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Last week, McDonald’s announced that they would be increasing salaries of all corporate-owned restaurant employees (which, unfortunately, only accounts for approximately 10 percent of McDonald’s locations). It now looks like McDonald’s bold move may be the start of a domino effect — literally. Yesterday, in an interview with CNBC, Domino's CEO Patrick Doyle said that the competition for labor is driving restaurants to increase the wages of their employees including perhaps, Dominos, just to stay in the game.
“The great news is the economy is moving, it is getting better, it’s getting harder to hire people, it’s why I think you’ve seen a lot of these announcements around pay,” he told CNBC in an on-camera interview. “I think the reality is the labor market is tightening up, you know, and we’ve got to respond to that. It’s getting harder to hire people, that drives wages up and that’s a great thing.”
Doyle said that most of his locations are franchise-owned, but as for the 400 stores owned by the parent company, he stated, “we need to pay more to hire people right now.” Domino’s later backpedaled, telling The Daily Meal that the “we” actually referred to the restaurant industry in general, and was not meant to imply a specific plan for wage increases at Domino’s restaurants.
“The jobs we’re talking about are mostly delivery positions. With tips, our drivers already make, on average, well over the minimum wage and over the amounts that you’ve recently heard from other retail and restaurant companies,” Tim McIntyre, vice president of communications at Domino’s, told The Daily Meal. “As you know, we’re largely a franchised organization, so wage rates are going to vary locally by owner, but we’re confident that we are highly competitive in the market.”
According to Glassdoor, Domino’s delivery drivers receive $7.76 hourly on average, which is above the federal minimum wage of $7.25. However, Domino’s does not quite have a clean track record when it comes to paying their employees fairly. Early last year, the pizza company settled a wage theft lawsuit for $1.28 million in court.
Restaurants in 2030: More Tech, Less People, Lots of Unknowns
By 2030, our human population will be smaller and older.
According to the recently released National Restaurant Association “Restaurant Industry 2030” report, from 2000–2010, Bureau of Labor Statistics (BLS) data reports that the U.S. population grew at a rate of 0.9 percent. From 2018–2030, the BLS and NRA project that annual figure to be 0.7 percent.
Furthermore, in 2010, only about 13 percent of the population was aged 65 and older. In 2020, the BLS and NRA project that same group will make up about 17 percent. By 2030, it will figure 21 percent. In 10 years’ time, the slices of the population occupied by those under 25 and those aged 25-44 will drop one full percentage point, from 31 to 30 percent and 27 to 26 percent, respectively.
A shrinking, aging population of American people will lead to a 2030 foodservice workforce that’s feeling the same effects.
Ten years will have the opposite effect on tech, however.
The NRA’s report used the Delphi method—a forecasting approach based on the results of rounds of questionnaires sent to a panel of experts—to predict the most likely developments for the foodservice industry by 2030. Out of the top five forecasted developments, three center around updated and increasing technology: Commonplace acceptance of mobile payment widespread handheld payment terminals that allow for payment at table and a majority of takeout and delivery orders placed digitally. Out of the 25 total top NRA forecasts, close to 50 percent (12) have a tech focus.
This combination of workforce and tech projections has some interesting implications for the foodservice industry, to put it lightly. Automation could make up for less-available human labor. Employees (older as whole in 2030) will more than likely need to bolster up tech skills to handle operational changes that rely heavily on digital literacy. A handful of other probable shifts and possible disruptors is also waiting down the pipeline, leaving the years between today and 2030 as a blank canvas ready for the foodservice industry to grapple with a slimmer workforce, wider base of technology, and bevvy of other changing circumstances.
What will the workforce look like in 10 years? That might depend on the restaurant industry cementing its status as a good career choice.
A shifting workforce
At the top of the NRA list of most likely industry structure developments is the prediction of upped competition for customers. Competition for good labor on the part of operators is bound to intensify as well.
Per BLS data, as of September 2019, the U.S. was in the longest uninterrupted streak of job growth on record, looking back on a consecutive 108 months of increase. Yet, while growth has occurred for the U.S. job market, the amount of that growth has been minimal. Even with this streak, the decade stretching from 2010 to 2020 is on pace to be the second-weakest for job expansion since the 1930s.
The NRA expects job growth to slow even more over the next decade. From 2010–2018, the BLS reports that employment grew at 1.7 percent annually from 2018–2030, the NRA projects this to fall one percentage point to 0.7 percent. Per that rate of growth, about 17.2 million restaurant and foodservice jobs are expected to exist in 2030.
Tight workforce expansion is a harbinger of a negatively growing economy, and it could be difficult for operators to provide workers with higher wages and enough hours during these periods. But higher wages, better working conditions, and more developed internal career ladders will be necessary for attracting 2030’s talent.
“To reach its 2030 potential, the restaurant industry needs to enhance its status as a good career choice,” an anonymous Delphi panelist said.
Thanks to the potential upcoming slow in population growth and change in age demographics, the workforce will grow modestly over the next 12 years (the NRA projects a rate of 0.5 percent). A demographic shift in the ages of laborers—the BLS predicts that employees 65 and older will be at a record high with 16.1 million of them in the workforce, with teenage employees at the lowest since 1963, with 5.1 million in the workforce—will mean that available employees will be searching for more careers, and for less part-time high school or college jobs.
The NRA’s Delphi panel predicts an increase in total employee compensation costs by 2030. As of July 1, 2019, the U.S. Department of Labor reports 30 states with minimum wage requirements higher than the federal per-hour standard of $7.25, and this group of states could increase by 2030. It almost surely will. The NRA report forecasts that labor levels in the foodservice industry will remain intensive, even with increased automation and tech, meaning pay will have to account for this intensity.
Some good news for operators: The NRA’s Delphi panel predicts an overall decrease of the average number of employees per unit, meaning that, while wage costs will most likely be higher, there will be less team members in need of a paycheck.
“Employers are likely to use compensation and benefits to attract new talent. Technology skills will be needed to ensure the staff is able to deal with automation and robotics, data analytics, and more,” the NRA report said.
The association’s Delphi panel expects a rise in fresh formats like virtual restaurants and ghost kitchens, and predicts that off-premises traffic will post stronger growth in 2030 than on-premises dining.
Other labor force changes coming up in 2030 include increased diversity. The restaurant industry already performs well when it comes to employing women and minority managers, but NRA’s Delphi panel expects to see both women and minorities in a larger proportion of upper management positions in 10 years’ time.
These future hiring patterns reflect an increasingly diversified U.S. population in 2030. According to U.S. Census Bureau predictions, white populations are expected to decrease from 59.7 percent of 2020’s population to 55.8 percent in 2030 African-American populations are expected to rise from 13.4 percent (2020) to 13.8 percent (2030) Asian populations will increase from 6 percent (2020) to 6.9 percent (2030) and Latinos will represent 21.1 percent of the population in 2030, up from 18.7 percent in 2020.
In 2019, the foodservice industry is in the process of widening its digital footprint and technological capabilities. In 2030, it will still be growing, but the technological moves made will have already changed the landscape of the industry significantly.
Tech is projected to alter the very core of the business, playing with the structure in ways that will require operators to be more agile than ever before. “As restaurants shift away from the traditional, operators must be nimble. Constant innovation and speed-to-market will help restaurants thrive as they serve guests where and when they want to be served,” the NRA’s report said.
The association’s Delphi panel expects a rise in fresh formats like virtual restaurants and ghost kitchens, and predicts that off-premises traffic will post stronger growth in 2030 than on-premises dining. These developments will bring with them a new, hybrid restaurant model, one that mixes full-service, fast-casual, and quick-serve styles with ultimate carryout and delivery convenience, with more restaurants dedicating specific areas to delivery and takeout.
“Restaurant physical spaces will be smaller, requiring less square footage due to the increase in delivery and takeout,” an anonymous Delphi panelist said.
Supply chain operations will most likely rely on machines over people, with most cases of ingredients shipped equipped with a barcode for easy monitoring, and food safety will be increasingly monitored by technology as well. Computerized cooking equipment is forecast to play a larger role in kitchens, leading to back-of-house operations that are more heavily automated (resulting in that decreased number of average employees per location). This will not only change the layout and labor elements of a concept, but could also lead to faster prep times.
More ghost kitchens? We wouldn't bet against it.
And automation won’t be reserved for back-of-house only. In addition to increased mobile payments, handheld payment terminals, and digital orders, 2030 should see a boost in kiosks and video menuboards in limited-service spaces, and more training is likely to take place through smartphones and the Internet. With operators seeking tech-savvy employees in 2030, it only makes sense that new training methods will be set in place that help bulk up that digital skillset as well as teach basic operational and customer service knowledge.
In terms of customer interface, the foodservice industry is expected to work to keep up with 2030’s consumers as new, better technology emerges on both sides of the restaurant counter, for employee and guest. The NRA Delphi panel predicts that brands will be more likely to use videos frequently to market their restaurants to customers, and also points ahead to increased availability of customer loyalty programs and frequent-diner databases, used as online advertising and brand promotion. And these tech updates won’t only benefit the consumer—brands are expected to leverage customer databases and point-of-sale data into actionable knowledge to improve margins and better target guests.
“Data budgets will likely surpass today’s marketing budgets for most restaurants,” an unnamed Delphi participant added.
There’s another side to this digital customer-engagement coin, however. Delphi experts find it less likely that customers will embrace data collection in everyday restaurant experiences, predicting that only a modest group of consumers will give permission for brands to gather information. Furthermore, the federal government is predicted to enact a new crop of data-privacy rules that will further regulate how businesses can handle gathered consumer data.
The NRA panel also projects that restaurants will be more susceptible to negative social media as digital footprints begin to replace physical footprints entirely.
Other industry updates
There’s a catalogue of other developments collected by the NRA’s Delphi panel for 2030, with most touching on menu- and sustainability-related categories, and all reflecting an industry that’s transforming at lightning speed.
“Restaurants have become a now industry,” the NRA report said. “The only constant as we look toward 2030 will be the speed of change and the hyper-competition the restaurant and foodservice industry will face.”
Facing ever-tighter margins and intense competition for a shrinking customer base, operators in 2030 will be searching for ways to up efficiency in all categories, and this includes what’s on the menu. While tech will be implemented in various areas of the back- and front-of-house to simplify operations, a cleaner, leaner index of ingredients will be put in place to streamline food and beverage.
In 2030, the NRA and BLS estimate that customers will spend around $1.2 trillion on the restaurant industry in total, up from $833 billion in 2018.
Comfort foods will likely still be in demand regardless of nutritional information, but the Delphi panel expects restaurants to offer more healthy options, clean ingredients such as fresh produce, and locally sourced foods. Customers will increasingly ask for allergen and sourcing information, while sporting more sophisticated palates, and plant-based alternatives are expected to reach new popularity.
Overall, a dual focus on high nutritional value and simple, straightforward foods is expected to emerge. “Tighter margins are the new norm. How do we run even leaner? Simple, good menus are the future,” an anonymous Delphi expert says.
Another key area of concern for foodservice brands 10 years from now? Sustainability. As the environment becomes a priority for more customers, the Delphi experts predict that sustainability will be integrated into every aspect of restaurant operations in 2030, from the widespread addition of energy-efficient equipment to sustainably-sourced menu items to eco-friendly restaurant designs and the implementation of recycling programs in-unit. More restaurants are expected to do away with single-use packaging, and it will be commonplace for restaurant operators to promote their sustainability practices and efforts in marketing to consumers.
A shift to energy- and water-saving, waste-minimizing construction is also expected. This shift will be aided by the lessened footprint of most restaurants that the increase in off-premises dining will likely cause—the hybrid model many brands will be experimenting with in 2020 will require less physical space, pushing into a virtual landscape instead.
Humans versus robots is a debate the industry isn't done having. Not even close.
The changes in workforce, tech, menu, sustainability, and other areas that the Delphi panel experts named most likely to occur over the next 10 years are not the only industrial shifts on the docket. A set of potential developments also hangs in the divide between 2020 and 2030, and though these disruptors are less certain, if brought to fruition they could levy seismic shifts on the industry as a whole.
The NRA partnered with a team of futurists from Foresight Alliance, a forward-focused consulting firm, to outline 10 prospective disruptors for the next decade—some of which are already growing legs in 2019.
Intelligent restaurants arise, featuring full integration with a network of apps, services, and personal AI assistants that enables real-time interaction.
Relying on an already-present, near-universal adoption of smartphones, integration of AI interactions between brand and customers, spread of physical objects embedded with tech, and growth of voice search, personalized diets, and consumer choices as an expression of values, intelligent restaurants would reimagine the brand-customer experience as one more heavily reliant on tech.
Intelligent units would feature up-to-the-minute, changing menuboards and prices, voice demand ordering through AI assistants, and increased consumer data for brands collected during the ordering process. These restaurants are more than an outlandish imagining McDonald’s doubled down on AI twice in 2019 with the purchases of both AI personalization company Dynamic Yield and voice-based tech company Apprente, suggesting a sooner-rather-than-later arrival date for this model with a potential extension into drive thru as well.
Virtual restaurants and cloud-based kitchens take off, giving “placeless” brands a spot in the industry.
In 2030, the NRA and BLS estimate that customers will spend around $1.2 trillion on the restaurant industry in total, up from $833 billion in 2018. With heightened demand and a smaller workforce, ghost or cloud kitchens—commercial kitchens without dine-in spaces that allow various brands to prep delivery orders without the interruption of a regular unit’s operations.
Some existing brands are already implementing ghost kitchens into their models, but other concepts exist only through cloud kitchens, and this is what futurists are calling out as a could-be disruptor for the next decade. New brands could pop up swiftly and simply with the one-fold construction of a single kitchen and all branding, marketing, and menus built through websites and social media. Furthermore, surprise pop-up versions of future online-only kitchens could generate new revenues for these virtual restaurants as well as provide digital natives with a special dining experience.
Domino's is already testing self-driving vehicles.
Third-party delivery apps challenge customer loyalty for individual brands, allowing off-premises digital ordering to eclipse customer interface with restaurants.
Third-party delivery is booming—online data portal Statista estimates that revenues from online food delivery total more than $107, 400 million in 2019, and expect an annual growth rate for online ordering of 9.9 percent from now through 2023.
Purchasing meals via app offers customers frictionless ordering and payment options, and the NRA and Foresight futurists recommend that brands look for creative ways to either partner with or compete with third-party channels in the next decade.
“Start-up independent restaurants could find opportunities in wholesaling to delivery apps,” the NRA report says. “An industry-financed delivery app could preserve restaurants’ direct brand relationships with customers.”
Autonomous vehicles change how people receive their food, and how they eat on-the-go.
While full integration of driverless vehicles could take more than one decade, the rumblings of driverless robot delivery vehicles are already being heard in foodservice. Domino’s Pizza is testing out self-driving robot delivery vehicles in Houston this year, with the brand looking ahead to a full incorporation of the driverless tech in the near future, and Uber Eats tested food delivery via drone in San Diego this summer and also announced a partnership with Volvo that will power a self-driving SUV.
A full rollout of autonomous vehicles will also impact the way drivers eat—with more time on their hands for eating (quite literally) that used to be occupied with a steering wheel, consumers could increase their on-the-go food and beverage orders.
Obviously, there are still legal- and safety-centric wrinkles to be ironed out in within the realm of driverless cars, but the NRA suggests that brands that get involved in the movement early will be ahead of the game when driver-free vehicles eventually hit the roads.
Non-food, big tech companies begin selling food and prepared meals.
Increased online retail options, added low-friction buying options (like Amazon’s One-Click), and new expectations from 2030’s crop of digital native consumers are some of the ingredients that could bring about a new stake in the foodservice industry occupied by non-food companies.
It’s already possible to order groceries from Amazon, but the brand and others like it could add prepared meals to its offerings by 2030. The NRA report predicts the potential involvement of streaming services as well—these services could partner with delivery companies already in existence to offer all-encompassing, entertainment-and-dining subscriptions.
Restaurants could capitalize on this innovation, too, looking for new ways to partner with bigger companies pushing into the food space. “Restaurants could move beyond current loyalty or rewards programs and offer flat-rate monthly subscription plans to customers,” the report says.
Foodservice integrates robots and automation into all areas of food prep and kitchen lines, creating the “bionic restaurant.”
In keeping with evolving front-of-house automation like order kiosks, the Foresight futurists see a possible largescale shift to automation and robots in back-of-house operations, too.
Some restaurants are already using robots for food prep in 2019, but, by 2030, technology could progress to a point where even motion-capture replication of the movements of chefs is on the table for machinery.
One variable in the totally-automated kitchens of the future? Human staff. Chefs and other kitchen employees will need to develop the skills and comfort level necessary to deal with automation and robots in the back of a unit, and with 2030’s expected smaller, older workforce, large groups of tech-savvy employees could be hard to come by.
A decline of shopping malls and brick-and-mortar retail shops leads to restaurants as the centers of socialization, creating an influx of food halls and food markets.
Statista expects retail e-commerce sales worldwide to double between 2018 and 2023, with total sales surpassing $6.5 trillion in 2023. As online shopping skyrockets and, subsequently, shopping malls and brick-and-mortar stores close their doors, and as off-premises dining grows, consumers could be searching for different social spaces to connect with others or work remotely. Food halls and street-food-style markets could fill this need.
“Growth in takeout and food delivery will increase the importance of the face-to-face restaurant experience,” the NRA report projects. Furthermore, the format of food halls and markets caters to culinary diversity and exploration, an element that will become more important in future years as foodie culture becomes mainstream.
Unpredictable, volatile weather drives up food costs and interrupts agriculture and food distribution.
One of the most foreboding forecasts for the next 10 years in foodservice is also a circumstance that’s more difficult to control. As the global temperatures and weather become more volatile, and as the availability of water potentially shifts, too, growing patterns of staple and specialty crops could be disturbed, driving up food costs and possibly adding new taxes on energy used or carbon emitted during production methods and transportation.
While these unpredictable weather-related shifts could change the very fabric of the industry, one possible partial remedy could be the perfection of plant-based and lab-grown meats, as well as increased consumer enthusiasm for these alternatives.
AI pushes into the culinary space, bringing about unexpected food and beverage experiences generated by a tech knowledge of cooking techniques, food chemistry, ingredients, and recipes.
An even more sophisticated technological iteration than back-of-house robotics, culinary AI has the potential to not only simplify operations and cut down on staff needed, but also to add a new wing of taste exploration to everyday restaurant operations.
The NRA predicts that specific AI’s could become as well-known as famed human chefs or bartenders, with restaurants able to leverage these AI assistants 24/7 availability and endless energy to offer up new, exploratory recipes in food and beverage.
In addition to creating entirely new categories of cuisine, these non-human chefs would have the ability to run at multiple locations simultaneously, allowing any number of restaurants with the necessary software capabilities to utilize their in-human amounts of kitchen knowledge.
Medical meals are embraced by an aging population, creating a new emphasis on functional foods.
The NRA’s final disruptor of note deals directly with the rising number of people 65 and older in the U.S. population as Americans age, food could become a weapon against lifestyle diseases like obesity and diabetes. And with the foodservice industry already moving into healthier, fresher menu trends, functional food could be a more widespread way of dealing with ailments in 2030.
In some cases, meals may even be prescribed by doctors, featuring ingredients personalized for individual states of health, diets, and outcomes. “Prescription meals will be more precisely targetable with a growing understanding of how food can impact gut microbes or activate gene traits,” the NRA report reads.
1. Use technology to improve your operations
Web-based technologies enable you to dramatically improve how you run your business. You're a good candidate if you're looking to increase market share, aggressively pursue cost reduction or greater efficiency, or prevent customer-service problems. Production management tools range from spreadsheets to off-the-shelf software solutions or business-specific , custom-developed applications. Here are some examples:
- E-purchasing (online buying) is an alternative vehicle you can use to get your materials from suppliers. This technology enables you to get more competitive pricing as you are no longer limited to local merchants. Generally, the cost of transaction processing is reduced and there is less paperwork.
- Smart inventory control systems can help you reduce inventory levels, improve profitability and speed up customer response time. Online and order management systems integrate inventory information with your organization's purchasing, accounting and e-business systems, so you can easily track order status and the movement of inventory within your company. You will also be able to identify peak and low periods, allowing you to adjust supply purchases and better manage working capital.
It also helps to keep abreast of technological developments and ensure that your business is taking advantage of the latest innovations to improve productivity. You can use the web or attend trade shows to stay on top of new technology. Trade shows are a great resource as software vendors often make their information available to attendees. You can also network with other organizations in your industry that may have already tried and tested new innovations. Finding out what your competitors are doing can narrow your search down for solutions that are specific to your industry. BDC Advisory Services can help you establish selection criteria and identify potential software suppliers.
COVID-19 Economy FAQs
Why are consumer prices rising?
Some shoppers may have noticed that their grocery bills are higher lately. Prices for energy and used cars and trucks are also up. Jayson Lusk, head of the agricultural economics department at Purdue University, said that multiple factors have been pushing up food prices, including China purchasing more American products recently, more people driving and pandemic-related challenges in supply chains and workforces. Also, wages are up, although productivity has been growing faster than labor compensation for decades. “I expect inflation to probably continue for the next half a year, at least,” Lusk said.
What does the CDC’s most recent mask guidance mean for stores and their workers?
By now you’ve heard the news on that guidance: Vaccinated people no longer need to wear a face mask indoors in most settings. Still, local governments and businesses are permitted to require them. Mask mandates have been tricky, even dangerous, for public-facing businesses to navigate. Retail workers around the country have been harassed and physically attacked while enforcing mask mandates. “The updated guidance has created an impossible situation for retailers,” said Lisa LaBruno, senior executive vice president of retail operations & innovation with the Retail Industry Leaders Association. “There is now ambiguity in expectations, both from retail team members and from customers.”
Why do you have to be out of work for more than six months before you’re classified as “long-term unemployed”?
After all, people start feeling the stress and financial hardship of long-term unemployment before they hit the 27-week mark. According to the latest data from the Bureau of Labor Statistics, 4.2 million Americans are long-term unemployed. Patrick Carey, an assistant commissioner in the Office of Employment and Unemployment at the statistics bureau, has one explanation. “The breakout of 27 or more weeks accords well with the maximum length of time that many states offer regular unemployment insurance benefits,” Carey said.
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Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
5 steps restaurants should take before bringing back staff
Before restaurants consider reopening their dining rooms, experts say operators should review payroll practices, rehire based on seniority and develop ways to monitor employee health.
This is the second article in a three-part series exploring strategies and techniques restaurants should consider before and after they reopen. The first in the series explored whether or not restaurants were ready to reopen amid social distancing restrictions and can be viewed here.
Alex Smith, CEO of Atlas Restaurant Group, has already formulated a plan for reopening with social distancing restrictions. The co-owner of the group of full-service restaurants, most of which are in Baltimore, plans to bring back his employees seven days before Maryland’s governor allows dining rooms to reopen, Smith told Restaurant Dive. That date is currently unknown, but restaurants would be part of the governor’s second phase of reopening .
“There are all these new normals that we’re going to have and our employees are going to have to go through training to make sure that our guests’ safety and employee safety is No. 1,” Smith said.
Atlas Restaurants, which employed 1,000 people before the pandemic, furloughed 900 team members and closed 14 of its 15 restaurants following dine-in restrictions, Smith said. The company retained key managers and corporate officers, which allowed it to keep an infrastructure in place to make it easier to reach out to employees and get organized once it is ready to reopen, Smith said.
“Our goal is survival,” Smith said. “Our goal is getting our Atlas family back to work.”
Once Atlas’ employees come back, Smith’s company will provide a training program to get people oriented to what that new normal will look like for his restaurants, which will include front-of-house staff wearing masks and employees wearing gloves, he said.
The restaurant group will have hand sanitizing stations separate from the bathrooms and will arrange tables so that they are six feet apart, with no more than six people seated at each table, he said.
As more states ease dining room restrictions, restaurants will need plans like these to properly bring their employees back and ensure they minimize employee and diner exposure to COVID-19.
Restaurant Dive spoke to several restaurant experts on employee and food safety issues that operators should keep in mind before and after they bring back furloughed employees to make sure they stay safe.
1. Reassess payroll practices and compliance
Operators should think of this time as a reboot, and take the opportunity to review payroll practices , policies and procedures for legal compliance, Alden Parker, co-chair of Fisher Phillips Hospitality Industry Group, told Restaurant Dive.
That could mean reviewing how restaurants treat meal and rest period compliance in states that have guidelines for these periods, he said. Operators could use this time to ensure they have the correct classifications for employees, such as whether assistant managers are properly classified as exempt or if they should be hourly and qualify for overtime. Now is also a great time to review tip pooling policies to make sure those are in compliance as well, he said.
One of the biggest things operators should be taking a look at is whether they should institute an arbitration agreement with a class-action waiver, he said.
With restaurants essentially starting back up like new businesses, employers have time to consider creating a system where employee issues would go through private arbitration versus leaving it open to potentially become a class-action case that goes through the court system, he said.
“It’s an excellent time to revisit those [policies] and put some effort into that before you start hiring people and putting them back on the books,” Parker said.
2. Set up policies for rehiring
Rehiring could be particularly troublesome because it could open up operators to charges of bias, according to Law360 . One way to prevent this from happening is to rehire based on seniority by bringing back servers and other staff that have been with the restaurant the longest, Parker said. Los Angeles is even considering a mandate requiring individuals to be rehired based on seniority.
Owners should also be tracking offer letters and whether employees accepted or declined their offer, Parker said. That way if the offer is passed on to a less senior employee, there is documentation backing that move, he said.
Many operators are concerned that the $600 per week that comes through unemployment benefits will be difficult to compete with when it comes time to rehire employees, Parker said.
“Restaurants and other small businesses are having trouble because … with the way that the unemployment benefits are, there are people who literally have to make a choice whether to go back to work and take less than they are getting right now or stay home,” David Bagley, managing director at Carl Marks Advisors, told Restaurant Dive. Carl Marks Advisors provides financial and operational services to companies in the middle market, including the restaurant sector.
“Restaurants are going to need to be on the front of that because they’re going to need to get their people back. … And they’re going to need to potentially recruit [former employees],” Bagley said.
Rehiring will be easier for larger restaurants and their franchisees because hiring is much more standardized by these organizations, whereas a small restaurant may not have the resources to easily hire someone and get them up to speed, Bagley said.
Some operators might need to increase pay for a short period of time to make up for the difference from what they could potentially get on unemployment , as well as changing operating hours or , as a last resort , increasing menu prices and calling it pandemic pricing, Bagley said. Chains like Starbucks, Chipotle, Darden and Domino’s have instituted short-term pay increases and/or bonuses for employees that are still on the job.
But maintaining increased wages long term would be particularly difficult and could force restaurants to employ fewer people, which could make service suffer, Bagley said. There are also fixed costs like rent and food that can’t necessarily be decreased to make up for higher labor costs, he said. Increasing menu prices could also be tricky with so much competition coming from people who are cooking at home, he said.
How restaurants approach this issue will be a case-by-case basis, Bagley said, adding that there really isn’t one answer for everyone.
3. Develop training for new sanitization, social distancing standards
Training will be key to bring employees up to speed with the many new social distancing and sanitization regulations that states and municipalities require.
This might look like a mandatory post-pandemic training session for employees before they return to work, according to a Streetsense Restaurant + Bar Relaunch Toolkit emailed to Restaurant Dive. These trainings should have clear , redefined and systemized new sanitation procedures that should be reinforced on a daily basis. Teams could make this into a fun process with things like games or small rewards for compliance with the new standards to help reinforce these guidelines, according to Streetsense.
Training should include strategies that help employees maintain social distancing from each other and customers, review coughing and sneezing etiquette, proper use of face coverings and gloves, and provide an emphasis on hand washing, Chris Boyles, VP of food safety at Steritech, told Restaurant Dive. Steritech conducts over 300,000 assessments a year in the areas of food safety, service excellence, workplace safety and guest experience.
“The proper cleaning and sanitizing practices always required in foodservice operations have not changed it is the increased attention these practices are receiving that will ultimately make them embedded in the food safety culture of restaurant operations,” Boyles said.
4. Set up daily cleaning protocols
Ongoing cleaning procedures will reduce the risk of exposure for employees and customers. Cleaning should include disinfection of high contact surfaces in the front- and back-of-house including, but not limited to, door handles and frames, countertops, POS equipment, headsets, buttons on equipment and any shared items on a table top, Boyles said.
These kinds of cleanings should be done between seatings, and silverware and preset tables should be replaced with single-use items, the National Restaurant Association said in its COVID-19 Reopening Guidance emailed to Restaurant Dive.
Operators should train and designate employees for extra disinfection duties, but make it an important role and not just a janitorial task, Boyles said. These employees should receive personal protective equipment and supplies. Restaurants should also consider a third-party cleaning and disinfection service periodically.
Food surfaces in the back-of-house should also be cleaned and sanitized, but if a disinfectant is used on these surfaces they should be rinsed before food touches the surface, he said.
Restaurants should keep in mind the added cost regular disinfection will have on their operations since disinfectants will be used more frequently, Boyles said. Operators also will have to take the time to evaluate and select new products if their current disinfectant isn’t designated to work effectively against COVID-19, Boyles said.
“Added labor costs may be necessary to have designated persons responsible for the more frequent disinfecting process, so this needs to be considered when planning for labor needs,” Boyles said.
If a restaurant has to close due to contamination of the premises due to a COVID-19 positive person and is ordered to close by the health department, there may be added costs to hire a third-party disinfection service as well, Boyles said.
5. Monitor employee health
Checking employees’ health and fitness should be among the top priorities to ensure that employees aren’t coming to work ill. Many restaurants are doing temperature checks and using health questionnaires, Parker said. While this would normally be considered a medical examination by the Equal Employment Opportunity Commission, the agency has relaxed that standard during the pandemic allowing screenings to occur so long as they are job-related . Other restaurants, such as McDonald’s , have been creating health questionnaires to monitor their employees on a daily basis to see if they have symptoms.
If employees are sick, symptomatic, exposed or confirm they have a food borne illness or COVID-19 they should not report to work, Boyles said. Employers should also work with HR to develop or modify their sick day policies so that employees are not afraid of losing their jobs if they get sick, he said.
If an employee does contract COVID-19, they should get a return-to-work notice from a healthcare professional, Parker said, adding that is a danger point if a restaurant denies allowing that employee to work out of an abundance of caution even when they are cleared.
“The other side of that coin is someone that gets COVID-19, goes through this 14-day period of time, and the doctor doesn't clear them,” Parker said. “Many employers will read the 14-day guideline and say, ‘Okay, you must be over it. Now let's get back to work.’ And if a healthcare professional is saying, ‘This person is still symptomatic or still susceptible to it.’ … If that’s the case, then the employer is going to have to consider … whether additional leave can be offered to the person.”
There will be plenty of ways to provide sick leave to employees, as well. Emergency paid leave granted under the Families First Coronavirus Response Act and additional paid leave under the Family and Medical Leave Act carry through the end of the year, he said. Employees in states with paid sick leave provisions would also have their sick day banks restored if they were furloughed and rehired, Parker said.
If employees that get sick on the job and COVID-19 exposure is traced to the workplace, employees would be able to file a workers compensation claim if the operator followed all the safety precautions, Parker said. However, this could become a serious and willful claim allegation if an employer ignores safety guidelines set by the Occupational Safety and Health Administration and the Centers for Disease Control and Prevention. Employees can then claim that the operator created an unsafe work environment. That can result in increased workers comp penalties or this could be taken out of workers comp and filed as a civil action in some states, he said.
It’s also important for operators to understand that despite their efforts, there may not be a way to completely protect employees from exposure.
“To a certain extent there’s going to be some risk borne by the individual,” Parker said. “There is going to have to be if anybody’s ever able to get back to work.”
For more information on strategies and procedures for reopening, check out National Restaurant Association’s COVID-19 Reopening Guidance and Streetsense’s Pandemic Relaunch Toolkit for Restaurants + Bars.
A quick view of the food delivery space
GrubHub (GRUB) shocked Wall Street in late October with a sub-par third quarter and concerning outlook. The company’s sales clocked in at $322 million versus analyst estimates for $330.5 million. Non-GAAP net earnings plunged to 27 cents a share — in line with analyst forecasts — from 45 cents a share a year ago. Growth rates in GrubHub’s closely watched “daily active grubs” and “gross food sales” metrics continued to slow.
For the nine months ended Sept. 30, GrubHub’s non-GAAP net earnings have dropped to $77.5 million from $135.7 million a year earlier despite a 35% increase in sales. That dynamic — surging sales and declining profits — reflects the intense competitive environment in food delivery where gobs of money must be spent on advertising and incentives to keep diners engaged.
GrubHub’s stock is down about 35% year to date.
The company’s main response to the soft quarter is to ramp up incentives to diners even more, which is likely putting pressure on the entire industry to cap off 2019. It also plans to add more restaurants to its delivery network.
“We will be moving quickly, spending more and trying many different strategies over the next 12-18 months to increase restaurant supply aggressively while making our diner experience more sticky – effectively taking action to remove any reason for diners to look anywhere else,” GrubHub founder and CEO Matt Maloney said in an October letter to shareholders.
Nevertheless, Wall Street remains concerned about GrubHub’s bottom line for the foreseeable future. Jefferies analyst Brent Thill says GrubHub’s fourth-quarter sales growth guidance of about 13% would be by far the lowest in the company’s history and a “step down” from 30% in the third quarter. GrubHub’s fourth quarter EBITDA guidance implies a 6% margin, which Thill notes would also be a historic low.
GrubHub’s initial 2020 EBITDA guidance of “at least” $100 million was markedly below Thill’s outlook of $180 million.
But hey, at least GrubHub is profitable and in business right? The same can’t be said for rival Uber Eats (not profitable, but still in business) and countless others in the industry.
For the nine months ended Sept. 30, Uber Eats (UBER) has lost a shocking $911 million on an adjusted EBITDA basis — that’s up from a $323 million loss a year ago. In its latest 10-Q filing, Uber highlights a range of issues with Uber Eats typical to the food delivery space and that are unlikely to abate anytime soon.
“Eats adjusted EBITDA loss increased primarily attributable to an increase in consumer promotions, brand marketing, and employee headcount costs,” the filing says. Losses of that magnitude for Uber Eats points to a business that is in big-time trouble, and clearly not viable in its existing form.
Meanwhile, Amazon Restaurants closed for good in June after making little headway in the food delivery space. Caviar couldn’t hack it, so it sold out to DoorDash in August for $410 million (a wise call by Caviar in light of GrubHub’s October commentary).
Waitr was told earlier this month by the Nasdaq it could be de-listed in January if it doesn’t get its stock back above $1.00. The reason the stock has crashed 97% this year to 33 cents? You guessed it, a year of staggering losses to the tune of $270 million as the company struggled to stay competitive amid all the industry discounting.
“Back in July or August I might have felt like this could go on for some indefinite period of time because there seemed to be — particularly in the private market — an appetite to drive growth with little regard to profitability,” Allison says. “I think the WeWork debacle and some other things going on out there — the decline in share prices for Uber and Lyft, PostMates’ IPO being stalled, the valuation of GrubHub has now come off — I think there is less patience out there among investors today in December of 2019 than there was in July or August. But I don’t know when the shakeout ultimately comes.”
A spokesperson for PostMates didn’t return a request for comment.
Ultimately, a shakeout along the lines of what Allison predicts could take several forms.
One, the entire third-party food delivery space goes belly up under the weight of its own penchant for offering deep discounts on orders, heavy advertising and aggressive investment in tech. In turn, a large restaurant chain such as McDonald’s could swoop in and buy a major delivery player on the cheap and gain access to a turnkey operation.
Another version of an industry shakeout could see a well-established player such as GrubHub continue to buy up smaller rivals to gain the required economies of scale to be a viable business longer term. GrubHub has taken on the role of consolidator thus far — it has acquired nine food delivery platforms since 2013, including Seamless and Eat24.
Or a slight twist on this version may see GrubHub merging with Uber Eats, becoming its own stand-alone entity. Uber would therefore primarily be a ride-hailing/transport company, which it could make money on.
What to Expect in Your 70s and Beyond
by Beth Howard, October 2012 | Comments: 0
Staying mentally and physically active can help keep you, well, young. What can you expect of the years ahead?
Everyone ages differently, and lifestyle plays a major role, but you'll experience both hard-to-notice and impossible-to-miss changes in your physical and mental health.
Read on for the good, the bad and the what's-up-with-that? transformations you'll encounter — plus the latest advice on feeling happy, sexy and pain-free.
Save Your Skin
The Good News: Your skin is drier, which can be welcome relief for the third of women who were plagued by oily skin and breakouts throughout their adulthood.
The Not-So-Good News: Wrinkles and lines are more plentiful, but so are the options for keeping skin looking bright. Gentle exfoliation and moisturizing are especially important. Pick skin products with antioxidants and glycolic acid, which promote skin thickening and increase collagen production. And apply a broad-spectrum sunscreen with a sun protection factor (SPF) of at least 30 every day. Laser treatments can help with dilated superficial blood vessels (called telangiectasias), which tend to appear without warning on the cheeks, nose, chin and legs. (The laser destroys the blood vessels underneath the skin - with no scarring.) And those extra skin tags? Your doctor can remove them through freezing, snipping or cauterizing.
What's Up With That? Non-articular cartilage, the type that gives ears and noses their shape, continues to grow with age, making these appendages larger. But look on the bright side: Such cartilage growth may have evolved to enable people to track and funnel sounds and smells as they age, suggests James Stankiewicz, M.D., chair of the Department of Otolaryngology — Head and Neck Surgery at Loyola University Chicago Stritch School of Medicine.
What's Ahead: As you age, the skin around your jawline tends to sag. If you're bothered by it, ask your doctor about skin-tightening radio-frequency treatments, which can tighten skin without damaging the epidermis.
Studies show strength training can build muscle, which can take force off the joints.
Bone Up for Good Health
The Good News: You can maintain muscle strength through activity.
The Not-So-Good News: About one in three women ages 75 through 85 has osteoporosis, a bone-thinning disease, which greatly increases the risk of fractures of the hip and spine. Studies show strength training can build muscle, which can take force off the joints. Plus, weight-bearing activities stimulate the bones to grow stronger and denser.
What's Up With That? Although worn joints may benefit from anti-inflammatory drugs and activity, surgery may become necessary as cartilage loss begins to accelerate. Regenerative techniques such as platelet-rich plasma and autologous (self) stem cell injections may also help, according to Nathan Wei, M.D., a rheumatologist in Frederick, Md.
What's Ahead: Joint-replacement surgeries are common one study showed that patients 75-plus recover just as quickly as those 65 to 74.
Preserve Your Senses
The Good News: Lifestyle plays a major role in helping to maintain your senses as you age. So stay away from loud noises, eat a well-balanced diet (which can help ward off such age-related eye disorders as macular degeneration) and see a doctor immediately if you notice that your senses of smell or taste diminish significantly. (This may indicate a sinus infection or be a reaction to medication.)
The Not-So-Good News: You may have trouble seeing when first entering a very dark or bright area. That's because as you age, your eye muscles slow down, causing your eyes' pupils to react more slowly to changes in light. After age 70, the ability to see fine details diminishes as well, because there are fewer nerve cells to transmit visual signals to the brain. If you're plagued by dry eye, medications like Restasis can help create more tears. Finally, some 68 percent of 70-somethings experience some degree of hearing loss. What to do? Swallow your pride and get tested for hearing aids, which have been associated with less cognitive decline and dementia. Wearing the devices could pay off in the long run, experts say, by helping you stay engaged with others and your environment.
What's Up With That? Have you noticed that blues seem gray and reds appear more intense? Not to worry. It's just changes in the lenses in your eyes, which have started to yellow with age. If it gets too bad, you may need cataract surgery. About half of people ages 65 through 74 have cataracts the number rises to more than 70 percent among those 75 or older.
What's Ahead: Your senses of smell and taste have likely declined, reducing the ability to enjoy subtle flavors. Taste buds decrease in number and sensitivity, and nerve endings in the nose may not work as well. The fix? Turn up the dial on seasonings. Ethnic cuisines like Indian and Thai contain spices and herbs that amplify the aromas and tastes of foods.
44 percent of women 68 through 80 report being very satisfied with their sex lives, compared with just 30 percent of women 55 to 68 years old.
Improve Your Sex Life
The Good News: Sex in your 70s and beyond? You bet! A recent survey found that 70-year-old men and women were much more likely to be sexually active, to report being in a happy relationship and to have a positive attitude toward sex than people that age who were polled in the 1970s and 1990s. Some 44 percent of women 68 through 80 report being very satisfied with their sex lives, compared with just 30 percent of women 55 to 68 years old.
The Not-So-Good News: Sex-related hormones — estrogen and progesterone in women, testosterone in men — decline, and vaginal dryness may become more noticeable. But lubricants are effective, as are prescription creams and tablets.
What's Up With That? Rates of erectile dysfunction (ED) increase with age by 70, between 40 and 60 percent of men will experience symptoms. Research shows that not smoking and eating a diet rich in antioxidants can help.
What's Ahead: A University of Chicago study finds almost 40 percent of men 75 to 85 are sexually active.
Motivate Your Metabolism
The Good News: While metabolism typically slows up to 5 percent per decade, that doesn't mean you have to gain weight in your 70s. Just stay active and cut calories if needed, says Alice Lichtenstein, D.Sc., director of the Cardiovascular Nutrition Laboratory at the USDA Human Nutrition Research Center on Aging.
The Not-So-Good News: In your 70s you may secrete less hydrochloric acid, which decreases the availability of vitamin B12, says Lichtenstein. Ask your doctor if you need a B12 supplement (optimal dose: 2.4 mcg daily).
What's Up With That? As you age, your ability to produce vitamin D in response to sunlight gradually decreases. Your doctor may recommend a vitamin D supplement — after age 70, you need 800 IU of vitamin D every day, as well as 1,200 mg daily of calcium.
What's Ahead: The sensations of hunger and thirst can decrease with age, often leading to dehydration and malnutrition. Plan to eat several small meals throughout the day, and consume at least 6 cups of liquid.
Your response to vaccines decreases with age, leaving you even more vulnerable to illnesses like flu and pneumonia.
Ramp Up Your Immunity
The Good News: Allergies, which result from an overreactive immune system, are likely a thing of the past, because your immune system isn't as sensitive.
The Not-So-Good News: That less-aggressive immune response means you're more susceptible to getting sick. Chronic inflammation, which is linked to heart disease, diabetes and arthritis, makes it even harder for the body to mount an effective immune response. So it's important to shed excess pounds, eat a good diet and exercise.
What's Up With That? Your response to vaccines decreases with age, leaving you even more vulnerable to illnesses like flu and pneumonia. After 65 you're eligible to get a higher-dose flu vaccine. A new study also suggests you can boost the effectiveness of your vaccines by getting at least seven hours of sleep a night.
What's Ahead: Rates of cancer rise with age but then level off around 85, so if you've gotten that far cancer-free, you may reach a very old age.
Keep Your Heart Strong
The Good News: Older hearts pump about the same volume of blood with each beat as younger hearts.
The Not-So-Good News: Your heart's walls are getting thicker and its valves are stiffer. One way to improve your heart health? Keep moving. Research recently showed that women and men age 70-plus who spent as little as a half hour a day on activities like walking and dancing had a 20 to 40 percent lower risk of dying from heart disease than those who reported no activity.
What's Up With That? A skipped beat or a racing heart could be atrial fibrillation, a type of heart arrhythmia that becomes more common with age. Since it can increase the risk of stroke, mention it to your doctor. You should also say if you're experiencing unusual fatigue, weakness when exercising or dizziness.
What's Ahead: Heart disease incidence rises it's the leading cause of death for people 75 through 84.
Take Fewer Nighttime Trips
The Good News: If you're generally healthy, your urological system likely functions pretty well. And an array of therapies can help when problems crop up.
The Not-So-Good News: Bladder tissue contracts and expands less efficiently as you get older, often leading to overactive bladder, incontinence and infection. About 60 percent of women in their 70s will experience some type of urinary incontinence. Ask your doctor about bladder training, medications and pelvic floor exercises ("Kegels"), which can strengthen the muscles around the bladder. More than half of men in their 70s experience symptoms of an enlarged prostate gland, called benign prostatic hyperplasia (BPH). Symptoms include a weak urine flow or difficulty urinating, but medications like tamsulosin and finasteride can help.
What's Up With That? Gotta go during the night? Not to worry that's normal. "In their 60s, 80 percent of people need to get up at least once a night," says Ryan P. Terlecki, M.D., assistant professor of urology at Wake Forest University School of Medicine in Winston-Salem, North Carolina. And 25 to 35 percent of those in their 70s get up at least twice. Try decreasing fluids after 6 p.m. and avoiding caffeine in the afternoon. If you're on diuretics for high blood pressure, speak to your doctor about taking your pill in the morning.
What's Ahead: Urinary tract infections are common as you age. The counterintuitive advice? If you're not experiencing symptoms, sometimes it's better to do nothing. Antibiotics can clear up the infection, but they often disrupt other bacterial balances.
The Good News: We're pretty happy. A recent AARP survey showed that of all the decades surveyed, the 70s tend to be some of the happiest years of your life. One explanation for the trend: years of experience. "As you get older, you know that bad times are going to pass," says Laura Carstensen, Ph.D., director of the Stanford Center on Longevity. "You also know that good times will pass, which makes those good times even more precious."
The Not-So-Good News: You might stay away from stressful situations, thereby missing out on new opportunities. Just make sure all of your social interactions stay strong. They may be key to facing future challenges with resilience.
What's Up With That? Does your spouse seem mellower than he or she once did? "The ability to regulate one's emotions improves as you get older," says Bob Knight, Ph.D., professor of gerontology and psychology at the USC Davis School of Gerontology in Los Angeles.
What's Ahead: As long as your health remains good, you can expect to be happy. Studies also suggest that negative emotions like anger and sadness become less frequent with age, perhaps because older adults get better at tuning out negativity.
As you age, your eye muscles slow down, causing your eyes' pupils to react more slowly to changes in light.
The Good News: Research shows that the steep loss of brain function once thought intrinsic to aging is often avoidable. "You can improve your brain health by getting regular mental stimulation, social interaction and physical activity," says Gary J. Kennedy, M.D., professor of psychiatry and behavioral science in the Division of Geriatric Psychiatry at Montefiore Medical Center in the Bronx, New York. And your gut instincts remain sharp as you age, too. In one study, older adults fared as well as those under 30 on intuitive decisions.
The Not-So-Good News: Part of your brain circuitry starts to burn out with age, but most of us compensate by relying on other parts of our brain, and our past experiences, to make decisions. "That's the 'wisdom' that accrues with older age," says Kennedy.
What's Up With That? Feeling increasingly forgetful? This happens because the transmission of nerve impulses between cells slows down as you age.
What's Ahead: Real cognitive decline becomes more prevalent by your 80s nearly half of Americans 85 or older have Alzheimer's. Your best prevention plan, as Kennedy advises: intellectual stimulation, time with family and friends, and exercise.
Domino’s CEO Says Restaurant Employers Must Increase Wages to Compete - Recipes
When compiling this year’s Pizza Power Report, three themes kept appearing again and again: quality ingredients, technology and the youth culture. Consumers are increasingly insisting on the freshest, healthiest ingredients, a trend driven largely by younger segments of consumers, who also demand the highest technology available to facilitate ease of ordering and delivery.
But, despite evolving approaches and consumer demands, the state of the pizza industry is strong. According to a Technomic study, 83% of consumers eat pizza at least once per month. According to PMQ’s 2018 Industry Census, 60.47% of respondents reported an increase in sales over the previous year. Internationally, pizzerias are thriving, with a five-year forecasted growth rate of 10.7%.
China: Foreign Chain Invasions
China continues growing, and everyone wants a piece of the pie. PMQ China projects that Pizza Hut will open a whopping 1,000 new units throughout the country in 2019, while Papa John’s and Domino’s are estimated to open 50 new units each. Other projected players include Sazeriya (Japan), Mr. Pizza (South Korea) and Dodo Pizza (Russia), planning to open 100, 50 and 20 new stores, respectively.
Source: Shelly Liu, PMQ China, Beijing, China
Italy: Competition Stays Fierce
In Italy, pizza would perhaps seem to be recession-proof. But, since 2013, 50% of new pizzerias closed their doors within the first five years of opening, according to Unioncamere. Strong competition is cited as the main reason for the high number of closures. Some pizzerias are making themselves more competitive by offering unique kinds of dough and healthy ingredients, though the majority of pizza consumed still follows Italian tradition.
Source: Marianna Iodice, RistoNews.com, Bari, Italy
American Chains Still Conquering the World
Chains may have dwindled domestically, but abroad they are actively expanding. Papa John’s added 146 global units from the 3rd quarter of 2017 to 2018. In the same period, Domino’s added 232 global units, and Yum! Brands added 192 Pizza Hut units worldwide. Domino’s has its strongest international presence in Australia and India, but it has also recently opened stores in Europe, notably in Scandinavia and Italy. This year, Papa John’s expanded its presence in Central Asia and Eastern Europe with new stores in Kazakhstan, Kyrgyzstan and Poland. Pizza Hut will be developing Latin America, the Caribbean and select countries of Europe in a landmark deal with Telepizza, while also investing heavily in the Chinese market.
Russia: Speed Is King
Par-baked crusts are swiftly replacing fresh or frozen dough for their ease of transport across long distances and improved shelf life. The need for consistency and speed reflects a market that is high-volume-driven. Pinsa par-baked crusts are also making waves for their ease of use and innovation in health benefits.
Source: Elena Shirokova, hotzilla.club, Moscow, Russia
Sweden: Pizza Expands to Gourmet
In contrast to Russia, Sweden is shedding its long-held belief that pizza is only for fast food consumption. Pizza is now appearing in upscale restaurants and other areas it was never seen in before, such as pubs, resorts and airports. Accordingly, pizza competitions and education events are also on the rise in Sweden.
Source: Mikael Lundgren, Sveba-Dahlen, Fristad, Sweden
Brazil: Refining the Market
Much like the United States, Brazil experienced a wave of Italian immigration at the beginning of the 20th century. From there, pizza culture was born, but it hasn’t been until recent years that the market demanded highly skilled pizza makers. Today, pizza makers are putting effort into education to understand different ways to make dough and select toppings wisely to promote both health and the culinary arts.
Source: Carlos Zoppetti, ConPizza, São Paulo, Brazil
For the first time, Domino’s overtook perennial heavyweight Pizza Hut in total sales. According to DominosPizza.com, global retail sales grew 8.3%, domestic same-store sales grew 6.3%, and international same-store sales grew 3.3%. The chain experienced a global net store growth of 232 units in the third quarter of 2018, according to a press release by dominos.com.
Domino’s has been enjoying a consistent growth pattern for the past several years. A January 2018 article in Forbes states that after hitting an all-time low in 2008, when its stocks sold for $3 per share, Domino’s now commands a price of $266. In that article, Kelly Garcia, Domino’s SVP of e-commerce development and emerging technologies, states that execs had to start thinking of themselves as heading up an “e-commerce company that happens to sell pizza.” Kelly says that Domino’s success is due to two critical factors—fundamentals and “surprise and delight.” Domino’s correctly identified that the industry was moving to mobile, which contributed to half of their digital sales, while digital sales now make up the majority of overall sales.
“Surprise and delight,” the second element in Domino’s plan, included implementing a strategy of enabling customers to order from any of their favorite devices. This led to development of its new ordering platform, Domino’s AnyWare, which allows customers to order through any number of devices, including in-home assistants such as Amazon Echo, smart TVs, smart watches, and social media platforms. Meanwhile, the emphasis on new platforms attracted top talent to work on product development. Garcia also notes that Domino’s loyalty program rewards its best customers and keeps them away from the competition.
Rethinking Fast Casual
Ravenous customers enjoy a delectable pie at MOD Pizza.
Although growth among fast-casual restaurants slowed significantly from 2016, this category continues to be an important and growing segment of the pizza industry. A Technomic study found that 28% of consumers frequent fast-casual establishments (visiting at least once per month), putting them on track with full-service pizzeria restaurants. Fast-casual pizzerias are also expanding their menus, offering dishes such as chicken wings, sandwiches and salads.
QSR reported in May 2018 that a survey of 1,000 consumers by AlixPartners, a global consulting firm, indicated that only 20% of millennials say they intend to visit fast-casual establishments twice weekly or more over the next year, compared with 24% in the 2017 survey. The same survey found that just 32% of diners in this year’s survey preferred fast-casual for lunch, a 5% drop from AlixPartners’ survey in 2017. At the same time, fast food was the preferred lunch destination by 35% of respondents in this year’s survey, an increase of 5% from the previous year.
Diane Kelter, a leading analyst in the foodservice sector, reflected on fast-casual changes in a Mintel report. “Even as things change, they still remain the same,” Kelter says. “The concept of quality food at an affordable price that launched the fast-casual segment has remained a key association. However, as dining habits shift and the landscape gets more competitive, fast casuals look beyond what worked in the past and focus on what lies ahead, including more premium beverages and automation, as well as the showcasing of specialty concepts on a mainstream stage.”
Labor costs and shortages remained a frequent topic of discussion in 2018. With many municipalities raising their minimum wages, combined with a depleted labor force due to a good economy, many pizzeria owners struggled to keep their kitchens staffed. Compound this with stagnant pizza prices and a low unemployment rate, and finding good workers can be difficult.
A CNN Business report from December 2017 reported an increase in minimum wages in 18 states and 20 cities, according to figures from the National Employment Law Project. The highest raises were reported in Washington’s Seattle-Tacoma area, with minimum wages for hospitality and transportation workers at $15.64 per hour.
Lenny Rago, co-owner of Panino’s in Chicago, believes that minimum wage increases necessitate raising menu prices. “I’m totally fine with the minimum wage increase, as long as the consumer is willing to pay a little more.”
An August 2018 article in Nation’s Restaurant News reported on a recent survey, called “Staffing Concerns in Restaurant Operations,” that revealed 67% of operators cited increased competition for workers as a key driver in rising costs. Kevin Ozan, McDonald’s Corp.’s chief financial officer, said in the article, “It’s a tight labor market out there. Labor staffing is a challenge, both for us and the franchisees. But that’s the industry, so I don’t know that we have it any worse than anybody else.” Turnover was also cited in the survey as a challenge: A full 46% of respondents said turnover increased either “significantly” or “somewhat” over the past year (43% said their turnover rates remained unchanged, while 10% said turnover decreased somewhat or significantly).
And, since many pizzerias seek entry-level workers, we see the youth movement having an effect on the pizza industry when it comes to employment. A September 2018 article in Nation’s Restaurant News revealed data from a recent survey of 1,600 Gen Zers and millennials conducted by the National Restaurant Association Educational Foundation (NRAEF) and the Center for Generational Kinetics. The study suggests almost 50% of Gen Z workers desire recognition, with some sort of weekly feedback, while 47% indicated a desire to have a mentor. In the article, Rob Gifford, NRAEF executive vice president, offered tips for recruiting and hiring younger employees: “Keep applications simple, user-friendly and easy to complete. Rely on current workers to recruit candidates via word-of-mouth, and maintain the restaurant’s reputation across all media channels.”
Rago believes that Gen Zers and millennials also have different expectations for the workplace schedule and environment. “They are trying to dictate their schedule to you, instead of being told when to work,” he says. “They’d rather work at an Uber or DoorDash, where they can make their own hours and do what they want, when they want. They’re not willing to take on jobs that require them to be there every week, with bosses telling them what to do.”
Mike’s Pizzeria, a chain of 29 restaurants based in Albany, New York, has had to increase its prices to accommodate for the rising minimum wage in that state, according to the Albany Business Review. Owner Mike Harvard told the magazine, “We couldn’t compete price-wise with the local pizzeria, because we have to spend more on payroll. Therefore, we have to charge more for pizza, so it kind of hurt. We lost sales because we had to raise our prices, and then raising prices drops revenue down, so it’s a tough situation.”
Meanwhile, Bruce Irving, founder of Smart Pizza Marketing based in Boston, believes there’s a “help crisis” in our industry—and that prices should keep up with rising costs. “We need to get past the perception that pizza costs $10—if you can feed a family of four with one pizza, that pizza should be $20,” he says. “There’s no way you can pay a dishwasher or a cashier $15 an hour, and your manager $20 to $25 an hour, if you charge $10 to $15 for a pizza.”
Thanks in part to the increasing popularity of regional pizza styles (think Neapolitan, Roman, Sicilian, Detroit and others), pizza consumers are growing more educated about the individual components of pizza. Hence, owners will need to promote their quality pizza ingredients (such as Italian flour or local produce) to boost their product’s image of authenticity. While consumers still rate overall taste as the most important factor when ordering pizza, 44% of consumers rated “fresh, high-quality ingredients” and “best crust” as deciding factors—up from 40% in 2016, according to a Technomic study. The same study reported that 49% of consumers indicate they would like pizza establishments to offer “more authentic” pizzas.
Irving feels that the increased sophistication of the pizza diner is a plus for independent pizzerias. “They do care about their ingredients,” Irving notes. “They don’t have one set style. They can mix and match and create new menu options, which is what people want.” And diners, due in part to social media platforms such as Facebook and Instagram, are posting photos of a growing number of regional pie types (such as Neapolitan or Detroit-style), contributing to the increase in their popularity. Also, because quality is important among younger customers, the independent operator has an advantage. “The younger generation wants to know what’s in their food, and that’s a great opportunity for independents to dominate their market, because they can do that,” Irving explains. “They’re not set in their ways. They can be nimble. If something doesn’t work, stop doing it. If it is working, do it more!”
Don’t Wait for the Dinner Bell
Although dinner still dominates the pizza industry, other dayparts, such as lunch and breakfast, have gained traction. According to a Technomic consumer survey, breakfast is the fastest-growing daypart in the restaurant industry. Egg and ham pizzas for breakfast are gaining popularity, with 17% of “super heavy” pizza consumers reporting they have eaten pizza at breakfast, according to a Technomic study.
Even 7-Eleven introduced a new breakfast pizza to their food lineup in 2018, and market testing at select 7-Eleven stores revealed that it was the second highest-selling pizza.
In fact, nutritionist Chelsey Amer told The Daily Meal in January that pizza isn’t necessarily an unhealthy way to kick off your morning. “You may be surprised to find out that an average slice of pizza and a bowl of cereal with whole milk contain nearly the same amount of calories,” Amer said. “However, pizza packs a much larger protein punch, which will keep you full and boost satiety throughout the morning. Plus, a slice of pizza contains more fat and much less sugar than most cold cereals, so you will not experience a quick sugar crash.”
“Breakfast pizzas have become very popular,” Marla Topliff, president of Rosati’s Pizza and chairman of the National Restaurant Association’s Pizzeria Council, adds. “It’s not that hard to make a breakfast pizza. You can put anything on a pie. Breakfast has always been a big daypart, just not typically for outlets like us. Fast-casual, five-minute pizzas have the lunch category covered. People want to be able to get in and get out. Dayparts have become a big factor and a booming trend. Everybody’s trying to capture a little of each of those. When we’re trying to get ready for a big football game on a Sunday, we’ll open our stores early and add a breakfast pizza in a lot of our pubs to capture that crowd, because that’s what they’re looking for.”
However, pizzeria owners should be cautious about adding a breakfast pizza to the menu without the proper product development. “I don’t think you should do breakfast pizza if it’s not what you’re good at,” Irving says. “Are 40 people a week asking you to open for breakfast? If they’re not, don’t just open for breakfast just because you think you might be able to grow your sales.”
Bruno, the robotic pizza-making arm from Zume Pizza. For more info, read our cover story on Zume in the June/July 2017 issue of PMQ Pizza Magazine.
Technology Leads the Way
When futurists of the 1950s speculated about 21st-century science and technology, they gave little thought to pizza delivery. But leading chains like Domino’s and Pizza Hut, along with up-and-coming companies like Zume Pizza, are turning science fiction into reality for the restaurant industry. Pizzerias are constantly working to find the next technological development that will make ordering and delivering pizzas quicker and easier for the consumer. However, this puts pressure on smaller independent pizzerias, which may lack the capital to invest in such new technologies, to keep up. A full 43% of pizza customers say they find online ordering and tracking technologies “appealing or extremely appealing,” according to a Technomic study, while the same study found that 24% of consumers felt similarly about pizzas that can be ordered from a smart TV.
But how do they feel about robots making their pies? Companies like Zume Pizza, a Mountain View, California-based startup with a so-called “cobot” culture—humans and robots working side by side in the kitchen—hope to answer that question. Zume, which was featured in PMQ’s June-July 2017 issue, earned a new round of funding for $375 million last fall from a single investor, SoftBank Vision Fund. The cash injection reportedly raised Zume’s valuation to roughly $2.25 billion, according to The Wall Street Journal—not too shabby for a company that presently delivers pizzas only in the San Francisco Bay area. Co-founded by Julia Collins and Alex Garden, Zume uses a robot-enabled assembly line to prep and par-bake pizzas, plus predictive algorithms that forecast where pizza orders will come from and what types will be ordered. The par-baked pizzas are then loaded onto huge delivery trucks equipped with refrigeration units and dozens of computerized ovens as the truck cruises a predetermined delivery area, human employees pop the pies into the ovens for the finishing bake when an order comes in and deliver them, fresh and piping-hot, to the customer’s door.
Other chains have taken note of Zume’s revolutionary model. Pizza Hut, in collaboration with Toyota, is working on its own version, the Tundra PIE Pro, still in the prototype stage. The setup utilizes a rebuilt Tundra SR5, with par-baked pies stored in mini fridges, a pair of robotic arms and a conveyor oven. One robot arm removes the pie from the fridge and places it on the conveyor oven. The pizza emerges, fully baked, on the other side, where a second robot arm transfers it to a cutting board, slices it into six pieces, places it in a pizza box, and closes the box.
Pizza Hut and Toyota are also developing a self-driving delivery vehicle, called the e-Palette, with a working version set to debut at the 2020 Olympics in Japan. Meanwhile, Domino’s has been testing its own self-driving delivery car, a tricked-out Ford Fusion Hybrid, in select markets, including Ann Arbor, Michigan, and Miami.
Even Little Caesars has gotten into the act, receiving a patent in March for its own pizza making robot. The chain also rolled out its first Pizza Portal, described as “the first heated, self-service mobile-order pickup station in the quick-service restaurant industry.” Customers download an app, prepay for their food on a mobile device, and receive a three-digit PIN or QR code. The customer can then go to the Pizza Portal at the store and input their PIN or scan their QR code to open a secured compartment in the portal, retrieving their pizza and skipping the line—no human interaction required.
Breakthroughs in foodservice automation aren’t limited to the pizza industry. Pasadena, California-based Miso Robotics introduced Flippy, an “autonomous robotic kitchen assistant,” earlier this year in Los Angeles. Flippy, which wowed customers at a CaliBurger location in Pasadena and in a food stand at Dodger Stadium, can flip burgers and place them on buns, and operate fryer baskets.
Topliff says that pizzeria owners shouldn’t lose sight of the big picture. “I think technology is a wonderful thing and is helping our industry grow to a great extent, but I also feel that, at some point, the personal touch is going to get lost in all this technology,” she says. “I still think nothing beats being able to talk to your customers and have face-to-face time with them.”
But technology still offers cost-cutting advantages to pizzeria owners, Topliff admits. “During these times when the price of labor is getting so high, things like kiosk ordering and mobile ordering have taken a giant leap. It’s less expensive for a store owner, especially an independent, to be able to keep business going. Technology is something we all have to keep an eye on.”
Diners are increasingly looking for healthier options at the restaurant. According to a Technomic study, 25% of consumers indicated they “would eat pizza more often if there were healthier options available,” with young consumers, women, and “super heavy” pizza eaters being most interested. According to PMQ’s 2018 Pizza Industry Census, 64.45% of respondents stated they offer a gluten-free crust, and 23.92% reported offering a vegan pizza.
Keto pizza has also gained popularity. As reported in Liz Barrett Foster’s article on the trend, published in the November issue of PMQ, Ron Mathews, owner of Rockstar Pizza in Brownsburg, Indiana, began offering keto-friendly menu items this year. “I’m having a hard time just keeping up with the demand,” Mathews says. “We’re selling a minimum of 100 keto pizzas on Saturdays, which is when we promote the offering.” Mathews even began offering keto sandwiches, which also proved popular.
|View our coverage of keto pizza in our Past Issues (November 2018) section at pmq.com.|
Rago says customers are also demanding higher-quality ingredients. “Quality ingredients help your product brand better,” he explains. “You’ll sell a lot more if you’re using quality ingredients, because people are starting to be aware of what’s going into food.” However, he adds, when adding these high-quality ingredients, operators must make sure to price their menu items accordingly.
Meanwhile, customers with special dietary needs, such as vegan or gluten-free, also expect various options at their favorite pizzerias. “People are just much more aware of what they are eating and putting into their bodies,” Irving says. “My daughter has an intolerance to gluten. If a pizzeria doesn’t offer some sort of gluten-free option, it’s probably not one we will go to. Do some research and explore new menu items have at least one or two alternative options so you can accommodate the whole family.”
Topliff agrees that today’s consumers have become more health-conscious. “With the advent of menu labeling, everybody knows exactly what you’re putting into your food,” she says. “You’re obligated to source the best ingredients, the freshest ingredients, because they’re being looked at more than ever.”
Another ingredient trend has been the uptick in plant-based and vegan ingredients. Domino’s Australia added three vegan pies to its menu, in addition to vegan garlic bread, according to a January 2018 article on livekindly.co. Domino’s Australia stated, “We have been overwhelmed by the popularity of our vegan cheese…We’ve received great feedback about having vegan cheese, and it will stay on the menu.”
The Youth Movement
At the close of 2018, there is an entire generation of consumers who never knew a world without computers, and many of them have no memory of a world without cell phones. Young customers tend to do anything and everything they can on their smartphones or online, whether it is ordering a ride via Uber or ordering a pizza. The convenience of not having to interact with other people is also an incentive to them.
At the same time, a Technomic study found pizza to be most popular among younger consumers (Gen Zers and millennials), with pizza consumption frequency lessening with age. According to a poll by Ellios.com, 40% of millennials think pizza is “the best food in the world.”
In an interview for an August 2018 article in the online publication diginomica, Papa John’s CEO Steve Richie discussed the importance of the younger generations. “Our focus on digital efforts is clearly to make certain that we are appealing to younger audiences, which will be the future of the overall business,” he said. “This brand reputational work is very, very critical to moving the overall comp sales forward while we’re solving for differentiations in messaging and the value perception and the introduction of all the new technology pieces.”
A November 2018 study by eMarketer Retail found that 36% of U.S. internet users ordered restaurant delivery in the past year, the majority of which were those under 35. The survey found that younger users have higher adoption rates and tend to use delivery services more frequently.
Irving notes that younger pizza consumers want online ordering, as well as information on your ingredients. “You have to recognize that and adapt your business,” he says. “If you don’t change now, it might not affect your business today, but five years from now, you’re going to look back and say, ‘I wish I had online ordering then, because now everybody else has it.’”
Topliff echoes the demands of those who prefer to do things right from their computer or phone for ease and convenience. But she also identifies an unexpected upside to online ordering: privacy. “There is a tendency to order more online, because no one is watching what you’re ordering,” she explains. “You have the ability to order in the privacy of your own home and by yourself. But some people still prefer to order in person, so you have to be prepared to go in any direction that is going to be most convenient and make your customers the happiest.”
Third-party delivery and ordering services have been game-changers in the pizza industry. For the first time, restaurateurs have the option of not hiring drivers and paying costly insurance bills for the luxury of delivering their product. However, these services come at their own cost.
A June 2018 Morning Consult poll reported that “31% of U.S. adults order delivery at least somewhat often, and 67% ‘hardly ever’ or ‘never’ order in.” The study also indicated that 82% said they prefer to order directly from a restaurant, while only 13% utilize a third-party delivery service 26% stated “quality of the food delivered” was the deciding factor in choosing a third-party delivery service. According to PMQ’s 2018 Pizza Industry Census, 67.46% of respondents reported not utilizing a third-party delivery service.
Rago believes that the convenience of third-party services does not necessarily offset the increased costs of utilizing those services. “I know it’s convenient, but they’re not money-conscious,” Rago says. “When you use those third-party companies, most of the time customers are paying an inflated rate or surcharge. Bottom line is, it’s costing the millennial more money without them necessarily realizing it.”
Topliff believes that, when evaluating a third-party service, operators must examine the seamlessness of the delivery process: Are they delivering in the right packaging? Are the pizzas actually arriving the way they should? “We’ve had our own deliveries and drivers for the 50 years that we’ve been in business,” Topliff says. “We still have the availability for things like UberEats and many of the third-party delivery services, only because that’s where some of our customers are. It seems like a lot of the millennials prefer to skip having that one-on-one contact and just want to be able to do it right from their computer, so we have to be in both places.”
Loyalty programs have been around for decades and remain hugely popular to this day, including for pizzerias.
According to PMQ’s 2018 Pizza Industry Census, 41.71% of respondents reported utilizing a loyalty program. In a 2016 Forrester Data Consumer Technographics North American Retail and Travel Survey, 60% of loyalty customers said the programs influence where they make purchases, and 48% said loyalty programs influence what they buy.
In the same survey, 64% of U.S. online adults who belong to any customer loyalty program, and who regularly participate in most of the programs they join, said the programs make them feel more loyal to the brand or company, compared with 42% who participate in just a few programs and 19% who rarely participate.
“I think every business should have loyalty programs,” Irving says. “If you can get someone to download your app, you can get them to order much more frequently through that app, because they are now a loyal customer. It’s something every business should look at.”
“You can’t be in business without a loyalty program these days,” Topliff agrees. “Everybody’s looking for them. We have coupons on the side of our boxes that say ‘Buy 12, get one free.’ We have it on every website and homepage and every possible social media place we can put it: If you’re part of our loyalty program, you’ll get something for free. These days, in these economic times, people are looking for that.”
In a Nutshell
Ultimately, despite all of the challenges today’s pizzeria owner faces, Topliff offers a positive summation of the state of the pizza industry. “Pizza has been one of the staples of the industry for the last hundred years,” she says. “There have been recessions, but pizza always seems to do well even during those times, because we’re the one food that families can depend on—that can feed a family for a fairly decent price, that helps celebrate football games and birthdays and kids’ parties. It’s always been the biggest percentage of the National Restaurant Association and the International Franchise Association.”
And, if there’s one more trend that doesn’t look to be slowing, it’s the increased focus on technology. Looking ahead to 2019, remain on the lookout for new innovations, whether it’s a new ordering app, a piece of equipment that can lower your labor costs, or an upgraded POS system. History shows that those who fail to adopt new technologies may be left behind, especially given the youth market’s affinity for all things high-tech. At the same time, don’t forget that using healthy, quality ingredients will always be a core component of any successful pizzeria—though times may be a-changing, some consumer demands will always remain in fashion.
HVAC, PLUMBING, CLEANING AND LANDSCAPE SERVICES
Big Mikes Rooter & Plumbing, Inc is hiring immediately for a local plumber with 2 years of experience and a current drivers license.
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AZ Air Conditioning and Heating is seeking Experienced Brand Ambassadors to join our team in the Los Angeles and Ventura county area! We are looking for motivated, engaging, and sales-oriented type Brand Ambassadors for our Big Box retailers. What you'll do: Communicate a thorough understanding of features, benefits, product differences and services Engage with in store customers in a friendly manner Enter customer info on IPAD Must be reliable and dependable.
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Ez Plumbing is Hiring Technicians and Installers with plumbing experience during these unprecedented times. We are trying to do our part in helping the economy recover jobs and help people put food on their tables.
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GEODIs in Rialto is hiring material handlers and forklift operators for their warehouse.
Central Coast Filter & Supply Company is a manufacturing company with offices in Ventura County specializing in sales of spraybooths and HVAC services. The company is looking for seasoned salespeople eager to build a base, as well as experienced HVAC spraybooth maintenance technicians. Training provided. Knowledge of how auto body shops work is a plus.
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Merry Maids of Orange County is looking for residential housekeepers.
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Aptive Environmental is a pest control company looking for an entry level service technician.
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Forever Landscape Maintenance in Alta Loma is hiring a landscape maintenance person with 1-2 years of experience.
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Air Concepts is looking for a HVAC installation technician to install, service and repair heating and air conditioning systems in Placentia.
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Temptechs Air Conditioning and Heating is hiring a HVAC installer, HVAC helper installer and a HVAC service technician.
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WSH Management is currently looking for maintenance technicians in Santa Ana, Long Beach and San Bernardino.
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Belle Air Services is looking for HVAC technicians and install experts to join their team. They're offer competitive pay and a sign-on bonus. Some responsibilities include HVAC services, repairs, routine preventative maintenance, full system installations and replacement.
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Servicon Systems Inc. is a leading environmental services provider and cleaning specialist company hiring and training up to 100 new employees.
Goettl Air Conditioning and Plumbing is hiring at least a hundred new workers in Nevada, Arizona, Texas and Californias. The company is offering paid training for veterans. Positions available include plumbing service technicians, dispatchers, project managers and installation coordinators.
AAA Association, LLC in Los Angeles is looking for a gardener to hire twice a month to trim greenery, water and blow leaves in area that's about 1-acre.
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Importing Products and Services
International trade involves more than shipping U.S. products overseas. For many products, foreign sources of supply can provide higher quality, lower cost or some other desirable feature in comparison to U.S. sources. For instance, Italian shoes, French wines and Japanese cameras are widely available in the United States because of their recognized superiority in some respects to domestic alternatives.
Importing doesn't have to be limited to goods, either. Many companies have grown by importing services in imaginative ways. For instance, a large quantity of the data-entry work that used to be done in the United States is now done by workers in countries such as India and China. The companies for whom this work is being done have effectively imported the data-entry services of international workers.
At one time, identifying sources of products to import was a serious challenge for American importers. But vast improvements in the global telecommunications network have greatly eased that task. Today anyone with a computer and a modem can do Web searches to locate suppliers virtually anywhere in the world. Furthermore, they can communicate with those suppliers, exchanging specifications and requirements far more easily, swiftly and conveniently than ever before. If you have an idea for importing a product made in another country, it should be easy to find a supplier who can sell it to you. Here are tips for finding a source of products to import:
- Start by focusing on countries whose imports to the United States are granted favored status. This means lower import duties and lower cost for you.
- Once you've selected countries as likely sources, contact trade representatives at the appropriate embassies. They should be able to provide you with lists of manufacturers of the products you're interested in.
- Attend foreign and domestic trade fairs where companies seeking to export to the United States are exhibitors.
- Read U.S. and foreign newspapers and magazines, scanning for advertisements and articles about products you might want to import.
The Internet is having a large impact on the way international business is conducted. This impact is especially significant when it comes to finding leads for international trade partners. You can look at TradeNet, the U.S. government's online trade-matching service, for numerous links, databases, message boards and other tools for finding products to import and other opportunities to grow your business internationally.
Once you've identified some likely sources of products to import, make contact with the company and begin gathering information. You'll want to obtain samples of products and, of course, discuss prices and terms of payment. Take special care to check the quality of the products-the United States is a sophisticated marketplace, and shoddy products that might succeed elsewhere will be shunned here.
As in any circumstance where you're checking out a new prospective supplier, ask for references. Get a referral to a company that has dealt with this supplier before, and call to check them out.
Shipping procedures are a paramount concern when moving products long distances. High-value items may be shipped by air, but many products come by ship. This often means transit times measured in months, with the associated risks of missing market opportunities. Make sure your supplier understands your requirements for delivery and that the shipping procedure chosen will do the job. Once you are happy with the arrangements, have an attorney experienced in international trade review the contract.