Big Food is Fostering Innovation

Large corporations have been noticing how consumers have been favoring products made by independent startup food companies, since a good chunk of those provide craft, high-quality, niche, and, a lot of times, healthier products.

Needless to say, big food wants in. Especially, since this specialty food segment has a tremendous growth potential.

So, how is big food seeking innovation?

Companies like Campbell Soup, Chobani, Kellogg, Kraft Heinz, Nestlé, PepsiCo, and Tyson Foods are creating innovation centers and/or partnering with existing incubators to help niche brands grow and flourish.

PepsiCo

Pepsico’s new center for innovation is called “The Hive.”

According to Food Dive, “this incubator will be a separate entrepreneurial group outside of the core headquarters that will help nurture niche products already in the portfolio,” like for example Stubborn Soda.

As Foodable has reported in the past, PepsiCo also partnered with a Chicago-based, food and beverage incubator, The Hatchery, in order to look at other startup brands that have the potential of becoming a possible venture for the beverage giant.

Tyson Foods

Earlier this year, Tyson Foods announced that it will be working with two incubators—Plug and Play and 1871—linking the food giant to innovation hailing from Silicon Valley and Chicago.

That’s not the first time Tyson showed it’s commitment for innovation. In fact, the company launched a venture capital fund in late 2016 “to invest in companies developing breakthrough technologies, business models and products to sustainably feed the growing world population,” according to the company website.

Since then, Tyson has invested in brands like for example Beyond Meat, that promote sustainability and others that promote the internet of food, like FoodLogiq.

Tyson is spearheading innovation through its own brand, ¡Yappah!, which aims to fight food waste by utilizing “forgotten” ingredients like rescued vegetable puree and spent grain to make protein crisps, and investments in companies like Future Meat Technologies, an Israel-based “biotechnology company aiming to transform global meat production through distributive manufacturing of fat and muscle cells, increasing food safety and reducing ecological impact worldwide,” as stated in the company’s website.

Chobani

Chobani is another company looking to foster innovation through its Food Tech Residency. The company set out specific challenges in the food and agriculture value chain they would like to tackle (like food waste, food safety, water conservation, logistics, etc.) and invites like-minded, early-stage tech and agriculture startups to apply for funding.

Currently, the brand is hosting it’s fourth incubator class, since it launched the program in 2016, with companies developing products like tea, hummus and allergen-free baking ingredients. Alongside the food startups, two tech companies will be participating in Chobani’s inaugural Tech Residency Program—CinderBio and Skyven Technologies.

Watch the video above to learn more and stay tuned to other Industry Pulse episodes to keep up with all the innovation happening around your business! To learn about other consumer trends involving sustainability like plant-based meals, watch the video below:

How Food Safety is Marketable

Audits, cleaning schedules, SOP's, and a glowing health department inspection are a marketing advantage. Identifying key elements in your operation to keep media recognition positive makes sense. Is there a balance between clean and museum-like? Form and function strike a balance with the right systems, people using tools and brainpower that matter.

“I always look for the place where I would want to eat after I am done doing the inspection,” said “Grace.”

Grace is a department of health inspector in the mid-Atlantic whose identity is being kept concealed for her privacy as well as those locations which she inspects. Grace tells of stories of cockroaches left bobbing in salad dressing, seeing blood dripping from a cook’s open wound into meatball mixture, and “that one time I saw a dishwasher using glass cleaner in the sanitizing sink in place of sanitizer,” amongst others.

Her tales of ill and disgust are numerous. But so are stories of stand-out operations that take customer safety as a guiding light. We know what bad publicity does - ask our friends at Chipotle how the last few years have gone.

Market food safety like any other marketable element of your operation to earn repeat business and shine as a professional establishment. 

Shuttershock

Shuttershock

Violation-Free and Proud!

“I make visits, usually, twice per year. Those are two good opportunities to impress me. If I am there any other time, it is because we have a problem,” said Grace. “A visit outside the two routines [stops] means that somebody has called [the health department] after being sick. That usually isn’t a good day for everybody involved.”

But what about a really good routine visit?

Most municipalities archive health department reports online for anybody to review. Take the A+ report card and make an Instagram post. Celebrate with your team and reward their work, while making that highlight a point of public engagement.

The FDA Food Code stipulates that the most recent health department inspection be available for the visitors to your operation to review.

Have a glowing report? Blow it up and hang it for all to see.

“One of the restaurants in my area posts [my] report in their bathroom stalls with a sign above it: ‘Relax and enjoy a healthy shit - Our food didn’t make you sick!’ While absolutely laughable, it is also a memorable experience that is sure to make its way into a discussion. That’s good marketing.

Shutterstock

Shutterstock

Audits aren’t Just for the IRS

Self-policing is better than, you know, the actual police, or in this case, an extra visit from the health department.

Dropping an audit tool into standard operating procedures means you never need to get ready for an inspection.

“I can always tell when there is panic in the kitchen when I visit,” said Grace. “You really aren’t hiding anything. There is nothing you can fix when I am walking through the dining room on my way [into the kitchen.] Forget it! Just always be ready.”

Many successful operations either engage a third-party sanitation auditor or use their own auditing tool. Grace says that "the dishwasher company or chemical suppliers often have services included in the cost of leasing a [dish] machine that will conduct cleaning audits.”

An audit tool can be twenty areas, or more,  of concentration or concern that is completed in check-box form by, say, a junior member of management.

Why? They learn what to look for and then share the information with the staff. The responsibility can even be passed around so there are always fresh insights.

More advice from Grace? Train the way you fight, fight the way you train. Expect every day to bring a health department visit and there will never be an issue. You owe it to your customers. Taking temperatures of chicken, logging refrigerator temps, and using the right sanitizer concentration should be the habit, not a one-off when there is an official visit.

What is too clean?

Share information about cleaning regimens across social platforms. Post a Boomerang video of deck-mopping the kitchen. No need to show the super gross stuff - like pumping out the grease trap - but put a highlight on your commitment to a clean operation by humanizing the hard work that goes into a solid facility.

No need to make every FaceBook post about cleaning, though. Overload starts to raise red flags, for customers and staff. Standard operating procedures and master cleaning schedules work in concert with daily cleaning routines, front-of-the-house ‘sparkle’ sessions, and regular maintenance. Ask staff for their input on what they feel needs a little extra attention, keeping in mind it is a kitchen, not a museum. There will be errant smudges, splatters, and stains. Commit to a food-safe operation without making the staff neurotic.

Shutterstock

Shutterstock

Advertise the Occasional Shut-Down

As much as we don’t like it, there are slow days. There is the predictable downturn, say, after New Years and before the Valentine’s Day rush. Make the most of a slouching Monday by advertising a day “Committed to Cleaning.”

You were going to do a deep clean anyhow; take advantage of the time by sharing the news.

“I have seen several places put a sign on the door about being closed for cleaning. They missed an opportunity. They should have said something like, ‘Hey! We are closed today so we can make sure your next visit is great,’ or something like that. Make it look like something they [the restaurant] wanted to do, not had to do.”

When Grace is gone, the next steps are up to you. But she will be back.

Engage staff in a formal, recognized food safety training, provide the right cleaning tools and food safety resources, and then tell the world about your seriously healthy operation. Use your website to share the latest self-audit and explain your food safety commitment.

Either you do or the health department will, but maybe not the way you want.

Beyond Meat Goes Public

A few weeks ago, there were rumors that the plant-based company Beyond Meat was planning to go public before the end of the year.

Well, these rumors ended up being true because last Friday, Beyond Meat filed an initial public offering for $100 million.

Beyond Meat reported $56.4 million in revenue for the first nine months of 2018, which is a 167 percent spike from last year.

"Going forward, we intend to continue to invest in innovation, supply chain capabilities, manufacturing and marketing initiatives," said the company in the filing.

The plant-based market is growing at a rapid rate as more consumers gravitate to a vegetarian or flexitarian lifestyle.

Plant-based consumption is up over 300 percent over the last year, according to our Foodable Labs data.

The Good Food Institute (GFI) has also released market data from Nielsen showing that the sales of this sector have recently exceeded $3.7 billion and that plant-based meat sales specifically have increased by 23 percent.

Beyond Meat was one the first companies to offer a vegan burger and quickly emerged as one of the biggest players in the plant-based protein market.

Besides being the first plant-based burger to be sold in the meat section at Whole Foods, the company has partnered with restaurants and food distributors across the country to get the Beyond Burger on more menus.

Beyond Meat has sold over 25 million veggie burgers that are "the closest thing to meat" ever created, boasts the company.

But the company has developed a product mimicking meat for a reason. Its target demographic aren't vegans and vegetarians, instead, it's flexitarians who may eat meat but choose not to often because of its environmental impact.

"Instead of marketing and merchandising The Beyond Burger to vegans and vegetarians (who represent less than 5% of the U.S. population), we request that the product be sold in the meat case at grocery retailers, where meat-loving consumers are accustomed to shopping for center-of-plate proteins," writes the company in the filing.

The Beyond Burger is now available in 11,000 grocery stores across the country.

Read more about Beyond Meat going public at "CNN."

Don’t miss The Barron Report episode below where Paul Barron goes into more detail about the plant-based company’s move to go public.

How Sweetgreen is Becoming the Next Fast Casual Unicorn

On this episode of the Barron Report Live, host Paul Barron discusses which wing-focused restaurant brand is taking on pizza for the next Super Bowl, the fire sale of Diageo’s liquor brands, and how Sweetgreen becoming the next food unicorn in the fast casual industry.

Wings Take on Pizza in Super Bowl Challenge
At :35 - Paul discusses the growth of the popular takeout brand, Wingstop. The chicken-wing fast casual chain has seen a 15.5 percent increase in annual growth last quarter, with systemwide same-store sales also growing by 6.3 percent, and its net income jumping 33.8 percent.

The increase in store count to 1,215 global locations, is pretty major move compared to growth in the fast casual segment is slowing down overall. Additionally, the company’s strategy and lack of direct competition are leading them to take over the takeout industry over pizza.

Diageo to Sell Off 19 of Its Brands
At 5:00 - Paul discusses Diageo’s, the world’s largest spirits producer, decision to sell 19 of its lower-end spirits brands to Sazerac for $550 million. The strategy appears to allow Diageo to focus on its premium labels.

This decision will allow the company to take on the trending craft spirits market. Paul has seen firsthand when filming the Foodable show “Across the Bar,” just how often mixologists have opted for a more unique craft cocktail brand.

Sweetgreen to Become the Next Fast Casual Unicorn?
At 6:31 - Paul discusses the biggest news of the week — how salad chain Sweetgreen is quickly becoming the next fast casual market leader.

Foodable identified early on that this concept would be a breakout brand in the fast casual market. With Sweetgreen’s HQ move to Los Angeles in 2016 to join other tech-focused restaurants that are raising money in private rounds at valuations of $1 billion or more, they are here to stay. “CNBC” recently reported that Sweetgreen is nearing a $200 million investment with Fidelity Investments.

The key to Sweetgreen’s success like other fast casual stars is to have a unique,  Xactor. For the salad chain, it’s all about lifestyle. Showcased in previous events like the Sweetlife festival, Sweetgreen is able to connect with their consumers celebrating passion and purpose.

Another brand that has been able to achieve this in the past is Chipotle, controlling the burrito business with ambiance, food, and environment compared to Baja Fresh.

In recent news revolving Chipotle, hedge fund Pershing Square Capital Management has sold another large chunk of its Chipotle Mexican Grill investment. The affiliated entities have reportedly sold a total of 118,307 shares of the fast casual chain for a total of $55.8 million.

Watch the live podcast above to learn Paul’s predictions for the fast casual market and what he believes to be next for these two stars, what other factors are playing into Wingstop’s impressive acceleration and its edge in takeout, and to find out which brands are being sold to Sazerac.

 
 

Operator Guidelines For Building Delivery Sales Through Third-Party Service Providers

The massive growth of off-premise third-party service providers is going to continue to proliferate. Working with third-party service providers can be a lucrative venture when done correctly, but it can also be a curse when done wrong. With so many variables, there are a lot of challenges that operators have to tackle on the quest to create a streamlined, successful, and profitable off-premise program. From technology, staffing, and packaging to call centers, order entry, and delivery – today’s restaurants have gone from a retail operation to a manufacturer with several distribution points.

On this episode of The Takeout, Delivery, and Catering Show, Valerie and Erle speak with Gracie Prasanson, director of sales for Jason’s Deli and a member of the Catering Council for Multi-Unit Operators, about how restaurant operators working with third-party service providers can make sure that a strong foundation is in place, and known risks are mitigated so that your restaurant does not get outmaneuvered by the third-party service provider.

SHOW NOTES

14:21 - The data paradox
17:49 - There is a connivence customer and Amazon knows it
20:04 - Food safety and legal concerns with third-party service providers
22:34 - How can one unit operation navigate the off-premise landscape?
27:50 - Rethinking packaging when it comes to delivery

00:55 - Gracie Prasanson, welcome to the show!
04:24 - We have to separate third-party marketplaces from third-party service providers
07:02 - Make sure you understand the fees
10:38 - Every detail about these transactions are different
12:54 - Third-party completely changes your menu pricing structure

 

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