Culinary Survival Strategies In Tough Times

A Presentation by Nancy Kruse The Kruse Company Culinary Survival Strategies: Operators at All Levels…

TOP TRENDS IN 2009?

Quick Service Family Dining Casual Dining 1. Focus on value Focus on value Focus on value 2. More food choices More food choices Beverage choices 3. Beverage choices Expanded take out More food choices

Source: National Restaurant Association 2009 2 …Remain Firmly Focused on Value

% Operators Who Expect More Focus on Value in 2010 Quick Service Family Dining Casual Dining 79% 46% 40%

And 30% Fine Dining Operators!

Source: National Restaurant Association 2010 3 Culinary Survival Strategies: Session Agenda

Menu Value Proposition= 4 Ps 9 Protein 9 Portion 9 Premium 9 Push Back

4 Menu Value Proposition I Protein Strategies

z PC z Mac & Comfort z Smart Prep

5 Protein Strategies 1. PC

Protein as Condiment: 6 Hardee’s French Dip Thickburger $4.49 Country Kitchen’s Smokehouse Burger

7 Coco’s Salmon Oscar

8 Olive Garden’s Mixed Grill

9 Protein Strategies 2. Mac & Comfort

10 Country Kitchen’s Steak Stroganoff

11 Protein Strategies 3. Slow Cooking

Maggiano’s Braised Cannelloni 12 Carrabba’s Braised Sicilian Pork

13 El Pollo Loco’s Carnitas

14 Protein Strategies: Key Takeaways

1. Driving Forces Protein is cost center for operator, value center for patron

2. Essential Elements Portion control + upscale image + smart prep, where appropriate

3. Implications to Restaurateurs Consider small (protein) touches for big (perceptual) returns Promote heck out of technique Think big picture, total package 15 Menu Value Proposition II Portion Strategies

z Mini Mania z Incredible Shrinking Plates

16 Portion Strategies: 1. Mini Mania

“Break-Out Food/Flavor on Your Menu?” 9 Sliders 9 Savory and/or Spicy Flavors 9 Seafood 9 Asian Foods/Flavors 9 Chilies

Source: NRN Research/Culinary R&D Program

17 Chili’s Big Mouth Bites

18 Old Chicago’s Meatball Sliders

19 Shari’s Slider Appetizer Platter

20 Famous Dave’s BBQ Buddies

z Georgia Chopped Pork z Texas Beef Brisket z BBQ Pulled Chicken z Hot Link Sausage

21 Pranna’s Lamb Sliders/Apple Relish & Mint Aioli

22 , NY Portion Strategies 2. Incredible Shrinking Plates

T.G.I. Friday’s Right Portion/Right Price… 23 …Right Time Hardee’s $1.99 Little Thickburger

24 Cheesecake Factory’s Wild Mushroom Crostini

With Madeira Cream Sauce $4.95 25 California Pizza Kitchen’s Brand New Small Plates Line

Sweet Corn Tamale Ravioli

26 Mediterranean Plate Harry’s Seafood Bar & Grill’s Petite Plates

27 Ocala, FL Portion Strategies: Key Takeaways

1. Driving Forces Sliders: Sharing + sampling + hands on + portion control + FUN Small Plates: Cost and/or calorie control

2. Essential Elements Reconfigured basics and/or creative small portions

3. Implications to Restaurateurs Downsize if, where it makes sense Price smartly Promote like crazy 28 Menu Value Proposition III Premium Strategies

z Better Burgers z Top Drawer Proteins z Better Beverages

29 Premium Strategies 1. Better Burgers

SELECTED NEW-AGE BURGER SPECIALISTS Chain HQ Est. Units Bobby’s Burger Palace New York, NY 4 Burger Lounge San Diego, CA 4 The Counter Culver City, CA 24 Arlington, VA 9 5 Guys Lorton, VA 400+ The Habit Santa Barbara, CA 25 , TX 12 Denver, CO 25

30 Data for 4th Quarter, 2009 Mooyah’s Menu Promise

31 Heavy Hitters Jump on Board

NOW PLAYING COMING SOON z Bobby Flay z Todd English z Emeril Lagasse z Thomas Keller z Hubert Keller z Stephen Hanson, z Richard Melman B.R. Guest Group, N.Y.C. Lettuce Entertain You, Chicago z Nancy Silverton, z Marcus Samuelsson La Brea Bakery, L.A. z Laurent Tourondel z Rachael Ray z Danny Meyer, Union Sq.Hospitality, N.Y.C.

32 Bobby’s Burger Palace “Crunchifies” Burgers

33 Independents on Board, Too: Blazing Onion Burger Company

Triple X Bacon Cheeseburger

34 Mill Creek, WA Premium Strategies 2. Top Drawer Proteins

Jack in the Box’s Sirloin Minis

35 Fleming’s Steakhouse’s New 5-6-7 Burger Line

36 Prime Sirloin Bacon Cheeseburger McDonald’s Angus Beef Burgers

37 Ruby’s Diner’s Kobe Burgers

38 ’s Natural Beef

100% Antibiotic- and Hormone-Free 39 Stir Crazy’s Mu Shu Duck Wraps

40 Bertucci’s Seafood Pasta LTO

41 Lots of Lobster Premium Strategies 3. Better Beverages

MOST ACTIVE MENU CATEGORIES AT TOP 250 CHAINS Category New Items Entrées 716 Appetizers 369 236 Desserts 230 Beverages 123

Note: Non-alcoholic beverages only Source: Technomic Menu Monitor, 2009 42 Iced Tea Scorecard: 359 MM Incremental Servings

Dunkin’ Donuts

McAlister’s Deli

43 Source; NPD/CREST Shari’s Blackberry Lemonade

44 Coffee, Mocha: Superior Sips

45 Elixir’s Smoked Anise

San Francisco, CA

46 Premium Strategies: Key Takeaways

1. Driving Forces “Luxe-ing” of retail meets recessionary spending

2. Essential Elements (Perception of) getting something better for not much more $

3. Implications to Restaurateurs Phenomenon with legs Consider burgers a surrogate Consider margin makers like beverages Consider consistency with brand 47 Menu Value Proposition IV Push-Back Strategies

“We’re in the business of RMR: RESTAURANT MEAL REPLACEMENT.”

--Tesco’s Fresh & Easy Development Chef Michael Ainslie

48 Restaurants Reel, Supermarkets Shine

SALES GROWTH FOR SELECTED FOODSERVICE SEGMENTS Segment 2008 2009 2010 Limited Service 3.0% 1.5% 1.5% Full Service -2.5 -7.5 -4.1 Supermarket* 6.0 4.5 3.5

*Foodservice/prepared foods only Source: Technomic, Inc. 49 Cost-Conscious Consumers Sticking Close to Home

50 Supper Share Slipping, Supermarkets Surging

PERCENT OF SUPPERS PREPARED BY RESTAURANTS 21.5% 21.2% 21.2%

20.8% 20.8% 20.7% 20.5% 20.6% 20.3%

19.5%

19.0%

98 99 '00 '01 '02 '03 '04 '05 '06 '07 '08 51 Source: The NPD Group Ukrop’s Covers Menu Bases…

52 …And Addresses Fuel-Price Concerns

53 Giant Eagle Mimics Restaurant Techniques

54 Whole Foods Caters To Convenience

55 From Horse’s Mouth: Competitive Insights

Supermarket Chefs Say… Their Strengths Our Strengths Convenience, Value Quality, Freshness Copycat Trends Unduplicated Techniques Minor Commitments Pampering Service Health, Local, Organic Affordable Escapes

Source: NRN Culinary R&D Conference 56 Push-Back Strategies 1. Promote Quality, Freshness

Red Lobster’s Georgia Peach and Kentucky Bourbon BBQ Shrimp & Scallops 57 Carrows’ Fresh Summer Omelet

58 Push-Back Strategies 2. Tout Technique…

Dairy Queen’s Proprietary Line

59 …Let Customers See You Sweat

Houlihan’s Seared Halibut 60 Seasons at Rose Creek’s Peanut-Marinated Steak/Asian Slaw

Fargo, ND 61 Push-Back Strategies 3. Pamper Them

62 Push-Back Strategies 4. Promote Wellness

63 Uno Chicago Grill’s Anjou Pear Salad

64 Push-Back Strategies 5. Sample, Sample, Sample…

…However It Makes Sense

Denny’s Breakfast Giveaway 65 Push-Back Strategies 6. Surprise and Delight Them

Sweet Tomatoes’ Mediterranean Sunrise Pasta 66 IHOP’s Cheesecake Pancakes

67 Firefly Bistro’s Lambalaya

South Pasadena, CA 68 Uno Chicago Grill’s Golden Pumpkin Soup

In Kabocha Squash Bowl 69 Uno Chicago Grill’s My Thai Flatbread Pizza

70 Wildflower Bread Company’s Roasted

z Fennel z Fresh Mozz z Tomato z Arugula z Herb Focaccia z Fig Confit

Scottsdale, AZ

71 Quattro’s Homemade Chocolate-Hazelnut Panini

Palo Alto, CA 72 Romano’s Macaroni Grill’s Cioppino

73 Blue Duck Tavern’s Bacon Popcorn

74 , DC Osteria via Stato’s Baconcello Martini

Chicago, IL 75 Culinary Survival Strategies: Summary and Conclusions

z Tough times demand culinary creativity – Four Ps: Protein, Portion, Premium, Push Back z Consider other Ps – Promotion: combos, LTOs, loyalty programs – Price: $5 sandwich threshold z Don’t forget what brought us here – Superior service – Kitchen expertise – Affordable escape – Relaxing ambiance – Hospitality! 76