noted that the aggregate performance of publicly traded brands within its top 10 rankings, or what it calls the “Simplicity Portfolio,” bettered those of some leading market indexes, including the Dow and S&P 500, FTSE and DAX, during the past two years.

Siegel+Gale, which has U.S. offices in Los Angeles, New York and San Francisco, created the index by surveying 6,152 consumers in China, Germany, India, the Middle East, United Kingdom and the United States. Questions were intended to gauge consumer perceptions of the complexity of their lives now and in the past, and to “pinpoint the role and value of simplicity in consumers’ lives.”

According to Siegel+Gale, survey responses indicated that the top brands in the index make consumers’ lives simpler by:

• Communicating directly, clearly and without jargon

• Reducing stress by providing savings/value

• Saving time by increased convenience and accessibility

• Facilitating ease of use and interactions

• Enabling consumers to get more from life: deeper relationships, easier lifestyles

Read more: http://www.nrn.com/article/quick-service-brands-get-high-marks-ease?ad=news#ixzz1FHLaIJyk

Restrictions on Kids’ Meals Proposed in California

Monday, February 28th, 2011

California lawmakers are scheduled to consider a bill next month that would set nutrition standards for kids’ meals that come with toys or other incentives.

Introduced Feb. 18 in a wave of proposals traditionally filed before California’s legislative deadline, AB1100 appears to be similar to regulations adopted in San Francisco and Santa Clara counties last year.

The California proposal, introduced by freshman Assemblyman Roger Hernandez of West Covina, Calif., is a “spot bill” that does not yet have specific language. Under law it must be in print for 30 days and can be scheduled for a committee hearing after March 22.

As introduced, the bill declares the intent of the legislature to enact legislation that would “improve the health of children in California by setting healthier standards for children’s meals that are accompanied by toys and other incentive items.”

Jot Condie, president and chief executive of the California Restaurant Association, said the industry would vigorously oppose any attempt to force restaurants to meet certain nutritional standards before promoting their product.

“This is not going to move the scale an ounce with regard to the obesity question,” Condie said of such policy moves. “Nobody is forcing parents to take their kids to buy meals that have toys. This is a gross misuse of public officials’ time.”

Meanwhile, lawmakers in Arizona are taking steps to pre-empt restrictions on kids’ meals with toys. A state House committee advanced a bill last week that would prevent cities and counties in the state from enacting laws that would ban toys or other incentives with meals, the Arizona Republic reported.

Read more: http://www.nrn.com/article/restrictions-kids%E2%80%99-meals-proposed-calif?ad=news#ixzz1FH4Nj57j

Domino’s Shifts Spotlight to Chicken

Tuesday, February 22nd, 2011

Domino’s Pizza is following the successful marketing effort that focused on its reformulated core pizza with a new product revamp and advertising campaign highlighting its chicken wings and boneless chicken.

Debuting this week, the reformulated wings are available in Hot, BBQ and the new Sweet Mango Habanero flavors, while the new boneless chicken item is served lightly breaded with a choice of four dipping sauces: Sweet Mango Habanero, Kickers Hot, BBQ or Ranch.

Prices for both items are $5.99 for an eight-piece order, $9.99 for 14 pieces, and $24.99 for a 40-piece order.

The new chicken products are the latest new items to drive Domino’s marketing, following the launch of the new pizza and previous debuts of Oven Baked Subs and Bread Bowl Pastas.

Much like the “Pizza Turnaround” TV and online commercials that ran during the debut of Domino’s “new, inspired” pizza in December 2009, the chain’s latest campaign to support its revamped chicken will feature a documentary-style look at Domino’s test kitchen and the employees in charge of improving the product. National TV ads and the full online documentary, staring Domino’s chicken chef known simply as Tate, will begin airing March 2.

The company said this campaign would be its first national advertising effort centered on chicken since 2002.

“We want to continue innovating and reinventing our menu and brand, and our new chicken is the next chapter of our story,” said J. Patrick Doyle, Domino’s president and chief executive. “Not only are our new boneless chicken and wings much improved based on customer feedback, but we are again opening our doors and letting consumers see the real people — behind the real story — talk about how this came about.”

“Over 80 percent of our menu consists of new, permanent menu items introduced since 2008, so the desire to continue getting better goes well beyond just our pizza,” said Russell Weiner, Domino’s chief marketing officer. “The feedback we heard from consumers was that they wanted more choice and customization with the boneless chicken, and of course, we know how loyal wing lovers are, so we strived to deliver on providing a better texture and flavor.”

Ann Arbor, Mich.-based Domino’s Pizza operates or franchises 9,351 in the United States and more than 60 countries.

Read more: http://www.nrn.com/article/dominos-shifts-spotlight-chicken?ad=news#ixzz1Ej0qWWry

Consumers to Spend More at Restaurants

Tuesday, February 22nd, 2011

Increased consumer spending at restaurants over the next three months will pay off in same-store sales growth at major chains, especially quick-service brands, according to a recent analyst report.

In a consumer survey conducted in February by RBC Capital Markets, 14 percent of respondents said they planned to spend more in restaurants over the next 90 days, a slight uptick from the 13 percent who said the same in January.

The latest results also reflected a 7-percent improvement in the number of consumers at the same time last year who said they planned to spend more at restaurants, analyst Larry Miller of RBC said in a research note Tuesday.

Meanwhile, the number of consumers who said they planned to spend less over the next three months dropped to 24 percent in February, compared with 25 percent in January.

Miller projected that restaurant same-store sales would continue to track in the positive low-single digits over the next several months.

“Improving comp-store sales is a central tenet of our thesis, as we expect there to be a long-lasting period of comp-store sales stability due to supply reductions and traffic gains as the economy recovers,” the report said.

However, Miller said he expects surging commodity inflation to challenge the restaurant industry over the next two years.

As a result, he said, quick-service companies such as McDonald’s Corp., Yum! Brands Inc., and Sonic Corp., are more likely to reap the benefits of the improving economy because their pricing power, supply chain scale and diversified commodity baskets allow them to better cope with food inflation.

“Sales rise at fast food as franchisees raise prices and reduce discounting, and the highly franchised business provides margin protection,” Miller said.

Read more: http://www.nrn.com/article/consumers-expected-spend-more-restaurants?ad=news#ixzz1EicP6xen

Consumers Craving More Ethnic Cuisine

Tuesday, February 22nd, 2011

Adventurous consumers are searching farther afield for exotic food experiences, according to recent studies published by two research firms.

Mintel, citing data from its “Global New Products Database,” said consumers appeared to be stretching beyond the relative comfort zones of the “big three” ethnic cuisines — Italian, Mexican and Chinese — to sample new tastes. As a result, the number of retail items that contained the words “Caribbean,” “Japanese” or “Thai” in their description grew rapidly between 2009 and 2010.

“Thai” was used 68 percent more often during that period, “Caribbean” was mentioned 150 percent more, and “Japanese” saw a jump of more than 230 percent, the Chicago-based research company found.

And while the foodservice industry has been a little slower to tap into those expanding ethnic culinary areas, a growing number of restaurateurs are beginning to broaden their culinary horizons as well.

For example, the 514-unit Boston Market introduced a Caribbean-inspired Island Mojo sauce and a Sweet Thai Chile Garlic sauce last spring. T.G.I. Friday’s featured Caribbean-style ribs, steak and chicken during a promotion last summer. And one of the new items added to the menu at the 145-unit Mimi’s Café last fall was a Thai Chicken Noodle Bowl.

In a recently released survey, Port Washington, N.Y.-based consumer research group NPD asked consumers what ethnic or regional flavors were present in lunch or dinner menu items they ordered, and found a 3-percent jump in the mention of “Japanese,” the largest increase in percentage terms of any ethnic category.

Mintel asked consumers where they learned about new “ethnic” foods, and 26 percent cited television programs, newspapers or magazines that featured cuisines from other countries. Cookbooks were the source for 23 percent of respondents, while 25 percent said they learned about new cuisines because they live in ethnically diverse neighborhoods, and 18 percent learned by traveling abroad.

Read more: http://www.nrn.com/article/consumers-craving-more-ethnic-cuisine?ad=news#ixzz1EiXmQPUx

Panera: Catering is ‘Big Business Opportunity’

Monday, February 14th, 2011

Panera Bread Co. plans to beef up its off-premises sales with catering, to begin milking meaningful data from its loyalty program and to expand its drive-thru units selectively, executives told analysts Friday.

In addition, Panera will be adding steak as a sandwich protein for the first time in a hot-sandwich push in the second quarter, according to William W. Moreton, Panera’s chief executive and president, who spoke on a conference call Friday, a day after the bakery-café company reported a 23-percent increase in fourth-quarter profit. Panera’s full results

“Over the last two years we’ve structured and built up the catering sales force and invested in tools of training,” Moreton said. In fiscal 2010, catering sales rose 26 percent and contributed about 1 percent to same-store sales growth, he added. And in the fourth quarter, catering sales grew 34 percent over the year-ago quarter. Similar rates are expected this year, and the company expects off-premises revenue will total about 7 percent of sales by year end.

Jeffrey Kip, Panera’s senior vice president and chief financial officer, said “We are thinking of catering as something larger.”

Moreton said Panera is looking at improving packaging, offering designated areas for pick up in the cafes and enhancing technology, with an online catering system expected to be available nationwide by the end of the second quarter.

“We really do think this will be a big business opportunity going forward,” Morteon said.

The company is also seeing strong carryout traffic at its 56 drive-thru units. Executives said they will be looking for more real estate opportunities that will provide for drive-thru options as well as looking at existing units that can be retrofitted with drive-thrus.

In addition, the “My Panera” loyalty program finished its rollout in November and now has 4.5 million registered card members, Moreton said.

“We believe our loyalty program contributed approximately two-thirds of the transaction lift in the [fourth] quarter,” he said. “We expect to continue positive transaction lift from this program in 2011.”

He said actual purchasing information is now available to the company, which will “get us as close to one-to-one marketing … as possible.”

In other Panera efforts:

- Soups. Panera executives said they have worked to enhance quality of items such as salads and soups, with the introduction of chili in the last quarter. Moreton said Panera is working on its chicken noodle and French onion soups. “Later this year, we’re going to test a program called ‘Soups of the World,’ which will have us bring some authentic recipes from different parts of the world to our customers,” Moreton added.

- Smoothies. The company already has rolled out a wild-berry smoothie this quarter and plans further rollouts through the year, Moreton said.

- Steak. “We’re going to introduce steak as a new protein for Panera in the second quarter,” Moreton said, “which we will combine with communications about our new hot sandwiches.” Panera completed its rollout of panini grills at the end of last year.

- Transaction numbers. “Much of our recent investment has been in focused on driving transaction growth,” Moreton said. For the full year, Panera recorded a 2.1-percent transaction growth at corporate restaurants and a 2.9-percent growth rate in the fourth quarter. “We expect transaction growth will be one of the key levers for our 2011 performance,” he said.

Read more: http://www.nrn.com/article/panera-catering-%E2%80%98big-business-opportunity%E2%80%99?ad=news#ixzz1DyDcmvwl

Chipotle to Open Asian Fast-Casual Concept

Monday, February 14th, 2011

Chipotle Mexican Grill founder Steve Ells said Wednesday he is developing an Asian fast-casual concept that he expects to debut in mid-2011.

Company officials were reluctant to give details on the plan, but said it would follow the Chipotle service format and its focus on “food with integrity” in ingredients, said spokesman Chris Arnold.

Arnold said the new concept will be similar in pricing to Chipotle, and that the restaurant will open in one of about 40 existing Chipotle markets. Denver-based Chipotle operates more than 1,000 restaurants nationwide.

Ells, who serves as Chipotle’s co-chief executive and chairman, said in a statement, “Since opening the first Chipotle some 17 years ago, I have often thought about how other types of food might fit the Chipotle model.

“Chipotle is not successful because we serve burritos and tacos,” he added. “Our success comes from finding the very best sustainably raised ingredients, prepared and cooked using classical methods in front of the customer, and served in an interactive format by special people dedicated to providing a great dining experience. And while our Chipotle restaurants will, of course, remain our primary focus, we are also excited to see how this format works with other cuisines.”

Analyst Sharon Zackfia with William Blair & Co. said the news was the “next logical evolution” of Chipotle.

“They have always been open to the idea that their Food with Integrity model is not specific to Mexican cuisine,” she said. “And Asian in general is one of the fastest-growing categories in the U.S., though it’s very fragmented.”

Other Asian fast-casual concepts include the 168-unit Pei Wei Asian Diner brand, owned by P.F. Chang¹s China Bistro Inc.; the 90-unit Pick Up Stix chain owned by Carlson Restaurants Worldwide; and the Flat Top Grill and Stir Crazy brands owned by Chicago-based Flat Out Crazy Restaurant Group, which operates about 28 locations of the two brands combined.

Chipotle’s new Asian concept, however, will no doubt get an initial lift because consumers are already so connected to the company’s core brand, said Dennis Lombardi, executive vice president of foodservice strategies at consulting firm WD Partners.

The format also works well in terms of speed of service, customer engagement, and customization — as well as greatly reducing problems with order accuracy as guests are part of the food preparation process, he said.

“Using the Chipotle service model for an Asian concept and having Chipotle do it will give them incredible credibility,” Lombardi said.

Read more: http://www.nrn.com/article/chipotle-open-asian-fast-casual-concept#ixzz1Dy7TJQKc

‘Healthy’ Doesn’t Just Mean Low-Cal

Monday, February 14th, 2011

Consumers are looking for healthful options at U.S. restaurants but not necessarily for fewer calories, according to recent NPD Group research.

NPD’s report, “Consumers Define Healthy Eating When They Go Out to Eat,” found that a significant share of foodservice traffic is driven by healthy-eating behaviors.

The report also addressed consumer attitudes about the importance of the taste, finding that some consumers equate healthier foods as not being as tasty. It also found that the majority of consumers expect to pay the same for healthier foods as those considered less healthy.

“The perception has been that healthy eating to consumers means low calorie and low fat, and our findings show that the perception is not the reality,” said Bonnie Riggs, restaurant industry analyst at the Chicago-based consultancy.

“Clearly, descriptors like ‘fresh’ or ‘natural’ will resonate more with consumers than ‘less calories,’” she said.

NPD conducted the survey in December, polling 7,080 people 18 years and older who had eaten lunch or dinner away from home in the past three months.

“More consumers are seeking healthy/light foods and having these options available on menus will meet these consumers’ needs,” Riggs said. “However, healthful menu options must be fresh, taste good and be affordably priced.”

Read more: http://www.nrn.com/article/%E2%80%98healthy%E2%80%99-doesn%E2%80%99t-just-mean-low-cal?ad=news#ixzz1DxudYPGf

Restaurant Nutrition Draws Focus of First Lady

Monday, February 7th, 2011

WASHINGTON — After wrapping her arms around the retail giant Wal-Mart and trying to cajole food makers into producing nutrition labels that are easier to understand, Michelle Obama, the first lady and a healthy-eating advocate, has her sights set on a new target: the nation’s restaurants.

Michelle Obama last month announcing an agreement with Wal-Mart that is a part of her effort to influence dietary habits.

A team of advisers to Mrs. Obama has been holding private talks over the past year with the National Restaurant Association, a trade group, in a bid to get restaurants to adopt her goals of smaller portions and children’s meals that include healthy offerings like carrots, apple slices and milk instead of French fries and soda, according to White House and industry officials.

The discussions are preliminary, and participants say they are nowhere near an agreement like the one Mrs. Obama announced recently with Wal-Mart to lower prices on fruits and vegetables and to reduce the amount of fat, sugar and salt in its foods. But they reveal how assertively she is working to prod the industry to sign on to her agenda.

On Tuesday, Mrs. Obama will begin a three-day publicity blitz to spotlight “Let’s Move!,” her campaign to reduce childhood obesity, which was announced one year ago this week.

She will introduce a public service announcement, appear on the “Today” show and deliver a speech in Atlanta promoting gardening and healthy-eating programs.

But as she uses her public platform to persuade children to eat healthier and exercise more, Mrs. Obama and her team are also quietly pressing the levers of industry and government. Over the past year she has become involved in many aspects of the nation’s dietary habits, exerting her influence over nutrition policy.

Her team has worked with beverage makers to design soda cans with calorie counts and is deeply involved in a major remake of the government’s most recognizable tool for delivering its healthy-eating message: the food pyramid.

Mrs. Obama persuaded Congress to require schools to include more fruits and vegetables in the lunches they offer, and she encouraged lawmakers to require restaurants to print nutrition information on menus, a provision that wound up in President Obama’s landmark health care law.

“They really want a cooperative relationship with the food industry, and they’re looking at industry to come up with ideas,” said Lanette R. Kovachi, corporate dietitian for Subway, the nation’s second-largest restaurant chain in terms of revenue. She said she had taken part in at least four conference calls with Mrs. Obama’s food advisers.

But in seeking partnerships with industry, Mrs. Obama runs a risk. While nutritionists and public health advocates give her high marks for putting healthy eating on the national agenda, many worry that she will be co-opted by companies rushing to embrace her without offering meaningful change.

“Can the food industry play a responsible role in the obesity epidemic? The answer isn’t no,” said Dr. David Ludwig, the director of the Optimal Weight for Life program at Children’s Hospital in Boston. “The point is that the best initiatives can be subverted for special interest, and it’s important to be vigilant when we form partnerships with industry.”

White House officials say Mrs. Obama has believed from the start that bringing industry to the negotiating table is critical to achieving her long-range goal of eliminating childhood obesity within a generation.

Melody Barnes, Mr. Obama’s domestic policy adviser and the chairwoman of a presidential task force on obesity, said industry has been eager to work with the White House. But Mrs. Obama does not lend her name to any plan or program, she said, unless it meets the recommendations of a task force report issued in May.

“If someone wants her support, we take a hard look at the data and the research to determine if the commitment meets our standards,” Ms. Barnes said. “And if the result is good for business as well as for the health of American children, we see that as a win-win.”

Still, Mrs. Obama has been treading carefully. As part of her anti-obesity campaign, she has called on food makers to design clear “front-of-package” labels to warn consumers about ingredients like salt, sugar and fat. But after months of negotiations with the White House, the companies insisted on a plan that would also spotlight healthy ingredients, like calcium or fiber.

The administration thought the new labels confusing, and they do not meet recommendations in a recent report by experts at the nonpartisan Institute of Medicine. When the food companies announced the plan, the White House put out a tepid statement calling it “a significant first step.” Mrs. Obama said nothing.

“She could have just added this to her list of things done, but she said, ‘Not good enough,’ ” said Dr. David Kessler, a commissioner of the Food and Drug Administration under President Bill Clinton “It was not done in a confrontational manner; she didn’t blast them, but she sent a very clear signal that it didn’t meet the mark.”

That, however, did not stop food industry executives from invoking Mrs. Obama’s name when they rolled out the labeling initiative last month and said they were responding to her call for action.

Mrs. Obama’s approach to the new labels contrasts starkly with her embrace of Wal-Mart’s plan to reformulate foods and lower prices on fruits and vegetables — a plan that carried political risks of its own. The conservative pundit Rush Limbaugh maintained that Mrs. Obama had “somehow bullied or pressured” the company, while liberals complained that she given her imprimatur to a company that her husband once criticized for its labor practices.

And some food industry experts say Wal-Mart, not Mrs. Obama, was the big winner. The company has long wanted to expand into urban areas, but often faces opposition in cities where unionized labor is powerful, like New York. Mrs. Obama’s endorsement may make it easier for the company to gain a foothold; she strongly supports bringing fruits and vegetables to so-called food deserts, low-income neighborhoods where healthy offerings are often expensive and scarce.

“Wal-Mart is very clever, very political,” said Walter Olson, who writes about food regulation for the Cato Institute, a libertarian research organization in Washington. “I think Wal-Mart has taken a list of things it was probably considering doing anyway and managed to get the first lady’s endorsement in a way that its shareholders will be laughing all the way down the produce aisle.”

Wal-Mart was already planning its initiative when Mrs. Obama became involved. But Leslie Dach, the company’s executive in charge of the project, said Mrs. Obama made it “stronger and ultimately smarter” by demanding that Wal-Mart examine its own progress. “We think she and her staff have approached this very seriously, rooted in the science,” Mr. Dach said.

Mrs. Obama’s outreach to restaurants is still in its early stages. A National Restaurant Association spokeswoman, Sue Hensley, called it “a positive dialogue” and said her group and Mrs. Obama had “the same goals in mind.”

In a speech to the association last fall, Mrs. Obama made those goals clear. Noting that research has shown that children consume more saturated fat and less fiber and calcium when they eat out, she challenged restaurant owners to change their menus, recipes and marketing practices to “give parents the confidence to know that they can go into any restaurant in this country and choose a genuinely healthy meal for their kids.”

Dr. Kessler said it would take years to gauge the effect of Mrs. Obama’s efforts.

“At the end of the day, this is about changing how we as a country look at food,” he said. “The food industry will change when consumers change what they want, and she’s worked hard to help us look at food differently. Long term, that’s what’s important.”