sha505: meeting the challenges of foodservice management ... · snatching success from the jaws of...

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SHA505: Meeting the Challenges of Foodservice Management School of Hotel Administration, Cornell University © 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners. 1 Hello, I am Professor Mutkoski, and I want to welcome you to Meeting the Challenges of Food Service Management. You are taking this course either because you are currently in food service management, or you are planning to be. Food service management is one of the most demanding and complex careers one can choose, but also one that can be very rewarding, for both personal satisfaction, and from a monetary standpoint. Making several hundred people happy for breakfast, lunch, or dinner really does make all the preparation worthwhile, and gives one a feeling of accomplishment. After all, we are in the hospitality business and we provide not only sustenance in the way of food and beverages, but we orchestrate the experience as well. It is a great business to be in, but it is a complicated business to run successfully. This course and the ones that follow are designed to look at the complex food service operations with a very systematic approach. Understanding why things happen is essential to improving a system or operation. As managers, you will spend a good deal of your time analyzing your operation. My wife still gets upset when we go out to a restaurant and I start to click into the analysis mode and say, “hm, let's see, if they just move that service stand over there, and change the flow from the kitchen a little, they wouldn't have that bottleneck in service.” Figuring out why something is happening is critical to improving the situation; once you know why, you can apply certain remedies, use various tools and management techniques, which will make operating a food service business much more profitable and enjoyable. I hope you thoroughly enjoy this course, and it helps you conquer some of the major issues and challenges facing the food service industry today, and in the future. Factors for Restaurant Failure For the small business operator or entrepreneur desiring to enter the industry, the fact that 67 percent of new business entrants fail within the first four years is alarming. This highlights the importance of having appropriate information surrounding the reasons for success and failure for similar business enterprises in the geographic area that you are planning to enter. Needless

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Page 1: SHA505: Meeting the Challenges of Foodservice Management ... · Snatching Success from the Jaws of Failure Here is an example of how factors that cause failure can be realized and

SHA505: Meeting the Challenges of Foodservice Management School of Hotel Administration, Cornell University

© 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.

1

Hello, I am Professor Mutkoski, and I want to welcome you to Meeting the Challenges of Food Service Management. You are taking this course either because you are currently in food service management, or you are planning to be. Food service management is one of the most demanding and complex careers one can choose, but also one that can be very rewarding, for both personal satisfaction, and from a monetary standpoint. Making several hundred people happy for breakfast, lunch, or dinner really does make all the preparation worthwhile, and gives one a feeling of accomplishment. After all, we are in the hospitality business and we provide not only sustenance in the way of food and beverages, but we orchestrate the experience as well. It is a great business to be in, but it is a complicated business to run successfully. This course and the ones that follow are designed to look at the complex food service operations with a very systematic approach. Understanding why things happen is essential to improving a system or operation. As managers, you will spend a good deal of your time analyzing your operation. My wife still gets upset when we go out to a restaurant and I start to click into the analysis mode and say, “hm, let's see, if they just move that service stand over there, and change the flow from the kitchen a little, they wouldn't have that bottleneck in service.” Figuring out why something is happening is critical to improving the situation; once you know why, you can apply certain remedies, use various tools and management techniques, which will make operating a food service business much more profitable and enjoyable. I hope you thoroughly enjoy this course, and it helps you conquer some of the major issues and challenges facing the food service industry today, and in the future.

Factors for Restaurant Failure

For the small business operator or entrepreneur desiring to enter the industry, the fact that 67 percent of new business entrants fail within the first four years is alarming. This highlights the importance of having appropriate information surrounding the reasons for success and failure for similar business enterprises in the geographic area that you are planning to enter. Needless

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SHA505: Meeting the Challenges of Foodservice Management School of Hotel Administration, Cornell University

© 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.

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to say, the entrepreneur must be knowledgeable of factors that correlate with success and failure of restaurants in a given market area. The entrepreneur should ask: "What exactly are the indications of success and failure, so I can plan accordingly?"

More Factors for Restaurant Failure

There have been a number of studies on failures of small business. In general, some of the common reasons for failure of small businesses were found to be the lack of specific target market, poor location, ineffective advertising and sales promotion, under-capitalization, inability to compete in trading area, and poor financial controls. Overall, the two most common themes that emerge are: ineffective financial controls and marketing strategies.

Market Assessment Factors for Restaurant Failure

Many factors must be considered under the category of poor market assessment. They may all stem from not devoting enough time and money to the initial planning stages. To save money, companies often use their own intuition to make judgments about the market, instead of seeking the services of professional firms who can provide a thorough demographic and psychographic market analysis.

If a thorough market assessment is not done, it is easy to see how a mistargeted concept can fail because it is not embraced by the local market. This happens even to large, successful companies.

Not long ago, Bertucci's Inc., an 80-unit Italian chain located in the northeastern United States decided to expand into Chicago and Atlanta. It seemed logical to the corporate office, since both cities have dense population bases and plenty of ethnic restaurants. After struggling for several years in both locations, the company has closed the six restaurants they opened in Atlanta and expansion in Chicago is now on hold. The reason, according to one report, is that people outside of the Northeast didn't understand the concept. The lesson to be learned is that just because a company is large and well established doesn't excuse its management from doing their homework.

Name as a Factor for Restaurant Failure

Wrong name: A restaurant's name plays an important role in identifying the personality of the restaurant. It gives customers a clue as to the restaurant's cuisine and décor. A restaurant is the sum of its parts, and the name gives identity to those parts. The wrong name sends the wrong message, and confuses potential customers, regardless of the quality of the restaurant.

Snatching Success from the Jaws of Failure

Here is an example of how factors that cause failure can be realized and addressed:

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SHA505: Meeting the Challenges of Foodservice Management School of Hotel Administration, Cornell University

© 2015 eCornell. All rights reserved. All other copyrights, trademarks, trade names, and logos are the sole property of their respective owners.

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A prototype restaurant called Margarita's opened in a major city in upstate New York. Months after opening, the restaurant was not even close to the projections in the business plan. Customers coming in had great things to say about the food and service, but even with significant investment in advertising, the restaurant was not drawing the numbers it should from a rather large population base. They finally hired a marketing research firm to determine the problem. The firm conducted surveys in the area, which showed the name evoked the incorrect image in the minds of people who had never been there. They thought the name indicated the food was Mexican and that it was hot and spicy. The actual menu of Margarita's was Southwestern with barbecue ribs, beef, chicken, and so on.

The marketing firm then conducted research on new names to see what impressions they created in people's minds. Galveston's, a Texas Restaurant and Bar was the name that they came up with. At great expense, the restaurant was renamed and a new promotional campaign put into place. This move turned the failing restaurant into a success.

Poor Location Factors in Restaurant Failure

The saying, "we were located one block from success," has been repeated over and over by independent operators when discussing a failed venture. In hotels, we see outlets located several floors from success literally hidden away so the public has no opportunity to see them. It is always possible to point to exceptions, such as Michelin 3-star chefs drawing people to remote locations; however, the wise investor will avoid risky locations.

Having a poor competitive analysis of your area is also a factor in many failures. A weak competitive analysis doesn't really provide the true picture of the restaurant in the market area, and leads to poor decisions on concept, menu, and pricing.

Capitalization Factors in Restaurant Failure

Because the barriers to entry can be relatively low in foodservice, individuals often attempt to start a business without enough money to carry them through the startup period. So capitalization factors often become an issue contributing to restaurant failure.

Failure to establish the necessary capital structure often results in too little equity and too much debt tipping the scales to failure. When things get tight and you can't make that loan payment, the spiral downward can happen quickly. Poor business planning and poor investor relationships can also contribute to this reason for failure.

Poor execution of restaurant operations is also a contributing factor to failure. Even the best possible restaurant concept, name, and location cannot survive if the operation does not execute consistently meal period after meal period.

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Management Experience Factors in Restaurant Failure

Anyone with money can open a restaurant. Because most people eat three meals a day, everyone has some degree of knowledge about food. Sometimes a person's love of food gets him or her thinking how nice it would be to own a restaurant. This lack of management experience is a major factor in restaurant failure.

Without the appropriate level of technical skills throughout the operation, it is virtually impossible to provide the quality and consistency of food and service demanded by the public today. People simply will not come back if the food or service is not up to acceptable levels.

There are so many opportunities for things to go wrong in a foodservice operation: situations like purchasing the wrong quality of ingredients, food rotting in storage, overcooked food or other production issues, rude servers and other low-quality service, poor perceived value, and inaccurate pricing. With all of these potential problems looming, inadequate utilization of systems management processes hurts your chances of success. Unless each foodservice system is in place and functioning properly, guests will eventually notice the negative results.

Market/Environmental Awareness Factors in Restaurant Failure

The inability to create and sustain a service culture can be a decisive factor. Service is such an important part of the dining experience that even excellent food preparation cannot sustain a restaurant in most markets today without a well-trained and courteous staff to present it.

The failure to change and adapt to a changing environment is another factor in many restaurant failures. We live in a world where change occurs more rapidly than in the past. Restaurants close every day because they are left behind by their markets.

Failure to obtain information necessary to keep abreast of the restaurant's environment often plays into failure. Sometimes restaurant managers and owners are so accustomed to focusing on their internal environment that they fail to see the changes going on in their communities or with their competition.

Timing is everything—failure to act on available information is an important mistake to avoid. If a window of opportunity opens and the operator fails to act, there may not be a second chance.

Operational and Ego Factors in Restaurant Failure

Choosing the wrong type of operation: Statistics show that independents have a much higher failure rate than franchise or chain operations. Because the chains have developed the systems and support network, they are able to avoid or minimize the risk from many of the classic reasons for failure.

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SHA505: Meeting the Challenges of Foodservice Management School of Hotel Administration, Cornell University

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Ego: This applies to both independent and corporate ventures. After having attended hotel school seminars, executives who have been very successful in limited-service restaurants will often want to open a fine dining restaurant as well to satisfy their egos. They sometimes end up subsidizing those operations with the profits from their limited-service restaurants. It is not uncommon for hotel companies to install food and beverage concepts because their corporate VP wants to dabble in running a gourmet restaurant. These are subsidized by banquet sales. We may not close them but they are ego-driven failures.

Creativity and Leasing Factors in Restaurant Failure

Simply taking ideas or modeling the operation after those already in the marketplace without differentiating the concept, food, and service package shows lack of creativity. The copycat syndrome often fails because the operating costs of the new venture can be significantly higher than the existing competitor.

Independent operators often get into lease agreements that do not have the most favorable terms because they are so anxious to get going they accept the first lease agreement offered. This failure to negotiate acceptable lease terms straps them with an occupancy cost that is too high to manage.

Marketing System – Market Research & Market Analysis

It is the premise of this course that a successful food and beverage operation begins with a thorough understanding of the market. That includes the makeup of the customer base and the nature of the competitors in the marketplace. Once the research has been completed and the information analyzed, the findings should be used to drive the development of the concept, menu, service, and pricing models. In fact, it is the market information that influences the decisions that need to be made in each of the following systems. There are really two parts to the marketing system: market research and analysis and the marketing communications mix, which includes advertising, promotion, merchandising, and community relations.

Service System

No matter what kind of restaurant, successful establishments have service systems in place. A service system governs how you manage the customer experience, starting with the interactions they have with staff. From the service-systems perspective, the quick-service establishment shares similar goals and systems as a full-service establishment. People need to enter the facility, place orders, be seated, interact pleasantly with staff, pay their bill, and

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depart (although not necessarily in that order). Where foodservice operations differ is in the level of service and how the service is provided. These differences are derived directly from the needs and expectations of the target market or customer base. But the essentials of the job the service system must accomplish doesn't change: a service system manages every step of these interactions.

Human Resources System

Whether the foodservice operation is large and has a separate human resources department or is small and relies on the foodservice manager to perform the HR functions, this system is vital to the success of the foodservice operation.

The system is responsible for recruiting, interviewing, selecting, orienting, and training staff. It begins with an analysis of the labor needs, which are translated into job analyses and written job descriptions. In addition to staffing and scheduling, the system deals with employee evaluations and career development.

Menu Planning System

A foodservice operation is the sum of its parts. The food offerings, food style, and price must fit the concept. Customer perception of value is directly linked to what they see on the menu. So much is communicated about the establishment from your menu, it's no wonder so many restaurants display the menu in publicly-accessed places such as the front window, elevators, and in the lobby. The menu planning system is a way to make sure this critical element of your restaurant is designed with price, item variety, customer value perception, and the business's message clearly in mind. The menu is the foodservice operator's blueprint for success.

Purchasing System

The purchasing system is the first link in a series of systems that relate to product acquisition and movement through the operation. This system is critical because it establishes the standards to ensure that the operation is getting the products demanded by its clientele. When ordering food products that are grown or raised rather than manufactured, the variability in product quality, size, condition, and price is enormous. The purchasing system must be designed to control the variability in the marketplace. If the purchasing system breaks down in any way, the impact will be felt elsewhere in the operation.

Receiving System

The receiving system is a critical quality and cost control function that ensures that the products being delivered meet the specifications as ordered. Too often, proper receiving is neglected because the operation is too busy or because a receiving system is viewed as too

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costly. There are so many opportunities for loss to occur as a result of inadequate receiving that it is essential to have trained personnel and adequate equipment.

Storage System

The storage system may not be exciting, but its function is essential. It is the buffer in the system that allows restaurants to operate with variable demand and periodic deliveries. Proper storage temperatures along with a clean storage environment will extend product life, maintain product quality, and prevent bacterial contamination or bacterial growth. Proper rotation of stock and inventory management are part of the storage system functions.

Production System

The production system is comprised of all the activities involved in the conversion of the purchased ingredients into the finished menu items sold to the clientele. The production system adds value to the product through preparation and presentation. It is responsible for maintaining or enhancing product quality while controlling yield and cost. The production system strives to find the proper balance between process speed and quality by implementing standardized procedures and by organizing work flow in the production area. Production systems vary dramatically, depending on the type of foodservice operation.

Control System

The control system has two purposes: To prevent loss from occurring and to alert management when a problem exists.

Every system within a foodservice operation needs some form of control. Because all systems are interdependent, it is sometimes difficult to determine where the cause of a problem originated. The tools, safeguards, and monitoring devices implemented by the control system assist management to pinpoint the cause so appropriate action can be taken.

To prevent loss and achieve the returns forecasted, the control system must be fully functional. Product, people, and revenue all require some degree of control for a foodservice operation to be successful.

Management System

While each system within the foodservice operation will generally have one or more managers, the foodservice manager guides the overall operation toward its goals by establishing objectives, organizing and directing the workforce, and monitoring all systems to insure that they are fully functional and that they interact appropriately. There are two primary responsibilities in the management system: strategic management and personnel management.

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Marketing System – Marketing Communications Mix

The second part of the marketing system deals with all efforts to communicate with the customer and to position the operation in a favorable light within the community at large. It includes paid advertising, public relations, promotional activities, merchandising, and community-service interactions.

Measuring Success: A Customer's Perspective

Success is a broad term, and there are many different ways to look at and measure success. Yet one overriding factor remains clear: restaurant success depends on customers. It is crucial to understand what is important to your customers, and why they choose to eat out.

Why Customers Eat Out

Knowing why consumers dine with us at various meal periods and days of the week can help us work on the attributes that are most important to them. These are some of the reasons people cite for going to restaurants.

Why customers eat out:

Enjoyment Lack of time Convenience Close to shopping Traveling Business meetings Celebrations

One of the things you notice by looking at this list is that dining out is occasion-based, so dining rooms need to be geared to specific occasions.

Focus Your Efforts

A restaurant can't be all things to all people, so trying to sell to a broad audience often sends mixed messages. It is far better to focus on one occasion segment, and develop your whole service package around the needs of the people in that segment. Having an occasion-based customer orientation drives home the right message to the right target market.

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Factors Important to Customers

Based on the occasion for a dining experience, customers also consider a variety of factors when selecting a specific restaurant. Many of those are listed here, but you can probably think of others.

Appropriate portion sizes Professional and timely service Customer recognition Variety International or ethnic food Quality of food and beverage Consistent food and service Atmosphere Location Exceptional food Personality of the restaurant Restaurant's clientele Good value for the price Personal values of the owner expressed in the operation Staff anticipation of guests' needs Comfortable concept and service package Novelty (food and presentation) Convenience (parking) Unique food and décor

Once you determine which occasion segment you are targeting, you can further refine your efforts by understanding which of these factors are most important to your customers.

Different Approaches to Measuring Success

Success is also perspective-oriented: Restaurant owners, managers, and employees all have differing ideas of what constitutes success. Managers and owners have different yardsticks for measuring success than customers do. Here are some of the metrics they find important.

Cover counts: How many people do you serve during each meal period or day part?

Average check: How much does the average guest spend per meal in your restaurant?

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Food cost: What percent of revenue does your restaurant spend on the food and ingredients for the menu items?

Labor cost: What percent of revenue does your restaurant spend on the salaries, benefits, and other employee-related costs?

RevPASH: RevPASH is revenue per available seat-hour. The newer measurement will help you determine if you are maximizing the revenue in your restaurant.

Profits: How much money is left over after you have covered all of your expenses? Is it enough?

Return on investment: Restaurant owners want to recoup their start-up costs as well as turn a profit. Is the return on investment what was expected?

How Employees Measure Restaurant Success

When it comes to success, individuals often have a simple measure: their own financial rewards resulting from their performance. Staff often measure success based on their tip totals, and management measure success by the bonuses they receive for reaching strategic financial goals.

Don't Lose Sight of the Customer

Have you ever heard a customer say, "Let's come back to this restaurant because it has very low food cost"? No, of course not. So aside from the internal metrics used internally by management, you also need to consider factors that capture the satisfaction of your customer.

Customer loyalty: How often do your customers return? How long are they willing to wait for a table? How far in advance will they make a reservation?

Another good indication that your restaurant is successful is when customers recommend the restaurant to others or return bringing friends and clients with them.

Meeting your service standards, such as serving your guests in a timely and professional manner, is another way to quantify success.

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More Qualitative Measures of Success

Training your staff to provide effective service in the high-pressure restaurant environment is not easy, and hearing few customer complaints is a good sign of success. Success also involves meeting your food standards. This requires serving appropriate portion sizes, attractively prepared food, and meat cooked as requested and served at the proper temperature. If your employees enjoy working for you and employee turnover is minimal, your staff can be an excellent barometer of the organization's success.

Another sign that a restaurant is enjoying success is hearing a manager speak about the operation with pride.

Rich Melman's Key Factors for Success

Rich Melman has enjoyed 38 successful restaurant openings in the Chicago area. During a National Restaurant Association address, he defined the essential elements for success as follows:

Hire the right people.

"If you demand perfection like I do, your success depends on how well you hire, train, and develop employees. You can accomplish almost anything if you hire the right people."

Nurture employees.

"If you give people an opportunity to grow, to be entrepreneurial, they will stay with you."Understand that creativity is a slow process.

Understand that creativity is a slow process.

"We emphasize research and authenticity as major parts of any new creative project. That combination is what makes things last. For instance, when I started Ambria (a Northern Italian eatery), I went to Europe and learned about fine food. When the critics praised Ambria, it boosted my confidence tremendously."

Prepare before opening.

"Ninety percent of a restaurant's success is determined before you open the doors. You have to make sure the concept, location, food, service, training, and discipline are all as perfect as you can get before you let the first customer in. Discipline is what makes the work fun in my restaurants—if the food is not right, the fun is not going to work either."

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Don't let your ego get in the way.

"My seventh restaurant, Bones, was a big lesson for me. I tried to bring Houston-style barbecue out to the suburbs. It was the wrong crowd; people just didn't seem to like the menu. You can't listen to too many people initially—you'll lose focus. But after a certain point, you do have to listen to what people want."

Plan for Success

Creating a successful restaurant requires satisfying the sometimes-competing expectations of the customer, the employees, the managers, and the owners. Managing for success requires a systematic style to approaching your foodservice operation that builds a definition of success into your plans, rather than hoping for success as a lucky outcome of your hard work.

What are the key factors for restaurant success?

Think about what makes you want to go back to a restaurant over and over. What are the reasons that the dining experience is so enjoyable? From a customer perspective, it's about the concept, the atmosphere, the mood, the reception, the service, the food and the beverages, the tangibles and the intangibles. It's value, and it's the overall experience. It takes a lot of planning and preparation to put all the components together to open a successful restaurant. To be successful in the eyes of the consumer, and from a business standpoint, a number of factors must be present: A thorough market assessment; the operation must be sufficiently capitalized; experienced management must be present; a technically skilled labor force must be acquired; consistent execution must take place; the operation must have the capacity to change; and a systems approach to management must be implemented.

What are the signs of an appropriate market assessment?

The right concept. The concept is well defined. It is clear and it addresses market needs and expectations. McDonald's offers convenience and speed and low prices. The Four Seasons restaurant offers sophistication, prestige, a high level of service, and high prices. Both restaurants are successful, yet the contrast couldn't be greater. Yet they have one thing in common: they both provide the correct concept for the market they serve.

The name conveys the concept, theme, and food style. Joe's Stone Crab, Outback Steak House, The Four Seasons, Red Lobster, Le Tour Dijon, PF Chang's, China Bistro—all send a very

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different, but accurate, message to the potential customer. What message does Frank's Place send?

Location, location, location. Some restaurants thrive in malls; some in neighborhoods. Some chains look for suburban locations while others stick with the higher density of urban locations. The market and the concept influence the location decision. There is a delicate balance between occupancy costs and sales volume. Paying less but getting an undesirable location can be an obstacle difficult, if not impossible, to overcome. On the other hand, paying too much for a great location can also make it difficult to achieve financial success.

Management has not only identified their key competitors, but they have also analyzed their competitors' strengths and weaknesses so that they can take advantage of and develop a competitive edge in the marketplace.

How can you tell if a restaurant is well capitalized?

They have adequate capital to remain in business and build their customer base. The general rule of thumb for independence is that you need enough working capital to get through the first 18 months of operation. If you haven't gotten to a stable volume of business by then, you probably never will.

What does proper execution mean?

Standards are set and maintained. Customer satisfaction is measured continuously. Success is all about consistency, doing it right every time. Someone once said: In the restaurant business, there are two or three shows a day and the performances are critiqued by the audience at every meal period. There are no outtakes in the foodservice business: it's a live performance.

Why is experienced management important?

The definition of chaos could easily be: a foodservice operation without management. Managers put order into foodservice operations by planning, organizing, staffing, controlling, and directing. The seasoned manager has a good sense of how the operation is doing at all times. He or she monitors the pulse and rhythm of the operation, and is able to take corrective action before chaos occurs.

Why is a technically skilled labor force important?

The consumer is more sophisticated, more knowledgeable, and more demanding today than ever. Technical competence in both front of the house and back of the house is essential to meet the expectations of this more discerning consumer. When a guest orders a steak medium-rare, it is not acceptable for the steak to come out cooked to a different degree of doneness.

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When a whole fish is boned at the table, the server needs to be skilled enough to do the job properly.

Why should a restaurant have the capacity to change?

Nothing remains the same except death and taxes. Shifts in populations, changes in demographics and in local and national economic conditions require restaurateurs to adapt. Food and fashion and interior design change, as do peoples' likes and dislikes. Fads and trends are part of life and they offer opportunities to managers who are keeping track of their changing environments. Management must keep track of external forces which impact on the restaurant, and make appropriate changes on a timely basis to keep the operation successful.

Why is a systems approach to management important?

In foodservice operations, we are in a restoration business. We feed people. We make them feel good. We provide a pleasant, safe and secure environment for this to take place. It sounds simple, but even a quick look at the logistics required to do this reveal that it is indeed a very complex business system. There are so many inter-related components, which if they are not controlled, can have a negative impact on the guest and the operation. Breaking this complex system down into a series of related subsystems allows managers to concentrate their efforts on developing the best operating procedures for each part of the foodservice system. This makes the system more consistent and much more manageable.

What are the main factors that make your restaurant successful?

John Zillmer

Well, I think first and foremost is... it's a pretty obvious one, is quality of food. You know, one of the things that we've invested significantly in over the last fifteen years has just been the development of new concepts and new programs to fit the customer needs. And, I think, without it, you're just nowhere. And then the second element is excellent customer service. I think if you have those two elements—you have very good food and excellent customer service—you can be successful in virtually any kind of foodservice operation. Without one or the other—you can have great food and bad customer service—your customers just won't come back.

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Phil Kendall

Some people have three big things, some people have ten things, but there are five things for me. And quite frankly, the first one of these five never changes. And that is, I think, one of the most important elements—is that it's a clean and well-maintained space. And that has to do whether it's your restaurant, whether it's a bar, or whether it's a banquet, or anything. You know, we all have a dive that we love to go to for breakfast, but it's because it's either in our hometown, or we know it, or we're familiar with it, or we like it. That's not what people feel when they go to a restaurant in a strange city or in a strange hotel, or whatever. They want it to be clean. They want it to be well maintained. That's your first impression, and I think it's the number one thing.

Second to me—and for me this has probably moved up the scale, but it still has always been one of the big five—and that's value for price paid. The lion's share of our customers, and probably ourselves even when we think about it: Hey, we don't mind paying, we just want to make sure that we're getting the right value. You know what? That's across the board. Whether that's a high-end experience or whether that's a quick, to go, kind of coffee experience.

The third thing, and this may sound odd for people, is: Hey, it's service and product. How good can be we at service? What can we do about service that's sort of makes us different, you know? What part of our service is that point of difference that we like to talk about? And you know what? Service is funny because, again, you have this incredible range. You've got great white tablecloth, sophisticated, again, overused kind of term, service, right? That really, in my mind, means really practiced people doing exactly what we would expect to happen in that environment. And then, the other side of it is, again, what is that service like at that breakfast bar? So, is service appropriate, or is your service, rather, appropriate for whatever theme, or whatever concept you are rolling out there.

The other side of that, of course, is: Hey, what am I selling? And again, I think that most of us think in the restaurant business, we talk about our food and we talk about: Hey, where do we buy it from? and, you know, Just how Gucci are these particular vegetables? or, Is this an organic product? or, Hey, we found the Haitian farmer in Florida that makes the best tangerine honey in the world. That's the product side I think that's, again, that's the really sexy side of the business. You know, I always think we should keep an edge on that and again, part of product is being current. Because there are places that have served the same thing for years and years, and they do it well, and I salute them for it. I don't think most of us have that luxury. I think most of us have to keep our product current and keep evolving that product all the time.

The fourth thing for me is comfort. Comfort is, again: Does this space feel good to me? We have the W Hotels, right? Now, the people that go to the W hotels find them incredibly comfortable. Busy lobby, active lobby, the bar is right there, the restaurant's right there, things are going on. I like that energy. Some people really love that energy and that energy is comforting. There's a

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completely different kind of energy than you get when you walk into the Phoenician and you are greeted by somebody that says: Good morning, good afternoon, or good evening. Both mean comfort to somebody, and I think that's what I'm talking about there is, if whatever you say that you are, is it comfortable? And, part of comfort, of course, is decor.

Fifth thing, and this could be number one for some people, and it doesn't matter what you call them: employees, staff, cast members, actors. Do the people that work for you—front- and back-of-the-house—contribute hospitality to your guests? Is the amount of time that a waitperson or a bartender or whomever has an exchange with that guest: Are they sincere? Are they endearing to a certain extent? Are they genuine? And so I think that's incredibly important, and it comes down to when I'm hiring people, hey, when I'm looking at people, you don't have to come with all the tools, but can I get you there?

What elements in your concept contribute to its success?

John Zillmer

What we've built into our concepts is a very high degree of authenticity and freshness, so, you won't find pre-packaged food product in ARAMARK locations. What you find are fresh ingredients, fresh spices; fresh ingredients that make the customer feel like they're getting an authentic, retail concept. So if they're getting something Mexican, it's something that they would expect to find in a retail environment. If they are getting a burger, they're not getting a frozen hockey puck, they're getting a nice fresh hamburger. And I think customers respond to that. Years ago we did something as simple as going to fresh mashed potatoes instead of making mashed potatoes from a can or from frozen state, and you'd be amazed at the difference in customer acceptability on a product just as simple as that.

How do you measure success?

John Zillmer

Well, we measure a couple of different elements. First of all participation in our locations is the key barometer or the key measurement. If we're serving more customers on a daily basis, you know, that...that shows that we're improving the quality of service and product. And, you know, because we operate in an environment where you have a relatively fixed customer base, if you're normally serving a thousand people a day and you can start to build that, the profit impact for the organization is extraordinary. Or if it's a management fee account, the subsidy reduction opportunity is significant. So participation is a key ingredient. And then we measure customer acceptance of the product as well, so that we're constantly doing customer surveys and customer feedback, so that we know that the products we're serving are meeting their expectations—both from a value standpoint and from an authenticity, or a taste, standpoint.

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Phil Kendall

For us, it's actually three elements. We spend an incredible amount of time surveying our guests, and gathering GSI data (guest service index). We're very serious about that, because we think, again, with so many different brands—and the Starwood flag are over all of them—we want to make sure that we know what's going on in each brand, and if one is out-performing another one: Hey, what kind of best practices can we draw from that brand that may fit another one? And if one is not performing the way we want it to do, and we think it's eroding.

Financials. Hey, we're a public company, we make no bones about it. We are always looking for the way that an asset performs—whether that be a single restaurant asset, whether it be a hotel, or whether that be a group of hotels that is in one particular area or portfolio.

And then the other thing is... you're not going to get any of this, again, if you don't have happy employees. You know, I think that gets an incredible amount of lip service, though. Even when I say happy employees, I'm probably not doing it justice. We spend an awful lot of... annually... even when things are not particularly good financially. Where other companies may say; Hey, you know what? Let's put the opinion survey off this year. We go: No, no, no! [knocks on wood] We're going to do the employee opinion survey. And, not only are we just going to do the employee opinion survey, if we ferret out some problems, we're going to address those.

I mean, it just hit me, I mean it's that people-product-profit thing, that we were all being coached on a long, long, time ago. And so that's, I guess, that's how we measure success.

How do you balance the needs of ownership with the expectations of the guest?

John Zillmer

Actually, I don't think there ever is a conflict between the ownership needs of ARAMARK and the service needs of the guest. I think by serving the needs of the guest you fulfill our needs. There sometimes are conflicts between the guest's needs and the client organization's needs. For example, you know, the customer wants lower prices, yet the client wants to reduce subsidy, and sometimes those things are in conflict. However, we tend to feel that by serving the customer needs, by, you know, providing services and offerings or food product that meets their expectations, that you built the top line, you build sales, and that ultimately that will reduce the client's costs. So, our focus tends to be on improving, building quality, and that that tends to serve the needs of all the constituencies involved.

Phil Kendall

Well, I think we're incredibly realistic about that, and one of the reasons that I think that we have an advantage there, is that we do have different brands. And guest expectation at the St. Regis level, or at the luxury level, or at the W level, is different than it is at the Four Points level.

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Ownership? Stockholders? Absolutely... absolutely. Hey, what are we doing? What business efficiencies are we bringing to the marketplace? And we're all about that... I mean... we work on our business management. We work on saving costs, driving revenue, daily. It almost doesn't matter what office you're in. Those are the kinds of things we're looking for. And... and again, back to what's the guest say? What is the employee giving us? And how are we performing financially?

The restaurant business is directly affected by changes in the economy. Local as well as global economic shifts may require quick action and operational adjustments on the part of the foodservice manager. Over the past 20 years, it is possible to see various cycles when some segments of the foodservice industry were able to prosper while others struggled.

In 2002 the US economy had a downturn and restaurant sales slowed but the growth cycle began again and restaurants prospered through 2007. In 2008 the US and world economy stalled and international travel was sharply down; the fine-dining segment was hit the hardest with customer counts diminishing. The casual-dining, fast casual, and quick service segments tried new promotions to attract customers trading down.

Different Responses to Challenges

Faced with the slow economy and its effects, fine-dining establishments responded by offering new, lower-priced menu items and attractive fixed-priced menus as well as lower priced wines on their wine lists and reduced corkage charges.

Casual-dining establishments responded by offering slightly more upscale menu items at slightly higher prices in an effort to capture the customers moving out of the fine-dining segment. Quick service restaurants focused on value pricing to gain more market share.

Adapting to Challenges

For companies to grow they need access to capital and they need places to build. As competition intensifies, the ability to find top-quality sites becomes more and more difficult.

When the economy is weak, raising capital for expansion can be difficult. During these times, successful companies with cash reserves are able to expand while other companies can't.

Several restaurant companies have begun to alter their concepts so they could open in non-traditional locations or secondary sites.

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Labor Challenges

Foodservice operators almost always list labor as an ongoing challenge. If it is not an actual shortage of labor, it is the inability to find people with the necessary skill set or personality.

Older workers, more working women, more minorities, and immigration are all having an impact on the workforce, and managers are having to adapt their styles to this increasing variety in the employee workforce.

Meeting Labor Challenges

The National Restaurant Association reported that foodservice managers operating in both limited-service and full-service categories identified recruiting and retaining employees as the biggest challenge their businesses were facing in both the short and long term. 2008 marked the 17th year of jobs expansion in the foodservice industry. While 2009 did not see any growth due to the economic downturn, the next decade promises to be one of continued growth, which will bring recruitment, retention, and training issues back to the forefront.

In response to the labor issues, the majority of foodservice operators continue to broaden their recruitment efforts. In markets with a shortage of labor, some employers have offered signing bonuses and finder's fees. They have also expanded their training efforts to cross-train current employees in an effort to retain their best employees.

Quality of Life Challenges

Quality-of-life issues, such as the high number of hours and days worked per week and the lack of personal time, have always put pressure on foodservice operations. The desire for more work/life balance has brought these issues to the forefront, and operators will be challenged more than ever to provide more balanced schedules for their managers and hourly staff.

Health and Nutrition Challenges

Consumers are certainly more knowledgeable and concerned with health and nutrition today than in the past. This provides the foodservice operator with both challenges and opportunities to meet customer needs that competitors are neglecting. In addition, operators are facing challenges from nutritional advocates who would like stricter menu-labeling laws and ultimately would like to restrict the offering of certain products.

Environmental Challenges Many environmental concerns impact foodservice operations, such as: garbage disposal (landfills or oceans), air and water quality, parking lot runoff, and water restrictions and sewer limits.

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In Atlanta, in order to reduce the sewerage overflow into the local river, two thirds (over 1600) of the city's restaurants were cited and fined for grease-trap violations. This resulted in all restaurants being required to obtain a new grease-trap permit or face being shut down by the Department of Public Works.

Challenges of Controlling Costs

Increases in product, labor, and energy costs continue to challenge operators to produce adequate returns.

To control these costs, foodservice operators are installing more energy-efficient equipment, such as low-water dishware washers and toilets as well as high-efficiency lighting. Others mention they have switched to a policy of serving water only when the guest asks for it.

Challenges of Changing Competition

Restaurants can no longer look only at other restaurants as competition for their customers: convenience stores, supermarkets, specialty food shops, bakeries, the Internet, and even catalogs are all fighting for market share with restaurants. In 2002, catalog and Internet sales of food, including holiday dinners with all the trimmings, amounted to approximately $7 billion dollars in the U.S. alone.

Restaurants of all categories—from limited service, to high-end full service—are fighting back by introducing new and more convenient meals-to-go services.

Challenges of Changing Customer Expectations

Keeping up with or slightly ahead of the customers' expectations is even more challenging today than in the past. With more media coverage of food and restaurants, customers are much more aware of the wide variety the marketplace offers, and expect more from their foodservice providers.

Challenges From Changing Demographics

While the baby-boom generation is currently in its peak earning years and is a major positive force for boosting restaurant sales, an aging population is creating new challenges. As the world's population ages, we are faced with a shortage of young workers in some areas. Restaurant operators are facing an older workforce and an overall older clientele.

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Political Challenges

Instability due to an uncertain political climate is a concern facing not only current operators in a country, but also those looking to expand. In 2002, McDonald's announced they would be closing 175 restaurants in ten different countries in the Middle East and Latin America.

Government Regulatory Challenges

Local ordinances, fire codes, and building codes can sometimes become considerable issues for your business. Wage rates, penalty rates, and benefits rates set by governments are challenges most operators face. New challenges come in the form of additional regulations, such as a ban on smoking in restaurants, bars, and other public facilities.

What are the major issues and challenges facing the foodservice industry today?

John Zillmer

Well, I think the single biggest challenge continues to be the availability of quality, trained staff and management. In this environment, you know, we continue to invest significant sums of money to bring people into the organization and to train them to the ARAMARK methodologies and to inculcate them in the culture of the organization. And when I say challenge, it's not that we can't find people or that there aren't good people available, it's... we consider it our number one priority. And so, the better we do at that, the better the organization performs, the better we serve the customer's needs. And so I think that probably has been and will continue to be our number- one challenge and priority in the business.

And I think if you asked anybody in the foodservice industry, whether it be retail, hospitality, restaurants, or whatever, they'd all pretty much say the same thing: that it's the availability of a quality, trained, staff and management.

Sourcing a quality product is a key concern for the organization. For example, we had mad cow disease in Europe that caused significant disruptions in the supply of available protein products—not just beef, but other proteins—because all of a sudden the demand for those went through the roof. So, you know, purchasing and sourcing of fresh and safe product has always been a concern and will continue to be.

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That's never really been an issue domestically, because we've got such a great distribution system in the U.S., that, you know, we're pretty much able to trade off suppliers and distribution at will. And, so not that significant an issue domestically, but, internationally it can be a significant problem.

Robert Wilkinson

I think one of the major issues facing the industry is the level of talent entering. I think the industry offers just as much rewards and satisfactions as the practice of law or medicine or architecture or engineering, or any some such high profession. But the industry has not presented itself well to levels of talent that those rewards are there and as the market develops and as the competitiveness develops, the requirement for talent becomes even more apparent.

Another major challenge is government regulations and unchecked obtrusiveness in the business. Although probably constructed in terms of ideals of protecting the public, onerous regulations can prevent the competitiveness especially of smaller operations because they don't have the same financial resources to overcome some of the regulatory burdens. So I think it affects the competitiveness of the industry.

What steps has your company taken to meet these challenges and deal with the issues?

John Zillmer

Some of our businesses have been impacted more by the economic environment than others, and we call them economically sensitive and non-economically sensitive businesses. Business services and refreshments, you know, because of the nature of the industry, they've been impacted to a greater degree than, let's say, healthcare or education or the K-through-12 marketplace. But we see those as short-term kind of situations, that's been through those cycles many times in the industry. And what we continue to do is to invest in those businesses so that when the cycle begins to turn around, we've got, we're positioned well to continue to grow those organizations.

I think the worst thing you can try is try to retrench, cut spending, cut overhead, do the things that, you know, would be your normal reaction to a tough economy. You know, we manage those expenditures carefully, but we're also very consistent in terms of the way we invest to build for the future of the company. We've made significant investments in the staff, in the management training area, that I think have paid significant dividends for the organization.

There are three management development programs that we have in the organization: one's called Advanced Leadership Development, one's called Strategic Leadership, and the other is our Executive Leadership Institute. And those three components all feed into each other. You start as a front-line manager, you take the ALDP course; as you graduate into district

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management, you're now taking the Strategic Leadership course; and as you become a regional vice president or higher, you, you know, take the Executive Leadership Institute.

Those represent extraordinary investments, you know, millions of dollars every year that we invest in the performance of the company, and in the management development process. It's really career enhancing for the people who have the opportunity to go through them, and it's something we've done for a number of years. Those programs are really award-winning; they're recognized by the human resource and the educational community as being top-notch. The faculty for those programs come from institutions like Penn and Cornell and Harvard and Michigan. And, so, it is a very significant commitment and one that we're very proud of and one we're committed to continuing.

Robert Wilkinson

For Houston's, we've made deliberate decisions and tactics to try to attract high talent levels. Fortunately, we have a long run of success to back up our ideas. But to communicate and offer up talent that very much responds to learning the industry, learning the business, learning what it is to be successful, and that is very motivated by that, we've tried to offer ourselves as the number-one reward we can give talent and people coming into our business because we feel like over the long run we have a lot to teach. And therefore, for folks that are so motivated, it becomes a major interest for them.

Sushi (a trend) Prologue: 1820s A Tokyo chef named Hanaya Yohei developed a recipe that combined several elements of Asian cuisine. Hanaya's innovation was to use fresh, sliced raw fish or other seafood combined with vinegar rice, then prepared and served for customers directly from his cart. Hanaya's focus was to serve his snack fast and fresh. His ideas proved so immensely popular that very quickly they began to be copied throughout Tokyo.

Late 1970s After 150 years of growth in Asia, sushi was introduced to U.S. customers along the west coast, where it experienced steady growth.

1988 A sushi outlet was introduced in Dodger stadium. It did not attract enough business to remain open, and closed after a few games.

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1993 Some evidence shows expensive sushi restaurants in decline, yet there is a growing number of fast, inexpensive Japanese restaurants and other outlets that serve sushi. In some respects, this evolution points back to what Hanaya Yohei was serving from his cart.

1994 Specializing in supermarket, in-store operations, ACE Inc, has over 100 sushi locations concentrated in the west coast.

Mid 1990s Sushi has begun to significantly diverge in the American market from the Japanese original, with many items derived from American ingredients based on American tastes. Americans often prefer sushi to be spicier, and American creations include the California roll, the spicy tuna roll, and the spider roll, which combines soft-shelled crab and spicy mayonnaise. Tuna as a sushi ingredient is actually an American innovation.

Mid 1990s Sushi has become an international phenomenon, with dozens of restaurants in Malaysia, Australia, and Europe. Many regard sushi as Japan's major contribution to popular, mainstream international cuisine.

1997 ACE Inc. opens their 200th supermarket sushi bar, and the first of many units begin operations on the east coast.

2001 Marketing surveys of children show an increased desire for ethnic food, including sushi! The First Book of Sushi, a book for children about sushi, was published in 2001.

2002 Sushi is available at 7-Elevens in San Francisco.

ACE Inc. now operates over 600 in-supermarket sushi stores, and there are over 5000 sushi restaurants in the U.S.

Epilogue Sushi is now sold in mainstream supermarkets throughout the United States.

Nouvelle Cuisine (a fad)

Prologue Some argue that the roots of nouvelle cuisine can be traced to the upheaval of French society following World War II, and the change in lifestyle away from the extended mealtime. Others

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argue that it reflected other, broader societal changes. But one thing is for sure: the top dishes of French 3-star restaurants were very stable and uniform for 50 years. But by 1965, there were stirrings of innovation, and by 1975–80, there was tremendous change and commotion in French cuisine.

1970s Nouvelle cuisine emerges in France. The French 3-star chefs use their background and skill to develop some very distinct dishes using combinations of unique ingredients and very attractive plate presentations. The chefs claim this nouvelle cuisine is a backlash to traditional, heavy French cooking served in exceptionally large portions.

1973 The Ten Commandments of “Nouvelle Cuisine” by Henri Gault and Christian Millau

Thou shalt not overcook. Thou shalt use fresh, quality produce. Thou shalt lighten thy menu. Thou shalt not be systematically modernistic. Thou shalt nonetheless seek out what the new techniques can bring you. Thou shalt avoid marinades, hanging of game, fermentations, etc. Thou shalt eliminate brown and white sauces. Thou shalt not ignore dietetics. Thou shalt not cheat on thy presentations. Thou shalt be inventive.

1980 Nouvelle cuisine has become the hot fad in many parts of the world, readily embracing Mediterranean influences in ingredients and spices, as well as Asian ingredients and spices like curry. Mid 1980s Nouvelle cuisine has its abuses—even in France, nouvelle cuisine becomes a term customers tire of because the value equation is often lacking. The food is well presented and prepared, but customers complain they're still hungry at the end of a very expensive meal. In the U.S., the nouvelle cuisine rage is often misunderstood and poorly implemented. In the hands of the less-skilled average cook, any combination of ingredients becomes fair game for the menu. The customer has become the guinea pig, and it doesn't take long for them to make their dissatisfaction heard—they vote with their feet, and restaurants featuring nouvelle cuisine see customer counts dwindle rapidly.

1987 A well-known French chef comments in Hotel and Motel Management magazine that “Nouvelle

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Cuisine is losing meaning.” Nouvelle cuisine has become a joke: the simple addition of an ingredient—a Kiwi, for example—transforms the dish into expensive nouvelle cuisine. Customers are tired of this and avoid restaurants featuring nouvelle cuisine.

1988 Canadian Hotel and Restaurant publishes an article titled “Nouvelle may have died a timely death.”

A popular joke by Mike Kalin quips, "Nouvelle Cuisine, roughly translated, means: I can't believe I paid ninety-six dollars and I'm still hungry."

Epilogue This is a case where the idea was great and has long-lasting effects on the food we prepare today; it opened the door for blending of cuisines and ingredients from different cultures. Nouvelle cuisine was the forerunner of healthier, more nutritious food preparations and consumption and lightened traditional preparations and presentations. It gave rise to fusion cuisine. But nouvelle cuisine itself enjoyed a short-lived usefulness because its basic concept was abused.

Defining Trends

According to Webster's New Collegiate Dictionary, a trend is defined as "a prevailing tendency or inclination; a current style or preference; a general movement or shift; the general movement in the course of time of a statistically detectable change."

Recent trends include:

People entertaining friends and family in restaurants rather than at home Increased consumption of bottled water Increased interest in nutrition and health Increase in the consumption of restaurant meals and home-replacement meals Increased consumption of pasta in the U.S.

Defining Fads

According to Webster's New Collegiate Dictionary, a fad is defined as "a practice or interest followed for a time with exaggerated zeal: a craze." The American Heritage Dictionary defines a fad as "a fashion in dress, behavior or speech that enjoys brief popularity."

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Recent fads in the United States include:

Cigar bars Mesquite-grilled foods Squid ink pasta Nouvelle cuisine

Defining Institutions

As defined in the American Heritage Dictionary, an institution is "a relationship or behavior pattern of importance in the life of a community or society. An ever present feature or fixture."

Some examples of behaviors that have become institutions include:

Dining out at restaurants Having a wedding catered

Some products that have become institutions include:

Beer, wine, or spirits Pasta in Italy Sushi in Japan Bread in France

Trends, Fads, and Institutions

What characteristics influence foodservice trends, fads, and institutions?

Demographics:

Lower birth rates and an aging population in many parts of the world Global travel and tourism Migration and immigration Changing nature of the traditional family and makeup of households

Sociological issues:

Rising standard of living Renewed interest in lifestyle issues—more leisure time Restaurants fulfilling psychological needs for human interaction

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Dealing with Trends and Fads

How can trends and fads be used to the foodservice operator's advantage?

By being proactive, restaurateurs can study the trends and develop:

New concepts New menu items New service-delivery systems, or New production-delivery systems

Being reactive, restaurateurs can study the trends and renew existing operations by introducing:

Menu design changes Décor upgrades Improvements to current service and production systems, or Newly focused marketing efforts

Keeping Track of Trends

How do foodservice managers keep track of trends?

By obtaining information from:

Trade publications and websites Statistical reports done by various trade organizations and government agencies Newspapers and magazines Television The Internet Suppliers and manufacturers Competitors, and By listening to their customers and employees

Predicting Food and Beverage Trends

It is important for a manager to realize that you can often predict trends and fads that will affect you in the future if you look at the correct predictors. You can sometimes do it by identifying and studying the city or geographic area that precedes yours in trend adoption. Studying trends in this region will help you predict what will happen 6 to 24 months down the line in your own area. Predicting trends through this research process may seem like fortune-telling.

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Rich Mellman built his very successful restaurant empire, Lettuce Entertain You in Chicago, by constantly watching the latest trends showing up in New York and Los Angeles. Mellman didn't simply copy the concepts, he adapted them to the local market by predicting acceptance based on his research in the other areas.

Seven Long-Term Trends

On the following slides, we will look at seven long-term trends that are currently very strong, and are on their way to becoming institutions.

First, women continue to enter the workforce in record numbers. This creates even more demand for home meal replacement. The Bureau of Labor Statistics reports that of the 121 million women age 16 years and over in the U.S., 72 million, or 59.5 percent, were labor force participants—working or looking for work.

Women comprise 46.5 percent of the total U.S. labor force and are projected to account for 47 percent of the labor force in 2016.

Women are projected to account for 49 percent of the increase in total labor force growth between 2006 and 2016.

Of the 68 million women employed in the U.S., 75 percent worked full-time, while 25 percent worked on a part-time basis.

The second trend is that the baby-boom generation is in its peak earning years of 35 to 55 years of age and thus continues to have a strong impact on the foodservice industry. In the U.S., the share of food expenditures captured by restaurants has increased steadily from 25% in 1955 to almost 47% in 2007. This will continue, and over the next ten years, it is estimated that restaurants will capture over 50% of the dollars spent on food.

The third long-term trend involves time-concerned consumers who desire greater choice in dining away from home, and are looking for quick and casual offerings. This has fueled the growth of casual restaurants and spawned the start of a new category called "quick casual."

The fourth trend is that home meal replacement continues to grow. Dual income families don't have the time to cook. They opt to pick something up on the way home. A National Restaurant poll shows that 3 out of 10 adults and half of younger adults (ages 18 to 24) surveyed indicated that take out was essential to their lifestyles.

The fifth trend involves looking for labor: identifying, recruiting, and retaining workers continues to be a trend with negative effects on foodservice.

The sixth trend shows increased use of technology to help with running the business.

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The final trend indicates an increased focus on how restaurants look and feel: after years of devoting their attention to food and service as a competitive edge, foodservice operators are now placing increased emphasis on design and décor.

How Trends Affect You

In addition to these broad trends, there are many specific ones that might already be affecting you, depending on the nature of your operation. Some of the following trends have been active for some time. Other trends in this grouping are more recent arrivals. Depending on your area and market, you might see more or fewer of them.

More Trends

Some region-specific trends that you may experience involve improving overall health, increasing nutritional awareness, and incorporating a fitness program.

Another trend that is tied to the healthful living trend is food and allergy awareness. As the public learns more about the impact of allergies on its health, the more proactive the foodservice industry needs to be in managing that concern. It is important to inform customers about items that contain potential allergens.

Another current trend is ample portion sizes. Over 40% of the baby-boom generation and 60% of Generations X and Y say they will occasionally select a large portion size so they will have something to take home with them. Nine out of ten full-service restaurants in the U.S. provide containers for food to go.

Starwood Hotels in their Sheraton properties came out with a "culinary basics" program that is simplicity-oriented. Philip Kendall, VP of food and beverage for Starwood Hotels, explained that some chefs were going off the creative edge with their menu options and this was causing confusion in the mind of the customer base frequenting the Sheraton-brand hotels. To correct this, they came up with the guideline that there could be only three ingredients on a plate, following the mantra of:

Keep it simple Do it well Make it fresh

This has been a very successful program for Sheraton.

Another current trend involves how food is grouped together according to specialty. For example, there has been an increase in ethnic-specific foods such as wraps, Thai cuisine, or regional Italian offerings.

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Branded products are also very popular, with Starbucks being one of the most common examples. Identifying foods with labels such as "certified organic," or indicating a specific local producer/farmer is also becoming more common.

Presenting food in smaller, more appetizer-like servings has gained popularity as it allows people to try a variety of items without having too much. It also allows restaurant managers to test new recipes without over purchasing ingredients.

Congratulations on completing this course. You’ve explored a lot of information, important

topics in foodservice management systems, in addition to tracking trends and fads. I hope it has

provided you with new insights and knowledge to better address some of the challenges facing

foodservice managers today. You should now have some additional tools with which to

manage. These should help you be more effective and more productive. They will also make

managing more fun.

Thank you for taking this course. I hope you enjoyed it and that you will join me again in the

foodservice management courses covering the remaining operational systems.