Archive for March, 2013

Sonic Exploring Loyalty Program, New Ads

Thursday, March 28th, 2013

Sonic Corp. executives expect revised media buying will help it maintain its profit margins, which more than doubled its net income in the second quarter.

Executives of the Oklahoma City-based drive-in operator who spoke with analysts Monday also indicated they are developing a loyalty program to help drive traffic for the brand.

On Monday Sonic reported an increase in net income to $3.6 million, or six cents per share, in the quarter ended Feb. 28, compared with $1.7 million in the same period last year. Revenue in the second quarter slipped to $111.1 million, from $115.1 million in the year-earlier quarter.

Sterne Agee analyst Lynne Collier maintained a neutral rating on Sonic’s shares on Tuesday. “While revenues were slightly shy of our expectations,” Collier wrote in a research note, “the upside stemmed from lower-than-expected other operating expenses as the company benefited from the re-franchising of lower volume units.”

Sonic refranchised 34 drive-ins during the quarter.

Advertising shifts have helped drive sales, said Clifford Hudson, Sonic’s chairman and chief executive. “As we’ve noted beginning in January 2013, approximately 70 percent of our media dollars will be invested in national cable, with the remaining portion in local television and other mediums,” Hudson said. “This is up from roughly a 50-50 split previously, and that is between local and national, and should have the impact of increasing the number of times our average customer or potential customer in every market will see our commercials.”

He said the exposure should eventually have a positive impact on new-store development.

In February 2012, Sonic re-introduced its “Two Guys” television commercials, which Hudson said helped drive traffic outside the typical lunch and dinner dayparts. About 50 percent of Sonic’s sales are outside those two periods, he said.

The reintroduction of the two recognizable characters was a key part of Sonic’s strategy, Hudson said, “enabling us to promote all dayparts, all of our dayparts in shorter time frames, or promote all of the dayparts within the same quarter, which is our objective.”

Hudson added that the “Two Guys” have become a brand-builder. “We’re continually looking for ways to keep them fresh and relevant because they have worked so hard for us and are so closely associated with our brand,” he said.

In answering analysts’ questions, Hudson said Sonic is also working on a potential loyalty program, a vehicle that remains fairly rare in the quick-service segment.

“We do think it has a place in our business, and we have many very regular customers, so it makes sense to reward them for being so but also help drive additional traffic with customers who might appreciate that as well,” Hudson said, adding that plans for a possible loyalty program were still evolving.

Sonic is also working on store profitability, said Stephen C. Vaughn, the company’s chief financial officer. He noted that the new, smaller building prototype improves return on investment.

“One of the reasons we expect stronger development over the longer term is the work we’ve done to improve new store return on investment through a new smaller building design,” Vaughn said, “which reduces non-land costs by 15 percent to 20 percent. We have opened several of these drive-ins to date, and we expect that this will become the primary layout for new stores in the future.”

As of Feb. 28, Sonic had 3,526 drive-in units in 43 states.

KFC Introduces Kids’ Meals

Thursday, March 28th, 2013

Sensing a big opportunity in its smallest consumers, KFC has introduced the Li’l Bucket kids’ meal and will promote it with two social media contests.

KFC said the kids’ meal’s default offerings of a Kentucky Grilled Chicken drumstick, green beans, an applesauce pouch from GoGo squeeZ and a Capri Sun Roarin’ Water has 210 calories, 4 grams of fat and 565 milligrams of sodium. The meal can be customized with other side dishes or chicken options, including four Original Recipe Bites, an Extra Crispy Tender or a Chicken Little sandwich.

Guests can substitute macaroni and cheese or mashed potatoes and gravy for the green beans, and 1-percent milk is an available alternative to the Capri Sun beverage. The suggested retail price of the Li’l Bucket is $3.99.

“We’ve found that our fans are looking for meals that appeal to moms and kids in terms of options and taste,” chief marketing officer Jason Marker said in a statement. “By pairing our freshly prepared chicken choices with delicious, convenient fruit and KFC’s famous sides, we’ve created a meal with balanced and kid-friendly options.”

Marker called the Li’l Bucket the “thinking mom’s kids’ meal,” because it aims to balance food options acceptable to parents with interactive features that their children would still find fun. He noted that GoGo squeeZ provides not only the applesauce packet but also several kid-friendly puzzle games, which are attached to the bottom of the bucket lid. “We thought we’d give them some food for though on the bucket in addition to the tasty meal inside,” he said.

Though market research firm The NPD Group found in a study last year that sales of kids’ meals declined in 2011, industry watchers nonetheless predicted that foods served to children would provide opportunities to grow sales in 2013. In its “What’s Hot in 2013″ culinary forecast that surveyed more than 1,800 chefs, the National Restaurant Association projected that among the top 10 culinary trends for this year would be healthful kids’ meals, children’s nutrition as a culinary theme, and whole-grain items in kids’ meals.

Since July 2011, the NRA has run the “Kids LiveWell” initiative to publicly inform parents of healthful kids’ options at partner restaurants. Former President Bill Clinton praised the program in his keynote speech at the NRA Restaurant, Hotel-Motel Show in Chicago last May.

Currently, neither KFC nor its sibling chains Pizza Hut or Taco Bell participate in Kids LiveWell, which has more than 80 restaurant brands as partners. KFC has committed itself to two marketing initiatives as a tie-in to the launch of the Li’l Bucket, however.

The first, the Li’l Playground Makeover Facebook contest, invites fans to nominate their local playgrounds as candidates for restoration and refurbishment to be paid for by KFC. Customers may submit photos to KFC’s Facebook page to enter, or they can tag videos or photos of their playgrounds with the “#KFCPlaygrounds” hash tag on Vine or Instagram. KFC will choose up to five winners to receive funding for their playgrounds, as well as Li’l Buckets kids’ meals to cater the neighborhood’s first block party at the new playground.

Additionally, through April 30, families can enter the KFC Ultimate Playground Experience Sweepstakes by scanning the QR code on each Li’l Bucket. Prizes include funds to cater a block party from KFC or an appearance from the GoGo squeeZ Mobile Playground.

Louisville, Ky.-based KFC operates or franchises more than 17,000 restaurants in more than 115 countries. The chain is a subsidiary of Louisville-based Yum! Brands Inc., as are Pizza Hut and Taco Bell.

Five Restaurant Trends to Watch This Spring

Thursday, March 14th, 2013

Spring is coming, and that means cooking with English peas and fava beans, morels and ramps, fiddleheads and rhubarb, just as it does every year. But seasonal produce isn’t the only factor inspiring restaurant offerings over the next few months.

Here’s a look at five trends — including flavors, cuisines and processes — that you can expect to see more of this spring.

Mediterranean goes mainstream

The cuisines of Spain, southern France, Italy, Greece, Turkey and North Africa have been growing steadily in popularity for the past decade, but they were given a meaningful shot in the arm recently. A study by the New England Journal of Medicine documenting what people have been claiming for years: that the region’s diet is good for the heart. Combine that with the now widespread acceptance of hummus and Greek yogurt, and you have a trend with real legs.

You’ll see Mediterranean touches this spring at places such as DGS Delicatessen in Washington, D.C., where chef Barry Koslow will be adding black sesame yogurt to spring pea soup with smoked salmon tartare. And at T. Cook’s at the Royal Palms Resort and Spa in Phoenix, chef Todd Sicolo has introduced a springtime salad of shaved asparagus and preserved lemon — a common North African ingredient — with morels, Reggiano cheese and tomatoes.

Chains are bringing Mediterranean influences to their food, too. For example, 147-unit Corner Bakery Café, based in Dallas, is adding a lemon chicken orzo soup to its menu this spring.

Restaurants will also be serving plenty of straight-up Mediterranean dishes, such as the Eastern Mediterranean parsley-and-bulgur salad Tabbouleh on the menu at True Food Kitchen, Sam Fox’s six-unit chain based in Scottsdale, Ariz.

Even decidedly non-Mediterranean concepts are getting in on the action: 31-unit BD’s Mongolian Grill is adding such items as tomato Parmesan soup, made with diced tomatoes mixed with garlic, herbs and Parmesan cheese — a Mediterranean mix if ever there was one.

Young garlic becomes the new ramp

Many chefs who were asked about what they were looking forward to this spring pointed to the usual seasonal favorites such as ramps and morels, but even more expressed enthusiasm about spring garlic.

Whether they meant the green shoots that are suitable for stir-frying or the young bulbs that are sweeter and lighter but more aromatic than garlic during the rest of the year, chefs seem particularly excited about this particular spring specialty.

John des Rosiers, the chef of Inovasi in Chicago, said he’s positively sick of springtime ramps, the leek-like vegetables that sprout during this time of year. “I like ramps, but enough is enough. We’ve got to start doing something else,” he said.

For him that something is young garlic. He’s thinking of poaching the greens, “to take some of the harshness out,” and then making a pesto out of them, perhaps to be served with savory chanterelle custard.

He’s also planning on charring the young bulbs on a grill, chopping them and making a salsa out of them with lime juice and olive oil. “It’s really great with different types of seafood,” he said.

Beverage flights take off

A standard at many independent and fine-dining restaurants, beverage flights, or small tastes of a variety of drinks, are now gracing the menus of more chain restaurants – and are including more than just wine.

Restaurateurs say beverage flights can add an educational component to a meal and enhance the dining experience, as well as provide a boost to checks.

One of the latest chains to add drink flights to its menu is 223-unit California Pizza Kitchen. CPK has added three wine flights, each of three 3-ounce pours for $12.

The 66-unit Smokey Bones chain has taken a different approach. Eager to let guests try more craft beers even before it adds more taps to its restaurants, the chain is offering a bucket of four craft bottles for $13.

This winter we saw a surge in after-dinner drink flights, and we can expect to see more of them this spring.

A certification for everything

Consumers have shown growing interest in where their food comes from. Whether they’re concerned about its wholesomeness, its sustainability, its healthfulness or its authenticity — or they just like an interesting story — they want to be assured of that they’re eating something good.

For years, the Associazione Vera Pizza Napoletana has been trying, with some success, to use its authentic Neapolitan pizza certification to stimulate sales of Neapolitan tomatoes and flour. And recently, the Marine Stewardship Council affixed its seal to the Filet-O-Fish sandwich and Fish McBites from McDonald’s, certifying that the chain is using certified sustainable Alaska pollock.

Now, more organizations are sprouting up to certify various aspects of food. This spring, The Daily Dish in Silver Spring, Md., is serving jumbo lump crabmeat that bears the Maryland Department of Natural Resources’ “True Blue” certification, verifying that it comes from the state’s waters.

Celebrity chef Paula Dean has teamed up with Florida Hospital to launch a line of healthy recipes called Healthy 100 Approved. These menu items, developed by dieticians, will be offered in restaurants in central Florida this spring. That designation joins the National Heart Association’s Heart-Check logo that’s affixed to certain menu items at Subway in a pilot program introduced last year.

At the higher end, Sanitas Per Escam — Latin for “health through eating” — is trying to gain traction by working with restaurants to develop menu items that fit its criteria of food that is not only good for you, but also sustainably sourced and delicious.

The expanding array of certifiable designations is likely to confuse both restaurateurs and their guests, but expect to see more of them in coming months. After that, maybe we’ll see a shakeout.

Pine pervades food, drinks

The influence of René Redzepi, chef of Noma in Copenhagen, can be felt in this trend — probably more of a fad, really — that incorporates the resinous, woody flavor of pine into food.

Smoking with pine boughs has been going on for a while, but now it’s being infused more directly into the food, and in more casual settings. For example at Stix, a new Mediterranean eatery in New York city that specializes in Greek food served on skewers, chef Nikolaos Stavrakakis purees pine with apple for one of his specialty juices.

David Schmidt, executive chef of the Enchantment resort in Sedona, Ariz., last year clipped pine stems to flavor beef broth and also steeped it in a light syrup that he used to make panna cotta. He’s planning on doing more of that this spring.

Judge Overturns New York Large Soda Ban

Thursday, March 14th, 2013

Just one day before New York City was set to ban the sale of large sodas and sugary beverages at restaurants and other venues throughout the five boroughs, a state judge overturned the new regulations, calling them “arbitrary and capricious.”

Beginning Tuesday, March 12, the ban, which had been championed by Mayor Michael Bloomberg, would have restricted restaurants, sports venues, movie theaters, street carts and delis from selling soda and other sugary beverages in cups or containers larger than 16 ounces. Retail food and convenience stores, which fall under the jurisdiction of the state of New York, would not have been regulated under the city ban.

The National Restaurant Association and other groups and individuals had challenged the regulations in a lawsuit filed in October in New York State Supreme Court in Manhattan. The lawsuit sought to block city officials from implementing the ban, claiming the city’s Board of Health had overstepped its authority when it passed the ban in September.

In his ruling, New York State Supreme Court Judge Milton Tingling wrote that the city is “enjoined and permanently restrained from implementing or enforcing” the new regulations. He ruled the ban was “fraught with arbitrary and capricious consequences. The simple reading of the rule leads to … uneven enforcement even within a particular city block, much less the city as a whole.”

New York officials defined sugary drinks as beverages sweetened with sugar or another caloric sweetener that contain more than 25 calories per eight fluid ounces and contain less than 51 percent milk or milk substitute by volume as an ingredient. The ban did not apply to diet drinks, calorie-free drinks and alcoholic beverages.

Tingling stated that the ban “excludes other beverages that have significantly higher concentrations of sugar sweeteners and/or calories on suspect grounds, and the loopholes inherent in the rule, including but not limited to limitations on re-fills, defeat and/or serve to gut the purpose of the rule.”

The city had said it would begin fining sellers by as much as $200 for violating the ban beginning in mid-June.

“This is a great victory, particularly for thousands of restaurant operators and industry suppliers serving New York City who would have experienced financial hardships had the ban been enacted,” said Dawn Sweeney, president and chief executive of the NRA. “We are extremely pleased that the judge recognized that the Board of Health exceeded its authority when it initially passed the ban.”

Sweeney added, “We look forward to working with public health officials to engage in a constructive dialogue that will have a positive and sustained impact on the people of New York City.”

Judith Thorman, senior vice president of Government Relations & Public Policy for the IFA, said in a statement, “We applaud the court’s decision to prevent Mayor Bloomberg’s unnecessary and ineffective proposal from being enacted and enforced. The proposal was an example of government overreach that unfairly targeted restaurant franchises and would have done little to combat obesity, while placing excessive and arbitrary costs on franchisees throughout New York City.”

The National Consumers League, a Washington, D.C.-based consumer advocacy group, expressed disappointment in the judge’s ruling. “With alarmingly high obesity rates, particularly amongst our children, it is important that leaders take decisive steps to protect public health,” said Sally Greenberg, NCL’s executive director. Sodas and other sugar sweetened beverages are a large part of the problem and their overconsumption needs to be addressed.”

Bloomberg had introduced the proposal last May, citing the city’s obesity and health problems as his reason for wanting to limit the size of sugary beverages.

“In New York City nearly 60 percent of adults and nearly 40 percent of children are overweight or obese, and there are real-world consequences,” Bloomberg had said earlier. “People’s lives will be shorter, their quality of life is going to be dramatically reduced, and obesity is going to start killing more people in this country than smoking.”