Plated Away From Home

Today’s special is this foodservice-focused edition of Plated by Bader Rutter. As recent developments at restaurants, contract feeders and convenience stores have taken center stage in the larger discussions about food and beverage, we seem to be living in bizarro land: inflation and prices are affecting foodservice at a dramatically higher rate than retail foods (as tracked by the USDA), yet consumer spending at foodservice continues to outpace retail. 

• The E. coli issue at McDonald’s (and Yum! Brands) goes on.
• Product development and menuing innovation carries on.
• Restaurant chain operations struggle to keep on.

Hold the Onions

The most monumental recent happening in foodservice is the E. coli outbreak affecting McDonald’s Quarter Pounders. In Food Safety News, attorney Bill Marler praised the steps USDA and meat packers have taken to nearly eliminate the bacteria from beef in the decades since deadly foodservice outbreaks in the 1980s and 1990s. But, Marler cautions, E. coli has crept back into food production in several forms of produce — like lettuce, onions and spinach — raising new concerns.

• On October 24, The Associated Press summarized the situation to date, noting that one person in Colorado had died and at least 75 had fallen ill due to E. coli poisoning. By this point, McDonald’s has traced the problem to slivered onions from a produce supplier in Colorado Springs. Food safety experts were initially concerned the outbreak was tied to beef, which would have had a much larger effect on customer health. And company costs. 
• Out of an abundance of caution, Yum! Brand chains (Taco Bell, Pizza Hut, and KFC) and Burger King all pulled onions from their menu items (The New York Times).
• In the aftermath, The Wall Street Journal’s Heather Haddon explained McDonald’s hard task of rebuilding consumer trust. The company’s stock value had declined about 6% in the midst of the outbreak. “We are certainly very sorry if someone got sick at our restaurant for eating an onion that we use on our QPC,” McDonald’s CEO Chris Kempczinski said. 
• Reuters Waylon Cunningham described why vegetable contamination presents a more challenging food safety problem to the supply chain. Two reasons cited by food safety experts: “Contamination of produce is harder to control than that of beef and cooking beef acts as a ‘silver bullet’ against contamination, unlike fresh produce.”

Our Takeaway: Major chains are not immune to food safety emergencies and are sometimes at the mercy of their foodservice suppliers.

Change on the Menu

Keeping menus fresh is a constant challenge for foodservice outlets of all types. In the past fortnight, strategies have ranged from attention-grabbing LTOs (limited-time offers) to wholescale adjustments for dietary restrictions:

• Jimmy John’s launches the ‘Picklewich,’ a new sandwich with a giant pickle instead of bread | NBC Los Angeles
• Smoothie King debuts a menu for Ozempic users | Restaurant Business
• Social media influencers are changing the Los Angeles restaurant scene | Eater
• Mexican Restaurant Week organized in New York City | NPR
• Taco Bell tests Indian, Thai, and Mexican Crunchwraps in TBX platform | Nation’s Restaurant News
• The top 100 vegan restaurants in America, according to Yelp | Food & Wine
• Popeyes is giving away free chicken sandwiches for 2 weeks | Today 
• Aramark Healthcare+ leans into BBQ Throwdown competition to engage both chefs and diners | FoodService Director
• McDonald’s new Chicken Big Mac is a bland, beige mess | The Washington Post 

Restaurants Don’t Run Themselves … Yet

Whether managing day-to-day food preparation, testing out new technology or determining the national footprint of a chain, foodservice leaders are paying special attention to operations.

• Consumer pushback against high food prices has proven to be a catalyst for change. Research group Circana published findings on the effectiveness of foodservice operation strategies like “providing value through creative offerings and strong customer engagement.”
• In addition to food price friction, Nation’s Restaurant News shared survey data that found customer service has fallen short lately, with more than one-third of reviews noting poor service times.
• Los Angeles Times profiled Miso Robotics, a company that claims robots will help with both customer service and cost concerns. As CEO Rich Hull explained: “What you’re trying to do is automate the tasks that the humans don’t enjoy doing.”
• In contrast, Eater noted that reservation systems are starting to see a de-automation trend in fine dining. New York restaurateur Tina Vaughn told the publication that it’s a point of differentiation: “People are almost starving for that human connection.”
• Supermarket News reported that Ghost Kitchen Brands has partnered with RichTech to run 20 restaurant locations inside Walmart stores. Coincidentally, one of the robots resembles a Russian nesting doll … with arms.
• 7-Eleven also opted to straddle the line between retail and foodservice. Just two weeks after announcing the closure of 444 locations (CNN), the convenience store chain unveiled plans to open 500 “food-forward” locations — each containing a quick-service restaurant — by the end of 2027 (QSR Magazine).
• The Wall Street Journal tracked Starbucks CEO Brian Niccol’s “Back to Starbucks” plan for returning the company to profitability — a plan that is sorely needed after a 6% drop in year-over-year comparable sales. Meanwhile, the Journal reported that Niccol’s former employer, Chipotle, disappointed investors by turning in a mere 13% growth in revenue from the previous year.

Our Takeaway: For every point of friction in foodservice, there are multiple approaches. The biggest chains are evaluating automation while smaller operations are emphasizing a more personal touch. But all are working to balance costs against customer perceptions of value.