SAVE THE DATE: October 29-30, 2024

You won't want to miss this year's premier chain distribution event in New Orleans, Louisiana, when DMA convenes the top operator partners to celebrate a great year. Conference attendees will be treated to top tier Chain industry insights from experts including:

  • Habits of High Growth Chains DMA's own Angela Korompilas discusses best practices with CAVA, Popeye's and other top brands
  • Picking Future Winners Restaurant Business Editor in Chief Jonathan Maze moderates a panel including Jeff Bernstein from Barclays who share their methods for choosing the next hot chain
  • FSMA 204 is NOWKaty Jones, Trustwell CEO, leads a distinguished panel of distributor experts as they share the immediate issues surrounding traceability for multi-unit operators
  • Technology Transformation McDonald's, Sauce Pricing and Olo discuss future tech driving transformation for multi-unit operators in the "three D's"
  • 2025 Industry Forecast for Chains – what you need to know to plan for the coming year

While being a guest at this conference has traditionally been the exclusive territory of DMA's customers, again this year a very limited number of seats will be made available to national chain operators interested in learning more. Reach out to Charley for more information about this opportunity or if you are interested in becoming an event sponsor.


Three Key Trends from NRA 2024

The food-away-from home industry gathered in Chicago between May 18 and May 21 for the 2024 National Restaurant Association Show (NRA 2024). Hosted at McCormick Place, the show served as a vehicle for product samples, in-person meetings, and a view into the biggest trends coming for the foodservice industry.

What were some of the biggest trends at the NRA 2024? Emerging technology, convenience, and cold beverages were among the biggest themes on display at the show.

Technology Solutions on Full Display at NRA 2024

Automation, artificial intelligence, and other robotics featured prevalently at the NRA 2024.

Robo-Cook showcased its back-of-house robotic arms in an appropriately unmanned display on the show floor. The exhibit showed how the arms could operate deep fryers and griddles for a restaurants' kitchen operations and free up labor for other tasks around the restaurant.

Raydiant Technologies, a software provider, displayed its technologies on the show floor. The company provides digital signboards that can be adjusted on the fly to account for out-of-stock items, as an example.

Raydiant also displayed its AI-based recognition system that can offer targeted meal deals for the demographic profile of the person standing in front of the screen. For example, when a child walked in front of the camera, the display showcased a kids' meal option.

Additionally, Middleby Corp. and demonstrated a kiosk and food locker setup that allowed for efficient ordering of food which would then be placed in a heated lock box for later consumer pick-up, providing a concept that could help cut down on labor costs for some operations.

Convenience is King at NRA 2024

Middleby and's solution could also fit into this convenience bucket, but it was far from the only example of how convenience is becoming more and more important in the restaurant industry.

Wonder showcased its quick-cook ovens that could create everything from pizza to steak to mac-and-cheese. The company pivoted from its delivery model to a food hall-style concept featuring multiple cuisine types that are available for dine-in, delivery, or pick-up service.

Nestle Professional also highlighted several easy-to-use solutions that restaurant operators could leverage back-of-house, including gourmet flatbreads and mac-and-cheese dishes formulated with Stouffer's white cheddar mac-and-cheese solution.

Cold Beverages Abound at NRA 2024

Energy-drink maker Celsius hosted a pop-up bar, providing cans of its signature product. Booth attendants also made mocktails from the product, however, showcasing a new way for restaurant operators to create enticing beverages for guests.

Meanwhile, beverage industry stalwarts The Coca-Cola Co. and PepsiCo both had impressive booths highlighting digital marketing and new flavors and brands. The displays reinforced how the brands are working to remain relevant with younger generations.

Poppi, a better-for-you soda brand, was also at the show. The company's formulations combine fruit juice, apple cider vinegar, and inulin prebiotics to create their products. Food Institute Focus
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Fast-Food Chains Racing to the Bottom to Attract Inflation-Weary Consumers

Whether spurred by inflation-weary consumers looking to cut their food budgets or people taking weight-loss drugs eschewing their usual diet of calorie-laden snacks, retailers and food manufacturers are rolling out deals to try to keep profits from tanking. All of a sudden, value meals are seemingly everywhere.

McDonald's and Burger King announced $5 meal deals; Wendy's unveiled a $3 breakfast; Walmart came up with a barbecue package for eight for less than $50; Target said it would cut its prices, and Nestle introduced a line of frozen $5 pizzas and sandwiches targeted at users of Ozempic and Wegovy.

"The immediate profit may not be substantial with discounted items like McDonald's $5 meal deal, or Walmart's cookout deal, but these transactions often lead to additional, more profitable purchases," Nick Drewe, CEO of Wethrift, told The Food Institute.

"If a customer opts for a $5 meal package, there's a good chance they might also order a dessert or a beverage at regular pricing."

No sooner had McDonald's, whose prices have soared in recent months to as much as $18 for a Big Mac meal, announced its $5 meal deal, than Burger King rolled out its own version.

EatThisNotThat reported Burger King would start its promotion sooner and keep it in place for much longer. The McDonald's Golden Arches deal is set to last for about a month after it begins June 25 while Burger King's Your Way Meal is expected to be available sooner and last several months.

Wendy's went for the breakfast crowd with its English muffin sandwiches accompanied by seasoned potatoes. The promotion began May 20 but the company did not say when it would end.

Pavel Naydenov, head of marketing at Businessmap, told FI meal deals are smart short-term strategies and that the lower margins to which they lead can be offset by customer volume and upselling. A side benefit, he said, is increased, longer-term loyalty.

"Interestingly, customer behavior showcases an inclination toward add-on purchases when initially attracted by such sales drivers, which indicates a probable rise in more profitable purchases," Naydenov said.

Michael Sawyer, operations director for UltimateKilimanjaro, said though such deals may get customers to walk through the door, they're not the ultimate marketing strategy.

"Offering deals is a great marketing tool, but in my opinion, they should only be used weekly (and every couple of months) if financially feasible, not as an entire sales strategy," Sawyer said, adding, "If a vendor chooses to run specific promotions, I recommend centering them around yearly seasons and holidays, creating an incentive for specific customers (such as loyalty programs) to receive better deals than those available to the general public, and hosting large discount programs for one week at a time to create a sense of urgency that compels the public to pay attention."

EatingWell reported Walmart's deal totals $6 per person and includes hotdogs, buns, condiments, baked beans, potato salad, fruit, sweet corn, chips, soda, frozen treats and cookies.

Target is going one better, cutting prices on some 5,000 items, including milk, meat and eggs.

"We know consumers are feeling pressured to make the most of their budget," said Rick Gomez, executive VP and chief food, essentials and beauty officer at Target.

At Nestle, officials told Reuters the company had been working on foods aimed at people taking weight-loss drugs for some time and will begin distributing the first batch in October under the brand name Vital Pursuit.

The Vital Pursuit products will reportedly contain more protein, iron and calcium than most of the company's other offerings.

"We moved real fast on this," said Tom Moe, president of Nestle USA's meal division. Food Institute Focus

Top 5 Casual-dining Restaurant Chains by Sales

Throughout America, many casual-dining restaurant chains lost customers last year as inflation-fatigued consumers largely stuck to strict budgets. Olive Garden, however, continued to flourish.

According to Restaurant Business, the 42-year-old Italian chain, which has 908 U.S. locations, saw its systemwide sales increase by nearly 9% last year and surpass the $5 billion mark.

"Olive Garden provides a predictable experience at a reasonable price – in a time when you can't always rely on that elsewhere. This will continue to fuel Olive Garden's growth," Kenny Rose, CEO of FranShares, told The Food Institute.

"Olive Garden has done a good job of catering to families of all generations," said Gary Pryor, senior business consultant at Waters Business Consulting Group.

Italian cuisine's relatively low production costs have helped Olive Garden sustain high profit margins, according to Spencer Michiel, a restaurant tech consultant at Back of House. Michiel added:

"Olive Garden's "menu simplicity and relaxed, casual service style make it possible to hire younger, less-skilled employees, keeping labor costs low."

Here's a look at the largest casual-dining chains' domestic systemwide sales in 2023 according to recent Technomic data:

     •  Olive Garden – $5.1 billion (up 8.8%)

     •  Texas Roadhouse – $4.8 billion (up 13.8%)

     •  Applebee's – $4.4 billion (down 0.1%)

     •  Chili's – $4 billion (up 6.3%)

     •  Buffalo Wild Wings – $4 billion (up 0.5%)

Two noteworthy data points from Olive Garden's closest pursuers, per Restaurant Business: Texas Roadhouse opened 24 locations last year while Applebee's closed more than 30 locations in 2023 (but still boasts a robust 1,536 American units).

According to a new study by Vericast, consumers are eating out less. More than half of respondents (58%) said they're eating out less frequently compared to 49% in 2023.

Per Vericast, 67% of consumers say that increased costs are making restaurants too expensive.

As a result, experts feel restaurant chains must focus on improving the customer experience.

"While the industry focuses on consistency – from how each guest is greeted to how each dish is prepared – it all starts with investing in teaching the ins and outs of each job to every staff member," Katie Fairchild, the CMO at Restaurant365, told FI. "Doing so encourages a strong culture, (and) reduces turnover."

Rose, meanwhile, said casual-dining chains must "take the first step to win customers' loyalty, reward them, make them feel loved, and give them a reason to come back." Food Institute Focus

Store News:

Burger King will launch a $5 meal deal ahead of the McDonald's launch of a similar package. Burger King will offer a choice of three sandwiches with nuggets, fries, and a drink, reported Bloomberg (May 23). Full Story

Red Robin has transformed its popular loyalty program, Red Robin Royalty, making it easier for members to earn free food and perks faster. Now, Red Robin Royalty members will earn one point for every dollar spent on qualifying purchases, not just entrees. Full Story

IHOP is using AI to boost check averages. The breakfast chain's AI recommendation engine makes menu suggestions based on what a customer has already ordered. It has proven quite persuasive, reported Restaurant Business (May 21). Full Story

Meanwhile, Dine Brands Global, parent company of IHOP and Applebee's, continues to lean into deals to attract diners and bolster profits. From the $1 margarita and the $200 date night pass at Applebee's, CFO Vance Chang noted that enticement may be a win because even if diners stick to deals, they are designed to make money without additional add-ons, reported The Wall Street Journal (May 28). Full Story

Fuzzy's Taco Shop has signed two deals to open 40 stores in Arizona and Texas, reported Yahoo! Finance (May 24). Full Story

Starbucks employees say customer wait times have risen after the algorithm that allocates store labor was changed. The system considers an array of inputs — such as order forecasts and product availability — to deliver a recommended staffing plan, reported Bloomberg (May 29). Full Story

CosMc's has debuted its mobile app. Beverage consumers tend to be more loyal to specific brands than other concepts, and many beverage companies from Starbucks to Dunkin' have trained consumers to use the app, fueling digital growth and mobile-empowered loyalty, reported Restaurant Business (May 28). Full Story

Can Shake Shack offer the same high-quality food and reputation as it expands and embraces drive-thru? The popular fast-food alternative built a $4 billion business with gourmet appeal and lofty prices, and now that it's expanding with at least 12 new restaurants this year, Shake Shack hopes to preserve its cult standing and premium branding while embracing drive-thru, reported The New York Times (May 30). Full Story

KFC has gone portable and ‘poppable' to lure the snacking generation. Bite-size Apple Pie Poppers, for example, lend themselves to line extensions to expand the chain's snack selections, reported Restaurant Business (May 28). Full Story

Taco Bell has partnered with Cheez-It to offer the new Cheez-It Crunchwrap Supreme and Tostada. Both feature a single Cheez-It cracker 16 times larger than the normal square, reported Restaurant Business (May 30). Full Story

Amazon integrated Grubhub directly into its shopping app and website. As part of the agreement, Amazon Prime members will continue to be eligible for free Grubhub+ memberships worth $120 a year. Full Story

Long John Silver's recently unveiled a new loyalty program called Seacret Society. The seafood chain's loyalty members will earn four coins for every dollar spent, and the coins can be redeemed for a variety of rewards. Full Story

Red Lobster could close more than 100 restaurants if it can't renegotiate leases. It already closed about 100 sites before filing for bankruptcy, and if it can't get better terms on lease payments, it may have to close 100 more, reported Restaurant Business (May 31). Full Story

Taco John's is adding AI voicebots to its drive-thrus. The Mexican fast-food chain will bring Presto Voice technology to more than 350 restaurants after it improved speed and ticket size at a test location; other competitors testing the technology include Wendy's, White Castle, Hardee's, and more, reported Restaurant Business (June 3). Full Story

Denny's has pledged $3.3 million to DEI organizations. The restaurant chain has formed a five-year partnership with 14 organizations that focus on five key pillars such as civil rights and business diversity, reported Nation's Restaurant News (May 31). Full Story

Rubio's Coastal Grill, a fast-casual chain, has declared bankruptcy. The chain blamed rising costs and the fast-food wage in California as it made its second Chapter 11 filing in four years. The chain plans to use the bankruptcy process to find a buyer, reported Restaurant Business (June 5). Full Story

Executives on the Move:

Wendy's named Abigail Pringle U.S. president. Full Story

Cracker Barrel has named Cheryl Henry to its board of directors. Henry formerly served as president and CEO of Ruth's Hospitality Group, which oversaw over 150 Ruth's Chris steakhouses worldwide. Full Story

The José Andrés Group has named Sam Bakhshandehpour its global CEO, reported (May 31). Full Story

Cherry Bounce Hospitality, a new restaurant group, has named Scott Taylor its CEO. Cherry Bounce includes regional restaurant chains Trudy's Authentic Tex-Mex, Cajun Steamer Bar & Grill, and Live.Eat.Surf Restaurants, reported Restaurant Business (May 29). Full Story


Bird Flu Approaching Danger Point

With the confirmation that a third dairy worker recently contracted H5N1 avian influenza and evidence the virus has spread to cattle in at least nine states, the USDA is ramping up efforts to stem the outbreak and pharmaceutical firms are expanding the manufacture of bulk vaccines.

After the initial outbreak in Texas cattle, it took nearly two months before veterinarians realized what was sickening the animals, and only then because farm cats that died were tested for the virus, Scientific American reported. The report said farmers started realizing there was a problem in February when data indicated something was interfering with rumination and milk production.

What made the cattle infection unusual is that other mammals that have contracted the disease were carnivores that ate infected birds, Amy Swinford, director of the Texas A&M Veterinary Medical Diagnostic Laboratory, told Scientific American. Illnesses among dairy workers initially were presumed to be seasonal flu.

The Food and Drug Administration has estimated that as much as 20% of the milk supply now contains fragments of the virus.

The recently sickened farmworkers exhibited respiratory symptoms, making it possible the disease could start spreading human-to-human, The New York Times said, calling for a "robust national testing strategy." So far, no human-to-human spread has been detected.

The Centers for Disease Control and Prevention has ordered 4.8 million vaccines and may order vaccination of farmworkers, The Guardian reported.

"Right now, there is nobody for whom vaccination is recommended," David Boucher, director of infectious diseases preparedness and response at the Administration for Strategic Preparedness and Response, told The Guardian. "But that is obviously something we're always looking for."

Meanwhile, In other ag-related news:

China beef: Detection of a banned additive that increases animal weight prompted China to destroy shipments of JBS USA beef from the company's Greeley, Colorado, processing plant, Reuters reported. The additive, ractopamine, is added to feed and has been banned in 160 countries but is legal in the U.S. despite efforts by environmentalists to ban the substance as a threat to human health.

JBS, headquartered in Brazil, is the world's largest beef producer. The suspension was effective May 27. The company said it is working with Chinese authorities to resolve the situation.

arm bill: The U.S. House Agriculture Committee recently advanced a $1.5 trillion farm bill without resolving partisan disputes concerning nutrition, agriculture and climate policies. The bill has the support of farm commodity groups but is opposed by environmental and hunger groups. It has virtually no chance of becoming law, Reuters reported.

Programs like the Supplemental Nutrition Assistance Program are operating under a one-year extension following the expiration of the 2018 farm bill last year. Only four Democrats supported the bill. Food Institute Focus

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Restaurants Post First Y-o-Y Increase of 2024 in March

Comparable restaurant sales increased 0.6% in April as comparable traffic ticked down 2.3%, according to Black Box Intelligence

Black Box noted that while the U.S. has managed to avoid a recession so far and that employment numbers remained robust, consumers were still unsure about the economy, which was hurting restaurant sales. 

Additionally, the group said that if chains have no choice but to raise prices, they need to refocus efforts on delivery other parts of the value equation. Full Story

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