Archive for February, 2014

Restaurant News: Salmonella Is More Resistant to Disinfectants than Ever

February 27, 2014

Food safety is top priority to those in the restaurant industry; food-borne illness is no joking matter. Salmonella is one of the more common bacterium lurking in the corners that restaurant business operators must attempt to guard against. It is most commonly found in raw meat and can typically be killed by thoroughly cooking food through. Unfortunately, a recent study published in Applied and Environmental Microbiology has demonstrated that salmonella has now become resistant to disinfectants to the point where, if it is allowed to form a biofilm on surfaces, it can be difficult, if not impossible, to kill.

The Food-Borne Illness Outbreak that Prompted a New Look at Salmonella

The study into salmonella’s new resistance to disinfectants was conducted by researchers from the National University of Ireland, Galway, when 160 people in 10 European countries got sick from the Agona serotype of salmonella. After some investigation, it was discovered that the source of the outbreak was meat from a food processing facility with a wide distribution range. It was further discovered that the biofilm that salmonella can create on hard surfaces, such as those found in just such a food processing facility, is nearly indestructible once it gets established.

Only One Disinfectant Tested Could Kill Salmonella, and Only in its Early Stages

The biofilm of salmonella forms on hard surfaces and gets denser and more securely attached as time passes. The researchers tested three common disinfectants on a variety of hard surfaces: sodium hypochlorite, sodium hydroxide and benzalkonium chloride, in two stages of salmonella biofilm development; early (48 hours) and relatively mature (168 hours). While all three disinfectants did lower the counts of salmonella, sodium hydroxide was the only one to effectively eradicate the biofilm in its early development stage. Worse, not a single one of the agents could kill the mature biofilm, even after being soaked for 90 minutes!

Is This Resistance to Disinfectants Found in All Types of Salmonella?

The researchers of this study were curious to know if there was anything special about this particular strain of salmonella that allowed it to survive so successfully on the hard surfaces of the food processing facility. The answer is, unfortunately, no. In fact, the study found that every single type of salmonella they examined was able to adapt to the specialized biofilm lifestyle, on every single surface they tested. This includes glass, stainless steel, glazed tile and plastic.

Obviously, this is troubling news for food-service businesses. Letting a salmonella biofilm develop that can’t be killed is equivalent to going out of business. While there’s not much that can be done about salmonella’s growing resistance to disinfectants, restaurant operators should continue to take the precautionary measures against food-borne illnesses that they always have taken.  This includes being mindful of cross-contamination, especially on hard surfaces prone to the development of salmonella, and serving foods that are thoroughly cooked. This study only underscores the necessity for continued and improved vigilance on the part of restaurant operators as science works to neutralize these nasty bacteria.

Are Private Exchanges the Solution For Restaurant Healthcare Coverage?

February 24, 2014

There’s been a lot of uncertainty around the Affordable Care Act (ACA), what with shaky website rollouts and patchy state-led networks.  In an effort to be prepared for the upcoming healthcare coverage mandate, many restaurant businesses are looking into private exchange marketplaces as a viable alternative for healthcare insurance coverage. Some well known chains have already made the move. Here are the pros and cons for choosing private over public healthcare exchanges.

The Pros of Restaurants Using Private Exchanges for Healthcare Coverage

Private healthcare exchanges run independently from the federal government. In theory, they represent a way to decrease risk, improve predictability and save money when offering employees coverage. From the employer perspective, a private exchange is appealing because you can know exactly how much you are going to spend per employee. In addition, some employers feel that the design of many private exchanges is laid out in such a way as to make employees’ options very clear, thereby limiting confusion and facilitating clear communication between employee and employer. Early reports from restaurants who have switched to a private exchange are positive, encouraging others to consider the potential cost savings found there.

The Cons of Restaurants Using Private Exchanges for Healthcare Coverage

While private exchanges may help employers limit their costs, not all employees are convinced that the benefits are in their favor. There seems to be some confusion in the sentiment, with 50% of employees surveyed last fall saying that they thought a private exchange would “give them greater choice and flexibility to choose benefits” while the other half said that going to a private exchange is, “merely my employer trying to cut costs.”

Public appearances aside, the biggest downside for employees using a private healthcare exchange is that they will then be excluded from eligibility for an insurance subsidy on the federal public exchange. Since many restaurant employee incomes are low, they would likely pay less for subsidized healthcare coverage on the federal exchange than they would on a private exchange.

Last but not least, private exchanges are only a good method of lowering costs if premiums don’t go up and up each year. If that happens, the employer will still end up increasing their cost of subsidy in order to give their workers access to an equivalent out-of-pocket expense.

Restaurants Turn to Private Exchange in Preparation for the 2015 Mandate

Starting January 1st, 2015, any company with 50 or more full-time-equivalent employees must offer their workers affordable healthcare insurance or else face penalties. There have already been a number of well known chains who have made the move, including Darden Restaurants, Inc. (Red Lobster, Olive Garden, Longhorn Steakhouse brands) and DineEquity, Inc. (Applebee’s, IHOP, Bob Evan’s Farms).

Theoretically, a private exchange should cut costs for restaurant owners, but how much it does is highly dependent on a number of variable factors. The whole system is still in its experimental stages, and only time will tell whether choosing a private exchange over the public exchange is truly the most beneficial choice for restaurant businesses to make.

3 Restaurant Marketing Trends to Watch in 2014

February 18, 2014

Marketing in today’s world can feel like a fragmented endeavor, what with all of the various options that are available. Traditional media marketing through television, radio and print remain important cornerstones of successful restaurant campaigns, but modern marketing options through social networks and digital and mobile platforms are equally critical. Rather than despairing over the fragmented nature of all of these options however, restaurant operators should embrace them as an opportunity to shine in multiple avenues and look for ways to implement integrated marketing and branding plans that build consumer awareness in new ways. Here are three restaurant marketing trends you will see a lot more in 2014.

Utilizing Restaurant Industry Applications and Refining Social Media Interactions

Smart phones now account for some 64% of all mobile phones in the U.S. and that figure grows steadily year by year. Consumers increasingly expect to be able to use their phones to interact with your business. Restaurants around the country are rolling out mobile-coupon and mobile-loyalty platforms with great success. Along with payment, loyalty, ordering and reservation functions, several restaurants are also developing games that align with brand messages or give food rewards to players to entertain and engage users. There is as much fragmentation within the type of device on which an application runs as there is in marketing avenue options. So, until there is an ‘ultimate device’ that everyone uses, it’s best for restaurant operators to keep versatility as top priority when developing and improving their applications. 

On the social media front, restaurant operators need to be more mindful than ever about how they look in the eyes of the public, and be prepared to deal with crisis should it arise. Previous years have shown us how quickly a brand’s reputation can get damaged through social media by careless responses from moderators regarding customer concerns. With a number of hot topics, such as minimum wage, poised to make headlines in 2014, restaurant operators should have a response plan of action or think about adjusting their cultural identities to best turn politics to their advantage. 

Old-Fashioned Restaurant Marketing Still Works, Especially on T.V.

With the rise of digital and social marketing, it can be easy think that you can let traditional media marketing fall by the wayside. This couldn’t be further from the truth. Despite the increasing popularity of digital and social marketing, television, in particular, remains a highly influential form of advertising. In fact, 68% of consumers surveyed in September of last year said they take action at least some of the time after viewing a TV commercial. The only thing that inspires a higher action rate than that is recommendations from friends and opinions posted online.  This underscores the folly of neglecting traditional forms of media marketing. 

Restaurants Co-Brand for Greater Reach

There is one final trend to watch in 2014 that we’ll discuss here. That trend is the potential that can be unlocked by partnering with the right companies and getting your research and development teams to collaborate. Such unions can be wildly successful for both businesses. Think of Taco Bell’s Dorito Locos Tacos, Cinnabon lending its signature flavor to Burger King’s breakfast products, as well as bottles of vodka, and McDonald’s and Kraft’s McCafe-branded coffee scheduled to hit grocery stores this year. Looking for ways to partner up and collaborate with other businesses in your area is a smart way to create a win-win situation for everyone, and you can count on seeing more such unions in the upcoming year.

Media marketing strategies will continue to evolve with technology and consumer demand. To be successful in the coming years, restaurant operators should focus on building integrated marketing plans and recognize that multiple media avenues are opportunities for creatively reaching and engaging customers.

3 of the Most Successful Restaurant Marketing Campaigns in 2013

February 11, 2014

As a restaurant operator, it never hurts to take a look at what is working really well for the competition. There were a number of highly successful restaurant marketing campaigns in 2013 worthy of review by the restaurateur looking to up their restaurant’s marketing campaign track record. Here is a brief review of three of the most successful. 

Wendy’s Makes a Home Run with Crowd-Sourcing

Crowd-sourcing can be a very powerful promotional strategy, but getting your customers engaged and interacting with your brand can be tricky. Wendy’s hit the crowd-sourcing home run in 2013 with their ‘Pretzel Love Stories’ and ‘Pretzel Love Songs.’ In these campaigns, they encouraged fans to comment on the Wendy’s Facebook and Twitter pages about how much they loved their new pretzel bun products. They then took these comments and cobbled them together into humorous video skits and songs telling the ‘pretzel love stories’ as crafted by the fans. They gave public credit to the people whose comments were selected, and, of course, ended each promotional video by encouraging viewers to send in more comments to help them write the next pretzel love song or story. The campaign went viral and ended up being a brilliantly successful marketing tactic for the restaurant.

Chipotle Mexican Grill Excels at Brand Positioning

Brand positioning can make all the difference in terms of how the public thinks of your restaurant. Over the last several years, Chipotle Mexican Grill has made its name with its ‘Cultivate a Better World’ and ‘Food With Integrity’ marketing campaigns, designed to demonstrate the brand’s commitment to sustainable and ethical food choices. In 2011, they put out a promotional video entitled “Back to the Start” which was wildly popular online. In 2013, they followed this up with a new video and matching smartphone and tablet apps entitled “The Scarecrow.” The object of the game is to guide the scarecrow character through a dystopian future landscape of processed food in search of sustainable sources to feed customers. The chain also offered free food rewards to download and play the mobile game. The campaign was again, wildly successful, and serves as a solid demonstration of how effective it can be to associate your brand with a cause about which people care. 

Dominos Takes the Pie with Personalized Pizza Profiles

While pizza joints were some of the first restaurants to embrace online ordering technology, it wasn’t until this last year that chains like Domino’s upped the ante in terms of customized online ordering. They decided to give customers the option to save a personalized ‘Pizza Profile’ in which they could save the details of their favorite orders to expedite future ordering. They then paired this feature with an extensive video marketing campaign illustrating the frustrations and waste of time ordering over the phone, and assured customers that they could reduce their order time to 30 seconds or less simply by creating a Pizza Profile on the Domino’s website.  Not only did this campaign bring in thousands of new customers, but it also had the added benefit of giving the company the contact information and permission needed to market to these customers in the future. 

Whether you want to look for ways to take advantage of restaurant technology, focus on positioning your brand, or find inventive new ways to appeal to your customers, it’s smart to scope out tactics being used successfully by competitors and employ them within your own business. Marketing success in 2014 and beyond will rely on taking notes on what’s working for others and integrating those ideas into your own unique restaurant marketing campaign.

Restaurant Operating Systems Are On the Horizon; Is Your Restaurant Ready for the Shift?

February 7, 2014

Restaurateurs have dreamt of a unified restaurant business technology platform for years. Development has been limited due to a lack of standards, action from established providers to eliminate competition and a proprietary development environment. Fortunately, cloud-based data warehouses, and standards like HTML5, now make the development of an integrated restaurant business operating system possible with relative ease. It’s only a matter of time before the first versions of a restaurant equivalent of Windows or iOS are available.

This availability will rapidly spark additional innovations, further expand competition, and provide a badly needed common language to exchange data between a variety of applications. This technology stands to be the biggest technical innovation in the restaurant industry since the introduction of integrated POS systems. Here are three key strategies you can employ to ensure that your restaurant is ready for the shift.

Ensure Your Restaurant Supports Open Vendors

At this point in the game, realization of the restaurant operating system dream is a possibility.  It relies largely on the cooperation of business solution providers to make their services available through Application Programming Interfaces (APIs) and Software Development Kits (SDKs). Open architecture is a critical element of a restaurant operating system that can be rapidly adopted throughout the industry. 

Unfortunately, many vendors take the opposite approach, and try to lock restaurant operators into expensive proprietary software which doesn’t interface with anything but itself. Others do make their APIs and SDKs available, but with a price tag so high that it’s out of reach for a startup developer. Either way, it’s limiting the ability of third-party developers to create the software for which we’re waiting. 

As a restaurant, it’s in your best interest to both support development of the technology you want, as well as to position your business to be able to take advantage of that technology when it becomes available. Therefore, you want to ensure that all of your vendors are ready, able, and willing to integrate with other solutions from different vendors; especially those who handle your POS, payroll and gift, loyalty or enterprise reporting.

Avoid Getting Hand-Cuffed to Antiquated Restaurant Equipment

The recent burst of mobile consumer technologies stands to open a world of new avenues in terms of improvement to restaurant operations. It would be folly to dump more money into extending the life of already out-dated equipment, just as it would be foolish to find yourself hand-cuffed to a specific piece of equipment for years to come. Instead, it would be far better to carefully evaluate new options for business services that are available and make strategic choices that will enable your restaurant to easily adapt to innovative technology as it comes. 

Don’t Get Roped into Shady Arrangements with ‘Free’ Restaurant Software

When you’re strapped for cash, it’s tempting to look for free solutions. But, when it comes to POS systems, ‘free’ usually comes with a larger price than it’s worth. All too often, these developers bait an operator into signing long-term payment processing contracts, with less than scrupulous clauses, in exchange for use of their ‘freeware.’ Even worse, a lot of those contracts last for up to seven years which virtually locks your establishment out of the opportunity to take advantage of any new innovations. This simultaneously forces your business to run on antiquated software. 

The business environment for restaurant technology will continue to evolve and there are some exciting changes on the horizon. Making smart decisions about your technological investments now will help ensure that you are in a position to take advantage of new restaurant technology and can stay ahead of the competition without having to completely restructure your business.

Why Paying Your Restaurant Employees More Now Saves You Cash Later

February 3, 2014

The restaurant industry has one of the highest employee turnover rates in the nation. A new study shows that low pay and benefits are the likely culprits. It also indicates that it would be beneficial to a restaurant operator to look for strategies in order to retain old employees rather than paying to hire and train new ones.

The study entitled “High Road 2.0: A National Study of Human Resource Practices, Turnover and Customer Service in the Restaurant Industry,” conducted a phone survey of managers from 1,150 restaurants around the country. The study examined management practices and outcomes across four customer segments; upscale fine dining, casual fine dining, moderately priced family restaurants and fast food/quick-service restaurants. The results were telling indeed.

Just How High Is the Turnover Rate in The Restaurant Industry?

Amazingly, almost one in every two fast food workers quits or is fired each year, bringing the turnover rate for this segment to a whopping 47%. Moderately priced restaurants weren’t much better, with a typical year bringing around a 40% turnover rate. Casual fine dining and upscale fine dining clocked in at 28% and 26%, respectively. The average cost of that turnover rate is somewhere around $18,200 per year for a restaurant with 30 employees. In a chain restaurant of more than 100 locations, the cost of such a high turnover rate grows into the millions of dollars.

The Link Between Pay, Benefits and Restaurant Employee Turnover Rates

As you can see, the turnover rate for restaurant employees decreases as the customer segment moves up the ladder. The fact that quick-service workers get drastically less in terms of pay and benefits than their upscale counterparts is most certainly a major factor in the differential between turnover rates. Fast food workers take home an average of $255 a week, whereas moderate family restaurant workers bring in an average of $431, casual dining employees bring home $573 and upscale restaurant workers take home an average of $659 a week.

Workers’ benefits, such as paid vacation and paid sick time, are often limited since, in many instances, they are kept at just under full time hours. Approximately 32.4% of fast food workers get some form of paid vacation, whereas 52.3% of upscale workers get this benefit. Somewhere around 30% of fast food, and moderate and casual fine dining workers, get employer subsidized health insurance, while upscale employees average closer to 53.8%.

The Take Home Point About Restaurant Employee Turnover Rate

The point here is it would cost less in the long run for you to pay more to retain your employees now, rather than hire and retrain new ones later. The authors of this study concluded that through careful analyses and better HR practices, a restaurant’s turnover rate could be reduced by as much as half.

In an industry which employs 10 million people and brought in an estimated sales revenue of $660.5 billion last year alone,  it only makes sense to put the people that make it possible first. Sara Jayaraman, Co-Founder and Co-Director of ROC United, an organization committed to improving wages and working conditions for restaurant workers, says it best:

The restaurant industry is extraordinarily people-powered, yet one of the least worker friendly industries out there, which comes with a major financial cost to each restaurant. The bottom line can grow as a result of ethical, high road employment practices.