Wyoming’s troubling Campylobacter uptick appears to be edging off a bit and is not in any way connected to the other larger campy hotspot on the U.S.-Mexico border at Yuma County, AZ.
As of July 22, the number of Campylobacter cases in Wyoming since June 1 had reached 34. “That is still ahead of our baseline, but not as dramatic as the four fold increase we reported earlier,” says Kim Keti, Wyoming Department of Health spokesman in Laramie.
Wyoming reported the sharp increase in dangerous human Campylobacter bacterial infections earlier in July after six people were hospitalized with it. No common source has been identified, but “animal-related” illness is partially driving the increase, says Kelly Weidenbach, a state epidemiologist.
Most of the victims are men, many with farm and ranch backgrounds.
Further south in a relatively small geographic area along the U.S.-Mexico border, health officials are continuing to investigate whether an increase in Campylobacter cases is responsible for an unusual spike in Guillain-Barre Syndrome (GBS).
Health officials in the U.S. and Mexico took notice when they counted at least 16 cases of GBS in the area. Now there are more than two dozen: 17 in Mexico and 7 on the U.S. side of the border.
Typically, there is only 1 case of GBS for every 100,000 people.
Yuma County, AZ and San Luis Rio Colorado, Sonora in Mexico are the two areas with GBS cases and one commonality they’ve identified are more cases of Campylobacter. Health officials are working together and crossing the border to conduct investigations.
The states of Arizona and Sonora are promoting thorough hand-washing and safe food preparation as the best defenses against infection. GBS is not passed person to person.
The Centers for Disease Control and Prevention (CDC) in Atlanta declined to comment on any involvement it might have in combatting the two diseases.
According to CDC, Campylobacteriosis is an infectious disease caused by bacteria of the genus Campylobacter.
Most people who become ill with campylobacteriosis get diarrhea, cramping, abdominal pain, and fever within two to five days after exposure to the organism.
The diarrhea may be bloody and can be accompanied by nausea and vomiting. The illness typically lasts one week. Some infected persons do not have any symptoms. In persons with compromised immune systems, Campylobacter occasionally spreads to the bloodstream and causes a serious life-threatening infection.
GBS is a serious neurological disorder involving inflammatory demyelination of peripheral nerves, according to CDC. It can occur spontaneously or after certain events such as infections.
Illness is typically characterized by the subacute onset of progressive, symmetrical weakness in the legs and arms, with loss of reflexes. Sensory abnormalities, involvement of cranial nerves, and paralysis of respiratory muscles also can occur. A small portion of patients die, and 20 percent of hospitalized patients can have prolonged disability.
Campylobacter jejuni, which causes bacterial gastroenteritis, is one identified participating factor for GBS.
As a Salmonella Agona outbreak linked to Mexican papayas unfolds, Congresswoman Rosa DeLauro (D-CT), Ranking Member on the Labor, Education, Health, and Human Services Appropriations Subcommittee, is calling on Congress to fund the implementation of the FDA Food Safety Modernization Act.
So far, the outbreak is linked to 99 illnesses, including 10 hospitalizations, in 23 states. A Texas-based marketer has recalled whole papayas sold under four brand names, and products containing papaya have been recalled as well.
“This recall is a prime example of why we must fully fund the Food Safety Modernization Act,” said Rep. DeLauo in a statement Wednesday. “This legislation, signed into law last year, has the capacity to strengthen and modernize our food safety system — but will only be successful if it has the tools and authority it needs.”
“The Food Safety Modernization Act gives the FDA new tools to better ensure that the food we consume, including that imported, is safe,” wrote DeLauro, citing the deep cuts to the U.S. Food and Drug Administration in the recent agriculture appropriations bill that cleared the House.
Under the plan, FDA would take an 11.5 percent cut, $280 million, in fiscal year 2012, $87 million of which would have a direct impact on food regulatory capacity.
The Congressional Budget Office estimates the food safety bill will cost $1.4 billion over 5 years to roll out.
“Essentially, we are asking the FDA to do more with less, and it will not work,” added DeLauro. “We should be investing in the FDA, not limiting its ability to effectively protect Americans.”
Congressman Jack Kingston (R-GA), Chairman of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Subcommittee, defends the cuts, citing America’s debt crisis.
During the appropriations debate on the floor last month, Kingston praised the private sector for maintaining such a high level of food safety without the “nanny state.”
“That’s the private sector working,” said Kingston. “The way you keep your customers coming back to buy more is by keeping them safe.”
Famous Dave’s will open a fast-casual prototype that may ultimately boost the chain’s domestic build-out by 100 locations, company executives said Thursday.
Christopher O’Donnell, chief executive of Minnetonka, Minn.-based Famous Dave’s of America Inc., during a conference call with analysts and a follow-up interview with Nation’s Restaurant News, talked about the new company-operated counter-service prototype. He said it is a conversion of a 3,000-square-foot shuttered Boston Market restaurant on a mall pad in Eden Prairie, Minn.
“I think it is important,” O’Donnell told NRN of the new development project, which just got the green light about three weeks ago. “I believe you make your best decisions when you have options that apply to today’s environment, and this is a significant opportunity for the brand to get into some second-tier markets and round out some others."
The conversion of the first-generation Boston Market “box” into the new Famous Dave’s counter-service restaurant will cost about $650,000, Diana Garvis Purcel, chief financial officer of the company, told analysts.
O’Donnell added that the prototype has the ability to do $1.5 million to $2.5 million in sales.
In comparison, in 2010, average annual sales per the 183 Famous Dave units were about $2.56 million at company-owned locations and $2.74 million among franchised operations, the company reported.
O’Donnell said that prior to the recession, ground-up construction of a full-service “smokehouse” design restaurant ran close to $3 million. Conversions were and are cheaper, he said, explaining that a company-owned restaurant now being converted from another concept in Falls Church, Va., carries about $1.2 million in development costs.
The counter-service restaurant planned for Eden Prairie was preceded by five “legacy” counter-service Famous Dave’s restaurants in Minnesota that remained true to the chain’s non-table-service beginnings, but may be larger than the 3,000-square-foot, 85-seat prototype that launched the system in 1994, O’Donnell said. He said it follows on the heels of a 2010 opening of a counter-service restaurant by a franchisee in Orange County, Calif.
Because of heightened interest in the fast-casual concept, it was no longer practical for the chain to work one-on-one with franchisees who want to develop such a restaurant, and it was time for the franchisor to create “the package,” O’Donnell said. He noted that three different franchisee groups are in conversations with the chain about moving ahead with counter-service locations.
O’Donnell also said that the fast-casual concept appeals to consumers.
“As we interview many of our guests, the counter-service [concept] does appeal to those who see it as a value because they don’t have to add the 15- to 20-percent tip,” he said. “Also, they can control their dining experience in terms of when they are ready to go, they go.”
The chain has seen recent growth in take-out and catering sales, versus its dine-in business. That was exemplified in the second quarter ended July 3 when same-store dine-in sales fell 1.7 percent at company stores, but off-premise business rose 0.5 percent, to 32.5 percent of total sales, Garvis Purcel said.
O’Donnell said that, initially, at least, the fast-casual variant will be self sufficient, in terms of producing the limited menu of core barbecue items it will sell: ribs, sliced pork, chicken and beef brisket, with a limited number of sides and salads. However, he said that in the future, depending on the market and circumstances, the chain might test an arrangement in which some counter-service locations are supplied, whether fully or partially, from a nearby full-service location.
Additional developments at Famous Dave’s:
• For the full year, fiscal 2011 food costs are expected to rise about 2.5 percent from fiscal 2010.
• In mid August, the chain will unveil new menu items and implement a 2-percent price increase on selected items. Among the new fare will be a Jalapeno Chili Roasted Corn Fritters appetizer served with honey, and hickory-smoked and grilled South Side Rib Tips, with a Memphis-style dry rub, jalapeno pickled red onions, Hellfire pickles and a new South Side barbecue sauce.
• O’Donnell gave a “rough estimate” of new restaurants to be opened during the next five years between 65 and 71. This year, the company said it would open 10 new locations, down from the 12 restaurants it previously expected to open in 2011.
Contact Alan J. Liddle at alan.liddle@penton.com.
Continuing to gain traffic momentum worldwide, Starbucks Corp. reported Thursday a 34-percent increase in third-quarter net income despite increased commodity costs.
The Seattle-based coffeehouse chain also upgraded its outlook for the year, saying that efforts to enhance the store experience have resonated with customers and driven traffic, mitigating the impact of higher commodity costs, including coffee.
For the third quarter ended July 3, Starbucks reported net income of $279.1 million, or 36 cents per share, compared with $207.9 million, or 27 cents per share, in the same quarter a year ago.
The results exceeded analyst expectations of 34 cents per share, according to surveys by Bloomberg.
Revenue rose 12 percent to $2.9 billion, as global same-store sales increased 8 percent. The same-store sales surge reflected a 6-percent increase in traffic and a 2-percent increase in average ticket, the company reported.
“These results demonstrate the power, and the extraordinary global potential, of our unique new business model,” said Howard Schultz, Starbucks chair, president and chief executive. “Starbucks has never been healthier, more connected to our customers and partners, or better positioned to go after the tremendous business opportunities that lie ahead.”
RELATED: Starbucks shuffles executive ranks
For the chain’s 10,957 U.S. units, Starbucks reported that net revenue rose 9 percent to $2 billion. Domestic same-store sales increased 8 percent as a result of a 6-percent increase in transactions and 2-percent increase in average check.
International net revenue totaled $658.5 million, a 20-percent increase over the same quarter last year, in part because of favorable foreign exchange rates. International same-store sales increased 5 percent on a 4-percent increase in transactions and a 1-percent jump in average ticket.
Also on Thursday, Starbucks announced that it has acquired full ownership of units in Switzerland and Austria, adding company-operated locations to its European portfolio.
Starbucks also said it has completed the previously announced acquisition of retail operations in central, southern and western China, which were previously operated in a joint venture with Maxim’s Caterers Ltd.
Starbucks’ consumer products group, or CPG, recorded a 25-percent increase in revenue to $218.4 million in the third quarter, with the company for the first time recognizing the full revenue from packaged coffee and tea after its breakup earlier this year with former licensing partner Kraft Foods.
Updating its outlook for the year, Starbucks now expects same-store sales growth at the high end of the 3-percent to 7-percent range projected earlier.
Earnings per share are projected to total between $1.50 and $1.51, a modest increase above earlier estimates of between $1.46 and $1.48.
The company expects to open a total of 600 locations this year, with about 500 internationally and 100 in the U.S. Earlier this month, however, the company lost 248 Seattle’s Best Coffee outlets that closed recently as a result of the Borders bookstore bankruptcy.
Next year, the company expects to accelerate growth with 800 new stores globally, including about 200 in the U.S., approximately half of which will be licensed locations. Internationally, Starbucks expects to open 600 locations next year, of which about two-thirds will be licensed.
Of the international total, about a quarter of the new stores will be in China, which is targeted to become Starbucks’ largest market outside the U.S. The company has pledged to open as many as 1,500 locations in mainland China by 2015.
With the additional store growth and expected strong sales from consumer retail goods, Starbucks is projecting same-store sales growth in the mid-single digits and revenue growth of about 10 percent in fiscal year 2012.
Higher coffee costs next year, however, are expected to have about a 21-cent per share impact on earnings.
At the end of the third quarter, Starbucks had 10,957 locations in the U.S., 6,691 of which are company operated and the rest licensed. Internationally, Starbucks ended the quarter with 6,061 locations, 2,218 of which are company owned.
Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout
As recovery in the upper tier of the economy continues to increase business travel and convention traffic, fine-dining chain Morton’s Restaurant Group Inc. has maintained its sales growth, logging its sixth consecutive quarter of same-store sales increases in the second quarter of 2011.
In the second quarter ended July 3, Chicago-based Morton’s tallied net income of $654,000, or 4 cents per share, compared with a net loss of $516,000, or 3 cents per share, a year earlier. Revenues increased 10.7 percent to $78 million, compared with $70.5 million in the second quarter of 2010. Same-store sales rose 8.2 percent compared with the same period a year earlier.
“We are pleased to report a strong second quarter, with comparable restaurant revenue up by 8.2 percent, reflecting our sixth consecutive quarter with positive comparable revenues,” said Christopher J. Artinian, president and chief executive of Morton’s Restaurant Group Inc.
“We also experienced an increase in overall traffic during the quarter, and our higher sales volumes were accompanied by expanded operating margins. In addition, business travel continues to trend positively, as evidenced by our increased traffic in convention markets. We remain well positioned to continue to grow our world-recognized brand both domestically and internationally, especially in Asia.”
Though the uptick in business travel has driven positive guest counts at Morton’s, the chain also has put in place several marketing initiatives to spur incremental traffic, including a sponsorship of the PGA Tour. Its newest addition to the bar menu, Spa-Tinis, are a line of low-calorie cocktails aimed at promoting happy-hour business.
Morton’s updated its projections for fiscal year 2011 to include full-year revenues between $320 million and $323 million, with same-store sales increases between 6 percent and 8 percent. Morton’s only new steakhouse for 2011 opened in the first quarter in Dallas, and a total of four restaurants are to be remodeled this year to include the Bar 12-21 area.
Morton’s Restaurant Group Inc. owns and operates 77 Morton’s the Steakhouse restaurants in 64 cities across 26 states, Puerto Rico and six international markets.
Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN
A fragile economy and overabundance of debt make it an especially difficult time to start a company. But this week, restaurant industry leaders and legends gathered in Chicago to recognize foodservice’s ability to develop hard-working operators — and their ideas.
The inaugural Winning Ideas from Successful Entrepreneurs Summit, or W.I.S.E. Summit, brought together founders and chief executives of some of the largest restaurant brands in the U.S. to share what drove their success and what keeps them dynamic in the face of new challenges. Restaurant Hospitality and Nation’s Restaurant News presented the conference along with John Y. Brown Jr., former governor of Kentucky and a serial entrepreneur who purchased KFC from founder Col. Harland Sanders and grew the chain by more than 4,000 units.
Other featured speakers included Drew Nieporent, founder of Myriad Restaurant Group; Rich Melman, founder and chairman of Lettuce Entertain You Enterprises; Antonio Swad, founder of Pizza Patrón and Wingstop; Todd Graves, founder and chief executive of Raising Cane’s Chicken Fingers; Kent Taylor, founder and chairman of Texas Roadhouse; John Schnatter, founder and chief executive of Papa John’s Pizza; and Tim Gannon, co-founder of Outback Steakhouse.
In his opening keynote speech, Brown said opportunities abound for entrepreneurs because “corporate America is pretty much brain-dead,” meaning that professional management executives can’t run restaurants or grow the industry as well as the operators starting their own brands.
“There are no geniuses,” Brown said. “The people here are all about the idea and dreams, and will, courage and independence.”
Here are some highlights from the speakers’ presentations:
Developing people as much as brands
In a joint question-and-answer presentation, Nieporent and Melman said they built their companies of eight and more than 80 restaurants, respectively, by developing their team members to have the same entrepreneurial mind-set that helped them open their first restaurants decades ago. To instill that confidence in others, they said, leaders must always work on improving themselves.
“Confidence without professional knowledge and the ability to back it up is just false confidence,” Nieporent said. “The best coaches, it’s not so much about their technique; it’s their character. The people who work for us have to have the confidence in us that we’ll make the right decisions.”
Leadership isn’t always necessarily about operating perfectly, Melman said.
“If you worked 12 hours a day, seven days a week and never missed a budget, I might not want you as a partner,” he said. “One of the basic things at our company is the ability to develop other people. What I look for goes under the heading of confidence: I look for people who could replace themselves.”
By trying to say yes to his servers and managers as much as possible, and creating a working environment in which they can be as happy and productive as possible, Melman said he could expect to hear “yes” in return when he asks them for their maximum effort.
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Identifying opportunities
Brown said a guiding principle in his business with KFC and as co-founder of Kenny Rogers’ Roasters was to look for the unfair advantage.
“Why would you be in business if you didn’t have an unfair advantage?” Brown asked. “All we are in this industry is our point of difference. We’re always changing, and you always have to keep improving.”
To find that differentiating factor, Brown advised attendees to “keep asking questions until you’re satisfied,” especially from the competent people on their management teams. He added that entrepreneurs can’t replace hard work or integrity, and that they have to have confidence in themselves and in their ideas.
Antonio Swad, who still leads Pizza Patrón as chief executive, said his Dallas-based brand succeeds because he began it to feed the Hispanic community.
“I wanted to serve the Hispanic community and not just sell to it, and that was very important,” Swad said. “So many people come to me and say, ‘This demographic is exploding. How can I make some money selling my food to Hispanics?’ That’s the wrong question, brother. You can’t. You need to serve them and respect that customer base.”
Gannon said the opportunity for him as “the food guy” when he founded Outback with Chris Sullivan and Bob Basham in 1987 was to fit the restaurant into an untapped position, serving steaks with bold flavors in a casual-dining segment between expensive steakhouses and more value-conscious buffets.
The power of perseverance
None of the speakers at the W.I.S.E. Summit qualifies as an overnight success, and all said sticking with their ideas amidst setbacks helped them accomplish their goals.
“Most people give up too soon on their concept and spend time finding ways to justify their failure instead of saying, ‘I need to fix this and move forward,’” Swad said. “If you stay with something long enough, you have the opportunity to apply what you’ve learned from the mistakes you’re making.”
Before Raising Cane’s was the fastest-growing chain focused solely on chicken finger meals, it was an idea Graves hatched in business school at Louisiana State University. His professor, however, didn’t share his vision for the restaurant brand Cane’s has become.
“The professor gave us the worst grade in the class. He said we had a fantastic business plan, but the concept would never work,” Graves said. “It just fired me up that much more. You tell an entrepreneur, ‘You can’t do this,’ and he or she is just going to go prove you wrong.”
In order to fund his dream of opening Raising Cane’s, Graves set out to work 20-hour days as a boilermaker in a California oil refinery and as a sockeye salmon fisherman in Alaska. Since opening that first location in Baton Rouge, La., in 1996, Raising Cane’s has grown to 107 locations in 15 states.
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Similarly, Texas Roadhouse founder Kent Taylor was turned down by banks more than 100 times when he was trying to start a restaurant concept in the early ’90s called Buckhead Bar and Grill, and he failed to secure 
funding from bankers another 80 or so times for Texas Roadhouse before opening the first unit in 1993.
“I was used to rejection, though,” he joked, “because in college I would ask girls to dance with me and they all rejected me.”
Texas Roadhouse now has nearly 350 locations in 46 states. Three out of the first five Texas Roadhouse units failed, and Taylor keeps mementos from those shuttered restaurants to remind himself not to rest on his accomplishments.
Always be improving
Melman, who founded Lettuce Entertain You with the opening of R.J. Grunts in Chicago in 1971, told attendees that “restaurants don’t get tired, owners get tired,” meaning that the key to keeping restaurant brands fresh is continually improving them.
“I tell our partners all the time, make a change every week,” Melman said. “Sometimes it’s a minor change, but there are always ways in which you can be better. Sometimes it’s the servers’ uniforms or a new food item, but it’s much tougher at the end of the year when you’re 50 ideas behind.”
But make sure the experimentation has a point with measurable results and doesn’t threaten a core piece of the business, said Outback’s Gannon, who invented the chain’s signature Bloomin’ Onion.
“We’ve had the Bloomin’ Onion in the store for 23 years and haven’t changed the seasonings or spices,” Gannon said. “When we first opened up we were afraid that our flavors were too bold for older people, but we opened in Sarasota, Fla., and found out that they wanted those bolder flavors. When you create a truly great product, it’s got wheels, and it can travel through many countries.”
Protecting your framework
Schnatter famously started Papa John’s in the broom closet of his father’s tavern, funding it by selling his beloved Z28 Camaro. He candidly expressed worry that he may not have been able to take the same risks if today’s business conditions were occurring back then. Unrestrained spending and regulation from the federal government have pressured businesses like his, Schnatter said, and the way to overcome that is to operate passionately, efficiently and better than any competitor.
“I find myself nervous in this environment, and for the first time in my business career, I’m not exactly sure what to do about it,” Schnatter said.
He told attendees that he built Papa John’s from one store in 1984 to nearly 4,000 worldwide by following a framework of being best-in-class at making pizza, having passionate leaders and employees, and cultivating profitable unit economics. He said every time a professional-management type has tinkered with that framework as a Papa John’s executive, the chain’s stock price and business health has suffered.
Further, that entrepreneurial focus at Papa John’s faces a severe economic headwind because political leaders have ignored the Founding Fathers’ aversion to public debt, Schnatter said.
“There’s nothing going on today that wasn’t established 230 years ago,” he said. “Economics 101 is Economics 101; common sense and human nature are common sense and human nature…What are the side effects if you mess with the framework?”
Schnatter said if the debt crisis continued, the results would hurt his business and any other in the American economy: a severely devalued dollar, increased home foreclosures and persistently high unemployment. As the dollar declines further, commodity pressures only intensifies for restaurant operators, he added.
To prosper in such an economy, Schnatter said, operators must be best-in-class and know which core values hold the brand together. But above all, it helps to be “abnormal,” he said.
“Companies that are doing great have to go against the grain,” Schnatter said.
Contact Mark Brandau at mark.brandau@penton.com.
Follow him on Twitter: @Mark_from_NRN
