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 Beef 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 New York City, 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 Elevation Burger Arlington, VA 9 5 Guys Lorton, VA 400+ The Habit Santa Barbara, CA 25 Mooyah Dallas, TX 12 Smashburger 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 Burgerville’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 Sandwiches 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 Sweet Potato Sandwich 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 Washington, 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.