Those kooks in white. Chicago is about to outlaw the sale of foie gras. So what are some of the city’s big-name chefs doing? Convening a Festival of Foie Gras, of course.
In a nose-thumbing the Chicago Seven would have loved (the political pranksters who disrupted the city’s 1968 Democratic Convention, for the sake of persons not of a certain vintage), 13 culinarians are holding a $150-a-plate event on July 11, roughly two weeks before the ban takes effect.
The baker’s dozen of cooks are all members of Chefs for Choice, a group that has already commenced a petition drive to thwart the ban. Proceeds from the Festival will be used to fund Choice’s opposition efforts.
“Many consider this food a delicacy,” the group said in its widely broadcast invitation to the July 11 bash, “but animal-rights advocates decry it as a product of inhumane treatment.
The chefs who have agreed to cook at the event include such local stars as Paul Kahan of Blackbird and Avec, and Dean Zanella of 312 Chicago. They’ll be joined by such out-of-towners as Jean-Francois Suteau of the Adophus Hotel in Dallas, and Hubert Seifert of Spagio in Columbus, Ohio. The dinner will be held at Allen’s – The New American Café.
Chicago is believed to be the first city in the nation to outlaw foie gras.
Tuesday, June 27, 2006
Those kooks in white. Chicago is about to outlaw the sale of foie gras. So what are some of the city’s big-name chefs doing? Convening a Festival of Foie Gras, of course.
Monday, June 26, 2006
While Nelson Peltz has been badgering other corporate chiefs to put their companies into buff financial shape, the activist shareholder has apparently let his own company lapse into Homer Simpson. On Friday, Standard & Poor’s gave Peltz’s Arby’s Restaurant Group a B+ credit rating, “with negative implications.”
Translation: The fast-food franchisor isn’t doing nearly as well as it was a year ago, but it’s not doing terribly, either. Best keep an eye on it, creditors and note holders.
The rating “is based on operating performance and credit measures that are well below expectations,” S&P anayst Robert Lichtenstein commented in a release. The rating service said it had expected the franchisor’s performance to improve, given the efficiencies it would likely realize from the acquisition of RTM Restaurant Group, a major franchisee, during the prior 12 months.
I would’ve called Peltz for a comment, but I’m more likely to secure a racquetball date with the Pope.
S&P said it expects to meet with Arby’s new management team to review a plan for improving operations. Golf-industry veteran Roland Smith was named the new president of Arby’s earlier this month by Peltz’s Triarc Cos.
Having your plan reviewed must be quite a switch for Peltz, who has pressed for significant strategic changes during the past year from Wendy’s International and the parent of Cracker Barrel, among other big-name concerns. The day before S&P issued its rating, Peltz’s Trian Group filed the necessary government documents to mount a proxy fight for five seats on the board of industry supplier H.J. Heinz, in which Trian holds a 5.5-percent stake.
Sunday, June 25, 2006
Two towns in northern California, less than 42 miles apart, yet a solar system distant in terms of what happened in each last week. Sorry to sound like Rod Serling, but whoever holds the rights to “The Twilight Zone” could have a good case against whomever—or whatever—was responsible for the creepy differences in how the burgs’ City Councils flexed their authority Wednesday. Consider the facts (best recited to yourself in a Vincent Price voice):
In Oakley, Calif., reported the nearby Contra Costa Times, local officials worked on a plan “to attract and retain
new businesses, sales tax revenue and job-producing industries.” Specifically, said the Thursday news story, the City Council is drafting measures to attract “desirable businesses”; among the operations mentioned in the story as welcomed imminent arrivals were a Straw Hat Pizza, the area’s first Starbucks, and a Wendy’s.
"We are getting on national retailers' radar screen," assistant city manager Karen Majors was quoted as saying, with inferred enthusiasm.
At the very time Oakley was borrowing the Bat Sign to flash “Welcome, Businesses!” across the clouds, nearby Oakland, Calif., was working itself into a froth over foam. It’s bad enough that some people were tossing their polystyrene fast-food containers in the streets of Jack London’s hometown. But kids were wolfing down burgers and pork fried rice that could conceivably have picked up chemicals leached from the Styrofoam by the food’s heat. And what about the threat to fish that feed in the Bay? You can see shreds of the takeout boxes floating everywhere.
Civic fathers decided something had to be done to protect residents. So they simultaneously banned polystyrene and mandated that ready-to-eat food sellers exclusively use biodegradable wraps and containers as of January. And this came after the city voted a few months ago to levy a tax on fast-food places, to pay for litter pick-up.
To their credit, the City Council specified that a switch to compostable materials would be required of restaurants only if the changeover would not cost establishments any more money. For that provision, the members should get a free weekend in Oakley.
While there, perhaps they could do some thinking. If you’re a business looking to extend your territory by opening new branches, where would you go? A place that welcomes you as part of a larger effort to increase tax revenues, spur the local economy, and put more people to work? Or one that hits you with a special tax because some of your customers don’t obey the law? And then follow up with, “No-go on that container, good neighbor. Hereabouts, you use a type we’ve decided is better for your customers.”
Which town is going to get your next site?
Then again, that’s assuming Oakland wants chain outlets in the first place, as Oakley has eagerly attested. Plenty of areas have enacted measures to fend off the big national brands, usually by banning businesses that follow a format. Those measures are championed as sure-fire ways of maintaining a locale’s unique character. But, for some strange reason, they tend to be championed by the local businesspeople who would compete with the incoming chains.
But let’s give Oakland the benefit of the doubt and assume its City Council truly wants the best quality of life for residents. If that’s really the case, I think it should also do what’s right for the restaurant operators and employees who live and work there.
Instead of banning polystyrene and mandating biodegradable packaging, why not lead restaurants to do so, by waiving the trash tax for any establishment that voluntarily makes the switch? The foam faulters would be happy, the restaurants would be happy, even the fishes would swim with a jauntier flip to their fins.
The real difference between the two towns is not their attitudes toward businesses, but the willingness of one to rely on incentives, while the other is focused on censure.
Which is the better place for business, from the standpoint of the resident as well as the entrepreneur?
Wednesday, June 21, 2006
Maybe I’m just a late bloomer, or perhaps it’s a function of not living near Houston or a satellite Enron office. But until yesterday, I’d never known an acknowledged white-collar criminal. Joe Micatrotto is the first acquaintance of mine to be facing jail time.
It’s all a little weird, even with the lead-up. It must have been two years ago that reports first surfaced of a glaring impropriety. Joe was accused of listing himself on the deed to a house in Italy that had actually been purchased and maintained by his employer at the time, Buca Inc., parent of the Buca di Beppo family-style Italian chain. That facility—ostensibly a training center for Buca’s chefs, but actually a prop intended to give the peasant-themed Buca a dash of authenticity—was something that Joe seemed to view with great pride. When he spoke about the house, you had to hold back the obvious comment that he was merely copy-catting what Olive Garden had done years earlier to make its Florida-developed menu seem more Florentine.
But you make concessions for good guys, and Joe certainly was one. He volunteered readily for industry events, and would pick up the phone when a reporter called. I’d met his wife, and she and he had even cooperated on a difficult story we’d run at Restaurant Business, the magazine where I served as chief editor before rejoining Nation’s Restaurant News. The article aired the unpleasant truth that being married to a restaurant executive isn’t easy, given the long hours, incessant travel, and intense pressures that are inflected on most foodservice higher-ups. Joe’s wife had spoken freely about how she’d sharply felt those negatives early in their relationship, and how she’d felt somewhat trapped by the life.
To illustrate that point, we photographed her in a jail setting, behind bars.
And now, of course, it’s Joe who’s likely heading toward incarceration. He pleaded guilty on Tuesday to fraud charges, stemming from shenanigans that make me ashamed. He was accused of working in cahoots with a supplier to bill Buca for $65,000, which offset what the vendor had given Micatrotto to repay debts on a restaurant he owned. Technically, he’d also violated stringent new financial disclosure requirements, which makes him the first executive in the country to be convicted under the much-cursed Sarbanes-Oxley statutes.
I know this is very politically incorrect, but I feel sorry for Joe. He was once honored with industry awards, and stood on stages with some of the industry’s greats. Many of the trade’s big names called him friend and colleague, and he was featured in the pages of Nation’s Restaurant News just weeks before his guilty plea was entered. And now he’ll likely never know that industry esteem again.
But, lest you think I’m about to bake a file into a Buca meatball for delivery on visiting day, I can’t shake the memory of what happened when accusations of serious wrong-doing were first leveled against Joe. I wrote an editorial for Restaurant Business at the time, noting that the industry shouldn’t righteously smirk at Enron or Tyco when it had its own steamy scandals. I mentioned Joe by name in the column.
Not long after the editorial appeared, I was working late one night at Restaurant Business. Coming back from a soda-machine run, I found a voice-mail message, angrily blasting me for suggesting Micatrotto was involved in a scandal, and chastising me for not speaking with him before putting something like that in print. If I had tracked Micatrotto down, the caller said, I’d have learned that he was a victim of circumstances. And how could he have ever regarded me as a friend? It was Joe, and he left his number, challenging me to give him a call.
So I did. I think he figured I’d left the office long ago and wouldn’t find the message until the next morning; he seemed a bit nervous when he answered his home phone and found me on the line. I told him I had to report what the authorities were saying, but I’d welcome his side, if he’d give it. He demurred, strongly suggesting he really couldn’t say a word because of legal complications. But he never backed away from his assertion that the problem lay in the circumstances, not in his behavior.
And now he’s pleaded guilty to actions that were worse than the accusations I’d reported.
Regardless of what he actually did, or how truthful he was that night he called, I wish him well. If there’s a positive aspect to this, it’s that this might be the vigorous body shake that convinces Joe to change whatever landed him in this mess, and to move on, positively.
Tuesday, June 20, 2006
If theater, David Letterman and cheap knock-offs of expensive watches aren’t enough to pull you to New York City this summer, consider the draw that came into focus last week for restaurateurs. In a single day, three local grab-and-go brands—all small, all relatively inexpensive, and all growth-minded—simultaneously revealed they’re about to see if a concept that makes it here can indeed make it anywhere. All three snagged news coverage with revelatons they’re about to expand, maybe big-time.
New York has hardly been a crucible for mass-market restaurant chains, T.G.I. Friday’s notwithstanding. But what makes last week’s developments truly interesting is what they say about the state of the industry west of the Hudson. Once upon a time, chain concepts were hatched and refined in places like Columbus, Peoria and Plano, where the population was far more mainstream and consistent with national norms. If you had a restaurant that generated lines in Bloomington, chances are it’d do well in Springfield, Lakeland and probably Bakersfield. By virtue of satisfying locals, the concept would be more attuned to that big hump in the bell curve of American tastes.
Then, if you were lucky, you could eventually push the brand into high-volume but notoriously snooty enclaves like New York, San Francisco and Seattle.
But last week’s events suggest that the heartland's growing sophistication is reversing the process. Now style, or at least upscale refinement, is what plays well to the broad market, vis-à-vis Panera, Starbucks and Chipotle. And that means importing the sort of places where pinky-benders along the coast might park their Pradas for lunch.
Of course, the flurry of announcements signaled more push by entrepreneurs here in New York than pull from would-be beret wearers in middle America. But the aspiring exporters must believe the qualities that made their upstarts popular in New York—freshness, quality and a perceived point of difference—will play well in Peoria.
And, certainly, the fledgling chains have been embraced locally. Mention Chop’t to anyone who works near the two existing units, like the one a few blocks from Nation’s Restaurant News’ headquarters, and you’ll get the reflexive response, “Oh, the place with the lines out the door?” My wife eats at the downtown outlet every day, and you’re talking about a person who should be used by mystery-shopping services to calibrate merciless criticism.
The concept features tossed-to-order salads served in a bowl or as a wrap, as do any number of competitors near the two existing stores. But fans (read: wife) insist the point of difference is the quality, for which they acknowledge paying a significant premium over what they’d fork over in the other places.
Blockheads describes itself as a purveyor of San Francisco-style Mexican food, but most aficionados know it as that burrito place with the puppets (the chains associates itself with a group of monkey-like stuffed mascots, who look like something Grandma might have knit just as she was going 'round the bend). Margaritas are also a big part of the draw.
Blockheads recently hired John Haywood, the Carrols and Metromedia veteran, to help the concept grow beyond its current six locations.
Meanwhile, The New York Times reported last week that a stock offering could be imminent for Starwich, the brainchild of two local entrepreneurs who worked for B.R. Guest, a collection of well-known independents in the city and elsewhere. Starwich’s specialty is high-quality lunch fare, including a pomegranate-juniper glazed-chicken sandwich, and a citrus-duck salad. It currently has nine outlets, including two in airports, two in Boston, and five in New York. The brand’s website suggests that Starwiches will soon be opening in Philadelphia and downtown Washington.
Thursday, June 15, 2006
Service sensibilities will likely collide with business imperatives again this summer as scenic restaurants contend once more with lingerers—customers who don’t understand they rent a table rather than buy it.
For restaurateurs, it’s a no-win situation. Parties settle into their seats to soak up the view or dig into the conversation long after they’ve stopped actually eating and drinking. Hospitality is almost a reflex for operators, so they’re loath to mar an otherwise memorable guest experience by hustling lingerers out the door. Yet as long as un-buying butts are nestled in the cushions, the cash register isn’t clanging. Proprietor, server and waiting guests all lose, big time.
So what are operators to do? Are they within their rights if they ask a slowpoke party to mosey along after everyone’s finished their meal?
We posed that question to the industry via this week’s Nation’s Restaurant NewsWeekly Newsletter, which was broadcast on Monday. It was also posted on our website, www.nrn.com, about one screen down.
There wasn’t a consensus, but a sizeable majority agreed the table squatters could be asked to grab a mint and move on—under certain conditions. If other customers are waiting, and if the bill wasn’t an exceptionally large one, or if you’d be closing otherwise, then, sure, give ‘em a nudge—as long as you do it with a tact that would make Chip and Dale break into golf claps.
As one respondent put it, “This is a tough question because the answer is, It depends.”
And, even with all that deliberation and care, you may still lose a guest.
“If I were having a pleasant time after a meal, enjoying lengthy conversation, and I was asked to leave, you can be sure I wouldn’t return to that place,” commented another anonymous responder.
“A restaurant has the right to ask anyone to leave,” Anonymous concluded. “Whether it’s good business practice is another question.”
The safest option, two respondents suggested, was drawing the party away from their over-used table, but still keeping them in house and happy. “This is the reason lounges were invented,” said Jill Vose of the Quincy Marriott. “I invite them to join us in the lounge.”
“I don’t think you can ask customers to leave,” wrote Gus Gregory, who gave his business affiliation as GGA. “[But] you can invite them to have coffee, dessert and conversation in the dessert room, garden patio, etc.”
And then there’s the counterpoint, perhaps best expressed by yet another anonymous responder. Here’s his/her advise, presented here in full: “No.”
Wednesday, June 14, 2006
Burger King apparently doesn’t like the restaurant industry, or at least not its bench of would-be leaders. Why else would the fast-food giant reach outside the trade one more time to fill a nosebleed-level corporate perch?
Yesterday the Home of the Whopper announced it’d hired a rental-car vet to tend its core market, the continent of North America. Hire-ee Chuck Fallon, who starts as North American president on June 19, presumably thinks of a grill as that piece of chrome on the front of Budget and Avis vehicles, which he flogged as executive VP of revenue generation for Cendant Car Rental Group. He may not know his kitchen equipment, but he does know John Chidsey, BK’s chief executive and Fallon’s new boss. Same as the old boss, actually; before being hired by Burger King, Chidsey was chairman and chief executive of Cendant’s $5.9-billion rental operations, overseeing Fallon.
Chidsey, in turn, had been brought into the chain to run Fallon’s designated Burger King-dom (called The Americas at the time) by then-CEO Greg Brenneman, an industry newcomer who hailed from the airline business. Brenneman had been given the BK crown by the trade novices who bought the chain from Diageo, a British distiller denounced by franchisees for its doh! approach to the U.S. restaurant business.
Given how poorly the chain had fared under Diageo, you’d have thought the new owners would pack BK’s C-level floor with ketchup-blooded industry lifers. Instead, with few exceptions, the ownership consortium opted for up-and-comers from other fields, apparently betting that fresh perspective would more readily yield a fresh start for a fortysomething brand.
The indications thus far suggest they wagered astutely. BK’s marketing is so intensely focused on young males—the prime market for the chain and many of its competitors—that the ads leave not-so-young males like me in the same state of bafflement I saw in my parents when they heard my Dylan records. We old timers would say the brand has cut through the clutter, even if we don’t understand how bucking rodeo chickens induce more 19-year-olds to buy chicken sandwiches.
By looking beyond industry-steeped recruitment candidates, BK has been able to find candidates with expertise in standard restaurant disciplines, like marketing, but decidedly different perspectives. In announcing the addition of Fallon, for instance, BK noted that he has deep experience in franchising, the basic set-up of the rental-car business. But the endeavor is practiced much differently in that realm. For instance, it’s hardly a mom-and-pop endeavor, just as restaurant franchising is no longer a matter of granting rights to a unit or two.
The travel trade also deals with a far more varied clientele, serving consumers from around the world. Would anyone dispute that BK’s customer base, even just in the U.S., is diversifying at a dizzying clip?
There’s a temptation to slag the inductees from other fields. After all, this is our industry; how could it not abound in the best candidates for our own trade’s jobs?
But attitudes forged outside the usual trade upbringing can provide a freshness that translates readily into innovation and nonconformance. It’s worked for BK.
The question is, will other restaurant companies be tempted to peek beyond the industry’s boundaries as well?
Monday, June 12, 2006
I tried the future for lunch today, but found it to be a lukewarm burrito.
Yet I’m still lauding Chipotle Grill for making appreciable progress toward that Holy Grail of web-minded restaurant chains, online ordering. From the very moment Al Gore invented the internet, lunch-heavy concepts have eyed the medium as a way of churning more orders through their packed restaurants during the midday crunch. Yet only the last season of “The Sopranos” has generated as many so-what’s. The outlets learned the bottleneck wasn’t taking more orders, but fulfilling them, and online placement did nothing more than increase the backlog. Without a payback in saved time, web-surfing customers saw little benefit other than being able to order lunch while monitoring their eBay bids. They still had to contend with the throngs at the restaurant, which meant either waiting in line or drawing murderous stares from traditional customers gathering cobwebs in the queue.
Undaunted, Chipotle decided to take its stab at simultaneously boosting production and cutting wait times through online ordering. Even its online introduction of the service is unusual. When you’re visiting the website, as I was last night, looking to verify a fact about the chain, a foil-wrapped burrito floats zeppelin-like across the screen, emblazoned with the enticement, “DON’T STAND IN LINE/click here.”
Click on the flying burrito and you’re zapped to a screen introducing Chipotle DSL, defined as Don’t Stand in Line. The explanation of DSL amounts to nine words: “Now you can order online from your favorite Chipotle.” Truthfully, that wasn’t enough of an orientation for me; it wasn’t clear that I’d stumbled onto a page where I could enter an order by word of mouse. If I didn’t work for a restaurant publication, I doubt I would have gone any further.
But as a lapsed Chipotle customer who no longer goes there for lunch because of the time-zone-crossing line snaking up to the counter, I’m glad I did. After working my way through a fairly standard online registration form, I was invited to input my zip code, which gave me a list of nearby Chipotle units, or at least ones some wizard applet adjudged to be close. In reality, some of the cited stores were miles away, too far to hit even if I fired up a jet pack outside my building. But I did have a choice, so I found the outlet that is truly closest to me, and clicked on its street address. I could also specify the exact time I wanted to pick up my meal.
Finally, I got down to placing my order, first by selecting a bol (Chipotle-ese for “bowl”), and then transporting to a screen that depicted the chain’s behind-the-counter assembly line. By clicking on ingredients, I built my burrito-in-a-bowl, then perused other options, like sides and beverages. I also had the opportunity to compose any custom instructions or special requests.
At the end of that stage, I was given a number to call 10 minutes after placing the order online. An on-screen message warned that the order wouldn’t be prepared if I didn’t call.
So I did. The person who answered gave me the impression I was calling a general number for the store, not one reserved for cyber-patrons. She also instructed me to walk to an inside window when I visited the restaurant at my requested pick-up time.
Convinced the system wouldn’t work, I’d specified a time of 11:50, when the line presumably wouldn’t be too lengthy. If my online order had disappeared into the ether, or I had to wait in a queue to pay for it, at least I wouldn’t waste a half-century. The situation wouldn’t be a total disaster.
I got to the store exactly at my pick-up time, and found it already packed. Eighteen people were in the License Renewal-caliber line, and there seemed every certainty I’d be Number 19.
But then I spied it: A walk-up station far in the back, under a sign that read “Faxed-In Orders.” With only one customers waiting in front of it.
I headed back, teary-eyed with relief and joy. A minute and $7.38 later, I was out of there, though not without snagging a few die-a-painful-death stares from the people on line.
The burrito, which was taken already bagged from a holding cabinet, could have been much, much hotter. The paper sack that held it had been stapled shut, so I didn’t know to pick up disposable utensils on the way out.
But the experience was a good one, and that unit will get business from me specifically because of the online ordering option.
It’s not perfect. But Chipotle did squeeze at least one more order out of its lunch rush, with far more likely to follow.
Sunday, June 11, 2006
The past week didn’t bring a dynamite single story about the restaurant business, but seldom has a seven-day stretch yielded as many news cherry bombs. Though subtle, they’re a collective nod the trade is changing monumentally, an inch at a time rather than in head-turning bounds.
Consider the turn signals that were flicked for menus, for instance. A scan of the headlines in the Breaking News section of our website shows that Panera Bread is courting Mom with new kids’ meals that incorporate organic and so-called natural components. The disclosure by the fast-casual darling is a follow up to the news a few weeks ago that it plans to add a pizza-like dinner item made with organically grown tomatoes.
In and of itself, that’s an interesting but hardly pulse-quickening development, given that Panera has yet to reach the market-making status of a McDonald’s or a Taco Bell, which can fundamentally change a product’s supply and demand macro-dynamics with a mere recipe tweak. (Before Claire Babrowski left McDonald’s upper ranks for the fast track to the chief executive’s job at Radio Shack, she bemoaned having the power to create a global sesame-seed shortage merely by changing the specs for Big Mac buns.)
But the week also brought an announcement from Chipotle Grill that it was switching to the use of natural chicken in more of its markets. Judging from what chain officials have indicated in the past, the move signals a step up in the availability of additive-free chicken. And the more that production increases, the more likely consumers are to embrace the product, the more likely producers are to accommodate the burgeoning demand, the more readily Chipotle and other chains can put the unadulterated protein on their menus. Each convert minutely tips the sale to that critical point where production takes off, and the price puts the option within reach of low-priced mass marketers.
Meanwhile, a farmers’ cooperative from North Dakota has begun to open restaurants where members’ meats and produce will be showcased alongside organic greens and other farm-to-fork proteins. They chose Washington, D.C., as the site of their first Agraria, but say they’re apparently already considering a duplication of the high-end eatery.
And that’s not the end of the push toward more wholesome, unprocessed, organic or sourced-by-growing-region foodstuffs. Local newspapers reported in recent days that McDonald’s supplier Paul Newman, who apparently also makes movies, is opening a restaurant this summer in a Westport, Conn., theater in collaboration with Michel Nischan, a chef and cookbook author known for his support of sustainable agriculture. Called The Dressing Room—Newman’s Own, A Homegrown Restaurant, the establishment will feature naturally grown and artisanal foods from local farmers. It’s one restaurant, in a town considerably off the beaten trail. But attach Newman’s name to it, and you can count on publicity, of the restaurant and its cause. You can already find coverage in newspapers thousands of miles away.
Those developments would seem to me like mere one-offs—just a series of coincidences—if it weren’t for a chain menu makers’ roundtable I recently moderated on health and nutrition. To a person, the participants attested that “health” is being equated more and more by consumers to “natural.” And nearly every one of the menu-writing participants, as you’ll read in the full coverage in an upcoming issue of Nation’s Restaurant News, believes they’ll soon have organic items on their menus. Indeed, one already does, and others readily cited peers who are already testing non-adulterated and additive-free items on mass-market menus.
They declared with assurance that issues of availability and price are about to be overcome, and that organics would soon become a staple on the menus of even the largest restaurant chains.
The tipping point, they said, was Wal-Mart’s directive to its food suppliers that they begin cultivating organic foodstuffs now, on a scale that could feed the giant retailer. That demand, the menu makers said, will justify the investment on the part of growers and processors in the wide-scale farming and ranching of organics. Factory food will be out, and natural or organic fare will be in, with its origins spelled out to an extensive degree.
But that trend is only one of the shifts that was nudged further along in the last week by individual developments. In the days ahead, maybe there’ll be time and space to look at some of those other currents, including the notion that honesty is making a comeback, be it in the way corporations are run, or in a resurging interest on the part of chefs in the simplest of fares, like burgers and hot dogs.
Friday, June 02, 2006
Get a whiff of the next consumer-liability issue that could put restaurant noses out of joint: Workplace scents and odors.
A group in Canada is already pushing for a ban on perfumes, air fresheners and other scents in restaurants and other public places, with some success. Asserting that the smells could trigger asthmatic attacks, advocates convinced the health committee of Ottawa’s civic council to vote yesterday on a prohibition. The panel balked at an outright ban, but did approve an initiative that would require municipal facilities to adopt a no-scent policy. The proposal, which now moves to the full council, also calls for the city to mount a publicity campaign that discourages people from using perfumes, colognes or other scents in public.
Opponents have said the awareness program could cost $100,000, to address a possible occurrence among the 2% or so of the population that is allergic or sensitive to the chemicals used to create fragrances or scents.
If this sounds like a quarterback-sneak of a victory by a group of whackos, keep in mind that Canada has lately been an early adopter of concerns that have since emerged as major issues for American restaurateurs. Food allergies, for instance, were a top-of-mind issue to the north back in the 1980s and ‘90s. And trans fats are far more pointed of a concern there, and have been for at least the last year.
This is a matter that could be coming south. And, from your standpoint, it could really stink.
Handicapping a restaurant stock involves far more these days than merely understanding unit economics, if a recent analysis of Buffalo Wild Wings Inc. is any indication. In the widely reported assessment, Keystone Capital Markets stockpicker Conrad Lyon noted that the chicken-wing chain’s share price had slipped about 10% during May because of investors’ concerns about avian flu and gas prices. But Lyon is more than a little bullish on the stock, in large degree because of LeBron James and his winning teammates on the Cleveland Cavaliers. The NBA squad played 13 post-season games before it was eliminated by the Detroit Pistons in the playoffs, as opposed to none last year, and almost a fourth of Buffalo Wild Wings’ units are located in Ohio, where the concept was founded. Ergo, more time spent eating the chain’s chicken wings during games, and perhaps more celebrating in the outlets afterward, yielding what Lyon forecasts as a 1 to 2-cent earnings increase for the company’s second quarter.
Regardless of how you feel about Nelson Peltz and his attempts to armchair-quarterback companies, you have to respect the foursome he could put together for a golf outing. The activist shareholder alerted the investment community this morning that he’s proceeding with efforts to put five associates on the board of foodservice supplier H.J. Heinz Co., including longtime partner Peter May and son-in-law Edward Gardner. In the process, Peltz revealed that there’s a new member of his posse: pro golfer Greg Norman, known during his competitive days as The Great White Shark. Reports of Peltz trying to buy rights to that title are totally unfounded.
Ditto for the suggestions that Peltz’s team plans to challenge executives on the links for control of their restaurant companies.
The final member of the nominee slate put forth by Peltz’s Trian Group would also be a welcome addition to any golfing party. He’s Michael F. Weinstein, the one-time CEO of Snapple, Royal Crown and Mistic. Who better to have in your outing than someone who appreciates having a beverage or two?