Restaurant and Food Service Blog

Federal health officials are checking into the possibility that an outbreak of salmonella-caused illness originally linked to tomatoes may instead be linked to something else, they said Friday.

“Produce investigations are very difficult, because a lot of times, vegetables are eaten all together,” said Dr. Patricia Griffin, chief of the Enteric Diseases Epidemiology Branch at the Centers for Disease Control and Prevention in Atlanta, Georgia. That makes it hard to trace back any one item to a source of contamination, she added. “We continue to keep an open mind about the possible source of this outbreak, as does FDA.”

Dr. David Acheson, associate commissioner for foods at the Food and Drug Administration, agreed. “There is a strong epidemiological association with tomatoes,” but the agency is also “looking into other ingredients,” he said.

The scare has prompted grocery chains nationwide to pull tomatoes from their shelves and some restaurants to stop offering them as ingredients.

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In just a matter of months, the restaurant industry and CKE Restaurants in particular, lost two legends — Carl’s Jr.(R) founder, Carl Karcher, who passed away in January and Hardee’s(R) founder, Wilbur Hardee, who passed away last week.

The two entrepreneurs paved the way for the two largest regional brands in the country with their drive, courage and tenacity. Karcher began the road to success with a lone hot dog cart and a dream in 1941 that grew to over 1,100 Carl’s Jr. restaurants nationwide. Hardee was a master of recognizing public trends and capitalized on the drive-in craze with his namesake restaurant in 1960, establishing the foundation for the chain that is now close to 2,000 strong.

“These two men were among the most innovative and forward-thinking of their time,” said Andrew F. Puzder, President and CEO of CKE Restaurants, Inc., parent company to both the Carl’s Jr. and Hardee’s brands. “Their lives should be celebrated and recognized for their immense achievements. We always strive to be leaders in innovation and to further our growth in honor of their entrepreneurial spirits and to keep their legacies alive.”

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Starbucks Corp.’s shares got a lift Friday after a regulatory filing disclosed a stake by activist investor Nelson Peltz’s Trian Partners in the coffeehouse giant. It will be interesting to see what Nelson Peltz has in store for the big green coffee giant. At just about every place that Nelson has put any interest in, he has managed to make significant changes.

When he bought shares in Wendy’s, he was able to influence the sale of Tim Horton’s. So from all the Trian holdings from Tiffany and Company to Cracker Barrel there have been big changes.

As the Wendy’s deal will close in Q3 of this year, I would suspect that there will be a lot of moves internally in Columbus. We are sure that Kerri Anderson will be out, but it would be likely that there will be a lot of parachutes opening around September.

We will have to see.

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Baskin-Robbins is rapidly expanding its Texas footprint with today’s announcement that Houston is now open for franchise sales. More than 100 new stores are projected over the next several years throughout Greater Houston area. This expansion falls right in line with the overall Dunkin Brands plan of building 10,000 stores by 2010. Obviously, most of the expansion will be West of the Mississippi.

With all of this rapid expansion, is the brand worried about burn out? Look at what has happened with some recent brands with rapid growth such as Quizno’s and Cold Stone Creamery. A minimum of only 3 stores per franchisee seems like a low number considering that the real expansion is going to come from major developers.

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The inventor of Jamoca Almond Fudge has died.

What a great story and proof of the American dream. I grew up on Baskin-Robbins and recall my parents taking me as a kid and eating Rocky Road. Baskin-Robbins is one of those great American Brands and is under great stewardship of the Dunkin Brands company.

Irvine – you certainly did a lot to make a lot of people happy – one scoop at a time!

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McDonald’s is a juggernaut. The No. 1 U.S. fast food chain grew 6.1% to $28.75 billion last year. For a little perspective about how big McDonald’s is: Its sales are three times that of No. 2 burger chain Burger King.
Not too bad, considering in 2003 some analysts were saying that the Golden Arches were becoming tarnished.
But now McDonald’s is killing their competition. Burger King is a distant second and Wendy’s has been purchased by Triarc, so who knows what will happen with that unlikely marriage.
In this article, Mary Dillion, Global CMO at McDonald’s is looking to see where she can take the burger behemoth next. There are economic problems here in the US, but I am sure that there are just a wealth of opportunities throughout the world. With the Summer Olympics in Beijing, millions will not only be exposed to China but also the heavy sponsorship McDonald’s will have there.

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I am shocked to hear that Craig Miller was given the boot at Ruth’s Chris. After the company had a bang out 2005 and started 2006 with great numbers, The company made a not so great move in acquiring Mitchells. He will not be getting his 2007 bonus. Ouch!

I will be surprised to see where the venerable steak house goes to find a new CEO. The fine dining sector has be taking a beating right now with food costs through the roof and every households’ disposable income shrinking. Craig did a great job in the transition post Katrina in moving the company from Louisiana to Orlando. But I think that Craig’s dismissal may be a sign of things to come if some of these restaurant companies don’t start thinking more nimbly.

A good read is Lane Cardwell of Chain Leader. In his blog posting from last week, The Beatings Will Continue (http://www.chainleader.com/blog/180000418/post/1110025311.html?nid=3974) he talks about how things had better get good now or no one will be safe. It looks like now a chairman/CEO is not safe either!

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Peter Romeo in his blog – The Scoop – talks about a similar story (http://nrnfoodserviceblog.blogspot.com/2008/04/customers-
sound-off.html). One company that is getting it is getting it right is Chipotle. In their Kent, Ohio store they believe that a norovirus infected as many as 400 patrons. The company went ahead and offer all of those sick that they would reimburse them for their medical bills. Not that is doing the right thing in my book.

With the increasing costs of food, I am not surprised that restauranteurs are cutting costs and trying to get away with it. Don’t they know that now is the time to win customer loyalty more than ever. Once you start to skimp and your customers start to be aware of it, you will soon find your restaurant less busy.

With this perfect storm of increasing costs and a soft economy, it will be the smarter companies that put customers first that will come out on top.

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In an email message to all its current employees, Howard Schultz, CEO and Chairman of Starbucks, outlined a reorganization for the coffee giant.  (See message) In the message, Schultz mentions that his return to the helm has been difficult especially with the decision to let go over 600 partners (employees).

According to one partner that I spoke to, the company has simply gotten too big too fast. But that may be oversimplifying the obvious.  Jim Donald took over as CEO a couple of years when Schultz stepped down.  Unfortunately, Donald took the approach of – If it ain’t broke, don’t fix it attitude.

The company did do well for a couple of years and showed great returns on Wall Street.  But the stores were losing its core values and soul. (Read Schultz’s email to Jim Donald on Starbucks Gossip blog)

Over the past year, stores in the Southern California market were closed due to not meeting company expectations financially.  But much of this was probably predicated on the fact that those stores could not meet the high company sales expectations because of the self-cannibalization the company has undertaken.  Gone now are the hot sandwiches but back is a rededication to what Schultz explains is focusing on core values.  For most of the partners that I have talked to the coffee is the most important part of the Starbucks experience. Not the music, books or even the WiFi.

The company will rebound from this.  And Schultz’s return is very much a welcome one. The bigger issue will be succession. Obviously, Donald was not the right person to lead the company and have the same vision that Schultz had.  As with most companies, it is difficult to replace the founder, especially one that had so much invested in the company – emotionally and strategically. 

The January 2008 Conde Nast Portfolio article by Joe Keohane – Fat Profits -had a great article on the new mega burgers that are hitting the scene across the fast food industry.   From the Wendy’s Baconator to the Carl Jr’s $6 Burger to the Hardee’s Monster Thickburger, there seems to be no end to the oversized burgers. These babies pack a serious punch with the Triple Whopper weighing in with over 80 grams of fat and most of these burgers pushing the 1200 calorie mark.  That is for one burger alone and nearly the total recommended calorie intake for most Americans.  At least by the FDA standards.

Many of the fat police have cried a foul and demanded that most fast food companies reconsider their offerings.  In the wake of the movie “Supersize Me” and the book “Fast Food Nation”, these recent menu offerings seem to rub it in the faces of these do-gooders.

I for one hate to see local municipalities get involved in the battle of the bulging waist line. Many of the headlines from last year covered how local governments were trying to fight businesses and companies to not have trans-fat and other harmful items on the menu.  The City of Chicago went as far as banning Foie Gras! What will be next? And don’t our leaders have more important matters to tend to?

If everyone is so concerned about the American public getting fat and the fat epidemic, then should we not really focus also on exercise? In all of this debate, I can never recall any of the fat police calling aloud that Americans need to get off the couch and away from the TV and go run a couple of miles.

In the Conde Nast article, Andrew Pudzer, CEO of CKE claims to eat as many as four or five times a week as his company’s restaurants, yet he remains slim due to a running schedule.

Can the fat police go find something else to find fault with? The real problem as to why America is so fat goes beyond our food offerings in our fast food restaurants.