2019 Brings Minimum Wage Hikes, How Will This Impact Restaurants?

The $15 minimum wage movement has morphed into a force to be reckoned with.

The Fight for $15 worker movement, that started in 2012, led to 20 cities initiating minimum wage increases in 2018.

In mid-February, thousands of fast-food workers gathered in protest in almost 50 cities in support of the $15 wage bump.

In the last few weeks, 20 states have passed legislation increasing the minimum wage, some of which included a tipped wage increase.

In Missouri, the new hourly wage increased from $7.85 to $8.60 and will be raised 85 cents per year until it reaches $12 in 2023. In Arkansas, the minimum wage has been raised from $8.50 to $9.25 and in 2021, it will hit $11.

Although most states are far from the $15 an hour minimum wage, California and Washington are at $12. In Washington D.C., the minimum wage has been increased from $13.25 per hour to $14.

Washington also requires employers to pay tipped employees the full state minimum wage before tips.

Find out what other states increased the minimum wage and the tipped wage in 2019 at "Toast" now.

So what does this ultimately mean for the restaurant industry?

Well, the average 5-6 % profit margin is tough enough for restaurant owners. When the minimum wage increases, the less profitable restaurants will be.

Many operators have argued that increases in labor costs, especially large ones like $15 an hour, like this would not only be detrimental to their business, but the employees would ultimately suffer from weekly hour cuts and even may lose their jobs entirely.

Not to mention, it encourages operators to invest in technology like self-ordering kiosks to cut labor costs.

Watch The Barron Report episode above where Host Paul Barron discusses how this affects the restaurants and that other changes will operators will make to counteract the increase in labor costs.

How the Emerging Brand and Shark Tank-Backed OatMeals Ventures to Define a New Fast Casual Category

Emerging brands continue to outperform the pack of cornerstone restaurants brands over the past year and the category breakouts are in a race for leadership. Take the crowded fast casual pizza category that now has a clear leader that has prevailed in Mod Pizza.

More and more category challengers are being created in a variety of segments today.

When you analyze the healthy halo category, it’s being dominated by sweetgreen and Tender Greens with new challengers like Lemonade and Flower Child.

Fresh Mex has been holding strong with Chipotle, however, they have seen some fall off in the dominance they once had in meal occasions. This leads us to a much more fragmented field of new category leaders.

OatMeals, on the other hand, is one of these unusual but potentially new category entries that could set a new standard for what it means to innovate at the brand level.

I had a chance to sit down with Founder and CEO Samantha Stephens of OatMeals, a one-unit NYC concept that is aiming to transform what was once a breakfast only menu item into an entire category for menu innovation.

Join me and watch this episode of The Barron Report above as we discuss how consumers are responding to this unusual brand, what it takes to launch a concept like this, and what it was like to present to the sharks on hit TV show "Shark Tank" and actually get a deal with Lori Greiner to build out the brand concept with an entirely new approach to brand building.

15 Restaurant Brands to Watch in 2019

When looking back on 2018, it was apparent that there were a clear group of concepts that were starting to separate from the pack in the restaurant industry. Restaurant closures topped at 50K closed locations in 2018– so the market seemed to have some correction.

While we did see some closings of lower performers in casual dining with Applebee’s alone closing over 250 locations in the past two years, the good news was the emerging brand's sector saw significant growth. This sector showed better performance in 2018 than any other brand groups.

These emerging brands consist of about 250 total brands that have multiple locations and are starting to take control of categories. Make sure to check out our 2018 Emerging Brands Report and to be on the lookout for our 2019 list.

sweetgreen-logo

All that said, my 15 brands to watch for 2019 are led by a group of leaders that I think have some unique and interesting aspects that put them in the limelight.

For example, Sweetgreen is setting a new standard of what it means to be a restaurant. The restaurant has morphed into a lifestyle brand or platform that will prove to be a new strategy for several brands that have the following.

lemonade restaurant logo

Lemonade is one of these as well and what separates the brand from the pack is its quality and the brand connection that is prevailing in a big way with guests. If they continue on a growth strategy this could be a player in the healthy halo sector very quickly.

Mod Pizza logo

Mod Pizza is another in this group that has clearly won the fast-casual pizza wars, now with over 400 locations and a management team that is geared toward people and culture this brand could be one to bet on.

Cava restaurant logo

My special mention would be Cava, while not on my 15 brands to watch, their acquisition of the Mediterranean fast-casual chain Zoe’s Kitchen creates both opportunities and challenges that I think are worth mentioning. They also have a rockstar group of investors that are a good reason to keep an eye on them.

Don't miss the episode of The Barron Report above where I break down why these brands have that X-factor.

Top Wine Trends to Expect in 2019

On this episode of The Barron Report, Paul Barron is joined by Emily Wines, master sommelier & vice president of wine and beverage experiences at Cooper’s Hawk Winery & Restaurants. The two discuss wine trends, understanding your wine menu, and what bar operators and owners should expect for 2019.

Some of Wines’ responsibilities include advancing team members’ knowledge of wine, serving as the liaison between Cooper’s Hawk and its individual restaurants, and engaging with guests and the brand’s 250,000+ Wine Club members. She also creates unique experiences centered around wine and spirits.

For your guest, it’s all about the journey of the wine - whether it be told through education, events, collaborative partnerships, or curated lifestyle adventures. Listen to this episode of The Barron Report for more insights on the new era of wine drinkers and building your 2019 wine list.

SHOW NOTES

  • 15:05 - Wine Bar Technology Fads

  • 18:43 - Generational Changes and the New Breed of Wine Drinkers

  • 22:19 - Building Your 2019 Wine List

  • 28:35 - Seasonal Wine Trends

  • 1:52 - Creating Unique Beverage Experiences with Coopers Hawk

  • 4:36 - Wine Trends that Should Stay in 2018

  • 8:03 - Frosé and Other Wine Trends Living Up to Their Hype

  • 11:58 - What is Causing $20 Bottles with Surprising Quality

 
 

On a recent episode of the Barron Report, Paul Barron interviewed Shana Clark, Wine, Sake and Cocktail Journalist and Consultant, to review Wine Spectators Top 100 Wine List of 2018. For more on the latest wine trends, check out the video below.

Research by:

Rachel Brill

Rachel Brill

Social Producer


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The Future of Edibles in the U.S. and Canada

On this episode of The Barron Report, Paul Barron is joined by Nancy Whiteman, founder and CEO of Wana Brands, the leading edibles company in the Colorado medical marijuana industry in terms of quality, consistency, and potency. The two discuss future innovations, laws, and potential brands entering the marijuana industry.

Wana Brands’ products are in over 450 dispensaries and account for $2 out of every $10 spent on edibles in Colorado. The company under Whiteman’s guidance has expanded to Oregon, Nevada, Arizona, and Illinois with hopes to expand their market in Florida and several other states.

Listen to this episode of The Barron Report for more insights on what the future will hold for edibles in the U.S. and Canada and how it will impact the foodservice industry.

SHOW NOTES

  • 17:37 - Edible Sales to Reach More Than $4 Billion by 2020

  • 19:12 - From Drug Trade to Grown Commercially in the U.S.

  • 22:22 - Bigger CPG Companies Looking to Enter the Cannabis Sector

  • 26:18 - What’s Next for Wana Brands

  • 1:00 - How Wana Brands Became an Edible Company

  • 4:06 - How Edibles are Expanding into the Foodservice Industry

  • 7:15 - Cannabis-Based Stocks

  • 9:03 - Predictions for Public Consumption in Restaurants and Bars

  • 15:18 - Dissecting Dosages for Medicinal and Recreational Use