The Battle for the Consumer Wallet and Camp Bacon
15 Min Read By MRM Staff
This edition of MRM’s Daily Bite features AlixPartners, eMarketer, The Middleby Corporation, ShopKeep, Genesis Hospitality, Zingerman’s, Chuck E. Cheese, US Foods, Southern Glazer’s, Mahony and Sons and Reis & Irvy’s.
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Dining Out in 2018
Restaurants will have to continue to battle for their share of consumers’ wallets this year, with Americans expecting to both dine out less and spend less per meal. That’s according to a survey of more than 1,000 consumers, released by AlixPartners. Overall, consumers said they plan to spend an average of $14.95 per meal this year, down from the $15.20 they said they spent over the past year. Furthermore, 31 percent of respondents in the survey said that “lower price” was “important” or “very important” to them in defining value, vs. 21 percent who said that in a similar AlixPartners survey released in the spring of 2017.
The fast-casual sector may be hardest hit this year in terms of dining occasions, according to the survey, with just 20 percent of Millennials surveyed saying they intend to visit fast-casual establishments twice weekly or more over the next 12 months, compared with 24 percent who said that in the 2017 survey. Meanwhile, according to the survey, fast food has surpassed fast casual for as the preferred spot for lunch, with just 32 percent of diners in this year’s survey picking fast casual as their preferred location for lunch, down from 37 percent in AlixPartners’ survey of a year ago—while fast food was preferred for lunch by 35 percent in this year’s survey, up from 30 percent in AlixPartners’ survey of a year ago.
We’re starting to see a shift in spending patterns among the Millennial generation, and restaurant operators need to be prepared.
For all those surveyed who are planning to dine out less, saving money to re-allocate towards other expenses was the No. 1 reason, chosen by 54 percent of those surveyed, vs. 50 percent in last year’s survey. Meanwhile, among all respondents, travel and retirement were cited as the biggest outside “share-of-wallet” pressures, cited by 38 percent and 33 percent, respectively, as their top pick. And among Millennials, “lifestyle” purchases (e.g., home, car, etc.) was the No. 1 reason, chosen by 43 percent of Millennials, compared with 27 percent in the survey of a year ago.
“We’re starting to see a shift in spending patterns among the Millennial generation, and restaurant operators need to be prepared,” said Adam Werner, global co-head of AlixPartners’ Restaurant, Hospitality and Leisure Practice and a managing director at the firm. “A lot of focus in recent times has been on the buying patterns of this generation, but it’s important to understand that Millennials are now having families and children, and that their spending priorities are beginning to reflect that.”
The AlixPartners survey also suggests that technology’s influence on consumer dining choices may be plateauing. For instance, the percentage of respondents rating nine major technologies, ranging from digital menus to mobile apps to mobile payments, as a “4” or “5” in terms of influencing restaurant choice (on a scale of 1 to 5) all declined in this year’s survey vs. the one released a year ago. However, when asked about their use of any mobile technologies by restaurant sector, 28 percent said they’ve used them in the fast-food sector (up from 23 percent in last year’s survey) and 23 percent said they have in fast casual (up from 18 percent in last year’s survey), suggesting that limited-service restaurants may be the most fertile ground for mobility.
At the same time, though, 40 percent of all respondents said they have never used any type of mobile technology related to dining, only a slight reduction from 42 percent in last year’s survey. Similarly, only 46 percent in this year’s survey said they are at least somewhat influenced by loyalty programs, the same percentage as in the survey released last year. And only 24 percent in this year’s survey said they follow their favorite restaurant on social media.
“There are two, very disparate consumer groups in this industry today: the technologically-engaged and those who are not—and, in fact, may never be,” said Kurt Schnaubelt a managing director in AlixPartners’ Restaurant, Hospitality and Leisure Practice. “It’s important for operators to fully assess investments they are making in technology and loyalty, to make sure they’re truly geared towards gaining net new market share, and not just wasting money chasing the latest fads.”
Survey results also suggest that ready-to-eat meals from grocery and convenience stores could be becoming a bigger threat to restaurants.
According to the survey, both delivery and take-out are expected to decrease slightly in the year ahead, particularly at fast-food and casual restaurants, with consumers saying they expect their monthly delivery and take-out orders to dip 11 percent (to an average of 3.34 visits this year) and 8 percent (to an average of 1.67 visits), respectively, vs. their number of visits in the past year. Meanwhile, respondents said they have increased interest in delivery and take-out from fast-casual and fine-dining establishments, saying they expect their number of annual visits to increase to an average of 2.06 visits and 1.48 visits, respectively, an increase 6 percent in each segment.
Among respondents who said they order delivery, 47 percent said they prefer delivery directly from the restaurant, vs. only 4 percent preferring to order via a third-party service (services such as Uber Eats, DoorDash, Postmates, etc.).
Meanwhile, meal-kit services (services such as Blue Apron, HelloFresh, Sun Basket, etc.) seem to be slow in gaining consumer adoption, according to the survey, with only 18 percent of respondents having tried such a service. In addition, 68 percent of those who said they haven’t tried a meal-kit service say they don’t plan to try one in the near future.
Survey results also suggest that ready-to-eat meals from grocery and convenience stores could be becoming a bigger threat to restaurants, with 25 percent of respondents citing such meals as a way to reduce restaurant spending, up from 19 percent in the AlixPartners survey released a year ago.
Among the other things also covered in this year’s AlixPartners survey: Consumer sensitivity to food-safety scares may be increasing, as 35 percent of respondents said they will “never” return to a restaurant chain that experienced a foodborne-illness event, regardless of the specific location of the incident. That compares with 28 percent who said that in a third AlixPartners survey, one conducted in the first quarter of 2016.
The AlixPartners 2018 U.S. Restaurant Outlook was conducted in February 2018. It polled 1,005 U.S consumers and focused on current and planned frequency of dining occasions across convenience stores, restaurants and ready-to-eat grocery. It also looked at expected spending on meals outside of the home, preferred types of restaurants and criteria for consumer preference in restaurant selection. The survey forms the foundation of a report also released by AlixPartners, entitled North American restaurants must target diverse consumers strategically—and continue battling share-of-wallet pressures.
Starbuck App is Most Popular
Starbucks will remain the most popular proximity mobile payment app, staying ahead of Apple Pay and other competitors, according to eMarketer’s latest forecast on U.S. proximity mobile payments.
This year, 23.4 million people ages 14 and over will use the Starbucks app to make a point-of-sale purchase at least once every six months. That puts it slightly ahead of the 22.0 million people who will use Apple Pay. Google Pay (11.1 million users) and Samsung Pay (9.9 million) will round out the top four payment apps. The ranking will remain unchanged through 2022.
“The Starbucks app is one of the bigger success stories in mobile proximity payments,” said eMarketer forecasting analyst Cindy Liu. “It has gained traction thanks to its ability to tie payments to its loyalty rewards program. For users of the app, the value of paying with their smartphone is clear and simple—you can save time and money at the register, all while racking up rewards and special offers.”
Competition is intensifying, however. While each of the top four apps will continue to gain users in the U.S. throughout the forecast period, their share of mobile payment users will continue to drop. That can mainly be attributed to new payment apps entering the market, particularly merchant-branded mobile apps.
“Retailers are increasingly creating their own payment apps, which allow them to capture valuable data about their users. They can also build in rewards and perks to boost customer loyalty,” Liu said.
Overall, the number of US proximity mobile payment users will grow 14.5 percent this year to reach 55.0 million. In 2018, for the first time, more than 25 percent of US smartphone users ages 14 and older will make a proximity mobile payment at least once every six months.
eMarketer’s forecasts and estimates are based on an analysis of quantitative and qualitative data from research firms, government agencies, media firms and public companies, plus interviews with top executives at publishers, ad buyers and agencies. Data is weighted based on methodology and soundness. Each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of available data means the forecasts reflect the latest business developments, technology trends and economic changes.
Middleby to Acquire Taylor Company
The Middleby Corporation entered into a definitive agreement to acquire the Taylor Company from UTC Climate, Controls & Security, a unit of United Technologies for $1.0 billion. Taylor is a world leader in beverage solutions, soft serve and ice cream dispensing equipment, frozen drink machines, and automated double‐sided grills. Middleby will finance the all‐cash acquisition under its existing revolving credit facility.
In 2017, Taylor had revenues of approximately $315 million and $65 million of adjusted earnings before interest, taxes and depreciation (“EBITDA”). The transaction has been structured to provide Middleby with a tax step‐up with a net present value of approximately $150 million. The transaction completion is subject to customary closing conditions, including regulatory approvals, with an expected closing early in the third quarter of 2018.
Selim A. Bassoul, Chairman and CEO, stated, “The acquisition of Taylor is highly strategic for Middleby and bolsters Middleby’s overall position as an industry leader in commercial foodservice. Taylor is a unique and premium brand in the commercial foodservice industry with leading positions in beverage, frozen dessert and grilling that are highly complementary to our existing offerings. Taylor products are well represented across the top restaurant chains and have significant presence across all foodservice segments including quick serve, casual dining, retail, convenience stores, and institutional foodservice establishments. The acquisition further deepens our presence in these categories and with existing customers for new offerings in the kitchen.”
“Taylor provides a leading platform to continue to build our portfolio of beverage solutions, complementing our existing brands and technologies in this product category. We believe Taylor is well positioned for growth as customers continue to invest in and expand their beverage offerings. Additionally, there are significant technology synergies amongst Taylor and our existing related businesses, which should further add to the growth opportunities in this category.”
Bassoul continued, “The Taylor automated double‐sided grill expands our cooking lineup with an advanced technology that provides customers with a specialized solution addressing labor savings, food safety and superior cooking performance. This acquisition enhances Middleby’s existing capabilities in automated cooking solutions and adds a critical technology as we further develop our portfolio of automated cooking solutions.”
Bassoul concluded, “We are very excited to have the Taylor management team and employees join the Middleby group of companies. The Taylor leadership team has deep industry experience and is highly respected by customers. This team has guided the company to strong levels of profitability and consistent financial performance over many years. We look forward to having them continue to lead the Taylor business, which will continue to operate from its existing facilities in Rockton, Illinois.”
ShopKeep Launches Register App
ShopKeep launched a version of the ShopKeep register app designed to run on the Android operating system – making ShopKeep’s industry leading software available to run on the wide variety of POS hardware platforms that now leverage Android as their base operating system.
The software will initially be deployed on First Data’s Clover devices. ShopKeep register app for Android launched earlier this month on the Clover Mini device and is slated to be available on the larger Clover Station in Q3 of this year. ShopKeep plans to expand the availability of its Android Register via additional partnerships that will be announced later this year.
The release of ShopKeep for Android is a development for the company, which up to now has deployed its app exclusively on Apple’s iOS platform.
“Extending ShopKeep to Android-based hardware platforms ensures that both our customers and partners have access to the full range of device options available in the market,” said Michael DeSimone ShopKeep’s CEO. “We are very excited to deploy our solution on the Clover platform as a first step in expanding the availability of ShopKeep in the market, and plan to extend our reach onto several hardware platforms through the back half of 2018.”
ShopKeep first announced an expanded partnership with First Data in February, 2017.
Genesis Hospitality Purchases The Peacock Inn
The Peacock Inn, an iconic Princeton landmark, is now under new ownership. The only boutique hotel and fine dining restaurant in the heart of downtown Princeton was purchased by the Genesis Hospitality Group. The Peacock Inn joins the historic Washington Crossing Inn, located in Washington Crossing, Pennsylvania, as a Genesis Hospitality member.
The Peacock Inn Hotel is a renovated 18th century colonial mansion with a storied history as a gathering place for great minds, including Albert Einstein and F. Scott Fitzgerald. There are 16 individually-designed and lavishly-appointed guest rooms,. Awarded Four Diamonds by AAA in 2017, The Peacock Inn Hotel is a member of Choice Hotels Ascend Collection, a group of upscale, independent hotels providing experiential, individualized travel with a sense of local flavor. The fine dining restaurant that earned a Zagat rating of 26 for food, ambiance and service and a Wine Spectator Award of Excellence three years in a row will reopen for dinner on Friday, May 25.
The new menus feature what Executive Chef Mark Valenza calls, “American mosaic cooking”, with fresh, seasonal ingredients including locally-farmed produce and aquaculture. Beyond dinner service, The Peacock Inn Restaurant will serve breakfast, lunch, and Sunday brunch beginning Sunday May 26. At The Peacock Inn Bar and Lounge, there is an extensive, well-curated wine list and a sparkling champagne bar. Finally, tea time is coming to Princeton-dedicated Afternoon Tea seatings begin in the fall.
“We are excited to unveil the next chapter in the long, rich history of The Peacock Inn,” says Dr. Eli Mordechai, CEO of Genesis Hospitality.
Ninth Annual Camp Bacon
Zingerman’s 9th Annual Camp Bacon, top photo, starts Wednesday, May 30. While some events have sold out, tickets are still available for many events, which take place in and around Ann Arbor through June 3, and can be purchased a la carte. Proceeds from events will help raise funds for Southern Foodways Alliance and Washtenaw County 4H.
Camp Bacon kicks off Wednesday, May 30 and runs through Sunday, June 3. Here’s the full lineup:
Camp Bacon Food Film Festival
Setting Down Roots: Immigrants to the South
Wednesday, May 30, 6:30 – 8:30 p.m.
Over the past half century, the demographics of the South have shifted more than any other corner of the U.S.—today, it’s fastest-growing region in the country. This year’s Camp Bacon Film Fest will feature six by Southern Foodways Alliance focused on immigrants who have made the South their home, bringing with them their own cultural and culinary influences. A discussion and audience Q&A will follow. This is a family-friendly event suitable for kids 12 and up.
$35/person. Ticket price includes Build-Your-Own BLT Bar, Caramel Bacon Popcorn, and soft drinks. Beer, wine, cocktails are available for purchase. Bourbon Watermelon Smash, a special Camp Bacon Film Fest cocktail, will be featured. Location: Greyline, 100 N. Ashley St, Ann Arbor
A Menu with Porcine Predilections
Thursday, May 31, 7 – 9:30 p.m.
Ji Hye Kim, managing partner and head chef at Miss Kim has designed a dinner menu with deliciously porcine predilections featuring: Pork Belly Bossam, Pork Skin Tteokbokki, Koryo Carrot Salad (because everyone needs balance in their lives!), Braised Pork Shoulder with Kimchi and Benton’s Bacon braised Collard greens, Fried Apple Dumpling with candied Nueske’s bacon bits.
$75/person. Price includes a bottle of soju or a flight of 5 house infused soju shots. Location: Miss Kim, 415 N 5th Ave, Ann Arbor,
Bakin’ with Bacon at BAKE!
BAKE! will use the power of bacon to flavor three amazing baked goods, all in honor of Zingerman’s Guide to Better Bacon (available at all Zingerman’s locations). You’ll make a similar version of our wildly popular peppered bacon farm bread, bacon cheddar scones found in the book, and sweet and salty bacon pecan sandy cookies. Attendees will be taken to hog heaven with a demonstration of our maple glazed bacon apple doughnuts.
$125/person. Location: BAKE! 3723 Plaza Dr., Ann Arbor
The Main Event
Saturday, June 2, 9 a.m. – 5 p.m.
This all-day event is filled with food, laughter, and lots of learning. Camp Bacon is excited to welcome a wide range of speakers presenting a variety of bacon-themed talks, including snout-to-tail cooking, the role of pork in African-American cuisine and culture, bacon and architecture, sustainable pig farming, the history of pigs in dinnerware, and lots more. Featured speakers include Rolando Beramendi, François Vecchio, Stephen Satterfield, Arturo Sanchez, Eddie Hernandez, Margaret Carney, Susan Schwallie and others. Artist-turned-meat-guy Brian Merkel is back this year with his bacon raffle.
$195/person. Location: Zingerman’s Cornman Farms, 8540 Island Lake Rd., Dexter
Biscuit Love Breakfast
Sunday, June 3, 9:30 a.m. – 11:30 a.m.
Every day in Nashville, Tennessee, people stand in line for hours to eat at Karl Worley’s Biscuit Love. Now, for one morning only, the award-winning chef will serve up his famous (like, rock star famous) biscuits right here in Ann Arbor as part of Camp Bacon! On Saturday, June 3, Zingerman’s Greyline makes room for Karl’s big Southern flavors built on rich tradition and a Southern Appalachian upbringing with our Biscuit Love Breakfast. He’ll be throwing down a breathtaking buffet of hometown favorites, like tender, buttery biscuits stuffed with Nashville hot chicken, biscuits and gravy that you’ll never forget, candied Chronic Bacon, and to really hit that sweet spot, biscuits with blueberry compote and lemon curd mascarpone.
$50/person. $10 of the ticket price will be donated to Southern Foodways and $10 to our local 4-H chapter. Location: Greyline, 100 N. Ashley St, Ann Arbor
Camp Bacon Street Fair (FREE event)
Sunday, June 3, 11 a.m. – 2 p.m.
Come on down to the market—just a block down from Zingerman’s Deli—to celebrate great pork with a three-hour street fair. An array of vendors will be selling, sampling and showcasing all things bacon. All ages welcome to this family friendly event.
Free to attend. Location: Artisan Market in Kerrytown, 315 Detroit St, Ann Arbor
The Zingerman’s Community of Businesses is a family of ten independently operated businesses all located in the Ann Arbor, MI area. Paul Saginaw and Ari Weinzweig founded Zingerman’s Delicatessen in 1982. In 1992, Paul and Ari partnered with Frank Carollo to open Zingerman’s Bakehouse. That was followed by other partnerships that brought forth ZingTrain (1994), Zingerman’s Mail Order (1996), Zingerman’s Creamery (2001), Zingerman’s Roadhouse (2003), Zingerman’s Coffee Co. (2004), Zingerman’s Candy Manufactory (2009), Zingerman’s Cornman Farms (2014), and Miss Kim (2016). Today, the Zingerman’s Community of Businesses has annual sales of almost $60 million.
Chuck E. Cheese Delivers
Chuck E. Cheese’s® is launching third-party delivery service from more than 345 participating locations nationwide.
“We know families love our fresh, never frozen pizza as much as our games,” said Ashley Zickefoose, chief marketing and concept officer at CEC Entertainment, Inc. “After years of hearing from guests that we should offer a way for families to enjoy our delicious pizzas at home, we’re excited to make delivery a reality as part of several game-changing initiatives that we have planned this year.”
The brand first started testing third-party delivery service in five markets (Dallas, Tampa, Orlando, Miami and San Francisco) at the end of 2017. Due to the success of the test and the sizable shift in dining trends today, Chuck E. Cheese’s decided to expand delivery nationally.
US Foods ‘Spring Into Service’
US Foods Holding Corp. recently concluded its “Spring into Service” initiative, a five-day company-sponsored event developed to empower Chicagoland US Foods employees to volunteer at local, charitable organizations during the work day. The initiative is part of the company’s ongoing commitment to hunger relief efforts. As a result of this years’ service, more than 83,500 meals were packaged by hundreds of employees who donated nearly 330 hours of time to organizations in and around Chicago.
“At US Foods, we believe in the power of food to give people a chance at a better future. By harnessing the philanthropic passion of our local workforce, we were able to make a considerable difference in the communities where we live and work,” said Debra Ceffalio, vice president of corporate communications, US Foods. “We’re proud of our colleagues and their achievements.”
Between May 14 and May 18, employees based at US Foods’ headquarters in Rosemont volunteered at organizations throughout Chicago and the surrounding suburbs whose missions are to eliminate hunger in their communities and provide access to healthier food. The organizations included Feed My Starving Children, Greater Chicago Food Depository, Ronald McDonald House Charities of Chicagoland & Northwest Indiana, Northern Illinois Food Bank, Growing Home and Operation Gratitude.
Southern Glazer’s Expands Partnership with Jackson Family Wines
Southern Glazer’s Wine & Spirits, the largest North American wine and spirits distribution company, expanded its distribution relationship with Jackson Family Wines, a family-owned company that crafts award-winning wines in Florida. With this agreement, Southern Glazer’s will now distribute Jackson Family Wines in 13 U.S. markets, effective immediately.
“Southern Glazer’s has had a long-standing and solid relationship with the Jackson family for more than three decades,” said Wayne E. Chaplin, Chief Executive Officer of Southern Glazer’s. “We couldn’t be happier that our two families are coming back together in Florida, an important wine market and the state where our business was originally founded 50 years ago. It feels like a home coming, and we look forward to much success ahead in Florida.”
“This is a perfect time for the Jackson Family to be coming back to ‘Team Florida’,” added Gene Sullivan, Executive Vice President, General Manager, Florida for Southern Glazer’s. “Jackson Family brings a wide range of world class wines to our market at a time where there is an incredible demand for high quality wines, and Southern Glazer’s is ideally positioned to help them grow their portfolio in Florida.”
Commenting on the announcement, Rick Tigner, Chief Executive Officer of Jackson Family Wines, added, “All of us at Jackson Family Wines are extremely excited with this move. Florida is a critical market for our continued growth and we are thrilled to expand our relationship with Wayne, his family, and Team Florida.”
Wines will be distributed through Southern Glazer’s, as well as the Company’s Artisanal Fine Wine & Spirits and Signature Luxury divisions. Southern Glazer’s currently distributes Jackson Family Wines in Arkansas, Alaska, Arizona, Delaware, Hawaii, Iowa, Idaho, New York, Ohio, Oregon, and Washington.
Southern Glazer’s has made significant investments to position the company as a leader in wine. It has more certified wine experts than any other North American wine and spirits distributor. Its employees have successfully completed more than 5,000 wine, sake and spirits education programs, from introductory to master-level achievements.
Frictionless Self-Pay at Mahony and Sons
Mahony and Sons, a restaurant group inspired by traditional Irish public houses, is the first in Vancouver to offer a frictionless self-pay experience to its guests. Every guest can now pay in 10 seconds or less, no app download required. With just a quick scan using their mobile phone, guests can view their bill and pay. Google Pay and Apple Pay-enabled phones can check out automatically without the need to add a credit card.
“We are proud of our tradition but we also recognize that guest behavior is changing and that the phone is now a part of the dining experience,” says Pete Mahony, CEO of Mahony & Sons. “People want convenience and speed – we are responding to that.”
This cutting-edge technology was developed by Ready, a restaurant technology company that specializes in secure, self-pay app solutions that allow restaurants to serve more guests and reduce labor costs. While Ready has clients in other major cities such as Toronto, Mahony & Sons is the first location in Ready’s home city of Vancouver. The service will initially be launched at Mahony & Sons’ Burrard Landing location.
“I am delighted to be able to enjoy a delicious meal during my break and still be back at the office on time for meetings since the payment is consistently fast,” says Garett Rogers, CTO of Ready.
Frozen Yogurt Robots Taking Over Canada
Reis & Irvy’s frozen yogurt robots are set to disrupt the industry in Canada.
Reis & Irvy’s was first introduced to Canada at the beginning of 2018, and already has commitments for over 120 robots. Only slightly larger than the average vending machine, and fully self-functioning, Reis & Irvy’s has proven to be on the forefront of innovation and can be placed practically anywhere with instant success, making it a secure investment for franchise owners.
“Once people understand the product and its technology, they immediately realize how unique and cool it is. Having seen them in action myself, I can guarantee they will surpass people’s already high expectations,” said Brett Beninger, President of Reis & Irvy’s Canada.
While food service companies like McDonald’s and Domino’s have moved in the direction of automating customer ordering, Reis & Irvy’s has automated both the ordering and the preparation process, eliminating the need for staffed labour all together.
“I first heard about Reis & Irvy’s in the U.S. and, as soon as heard the ad, I tried to find out how I could be a part of this new and exciting technology. Once I found Reis & Irvy’s in Canada, I quickly committed to buy multiple robots and I plan on buying a lot more,” said Barry Ehlert an entrepreneur from Calgary.