The sands are shifting almost daily and almost on every front: That’s the verdict from five restaurant industry leaders who shared their views Monday on the state of the industry at the National Restaurant Association show in Chicago Saturday. About 70 executives and future franchisees watched the discussion as part of an education session called, “Lessons from Leaders.”
The session delivered on its promise, with five leaders revealing their feelings about commodity and other business costs, labor issues and the near constant work needed to keep up with restaurant technology.
Saladworks CEO Patrick Sugrue moderated the session, which included:
- Fresh Brothers Pizza founder and CEO Adam Goldberg.
- Grimaldi’s President and CEO Eric Greenwald.
- Focus Brands North America President Paul Damico.
- Fazoli’s President and CEO Carl Howard.
The men shared their successes and struggles when it came to dealing with the rapidly changing assortment of diners’ demands for faster service, ever-fresher ingredients and the most cutting edge technology available. They agreed that the last 12-18 months have been particularly intense. See below for some of their responses.
Q: What would you identify as the primary problems and challenges you’ve been tackling over the last year?
Fazoli’s/Howard: Labor … but really staying caught up with the changing consumer. The consumer is changing so fast … changing the way food is ordered, way they behave. We’ve had to do everything all over, with a whole new point of sales system. … just a whole lot of technical changes in the last few months. …
The changing consumer is really amazing. Now everyone carries around a 32-gig computer in their pocket. … So the consumer is changing where now they don’t even want to engage through dining — they want to engage the way they want to engage, through their mobiles or laptops. … And the younger group (Gen Z consumers) are way more comfortable in (not interacting with restaurants and their staffs). So I’d say if you’re not figuring out ways to adapt your brand and ways to bring product to consumers (in response to technology) then you are falling behind.
Grimaldi’s/Greenwald: At Grimaldi’s we’ve felt many of those too, starting at the top with costs. … Construction costs went up 30 percent … and the labor pool is very difficult. We’ve even hired recruiters to add people. … Then costs on G&A … healthcare costs, insurance costs. … Like how do I sell more pizzas to cover a $100,000 change in one insurance policy?
Fresh/Goldberg: One of the biggest changes with the new stores we’re making is that … I remember we really (emphasized) talking to customers (when he joined the company) 8 1/2 years ago. Now, all that’s going away. … Like with the store we just put in, we put kiosks in and put in pick-up ‘cubby hole’ areas where people just walk up, grab their food and walk away, literally without any conversations. And that’s going over very well. So as we look to remodel older units, we’re looking at ways (for diners) to walk in, grab their food and leavy, which is very, very against what we stood for originally really. looking at walk, grab food and leave, very very against what stood for originally really.
Q: What about marketing?
Fazoli’s/Howard: Consumer segmentation something have laser focus on now. … The days of the $40,000, $50,000, $60,000 national ad spend? Alll that is gone. We’ve reallocated all those toi social media … and being able to segment your consumer base and cater marketing to each group (is how it’s moving).
Grimaldi’s/Greenwald: I always learned the Golden Rule that you treat people how you want to be treated … but now I’ve learned to first ask them, ‘How do you want to be treated at our restaurants?’ … And now we’re very open to making changes, where I wasn’t as much in the past.”
Q: What are your brand differentiators now?
Fresh/Goldberg: The quality of our products … and we’ve developed vegan and gluten-free choices. … We saw this needs to be better — this is the direction (diners) are going in.”
Focus/Paul Damico: As the leader of six brands … one thing we do to draw (customers) across all six brands is the time, care and money we spend to select our franchisees. … If we make mistakes often of bringing the wrong people on, it can break a brand. … It’s really about selection, then.
Fazoli’s/Howard: When I started here nine years ago, we were the world’s ‘fastest Italian brand.’ …Now though we’re so focused on quality …. like our next menu that rolls out June 19. … We’ve got a lot of baked pasta dishes and that whole line is really our specialty … and now our guests are ordering about 20 to 25 percent (in) our baked products. … And the other thing that makes us different is we’re less expensive (than other fast casual Italian chains).
Q: For brands like us (Saladworks) that have been around a bit — in our case 30 years — how are you managing the balancing act of higher-level ingredients and justifying that significant investment? I need a solution other than going to $12 to $18 entrees.
Fazoli’s/ Howard: I know for us, we’re spending $1.5 million to (upgrade) our products. … The younger audience is very passionate about this. … As far as (how that initiative went over with) franchisees. … I got a standing ovation from our franchisees at our conference recently when I told them about that $1.5 million investment in clean ingredients.
Q: What advice would you give to others seeking to grow their brands today?
Grimaldi’s.Greenwald: It’s about people. I surrounded myself with people who have done it (successfully grown brands) and the most important thing you can do is ask questions. … Then the second thing is to be really clear on what you want to do. … Like we built an organizational (chart) around that, and it didn’t have any titles, but instead, tasks to do what we wanted to do.
Focus/Damico: Have a professional mentor you can rely on to ask stupid questions … and make sure you are well capitalized for the downfalls that are going to come because they ARE going to come.
Fazoli’s/Howard: For a lot of us, we become so focused on the wrong things. Focus on product and service … and get one or two right before you worry about the other 50. My biggest advice is to do a great job with product and service.
Fresh/Goldberg: Embrace change….. We’re doing things that if you asked me last year, I would have said, ‘Absolutely not!’ … I came from the entertainment industry and when I made the leap to this industry, people thought I was crazy. But this industry is so unique because we all help each other in some way. … Like there are 10 people in this room I can call and ask a question and they will help me out.
Photo Credit: iStock
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