Archive for August, 2010

Bob Evans Closes Plant

August 31, 2010

In a continuing sign of the hard times we live in, Bob Evans Farms–which runs both factories and a chain of retail restaurants across the Midwest–announced recently that they will shutter their plant in Galva, Ill. The sausage plant, which has operated since 1972, employed about 70 people.

Why is Bob Evens Closing Up Shop?

In explaining the move, Bob Evans Food Products President Mike Townsley said that the company was being forced to take these measures in order to “adapt to these tough market conditions.” The move leaves Bob Evans Foods with just four additional plants in Xenia and Bidwell, Ohio, Hillsdale, Michigan and Richardson, Texas.

The move is seen as a further blow to the hard hit town of Galva where the recession has already taken a severe toll and unemployment remains high. City administrator Dave Dyer described the move as a “major blow” to the city where the sausage and restaurant chain had been one of the major employers.

From Humble Origins…

The company began life as a single truck stop style diner in Rio Grande, Ohio.  Under the steady hand of founder Bob Evans, the company grew to offer a total of 570 locations throughout 23 states and later became a major food processor as well.

Famous for their sausages, which Mr. Evans had always heard from his friends was “the best around,” the company started packing sausage and became a major sausage company after Bob Evans turned to his cousin Tim Evans who owned a meat packing company.

The Evans Packing Company made an agreement to package the Bob Evans sausages and both cousins went on to extreme fame and fortune. Mr. Evans passed away in 2007 at his ranch in Ohio and the company is now managed through corporate headquarters in Columbus, Ohio.

Hard Times for Bob Evans’ Stock Prices, Good Times for Gross Earnings

Investors of late have been punishing the stock, with shares of the company trading at or near their 52 week low of $23.10 for some time. In other news however, the company did post the highest gross earnings in the restaurant industry meaning they should be expected to rebound. .

Wheat Prices Rise and Affect Restaurateurs

August 29, 2010

Wheat prices are soaring and that means bad news for the restaurant and bakery industries. It’s an unfortunate result of a variety of factors. While there is no wheat shortage expected, since there is no longer an abundance either, everything from pasta to bread to simple flour will be soaring in price.

Those who rely on these staple products for their restaurants (and let’s face it – aside from a Sushi place, virtually every restaurant will be affected since they at least serve bread) should brace for the extra costs that will be involved.

What Happened to the Price of Wheat?

The cause of the global crisis was a recent announcement by the Russian Federation that they would not be exporting any wheat this summer. The reason was a poor yield in their crop, meaning that they believe they will need to keep everything at home in order to feed their own people.

This has left American and other distributors of wheat based products scrambling for alternative sources as the price on the global market starts to go through the roof.

What this Means for Restaurateurs

Whether you own a restaurant or a bakery, you can expect costs to go up. Aside the obvious costs where bread and flour prices are expected to see a significant rise, there will also be indirect costs since farmers often rely on wheat based feed for their livestock. As price increases are felt across the world, we can expect the cost of meat based products to go up as well

Try Alternate Grains

Since wheat is the primary grain affected, some restaurateurs may wish to experiment with alternate grains for bread products and, to a lesser extent, pasta based products. Products usually made from wheat can also be made from grains such as oats and rye, not to mention rice based products that are used by Celiac disease sufferers.

Meat Makes You Smart

August 27, 2010

It sounds like it could be a new marketing slogan, but the idea that “meat makes you smart” is actually rooted entirely in science.  While restaurants that serve meat certainly stand to benefit from this research, there’s even a positive angle that vegetarian food service can take!

A Need for New Food Sources

Ancient humans, or rather pre-humans, were purely food gatherers. They would gather food from the field and eat berries and whatever else was naturally growing around them.

However, because these types of food sources were so hard to come by, our ancient ancestors had to work really hard just to stay alive. It wasn’t until pre-humans started using sharpened tools to harvest animal meat and then to cook it that our species began to evolve into what it is today.

That’s because meat was more calorie-dense.  This means that ancient humans could get by on a lower volume of meat than of other foods.  Roasting it over a fire would release more of the nutrition that was locked up in the meat, according to a recent report on National Public Radio.

Promoting Meat-Serving Restaurants with the NPR Study

Whatever your personal views on the subject, whether you subscribe to the view that the world is around 6,000 years old or billions of years old or anywhere in between, this sounds to us like a positive concept that could be used by restaurants serving meat on their menus to bring in the customers.

By bringing out the concept that meat makes you smart, you can effectively capitalize on everyone’s desire to better themselves.

Vegetarian Restaurants Can Put a Twist on This Too

Even vegetarian restaurants could get in on the act, making the claim that the all vegetable diet is a more natural one as evidenced by the fact that our ancient ancestors ate no meat. However you slice it (no pun intended), there’s potential there somewhere.

Why Your Restaurant isn’t Just About Food

August 25, 2010

We recently read a new survey regarding restaurant customer service from Empathica.  It reminded us of a story about a girl who used to love going to restaurants, but was always annoyed when her mother wouldn’t let her have tuna fish.

The story was published in the New York Times a number of years ago. It discussed issues of child rearing. The girl in the story loved eating tuna fish in the restaurant, but her mother always refused to allow her to buy it because she would say “you can have tuna fish at home.”

“It Just Tastes Better at the Restaurant”

The woman who wrote the story mentioned that yes, she could have tuna fish at home. However, it wasn’t creamy and loaded down with mayonnaise like it was at the restaurant. Instead, it was dry and “good for you” at home.

The story was brought to up to illustrate the point that when you have kids out at a restaurant, you should allow them to indulge and not be so strict. The story equally points up another issue which is more important for American restaurateurs: It’s all about the experience.

It’s Not Just About The Food!

Even if all you run is a small hot dog stand in the middle of New York City, the experience of getting a hot dog at a New York City hot dog stand instead of cooking one at home is why people are willing to spend the money to buy from you. All the more so when you run a full service restaurant – it’s all about the experience and that’s the main reason people go out to eat.

Of course there are other factors that enter the picture, such as time constraints or lack of any desire to cook. But the primary issue for any restaurateur should be to make sure that their customers have an amazing experience at their restaurants.

Customer Satisfaction can Kill or Carry Your Business

However, a recent survey shows that 52% of Americans are unhappy with the customer service they are getting when they go out to eat. When we see numbers like this, it should scare the heck out of us.  Why? Because it means that the limited discretionary spending money people have is likely going into DVDs, internet entertainment, and frozen pizzas instead of into restaurants.

No one is immune. Horrible—or even moderately bad—customer service can effectively take four stars off of any five-star rating. So, do your utmost to make sure your guests are happy and having a good time. It’s not just a feel good moment. It’s a solid business decision as well.

To Kindle or Not to Kindle—That is the Question

August 23, 2010

A writer for the New York Times recently complained that when he took out his Kindle e-book reader that he was not allowed to use it in two different restaurants in New York City, ostensibly because there was a policy in place at these establishments whereby computers were banned. He argued that the Kindle is not a computer but rather a book reader, but to no avail.

An Era of Persistent High Unemployment

In an era of persistently high unemployment, many people are trying to find a place where they can sit and send out their resumes undisturbed, while perhaps sipping a cup of coffee or eating a piece of cake.

However, when these people occupy a table for three or four hours at a time, spending just $3 for a cup of coffee, it becomes increasingly difficult to see them as customers. Instead, they may look begin to look like freeloaders! This is the reason why some restaurants are now trying the “no computers policy” on for size.

Steady Customers

Many of the arguments for allowing computers in restaurants and even offering free wifi and charging stations for them revolve around the fact that customers who come in regularly, even if they don’t buy too much, are worth more than the occasional drop in customer.

But as you might guess, this value will be different for every restaurant, café, or coffee shop, and depends on a multitude of factors.

There is no right or wrong answer to whether or not you should implement a no computer policy. It is up to each restaurant owner to set their own terms based on what they see happening in their own establishments.

How to Be Fair and Still Protect Your Bottom Line

However, we did like the suggestion made by one commenter at the New York Times – Simply place a time limit per person at a table. A half hour for one person, an hour for two people, an hour and a half for three or more. This way, everyone can be accommodated while still allowing for turnover and avoiding those who park themselves for four hours at a table for four, and spend just $3 for a cup of coffee the entire time.

Celebrating “Chocolate Week”

August 21, 2010

Ah, chocolate. It’s the stuff of dreams for many of us. For some, it’s something to be avoided either because of diabetes or allergies. But no matter where you fall on the spectrum, you can’t help but be fascinated by America’s favorite guilty pleasure.

The Ultimate Chocolate Show

Well this September 27th, if you happen to be in Las Vegas, you can see the ultimate chocolate show, the U.S. Finals for the World Chocolate Masters. It will be taking place at the International Baking Industry Exposition and will choose one finalist to compete for the “world cup” of chocolate in Switzerland this year

We’ve seen some pretty amazing creations in chocolate, including a dress made entirely of chocolate (no, we’re not kidding – it was at a chocolate show in Belgium a few years ago), but we’re also expecting some pretty amazing creations to be on display in Las Vegas this year.

Chocolate Week can Help Your Food Service

However, besides the excitement of seeing materials put on display in Vegas where people out to gamble can also check out the latest in the sweet delicacy, there is also a real chance for restaurateurs to make the most of this spectacle.

We’re suggesting that restaurateurs pick favorites from the chocolate competition and use them to drive sales in their establishments. In essence, by piggybacking on the show in Vegas, we can ensure that our customers will be engaged and want to spend more of their own money buying whatever we care to whip up involving chocolate.

How to Cash In on Chocolate Week

And virtually any restaurant can participate in such a “chocolate week.” We’ve seen creations ranging from chocolate sushi (it’s shaped like sushi, served as desert at a sushi restaurant, but filled with chocolate mousse instead of rice and fish) to deep fried chocolate bars.

As you can see, chocolate can be worked into any menu, regardless of cuisine or clientele. There is a market for virtually anything you might be able to come up with to drum extra desert business at your own establishment. So get your creative juices flowing and show America why we love chocolate!

The Coffee Comeback: Why Breakfast has Become a Meal to Eat Outside the Home

August 19, 2010

Coffee, in spite of the advice of budget experts who recommend that people drink it at home on the cheap is not only doing well, but is actually showing an increase in sales value.

That’s because more people than ever are going out for breakfast – a meal traditionally underserved by most restaurant chains since it was assumed that the first meal of the day would be consumed at home before racing off to work.

Getting to Work Earlier Means Getting a Decent Breakfast is Harder than Ever

The reasons for the trend are clear: in spite of the fact that the Great Recession has been pushing people to try to save money, people are working even harder to make sure they can keep their jobs so that they don’t have to worry about saving money (at least not as much).

That means more workers than ever are grabbing an early breakfast out before heading into the office, just so they can show the boss how dedicated they are to the cause and thus avoid being the next person to be laid off.

What the “Coffee Breakfast” Means for You

Increasing the selection of morning foods and of course coffee can only be a good thing for most restaurant owners. As more workers decide to eat out, those who get in early on this trend will see the most benefit as people start to stick with their usual routine.

Keep it Fast

The one key component that restaurateurs should be keeping in mind however is that speed is of the essence. Breakfast meals out are not likely to be considered a luxury where people are sitting down for a slow breakfast. Instead, expect customers to be in and out briskly, demanding fast service and possibly even office delivery.

You can also improve your bottom line by offering online ordering where a meal can be ordered through the Internet and then delivered directly to the office for the person to eat a their desk.

Golden Arches a Solid Investment

August 17, 2010

“I’ll have a Big Mac, fries and a not so great yield on my bonds please.” Welcome to McDonald’s in 2010. No, the golden arches are not offering to sell their customers a bond together with their Egg McMuffin.

However, they did recently issue a 10 year bond. The rate is impressive – for McDonalds at least, giving a measly 3.5% meaning the bonds may just outpace inflation, but certainly not by much.

What it Means for You

So what does this mean in the grand scheme of things? It means that investors know a good thing when they see it. The house that Ronald built is a growing franchise with solid prospects for the future.
While the yield on the corporate bonds from McDonald’s may not be anything to write home about, the fact is that it is a solid investment where your money can be parked for the next few years with a reasonable assurance of actually keeping your money intact and even growing at a steady, albeit slow pace.

Bonds Are Not the Only Way to Invest

If the yield on the bonds isn’t quite your thing, you may wish to consider direct investment in the Golden Arches instead. McDonald’s stock is a solid investment right now, offering decent yields and a dividend that is (as of this writing) linked to inflation. That means that McD’s stock could be a solid investment.

Showing Growth Overseas

Certainly the company is showing good growth overseas, opening restaurants at a speedy pace in places as far away as Israel and India (in fact, according to reports, McDonald’s is the one and only American chain actually seeing growth in the Israeli market – a small one to be certain, but a solid indicator of the solidity of the brand name).

Steady Growth

In fact, if you look at the stock charts, you will see that McDonald’s stock has enjoyed mostly steady growth over the past year with only a small dip midyear breaking their progress toward the current value of the stock.

Breakfast in A Pocket – The Newest Jack in the Box Menu Item

August 15, 2010

New ideas for breakfast meals are always being welcomed. Plus, Mediterranean items have become a big business in this country. So, the next logical thing is of course, creating a meal in a pocket. A pita pocket that is.

Jack in the Box restaurants are trying to capitalize on the newest craze in eating out — grabbing breakfast out of the house rather than stuffing down some toast and coffee before heading out the door.

And their answer has been to embrace one aspect of the Mediterranean diet by putting their breakfast meal into the now ubiquitous pocket bread while still staying true to the more traditional American style breakfast.

Mediterranean Bread, American Food

The Jack in the Box breakfast pita will have scrambled eggs, bacon and ham together with American cheese stuffed into the traditional Middle Eastern bread. While natives of the area will be horrified, the meal is expected to be quite a hit. It will be served together with a side of salsa in an attempt to appeal to more health conscious breakfast eaters who still want something tasty to eat.

Jack in the Box is one of those “breakfast all day” types of restaurants so expect to see some people grabbing a pocket full of goodness to eat as a quick lunch as well. The new menu item will be priced at $2.69.

Investor Reaction and Stock History

The new breakfast menu at Jack in the Box isn’t so popular with investors it would seem though, who have pushed the stock down to $20.15 as of this writing, down from a 52 week high of $26.37. Still, expect the chain to continue trying new things in order to entice more people back into their restaurants and to keep investors happy.

The company only owns a little more than half of its 2,200 restaurants nationwide, with 1,200 being company owned and the other 1,000 owned by private franchisees who carry the same menu items but share a portion of their profits with the parent company.

New Competition from the Takeout Counter

August 13, 2010

They say a little competition never hurt anyone, but the competition from supermarkets for the breakfast and lunch crowds that ordinarily might have dropped by a restaurant is cause for concern for some restaurateurs.

It turns out that in addition to competing with each other, fast casual places throughout the country now have to compete with fresh breakfast and lunch available as a takeout option at many local supermarkets. While these options will never replace the experience of sitting down for a fine dining experience while meeting a client, they are creating problems for restaurants that rely on the “grab a quick lunch and head back to the office” crowd.

Surviving the New “Takeout” Competition

In the NPD Group Restaurant Analyst Bonnie Riggs is warning in a recent report that restaurateurs will need to “take notice” of this new form of competition if they are to continue to survive and thrive. A big part of the problem she explains has been the recent recession when many consumers became more price conscious and realized that eating lunch from the takeout counter at their desks was a cheaper option than hitting up a real restaurant.

And the threat isn’t just from major supermarkets says industry commentator Peter Romeo. According to Romeo, even the small corner grocery has started getting in on the act, offering fresh food ready to eat for workers to take back to the office.  He also says that the stigma that once surrounded those who brought lunch in from the takeout counter has started to dissipate, as the quality of the food has gotten better and better.

While the new competition can make life difficult for some restaurants, restaurateurs are finding ways to compete effectively. The problem doesn’t really have an effect on the higher end white tablecloth restaurants where clients are entertained and fast food joints have prices comparable to those at the supermarket.

Atmosphere Could Trump the Convenience

However, fast casual restaurants are competing effectively against this new phenomenon by stressing what it is they do best – they offer customers more than just food. They offer an experience, a chance to get out of the office and forget their problems for a few minutes during their lunch break. This is invaluable to many workers and something that no supermarket has yet to find a way to compete with.