A Deeper Dive

How can operators avoid price increases as their own costs increase? This week’s episode of the Restaurant Business podcast A Deeper Dive features Rich Shank, senior principal with RB sister company Technomic. He discusses the challenging operating environment when it comes to menu pricing. Restaurants have been raising prices aggressively this year as higher prices for food and labor eat into margins. Menu prices are up 8% over the past year. But there are signs that consumers are starting to reject these price increases, enough that Shank wrote in RB that operators may need to rethink their price increases. He explains the consumer environment and how operators can offset their own higher costs without hurting consumers. We also talk about another piece of data: the decline in restaurant use by the older and bigger Baby Boom generation, and what that means to certain types of concepts.

The beverage business is rapidly changing and drive-thru coffee concepts like Scooters Coffee are right in the middle of it. This week’s episode of the Restaurant Business podcast A Deeper Dive features Joe Thornton, the president of Scooter’s. Scooter’s has quietly been one of the fastest growing restaurant chains in the U.S. System sales and unit count have nearly tripled over the past five years, according to RB sister company Technomic. Thornton talks about that growth and what has been key to the business. He talks about the brand’s franchising model and its focus on its drive-thru coffee kiosks, which sell a selection of beverages and food from 600-square-feet shops. He talks about the brand’s real estate strategy and where the company fits in a rapidly changing and shifting beverage business.

If you haven’t come across a bubble tea concept yet, you will quite soon. This week’s episode of the Restaurant Business podcast A Deeper Dive features Paul Reynish, who was named global CEO of the bubble tea concept Gong Cha earlier this year. Gong Cha was founded in Taiwan in 1996 and is now based in London. It has quietly been one of the fastest-growing chains in the country. It operates more than 1,600 locations globally. It finished 2021 with nearly 170 locations in the U.S., up 700% over the past five years. Reynish was hired after stints at Dunkin’ and Five Guys. He talks about the brand’s plans for growth, including how many units it expects at the end of this year. He talks about the bubble tea trend generally, about the rapidly changing U.S. beverage market and where Gong Cha fits in that market. He also discusses the chain’s plans for food.

How big of a deal is the unionization effort at Starbucks? This week’s episode of the Restaurant Business podcast A Deeper Dive features my colleague Peter Romeo, who talks about the ongoing unionization campaign at the coffee giant. More than 200 Starbucks locations have voted to form a union. The company has undertaken a massive effort to stop it. Peter and I discuss that unionization campaign, Starbucks’ response, whether it’s working or not, and whether other restaurant chains should worry at this point. We also talk about the California Fast Act, and the potential impact that newly passed law could have on fast-food chains and other restaurant employers in the state. We also talk about whether that law could spread to other states.

The nation’s opioid crisis grew much worse during the pandemic. And it has hit restaurants particularly hard. This week’s episode of the Restaurant Business podcast A Deeper Dive features Rick Van Warner, a former longtime industry executive and ex-CEO of the Tex-Mex chain Tijuana Flats. He is also on the board at Project Opioid, a Florida-based agency that works with employers on the opioid crisis. Van Warner is also the author of the book On Pills and Needles, where he tells the story of his son’s addiction to opioids and the family’s long struggle to help him recover. Van Warner tells his story and we talk about the risk restaurant workers face from opioids and in particular, synthetic opioids like fentanyl. He also has recommendations for employers on how they can deal with the issue.

Can fries fix Quiznos? This week’s episode of the Restaurant Business podcast A Deeper Dive features Mark Lohmann, the president of Rego Restaurant Group, which owns Quiznos as well as its sister chain Taco Del Mar. Quiznos has gone from nearly 4,700 U.S. restaurants in 2006 to just 200 now, plus fewer than 300 internationally, a 90% reduction in total unit count that is unprecedented in restaurant industry history. These days the brand is trying just about everything to stop that decline. That has included a new prototype featuring a new menu that includes grilled steak, subs featuring eggs and even French fries. Those are all made by new fryers and grills that Quiznos previously didn’t have. Lohmann talks about that plan and what it means for the chain’s future. He also talks about some of the chain’s other strategies, such as its new prefabricated prototype it is testing elsewhere as well as other changes. He talks about Quiznos’ unique advantages and why he believes the chain is at an Inflection point.

How did Smoothie King convince franchisees to go along with a complete menu overhaul? And how did customers react? This week’s episode of the Restaurant Business podcast A Deeper Dive features Wan Kim, the CEO and owner of the Texas-based Smoothie King brand. Kim was a franchisee of the brand in South Korea before he bought the company and moved to the U.S. Smoothie King has been one of the country’s fastest-growing chains and smoothies are increasingly popular among consumers. The brand’s sales grew 25% last year alone. Kim discusses a wide range of topics, including the smoothie business, the impact of McDonald’s smoothies and where the brand is headed. Yet he also reveals the risk the chain made when it decided a few years ago to cut back on sugar, even at the expense of some customers and even some operators.

Getting attention is the name of the game in the ultra-competitive restaurant industry, and Krispy Kreme has been doing quite a bit of that lately. This week’s episode of the Restaurant Business podcast A Deeper Dive features Dave Skena, the global chief brand officer for the doughnut chain. Skena’s job is to get attention for a well-known brand and the company has been doing some interesting things lately to accomplish that, sometimes taking a few risks in the process. That includes last year’s notable vaccine promotion, offering a free doughnut to customers who could offer proof of vaccination. He discusses the company’s numerous other marketing promotions, such as one offering customers a dozen doughnuts for the price of a gallon of gas. He talks about the chain’s overall strategy and the challenges of marketing a brand that is evolving into an omnichannel concept that sells doughnuts in a lot more places than just a shop.

Pumpkin spice season comes earlier every year. Why? This week’s episode of the Restaurant Business podcast A Deeper Dive features RB Senior Editor Pat Cobe, who joins me to talk about what’s on the menu at fast-food chains. We speak first about the recent news that Taco Bell has a partnership with the dessert concept Milk Bar. The two are launching the Strawberry Bell Truffle at a limited number of locations, two Milk Bar units and one Taco Bell. We discuss such ultra-limited time offers. We also talk about the plant-based trend and what it means that McDonald’s McPlant test apparently didn’t quite fly. And of course we chat about pumpkin spice, and why such products keep arriving earlier every year.

How is the restaurant industry dealing with the difficult operating environment? This week’s episode of the Restaurant Business podcast A Deeper Dive features an interview with Michelle Korsmo, who took over as CEO of the National Restaurant Association in May. Korsmo discusses her career to date. She has worked in public policy at the state and federal levels and most recently was chief executive of the Wine and Spirits Wholesalers of America before taking over the top post at the association. Korsmo discusses the state of the industry at the moment. And she talks about the Restaurant Revitalization Fund, and why the U.S. Small Business Administration is sitting on $180 million in leftover funding. The SBA may release those funds. She also talks about balancing the needs of those small restaurants with those of large chains. There is also a discussion on so-called “shrinkflation.”