Foodservice Distribution Conglomerates are Only Getting Bigger – or Are They?

Foodservice distribution giants continue to consolidate their holds on the market, according to Technomic. The food consultancy, based in Chicago, recently released a December 2011 report on the top “power distributor” movers and shakers from 2010. The results are interesting, to say the least.

 

Who’s in the Foodservice Distribution Report?

 

Technomic’s report concerns the top 35 power distributors in the United States, all of whom had annual calendar-year sales of $150 million or more during 2010.

 

As many of you have already guessed, Sysco Corp tops the list – at over $39 billion! U.S Foodservice comes in second place at less than half that: $18.9 billion.

 

Not until 10th place Labatt Food Service do we drop down below the billion dollar mark. Their 2010 sales totaled $922 million.

 

So What do the Figures Mean?

 

For most of these foodservice distribution companies, these massive figures don’t represent staying stagnant. All but three of the top 15 foodservice giants reported some sort of sales growth in 2010.

 

Only two companies – U.S. Food Service and Institution Food House – reported losses (Half a percent and 5.4%, respectively). Scottsdale, AZ-based Services Group of America reported neither gain nor loss, at 0% growth.

 

All in all, it means that distribution giants are grabbing even more of the pie than usual. This has been the state of affairs with other industries – in fact, with the U.S. corporate scene in general – for many years now.

 

But There’s a Catch!

 

It’s important to take note that these distribution giants could very well be doing high dollar amounts of sales while still doing less volume. Increases in the top 15 companies range from 1% to 13.6%.

 

Sharp price increases during 2010 may actually balance out these figures and indicate that, while the dollar amounts may be up, per-unit sales volume was perhaps closer to flat. In fact for many companies with a dollar-amount increase, volume might have actually gone down in 2010!

 

I’m curious to see the reports on 2011. I believe the numbers will be more encouraging.

Applebee’s to Add 550 Calorie Weight Loss Dishes to Menu

You may remember my blog post a little while back about Hungry Girl mastermind Lisa Lillien teaming up with Tyson Foods to help people keep their weight-loss new year’s resolutions. It turns out they’re not the only ones getting in on the act: Applebee’s is now offering full-size low calorie dishes to its guests. As with the Hungry Girl/Tyson venture, all dishes are 550 calories or less.

 

How the Menu Will Help Keep New Year’s Resolutions

 

Their strategy is also similar to the Hungry Girl/Tyson venture. The Applebee’s chain showed in a Harris Interactive survey that fully 90% of Americans break their weight loss resolutions.

 

Respondents claimed that often there simply were not enough flavors in their diets, and that their weight loss programs offered too many restrictions. These are issues tackled by the Hungry Girl plan.

 

(Let me say right now that I don’t want to give the wrong impression; I don’t think that Applebee’s is copying Hungry Girl/Tyson, nor do I believe it is the other way around. Instead, both groups are hitting on a common problem with New Year’s weight loss resolutions, and offering tasteful solutions to those problems.)

 

Interestingly, the most popular response to the survey was, “I want to eat what I want, when I want.” So what is Applebee’s offering?

 

Applebee’s Under 550 Menu Items

 

Here are two of the new items featured at Applebee’s restaurants:

 

• Sizzling Chili Lime Chicken. This dish features several flavors and modes of cooking, combining Asian-style skillet vegetables served with chili sauce over grilled chicken. The whole thing is laid out on a bed of rice, with fresh cilantro and a squeeze of lime.
• Roasted Garlic Sirloin. This is a 7oz. sirloin steak, topped with sautéed onions. Sides include creamed spinach inside a Portabella mushroom cap, as well as herbed potatoes.

 

Will the new menu help people meet their New Year’s weight loss resolutions? It will probably help some people. And even if it doesn’t, it’s virtually guaranteed to get more people through Applebee’s doors this year. It’s not too late to adopt this tactic for your own operation – just like it’s not too late to invest in parent company DineEquity (NYSE:DIN)>

 

Mobile Marketing for Restaurants: Chili’s and Buffalo Wild Wings Introduce Multi-Function Apps

As I’ve discussed recently, mobile apps are starting to make headway in the food service industry. They are by no means standard practice just yet – but adoption by major chains like Chili’s and Buffalo Wild Wings might just be what makes mobile apps for restaurants standard “gear” for the future.

 

• What are these two chains doing with their mobile apps?

 

The Buffalo Wild Wings iPad App

 

Buffalo Wild Wings isn’t just offering an application. The chain is following the lead of some higher-end restaurants and putting iPads at its tables.

 

Guests don’t just get to order form the touchscreen device. They can also use the iPad for gaming, social media (such as Facebook), entertainment and even shopping!

 

Early tests indicate that the iPad facilitates more efficient ordering, cuts down on order times, and improves the interaction between guests and servers.

 

Right now, the iPads are only available at one of the Buffalo Wild Wings locations in Toronto. If the test does well there, it may soon spread to all 300 Buffalo Wild Wings locations.

 

Chili’s Mobile App for Smart Phones

 

Casual dining giant Chili’s also has its own mobile apps – in fact you can find a Chili’s mobile app for both the Android and the iPhone. These apps are free to download, and offer guests a wide range of actions.

 

The Chili’s mobile app allows customers to:

 

• Order via phone app. Guests can order take-out, as well as schedule dine-in meals ahead of time.
• View the Chili’s menu. Menus are fully updated and feature all relevant specials and feature items, including its Custom Combinations and the Chili’s $20 dinner for 2.
• Functionality available for Blackberry, Windows Phone, and others. While the mobile apps are only available for Android and Apple i-products, users with other Web-capable mobile devices can use the same online ordering technology at www.ChilisToGo.com.

 

Mobile apps aren’t yet standard in the industry. But widespread usage by large chains might make them so. For now, it’s a good idea to keep an eye on how apps work out for these major food service name brands.

Hungry Girl and Tyson Foods Team Up for New Year’s Weight Loss Resolutions

Multi-channel phenomenon Hungry Girl has teamed up with Arkansas-based frozen foods giant Tyson Foods to help women safely lose weight during the first month of the new year in 2012.

 

About the Hungry Girl-Meets-Tyson Program

 

The weight loss educational/motivational program – known as “30 Days, 30 Ways, 30 Rewards” – will feature a different recipe every day. The program wants to focus on helping women lose weight gradually during the new year instead of trying to lose too much weight, too soon.

 

The key here is “one click a day”, according to Tyson and Hungry Girl. Readers can check the program’s website daily for a healthy recipe (under 500 calories), a clever tip, and a chance at winning a health-themed prize.

 

Where Does Tyson Factor Into Hungry Girl’s Weight Loss Program?

 

Hungry Girl cites Tyson’s Grilled & Ready line of frozen chicken and beef products as the perfect solution to losing weight during the new year.

 

“Convenient meal staples are key,” says Lillien. “Items like veggies, high-fiber tortillas, and plenty of protein.”

 

As you might guess, everyone’s favorite hungry girl goes on to recommend the Grilled & Ready line of food products as a tasty and convenient solution for helping weight loss in 2012.

 

How Else does the Program Work?

 

The 30 Days, 30 Ways, 30 Rewards program also encourages:

 

• Swapping out “indulgent” foods for lower-calorie substitutes. One recommended swap is using “thin bagels” (available at most major grocery stores) and light cream cheese to really cut back on the weekly calories.
• Change up meals and snacks. Too much of the same thing can get you caught in a “food rut”, the program claims. Readers are encouraged not to let their taste buds get bored!
• Indulge thyself. Occasional indulgences are encouraged. This little bit of psychology will probably help keep many on the program who would’ve otherwise fallen off, and lead to more (instead of less) weight loss.

 

That’s the program in a nutshell. Lillien & her Hungry Girl program have been all over the Web, television, bookstores, and other media ever since 2004. It will be interesting to see who she teams up with next.

Good News! Restaurant Performance Index Climbs

Restaurant Performance Index Climbs its Highest in Five Months

 

Good news for the food service sector! In late December, the National Restaurant Association reported that its Restaurant Performance Index increased 0.6% from October to November, landing at a firm 100.6 in November, from October. This was the third straight month the index stood at over 100. But what does this mean in plain English?

 

It means the food service sector of the economy is growing – or at least, it means that key indicators of growth are showing expansion. Any Restaurant Performance Index over 100 indicates this expansion.

 

What Does the Restaurant Performance Index Mean for the Future?

 

“That’s great,” some of you may be saying. “It’s nice that this happened at the end of 2011. But what does 2012 hold for me?”

 

To understand that, it helps to understand where the Index comes from. Restaurant owners report same-store sales, customer traffic levels, outlook for the future, and expenditures planned for the next six months (such as remodeling, new equipment, etc). All of these are indicators of the health of the industry (or the lack thereof).

 

Same Store Sales Highest in Four Years

 

One of the most positive indicators is that, overall, operators showed their strong net positive same store sales in over four years.

 

This wasn’t just from individuals who started spending more per visit, during the holidays: customer traffic showed an increase in November as well.

 

Economic Outlook Good for Restaurants

 

The Restaurant Performance Index isn’t the only indicator that bodes well for the restaurant industry. The RPI also takes into consideration overall economic factors as well.

 

It also doesn’t hurt to consider that some areas hardest hit by the recession – such as Las Vegas’s housing and construction market – have been picking up. In some areas, more construction and related loans were approved in the first half of 2011 than in all 12 months of 2010 combined.

 

While the country may not be out of the forest just yet, the Restaurant Performance Index shows that things are looking up for the food service industry – which hopefully tells us something about the nation’s economy as a whole.

How Will Wage Changes Affect Your Establishment?

The state minimum wage has been raised, or is scheduled to be raised, in 8 states this year: Washington, Vermont, Oregon, Ohio, Montana, Florida, Colorado, and Arizona. This likely affects your business (or will), whether you live in one of these states or not.

 

What do these wage changes mean, and how will they affect you? That is what I’d like to discuss with you today.

 

Why the Wage Hike Affects You – Even if it Doesn’t

 

Anyone running their own operation knows that pessimism doesn’t help run a business – but realism does.

 

I hope that I sound realistic rather than pessimistic when I say that wage increases will be coming soon to the rest of the 42 states in the union.

 

How each operator will deal with this is largely a personal choice. But we can make educated decisions based on how establishments in other states handle the change.

 

What the Wage Increases Don’t Mean

 

Washington is a “no tip credit” state. This means that restaurant owners and managers don’t have the option of paying a lower wage to wait staff and other employees that receive tips. On average, each Washington restaurant employs three fewer employees than the national restaurant average.

 

More importantly, employers in Washington State have had to deal with minimum wage hikes every year since 1998 (except for 2009).

 

The Washington Restaurant Association surveyed its members and found out that most of members will not make up for increased labor costs by raising their prices. That would be a difficult step for any operation in today’s economy.

 

Instead, 70% claimed that they would cut hours, shifts, employees, or benefits to offset 2012’s $0.37 minimum wage hike.

 

What do these Figures Mean for Your Operation?

 

As a restaurant owner or manager, you have a choice of what to do about these wage increases when they come your way. You already know how small changes in cost of operating – be it wages, food costs, or even the price of electricity or gas – can add up.

 

Many of you are already paying above minimum wage for your kitchen staff, and potentially for other staff as well. Does this mean you should just ignore the issue?

 

Hardly. Wage increases have a ripple effect that modifies the entire economy. You’ll likely improve turnover if you raise your staff wages at least some token amount – it doesn’t have to be the full wage increase amount.

 

How will you absorb the costs? Some operators prefer to raise the cost of select popular items by several cents. Others may cut shifts by 15 or 30 minutes, or deal with less closing or opening staff.

 

The choice is up to you. Just remember that smart business decisions will help you weather any economy!

Restaurant Marketing on Facebook and Your Website

While they haven’t yet reached the importance of traditional media (at least, not for most demographics), websites and Facebook pages are vital points of contact for many restaurants and bars these days. Today, I’d like to offer a couple of tips about how to use these two important online marketing tools.

 

Should You Concentrate on Facebook or Your Website?

 

Are you getting very much customer interaction on the Web? More and more of us are these days. But it’s important to identify where that interaction happens.

 

That’s why it’s important to see if your website or your Facebook page (for example) gets the most more interaction. Quite often, it will be Facebook that gets more interaction!

 

If you don’t have a webmaster, you can easily install analytics on your site with Google Analytics. Their website is at http://analytics.google.com. (Of course I’m no Google spokesperson, but their analytics platform is the easiest way for most of us non-technical types to get accurate reporting about what our websites are doing without having to deal with unnecessary technical issues.)

 

What to Do with Your New Knowledge

 

Knowing where your guests interact online is just the start, though. What do you do with this knowledge?

 

If guests are more prominently looking at your Facebook page, then make sure you are interacting back on a regular basis. Put all of your major events, as well as new drink and dinner items, on your Facebook page as soon as they are available. If you have daily specials, post them there as well.

 

Even if you don’t have daily specials, it’s important to post to Facebook every other day or so, if that’s where people are finding you. And consider posting links to your website on a regular basis!

 

If more people are looking at your website, consider adding a blog or other interactive features. And don’t forget to put “Like” and “+1” buttons for people to share their love of your establishment on Facebook and Google Plus, respectively.

 

If people are visiting both your website and your Facebook page relatively equally, then just keep doing what you’re doing!

Mobile Websites for Restaurants vs. Mobile Apps for Restaurants

While patrons still rely on traditional media like print ads, newspaper reviews, and word of mouth to guide their restaurant decisions, an increasing number are also using the Internet and their mobile devices for the same – and often in strange ways.

 

Mobile Usage is Growing Every Year – and Why this is Good for Restaurants

 

Every year, more people reach the web more of the time through mobile devices – and less through “traditional” means like laptops and personal home computers.

 

While this may not be a great thing for computer manufacturers, it’s great news for the food service industry. Why? Entertainment, shopping, and dining out are three things that the average smartphone user looks for when he or she is out and about.

 

If your restaurant is able to connect by way of mobile device, you’ll get “impulse traffic” for sure. But more importantly, you’ll get groups of friends and other medium-to-large parties who didn’t start the night with a restaurant in mind – but who now want to walk through your doors.

 

Should You Go for a Mobile Website or an App?

 

If you have to choose between the two, spend your money first on a mobile-friendly website. Mobile websites are one-size fits all for every kind of smart phone, as well as other mobile devices like tablets and touchscreen iPods.

 

If you want mobile apps, however, you need to build one for each operating platform. Straight out of the gate, that means you need one for Android, one for Apple (iPods, iPads, and iPhones), one for Blackberry, and one for Windows (for the up-and-coming Windows phone).

 

What You Should Put on Mobile Websites for Restaurants

 

The difference between a mobile site and a regular website can be confusing if you’re not immersed in the online world. The long and short of it is this: a mobile site is a stripped-down version of your restaurant’s regular website.

 

A mobile website should give your same basic information, without all the bells and whistles of your great design. You may even want to leave off some of your content, in order to keep it simple.

 

A mobile website should have: easy-to-find contact and location information (integration with Google Maps is a plus), phone number, booking information, and business hours.

 

If there’s anything else you want to add, that’s all up to you. Discounts for mobile or first-time customers are usually a good idea, but the most important thing is to make sure guests can easily find your menu – and then easily find their way through your doors!

 

How to Make Yourself Stand Out Locally

These days, patrons are more and more community-centered. That’s great if you’re a local “mom & pop” establishment. But did you know that you can style your restaurant as “local”, even if it’s part of a national franchise?

 

It’s entirely possible. In fact, it’s preferable! You’ll pull more local business, and even more out-of-town business (especially if you are in a tourist location), by combining franchise name-brand recognition with attention to local community and culture.

 

Here are three ways to cement yourself into your community so that you escape the “anti-corporate/anti-national chain” malaise that has come about in the past few years.

 

Have a Signature “Local” Item

 

If it’s allowed, create a signature drink or dish that people can’t find anywhere else (even other restaurants in your franchise – subject to your franchise rules, of course).

 

Also be aware that, in time, the franchise might add your idea to the menu of all its branded restaurants. So be sure and name your dish or drink after your local area, or after something (landmark or event) that local patrons associate with your area. In fact, that is probably something you should do in any case.

 

Host Local Meetings

 

Perhaps you have a conference room that you could offer free of charge to local groups (businesses, non-profits, and other interest groups). Or you could offer discounts to organizations that choose to meet at your establishment.

 

In fact, you may not even need to concern yourself with discounts. All you will need to do in many cases is advertise that you are open to large parties, non-profits, business events, etc. Fliers in the mail can be an effective way of doing this. Often, all you need to do is get the idea out there.

 

Decorate Your Restaurant with Items of Local Interest

 

This can include local sports team jerseys; photographs of local landmarks, events, and celebrities; highway signs and other antique(-ish) memorabilia of anything your area is known for.

 

In the right establishment, newspaper or magazine articles about events significant to your area can also look great while adding local flavor. You may also want to consider event tickets, concern posters, etc., depending on the theme and demographic of your guests.

To App or Not to App? Mobile Apps for Restaurants

Does your restaurant, bar, or other location need its own mobile app? Some consultants will tell you that it definitely does – and they can get you one for just the right price! Others will claim that it’s just a waste of money.

 

The truth about mobile apps is that what you need depends on various factors like your budget, your current website, and your clientele. The two most important questions you should ask yourself are: “Do I have a mobile-friendly website?” and “Who is my target audience?”

 

Is Your Restaurant’s Website Mobile-Friendly?

 

If your answer is “Yes,” then you are safe without a mobile app – but you may want to get one anyway, depending on your competition.

 

If your answer is “No,” then unless you have an enormous percentage of guests who have told you they’d like to order from their iPhones, Androids, or iPads/Tablets, you should first make your website mobile-friendly.

 

Who is Your Competition?

 

If you operate a restaurant that competes with someone like Chili’s (whose restaurants can now take orders via mobile apps) when it comes to target demographic or overall experience, then as much as I hate to say it, you probably need to “keep up with the joneses”.

 

Repeat Customers Might Use Apps More

 

Using an Android or iPhone app to order food at a restaurant can be a bit challenging, frustrating or potentially scary. But once customers have gotten used to ordering this way, they are more likely to think of it as fun, fast, and convenient.

 

It’s likely that your regulars will be the first to become comfortable with apps. So, if your most frequent or loyal customers are sporting lots of mobile devices inside of your restaurant, you may want to go for the app.

 

But is it Worth the Price?

 

Having a mobile app developed can run you anywhere from a few hundred to a few thousand dollars. Will it be worth it for you to have one for the Android and one for Apple devices (because you will likely need both)?

 

Ask yourself this: Am I likely to lose business this year if I don’t have a mobile app for my restaurant? If so, then you should get one as soon as possible.

 

There are other reasons you might want to use them – the novelty factor can attract more guests if you’re the only one doing this in your local market, for example. But unless you are set to lose money in the immediate future, mobile apps are optional for the time being.