Big Week for DMA at IFMA Presidents Conference
DMA's own Matt Kot joined the panel “How Technology and Information Changes Everything” at Presidents Conference last Tuesday to share the impact DMA’s technology changes will have on customers’ and distributors’ futures. A panel of experts discussed what is already starting to happen and what is right around the corner and included leaders from Arrowstream, Cut+Dry and Kinetic12. Kot is a DMA veteran who now leads the DMA Advantage team overseeing analytics and technology solutions.
Pat Mulhern was honored last week with an Industry Sparkplug award for his long-standing support of IFMA, representing the supply chain community. The IFMA Sparkplug award honors individuals who have made significant impacts on the association’s programs through their board and/or committee involvement. He and his team have been instrumental in contributing insights and thought leadership to IFMA’s membership from speaking at conferences to providing distribution insights to IFMA’s Go-to-Market Planning Program subscribers. Please leave a message congratulating Pat here to show your support.


3 Key Themes for Foodservice from DMA Live in Texas

Labor challenges, diverging dining hours, and burgeoning menus were among the foodservice themes explored by panelists at info sessions presented by Distribution Market Advantage (DMA) as the organization hosted its Live in Texas event in Arlington between Oct. 23 and Oct. 25.

Major stakeholders from the foodservice industry including distributors, operators, and suppliers convened at Live! by Loews for three days of meetings, networking opportunities, and learning sessions. The Food Institute was invited to attend and came away with three major takeaways for the foodservice industry.

Early Birds and Late-Night Diners

The traditional dinner hour is changing, according to R.J. Hottovy, head of analytical research for He noted more and more, Americans were becoming early bird diners or enjoying fast-food fare at later hours.

Data shared by Hottovy indicated visitation growth for various fine dining restaurants between the hours of 3:00 p.m. and 7:00 p.m. while visitation dropped for the previously popular 8:00 p.m. to 10:00 p.m. time range.

On the other hand, many diners were turning to quick-service restaurants for food in the later hours of the day. data found growth in the late-night period (defined as the 10:00 p.m. to 4:00 a.m. timeframe) growing for a variety of restaurant operators, including Burger King, Wendy's, McDonald's, Taco Bell, and Jack in the Box.

The data showed growth in the breakfast (4:00 a.m. to 10:00 a.m.) and afternoon snack (2:00 p.m. to 5:00 p.m.) time periods among the five examples, as well, with only the dinner period (5:00 p.m. to 10:00 p.m.) showing any declines.

Labor Remains an Issue in Foodservice

Megan Lynberg, vice president of sales Americas at Datassential, noted that although the unemployment rate was normalizing to pre-pandemic figures, the foodservice industry was still contending with labor issues related to wages, skill level, and participation.

To that end, she said 65% of operators had reported they were hiring less-qualified staff for operations in the current environment when compared to historic norms.

Additionally, she shared data on understaffing levels by job position and function within restaurants. Of note, 24% of restaurants said they were significantly understaffed with prep, line, and short-order cooks; 43% said they were also slightly understaffed at these positions.

At the front of the house, there was significant understaffing for both the busser/barback/food runner positions (12%) and servers/bartenders (12%). Twenty-seven percent of restaurants said they were slightly understaffed for both groupings.

Menu Item Counts, LTOs Still on the Rise

David Henkes, senior principal and head of partnerships with Technomic, explained that menu item counts were once again on the rise in the foodservice industry.

He shared data showing a 5.2% increase in menu item counts between first quarter 2018 and first quarter 2023; he also highlighted a 2.7% increase between first quarter 2022 and first quarter 2023 for menu item counts.

Additionally, limited-time offers (LTOs) were on the rise. Technomic tracked 20,722 LTOs across limited-service restaurants, full-service restaurants, and convenience stores in 2022, which was up 2.2% from the year before. More strikingly, these figures were up 45.4% when compared to 2018.

Henkes noted that menu innovation would likely draw in more consumers, but that newer items on the menu could create distribution challenges, especially as menu complexity grew. Food Institute Focus

Pizza Trends for 2024: Artisan, Crustless and Value Pies

Americans' appetite for pizza has reached eye-opening proportions.

Consider: A survey by Caulipower Pizza indicated 98% of Americans eat pizza. Meanwhile, a recent poll produced by revealed 74% of Americans would be satisfied eating pizza for any meal of the day.

"People love pizza. It's that simple," said Jim Metevier, the CEO of Mountain Mike's Pizza.

"Pizza is completely customizable to individual flavor preferences. ... It's quick, delicious, and portable," Metevier told The Food Institute.

Trendincite recently noted that the frozen pizza category increased by 10.7% from the past year, reaching sales of $6.83 billion. And numerous pizza innovations have been unveiled in recent months, apparent in grocers' freezers and at chain restaurants.

The new year promises more unique products as R&D teams consider every pizza concept imaginable.

"I think we'll see innovations around crusts – stuffed, flavored, etcetera – that will grow in popularity, and we'll see artisan takes on pizza becoming an even larger part of the frozen pizza segment," Metevier said.

The Latest Innovations Offer Flavor & Value

MOD Pizza recently added a "folded" Pocket Pie to its menu. In a similar spirit, Conagra has introduced three new Banquet MEGA Crustless Pizzas.

Meanwhile, Cynthia Ottavio, director of menu innovation at Donatos, said "In 2024 we believe the ‘sweet heat' trend will gain even more popularity. Food trends have become even more widespread thanks to short-form videos on social media, and hot honey is no exception.

"Sweet heat, or the blend of spicy and sweet, is ideal for pizza because it gives an extra kick to each bite but isn't overwhelming," Ottavio said.

Brands are also developing new pies with distinct crusts. California Pizza Kitchen has added Croissant Inspired Thin Crust Pizzas with flaky layers, according to Trendincite.

Because pizza can be a labor-intensive product, the food industry is increasingly turning to robotics to provide solutions. Donatos, for example, is testing automated machines that distribute sauce and toppings on pizzas in addition to a slicing machine that cuts pies.

Additionally, DiGiorno is testing Pizza Kiosks at locations like Walmart in Colorado. The kiosks are essentially large vending machines with an oven and premade, 10-inch pizzas that take roughly three minutes to prepare, Trendincite explained.

In a period of inflation, businesses must be mindful of consumers' economic concerns, too.

"I believe 2024 will see consumers continue to face economic uncertainty and look to stretch financial resources as far as they can," Metevier said. "As a result, we'll see a focus on bundling and building value." Food Institute Focus

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The Future of Restaurants: Data and Insights for 2024 and Beyond

What do consumers desire in 2024 when they eat out? Value and convenience, mostly, and though those are universal qualities most any time, an uncertain economic outlook and increased food prices have seen consumers slowly shifting their habits after re-emerging in 2022 into the general market and enduring inflation throughout 2023.

R.J. Hottovy, Head of Analytical Research at, recently sat down with The Food Institute to discuss what's coming in 2024 in the restaurant sector.


January 2023 saw a strong start in both retail and overall dining spend from consumers compared to the year before, but as the year has continued, those trends are reversing—consumers are eating out less, staying in more, and preparing for the winter amid an uncertain economy.

"We're starting to see some normalization," Hottovy said, "as some of the spending in restaurants driven by the holidays is now leveling off a bit."

As of September, year-over-year spending in both categories is around -5%. Spread among different restaurant categories – QSR, Fast Casual, Specialty Coffee, Casual Dining, and Fine Dining – monthly visits has swung almost 20% except in the specialty coffee category, though this may have more to do its annual appeal and the return to the office for many consumers.

"Consumers want to stretch budgets," Hottovy said. "Visitation trends holding steady show a big change in consumer behavior; fast casual is thriving, possibly due to the value and ease of mobile ordering combined with takeout. It was already happening pre-pandemic but has now accelerated and is here to stay."

Four Keys to Understanding Contemporary Visitation Trends

"Why the shifts?" Hottovy asked. Here are some of the answers:

Return to Office – Return-to-office remains below pre-pandemic levels but year-over-year gains have helped, especially in specialty coffee and fast casual.

Migration – Chains employing suburban real estate strategies have been winners, and many companies are looking with hungry eyes toward urban residential areas. Rural and suburban population densities have been increasing since 2018 as urban centers are losing people.

"Chipotle has done a good job with this and it's just fascinating," he added. "Historically, groups have stayed away from these markets due to lower volume but previously unexplored markets are paying dividends."

Value – Consumers remain price-sensitive and are exploring more channels to find values. Across the broader food category (restaurants, grocery, dollar stores), people are shopping in different channels more than ever before. They're trialing different locations and brands, and as inflation pressures the common consumer, many are shifting toward dollar stores, ALDI, and value chains to stretch their budgets. Private label and branded products are playing an increased role in that as well.

Experience – Early post-pandemic visitation gains went to larger players given their scale. Eatertainment (Dave & Buster's, Top Golf, Main Event Entertainment, etc.) are doing well. Eatertainment gains naturally occurred post-pandemic and now they're even higher with 25-30% increased foot traffic.

"Chains with unique experiences are making up ground," he said. "Experiential concepts are really doing well. Olive Garden and Outback-type restaurants are doing well, particularly in the past 12-18 months."

What Have We Learned?

Combined, these factors point to a value-driven consumer willing to shift brands and modes of eating in order to have an experience, feel good, and make their dollars work. Compared to Q3 2022, Fast Casual and Quick Service restaurants have seen phenomenal numbers:

The Fast Casual category is led by:

Wingstop – +24.9%

Raising Cane's – +20.7%

Panda Express – +9.7%

The Full Service category is led by:

Cooper's Hawk – +9.7%

Texas Roadhouse – +3.7%

Red Lobster – +3.7%

In Coffee, Breakfast, and Bakery, Hottovy pointed out Dutch Bros. Coffee with a whopping +24.2% increase YoY, followed by Starbucks at a distant +6.4% and Peet's Coffee & Tea at 1.8%.

"Broadly speaking, more suburban openings for fast casuals is evident," Hottovy said. "Fast casual is re-emerging and asserting itself despite blurred lines with QSR."

People are also eating earlier. Six p.m. may be the new 8 p.m. as a swift change toward late afternoon / early evening dayparts is evident across categories. Reservation times are moving up coupled with less visits in the late hours and more from 3-7.

"We [] think it has a lot to do with return-to-office and more flexibility with dining out," Hottovy said.

"Late night dining is experiencing a resurgence as well. Consumers eating at the 10:00 p.m. or or later daypart over the last several quarters is increasing, particularly at Taco Bell and Jack in the Box."

Outlook for 2024

Hottovy summed up the previous three years as such:

2021 – The year of shelter

2022 – The year consumers make adjustments and re-emerge

2023 – The year of inflation

2024 – The year of innovation

"Innovation is key next year," Hottovy concluded.

"Consumers want value and convenience. Automation is hitting its stride after almost a decade of hype and slow implementation."

Hottovy said today's automation not only saves labor but can increase food quality. Sweetgreen's Infinite Kitchen concept in Illinois has a fully automated assembly line, and that location has 50% higher visits than legacy locations. Meanwhile, Chipotle is testing conveyor-type options for salads and bowls.

He also believes the suburban advantage will continue to play out, as well as holiday and experience-driven meals around Easter, Mother's Day, and certainly the upcoming holidays. Event-based spending will continue into 2024. Food Institute Focus

Store News:

Pizza Hut introduced a new $7 value menu. The $7 Deal Lovers Menu rivals Papa Johns and Domino's as more brands push value offers, reported Restaurant Business (Oct. 23). Full Story

Domino's is giving away $1 million of free pizzas to people who are paying their student loans again. The company is giving out codes for one free medium two-topping pizza. The promotion follows the successful "Emergency Pizza" promotion as Domino's tries to rebuild sales after a difficult two years after the pandemic, reported Restaurant Business (Oct. 26). Full Story

Cracker Barrel has partnered with superstar Dolly Parton to be the face of "Rewards That Rock," a campaign honoring the brand's recently launched rewards program. To celebrate the partnership, Cracker Barrel and Dolly are giving rewards members the chance to win one of 667 custom-designed Dolly Rockin' chairs. Full Story

Raising Cane's plans to borrow $500 million from the junk-bond market to refinance its debt, becoming the latest eatery looking to address its upcoming maturities. Initial price talk on the senior unsecured notes calls for a yield in the high 9% to 10% range, reported Bloomberg (Oct. 30). Full Story

Sandwich chain Potbelly has signed a 40-unit franchise deal in Florida and Ohio. The chain, which current has 430 locations, is pushing both refranchising and new-unit franchise growth, reported Restaurant Business (Oct. 30). Full Story

Starbucks will add 17,000 locations by 2030 and hopes to cut $3 billion in costs. The announcement is the latest in the brand's "reinvention" strategy laid out by former CEO Howard Schultz as the Seattle-based coffee company beat Wall Street estimates for quarterly earnings and revenue, driving shares up 9.5%, reported CNBC (Nov. 2). Full Story

Chili's efforts to turn around sales and foot traffic are working. Year-over-year traffic was positive in October as the chain remains focused on core menu items, improved service, less discounts, and more advertising. Chili's prices are 8.8% higher than they were a year ago as a barrage of TV advertising and revamped chicken tenders are attracting more customers, reported Restaurant Business (Nov. 1). Full Story

KFC unveiled a new holiday bucket design and matching holiday merch collection. The fried-chicken chain is also serving up two new menu items this November: a Mac & Cheese Wrap and the Colonel's Homestyle Brownie. Full Story

Little Caesars will launch new Detroit-style Slices-N-Stix across New York City locations. The combo includes two slices of Detroit-style deep-dish pizza and four pieces of Italian Cheese Bread. Full Story

Minneapolis-area plant-based restaurant chain Stalk & Spade has unexpectedly closed all locations. The restaurants, from the owner of the Crisp & Green salad chain, said the "unpredictable landscape" of the plant-based industry was a key factor, reported The Minneapolis Star-Tribune (Nov. 2). Full Story

Clover Food Lab, once considered a hot, plant-based restaurant concept, has declared bankruptcy. The 12-unit Massachusetts chain sought debt protection after financing froze just as it kicked off expansion plans, reported Restaurant Business (Nov. 6). Full Story

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Executives on the Move:

C.H. Guenther & Son named Rod Hepponstall CEO of the branded and private-label food company, effective November 6. He had been the CEO of High Liner Foods. Full Story

Weldon Spangler was named CEO of TGI Fridays after Brandon Coleman resigned for personal reasons; Spangler has over 30 years of restaurant experience. Full Story

Scooter's Coffee has named Joe Thornton CEO. The chain's president will take over as chief executive effective January 1. Full Story

CEC Entertainment, LLC. has selected Mark Kupferman as chief insights and marketing officer for the company's flagship brand, Chuck E. Cheese, and its virtual kitchen brands. Full Story

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Are Edible Insects the Future of Alternative Protein?

Edible insects have all the makings of a smash hit in the alternative protein sector. Insect protein is nutritious—a good source of essential minerals—and sustainable, too. It requires significantly less land and water to produce than conventional livestock and can be raised on organic waste from food processing.

The big problem? U.S. consumers might not want to eat bugs.

What would it take for edible insects to become a popular protein in the U.S.? The Food Institute tapped Alexandra Kazaks, PhD, RDN from the Institute of Food Technologists' Nutrition Division, to consider this question.

Overcoming Bug-Related Barriers

"In many parts of the world, entomophagy—the practice of eating insects—is a well-established tradition," said Kazaks. "However, in the United States, most people view insects as pests or carriers of diseases, and the thought of eating them is met with skepticism, repulsion, and a considerable ‘ick' factor."

It's true—many U.S. consumers are grossed out by the thought of eating insects. Mainly because it's a significant departure from the taste, texture, and appearance of the foods they're used to. This feeling is akin to neophobia—a fear of the unfamiliar or unknown—and often creates an aversion to new foods.

"To address this unfamiliarity, it would be helpful to introduce insect-based products in a way that is not intimidating and emphasizes their nutritional benefits, their potential as versatile, inconspicuous ingredients in food products," explained Kazacks.

But beyond the intimidation factor, safety is another chief concern for many American consumers, especially because people often associate insects with the spread of disease. However, just like any other protein, insects are completely safe to eat when raised in a sanitary environment, and according to Kazaks, can be even safer than conventional livestock.

One caveat is that consumers who are allergic to crustaceans should steer clear of insect protein. "Prioritizing allergen labeling related to edible insects is essential for building consumer confidence," said Kazaks.

Insect Intrigue Among U.S. Consumers

"Market research shows that there is a growing curiosity about insect-based protein products among some consumers," explained Kazaks. "This is driven by factors like sustainability and health consciousness."

To illustrate where consumers currently stand on the subject, Kazaks shared findings from a recent study of U.S. adults which assessed their acceptance of mealworms as an edible insect, as well as their previous experience with insect protein.

Again, because familiarity breeds acceptance, prior exposure to insect protein significantly impacted consumers' comfortability with mealworms. "Those who had previously consumed insects showed higher willingness to buy mealworm products," said Kazaks. And notably, "more than one third of participants had eaten insects."

Age was another big determinant of how consumers felt about edible insects. "Younger adults had significantly higher willingness to buy than adults aged 35 or older," Kazaks explained. This could signal that insect protein will continue to gain acceptance in the U.S. as younger consumers grow into their buying power—but only time will tell.

It is also worth noting that mealworm protein was most appealing when served in protein bars and restaurant dishes, indicating two potential entry points on the path to consumer adoption. "The opportunity for familiarity and exposure is increasing as there is growth of new products featuring insects in the marketplace, and [edible insects are] featured in trendy restaurants across the country," said Kazaks.

Edible Insects as Future Food

"Insect products show promise in the U.S., but industry adaptability to changing consumer preferences and regulations is crucial to realize their potential," Kazaks said.

The U.S. Food and Drug Administration (FDA) has made some progress establishing regulations for insect-based food products, but much is still left open to interpretation. Presently, insect protein falls under the umbrella of the FDA's general human and animal food regulations. The regulatory organization has commented that "bugs/insects are considered food if that is the intended use."

"As these regulations become more defined and standardized, it will create a more stable and predictable environment for producers, encouraging further growth in the industry," noted Kazaks. "The right mix of innovation, education, and policy support can help achieve a more sustainable and diverse food future."

And the sustainable nature of insect protein could end up being the key to consumer adoption over time. "As concerns about the environmental impact of food production grow, more companies and entrepreneurs are likely to invest in insect farming," said Kazaks.

"In a world where consumers are increasingly receptive to exploring a variety of food sources, insect products are positioned to claim a substantial presence alongside plant-based and cell-based alternatives," she said. Food Institute Focus


Restaurant Sales, Traffic Continue Decline in September

Restaurant sales were up 0.6% on a comparable dollar sales basis even as comparable traffic slid 3.3%, according to Black Box Intelligence by guestXM. Comparable sales were up 1.5% in August and 2.8% in July.

In fact, the sales growth rate was the softest experienced by the industry in over two years – the last time the restaurant industry saw this type of growth was February 2021, the last month of the pandemic period in which the industry lapped pre-COVID sales.

Average check growth is decelerating on a year-over-year basis, according to Black Box Intelligence. Consumers continue to spend more on average as they go out to eat, but the rate at which the check has increased is moderating significantly in recent months. Full Story

Selected Results:

Global same-store sales at McDonald's grew 8.8% as U.S. same-store sales grew 8.1%; McDonald's revenue climbed 14% this quarter as price hikes boosted sales above Wall Street estimates, reported CNBC (Oct. 30). Full Story

Slow Pizza Hut sales in the U.S. diminish Yum Brands' revenue. Pizza Hut's same-store sales growth was weaker than expected, driving down Yum Brands' earnings despite net sales rising 4% due to strong performance from KFC and Taco Bell, reported CNBC (Nov. 11). Full Story

Starbucks' quarterly earnings beat Wall Street estimates as domestic same-store sales rose 8%. In China, its second-largest market, same-store sales rose 5%, all fueled by a robust fall menu and premiumization of its top drinks, including the 20th anniversary of the Pumpkin Spice Latte, reported CNBC (Nov. 2). Full Story

Restaurant Brands International posted same-store sales of 7.2% for its Burger King division in the most recent quarter, falling below estimates of 8.71%. The company noted weaker household budgets are forcing customers to pull back on restaurant food, reported Reuters (Nov. 3). Full Story

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