MRM Research Roundup: Mid-December 2018 Edition

Modern Restaurant Management (MRM) magazine's Research Roundup features news on restaurant sales, straws, eating at home,  food made by robots and the top food news stories of 2018.

Positive Restaurant Sales

The restaurant industry is closing the year strong, driving optimism for the growing sales momentum seen through most of the year carrying into 2019. Same-store sales growth was 1.0 percent in November, which became the sixth consecutive month of positive sales growth for the industry. Excluding a very small dip in same-store sales during May, every month since March has posted positive same-store sales growth. This represents a period of expansion not experienced by the industry in over three years. These insights come from TDn2K’s Black Box Intelligence™ data, based on weekly sales from over 30,000+ locations representing 170+ brands and nearly $71 billion in annual sales.

“Although we have been excited to report on positive sales growth for most of the year, there was always the caveat of this only being a recovery from a short-term perspective,” commented Victor Fernandez, vice president of insights and knowledge for TDn2K. “The industry’s sales were better than a year ago, but in reality, we were still negative compared with where we were two years prior. However, there is some encouraging news in the fact that, over the last two years, two months have posted same-store sales growth on a two-year basis. Those two months were October and November of this year. What is perhaps more reassuring is that those two months were among the three strongest based on sales growth last year, meaning it’s not a matter of the industry jumping over some easy hurdles. We are starting to see some longer-term recovery in restaurant sales.”

Recovery Not Complete Without Traffic Growth

Since the recession, no matter how optimistic the message may be when discussing restaurant sales, the sobering counterargument to the industry experiencing real recovery has always come in the form of declining traffic. Same-store traffic growth was -1.9 percent during November, which represented a small 0.3 percentage point improvement over October’s growth rate.

“Though chain restaurants as a whole are far from being able to solve their main problem of losing dining occasions to competitors outside the sector (independent restaurants, prepared food at grocery stores, convenience stores, etc.),” said Fernandez, “Black Box Intelligence data shows that those restaurant brands in the top quartile of performance have continuously achieved positive same-store traffic growth. Additionally, TDn2K in it’s White Box Social Intelligence research has revealed that it is factors such as superior service, an ambiance that meets expectations and consistency in execution throughout the system on all attributes of the restaurant experience that are enabling those brands to achieve traffic success.”

Economy Poised for Strong Holiday Season and Sustained Growth In First Half of 2019

“The economy remains solid and, most importantly, wage gains are rising,” explained Joel Naroff, president of Naroff Economic Advisors and TDn2K economist. “Though they still are not high, the tight labor market is forcing firms of all sizes, not just large ones, to raise salaries and hourly pay. That is sustaining consumer confidence and spending. It looks like the holiday season will be strong.”

“Looking toward 2019, while economic growth may moderate, it should remain above trend, which is another way to say it will be solid. That will likely mean further declines in the unemployment rate and faster increases in workers’ incomes. The real question is whether inflation accelerates. So far, the rise has been relatively modest and that is sustaining household spending power. But with the savings rate continuing to fall, any jump in prices would limit demand. The outlook for restaurant sales is for it to remain solid through much of the first half of 2019, but growth is likely to decelerate as we go through the second half. 

As Consumer Preferences Change, Off-Premise Sales Fuel Growth

Though same-store sales have been strong in recent months from a top-line perspective, the location those restaurant meals are being consumed reveals some very important shifts in consumer behavior. Dine-in same-store sales growth has actually been negative in recent months, but strong growth in to-go and other forms of off-premise sales have lifted the industry into positive growth. Furthermore, the growth in to-go sales has been accelerating rapidly. For 2018 year to date, it is approaching 9.0 percent year over year. As a comparison, to-go sales in comparable stores grew by less than 4.0 percent in each of the two previous years.

Another interesting insight gleaned from the latest Black Box Intelligence data is that consumers may be increasingly willing to buy their holiday-related meals from restaurants for consumption off-premise. Same-store sales growth for to-go, catering and banquets all posted double digit growth during the week of Thanksgiving compared with that same holiday week a year ago.

Job Growth and High Turnover: Workforce Headaches Persist

Guests are putting a premium on restaurants meeting their service expectations according to TDn2K’s White Box Social Intelligence™. Moreover, it is in the consistency of execution that top performing brands thrive. Unfortunately, many restaurants are discovering it is very difficult to deliver on these premises when they are continuously understaffed. Turnover for restaurant hourly employees and all levels of management increased again in October based on TDn2K’s People Report™ numbers. This increase falls on top of already historically high turnover rates.

Besides keeping up with these vacancies, restaurants also need to recruit for new restaurant openings. People Report data shows chain restaurant jobs grew by 1.8 percent during October, up from 1.7 percent recorded for September.

In this increasingly tight labor market in which the war for talent is a roadblock for successful restaurant operations, companies need to answer the question: what will attract employees to work for us and become engaged contributors? The answer, according to the data, can usually be found in compensation, career development, work/life balance and culture.

Cautious Optimism

The full-service segment—and casual dining in particular—has faced numerous challenges over the past several years, but cautious optimism is emerging as some turnaround efforts gain traction. Technomic's 2018 Future of FSR Consumer Trend Report finds that while the segment isn't out of the woods, increased emphasis on value, off-premise sales, alcohol and memorable away-from-home experiences is helping the category move in the right direction.

"Following a year in which the total unit count for Top 500 casual-dining chains declined 1.5 percent, some brands are starting to see positive signs at the unit level," explains Charles Winship, senior research analyst at Technomic. "As the segment's turnaround continues, efforts will turn to cultivating sustainable, long-term growth strategies that avoid the issues that led to casual dining's downturn to begin with, such as weak value propositions, an oversupply of restaurants and failing to evolve with consumers' dining habits."

Key takeaways from the report include: 

• 53 percent of consumers say they visit traditional casual-dining restaurants at least once a month 
• 38 percent of family-style consumers say they're more likely to visit a chain than an independent 
• 51 percent of upscale casual-dining restaurant consumers say they visit these restaurants to celebrate special occasions 

Compiling findings from more than 1,600 consumer responses, as well as menu and industry data from the Ignite database, the comprehensive 2018 Future of FSR Consumer Trend Report serves as a guide for foodservice operators and suppliers to help them better understand how consumer patronage, attitudes and preferences toward full-service restaurants are evolving and to identify key areas of opportunity. 

Top Food News of the Year

For the first time in the 16-year history of the Hunter Public Relations Annual Food News Study, environmental advocacy broke through as the most memorable story of the year, with news of Plastic Straw Bans across America ranking as 2018's No. 1 food news story. In addition, the study found the importance of all food news surged amongst Americans, with almost half saying that food and nutrition news are more important than any other type of news – marking the highest level of importance seen in more than half a decade.  

Since 2003, Hunter has commissioned a study annually to identify the top food news stories according to the opinions of Americans. In addition, the study continues the tradition of providing a trended perspective on the magnitude of importance food news has to Americans, the types of news stories resonating today relative to prior years and the media sources used for gaining information on food. The study goes on to identify the impact of these stories across the entire continuum of consumer engagement by measuring the degree to which these stories changed consumer opinion, behavior and spurred advocacy.

Hunter, in partnership with Libran Research & Consulting, surveyed 1,001 American adults and asked respondents to select the most recalled news stories of the past 12 months. The data is reviewed overall and by key demographics, including the age cohorts of Millennials/Gen Zs, Gen Xers and Baby Boomers/Matures. 

In summer 2018, a video of marine biologists removing a plastic straw stuck in a sea turtle's nose grabbed national attention and galvanized a movement to ban plastic straws. Shortly after the video went viral, coffee mega retailer Starbucks announced that it would begin to phase out single-use straws from its more than 28,000 locations, with a goal to eliminate plastic straws in all stores by 2020. Two months later, California became the first state to ban full-service restaurants from offering plastic straws to customers, unless they specifically request them. These major moves ignited a firestorm of consumer conversation and media coverage. Plastic straws are recyclable, however, given their size and weight, most are often mechanically sorted out during the recycling process and end up in landfills and the ocean. 

On a lighter note, occupying 2018's No. 2 spot: Dunkin' Donuts Changes Name to Dunkin.' Though it's long been on a first name basis with consumers, Dunkin' Donuts officially dropped the "Donuts" and became simply "Dunkin'" in September 2018. The new branding conveys the company's desire to make itself known for more than just doughnuts while embracing Dunkin's heritage and retaining its recognizable pink and orange iconic logo, introduced back in 1973. 

Americans of all ages continue to rank food safety stories high in the survey, and despite environmental advocacy being the most memorable story, food safety (44 percent) and food nutrition/health & wellness (23 percent) are deemed the most important topics addressed in 2018. The Romaine Lettuce Recall came in as the No. 3 food news story of the year, with more than three major recalls announced over the course of the year, and the FDA Suspects Contaminated Whey is Culprit in Salmonella-Related Recalls, ranked as the No. 9 food news story of the year. 

This year's most shareable stories appear to have more "water cooler" potential, meaning that Americans are more open to talking about these stories with friends, family or coworkers as compared to sharing the original articles or sharing personal photos/comments via social media. Two of the most sharable stories of the year included Racial Profiling at Starbucks Spurs Outrage, the No. 4 top food news story of the year, and China Tariff Impacting U.S. farmers at No. 5. 

Also included in the top 10 food news stories of 2018:

With online retailers and click-and-collect services gaining new users each day, it's no surprise that Online Grocery Shopping Booms captured the No. 6 spot on this year's list. According to a study by the Food Marketing Institute conducted by Nielsen, online grocery sales are predicted to capture 20 percent of total grocery retail by 2025 to reach $100 billion in consumer sales.

Forget unicorn food and kombucha, THC and CBD infused products were everywhere in 2018, with Cannabis in Food and Beverages snagging the No. 7 spot on the list. Legalization of marijuana continues to spread among states in the U.S. – with recreational marijuana now legal in 10 states – and food and beverage companies are jumping on board. From THC cold brew coffee to cannabis chocolate bars, these specialty food and beverage items are capturing consumer attention. 

Got milk? It's up for debate! Coming in at No. 8 is Should Plant-Based 'Milk' (Almond, Soy, etc.) Really Be Called Milk? In July 2018, the Food and Drug Administration signaled plans to start enforcing a federal standard that defines "milk" as coming from the "milking source of one or more healthy cows." Almond, soy, oat and other "milks" are on notice. 

Combining mayo and ketchup as a dipping sauce is nothing new, but the Launch of Mayochup, the No. 10 food news story on the list, got saucy Americans paying attention. Heinz stoked interest of the new condiment in April 2018 and started a full-on social media frenzy when it finally released Mayochup in the U.S. in September 2018.

To summarize, the top food news stories of 2018 according to the Hunter Public Relations 16th Annual Food News Study are as follows: 

Importance of Food News Soars 
This year, 35 percent of Americans feel that food and nutrition news stories are very important, the highest level the study has seen in recent years. This increase traces to a surge by Millennials/Gen Zs with 83 percent saying food news is very important/important in 2018 versus 77 percent in 2017, while the importance attributed to food news stories remained relatively flat for Gen X and Baby Boomers/Matures. With regard to food news' importance versus other types of news stories, the study found a substantial increase by Millennials/Gen Zs this year, with 64 percent claiming food news is much more/somewhat more important than other types of stories versus 42 percent in 2017, although Boomers are also seeing the increased relevance of this year's food news stories.

Impact of Food News on Consumer Engagement Continuum  
Almost everyone surveyed (86 percent) was aware of at least one important food news story in 2018, and around half of those aware were impacted through changes in opinion, changes in behavior and/or sharing with others. Food trends, nutrition stories and food safety tend to be associated with the strongest changes in opinion, while food safety news and environmental activism is associated with strongest changes in behavior. Opinion change due to these news stories is higher for younger Americans, those with kids and Hispanics.

Popularity of "Sharing" a Meal on Social Media
As sharing food experiences through social media appears to become more prominent, the study, for the first time, asked respondents if they post pictures of food they make at home and food they order in restaurants. Almost half of all Americans (47 percent) post their food on social media. However, this activity climbs to 74 percent with Millennials/Gen Z, with nearly 3 in 4 participating in food sharing culture.

Digital Media Reigns Supreme for Consuming Food News and Information 
We continue to see a shift in how Americans access general food news with respondents reporting that they are turning more to digital discovery platforms (such as social media and YouTube) and less to traditional media (such as TV, direct mail, books, magazines or newspapers) for food information. However, older Americans continue to more strongly utilize these more traditional sources of media. In prior years, Hispanics were more frequently early adopters in turning to digital media for food information, however, in 2018 the gap narrowed somewhat, as Hispanics and non-Hispanics are largely turning to similar types of media for food information. Exceptions are podcasts and YouTube, where Hispanics (17 percent and 24 percent) are more likely to turn than non-Hispanics (11 percent and 15 percent).

Is There a Future in Plastics?

Food and drinks producers must challenge their suppliers to produce more environmentally friendly packaging now or risk being at the mercy of a future 'plastic tax' according to the latest report from FUTURES – the new insights service from just-food and just-drinks.

The report, which asks if we will ever see a plastic-free world, also recommends that firms should make plastic reduction a long-term goal, delivered through a series of smaller steps rather than risk operational paralysis by setting one huge, unrealistic objective.

The latest free report from FUTURES offers a detailed look at the practicalities of a plastic-free future, the challenges with recycling, and the startups that could hold the answers to our plastic problem. In keeping with all FUTURES reports, it also considers the trends driving change and what food and drinks companies need to think about now, in order to prepare for the future.

Key features in the report include:

• The five consumer trends driving the need to rethink plastic 
• Expert commentary from Colin Elkins, global industry director of process manufacturing at enterprise software company IFS 
• A closer look at the startups driving innovation  
• Five things food and drinks companies can start to do now 

FUTURES editor Lucy Britner said: "Industry's desire to be more efficient and sustainable, coupled with the seismic shift in consumer attitudes towards plastic, will continue to drive innovation from startups as well as from food and drinks companies.

"This is the third in a series of future insights reports, designed to look at what will disrupt the food and drinks industries and offer insight into what businesses can start to do now."

Shift in Canadian's Dining Habits

 A new report released  by Eagle Eye, a leading SaaS digital marketing provider, reveals a significant shift in Canadian consumer dining habits and their attitudes toward food and beverage brands, presenting new revenue opportunities for Canadian businesses heading into 2019. 

Eagle Eye's report, Changing Tastes & Flavours: Canadians' Attitudes Toward Food and Beverage Brands Are Changing. Are F&B Operators Moving Fast Enough? comes at a time when Canada's vast geography, rich landscape and varied demographics have created a national food and beverage (F&B) industry that is dynamic, competitive, and as diverse as its citizens. But even with the global economy's unpredictability and fast-paced technological developments, the Canadian F&B sector has remained resilient. 

Based on a survey conducted by Eagle Eye of 2,000 Canadian consumers and over 200 F&B professionals, the report looks at the relationship between how consumers engage with F&B establishments across the country, and whether F&B operators are equipped with the right tools and technology to meet those expectations. Key consumer statistics include:

• 71 percent have a meal outside of their home up to 10 times per month 
• Younger generations and working professionals dine out more frequently, up to 20 times per month 
• 62 percent of consumers spend up to $30 per visit 
• 30 percent of Canadian consumers are currently members of a restaurant loyalty program 
• 13 percent of Canadians use third-party delivery services like Uber Eats to order from restaurants, rather than through the restaurant directly

With more options and ways to interact with restaurants, bars, quick service restaurants (QSRs), taverns, and other F&B establishments, consumer dining habits have evolved significantly over the last twelve months. These behaviors include a higher frequency of restaurant delivery, getting fast food, buying prepared foods from the grocery store, getting takeout from a restaurant and ordering third-party food delivery services. 

But while dining out remains at an all-time high for consumers, new data shows that many F&B operators are failing to engage with consumers—and losing out on revenue opportunities in the process:

• 38 percent of consumers have not received communications from a restaurant brand in the past 3 months 
• Only 22 percent have received a personalized offer to prompt a first time-visit 
• 35 percent have received an offer to prompt a return visit 
• 60 percent of consumers would return for another visit if offered a coupon 
• Only 30 percent of operators use technology, data and insights to identify their customers through promo codes, card payments or loyalty memberships

"Today's food and beverage sector is increasingly competitive, but most operators lack insights into who their customers are, how often they visit and what they're ordering," said Tim Mason, Chief Executive Officer at Eagle Eye. "To capitalize on the revenue opportunities our report has uncovered, Canadian brands need to become digitally connected to gather customer data, create a direct marketing channel, and stand out from their competitors. With the right digital infrastructure, food and beverage operators can cost effectively drive repeat visits and increase spend per visit."

The report also speaks to major challenges F&B operators face across Canada, including:

• Fraud continues to impact the industry, with 79 percent of operators experiencing customer- and staff-related fraud 
• 36 percent of restaurant owners struggle with rising costs, but is most prominent among independently-operated businesses and those in operation for 20-plus years 
• Staff turnover can be as high as 200-300 percent in a given restaurant 

Strategies to overcome these challenges, and engage with customers in real-time via digital, mobile and social channels, are also addressed in the report, to help operators strengthen brand loyalty and drive revenue growth in a highly competitive market.

Gift-Card Sales Report

Paytronix Systems, Inc., released its inaugural Annual Gift Card Sales Report. Leveraging data from over 190 restaurant brands and 550 stored value program figures, the study is one of the first to analyze the trends around restaurant gift card sales, focusing on the impact of various sales channels and consumer redemption rates, particularly during the holiday season.

One of the key findings reveals that third-party channels accounted for over half of all restaurant gift card sales in 2017, for both units sold and total dollars. Third-party channels include discount warehouses like Costco as well as gift cards sold in retail establishments not owned by the restaurant brand, including grocery, convenience or drug store outlets.

“Third-party retail sales are a critical component to any gift card program and this report underscores its value for restaurant brands,” said Andrew Robbins, President and co-founder of Paytronix. “Gift sales contribute substantial top-line impact, plus it offers the often overlooked benefit of being one of the most effective customer acquisition programs.”

As part of this report, Grotto Pizza, a mainstay of family casual dining at Delaware’s beaches since 1960 with locations across the northeast, announced it increased sales by 30 percent thanks to its strategic gift program. Additionally, Zaxby’s, a fast casual chicken restaurant concept with over 800 locations nationwide, experienced 18 percent increase in gift sales through its partnership with Paytronix. Both case studies are detailed in this report and highlight the broader business value of having a strategic gift program.  

Other key findings include:

• 2017 experienced modest growth from 2016 with a .76 percent increase in total gift card sales
•  In-store sales accounted for 42.8 percent of all gift card sales in 2017, down from the previous year as third-party retailers continue to gain popularity
• However, during the holiday season, in-store sales attributed 51.5 percent of all sales, overtaking popularity of third-party retailers from November 1 through December 24
• Around 70 percent of all gift cards are redeemed within 180 days of purchase, with about 20 percent still having a balance on the card after a full year
• Quick service restaurant gift cards are redeemed more quickly than other categories, with a 75 percent redemption rate after 180 days compared to 52 percent for fine dining. 

View or download the full report here.

Best Places to Work

Glassdoor revealed its 11th annual Employees’ Choice Awards, honoring the Best Places to Work in 2019 in the United States. This year, three Restaurants, Bars & Food Services companies made the list. Unlike other workplace awards, winners are determined based on feedback provided by those who know the company best – the employees. This is Glassdoor’s biggest and most popular list of the year.

Restaurants, Bars & Food Services Company Highlights:

• In-N-Out Burger ranks 3 overall, scored a rating of 4.5 and currently has open jobs on Glassdoor.
• Raising Cane's ranks 96 overall, scored a rating of 4.2 and currently has open jobs on Glassdoor.
• FLIK Hospitality Group ranks 97 overall, scored a rating of 4.2 and currently has open jobs on Glassdoor. 

Would You Eat Food Made by Robots?

A new survey reveals that more than half of restaurant diners would eat food made by robots – if it tasted good.

The ‘Refuelling Rituals’ survey – published by London-based international customer experience and branding agency I-AM – states that 56 per cent would consider robot-made food.

And 59 per cent said they would be happy to see more technology in restaurants if it meant an improvement in the dining experience.

While people are still eating out and ordering take-aways, 49 per cent of them say they are now cooking at home more than they used to, making this a key growth area – especially in the realm of meal-kit services.

Some 54 percent cite the main benefits of meal-kits as a good way to learn new recipes while 40 per cent favour them as a less wasteful option. Meanwhile, 74 per cent of those surveyed say eating out inspires them to cook at home more.

The survey of 2000 18 to 45-year olds living in UK urban areas reports that ‘dining is about’: being social (76 percent), getting away from the kitchen (73 percent), special occasions (69 percent), eating something unable to unwilling to cook (64 percent) and eating something new (62 percent).

Other key findings in the wide-ranging survey include:

• 43 percent – and 52 percent of 36 to 45-year-olds – eat less meat than they used to.
• 54 percent feel that images are more influential than text when looking at a menu and deciding what to eat
• 64 percent of people have visited a pop-up restaurant/experience in the past year
• 21 percent eat breakfast out more than they used to, while among those that are now eating out more than they used to in general, this increases to 43 percent
• 75 percent would consider taking a smaller portion size, with 36 percent believing this would enable them to eat a healthier or lighter meal. However, a fifth of respondents said it would leave room to try another smaller plate of something else.
• 83 percent are willing to pay more for their food if it benefits society, although 68 percent would expect it to be no more than 10 percent on top of their total bill
• 49 percent want to see nutritional information on the menu and 42 percent want to see provenance of the food and ingredients on the menu as well
• 58 percent would be more likely to visit a restaurant because of a famous chef or founder

Jon Blakeney, Group Managing Director at I-AM, said: “As technology-powered ordering systems become ubiquitous, restaurants and other eateries are beginning to think about automating the back end.

“Like retail, automating parts of restaurants can mean more profits and more efficiency. In a landscape where margins are tight, it means more breathing space to offer better service, more interesting recipes and entertainment.”

The Winter 2018 sector report ‘Refuelling Rituals’ can be downloaded here.

Eat Out at Home

For a variety of reasons — streaming media, working from home, the need to find comfort and shelter from the maddening crowd, or practicing Hygge, the Danish art of coziness — U.S. consumers are staying home. Staying home also means eating more meals at home and an increasing number of those meals are purchased from restaurants and foodservice outlets. In the year ending September 2018 dining at a restaurant represented 37 percent of all visits and remained flat compared to last year and restaurant meals consumed in-home accounted for 32 percent of all traffic and increased visits by 2 percent, reports The NPD Group. 

Proof that U.S. consumers are homebodies is that 71 percent of those who chose to eat at home were at home prior to eating the restaurant meal. Adult, single person parties with higher incomes of $100K or above are driving the majority of restaurant meals eaten at home increases. Families and groups of five or more make up 31 percent of foodservice meals eaten at home, according to NPD’s ongoing foodservice market research, CREST®.

The two percent increase in eaten at home restaurant meals is reflected across restaurant segments, quick service and full service. Although dinner still represents almost half of all at-home occasions for foodservice, morning meal, and lunch showed the strongest growth in the period. French fries, burgers, and pizza topped the list of menu items eaten at home from quick service restaurants; and Chinese/Asian/Indian, rice, and French fries were the top menu items from full service restaurants eaten at home, reports NPD. 

“Home is where the heart is when it comes to U.S. consumers but they still look for the convenience that is offered by a ready-made restaurant meal,” says David Portalatin, NPD food Industry advisor and author of Eating Patterns in America. “We don’t look for this trend to change anytime soon and operators and foodservice manufacturers can take advantage of the stay-at-home movement by offering at-home eaters with innovative ready-to-eat meal solutions and a greater degree of convenience.”

Hot Food Items for 2019

Based on Square sales data., here's a breakdown of the trends that will reign supreme in 2019: based off of 2018 sales growth across the U.S.

• Aperol Spritz: Sales increased 515 percent
• Oat Milk: Sales were up 425 percent

• Unicorn-themed: Items saw sales grow  110 percent

• Tahini: Sales were up 90 percent
• Avocado: Toast isn’t going anywhere, sales grew 84 percent
• Turmeric: Sales saw a yearly jump of 66 percent
• Matcha: Sales increased 62 percent
• Banh Mi: Sales were up 44 percent

A few best selling items among the top food trends:

Unicorn foods: Unicorn cake pops, Unicorn macarons

Tahini: Chicken Tahini Farro, Tahini Squash Bowl, Tahini Chocolate Balls

Turmeric: (largely beverages) Turmeric Latte, Turmeric tonic, Turmeric lemonade

Matcha: Matcha latte, Strawberry Matcha, Matcha milk tea

Chicken Strips vs. Nuggets

Not since the classic why did the chicken cross the road? question has there been such a puzzling chicken question as this: Are chicken strips cannibalizing chicken nugget servings at foodservice? Chicken strip servings at restaurants and foodservice outlets increased by 16 percent in the quarter ending September 2018 compared to same period last year whereas chicken nugget servings declined by 3 percent, reports The NPD Group. The logical answer is that fans of breaded chicken are swapping out nuggets for strips. The correct answer: No they’re not. 

Chicken nuggets lost buyers but these buyers were not switching to chicken strips, according to NPD’s receipt mining service, Checkout, which follows the same buyers over time. The lost nugget buyers did not increase their participation with chicken strips in the quarter ending September 2018 compared to last year. The simple answer is that the two breaded chicken items appeal to different buyers, and the double-digit growth in chicken strip servings is attributed to product innovation at quick service restaurants and new fast casual concepts built around chicken strips. 

Although things may not be going well for chicken nuggets at the moment, there were still 2.3 billion chicken nugget servings ordered in the year ending September 2018 compared to 1.5 billion servings orders of chicken strips. There is also the fact that chicken overall is popular with consumers. Pounds of chicken shipped by broadline distributors to independent and micro/small chain restaurants and other foodservice outlets increased by 4 percent in the period compared to last year. 

“Innovative restaurant operators have taken a long time favorite food and elevated the offering,” said David Portalatin, NPD food Industry advisor and author of Eating Patterns in America. “Chicken strips have long been a consumer favorite, but when you take something that consumers already love and deliver value, or elevate the form as some fast casual concepts have, you have a strong platform for growth.”

Is Q4 Most Profitable Time of Year?

According to Kabbage data, small business owners see higher profits despite increased costs as high as 75 percent. Kabbage, Inc. released data showing that the last three months of the calendar year cause the greatest fluctuation in cash flow among small businesses. Polling 300 U.S. small businesses, the survey found that one-third said the fourth quarter is the most profitable time of the year for their business. The survey also revealed 42 percent of small businesses report costs increasing as high as 25 percent in the same time period.  

The impact of fourth-quarter profitability varies by industry, with online retailers (74 percent) and brick-and-mortal retailers (71 percent) reporting Q4 as their most profitable time of the year, followed by:

• Restaurants, bars and caters, 47 percent
• Transportation, 38 percent
• Real Estate and Property Management, 33 percent
• IT and Software, 27 percent

The same industries see an increase of costs during year-end. Online retailers (65 percent), brick-and-mortar retailers (60 percent), real estate businesses (56 percent), restaurants (50 percent) and construction companies (44 percent) cited their costs on average increase 25 percent, with some citing increases as high as 75 percent. 

Across all industries, small businesses stated the top three reasons for heightened costs are:

• Purchasing more inventory (41 percent)
• Spending more on employees in the form of holiday gifts and dinner parties (31 percent)
• Increasing spend on advertising (25 percent)

“The data shows that small business owners have a great opportunity in the last three months of the year to increase profits, but it requires careful cash flow planning,” said Kabbage CFO Scott Rosenberg. “As a former retail industry executive, I’ve seen first-hand how seasonality can turn a good year into a great year and how critical it is to be financially prepared to manage climbing costs to reach higher profits.”

Pollution and Restaurants

 A new study from the Center for Atmospheric Particles Studies (CAPS) at Carnegie Mellon University found that restaurants are a significant source of air pollution. Unlike automotive emissions, restaurants and commercial kitchens as a source of air pollution have largely been ignored. 

“Restaurant food-cooking emissions are a major, if not the major, driver of spatial variability of organic aerosol, says Ellis Robinson a postdoctoral researcher at CAPS and leader of the study.

According to the paper:

• Restaurants are responsible for high concentrations of organic aerosol (OA), a large source of air pollution, within their immediate surrounding areas.
• The researchers used an aerosol mass spectrometer to measure air quality throughout the city of Pittsburgh, Pennsylvania and were able to determine whether the OA had originated from restaurant sources. 
•  Of the high-concentration OA “plumes” measured by the team, 7/10 originated from restaurants or other cooking sources.

“I don’t want someone to see this and think we need to close all restaurants,” says Robinson. “I think it’s good if we’ve compelled people to think a little more about food cooking as part of the larger air quality picture.”

The study was published in Environmental Science & Technology. 

What's the Best Airline Food?

There will be more than 45.7 million passengers traveling during the holiday season (Dec. 20 – Jan. 6) according to Airlines for America (A4A). Knowing the "best" and "worst" choices is a valuable tool for any traveler, so Dr. Charles Platkin, the executive director of the Hunter College NYC Food Policy Center and editor of DietDetective.com once again studied the best "Calorie Bargains" and “Calorie Rip-offs” at 35,000 feet.

The Hunter College NYC Food Policy Center and DietDetective.com has released the 2018-19 Airline Food Study rating foods for eleven (11) airlines. The study assigned a “Health Score” (5 stars = highest rate, 0 star = lowest) based on eleven criteria including health and calorie levels of meals, snack boxes and individual snacks, level of transparency (display nutrient information & ingredients), improvement and maintenance of healthy offerings, menu innovation, food and water safety and cooperation in providing this information. The survey includes health ratings, average calories per airline, comments, best bets, food offerings, costs, nutrition information  (e.g., calories and exercise equivalents.) See the full study here.

“This year Alaska Airlines wins the top spot as the airline with the 'healthiest' food choices in the sky with Delta right behind, as well as Air Canada and JetBlue,”  says Charles Platkin, PhD, JD, MPH, the executive director of the Hunter College NYC Food Policy Center and editor of DietDetective.com.

The average number of calories per menu choice in 2016 was 392, in 2017 it was 405 calories, and this year it is 373, a 32 percent calorie decrease over last year. Keep in mind, calories are not everything;  the study also looks at the nutrients in these foods, as well as innovations moving towards healthy, tasty, inexpensive, sustainable foods.

Here are the major airline food headlines:

• Alaska Airlines pulls to the top spot this year as the healthiest airline and inherits Virgin America’s (VA) top spot. The airline worked hard to inherit the food footprint of VA, and surpassed VA by offering better individual snacks and healthier meals. 
• American and Delta are offering complimentary meals in economy class on domestic flights, something we haven't seen in more than 15 years.
• Airlines are eliminating packages of snack foods and offering individual smaller packages or eliminating individual snacks altogether.
• The “Shame on You” award goes to Frontier.  
• American and Hawaiian Airlines are most improved. 

Eating lots of heavy carbs such as pasta with thick, dense sauces, breads, muffins or cakes will leave you feeling lethargic, cranky and not full or satisfied.  Your blood sugar levels will spike and then fall, which will negatively impact how you feel. On the other hand, you will enjoy an immediate benefit from eating small meals, lots of raw or steamed veggies, and fruits. The fact that food impacts mood, attitude and behavior has been well documented in the scientific literature. Whether you’re traveling for business or pleasure, eating healthier will leave you feeling sharper and more energetic rather than bloated and lethargic.

Research shows that people typically consume most, if not all of the food that’s placed in front of them. So, avoid snack boxes unless you’re splitting them with a few other people, or it is your main meal.

Water Watch: This year the study includes food and water safety criteria.  It’s probably best to avoid drinking water from the tap on a plane, which also means staying away from coffee and tea. Even though the EPA has instituted the Aircraft Drinking Water Rule (ADWR) to “ensure that safe and reliable drinking water is provided to aircraft passengers and crew,” there are a couple of reliable researchers who believe there may be harmful bacteria in airline water. This is probably because the water tanks are not emptied very often (you would think they’d be emptied and cleaned at least once a day, but this is not so). So water is just sitting for long periods of time in what appear to be not-so-clean tanks.  Buy bottled water in the airport as well as coffee or tea; you can probably ask the flight attendant to heat it up for you.

Here are the food-service offerings from several of the more popular airlines, along with Diet Detective's comments, ratings (Health Score: 5 stars = highest rating), calories, exercise equivalents (amount of walking required to burn off the food consumed) and personal favorites.

Summary of Health Ratings (5 Stars is highest): Alaska 4.25 stars, Delta 3.7 stars, JetBlue 3.55 stars, Air Canada 3.45 stars, American 3 stars, United Airlines 2.75 stars, Hawaiian Airlines 2.65 stars, Allegiant Air 2.1 stars, Southwest Airlines 1.6 stars, Spirit Airlines 1.1 stars, Frontier Air .85 stars

Food and Internet Connection

 The Canadian Internet Registration Authority (CIRA) released a report about food and the internet. How the internet feeds hungry Canadians explores the internet's impact on Canadians' access to food. From apps delivering food to Canadians' homes, to websites fueling the local food movement, to the ways in which the internet affects food security in Canada – for better or for worse – this report covers it all.

"Given how important food and the internet are to Canadians, CIRA decided to explore the intersection between the two," says David Fowler, vice president of marketing and communications at CIRA. "With the rise of websites and apps allowing Canadians to order food to their front door, .CA websites promoting local food products and technologies directing food meant for a landfill toward organizations feeding hungry Canadians, the internet and food have never been more connected."

Key facts

According to Canada's Internet Factbook, nearly a quarter of Canadians (24 per cent) have purchased food online in the past year. This is on the rise growing from 14 per cent in 2016 and 17 per cent in 2017. 

CIRA shared a survey via social media in September about how Canadians are purchasing food online. The survey received 128 respondents from across Canada aged 18 to 55+. Although not scientific nor proportionate to population, the results provided the following insights: 

• Ordering restaurant takeout is the most common way respondents purchased food online. This includes using a restaurant's website or app for delivery (68 per cent) or pick up (57 per cent) or through a delivery service like Skip the Dishes (59 per cent). 
• The next most popular way to access food online is by ordering specialty or health food products not readily found in a grocery store (27 per cent of respondents have done this). 
• 17 per cent of respondents have ordered groceries online to be picked up at the store and 11 per cent have ordered them online and had them delivered to their home. 
• 17 per cent have ordered grocery products online at a non-traditional grocery store such as Amazon. 
• 16 per cent of respondents ordered a food box/meal kit online. 
• Ordering takeout online is popular among all ages of respondents. But age makes a difference when ordering groceries online (most popular among 35 to 44-year-olds and 55+).

The local food movement is thriving online through provincial government websites and organizations promoting provincial produce and flavours, restaurants specializing in farm-to-table menus and subscription meal kit services that are growing in popularity in Canada. 

With four million people struggling to put enough food on the table (according to Food Banks Canada), the internet provides solutions that send more food to organizations feeding hungry Canadians. This includes Moisson Montreal, the largest foodbank in Canada, who is using digital technology to redirect food intended for the landfill to community organizations fighting hunger.