Food, Service and Hospitality
It’s hard to believe it’s time for the National Restaurant Association Show again. It seems like I just got back from last year’s event with a bunch of new ideas and knowledge.
This year I’m looking forward to connecting with our customers and brokers, as well as seeing some of the new food. Last year I was intrigued by the flash frozen ice cream vending machine, and I want to see what creative options are on display this time.
I’m also curious about some of the technology solutions that are new. Every year there seems to be some technology designed to help the restaurant operator do something faster, cheaper and/or better. I’m wondering when I’m going to see the app that makes apps faster, cheaper and/or better!
The great thing about this show is that the knowledge isn’t limited to just the show floor. The education sessions can be just as helpful and in some cases more so. As the leader of an organization I’m always thinking of our employees so I want to stop by the session, “Best Practices for Employee Engagement”. It’s been documented in many studies that employees who are engaged with their job and the organization are happier and more productive. It’s going to be interesting to find out what things we’re already doing right and what opportunities we have.
Lastly, I’m looking forward the Women’s Foodservice Forum breakfast Monday morning. I am a strong supporter of this organization because they really create content and curriculum to help women advance in the industry. The subject this year is “Executive Intelligence” with Justin Menkes and is all about recognizing those softer skills that all leaders need. It should be fascinating.
Even though the show seems to come around quickly, it’s such a great opportunity to remind myself how great this industry is and how much fun it is to be part of it. My next post will be all about my experiences at the show so check back for that.
What are you looking forward to this year?
Broker consolidation—like everything else in this life—is change and has numerous opportunities and challenges.
One of the biggest opportunities is the resources available with a large brokerage. Smaller manufacturers—like National Checking Company—get access to a broader group of customers and end-users and participation in food shows and sales meetings that on your own you couldn’t afford. And with more and more broadline distributors utilizing these brokers to be their sales force those benefits are substantial.
Larger brokerages also tend to be more data driven and technologically savvy, enhancing accountability to both the brokerage and vendors.
But with opportunities also come challenges. Large brokerages tend to specialize in center of the plate and categories outside of that are foreign to them. More people and more manufacturers for a brokerage is good, but there is still only so much time in a day and resources tend get spread thin.
Broker hours are divided up and the majority goes to the largest food manufacturers who demand the time and pay by far the most commissions. Even in the nonfoods categories money buys time and the more you have the more you get.
The key for smaller manufacturers is effective management, messaging and marketing. Regardless of the size of the broker, manufacturers really have to effectively and efficiently manage the broker sales team. If you rely on them to do the work for you, you will get pushed aside or completely lost.
Message reinforcement and adding value for all stakeholders is central in NCCO’s mission. Even as new challenges emerge with “Super Brokers” the opportunities presented—both with the brokerages and in the marketplace—are every bit as intriguing.
I was talking with one of sales managers the other day who mentioned that he thinks the emergence of Super Brokers has created an opportunity in the market for smaller startup brokerages with the ability to specialize, especially in the nonfoods category.
What are your thoughts on the evolution of the broker dynamic and where do you think its heading?
Spring is a particularly busy time for food shows for those of us in the food service industry. NCCO participates in many shows which gives us a chance to interact with many different industry professionals including those from restaurants, distributors and brokers.
Given that such a wealth of knowledge is spread around this time of year in the industry, I thought I’d take the time to fill you in on a couple trends NCCO has noticed this year.
A New Brand of Food Show
The trend to have "concept shows" seems to be spreading like wildfire. The idea to have 3 or 4 shows each show season is appealing to distributors because they can use these regional shows to attract different types of customers. For example: A recreational and summer showcase that focuses on
Recreational, Camps, Child Care and Golf Course Key Customers might attract customers that have no interest in going to a giant food show that a lot of items that they aren't in the market for.
One of our salespeople will be participating in their first "virtual show" in a few weeks. Although I think this is a time and cost saver for both the distributor and the end-user, I'm not sure that it will be as successful as traditional food shows. It’s difficult to replace the “touch and feel” aspect of traditional food shows.
Increased Focus on Food Safety and Health Inspectors
A lot of customers are very focused on the DateIt labels. Just the display will draw them into the booth. In the past, the customers would laugh and proudly exclaim that they were using masking tape, or writing on the film or foil, or “we use it the same day and don’t need to label anything”.
It seems as though masking tape is not cutting it anymore for all the reasons we outline – sticky residue, looks awful, cannot read righting, no consistency in the format, and heath inspectors are looking a lot more closely to the labeling process and systems. And rather than just the big chains focusing on this, I see a lot of small independent restaurants seeing the value in food safety labels.
Speaking of Alternatives to Masking Tape
One new twist I’ve noticed this show season is the growing interest in dissolving labels. Even though dissolving labels have been around for a while, for a lot of customers this product is a revelation and an opportunity for offering something new.
What are some new trends that you’ve seen this year?
Spring in Minnesota always seems to take its sweet time. Today—March 29, 2013—the temperature is suppose to reach a balmy 53 degrees, which is hard earned as we’ve barely gotten above 40 since November.
But even in Minnesota, April 1st is Major League Baseball’s Opening Day. I was reminded of that when I spent a day away my office window and worked the NCCO booth at a food service distributor’s recent food show, which was hosted at Target Field.
April 1st isn’t just Opening Day for the Twins, it’s also opening day for NCCO, as it marks the beginning of our fiscal year. On Opening Day teams really fall into two buckets: some teams are looking to build on the past season’s success and some are looking for a fresh start after a disappointing previous year.
Unfortunately for the past few seasons the Twins have been in the latter of those two categories, but fortunately—and more importantly—National Checking Company is in the former group. NCCO achieved another successful fiscal year in 2013 and it is because of the hard work of myriad people.
I wanted to take this time to say thank you to our partners and employees who work so diligently to help achieve sustained success. I also want to thank our many customers who value our products and services and continue to rely on them.
NCCO is committed to providing the highest quality products and services possible. We pride ourselves on those quality products and our ability to meet whatever fulfillment and shipping demands we’re presented with.
As we start another fiscal year, I can guarantee that NCCO will continue to push forward, providing quality products and continually working to help meet customers needs and provide new solutions.
I hope I’m wrong, but I’m skeptical about the prospects of this year’s Twins season. But because of the hard work and continued dedication of NCCO’s employees and partners, I can say that I am excited about the prospects of this new fiscal year, and the future of NCCO.
I remember first learning of Groupon in 2009. Back then Groupon was young, innovative and expanding into new markets. When it first emerged in the Twin Cities market I remember hearing a story about a local sushi restaurant offering a Groupon. Although I didn’t buy it (nor have I ever bought one!), I heard the stories of the unbelievable success of the deal—producing lines of consumers around the block.
At that time I remember thinking about how amazing of a thing it was that could you could conduct a deal or campaign and the biggest issue you would have would be it being TOO successful. I imagine this was a common thought back then which, in part, explains Groupon’s meteoric rise.
Fast forward four years and the daily deal market is over saturated and research is surfacing that the opportunities with daily deals might not be as wildly successful as once thought.
A recent article in Nation’s Restaurant News summarized the results of a study from Cornell University of a few hundred restaurant’s experiences with daily deals. The results showed the deals can be very positive:
· 40% of deal purchasers were new customers,
· 35% of first-time deal customers returned to restaurant without further incentive
· 100% of operators reported sales increases, sometimes significant increases of more than 80%
But, like almost everything else in this world, there are hidden costs associated with daily deals. The two big ones I see are:
· 62% of operators reported breaking even or losing money on the deal
· Half of operators said deal users tip servers based on the net amount
Operators reporting breaking even or losing money on the deal is significant, but given that the study also found that operators underestimated the amount of return business from the deals, and also deal users’ willingness to recommend the restaurant to others, restaurant operators are still getting good bang for their marketing dollars.
The latter finding is the one I find most concerning because it represents competing interests. If half of these deal users tip the net amount of a 50% off deal—that translates to a 50% lower tip for servers. Right or wrong, this simple fact is a natural disincentive for servers to provide exemplary service—and who could blame them.
The issue is compounded by the researchers conclusion, according to the article, being: “Given the consumers’ attitudes, the best strategy to bring back deal buyers is to offer them a first-class experience so that they can see a restaurant’s full value proposition,” the researchers concluded.”
The real conclusion from daily deals becomes complicated: In order to receive the full potential return on investment necessary to achieve profitability, exceptional service is necessary to show patrons the restaurant’s “full value proposition”, but the nature of the investment lends itself to random low tips which inherently impact servers attitudes towards deal users and thus potentially drives the level of service lower than presumably sufficient to ensure that return business.
So what are we left to do?
Well the way I see it daily deals still provide a great opportunity for operators who set them up properly. Operators who offer deals that include an essential social media sharing component for patrons and an appropriate discount stand to benefit the most.
Maintaining a professional, skilled and trained waitstaff is necessary to ensure deal users’ experiences are up to your establishment’s standards.
Have you participated in a daily deal and, if so, what was your experience like?
The second month of 2013 is about to close, so it seems appropriate to close our 2013 Restaurant Industry Preview blog series as well. The first two posts in the series outlined what customers value and affects their decisions, and the second post discussed the trend of off-premise dining as an opportunity for all restaurants.
To wrap up the series we’re going to offer up a few trends that we think will play a significant role in the restaurant industry in 2013, but we’ll also throw out a couple that we don’t think will have a significant impact. Please note that for the latter trends we’re not saying that some of those trends won’t have an impact in 2013, we’re just saying the impact won’t be newsworthy. So let’s skip the big introduction and get right into the list.
Impactful Factor #1: Generational Marketing
In Nation’s Restaurant News’ Jan. 14 “2013 Forecast Industry & Trends” issue, the NRN asserts that baby boomers have been less affected by the adverse job market than millennials and also notes that younger people have proven to be less receptive to traditional deal-oriented marketing.
One great example (alluded to in the NRN’s article) is that younger tech savvy consumers respond less to regular deals than they do mobile driven loyalty programs for example; whereas an older generation is more responsive to traditional deals and might be apprehensive to participate in a loyalty program that utilizes mobile technology. Restaurants that recognize that different age groups value different opportunities will maximize the return on their marketing dollar investment.
Non-Impactful Factor #1: Locally Sourced Ingredients
Ok, let me say first that I love locally sourced ingredients as much as anyone. But (as mentioned before) this list is focused more on impact in 2013 than it is on just the trends of 2013. According to the National Restaurant Association’s “What’s Hot” survey, 3 of the top 7 menu trends of 2013 have to do with local sourcing, just like last year, and the year before, and the ye… You get the idea.
Local sourcing is great for the industry and the world, oftentimes promotes more healthy choices and saying it will have a significant impact in 2013 is like saying the sun will have a significant impact on crop production—it’s true but not exactly meaningful.
Impactful Factor #2: Food is Part of a Successful Plan
According to a recent Technomic survey, nearly three-quarters of respondents said dining out with friends helps to create memorable restaurant experiences. Data from the NRA’s National Household survey mirrors Technomic’s findings—93% of adults said they enjoy going to restaurants and 79% said it’s an opportunity to socialize and better use of leisure time than cooking and cleaning up.
What this—and myriad other data points—adds up to is that consumers desire good food, but along with that they are looking to experience and memorable, enjoyable experience with friends and family. The 2013 economy will be challenging, as has been discussed, but restaurants that focus on creating good food, enjoyable experiences with great service and offer a unique, friendly atmosphere will have an edge.
Non-Impactful Factor #2: Tablet/Mobile Payments and Order Processing
Tablets and mobile technology is undoubtedly changing the dining experience. While marketing opportunities are limitless within the tablet/mobile arena, payment processing will continue to lag behind. The reasons are twofold.
According to the NRA, a majority of fullservice restaurants will devote more resources to customer facing technology such as iPads/tablets, Wi-Fi, etc., while less than a third plan on bolstering point-of-sale or back-of-the-house technology.
Also, as previously mentioned, a very large amount of restaurant consumers are the older generation. This generation doesn’t represent much of an opportunity for mobile payment innovations. In the coming years mobile payment solutions will absolutely change the landscape of restaurant payments. But considering already razor thin margins for restaurants, demand for such systems will need to grow (which it will) and it will have to become more cost effective (which it also will), the change is happening, but it’s happening slowly.
What do you think are the factors that will shape (or won’t shape) the industry in 2013?
In our first installment we outlined the opportunities for restaurants to differentiate themselves with service quality and take advantage of loyal advocates.
One theme that continuously rises to the top in any 2013 Restaurant Industry preview is increased competition. The increased competition stems from the relatively fewer consumers to attract and increased consumer frugality.
Cautiously optimistic consumers are patronizing restaurants, but recent data from the Bureau of Economic Analysis shows that “caution” still outweighs “optimism”. According to the BEA, even though Disposable Personal Income grew from November to December 2012 by 2.7%, Real Consumer Spending actually decreased.
This data parallels industry pontifications that opportunities exist, for savvy restaurateurs and operators who have a keen eye on differentiation. One large opportunity for restaurants (and data suggests some plan to take advantage of it) is the continued consumer demand for off premise dining.
More than half of all consumers say they would use delivery or curbside takeout services from fullservice or quickservice restaurants, which is a percentage that has steadily rose over the past few years.
Takeout and delivery options are not necessarily a new idea, but one that is evolving. Although offering off-premise options in the current market would still be a point of differentiation, data trends suggest that we’re nearing a point where offering off-premise options will be necessary to compete.
According to the NRA, three-quarters of quickservice and fast casual restaurants plan to upgrade takeout packaging in 2013. Additionally, about half of operators said they plan to make their packaging more environmentally friendly.
Ultimately increased off-premise dining represents a great growth opportunity by accommodating busy consumer schedules and ensuring your product continues to be consumed and top-of-mind.
The integral components of expanding off-premise options should be assessing curbside and/or delivery opportunities as well as packaging options for food integrity and brand promotion. Although custom takeout packaging can be expensive, customizing quality generic packaging can be easy and affordable (shameless Custom Label plug).
This year, don’t restrict your opportunities to simply on-premise dining. Take a hard look at what (if any) off-premise options would work for you. If you do, I’m confident you’ll grab a larger share of the increased disposable personal income.
For the restaurant industry, each new year brings myriad statistics about consumer trends, employment outlooks, commodity prices and hundreds of other data points. Many a restaurateur has begun the process of sifting through this ocean of information only to end up overwhelmed and rocking back and forth in the fetal position in the far back corner of the freezer next to the properly labeled (shameless DateIt™ food safety products plug) dressings and vegetables.
I know how challenging it can be to synthesize all the data and turn it into meaningful, actionable information. With that in mind, this year we’re going to focus a few successive blog posts about 2013 restaurant industry preview data. But rather than regurgitate all the numbers that can be found from all sorts of outlets, we’re going to isolate a few common themes and trends and identify why they matter to restaurants or other industry professionals.
This week we’re going to focus on customers and customer loyalty in 2013. Customer loyalty has always been the lifeblood of the restaurant industry and it appears to be becoming an even more integral component of every restaurant’s bottom line.
According to the National Restaurant Association’s 2013 Restaurant Industry Forecast, repeat customers make up approximately two-thirds of a restaurant’s sales across nearly all segments (the exception being fine-dining, where repeat customers represent half of total sales).
But while restaurant operators report that repeat business made up a larger amount of sales in 2012 than it did in 2011, operators also said customer loyalty is more difficult to maintain than it was a few years ago.
Interesting data, right? Except, what does it all mean?
Well one thing it certainly means is that competition among restaurants is as high as it has ever been, and to emerge as a winner you must capitalize on your advocates. Repeat customers’ importance to individual restaurants is twofold: obviously they’re important because they make up the majority of sales for any given restaurant; but repeat customers also tend to be satisfied customers who are your restaurant’s biggest advocates.
While technology continues to change the face of every industry, it’s not really changing why people choose restaurants. Across all segments of people, the NRA’s forecast reports that far and away the number one factor for people choosing a restaurant is recommendations from family friends.
Interestingly the overwhelming second largest factor was “ease of parking at the restaurant,” but I’m not sure there is a larger takeaway with that one.
The final data point that must be mentioned from the NRA’s Industry Preview in regards to customers is the number one reason customers cite for choosing a restaurant: good service. Across all age groups and both men and women list good service as the number one reason for choosing restaurants.
I know, more data. But let’s add it up.
- Repeat customers make up the largest proportion of your business and are your biggest advocates.
- People choose restaurants most often on recommendations from family and friends.
- The most important thing to customers across all segments is quality service.
This year, as you’re focusing on introducing unique and interesting menu items and capitalizing on increased off-premise opportunities (blog foreshadowing); refocus efforts on increasing your service quality. Write down orders to ensure accurate processing and suggest different and interesting menu items (hey, we can help with that).
Providing a higher level of service than your competitors is the key to standing out in the industry, creating repeat customers and generating new customers.
The other day, in the midst of multitudes of 2013 preparations—both personal and professional—I found myself thinking back to the year that was 2012.
Though the travel that is required for my job can at times be demanding, I also have the privilege of visiting wonderful dining establishments that maybe I otherwise would not. I wanted two share two experiences in particular that stood out in 2012.
Dallas Fish Market
I was in Dallas with a co-worker in April and we decided we were in the mood for seafood one night and in walking around Main Street came across the Dallas Fish Market.
The entire meal was fantastic but what I really remember about the experience was the appetizer we ordered. It was a tuna tartare tower, and boy was it a tower, of about 12 different layers beautifully presented and centered on this large serving plate.
As we’re looking at this trying to figure out how to eat it, the server asked if we would like him to mix it and we said yes. He proceeded to take two spoons in one hand, like giant chopsticks, and mixed and folded everything so the presentation was now spread along the entire plate with all the layers evenly mixed.
He then took these two spoons and served each of us a portion of the now mixed tower and did all this with his other hand behind his back. The appetizer was excellent but the presentation, demonstration and service is what made it memorable.
I was in Las Vegas for work this fall and decided on a whim to go to Mesa Grill at Caesar’s Palace for dinner one night. I didn’t have a reservation but the seats at the bar and the three or four tables in the bar are first come first served so I thought I would see if I could get in that way.
When I got there all those seats were full but the hostess said I was welcome to wait for one to open and showed me where I could stand. I decided to give it about a half hour and luckily I only had to wait about 15 minutes until a couple who had been sitting at a small table left. Being polite, I waited until the table had been cleared and wiped down and just as that was finishing two gentlemen walked in to the restaurant and headed right to that table.
As I was about to say something to them the hostess stepped in and said that I had been waiting and it was my table and they were now welcome to stand where I had been waiting for the next available seats. I appreciated the server taking charge of the situation and not expecting the customers to deal with it, avoiding a potential throwdown between customers.
The common thread between these two experiences is the exceptional service level. Exceptional service isn’t limited to just fine dining establishments or simply ensuring water glasses are kept full. Exceptional service is also about creating memorable enjoyable experiences.
Nothing can have as significant an impact on business as maintaining exceptional service quality, especially given that the world we live in today doesn’t really expect it.
Did you have any exceptional dining experiences this year?
You probably don’t think about it too often, but most every time you get a receipt or sign a credit card bill, you are using thermal receipt paper. And the thermal paper world has been abuzz this month.
Koehler Papers, a German-based manufacturer, announced that, beginning in April, it would no longer be selling thermal paper products in North America. This action was the result of an ongoing dispute with the US Department of Commerce (DOC), which recently levied a 75% tariff on Koehler’s thermal products. Since Koehler’s share of this market was approximately 40%, its withdrawal will dramatically impact the availability and price of those thermal receipts.
Several converters, who relied heavily on Koehler, will be scrambling to find alternative sources in order to continue to produce thermal rolls. Fortunately, NCCO works with a number of vendors and has obtained commitments from these partners to guarantee that our supply will not be disrupted. We will continue to get BPA-free, high-quality, thermal paper, and be able to meet the needs of our customers. Because of the decreased supply and increased demand for the available tonnage, it is likely that there will be pricing pressure on the raw material, and we will address that as the impact becomes clearer.
Although Koehler’s announcement has created uncertainty for other suppliers of thermal products, I am confident that NCCO will be able to continue to provide you the support you have come to expect as we work together to grow your business. We are committed to making sure you will get the products you need, when you need them at prices that will allow you to be competitive in this evolving and changing world.
Should you have any questions or comments, feel free to reply to this blog or contact your regional representative or me.