Driving in Millennials without losing Baby Boomers, the challenge of maintaining authenticity with growth and the difficult move to digital ordering were some of the themes of opening day at the 55th annual MUFSO conference on Sunday.
The event brought more than 1,000 restaurant operators, suppliers and other industry professionals from across the country to Dallas for three days of learning and networking — starting with a series of breakout panels and an awards ceremony spotlighting this year’s Hot Concepts winners chosen by Nation’s Restaurant News, as well as the Best Concepts selected by Food Management.
“We covered a lot of ground in our sessions today,” said Chris Keating, vice president and market leader for the Penton Restaurant Group. “Mobile ordering, menu innovation, marketing to Millennials, managing margins — and that’s just the M’s. But the highlight, as always, is seeing the innovation from our Hot Concepts and Best Concepts winners.”
The creative minds from this year’s Hot Concepts chosen by Nation’s Restaurant News editors shared their insights on a panel that included Scott Slater, founder and chief executive of Slater’s 50/50; Matt Matros, founder of Protein Bar; Stephen Erickson, president of PDQ; Martin Berson, co-founder and chief executive of Snap Kitchen; and Chance Carlisle, chief executive of LYFE Kitchen.
San Diego-based Slater’s 50/50 stands out as the only full-service concept among them, and one known for “burgers, bacon and beer,” amid the largely more health-focused concepts on the panel. But even so, Slater said his customers still look for quality ingredients. Slater’s 50/50 uses all-natural beef from Southern California, for example, local produce and locally sourced beers that rotate on tap.
Most on the Hot Concepts panel agreed that the goal is to offer consumers options that meet their various needs, from gluten-free items to vegan or low-carbohydrate. In the end, what really matters is whether the food is delicious, they said. But brand authenticity is also key.
“Good brands make claims to have authenticity, but great brands really know who they are,” said Carlisle of LYFE Kitchen, based in Memphis, Tenn., an upscale fast-casual concept with 10 locations.
Both Matros of the Chicago-based Protein Bar and Berson of the Austin, Texas-based Snap Kitchen described their first year into their private-equity partnership with Catterton Partners.
Matros said the year has been challenging as he makes the transition from entrepreneur to leader of a now 20-unit chain.
Berson agreed, saying, “It has been a learning process for me. I’m much more of an entrepreneur. I think my business card says head dishwasher, and it still should. When you start something, you’re passionate about every component. But when you take a step back and become a leader, it’s a new challenge.”
At Tampa-based PDQ, which stands for People Dedicated to Quality, a challenge for growth has been building a culture that sets people up to succeed. The chicken-tender concept was developed by Outback Steakhouse co-founder Bob Basham and Nick Reader, chief executive of MVP Holdings.
“Finding and creating the right culture for people to aspire to greatness is a tough thing to do,” said Erickson of PDQ.
In a panel on “Marketing to the Ages: Know Your X, Y and Zs,” Dennis Lombardi, executive vice president, foodservice strategies for WD Partners, warned that full-service concepts may find an uphill battle with a younger demographic content with a less-than-full-service experience.
But he stressed the need for restaurant chains to find balance in their targeted appeal to both Millennials and Baby Boomers. “Boomers are passing the torch to Millennials,” he said. “The challenge or us as restaurant operators is to not to get too far ahead of that torch, or too far behind,” he said. “Millennials will become the lifeblood of our industry. But don’t count out Boomer before it’s time.”
Denny’s, for example, is a 60-plus year-old brand with 90 percent brand awareness that in recent years has been winning over seniors that have long loved the brand, alongside young families and Millennials.
With its “America’s Diner” positioning, Denny’s has strived to “be significant in the lives of guests,” but with a multifaceted approach, said John Dillon, Denny’s vice president of marketing.
Marketing efforts have ranged from a 15-percent discount for AARP cardholders to the more Millennial-friendly web series recently launched called “The Grand Slams,” which is designed to be edgy and funny — and likely to go viral.
Next up in the effort to drive in Millennials: Denny’s recently opened a fast-casual-like variant at the University of Alabama-Birmingham called The Den offering a limited menu and order-at-the counter service. The company is planning more The Den locations on college campuses later this year.
Challenges of new technology
In the panel “Investor Strategies: Who Invests and Why,” Steve Romaniello, managing director of Roark Capital Group, said the companies within Roark’s portfolio have grown both organically and through acquisition, but, either way, the goal is to create efficiencies.
“You have to have a team with an appetite for it and an infrastructure to leverage,” he said. The ideal acquisition candidate fills both a “strategic” as well as an investment need.
Roark’s Focus Brands, for example, saw Cinnabon’s hard-earned knowledge of how to open and operate in foreign markets as a value add that could be applied to other portfolio operations.
In a panel titled “Online and Mobile Ordering: Beyond the Pizza Players,” panelists shared the many challenges of executing a move into what is very new technology.
Jeff Gruber, director of communications for Dickey’s Barbecue Restaurants, for example, said the barbecue chain has online ordering in 93 percent of units systemwide, and it is fully integrated with the company’s POS system.
But the process was long. “It took us from 2008 to 2012 to get this thing off the ground,” he said.
A lot of that time was spent searching for the right partner and finding a way to integrate it. Dickey’s partnered with New York-based OLO for online ordering and the move was deemed a success.
“Online check averages are more than double the dine-in ticket average,” said Gruber, and online sales accounted for about 1.6 percent of net sales as of September.
Cousins Subs said also partners with OLO. Justin McCoy, Cousins’ vice president of marketing, said discussions around online ordering began in 2009, and, after launching a test with OLO in 25 locations, the program was rolled out in March. Now, 92 percent of units are online and the chain launched a mobile app on iOS and Android in June.
Twenty-seven percent of online orders come from mobile devices, and they account for about 16 percent of online sales, he said. Online accounted for 1.5 percent of overall sales as of September.
In addition, online check averages have risen exponentially. “Online check averages are more than double dine-in check averages,” McCoy said. “We recently launched group ordering, delivery to mobile ordering and (we’re) working on push notifications.”
On Monday, the conference continues with more breakout panels and keynote speakers such as Trendhunter.com founder and chief executive Jeremy Gutsche.
Later Monday, the 2014 Operator of the Year will be revealed from among five Golden Chain honorees named earlier this year, including Sandra Cochran, president and chief executive of Cracker Barrel Old Country Store; Greg Creed, chief executive of Taco Bell; Joseph DePinto, president and chief executive of 7-Eleven; Aylwin Lewis, president and chief executive of Potbelly Sandwich Works; and W. Kent Taylor, founder and chief executive of Texas Roadhouse.
MUFSO title sponsors are American Express; The Coca Cola Company; and International Franchise Association.
Keynotes/general sessions are presented by: e*Restaurant from Altametrics; Pro*Act; Red Book Connect; SurveyMini by SMG and the Texas Restaurant Association.
Pillar sponsors include: Idahoan Foods, Sweet Street Desserts and Ventura Foods (Culinary); Red Book Connect (Entrepreneur); Smithfield Farmland (Ideas); and Fishbowl, MomentFeed, Paytronix and Single Platform from Constant Contact (Marketing).
The Monday night awards reception is sponsored by: Avocados from Mexico; Daiya Foods; Ovention; Sara Lee Foodservice; Segafredo Zanetti and Texas Pete®.
Coca Cola presents the Shake, Sparkle & Stir event, and Texas Pete® is sponsoring the MUFSO Kitchen Hero Cook Off, benefitting Share Our Strength’s No Kid Hungry Campaign.
Hot Concept/Best Concepts Celebration is sponsored by e*Restaurant from Altametrics; Golden Chain Awards are sponsored by SurveyMini by SMG.
MUFSO App is sponsored by Qualisoy; MUFSO WiFi is sponsored by ROSnet; and Conference Pen is sponsored by CSM Bakery Products.
Refreshment breaks are sponsored by Royal Cup Coffee and Wrigley Foodservice.