September 17, 2020
"Winning Operators' Bold Predictions" delivered on attendees' expectations for quality content! You don't often hear "heartfelt" or "emotional" in the feedback for a virtual event, but that's exactly what we're already hearing regarding this rockstar panel's exchange! Kelli ValadeCraig CulverDave Boennighausen and host Wendy Davidson shared their optimistic, hopeful and very real feelings about the future of foodservice. We are so grateful for their collaboration!

View the full webinar recording here. Keep your eyes open for details on DMA's October (as part of MUFSO) and November events, and, of course, follow DMA on LinkedIn for the very latest news.
SUPPLY CHAIN
More Facility Closures Follow Rise in COVID-19 Cases
As coronavirus cases around the U.S. continue to rise, manufacturing plants—particularly poultry processing—are experiencing more closures.

On Aug. 31, the U.S. topped 6 million cases of coronavirus. The food processing industry has been hit particularly hard throughout the pandemic, reported CNN (Aug. 31). Full Story

The Fresno Bee reported on Aug. 27 that the Foster Farms’ Livingston Facility in Merced County, CA, was ordered to shut down over the largest and most severe COVID-19 outbreak in the county. Full Story

At least 358 employees tested positive and eight employees died due to the coronavirus, according to a letter obtained from the Merced County Health Department. The outbreak at the facility accounts for 18% of COVID-19 deaths in the county under age 65, 7% of total county deaths, and 4 out of 10 coronavirus deaths in Livingston.

About two days later, Foster Farms issued a statement regarding the closure noting that it will shut down its Livingston Poultry Complex for six days. Full Story

“We agree that the best approach to ensuring the future safety of our Livingston plant workers is to begin anew with a clean slate,” the statement read.

“We further agree with the Merced Public Health Department that opportunities exist to enhance social distancing, add to professional healthcare staffing that will oversee COVID-19 programs, and improve COVID-19 related employee communication,” according to the statement. “Most importantly, we are committed to the ongoing exchange of data, and open lines of communication with the Merced Public Health Department, which is at the core of tracking and resolving COVID-19 cases before they reach outbreak status.”

Foster Farms reopened its Livingstone, CA, poultry facility after the deep cleaning, testing employees, and providing one-on-one COVID-19 training. The company is providing medical leave benefits for infected employees. It also committed to continue following local health officials’ orders, which include adding a licensed healthcare professional to oversee COVID-19 programs, forming a COVID-19 joint committee that includes workers and company reps as well as making changes to the interior setup. Full Story Concurrently, Foster Farms will have completed two rounds of testing for all other major processing and logistical facilities that comprise the Livingston Poultry Complex. Full Story

In Canada, a Sofina Foods/Lilydale poultry facility in Calgary did not close despite a growing coronavirus outbreak and call from UFCW Local 401 for temporary closure, reported The Globe and Mail (Aug. 29). Full Story

There had been 19 cases of the virus with 18 of them still considered active, according to an Alberta Health official. However, an official with the company said the number is now higher than that.

Alberta Health Services (AHS) confirmed that, after we encouraged all our employees to take a second test, nine additional individuals tested positive for the COVID-19 virus. This brings our total to 27 employees, all from the same shift,” wrote spokesperson Daniele Dufour in an email to The Canadian Press.

The facility, which had another outbreak in April, manufactures fresh chicken products and employs about 450 people.

Dufour noted that Sofina has been working with AHS and the Canadian Food Inspection Agency to manage the outbreak, which includes asking employees on the shift to stay home while they continue to assess the needs for additional measures in order to contain any risk of further spread.

Meanwhile, over 400,000 chickens will be culled in the UK due to slaughterhouse disruptions caused by the coronavirus, reported The Guardian (Aug. 31). Full Story

In Scotland, Coupar Angus, which is owned by the 2 Sisters Food Group, confirmed that 110,000 birds had been culled. The company is slated to reopen after a temporary shutdown and said it doesn’t project any further culls.

In England, about half of the staff at Banham Poultry in Norfolk had to self-isolate after 75 staff tested positive for coronavirus. The facility plans “to humanely cull 300,000 birds using a gas system,” said Blaine Van Rensburg, the company’s director, in a statement.

Asked about the risk of further culls, Van Rensburg said, “Given we don’t know how long this current situation will last, we won’t be speculating on how many others will need to be humanely culled.”

In the U.S., millions of farm animals were culled on-farm earlier this summer after the closure of meat facilities because of coronavirus outbreaks among staff. As a result, the country’s slaughtering capacity for cows and pigs was cut by 25% and 40% respectively. Food Institute Focus
INDUSTRY TRENDS
Are Pick-Up Only Formats the Future of Food?
As digital ordering grows in popularity, food companies are adapting with new formats.

Taco Bell
Yum Brands Inc. plans to launch a Taco Bell mobile restaurant in first quarter 2021 under the Taco Bell Go Mobile banner. Full Story

Taco Bell Go Mobile locations will be around 1,353-sq. ft., compared to the average 2,500-sq. ft. Taco Bell restaurant. The new concepts will also have two drive-thru lanes including a new priority pickup lane with rapid service for customers who order via the app.

Powered by smart kitchen technology that’s integrated with the Taco Bell app, Taco Bell Go Mobile restaurants will detect when guests arrive at the restaurant and suggest the quickest route for a seamless pick-up experience. Customers will also have the option to receive their order via contactless curbside pickup.

To streamline guests’ experiences, Taco Bell Go Mobile will include tablet ordering in drive-thrus and curbside pickup, both of which will be operated by a concierge service of team members, known as “bellhops.”

“With demand for our drive-thru at an all-time high, we know adapting to meet our consumers rapidly changing needs has never been more important,” said Taco Bell president, Global COO, Mike Grams. “The Taco Bell Go Mobile restaurant concept is not only an evolved physical footprint but a completely synchronized digital experience centered around streamlining guest access points.” 

Starbucks
Starbucks revealed it is accelerating the rollout of new pick-up stores, reported ABC News (July 30). Full Story

“In urban core markets where drive-thru and curbside aren’t feasible, we will begin to reposition our store formats,” CEO Kevin Johnson said. “These stores are built in a smaller footprint and create a familiar and convenient walk-through experience that is very relevant to customers in urban markets.”

The new store concepts will “ideally be located within a three- to five-minute walk from a traditional Starbucks store” to give customers flexibility to enjoy a beverage in the store or on the go. The company plans to accelerate the development of over 50 of these stores over the next 12 to 18 months with a view to have several hundred in the U.S. over the next three to five years.

Additionally, Starbucks will introduce “a simple handheld device to further increase throughput and improve the customer experience.” A new curbside pickup experience will also be available in 700 to 1,000 locations by the end of this quarter to enable incremental customer visits.

Shake Shack
For the first time, Shake Shack is venturing into the drive-thru concept, reported CNBC (Aug. 5). Full Story

Stores will have lanes for ordering onsite and for digital order pickup. At some restaurants, the company wants to build either a lane only for digital order pickup or a walk-up window, both of which have been dubbed “Shack Tracks.”

“Look, in the moment of safety, people want to stay in their cars,” Shake Shack CEO Randy Garutti told analysts on a conference call. “That’s not going to last forever. But obviously, this country has proven that the drive-thru in its old form works. We want to do in this new form.”

Chipotle
Chipotle Mexican Grill opened its first “Chipotlanes” in 2018 as part of its push into digital ordering.
The drive-thru lanes are only for digital order pickup to cut down on the chain’s indoor lines and speed up service. Chipotle is planning for 60% of new restaurants this year to have a Chipotlane, up from its 50% forecast in February. By 2021, 70% of its new locations will have a drive-thru lane.

The chain’s 13 restaurants with a Chipotlane that have been open for more than a year are experiencing 10% higher same-store sales than the locations without a drive-thru lane, according to CEO Brian Niccol.

Burger King
Burger King unveiled new restaurant designs optimized for COVID-19, which includes offering multiple ordering and delivery modes. The restaurants are 60% smaller with multi-lane drive-thrus, dedicated mobile order and curbside pick-up areas as well as drive-in and walk-up order areas. Other features include pick-up lockers, exterior dining spaces, and suspended kitchens and dining rooms that are ideal for urban driving cities. Full Story

On the Right Track
The focus on these new formats is warranted. Drive-thru restaurant visits increased by 26% in the April, May, and June quarter and represented 42% of all restaurant visits, according to The NPD Group. In July when more restaurants were reopened, drive-thru visits still increased by 13%, the highest visit increase among the service modes of on-premises, carry-out, and delivery. Food Institute Focus

Weekend Takeout Surges as More Indoor Dining Opens
Friday and Saturday night takeout is emerging as a lasting trend during the pandemic, according to Technomic.

Research found that off-premise meals on Friday and Saturday nights accounted for 24% of overall sales in the second quarter—about double the second quarter of last year, reported The Washington Post (Aug. 28). Full Story

Since the pandemic began, the average number of orders was 31% higher on Fridays than on other days of the week, while the average order dollar value was also 34% higher, according to Rewards Network. Uber also reported an increase in orders placed between 2 p.m. and 6 p.m. on Fridays, while Grubhub found that gross food sales grew 59% year-over-year to $2.3 billion up from $1.5 billion in the same period last year.

At Starbird in Sunnyvale, CA, a chicken-centric restaurant with five locations in the San Francisco Bay area, business was up 100% on a Friday night in August. “There has been a demand surge on Friday nights,” said owner Aaron Noveshen.

“Initially during the pandemic, people were cooking a lot, but if there was one day they weren’t cooking, it was Friday. It became this sacred, end-of-week treat. If they couldn’t go out, they could bring food in,” he added.

At Abe’s Place Tap & Grill in Clearwater, FL, owner Abraham Moussa has a bank of people answering phones, two cashiers, two runners, two expediters, and a whole crew on board on Friday nights.
“Between 5 and 9 p.m., we do not stop,” Moussa said, noting curbside Friday and Saturday nights represents the restaurant’s biggest increases. Average tickets during those nights were $75 to $100 pre-pandemic and his average checks now are $150 to $200.

However, more states are allowing indoor dining—which could make for less weekend takeout.
New Jersey bars and restaurants were allowed to reopen their indoor dining sections with restrictions ahead of the Labor Day weekend, reported NJ.com (Aug. 31). Full Story

“NEW: Restaurants statewide will be able to open for indoor dining beginning this FRIDAY at 25% capacity and with social distancing between tables,” Gov. Phil Murphy said in a tweet. “Reopening responsibly will help us restore one of our state’s key industries while continuing to make progress against #COVID19.”

The move comes about two months after Murphy postponed indoor dining he originally announced would be permitted ahead of the July Fourth weekend. Current restrictions mirror the ones detailed in the original plan, some of which consist of patrons wearing masks unless eating, tables spaced at least 6 ft. apart, enhanced sanitation, and limiting seating to a maximum of eight customers per table—unless from an immediate family or same household.

Other restrictions include staff wearing masks, guests placing orders only at a table and staffers bringing food and beverages only to tables, patrons barred from walking around while eating, encouraging reservations, and requiring customers to provide a phone number if making a reservation to facilitate contact tracing.

Additionally, indoor restaurant dining will be allowed in New York City at 25% usual capacity starting Sept. 30, according to New York Gov. Andrew Cuomo. Diners will be required to wear face coverings while not seated; temperature checks will be given at the door; a member of each party must provide information for contact tracing; bar seating will not be permitted; and restaurants will close at midnight, reported MarketWatch (Sept. 9). Full Story 

In California, a new color-coded reopening framework has big implications for the state’s restaurant scene, reported Eater (Aug. 31). Full Story

The plan creates a four-tier system that runs county-by-county across the state, allowing for those areas with reduced cases and positivity rates to reopen ahead of more heavily impacted neighboring counties. Meeting the needed criteria at the county level means that restaurants within those certain counties, such as Napa and El Dorado, were able to reopen for limited indoor dining service on Aug. 31.

Some room exists for local variance within the new system. For example, San Francisco is in the red tier, meaning restaurants were able to reopen for indoor dining at 25% capacity (or 100 diners, whichever is fewer) as of Aug. 31.

 
Plant-Based Continues to Resonate with Consumers
Shoppers are increasingly turning to plant-based products.

The specialty plant-based segment has grown more than 27% since 2017, reaching nearly $5 billion in total brick-and-mortar sales in 2019, according to the recent State of the Specialty Food Industry research from the Specialty Food Association and Mintel. SPINS indicated sales of plant-based products outpaced sales gains during March in the overall food and beverage market, as well as in natural products and organic products, the SFA State of the Industry report found. Full Story

During the pandemic, supply for plant-based alternatives remained strong, while traditional meat and dairy supply struggled to keep up following a surge in demand in March.

“We have not seen any real issues in the food supply,” said Tony Antoci, CEO of Los Angeles-based Erewhon Market. “During the crazy days in March and April the supplies were short but for the most part recovered completely.”

Refrigerated plant-based meat alternatives went up 112% in dollar sales and 70% in unit volume between 2017 and 2019, driven in part by inflation and in part by consumers buying new premium brands such as Beyond Meat—and demand is still growing.

Following Impossible Foods Inc.’s debut of its direct-to-consumer e-commerce site in June, Beyond Meat recently launched its shop.beyondmeat.com site that makes its products directly available to consumers. Meanwhile, Incogmeato by MorningStar Farms is offering the largest new product line in the brand’s 40-year history, reported MarketWatch (Aug. 27). Full Story

Since March, Impossible Foods has increased its presence at grocery outlets 60 times to 9,000 stores, which include Kroger and Walmart. Impossible products are also sold at Starbucks’ 15,000 stores.
In the week beginning Aug. 23, Impossible said its flagship product was now available in packages of two pre-formed, quarter-pound, burger patties at nearly 2,000 grocery stores nationwide owned by Kroger.
Capitalizing on the trend, Hormel is launching a new line of plant-based ingredient solutions available to food manufacturers in the U.S. Full Story

“These new products are designed to help food manufacturers incorporate more plant-based foods into their offerings for the growing number of consumers interested in adding these items to their diets,” said Paul Sheehan, director of sales for Hormel Ingredient Solutions.

The products are powered by pea protein and include fully cooked crumbles and uncooked ground products, with the former available in options ranging from traditional and Italian, to breakfast and Chorizo-style flavors.

“The bottom line is that people want to add more plants to their diet, but they also want them to taste great,” said Sheehan. “These new items allow food manufacturers to explore how easy it is to add the power of plant-based ingredients to a variety of applications.”

Meanwhile, Lightlife Foods unveiled its “Clean Break” campaign to highlight the latest version of its plant-based burger—a vegan patty reformulated with only 11 ingredients. The company also called on Impossible and Beyond to follow in its footsteps and create cleaner plant-based foods, reported Forbes (Aug. 25). Full Story

In an open letter to Beyond Meat and Impossible Foods advertised in newspapers, Lightlife president Dan Curtin writes, “Enough with the hyper-processed ingredients, GMOs, unnecessary additives and fillers, and fake blood.”

He noted that Lightlife is making a “clean break” from “food tech companies” to use simpler ingredients and methods.

However, although Lightlife’s new plant-based burger does have fewer ingredients than its competitors, it clocks in at around the same calorie count and overall fat.

Additionally, it’s not just plant-based meat that consumers are after. Dairy alternatives are also growing in popularity.

Halo Top is introducing an improved dairy-free recipe for the light ice cream maker’s non-dairy flavors. Halo Top’s Dairy-Free series starts with a coconut milk base and now contains fava bean protein. Full Story

“With our Dairy-Free line, we replaced brown rice protein with fava bean protein for a creamier texture that’s packed with flavor,” said Shilpa Gadhok, senior brand manager. “Plant-based demand is higher than ever, and we want to provide our fans with an offering they feel great about eating—so they don’t have to choose between pursuing a plant-based lifestyle and enjoying dessert.” Food Institute Focus

Executives on the Move:
  • Fresh Hospitality named Rachel Layton managing partner of the I Love Juice Bar brand. Full Story
  • JDE Peet's appointed Fabien Simon as CEO. Full Story
  • Bojangles named Monica Sauls chief people officer. Full Story

Store News:
  • Silver Diner invested $500,000 to install air filtration, purification, and UV light systems across all 20 locations. The chain is reportedly the first in the U.S. to make the move and its cofounder acknowledges that it was a big investment but said it was necessary and patronage at some locations has risen to around 60%-70% of the 2019 totals since installation, reported Richmond Times-DispatchFull Story
  • White Castle is offering delivery via PostmatesFull Story
  • QDOBA Mexican Eats is testing Mexican cauliflower mash at 23 restaurants in the Indianapolis market. Full Story
  • El Pollo Loco launched a loyalty program that offers cash rewards, calling it the most competitive in the industry. The restaurant chain is providing exclusive in-app offers and will add GPS-enabled curbside pickup to the app. Full Story
  • Taco Bell will eliminate an additional five items from its menubeginning Nov. 5, following the removal of about a dozen items in August. The company will remove pico de gallo, the Mexican Pizza, and its shredded chicken soft taco, burrito, and quesadilla melt products. New additions include chicken chipotle melt and Dragonfruit Freeze drink. Full Story
  • Luby’s will sell Fuddruckers and Luby’s Cafeterias as part of liquidation and dissolution plan that was approved by the company’s board of directors, reported NJ.com (Sept. 9). Full Story
  • Daniel Boulud Kitchen will expand its meal kit service nationwide through a partnership with Goldbelly. Full Story
  • Chipotle Mexican Grill added a group ordering feature to its app. Full Story
  • Chick-fil-A added a chocolate fudge brownie and specialty-grade Thrive Farmers coffee to the menu. Full Story
  • Ruby Tuesday introduced Pasta Americana entrees. Full Story
  • White Castle launched Craver Nation, a loyalty program based on personal preference instead of points or number of purchases. Users will receive new discounts and offers every month based on their purchase history. Full Story 
ECONOMIC PULSE
Foodservice operators reported a 12.3% decrease in same-store sales in August, highlighting continued struggles for the industry, according to Black Box Intelligence. However, these figures represented the best they have been since February when the pandemic was a regional threat. Comparable traffic was down about 17.7% as well during the month, showcasing how much ground the industry needs to cover before it can return to pre-COVID-19 levels. Full Story

Selected Restaurant Results
  • Fazoli's concluded its most successful July in brand history with record-breaking sales and traffic. The brand followed up positive May and June sales and traffic growth with a 16% increase in sales and 17% increase in traffic over the prior year. Fazoli's noted a 65% increase in drive-thru sales, as well as 410% increase in online ordering, and 200% increase in delivery orders. Full Story
  • In August, Papa John’s International’s estimated comparable sales rose 24.2% in North America and 23.3% abroad and the company said its customer satisfaction and brand affinity scores are also rising. Almost all North American restaurants are open, and the number of locations that remain temporarily closed has declined to about 150, most of which are in Latin America and Europe. Full Story
  • While most businesses were unprepared for the pandemic, Domino's was ready. The company began "Carside" pickup and delivery options in 2019, which helped to push sales up 16% in the second quarter while other foodservice operators struggled, reported The Wall Street Journal (Sept. 4). Full Story
  • Dave & Buster's Entertainment Inc. reported a revenue drop of 85% to $50.8 million during second quarter 2020, down from analyst projections of $78.5 million. The company reopened 84 stores in 27 states during the quarter, reported MarketWatch (Sept. 10). Full Story
PARTNER NEWS
Cut to the Clean with P&G
With over 180 years of innovation and product development to our name, our superior cleaning solutions, from brands you know and trust, deliver a noticeably exceptional clean you can see and smell!

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  • Proprietary technology, developed over years of research, proven to be superior to the leading competition 

Efficient equipment means savings.
From accurate chemical dispensing equipment to Energy Star rated dish machines, our efficient equipment saves you money on water and chemicals. We have multiple dish machine options and customizable capabilities to fit your operation’s needs.
Peace of mind service 24/7/365
Our service is non-commissioned, comprehensive, and professional.
  • Non-commissioned service model: our technicians are not rewarded or incentivized by selling you extra products or unnecessary parts during service visits. Instead, our technicians are measured by timeliness, program compliance, and your satisfaction
  • Comprehensive maintenance: every service visit follows a detailed checklist for program compliance and verifies equipment performance and dosage accuracy
  • Peace of mind 24/7/365 nationwide: outstanding technician-to-customer ratio so you have more individualized, focused attention to ensure your satisfaction
  • Professional: verification of program compliance outside of technician group + Regulatory agency compliance support 
Let P&G Professional help you and your operations develop a complete, customized and transparent program. Please contact James Kennedy (kennedy.jh@pg.com, 704.609.8015), Bruce Bykowski (bykowski.bd@pg.com) or Taft Sales (sales.tl@pg.com) to learn more about the Total Foodservice Solutions program from P&G Professional.
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