Archive for August, 2011

iPads Replacing Restaurant Menus

Monday, August 29th, 2011

When a restaurant offers 61 options for a hamburger, a laminated cardboard menu just won’t do.

In one of the more logical unions of restaurants and technology, Stacked: Food Well Built, which opened Wednesday at Fashion Valley Mall, puts an Apple iPad on every table. Diners drag and drop ingredients with their finger to visually create their perfect burger, pizza or salad. And at the end of the meal, they pay the bill without needing to flag down a waiter.

“The iPad controls when they order and when they pay. That’s the two most frustrating things in the dining experience,” said Paul Motenko, co-founder of Stacked. This allows for fewer wait staff and faster food delivery but still keeps many perks of a full-service restaurant. “Our servers are always around,” he added. “We hope customers never have to flag anyone down, but there is a help button.”

Restaurants are finally catching up with the rest of us as more adopt technology to alleviate waiting, ease ordering and improve service. There are now restaurants that text mobile phones when a table is ready. Another service relies on text messages to get a waiter’s attention. Some mobile apps let you order, some let you pay at the table. Some email the receipt so you don’t lose the scrap of paper. Such features are showing up at local restaurants, albeit slowly.

“Generally, most restaurants aren’t necessarily on the cutting edge of technology use, often due to cost,” said Annika Stensson, spokeswoman for the National Restaurant Association. “Restaurants operate on slim profit margins, making investments a carefully planned process. If it’s a choice between upgrading stoves to maintain food quality or getting iPads to use as menus, most would choose the stoves.”

The association estimates that just 2 percent of full-service restaurants used an electronic ordering or payment system at the table. But 25 percent of these restaurants believe such table systems would become popular in the future. There’s greater acceptance with fast-casual and quick-service restaurants, with 50 percent believing these trends are coming soon.

“Technology can help increase productivity, which is an important driver in profitability. In addition, consumers are showing an increasing interest in using technology in restaurants and because the industry is driven by consumer demand, it’s likely that we will see more technology integrated into the restaurant experience,” Stensson said.

Via text message

Zingle, based in Del Mar, enables businesses to accept orders via text message. Inspired by founder Ford Blakely’s complicated coffee order (single shot, soy mocha, two pumps, no whip), Zingle gives businesses lead time to complete the order for “anything that requires special attention,” Blakely said.

“Our whole business is about speed and catering to customers who hate to wait,” said Blakely, who hated waiting so much, he bought a mobile phone for his favorite coffee shop just so he could text in his order. “Texting has been the most insane phenomenon from a consumer standpoint and it’s taken a long time for texting to enter the (restaurant) field. ”

Businesses get a special phone number and a printer to receive and print text orders. The efficiency has helped the two-year-old business grow to six full-time employees and today, it counts Subway, Smoothie King and hundreds of independent eateries as customers. Zingle also just expanded to New York and has an app waiting for Apple’s approval.

Using iPads

In San Diego, Stacked isn’t the first to adopt iPads. Wait staff at Candelas use iPads to show pictures of food. Naked Pizza hangs a few iPads on the wall for waiting customers. And chef Martin Gonzalez’s two restaurants, Toast Enoteca & Cucina and Acqua Al 2, offer a sortable wine menu on an iPad using Incentient’s SmartCellar software.

“We have a lot of information on it,” said Carlos Anaya, general manager for Toast and Acqua. “It’s different; it’s interactive. People want to read more about the wines. And you can sort by varietal, region, grape, vintage and country.”

Stacked is definitely a concept with big plans. Motenko and co-founder Jerry Hennessy previously served as co-CEOs at B.J.’s Restaurants, where they grew the chain from a half-dozen restaurants to more than 80 nationwide. Motenko, who estimates that the Fashion Valley location will have 70 iPads, said it took 2½ years to develop the technology to enable guests to order exactly what they want. The “over $1 million” investment was created from scratch after the founders realized that what they wanted didn’t yet exist — including the iPad.

“It was very critical to make it so simple and intuitive that people come to the restaurant and with very little guidance, order the food,” he said.

With its first location in Torrance open since May, the company has fixed issues — no more accidentally ordering an item twice — and gathered up some stats: 95 percent of diners customize their orders, which are ready 3 to 10 minutes faster than ordering the traditional route through a waiter. And he’s happy to say that no one has tried to sneak out with an iPad, which have “several levels of security.”

Overall popularity

“The biggest surprise was how people of all ages were enjoying the experience for different reasons. Because of the nature of the technology, most assumed it would be attractive to younger people. Young people just took to it like this is how it should always be,” Motenko said. “But the people who enjoyed it the most were a little older. … They enjoyed the simplicity and appreciated the benefits of speed it provides.”

His favorite story, however, was the time a group of customers came in wearing Geek Squad shirts. “I asked them what they thought about the technology, and one of them looked at me with a serious look on her face and said, ‘It’s not about the technology, it’s about the food.’ ”

Stacked, which averages 3.5 stars on for the Torrance location, could eventually license the technology to others in the future, but right now it plans to expand in order to recoup the investment. The next one opens in Cerritos this fall. But, Motenko warns, as with all great tech gadgets, mixing the latest technology with restaurants isn’t always a sure thing.

“People have come to our restaurant to see what it’s all about and to see if it’s something they’re interested in adapting to their own restaurant. I say don’t do it just to have an iPad in the restaurant. If there’s a reason the iPad is going to enhance the experience, then it makes sense,” Motenko said.

New on the plate

Watch for startups offering technology to improve customers’ experiences:

Wait time: Textaurant lets consumers check wait times at area restaurants on their phone or computer. Also enables restaurant to text waiting diners when table is ready. The Massachusetts company hopes to be in its first San Diego restaurants by the end of the year. Several others offer similar services, including, and

Ordering: MenuPad out of Australia has an iPad-based ordering system for customers and waiters to configure dishes, place orders and get service. Exit41 in Andover, Mass., also offers an iPad-based kiosk for ordering food. St. Louis-based eTab has its own touch-screen tablet that also allows customers to order, get help, split and pay the bill. E la Carte is another with its own tablet.

The bill: TabbedOut, based in Austin, Texas, is a mobile payment system targeting the restaurant industry. Customers pay for dinner at participating restaurants using a mobile app, which allows them to also review the bill, get the receipt emailed and share the experience with friends online. Dallas-based TableTop Media offers a small touch-screen display called Ziosk allowing customers to see specials, order and reorder drinks and pay the bill.

Order ahead: Zingle tackles the waiting period it takes a restaurant to prepare an item. Customers text orders, which are received by the eatery and printed out on a small printer. Several other large restaurant chains, like 5 Guys Burgers and Fries, offer mobile apps that let you order ahead. Companies that provide the technology to restaurants include

Service: offers diners a number to text on their mobile phones if a waiter is not in sight. The message pops up on a display in the kitchen.

Study: Chipotle Tops Limited-Service Restaurants Among Gen Y

Monday, August 29th, 2011

Chipotle is the most preferred limited-service restaurant among Generation Y consumers surveyed in a new study by L.E.K. Consulting.

In May, L.E.K., a Boston-based global consulting firm, interviewed 1,300 consumers of all ages about their limited-service restaurant preferences. They focused on Gen Y — people ages 16 to 24 — since nearly 20 percent of Gen Y consumers buys a limited-service food item almost every other day. Less than half as many baby boomers, ages 45 to 64, purchase from those restaurants as frequently.

“As Gen Y’s purchasing power and [limited-service restaurant] spending grow with age, their loyalty today is critical to building a strong base of customers that can deliver the next generation of sales,” the study said.

The top five limited-service restaurants for surveyed Gen Y consumers were Chipotle, Panda Express, Dunkin’ Donuts, Chick-fil-A and Wendy’s. McDonald’s only ranked eleventh with surveyed Gen Y consumers, but was number three with all other generations interviewed.

Gen Y survey respondents ranked Boston Market twentieth, compared to all other ages, which rated the chicken-chain number five. Those Gen-Y respondents placed Subway at number 14, while all ages ranked it sixth.

The top 10 results for surveyed Gen Y consumers were:

1. Chipotle Mexican Grill
2. Panda Express
3. Dunkin’ Donuts
4. Chick-fil-A
5. Wendy’s
6. Burger King
7. Hardee’s
8. Qdoba
9. Taco Bell
10. Sonic

The top 10 results for surveyed consumers of all ages excluding Gen Y were:

1. Chick-fil-A
2. Dunkin’ Donuts
3. McDonald’s
4. Chipotle
5. Boston Market
6. Subway
7. Panda Express
8. Hardee’s
9. Wendy’s
10. Sonic

Other key findings of the study included:

• Surveyed Gen Y consumers are more loyal to their brands. Gen Y is most passionate about their limited-service restaurant choices and ranked their preferred brands on average 12 percent higher than any other generation in L.E.K.’s Choice Conversion Score (CCS), a ranking that measures the strength of a brand’s connections with what consumers are seeking.

• Surveyed Gen Y consumers are less concerned with healthful and quality ingredients than other generations.

• Surveyed Gen Y consumers prefer Wendy’s and Burger King over McDonald’s.

Gen Y’s reliance on social media for quick, intense connectivity and the influence of their friends on restaurant preferences means limited-service establishments must be strategic in marketing to this age demographic, said John Weber, co-author of the study and vice president of L.E.K.

“You have your work cut out for you to change that [Gen Y] consumer’s perception,” Weber said. “Capturing them when they’re young is important to keep them in the pipeline for the future.”

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Burger King Officially Rolls Out Oatmeal

Monday, August 29th, 2011

Burger King has begun selling oatmeal, joining other quick-service chains such as McDonald’s, Starbucks and Chick-fil-A, as part of the company’s strategy to update the brand’s menu and image.

The Miami-based burger chain sells Quaker-brand oatmeal for $1.99 from 6 a.m. to 10:30 a.m.

“At a time when so many families are looking for better-for-you meal offerings on the go, Quaker’s partnership with Burger King provides a flavorful, whole-grain choice when eating outside the home,” Margery Schelling, global innovation officer for PepsiCo Foodservice, parent to The Quaker Oats Company, said.

Burger King’s oatmeal comes in Original and Fruit Topped Maple flavors. The fruit-topped version features dried fruit, including cranberries, raisins, cherries and blueberries.

“BKC is committed to offering Burger King guests quality, great-tasting food, beginning with breakfast,” Leo Leon, vice president of Burger King Global Innovation, said.

During conference calls this year, Burger King executives told analysts that the company would introduce new menu items, which include fruit smoothies and salads currently being tested, to broaden the brand’s appeal beyond its traditional young male burger-eating demographic.

The oatmeal debut came soon after Burger King introduced a new burger, the California Whopper, and a new television ad campaign that ditched the longtime King mascot from its marketing.

Earnings at the 12,251-unit chain have struggled recently under its new owners, 3G Capital Management LLC. Two weeks ago, Burger King reported that net income fell 12.7 percent in the second quarter, while second-quarter revenue dropped 4 percent and same-store sales decreased 5.3 percent in the United States and Canada.

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Bulking Up

Monday, August 22nd, 2011

Derek Barbagallo is the chief executive and chief financial officer of Colony Foods in Lawrence, Mass. Despite the recession, he has invested in infrastructure and staff to prepare for post-recession growth. A third-generation company executive, Barbagallo has a business theory that guides his leadership: “Don’t live in the past, and learn from your mistakes.”

Joseph Mario Barbagallo founded the company 55 years ago as a jobber working out of his garage. Three brothers, Joe, Mike and Paul, followed in their father’s footsteps and ran separate businesses until they combined forces and moved into the warehouse where Colony is located now. Other family members in the business include Joe’s son, Joseph, and Paul’s son, Paul.

Growth is a key word for Barbagallo. When he joined the family business in 1992, revenue was $2.5 million. It recently topped out at $37.5 million. All this is the result of a strategic customer focus, he said. Colony bills itself as a company that is “small enough to care but big enough to make a difference.” Barbagallo said Colony concentrates on ways to add gross profit dollars to customers’ bottom lines, particularly in light of the recent recession.

The Colony distribution center has new freezers and coolers so operations can run more efficiently, and there is plenty of room for growth. Barbagallo is in the process of building a strong mid-level management team. In the last 18 months the company hired a sales manager and six new sales people. 

How do you help your customers protect their bottom lines?

One thing we do is to help them with new products — either to add to their menus or to help manage costs in the kitchen. Most distributors have a food show once or twice a year, but we have a 52-week food show. We send new items and fresh ideas every week to every customer.

How are they delivered?

Our drivers deliver the samples. Drivers are in the operations even more frequently than our sales reps. We let them try the items at home so they are familiar with them and can either answer questions or comment on them to the customers. We also give them a brief training session. Plus, the featured manufacturers provide funds for a driver incentive program. They can win things like gas cards.

What are some examples of the products you sampled recently?

We’ve featured olive oils, veal, smallwares, butter, ketchup, spices and sauces, among other things.

Do you have an example of a customer that has taken on one of these new products successfully?

We became an authorized distributor for a coffee-machine company. Many customers took advantage of this idea to garner additional business and help drive dessert sales after their meal. Just by adding coffee to their menu and selling 10 cups a day, they realized an additional $2,000 total gross profit dollar contribution to the bottom line. Not bad for a $100 investment. Plus, they can offer the freshest cup around, as every cup is served within seconds after being brewed.

On your website you have photos of “Big Dave” and a great video of “Chef Bruno” demonstrating a pizza-packaging item. How do they fit into your sales team?

Big Dave is who I call the Brad Pitt of the pizza world. Dave Ostrander is a consultant who has helped thousands of pizza operators and has partnered with us to help our customers. Chef Bruno is another example of how we help our customers differentiate themselves. The product he’s [demonstrating] is an item that helps our customers deliver pizza as close to “out of the oven” [as possible], even though it has been in a box for 20 to 30 minutes. 

Any other family members planning to join the company? How about your twin 13-year-old daughters?

As of now I am not sure who wants to come aboard. But I will have any future members go to work in the world after college before joining the family business. I also will encourage any fourth-generation person who may think they want to join the family business to work at a pizzeria for the summer or some part-time foodservice job to get to know and understand the industry and how it works. 

As far as my daughters go, I hope they learn from my mistakes and learn to delegate, manage, listen and surround themselves with good people. And, yes, I would love to experience the joy of working with my daughters in the family business someday.

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Restaurants Tap into Power of QR Codes

Monday, August 22nd, 2011

Research is revealing more about the use and users of QR codes, as the consumer engagement technology finds its way into new promotions by restaurants such as Taco Bell and Boudin Bakery.

Unlike conventional bar codes, a QR code stores information vertically and horizontally, and when a smartphone camera captures its likeness, special software displays on that phone additional information or links the user to a website with data or special offers.

Irvine, Calif.-based Taco Bell is currently using such codes to promote its Big Box Remixed meal bundle, and 23-unit fast-casual Boudin Bakery of San Francisco incorporated QR codes into a recent a Facebook coupon so smartphone users could quickly access an online store-locator tool.

Just how many consumers are using such QR code technology and where are they using it?

Recent research by digital media measurement company comScore Inc. indicated that in June, 14 million smartphone and other camera-equipped mobile device users in the United States scanned a QR code. That represented about 6.2 percent of all mobile device users ages 13 or older, the Reston, Va.-based company said.

ComScore collected the data in its monthly MobiLens survey, which gathers information from more than 10,000 respondents in the U.S.

About one in 13 of those QR code scanners, or 7.6 percent of the group, did their scanning while in a restaurant, according to the research. Most of the surveyed individuals scanned from home, 58 percent; a retail business, 39.4 percent; grocery store, 24.5 percent; work, 19.7 percent; or outside or while using public transit, 12.6 percent.

The QR code scanning research also found that:

• Most June scanners, 60.5 percent, were male, and the majority of scanners were ages 18 to 34, 53.4 percent.

• About one in three scanners, or 36.1 percent, had a household income of $100,000 or above.

• The most popular source for the QR codes scanned in June were magazines or newspapers, 49.4 percent; product packaging, 35.3 percent; website or computer screen, 27.4 percent; poster, flier or kiosk, 23.5 percent; business card or brochure, 13.4 percent; storefront, 12.8 percent; or TV screen, 11.7 percent.

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Tavern on the Green Could be Reborn as a Chain

Monday, August 22nd, 2011

Louis Bivona, the owner of Tavern on the Green’s charity-based licensing firm, said Friday he is exploring the possibility of chaining the iconic Central Park, New York City-based restaurant.

Bivona — who indicated that he also has other, more extensive plans for the brand — bid $1.3 million for certain intellectual-property rights to the shuttered Tavern, which has been in Chapter 7 bankruptcy since 2010.

The rights are being sold to help pay off the restaurant’s creditors.

The trustee of the bankruptcy estates of Tavern on the Green Limited Partnerships and LeRoy Adventures Inc. — which had run the high-grossing restaurant since 1976 — entered into an agreement to sell the rights to Bivona.

However, a bankruptcy court-approved bidding process first must be conducted before the sale is finalized. The auction is expected to be completed in late September.

The trademark rights being auctioned would enable the new owner to have royalty-free use of the Tavern on the Green name and logo for new restaurants outside of New York, New Jersey, Connecticut and parts of Pennsylvania, according to Streambank LLC, a Needham, Mass.-based firm retained by the trustee to conduct the sale.

The City of New York, which established the original Central Park restaurant in 1934, was awarded the rights to operate or license Tavern on the Green in the aforementioned areas by a U.S. District Judge last year.

Additional rights include ownership of the Tavern trademark for salad dressings and oils, as well as the rights to register the trademark for other products, including packaged food items, home décor and cookware.

“This is a tremendous opportunity to own an iconic brand that is world renowned — and arguably the most famous full-service restaurant brand in the world,” Gabe Fried, a Streambank executive, said in a statement.

At the peak of its popularity, Tavern on the Green was said to generate in excess of $35 million in sales annually.

Bivona, who declined to provide details of his plans for the brand, admitted that he would likely license future restaurants to others rather than operate them himself if he wins the bid.

“If we win, we have some unique ideas,” he told Nation’s Restaurant News. “We’ll do it right.”

Bivona said his entire purpose for acquiring the trademark rights to Tavern on the Green is to help raise money for the National Center for Missing and Exploited Children, of which he is chairman of the New York branch.

“I came to this with a whole different perspective,” he said. “I was searching for a way to fund the charity, and saw what Paul Newman was doing with his company.”

Bivona has been distributing Tavern-branded salad dressings, oils and marinades under the name Tavern Direct, since 2007.

Most of the premium products range in price from $8.50 to $11, with 50 cents from each item sold donated to the center. “I really think we have found a great way to fund the center,” Bivona said. “We will definitely be able to do this with any number of products.”

The LeRoy family filed for Chapter 11 bankruptcy following the termination of its contract with the City of New York to run Tavern on the Green, and closed the restaurant on Dec. 31, 2009. A U.S. bankruptcy judge converted the case to a Chapter 7 liquidation after creditors requested the change after an auction of the Tavern’s content failed to raise enough money to pay off debt.

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Jack in the Box: Turnaround Plan Working

Monday, August 15th, 2011

Jack in the Box’s turnaround efforts are taking hold, but beef and other commodity costs are expected to continue to pressure margins into fiscal year 2012, company officials said Thursday.

In a call to analysts following a mixed report of third-quarter earnings on Wednesday, Linda Lang, chair and chief executive of San Diego-based Jack in the Box Inc., said she was very pleased that same-store sales at company-owned locations for the namesake quick-service chain were up 4.7 percent, and up 2.4 percent at franchise locations, marking the fourth consecutive quarter of sequentially improving trends.

The improved performance reflected both traffic increases and a higher average check, she said, and trends were up across all dayparts and markets, including California, Arizona and Texas, which have suffered from high unemployment and home foreclosure rates through the recession.

Lang credited the gains with the company’s ongoing efforts to improve customer experience at Jack in the Box.

About 72 percent of Jack in the Box locations have undergone a re-imaging, an ongoing remodel program that is expected to reach all units before the end of the calendar year, she said.

In June, Jack in the Box began rolling out new easier-to-navigate menu boards that dropped underperforming items and highlighted average-check builders. In addition, it upgraded key menu items over the past year.

Jack in the Box has also worked to improve service, and Lang said customer satisfaction ratings are up, specifically for order accuracy and cleanliness. In March, the chain launched a new initiative to improve its speed of service.

“We recognize that these investments may pressure margins in the near term, but they will drive sales and build loyalty in the long term,” she said.

Lang also said the chain has driven traffic by offering both bundled meals as a value proposition — along with check-building sides, desserts and shakes — in addition to more premium items, like the Bourbon BBQ Steak grilled sandwich introduced in April.

The average check at Jack in the Box also benefited from a 1.4 percent menu price increase at company-owned restaurants in May, Lang noted.

Despite rising commodity costs, however, Lang said the company will remain cautious about further price increases given the fragile consumer climate.

At its Qdoba Mexican Grill brand, same-store sales were up 5.1 percent systemwide during the quarter. About 2 percent of that increase came from pricing, with the rest reflecting an increase in transactions and catering sales, Lang said.

For the year, the company has projected commodity costs for both brands to be 5 percent higher than last year, with beef, expected to be up about 13 percent, accounting for about 20 percent of the company’s spending.

Jerry Rebel, Jack in the Box Inc.’s executive vice president and chief financial officer, said there has been no indication that beef commodity prices will decline into next year.

“Things are volatile right now, and we’ll have a much better view in November,” when the company is scheduled to report fourth quarter results, he said.

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BK’s Menu Overhaul Goes Far Beyond Burgers

Monday, August 15th, 2011

Burger King is conducting a major overhaul of its menu in an effort to reverse sliding sales and broaden the brand’s appeal.

The Miami-based quick-service chain is testing a variety of new menu offerings, including fruit smoothies — which have been ringing up healthy sales increases in the QSR segment — specialty coffees, low-fat parfaits, oatmeal with dried fruit, and salads.

Observers say Burger King’s strategy is an attempt to diversify the chain’s longtime core demographic, which for years focused on the 18- to 34-year-old burger-eating male.

“It’s overdue,” said Dennis Lombardi, executive vice president of foodservice strategies for Columbus, Ohio-based WD Partners. “The strategy of going to the male demographic got a serious dent in it when the economy went south. That group has high unemployment. McDonald’s success has been very apparent by broadening its demos.”

“I’m glad Burger King is [updating its menu] now, and I wonder why they didn’t do it two years ago,” Lombardi said. “It’s not surprising. The whole industry is watchful of what works for others and then comes out with the parallel models.”

Preparing for a late Thursday afternoon conference call, the 12,251-unit burger chain is coming off two struggling quarters as global same-store sales fell 2.8 percent in the first quarter of 2011 and 3.7 percent in the fourth quarter of 2010.

For the most part, not much detail is known about the ongoing menu product testing, according to Tony Versaci, chairman of the burger chain’s National Franchisee Association.

“They’ve been very, very, very secretive,” said Versaci, president and chief executive of the 17-unit Burger King franchisee Multi King Corp. of Michigan and Illinois. “They haven’t told us anything.”

However, by broadening its menu selection, offering non-burger items, and reaching out to women and families, Burger King could tap into a consumer audience that it didn’t appeal to past years, said Bonnie Riggs, a restaurant industry analyst with The NPD Group, a Port Washington, N.Y.-based market research company.

“They’ve always had the 18 to 34 super fans,” she said. “But what did they do to attract families with kids? They didn’t compete in that area. This new [Burger King] management decided to broaden the demographic profile and it’s a good move on their part.”

Burger King’s move to introduce smoothies taps into the current quick-service trend of specialty beverages and snacks, said Darren Tristano, executive vice president of Technomic Inc.

“Chains are focusing on beverages and snacks like oatmeal,” Tristano said. “They’re hitting the complimentary food items and hitting the snacks.”

Sales for smoothies in the quick-service category increased by double digits during a 12-month period that ended May 31. At the same time, specialty coffees, such as iced coffees and frappes, increased 5 percent for the same period, Riggs said.

Smoothies potentially can be a strong new item for Burger King because they can diversify the chain’s demographic by appealing to women, serve as a healthy menu alternative and be consumed as a snack, which is another strong quick-service trend, Riggs said.

The fact that a big burger brand such as McDonald’s has introduced and marketed smoothies already makes it easier for Burger King to add that item to its menu, she added.

McDonald’s said this week that beverages such as its highly publicized Mango Pineapple Real Fruit Smoothie helped produce its 5.1-percent increase in global same-store sales in July.

“McDonald’s led the way in terms of consumers visiting hamburger restaurants and ordering smoothies,” Riggs said. “It would be something that Burger King can add to its menu that consumers are already aware of.”

Other types of quick-service menu products that have increased in the past year have been breakfast-related and chicken offerings, Riggs said. Specifically, those items include chicken nuggets, breaded chicken, chicken strips; and breakfast wraps, burritos and sandwiches, she said.

Burger King’s menu update comes at a time when the brand is struggling to grow its sales following the acquisition by private-equity firm 3G Capital last fall. Besides seeing sweeping changes in its management, Burger King also cut ties with its longtime ad agency, Crispin Porter + Bogusky, hiring McGarryBowen with the goal to move away from the signature King mascot character.

Even with sagging sales, Burger King has an opportunity to turn things around with its new menu items, experts said. With 9 percent of consumers saying they want fresh and lighter fare, quick-service operators such as Burger King have to pay attention to that demographic slice, especially when there are 61 billion annual visits to restaurants in the United States, with nearly one out of four visits to a burger chain restaurant, Riggs said.

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The Magic Touch

Monday, August 8th, 2011

Tableside touch-screen computer terminals for promotions, guest self-ordering and check settlement are catching on, as a growing number of operators seek to give guests more control over their dining experience while at the same time capturing useful operational and marketing data.

Most recently, 122-unit Chili’s franchisee ERJ Dining LLC said it was rolling out tableside touch-screen devices, joining such other operators as Umami Restaurant Group of Los Angeles and independents such as Calafia Café in Palo Alto, Calif., and The Post, a sports bar in St. Louis. 

“Guests love to be able to pay their checks when they are ready and have entertainment on the table during their visit,” said Mike Bova, executive vice president of operations for Louisville, Ky.-based ERJ. “And beyond the improvement in guest satisfaction, we’ve been able to see the benefits of increased sales of promoted items while reducing costs associated with labor and operations.”

The new technologies make it possible for table-service restaurant guests to command more of the steps tied to ordering and payment, which can shorten their dining time, when desired, and reduce order errors and the possibility of credit card fraud. In some cases, patrons can play solo or group games or otherwise view entertainment content, such as movie trailers. 

At the same time, these technologies can give restaurateurs the ability to use appealing photography to showcase menu items, tailor user interfaces to incorporate suggestive selling, deliver multimedia marketing messages, survey guests about their experience and recruit for loyalty programs. The ability to capture and analyze the data tied to multiple decisions made by guests using the at-table devices is another lure for some operators wanting to fine tune promotions and menu development.

ERJ and its vendor, TableTop Media, said the Chili’s operator has shaved an average of three minutes off of its table-turn times, seen unspecified higher per-person check averages and experienced a significant increase in its loyalty club enrollment.

By design, the devices used at ERJ’s Chili’s locations, called Ziosks, permit guests to self-order only a limited number of items, such as drinks and desserts. But some other restaurants are putting touch-screen ordering of their entire menus at guests’ fingertips, including The Post, which is using the eTab technology of eTab International Inc., and Umami Restaurant Group, which has deployed E la Carte’s Presto devices at the company’s full-service Umami Burger in La Brea, Calif.

The technologies of E la Carte, eTab and TableTop Media require integration with a restaurant’s point-of-sale system and incorporate payment-card readers. Under each of their business models, restaurateurs pay monthly service fees. 

“Tables using eTab are ordering more,” said The Post co-owner Adrian Glass, noting that revenue rises about 10 percent with the use of the at-table technology, and that faster service and higher guest purchases of specials promoted on the devices are two of the reasons. “Most [guests] are shocked at how quickly their drinks get out to them.”

The Post, which generates annual sales of about $1.1 million from 130 seats, is eTab’s beta test site and has been using 25 of the tablet-computer-type devices on a full-time basis since January. As a test site, to this point, it has paid no usage fees.

During a long sporting event, eTab users might order “one, possibly two, additional rounds” of drinks or appetizers, Glass said. That’s because guests are able to place orders directly with the kitchen or bar, as opposed to being required to catch the attention of their server, who would then have to walk to a point-of-sale system terminal to enter that information, he said.

Glass noted that guests may choose to blend the service styles, ordering from both a waitress and the device during a meal.

“I tell [reluctant guests], ‘Don’t be so quick to shun it. If your waitress has four tables saving her time using eTab, she has more time to hang out at your table and pay attention to your party.’”

Glass said getting buy-in from some servers has been a challenge. He noted that reluctance was fueled by what has proven to be the unfounded fear that guests will tip less, as a percentage of their tab, if they self-order. 

His operation’s use of wait staffers to explain the technology to guests can be undermined on busy nights, Glass said, as demands on servers’ time might cut short that introduction. He said the problem might be avoided at restaurants that use dedicated hosts or hostesses.

“It’s not really affecting our sales, but we like the fact it makes things happen quicker; that’s important in a small restaurant,” Umami chief executive Adam Fleischman said after a month of using Presto terminals.

About 50 percent of the guests at the La Brea Umami Burger are using the at-table ordering devices available at all 15 tables, Fleischman said. 

“Guest reaction has been very good; people are comfortable with [the technology] and finding it intuitive to use.”

Fleischman said he has not yet altered staffing levels in response to the relatively high usage rate of the technology.

At least one analyst following publicly traded casual-dining restaurant companies — Keybanc Capital Markets Inc.’s Brad Ludington — is keeping an eye on at-table marketing and ordering devices. Ludington wrote last fall about the upside of the technology in notes about a test of Ziosks at a limited number of California Pizza Kitchen locations.

“We believe that the potential cost savings, positive impact on customer satisfaction, improved reads on new menu items and improved market-research capabilities could not only help CPK, but could be a trend seen across multiple casual-dining brands in the coming years,” he concluded. 

What to consider

Six questions to ask before
choosing a table-top system:

1 Does the technology integrate with existing point-of-sale software? If not, how much will integration cost?

2 Are payment functions compliant with the latest data security standards?

3 What is the device’s battery life? How long does it take to recharge the batteries, and what are the wiring and space requirements for the charging equipment?

4 In addition to a monthly usage fee, will there be costs for other services, such as data storage or report generation?

5 If the devices display third-party advertisements, will I receive a share of that revenue?

6 What happens if the system is defective, damaged or stolen?

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Social Media Helps Spur Produce Consumption

Monday, August 8th, 2011

A campaign to double the amount of produce served in restaurants by 2020 has reached a critical juncture, and social media and new consumer-facing technologies can help push the movement forward, according to foodservice operators and industry trade group leaders.

The Millennial generation is “much more adventurous” than Generation X and Baby Boomers, and that is leading to “more plant-based foods” on menus, said Rick Wolff, director of culinary standards for Bethesda, Md.-based contract feeder HMSHost Corp., during the opening educational presentation of the 30th Annual Produce Marketing Association Foodservice Conference & Expo in Monterey, Calif.

Wolff, who was part of a panel comprising operators, growers and distributors, was referring to college-age consumers. But he added that even in the airport settings where his company conducts most of its business, customers increasingly are asking questions about ingredients, such as “Is it sustainable? Is there a farmer behind it? What is the reality [or impact on the carbon footprint] when you bring us that product and it is out of season?”

Michael Pursell, associate vice president of marketing for Philadelphia-based contract feeder Aramark’s education division, said there is a “big push” on college campuses for convenience in the form of grab-and-go stations with packaged individual portions of fruits, vegetables and other foods, and retail-style multi-concept, food-and-beverage presentations, such as one might find in a commercial mall food court.

“Another trend that is up and coming,” not only at colleges but high schools as well, “is the idea of customization,” or the concept of “made-for-you,” such as is exemplified by Chipotle Mexican Grill’s assemble-to-order service format, among others, he said.

Pursell underscored the importance of social media platforms, such as Facebook, Twitter and FourSquare, when dealing with consumers.

“The Millennial generation is more in tune with that,” the Aramark executive said of social media. “So, as a marketing strategy, if you don’t have one [a social media platform] it is very important that you come up with one.”

Dawn Sweeney, chief executive and president of the Washington, D.C.-based National Restaurant Association, who co-hosted the educational presentation with her PMA counterpart, Bryan Silbermann, too, felt that social media can play a key role in meeting the goals of Foodservice 2020. That campaign to increase produce sales at restaurants was launched two years ago by the NRA, the Newark, Del.-based PMA and the International Foodservice Distributors Association of McLean, Va.

“Social media applications are the tools to enable the connection” with consumers, Sweeney said, addressing growers in the audience as well as distributors and operators. “The story you tell once you get the consumer’s attention is what builds the relationship. Based on what I saw here yesterday [during farm tours], you have plenty of stories to tell a hungry American population crying out for great flavor wrapped in health and wellness.”

The PMA’s Silbermann maintained that research and other evidence suggests, “We are at a tipping point” and near “a major shift in demand for fresh produce on menus.”

Silbermann and the NRA’s Sweeney presented a variety of statistics about produce and healthful foods marketing by restaurants that may be indicators of the increased availability of such items. They also mentioned other industry trends to the audience made up from among the nearly 1,700 conference attendees reported by PMA.

They included:

• Menu items listed as “healthy” grew by 65 percent between 2009 and 2010, according to Mintel Menu Insights. “This is in direct response to consumers actions: Last year the NRA’s National Household Survey revealed that 70 percent of adults say they try to eat healthier when they’re out than they did just two years previously,” Sweeney said. “And we know that one out of three have searched online for nutritional information about restaurant food.”

• Citing research by Mintel Menu Insights, which was sponsored by the Markon Cooperative for produce and Paramount Citrus company, Silbermann said that since 2007, mentions of fruit and vegetables on menus increased 15.2 percent, with the greatest increase, or 7.1 percent, happening since 2009 and the inception of Foodservice 2020. He said menu mentions of fruit grew more than 30 percent and on-menu references to vegetables increased 9.7 percent.

• Expanding on those findings and others, Sweeney added that more than 80 percent of the menu mentions occurred in the menus of casual-dining restaurants, which saw an 18.6-percent increase in such mentions. “I can’t tell you how thrilled I was to see that the most significant growth in fruit mentions took place in kids’ meals, with an increase of 77 percent. Vegetables weighed in at a healthy 33.5-percent increase in kids meals,” the NRA executive added.

“According to Nation’s Restaurant News, 92 percent of social media users eat at a sit-down restaurant at least once a month, 58 percent of Americans now view restaurants online and 16 percent of all consumers are connecting with their favorite restaurants through Facebook, YouTube or MySpace,” Sweeney said. “NRN also reports that digital upselling is emerging as a powerful new trend [and that] some operators are seeing 15 to 20 percent average check increases [from it, and] guests are staying longer and seem to spend more through the use of videos, interactive games, digital signage and Internet ordering interfaces.”

Silbermann cited NPD Group research data showing that breakfast and brunch accounted for 60 percent of the foodservice industry’s traffic growth over the past five years and wondered if that might not be the reason for the dramatic increase in mentions of fruit items on menus.

“C-stores and retailers are moving into this area with a vengeance,” the PMA leader said before adding, rhetorically, “So what are your breakfast plans to hold onto and grow your market share?”

Among the other panelists for the opening session, “Foodservice 2020 - Challenges Met with Opportunities,” were Rich Dachman, vice president of produce for Sysco Corp.; Lorri Koster, co-chairman of the board of Mann Packing Company Inc.; Robert Verloop, executive vice president of marketing for Naturipe Farms LLC; Greg Drescher, executive director of strategic initiatives for the Culinary Institute of America; and Peter Testa, president of Testa Produce Inc.

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