Panera 2.0: Making Fast Food Faster

The Wall Street Journal: “Seven years ago, customers at Panera had to wait in line for up to eight minutes to place an order … Today, online orders make up more than a quarter of sales at its company-owned restaurants, and the average time customers spend waiting in line to order food has shrunk to one minute. Panera is widely cited by analysts as one of the most technologically savvy, best-performing chains in the industry.”

In 2012, “the chain opened a Panera prototype in Braintree, Mass., to test all elements of “Panera 2.0”: self-order kiosks, delivery, digital ordering and a new practice of bringing food to customers’ tables … Easing the ordering bottleneck by taking orders online, instead of at the counter, wasn’t enough: The kitchen had to be able to handle the volume. Allowing customers to place orders themselves led to more customization, but also more staff mistakes. The company revamped the way employees process orders in an effort to minimize errors by simplifying the kitchen display systems.”

“Digital orders now make up 26% of sales in Panera’s more than 900 company-owned cafes and delivery is available in 24% of its total locations—a percentage it expects to grow to as much as 40% by year-end. The chain in April said it plans to add 10,000 delivery drivers this year, on top of the roughly 4,000 it has now … Panera turned the corner last year as digital orders and delivery gained traction. In the first quarter of 2016, the chain posted its best traffic and same-store sales growth in four years, outperforming the industry by 6.5 percentage points—the widest margin it had ever recorded.”

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$13 Burgers Slows Demand for Fast Food

The Wall Street Journal “As the number of outlets serving ‘better’ burgers—featuring nontraditional toppings and artisan buns—has skyrocketed over the past decade, so has the average burger tab, turning some customers off … Lunch traffic to quick-serve hamburger restaurants fell 5% last year—the biggest year-over-year decline that market-research firm NPD Group Inc. has recorded … The average lunch burger check—including fries and a beverage—has risen 22% since the financial crisis to $5.83, with a 4% increase last year alone, according to NPD.”

“With so much competition and only so many ways to differentiate a burger, upstarts have been coming out with evermore gourmet ingredients, such as Wagyu beef, roasted garlic aioli and truffled arugula, which have raised the bar for burgers overall—and their price tag …they can beef up profits by charging extra for additional toppings … A basic hamburger at (Fatburger) starts at $5.94, but after adding bacon and chili, it is $8.14. With fries and a drink, the combo totals $13.37.”

McDonald’s recently adopted a back-to-basics approach after years of chasing health-minded customers with products such as salads, sandwich wraps and fruit smoothies. It had neglected its burgers and recently found that only one in five millennials had ever tried its signature Big Mac … The burger giant has been trying to improve the quality of its burgers by adjusting temperatures and cook times to deliver hotter, fresher burgers. Next year, it plans to make its Quarter Pounders with fresh, instead of frozen, beef. It is also in the process of rolling out higher-end, customizable burgers from a ‘Signature Crafted’ menu to compete with the ‘better’ burger places, but at a much lower price.”

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Seaweed Cups: Food as Packaging

The New York Times: “A growing number of entrepreneurs and researchers are working to turn foods like mushrooms, kelp, milk and tomato peels into edible — if not always palatable — replacements for plastics, coatings and other packaging materials.” For example: “The United States Department of Agriculture … has developed a material from milk protein that can be used to line pizza boxes, encase cheese or create, say, soluble soup packets that can simply be dropped in hot water. The product could even serve as a substitute for the sugar used to coat cereal flakes to prevent them from going soggy too fast.”

“Over the past several years, governments have quietly bankrolled efforts to develop packaging from food. The European Union, which underwrote a project to develop coatings from whey and potato proteins from 2011 to 2015, estimates that the global market for so-called bioplastics is growing by as much as 30 percent each year.”
However: “Nestlé says it wouldn’t want its demand for packaging to reduce the food supply, given widespread hunger … Few, however, are begging to eat the peels left after tomatoes are processed. A group of researchers in Italy has used them to develop a lining for cans.”

“A British start-up called Skipping Rocks Lab is taking matters into its own hands. The company has developed a packaging it calls Ohoo from edible seaweed, and is building a machine to produce containers from Ohoo to hold water, juices, cosmetics and other liquids on the spot. A juice bar, for instance, could create a container with each order.”

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Split Decision: Bezos Goes Bananas

The Wall Street Journal: “It started with a brainstorm from founder and CEO Jeff Bezos that Amazon should offer everyone near its headquarters—not just employees—healthy, eco-friendly snacks as a public service. After considering oranges, Amazon picked bananas, and opened its first Community Banana Stand in late 2015. It has since expanded to two stands on its corporate campus, which sprawls across several blocks in downtown Seattle, and says it has given out more than 1.7 million free bananas.”

“The response has been split. Most Amazonians like them. Other workers say it is now hard to find bananas in stock at nearby grocery stores. And some eateries in a two-block radius of the stands are feeling squished.”

“Amazon has traditionally been more frugal with its perks than other tech companies, which offer dry cleaning, haircuts, cold-brew coffee, nap pods and in-house yoga classes, among other things … Most visitors take two. Others take close to a dozen, claiming they have hungry co-workers—never, of course, that they hanker to bake banana bread after work. Some post photos on Instagram feeding the bananas to their dogs. The stand offers dog treats for four-legged friends.”

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Little Damage: Almond Charcoal Ice Cream!

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April Lavalle: “Little Damage Ice Cream Shop in Los Angeles, California is flipping the bird at all those ‘unicorn’-inspired sweet treats by creating a frozen confection that will take you to the dark side.Their pitch-black, almond-charcoal flavored soft serve ice cream is taking Instagram by storm, and it will definitely inject a little Halloween into your favorite summer treat.”

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Where Does Coke Taste So Good?

The New York Times: “The latest television commercials for McDonald’s, featuring the actress Mindy Kaling, do not appear on the company’s YouTube channel, Facebook page or Twitter account. In fact, they don’t mention McDonald’s at all — though they do mention Coca-Cola and Google.”

“The ads are part of the chain’s first unbranded marketing campaign, in which it is coyly asking people to search Google for ‘that place where Coke tastes so good.’ The query, meant to capitalize on millions of search engine results that favor the fast-food chain, is central to the ads where association with the brand is limited to placing Ms. Kaling in a bright yellow dress against a red backdrop.”

“The notion that Coke tastes differently at McDonald’s has been a topic of fascination for some time. The New York Times, as part of a 2014 article on the business relationship between McDonald’s and Coke, which dates back to 1955, reported that Coke has a special system for transporting and producing the beverage at the fast-food chain. Part of that includes delivering its syrup in stainless steel tanks versus plastic bags. McDonald’s also says it pre-chills the water and the syrup before it enters its fountain dispensers, and offers a slightly wider straw.”

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Yes Plz: Locol Coffee Good & Cheap

The New York Times: “Is it possible for high-quality coffee to be inexpensive? At Locol, the self-described ‘revolutionary fast food’ chain opened last year by the chefs Roy Choi and Daniel Patterson, the answer is yes. Locol’s stated mission is to bring wholesome, affordable food to underserved neighborhoods … Obtained and roasted according to the same lofty standards found at … any of the small, innovative companies that have transformed the high end of the industry in the past decade, Locol’s coffee is clean and flavorful.”

“But unlike those shops, where a cup can cost $3 or more, Locol charges just $1 for a 12-ounce coffee, or $1.50 if you want milk and sugar. Rather than offer free condiments and pass on the cost to all customers, those who want milky, sweet coffee pay for their pleasures, while drinkers of black coffee get a break … Locol is rolling out a coffee brand called Yes Plz and plans to eventually open coffee windows and stand-alone shops in addition to supplying its three locations.”

Tony Konecny of Locol comments: “Coffee still thinks that mass appeal is a sign of selling out and inauthenticity, but everybody wears Levi’s. I think contemporary coffee has failed to find the consumers it should be finding.” He adds: “What we know about coffee sourcing, coffee roasting, coffee brewing, coffee service — there’s really no reason why you couldn’t make the coffee at every bodega taste good.”

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How Music Changes Dining Behavior

Quartz: “Soundtrack Your Brand, a Spotify-backed music-streaming startup, today released a massive study on the impact of background music in a restaurant setting … Researchers found that music they deemed thoughtful and ‘on-brand’ can drive up sales—especially dessert sales, as customers linger longer—but music that’s too mainstream can actively hurt sales. Restaurants would actually be better off not playing music than playing a random scroll of top hits, it turns out.”

“Soundtrack Your Brand co-founder Ola Sars, who previously helped found Beats Music, which is now owned by Apple. Sars adds that music branding seems to come down to finding the perfect level of subtle emotional engagement: customers balk at hearing overly popular songs because they likely find them too noticeable or distracting, for example.”

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Cava Mezze & The ROI of ‘Experience’

Fast Company: Cava Mezze, a chain of 24 Mediterranean restaurants, is using “a system of sensors … to monitor everything from customer wait times to food-safety practices … to boost Cava’s ROI of experience.” Chief data scientist Josh Patchus “trains motion sensors (stationed in select restaurants) on customers as they’re waiting to order. What he found: Lines tend to bunch up near the menu board and while people are selecting ingredients at the serving station … Rather than limit customers’ options, he redesigned the menu boards so that customers know what to expect when they reach the serving station. The change has helped lines move 10% faster and hold 12% more people.”

“Sensors in the restaurants’ seating areas show that customers in urban locations often stay only long enough to eat, but in the suburbs they prefer to linger … Patchus suggested increasing seating at the suburban outposts by 30%, allowing them to accommodate large groups. Those parties boosted revenue in the redesigned stores by 20% per square foot … Patchus uses the sensors to monitor back-of-house operations. Walk-in refrigerators can now tell managers how long they’ve been left open, and if there have been any temperature or humidity spikes … food-quality complaints from customers have dropped 28%.”

“If the cash register is too close to the serving station, customers have to shout their choices, and it can be hard for them to hear the server’s response. Sensors track decibel levels in the ordering area; if they’re high, Patchus suggests a remodel.” Patchus comments: “To understand our customers, we have to be around our customers.”

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