A James Beard Foundation survey shows what’s on chefs’ minds. The FAST Act faces a significant challenge. BradyIFS and Easy Ice each make two acquisitions.
Rising food costs represent the number one issue of concern for chefs heading into 2023, according to the James Beard Foundation’s Fall Industry Survey. In fact, 44% of the chefs participating in this national study ranked it as their top worry. Rising labor costs, the inability to find staff to hire, and rising non-food costs (utilities, containers, furniture, etc.) clustered as the next three issues of concern. And, naturally, supply chain issues around food items were next. Interestingly, staff retention and supply chain issues around non-food items fell lower on the list.
As a result of higher food and labor costs, 67% of the chefs participating in the James Beard Foundation study increased their prices on their entire menu and 25% did so on select menu items. Only 8% did not raise prices. More than half of the respondents have reduced the number of dishes on their menus, with 31% both cutting down and simplifying their offerings.
While fully aware of the challenges that lay ahead in the coming year, the chefs participating in the James Beard Foundation study did offer some reasons for optimism. For example, many respondents expressed hope in the “next generation” for motivating innovation and progress for the industry. And they showed confidence in the industry’s fortitude.
“We are a resilient group of people who have fostered a strong network of community,” wrote in one of the respondents. Others wrote that they know the industry will make it through tough times the way it has so many times before.
Foodservice News This Week
- California’s controversial Fast Food Accountability and Standards Recovery Act (FAST Act) may be put on hold until 2024. The Save Local Restaurants Coalition, led by the National Restaurant Association, International Franchise Association (IFA), and The U.S. Chamber of Commerce, has gathered enough signatures for a referendum on the November 2024 ballot. Once the California Secretary of State has verified the Coalition has submitted the needed number of signatures, implementation of the law will be on hold until the vote, per the NRA. The FAST Act creates an unelected council to regulate national quick service chain operations. The 10-member body would oversee wages, training, and health and safety standards. These changes would increase prices at quick service restaurants by 20% to 22%, per the NRA, and ultimately slow business growth.
- McDonald’s is the latest restaurant chain to experiment with a smaller restaurant with more of a technology focus. The location, which is near Ft. Worth, Texas, allows for both on-premises and off-premises dining. The inside includes pickup shelves for orders. Outside includes parking spots for delivery drivers and users of curbside pickup.
- Could a potential recession force consumers to cut back on their expensive delivery habits? Not likely, according to the CEO of Shake Shack. “People have an irrational ability to pay for the convenience of things to come and show up in their house,” said Randy Garutti, CEO of Shake Shack. Although he did acknowledge that consumers are starting to realize how expensive delivery can be.
- Third-party delivery provider DoorDash will lay off 1,250 corporate employees, the company announced. This latest cost-cutting effort is fueled by tapering growth and over-hiring, per a note from the company’s CEO to employees.
- Easy Ice expanded its reach with two acquisitions. The self-described provider of full-service ice machine subscription services purchased Polar Ice Systems in Demotte, Ind., and Cube Aire Refrigeration, in Lakeside, Calif. Prior to these acquisitions, Easy Ice had 16 locations scattered throughout the country.
- BradyIFS continued to expand via acquisition with two purchases. The company acquired Maintenance Supplies and Marketing, a jan/san, facilities maintenance and foodservice distributor serving Northern California. BradyIFS also acquired H.C. Walterhoefer and Sons, a foodservice, dry goods and jan/san distributor serving Maryland and Virginia.
- Canadian restaurant franchisor Foodtastic will acquire Quesada Burritos & Tacos, a chain with more than 175 locations across 8 provinces. Quesada plans to open more than 50 locations over the next 36 months, per a company release.
- Growth Chains: Bojangles inked a franchise development agreement with Melanbo, a franchise group partly owned by music executives Mel Carter and Kevin “Coach K” Lee. Carter and his ownership group will develop 14 new locations in the Atlanta market, building upon their acquisition of 18 existing Bojangles restaurants in Georgia, North Carolina, and South Carolina. The acquisition and size of the multi-unit development agreement make Melanbo the largest Black-controlled franchisee in Bojangles’ system, per a release. The Habit Burger Grill opened a location in in Puyallup, Wash. The PJW Restaurant Group opened its 21st J. Whelihan’s location. This restaurant is in Broomall, Pa. The company opened another location in Hatfield, Pa., this past summer. Sip Fresh, a handcrafted juice and beverage concept, plans to open a location in Glendale, Ariz. This will be the chain’s first unit outside of California. Halsted Street Deli & Bagel will open a location in Naperville, Ill., in January. It will be the chain’s first unit outside of Chicago.
Economic News This Week
- New orders for manufactured goods increased 1% in October compared to the previous month, per the U.S. Census Bureau. New orders have increased in 12 of the past 13 months, including 0.3% in September. Unfilled orders, up 26 consecutive months, increased 0.6% in October. This 0.1% more than in September. In other words, supply chain issues have not yet abated.
- The personal consumption expenditures price index came in at 6% for October, which is down 0.3% from the previous month, per the U.S. Bureau of Economic Analysis. Both personal income and disposable personal income increased 0.7% in October. Personal consumption expenditures increased 0.8%. Excluding food and energy, the PCE price index increased 0.2%. Real DPI increased 0.4% in October and real PCE increased 0.5%.
- Private sector employment increased by 127,000 jobs in November and annual pay was up 7.6% year-over-year, according to the ADP National Employment Report. This was the smallest gain in jobs since January 2021. Not surprisingly, interest-rate sensitive job segments, like construction, contributed to the slower job growth. In contrast, consumer-facing sectors like healthcare and hospitality were bright spots, with the latter adding 224,000 positions. “Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains,” said Nela Richardson, chief economist, ADP. “In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting, and the post-pandemic recovery is stabilizing.”
- Initial-jobless claims totaled 225,000 for the week-ending November 26, per the U.S. Department of Labor. That’s a decrease of 16,000 from the previous week. The 4-week moving average was 228,750, an increase of 1,750 from the previous week.
- The number of job openings edged down to 10.3 million on the last business day of October, per the U.S. Bureau of Labor Statistics. The number of hires and total separations changed little at 6.0 million and 5.7 million, respectively. Within separations, quits (4.0 million) and layoffs and discharges (1.4 million) changed little.
- For the first time since May of 2020, economic activity in the manufacturing sector contracted in November, per the Institute for Supply Management. The November report came in at 49%, 1.2% less than October. Despite the slowing in activity, the manufacturing sector remains in a growth mode, the ISM pointed out.
- For the 30th month in a row economic activity in the services sector grew in November, per the Institute for Supply Management. The Services PMI came in at 5%, which is 2.1% greater than October. Overall, 13 of the service industries reported growth in November.