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IFMA COEX 2024: Key Themes and Industry Trends

The food away-from-home ecosystem, including suppliers, manufacturers, and operators, convened at the Loews Kansas City Hotel March 3 through March 6 for COEX 2024, hosted by the International Foodservice Manufacturers Association (IFMA). Attendees were treated to three days of face-to-face meetings, networking events, emerging food trends, and data sessions.

Phil Kafarakis, IFMA president and CEO, was proud to report operator representation increased for this year's iteration of the Chain Operator Exchange event, and that 50% of foodservice operator attendees were first-time visitors.

He also noted that since IFMA had opened its doors to more members of the industry following the 2023 Presidents Conference, attendance was more representative of all parts of the food away-from-home ecosystem.

"We're very excited about the kickoff of the year. And now we're going to build off of this with the other programs, at the Virtual Marketing & Sales Conference and then Presidents Conference at the end of the year," he told The Food Institute at the event.

To Succeed, ‘Find a Way'

Josh Linkner issued the opening keynote for the COEX 2024 and noted that creativity and innovation was critical for continued growth and success. He also noted that research had found all humans are naturally drawn to creativity, but that it manifested in different ways.

He argued that the foodservice industry was being called to lead in a fresh manner, and that the headwinds the industry is facing are clear: it would no longer suffice to rely on the models of the past and expect new results. He also encouraged leaders to think small when innovating.

"We think that innovators take these high-risk moonshots, that they are always swinging for the fences, but the best of the best do the opposite. They cultivate small daily acts of creativity and think of them as micro-innovations on a high-frequency basis," he said.

‘The Next Normal' Emerges in 2024

Bruce Reinstein and Tim Hand, both partners with Kinetic 12, developed a timeline of the post-pandemic period for operators, and noted that 2024 was the beginning of "The Next Normal." This period would require a balancing act for both growth and profitability.

"Now let's define ‘The Next Normal.' We're defining it as not fighting the fire of the day, but about getting back to kind of the pillars of business management, which is managing these two things – growth and profitability," said Hand.

The pair discussed how the top operator concerns per data from their Emergence Chain Restaurant Group in the first quarter of 2024 centered around building customer traffic, but also maintaining it.

To do so, many said they were trying to be more consistent with their menu executions (51%), adding or expanding a loyalty program (44%), and building a happier or more engaged staff (44%).

"So you've done all the work, you have additional new consumers, you have loyalty, but are you actually keeping those consumers? So that's a concern. It's a big concern, but in the end, if you're not profitable it doesn't matter how much traffic you have," said Reinstein.

A Focus on Labor and Listening to Your Team

Another key COEX 2024 theme was a focus on labor, with Brinker International CEO and president Kevin Hochman sharing how empowering store employees led to better results for the company.

He shared an anecdote about an employee who felt they were wasting their time counting shrimp, which led to a simplification effort that saved millions of dollars while improving the guest experience.

Hochman said eliminating unnecessary tasks would allow team members to focus on core responsibilities and improving the guest experience, which remains the core for any hospitality business. And by listening to team members, the company saw positive results.

"The biggest thing is they know that their ideas are going to show up quickly in the updates that we do, so they feel like they're a part of the future. And I think when you can get a large team feeling like they are a part of paving the're going to be more excited to stay there," Hochman noted in an on-stage conversation with Kafarakis.

Core Menus Shrink, LTOs Continue to Reign Supreme

Megan Lynberg, vice president of sales at Datassential, revealed data showing a 9% increase in limited-time offer (LTO) introductions at chain locations since 2021, showcasing the staying power of the offerings. The average chain added 22 new items per year, with Starbucks (104), TGI Fridays (77), and Taco Bell (66) at the head of the pack.

When it comes to the types of LTOs introduced in 2023, the top categories were somewhat surprising: non-alcoholic beverages (589), desserts (54), and appetizers & sides (405) were the most popular categories for LTO introductions.

"A lot of consumers are going to be motivated to visit a restaurant when you're offering an LTO or something that they'd like to try, so there is benefit to that item being new and exclusive," shared Lynberg.

Global Flavors and Differentiated Ingredients

Lizzy Freier, director of menu research and insights at Technomic, shared that 40% of consumers want restaurants to offer foods with complex flavor combinations. As a result, more chain operators were offering dishes and drinks that offer those types of experiences.

She noted five flavors, sauces, and ingredients in particular that were gaining traction:

· Chraimeh sauce

· Awaze

 ·  Schisandra berry

 ·  Bulldog sauce

 ·  Jeow som

She also noted consumers were looking for more differentiated ingredients. Instead of just apple, they would be looking for Pink Lady or Granny Smith descriptors on a menu.

"It's just that kind of added attention to detail and it's something that a lot of consumers are very much craving. And in addition to this, we are seeing an influx of regional or country callouts directly on menus as well. And this is coinciding with the fact that consumers are increasingly interested in more global cuisines and regional cuisines on menus.," she said.

Finding Ways to Engage with the Health-Minded Consumer

Jack Li, co-founder and executive chairman of Datassential, served as the anchor presenter of COEX 2024 and noted that the fastest-growing chains in the country were those that engaged consumers with health and wellness.

He also pointed to the growth of wearable devices that can monitor blood glucose levels on a nearly instantaneous basis as a major source of change for how consumers will eat.

"With wearables that are measuring things, people will make a very direct and immediate connection between what they eat and what they do and how they exercise and all the other aspects of life, and what's actually happening to their body in real time. The shortening of that connection, that immediacy is what I think is going to drive changes in consumer behavior," he said. Food Institute Focus

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COLUMN: How to Effectively Handle High Food Prices

The other day, I took my son to Five Guys and he got a cheeseburger, fries, and a milkshake. It was almost $20 ... yet there was a line all the way to the door. So, it seems like the tide has risen for everybody.

Right now, everybody's grappling with the same food prices.

As a restaurant operator, you must be profitable despite rising food prices. The whole reason anyone got in this business was to make money – and to hopefully become wealthy. We love feeding people, but it's no fun if you're losing money. So, you have to raise your menu prices at times like this.

Any publicly traded restaurant CFO would tell you that you should raise your prices 5% every year anyway, just to stay ahead. And then, last year, considering the high inflation, you probably needed to move prices up 10 points.

Guess what? There are ways to make price increases palatable to restaurant customers. Here's how:

Consider Suggestive Selling

When I first started working with Five Guys years ago, I asked employees what percentage of people typically order fries and soda in addition to their burgers. They claimed most customers did. But then we actually stood there and counted, and it was a surprisingly low number.

So, we started to use suggestive selling, where you asked customers "What size fry?" And, "What size Coke?" And, all of a sudden, more customers ordered fries and Cokes.

The margin on fries and soda are better than ground beef. So, using the suggestive selling technique helps drive gross profit despite food prices.

Utilize Menu Engineering

Another valuable tactic involves operators "engineering" their menu around more profitable items. So, if the cost of chicken goes nuts, market something else. It could be a side item, or it could be drinks.

Menu engineering is important. There are many engineering consultants that are great at figuring out how to strategically work it out; every quarter you bump certain sections of the menu up, so prices increase but it's not shocking to customers. You have to stay out in front of it.

Ask yourself, "What else can I sell that's more profitable?"

Zero in on Your Target Customer

I don't mean to pick on Chili's – I want everyone in the restaurant industry to make a lot of money. I've gotta say, though, Chili's has a $10.99 value meal right now where customers get a beverage, appetizer, and entrée. Frankly, that's the worst idea because, in that scenario, the restaurant is trying to attract customers with a loss leader.

Someone in that chain's marketing department apparently said "Offer this value meal and we'll make it up in the long run, by selling additional items like alcohol." But what you're really doing is conditioning your customers to only visit your restaurant for low-price items.

When chains come up with these ridiculously low-priced value meals it's simply not sustainable. It's misguided. Chains like Chili's should be going after the premium customer – it's way more profitable.

Words for the Road amid High Food Prices

Remember, in 2024 every restaurant is raising their prices. Look at Chipotle: they've raised menu prices four times recently, yet their customer count increases and their overall sales increase. People keep going to Chipotle because it's good and it's consistent.

If customers only go to your restaurant because you're the cheapest one on the block, that's a pretty thin business premise.

I hear restaurant operators say "I can't raise prices because it'll freak out my customers." But I always say the value is in the plate, not the price.

Some burgers are 99 cents, but some are $30 and people pay that – because they perceive that the $30 burger is worth it. Food Institute Focus

Cloud Bread to Burn-away Cakes: Tomorrow's TikTok Trends in Restaurant & Retail

Food brands and restaurant/retail companies have long listened to consumers regarding what's hot, what's not, and what's coming (and what's so last year!), but few tools have amplified consumers' voices like TikTok.

A guy named Keith Lee (@keith_lee125, for curious Tokkers) was thrust into the limelight last year as his Chipotle hack, the Keithadilla, first went viral and then went corporate when Chipotle not only embraced it, but made it a part of its menu.

From fashion to food to home how-to, no one knows what tomorrow's fan-based must-have will be or can predict which form it will take; when McDonald's released its Happy Birthday Grimace Happy Meal last summer, TikTok was overrun with sometimes hilarious (and often gruesome) videos of purple-smeared tweens meeting their untimely ends at the hands of The Purple One, boosting sales and prompting McDonald's CEO Chris Kempczinski, during its July earnings call, to say, "This quarter, if I'm being honest, the theme was Grimace."

But no one wants to be secondhand news, as Lindsay Buckingham once sang – it's tomorrow that's hot. Here are a few rumors about what to expect via TikTok at a restaurant, grocer, or retailer near you.

You Can Go Your Own Way

From chefs to retailers to restaurant operators, catching fire with a dish that went viral on TikTok can ignite a fan base (and bolster quarterly revenue).

"We've seen a big uptick in chefs and operators leveraging TikTok. It's a perfect creative outlet to showcase culinary skills and personalities," said Sharon Ponti, social media manager at FoodMix, to FI.

"And thanks to the algorithm, TikTok has been helping talented chefs gain significant visibility and recognition in the culinary world. A recent example here at FoodMix is the viral onion tart that took over in 2023," noting that pre-peeled onions made for many a scrumptious meal.

"Tapping into peer-to-peer influence within the foodservice space is key to increasing our clients' social following and overall engagement. Beyond chef creators, there are ample opportunities to create connections and spread awareness for away-from-home food and beverage brands on TikTok, especially when it comes to getting brands in front of the young, up-and-coming decision makers entering the foodservice realm."

Pickles remain a hot condiment and the Chamoy pickle is one the rise on TikTok. Chamoy pickles are generally giant pickles stuffed with anything from sweet peppers to spicy jalapenos and often drizzled in hot sauce and/or chili powder.

Chamoy is a popular Mexican condiment made from dried fruit and chilis," said Petra Khan, senior strategist at ICUC, a global social media and online community management agency, to FI. "TikTokers are putting Chamoy over anything you can think of, from peach rings and other candy, fruits & veggies, chips, and even on their drinks!"

Khan said that the versatility of Chamoy means many brands, at-home food DIYers, and more can really put their own spin on the unique food and tap into the trend.

"Make it relevant to your brand and your audience, and you're steps away from creating a viral combination," she added.

In other words, instead of merely dreaming about going viral, see what's out there, throw on an apron, and head to the kitchen.

Don't Stop (Remixing Viral Recipes)

Camila Santos is co-founder and creative director at Host Hospitality, and she noted several trends to watch for in the year ahead:

Burn-away Cake – This captivating trend, noted by one of our clients who is already considering its implementation, offers a novel way to entice diners with hidden surprises and messages, sparking curiosity and enhancing the dining experience. Why implement? To create an interactive and memorable dining experience that engages customers and generates buzz.

The burn-away cake was already heating up on TikTok, so to speak, then went supernova when Elmo asked everyone how they were doing on Twitter and the people responded – NOT VERY WELL, ELMO.

Other trends to note include:

 ·  Cloud Bread – With its ethereal appearance and simple yet visually stunning preparation, cloud bread presents an opportunity to offer a unique and Instagram-worthy menu item that appeals to the growing demand for visually appealing dishes. Why implement? To attract social media-savvy customers and capitalize on the trend's virality for increased brand visibility.

 ·  Broths – As consumers increasingly prioritize health and wellness, the resurgence of broths provides an opportunity to offer comforting, nutrient-rich menu options that cater to this growing demand for wholesome and nourishing fare. Why implement? To tap into the health-conscious market segment and offer a diverse range of flavorful and nutritious options.

 ·  Mirror Glaze Cakes – Mirror glaze cakes provide a visually stunning dessert option that combines artistic flair with indulgent flavors, offering a decadent treat that appeals to customers seeking unique and luxurious dining experiences. Why implement? To differentiate your dessert offerings and captivate customers with visually stunning creations that leave a lasting impression.

 ·  Fruit-infused Ice Cubes for Cocktails – By infusing ice cubes with fresh fruits and herbs, restaurants can elevate their cocktail presentations, adding a refreshing burst of flavor and visual appeal that enhances the overall drinking experience. Why implement? To offer innovative and refreshing cocktail options that appeal to customers' senses and encourage repeat visits.

 ·  Creme Brulee Bagel – Combining the classic flavors of creme brulee with the beloved texture of a bagel, this innovative culinary creation offers a unique twist on a breakfast staple, catering to customers' desire for novel and indulgent menu items. Why implement? To offer a creative and indulgent breakfast option that stands out from traditional offerings and generates excitement among customers.

 ·  Chopped Bagel – By deconstructing the classic bagel sandwich and serving it in a chopped format, restaurants can offer a customizable and convenient dining option that caters to customers' preferences for personalized and on-the-go meals. Why implement? To provide customers with a versatile and customizable menu option that caters to their individual tastes and dietary preferences."

New Yorkers may tremble at that last one, but 1.5 million viewers can't be wrong.

Can they? Food Institute Focus

Store News:

McDonald's became WcDonald's at over 13,000 stores and offer a limited-time Savory Chili WcDonald's Sauce. The promotion and name change derives from how McDonald's has been referred to in Japanese comics, called manga, for decades, reported Restaurant Business (Feb. 21). Full Story

Meanwhile, McDonald's and other restaurant chains are looking to the Sun Belt for growth as its population soars. Sun Belt states such as Texas, Florida, and North Carolina typically have friendly reputations for businesses, and the region has experienced much more robust growth in recent years than the Midwest and Northeast; Sun Belt cities typically have more space, warmer weather, less government restrictions, and cheaper housing, reported CNBC (March 9). Full Story

Focus Brands is changing its name to GoTo Foods. The parent company of chains like Cinnabon, Auntie Anne's, and Schlotzsky's said it's evolving into a "platform business, reported Restaurant Brands (Feb. 20). Full Story

KFC is introducing a new pizza item called the Chizza—a portmanteau of fried chicken and pizza. The item first appeared on menus in the Philippines in 2015 and has made its way to Korea, Taiwan, India, Thailand, Germany, Spain, and Mexico, among other countries, reported QSR Web (Feb. 21). Full Story

Brown sugar bacon is back at Arby's, adding sweet-and-salty flavoring to the chain's roast beef, turkey, and BLT sandwiches, reported (Feb. 21). Full Story

Bloomin' Brands, which owns Outback Steakhouse, Carrabba's Italian Grill, Bonefish Grill, and others, will close 41 restaurants with plans to open as many as 45 more. All but two of the closures will be in the U.S. and most will be Outback locations. The majority are older units with leases dating to the 90s and cost the company about $100 million in revenue this year, reported Restaurant Business (Feb. 23). Full Story

Starbucks will increase wages for some of its union workers as its relationship with Workers United dwindles. The news comes as a welcome boon after a protracted standoff between the coffee juggernaut and the union representing some baristas. Starbucks also said it would provide unionized cafes with credit card tipping, a benefit that's been available in nonunion stores for more than a year, reported CNBC (Feb. 27). Full Story

Crave Hot Dogs & BBQ has rapidly expanded its food trucks across the U.S., reaching states from New Jersey to Florida and west to Arizona. Offering a diverse menu with items like the Mac N Brisket Sandwich, the food trucks have not only become popular at events but also present a franchising opportunity for entrepreneurs looking to enter the fast-casual food market. Full Story

Pass the pizza – Domino's is adding more franchisees as store profitability improves. In 2023, the chain added the largest number of operators in 15 years. Most impressive is every single one of the 60 operators came from within and started as a delivery driver or another employee within Domino's, reported Restaurant Business (Feb. 27). Full Story

Panera Bread secured an exemption from California's new $20 minimum wage law, benefiting from a unique provision that excludes chains involved in baking and selling bread as standalone items. This move, influenced by Governor Newsom and billionaire Greg Flynn, raises questions about the law's intricacies and enforcement, reported Bloomberg (Feb. 28). Full Story

Meanwhile, Panera Bread is undergoing an extensive menu revamp, introducing over 20 updates and nine new items—some under $10. This strategic move, set to launch on April 4, will also bring enhancements to classics like the Bravo Club Sandwich and Fuji Apple Chicken Salad, reported Forbes (Feb. 29). Full Story

IHOP has teamed up with Lay's to launch Rooty Tooty Fresh ‘N Fruity chips, now available at Walmart stores nationwide. The novel creation features the flavor of IHOP pancakes, with sweet notes of strawberries and maple syrup, finished with a subtle flavor of bacon, reported Nation's Restaurant News (Feb. 27). Full Story

Chipotle is further committing to its venture fund, Cultivate Next, on its second anniversary with another $50 million. The total investment pool is now $100 million, and upcoming investments include Greenfield Robotics (robots who weed); Nitricity (planet-friendly fertilizer); Vebu (the tech company that developed Autocado, a robot who peels and cores avocados); Meati Foods (mycelium-based food); and Zero Acre Farms (an alternative oils manufacturer), reported Restaurant Business (Feb. 28). Full Story

In-N-Out Burger is set to open its first restaurant in Washington state, marking a significant expansion beyond its California roots. The new location in Ridgefield, near Vancouver, will bring the beloved fast-food chain closer to Seattle residents, offering a taste of California cuisine to the Pacific Northwest, reported RetailWire (March 1). Full Story

Red Robin sold 10 restaurants for $24 million in a sale-leaseback transaction. It's the third such deal for the 500-unit chain in one year, and the proceeds will be used to pay down debt, reported Restaurant Business (March 4). Full Story

The Boston Market rotisserie chicken chain is down to just 27 restaurants after it began 2023 with nearly 300 locations. The chain's owner also recently had his second bankruptcy filing terminated over technical issues, reported Restaurant Business (March 11). Full Story


Executives on the Move:

Mountain Mike's Pizza has promoted Jim Metevier to the role of CEO. Metevier had served as the chain's president and COO the past five years, and now aims to accelerate franchise development as Mountain Mike's approaches 300 U.S. locations. Full Story

Noodles & Company has named Drew Madsen CEO. The former Panera Bread president has served on the board and was interim CEO since November. Full Story

Restaurant Brands International named Sami Siddiqui as CFO, Thiago Santelmo as president of international, and Jeff Klein as president of Popeyes U.S. and Canada. Full Story


Egg Market Remains Volatile Amid HPAI, Cage-Free Standards

Egg prices were volatile in 2023 due to highly pathogenic avian influenza (HPAI). Not much has changed as the calendar has flipped into 2024.

"The U.S. egg market has been extremely volatile since quarter four of 2023," said Eggs Unlimited global trade strategist Brian Moscogiuri in an e-mail to The Food Institute. "Prices hit the highest levels we've ever seen for the month of February, forcing retailers to raise shelf prices and distributors to reduce inventory positions more recently."

Moscogiuri noted this supply dynamic allowed supplies to recover and spot prices to fall sharply as February ended, which was opportune with an early Easter holiday on deck for 2024.

Wells Fargo Agri-Food Institute sector manager Kevin Bergquist confirmed this dynamic, saying the current egg market remained highly variable and unpredictable.

"Wholesale egg prices likely won't skyrocket to nearly $5.50 per dozen like in late 2022, but if the last two weeks are any indication of the near-term future, we are definitely headed that way right now. The HPAI wild card is still very much in play," he wrote in an e-mail to The Food Institute.

HPAI Continues to Impact the Egg Industry

Bergquist noted that the market never really settled from the 2022-23 HPAI outbreak despite some "normal" seasonal changes.

"Although the justification for the wild egg markets is rightly placed on the HPAI outbreak over the last two years, there is no reliable metric to predict the egg market. Some prognosticators point to 320 million egg layers as a threshold figure when the egg market will have enough of a dependable supply to restore ‘normal' pricing patterns. The current USDA figure is 312 million layers as of January 2024," he noted.

Both Bergquist and Moscogiuri pointed to a fall outbreak of HPAI as a major inflection point for the industry.

"Surprisingly, HPAI did not impact commercial egg production during the spring migration of 2023. Many believed that the cycle could be over, but the virus returned in November. Through early January, the industry lost about 14 million layers, and we have seen more than 50 million egg-laying hens affected in the last two years," said Moscogiuri.

Cage-Free Initiatives Take Hold

Cage-free initiatives at both the state and corporate levels are impacting egg prices, too.

"Washington and Oregon also transitioned to cage-free standards to begin 2024, and we will see a continued rollout of cage-free initiatives at the state and corporate level over the next few years. Retailers also ran some unexpected and aggressive price points through the back half of January, bolstering the demand for shell eggs and driving weekly inventory levels to the lowest levels in over five years later in the month," said Moscogiuri.

McDonald's was one such corporation that fulfilled a promise to source cage-free eggs, a commitment it made in 2015. The company said it sourced almost 2 billion eggs in 2023; as of February 2024, it has sourced only cage-free eggs.

Future Prospects for the Egg Market

When it comes to the future of the egg market, "Expect the unexpected," Bergquist noted, "Egg prices will likely remain highly variable for the near future."

"Eggs have always been touted as a low-cost food protein when compared to alternative products like beef, pork, and poultry. Right now, however, egg prices are rising and prices for other proteins, namely poultry, are very affordable. Consumers may wish to seek out value-priced alternative goods when the opportunity presents itself," he added.

Moscogiuri saw more volatility in the industry's immediate future.

"The market is likely to remain volatile through Easter, but the holiday falls early this year. That means there is a long period between April and May when demand is typically slow. Seasonal slowdowns in demand could give the market an opportunity to normalize – something we saw during the summer of 2023. However, the risk of HPAI's impact this spring remains very real and is something buyers and sellers will be playing close attention to." Food Institute Focus


Restaurant Prices Up as Sales, Traffic Fall

January offered little clarity in terms of the current health of the restaurant industry from a year-over-year growth perspective, according to Black Box Intelligence, which reported comparable sales were down 4.5% and comparable traffic was down 7.1%. Full Story

Meanwhile, average restaurant price increases rose 4% over the past year. New data from Technomic reveals that restaurants raised prices more for proteins (9.7%), however, and less for sides and alcohol. Cold coffee beverage prices skyrocketed as high as 22% more. Consumers continue to fork over cash, however, as their willingness to pay for meals increased 30% since the pandemic, reported Restaurant Business (March 13). Full Story

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