Authenticity, comfort and food trucks are steering menu innovation, as chefs work to drive guest traffic — and customer returns — in a stubborn economy, menu expert Nancy Kruse said during the recent Menu Trend & Directions conference.
In the first half of the year, the top 250 restaurant chains have introduced 1,521 new entrée items and 1,726 new entrée limited-time offers, according to Nancy Kruse and her State of the Plate. When sides, appetizers, sandwiches and desserts are added, those numbers swell to 3,191 new items and 2,783 limited-time offerings, according to research from Technomic Inc.
The Menu Trends & Directions conference was held this week in Dallas, and is produced by Nation’s Restaurant News, The Kruse Co. and Technomic.
Given the challenging environment, “the response is a distinct uplift in the amount of innovation as it pertains to menu development,” said Kruse, president of The Kruse Co. and a columnist for Nation’s Restaurant News.
That innovation breaks into three camps: creative comfort that feeds slower evolutionary menu innovation, food trucks that fuel disruptive innovation, and consumers’ desire for authenticity that sparks revolutionary innovation, Kruse said.
Creative comfort
Waffles and pretzels are the hot examples of creative comfort, Kruse said, highlighting such items as Dunkin’ Donuts Waffle Breakfast Sandwich and the Bold Folds offered at Bruxie’s in Orange, Calif., which folds waffles around prosciutto and gruyere cheese, smoked salmon and dill, or lemon cream and berries.
“We are awash in waffle-mania,” she said.
IHOP also has introduced chicken and waffles, bringing American soul food to the mainstream. And Shari’s has found success with its seasonal Fresh Blackberry Belgian Waffle LTO.
Two unique waffle applications can be found at the University of California, Berkley, where waffles are embossed with the school’s insignia, and in grocery stores, where a gourmet caffeinated toaster waffle is now available.
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In the same vein, pretzels are taking on new twists, Kruse said, particularly Friendly’s Soft Pretzel Bacon Burger, where the pretzel acts as the bun, and the pretzel-dusted calamari found at ABC Kitchen in New York.
At Chancery Family Pub in Milwaukee, a pretzel serves as a crouton for soup, and at Smokey Bones pretzel bites are served with the Cajun Shrimp Skillet to sop up the sauce.
The widespread attention is forcing pretzel specialists to up their ante as well, Kruse said, noting that Pretzelmaker now offers a pumpkin spice pretzel.
Stuffed and stacked foods also reflect evolutionary innovation, as operators seek that “wow” factor and a strong value perception. Examples include Burger King’s Stuffed Steakhouse Burger, La Madeleine’s Stuffed French Toast, Pizza Hut’s Ultimate Stuffed Crust Pizza and Carrows’ Pastrami Burger, where the cured meat acts as a toping.
Food trucks
While the food truck segment is still small, it is significantly influencing food, customer communication and delivery expectations, Kruse said.
Food truck fare is fun, convenient, sometimes exotic and generally high quality, and food truck service is unintimidating, personal and communal, she said. When you factor in the digital and spontaneous aspects of food truck marketing, the segment is rapidly reshaping the customer experience.
Kruse higlighted The Dump Truck in Portland, Ore., which offers a variety of dumplings at the low price of eight for $6; Lardon of Los Angeles, where bacon graces every dish; and Streetza Pizza of Milwaukee, which serves such innovative riffs as crab leg pizza and s’mores pizza.
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Authenticity
Keeping it real is on the revolutionary front of innovation, Kruse said.
“That doesn’t just mean freshness or flavor, but goes way, way beyond that,” she said. Authenticity takes into account preparation, provenance, product quality and how items are promoted, she added.
Artisanal preparation techniques are on the rise, Kruse said, noting that words like grilling, frying, toasting, smoking, aging and pickling are popping up on menus more frequently. Such techniques can be found in all segments, with quick-service chain Carl’s Jr. pushing hand-scooped shakes and hand-breaded chicken, and numerous operators, including Five Guys, Chick-fil-A and In-N-Out, all selling fresh-cut fries.
In terms of provenance and promotion, more restaurateurs are showcasing their ties to farmers and dairies on websites and in advertising. For instance, Eat ‘N Park boasts its association with more than 20 such producers, and Annie Meyers is heralded as the forager for the Spotted Pig in New York. Some Red Lobster commercials even feature the fisherman who caught the seafood.
And product has become more authentic, as exhibited by Bertucci’s Rustic Tortas, Grand Lux Café’s Avocado & Heirloom Tomato Salad, and Smashing Tomato’s Neapolitan Pizza, which is certified by the Associazione Verace Pizza Napoletana, or AVPN.
“All of you are being pushed to respond to new evolving demands from the customer regarding authenticity,” Kruse said.
Contact Robin Lee Allen at robinlee.allen@penton.com.
Follow her on Twitter: @RobinLeeAllen
Bruegger’s Enterprises will open the first Timothy’s Coffee restaurant in the United States in Boston Saturday.
The Canadian coffee house chain will offer more than 30 blends of coffee, including mild, medium and strong roasts, and some varieties made exclusively from beans certified by the Rainforest Alliance conservation organization.
Timothy’s also offers sweet and savory baked goods and sandwiches for breakfast and lunch.
“Timothy’s is a strong brand in Canada and has carved out a distinctive position as global coffee experts,” said Jim Greco, chief executive of Bruegger’s Enterprises Inc. and Threecaf Brands, a wholly-owned subsidiary of Bruegger’s Enterprises.
“Bruegger’s continued success in the market, combined with high demand for premium coffee, makes Boston an ideal fit for Timothy’s first neighborhood location in the U.S.,” he added.
The new Timothy’s is a 1,800-square-foot unit in Boston’s Hancock Village that has indoor seating for 30 guests.
The Boston location will be Timothy’s 90th unit.
Bruegger’s Enterprises, based in Burlington, Vt., operates 300 Bruegger’s bakeries.
Contact Bret Thorn at bret.thorn@penton.com.
Follow him on Twitter: @foodwriterdiary
Essential Pizza, the franchise operator of 72 Papa John’s units in Minnesota and Colorado, filed for Chapter 11 bankruptcy protection this week after multiple lawsuits from lenders and delivery drivers, and one against the franchisor.
Baltimore-based Essential Pizza, which acquired the Papa John’s units in 2007, asked the U.S. Bankruptcy Court for the District of Maryland Thursday to free up funds to pay the group’s estimated 1,200 employees and continue operations, according to court filings.
In August, Essential Pizza was sued by lender GE Capital Corp. for breach of contract after falling into default on a loan that helped the franchisee acquire the Papa John’s operation in 2007 for $11.2 million from private-equity firm Blackstreet Capital Partners. At the time, the group included 82 units, according to court documents.
Essential Pizza is also reportedly embroiled in an ongoing lawsuit against franchisor Papa John’s International related to that acquisition. In that lawsuit, attorneys for Essential Pizza argued that Papa John’s failed to disclose tax and other liabilities for the then underperforming group of restaurants.
Among the liabilities is a class-action lawsuit filed by delivery drivers in Colorado and Minnesota.
The delivery drivers have charged the franchisee with violations of the Fair Labor Standards Act, arguing that they were paid less than the federal and state minimum wages because they were not reimbursed for car costs, the purchase and maintenance of uniforms, and other job-related expenses, according to court filings.
Contact Lisa Jennings at lisa.jennings@penton.com.
Follow her on Twitter: @livetodineout
Multi-concept operator Star Buffet Inc. filed for Chapter 11 bankruptcy protection Thursday, citing a legal judgment and the inability to refinance mortgage obligations and its credit facility.
Scottsdale, Ariz.-based Star Buffet, which operates 4B’s and JB’s restaurants, among others, and its Summit Family Restaurants Inc. subsidiary, filed the petition in U.S. Bankruptcy Court in Arizona.
In a statement, Star Buffet said it would continue operations while the case is considered. The company also said it plans to appeal a $723,489 judgment against the company that led up to the bankruptcy filing.
“Although the company is profitable and has significant equity in its real estate portfolio, it has been unable to refinance current mortgage obligations or a Wells Fargo secured credit facility due in January 2012,” the company said.
The company said it was current in its payments on its $5.6-million Wells Fargo secured credit facility and $5.4 million in mortgage loans.
As of Aug. 15, Star Buffet showed assets of $22.4 million and liabilities of $21.4 million. Last fiscal year, the company had annual revenue of about $53 million.
Star Buffet and its subsidiaries operate seven 4B’s restaurants, seven JB’s restaurants, four Barnhill’s Buffet restaurants, three K-BOB’S Steakhouses and two HomeTown Buffets, as well as one each of Casa Bonita Mexican, Whistle Junction, BuddyFreddys, Western Sizzlin, Holiday House, JJ North’s Grand Buffet, Pecos Diamond Steakhouse and Bar-H Steakhouse.
Contact Ron Ruggless at ronald.ruggless@penton.com.
Follow him on Twitter: @RonRuggless
A pervasive sense of pessimism dominated the foodservice community in August, pushing the National Restaurant Association’s Restaurant Performance Index to its lowest level in 13 months.
Impacted by softer sales and declining traffic, the RPI fell to 99.4 in August, a decrease of 0.3 percent from its July level.
This marks the second consecutive month the RPI was below 100, indicating contraction in key foodservice industry indicators, NRA officials said.
“The August decline in the Restaurant Performance Index resulted from the softening of both current situation and expectations indicators, as well as Hurricane Irene,” said Hudson Riehle, the NRA’s senior vice president of the Research and Knowledge Group. “Although restaurant operators reported net positive same-store sales results in August, their six-month outlook for both sales growth and the economy continued to deteriorate.”
The NRA said less than one in five operators expect economic conditions to rebound in the next six months.
“It is important to note that the industry’s August performance is a substantial improvement over the 2008-2009 period,” Riehle added, “but overall, the near-term health of the restaurant industry will depend heavily on the economy’s ability to create jobs and bolster consumer confidence.”
Hear Riehle’s industry update; story continues below
The Current Situation Index, which measures current trends in same-store sales, traffic, labor and capital expenditures, fell to 99.3 in August, a decline of 0.5 percent from July, and the second consecutive monthly decline.
While foodservice operators generated net positive same-store sales in August, the overall results were softer than in recent months, the NRA said. According to the RPI, 45 percent of operators reported same-store sales gains in August compared with the year-ago period, while 37 percent of operators reported lower same-store sales.
By comparison, 48 percent of operators reported higher same-store sales in July, while 34 percent reported a sales decrease.
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Operators also reported a net decline in traffic for the first time in three months, the NRA said. The association said 34 percent of operators reported a rise in customer traffic between August 2010 and August 2011, a decline from 40 percent of restaurateurs who reported higher traffic in July. Some 42 percent of operators reported a traffic decline in August, an increase from 37 percent reporting softer traffic in July.
The Expectations Index, which measures restaurant operators’ six-month outlook for four indicators — same-store sales, employees, capital expenditures and business conditions — slipped to 99.5 in August, a decrease of 0.1 percent from July, marking the Index’s lowest level in nearly two years.
August also was the second consecutive month the Expectations Index was below 100, which the NRA said reflects operators’ uncertainty about future business conditions.
The RPI found that 33 percent of restaurateurs anticipate that sales will rise in six months compared with the same period a year ago. That marks a decrease from 39 percent last year and the lowest level in 19 months.
Operators also are generally downbeat about the direction of the overall economy, with only 18 percent saying they expect economic conditions to improve in the next six months.
The RPI, which is based on responses to the NRA’s Restaurant Industry Tracking Survey, gauges the health and outlook of the foodservice industry on a monthly basis through such indicators as traffic, labor and capital expenditures.
Contact Paul Frumkin at paul.frumkin@penton.com.
OSI Restaurant Partners LLC, operator of the Outback Steakhouse chain, has reached a settlement with T-Bird Nevada LLC, one of its largest franchisees, over a loan that was the subject of an Outback lawsuit against T-Bird two years ago.
T-Bird, which operates 56 Outback Steakhouse restaurants in California, has agreed to pay $33.3 million to OSI under the settlement, according to an OSI document filed with the U.S. Securities and Exchange Commission two days ago.
T-Bird has 60 days from Monday, when the deal was reached, to pay Outback, according to the SEC filing.
“We are pleased the matter has been resolved,” OSI chief legal officer Joe Kadow told Nation’s Restaurant News Friday.
Tampa, Fla.-based OSI sued T-Bird on Feb. 19, 2009, alleging that T-Bird defaulted on a bank loan that OSI had guaranteed. OSI claimed in the lawsuit that T-Bird therefore defaulted on its franchise agreement.
T-Bird principal owner Thomas Shannon was a close friend of Outback co-founders Chris Sullivan and Bob Basham when Shannon agreed in 1993 to open an Outback franchise market in California. Four years later, T-Bird received a $25-million loan from Bank of America to open more Outback Steakhouses in California, with Outback guaranteeing the loan.
In February 2001, the loan was raised to $35 million and extended through Dec. 31, 2008. T-Bird did not repay the loan, and the bank contacted Outback, which repaid the loan.
Less than two months later, in February 2009, Outback filed a complaint against T-Bird in Florida state court, alleging that T-Bird defaulted on the loan and franchise agreement. T-Bird countersued the next day in California.
Shannon could not be reached for comment at press time.
OSI also operates Carrabba’s Italian Grill, Bonefish Grill, Fleming’s Prime Steakhouse and Roy’s Hawaiian Fusion Cuisine.
Contact Alan Snel at alan.snel@penton.com.
Follow him on Twitter: @AlansnelNRN
