Week of Aug. 30, 2010



The Yanks are Coming to Canada — Reuters Analysis
“U.S. restaurants want a bite of the Canadian market” is the title of a Reuters Analysis available online, which notes a wide range of existing and new U.S. chain restaurants coming to Canada. The most recent arrivals are Buffalo Wild Wings (700 U.S. sports bar and grill locations), Five Guys Burgers and Fries, (655 restaurants) and Chipotle Mexican Grill (some 1,000 company-owned restaurants). “The Canadian economy is in a lot better shape than the U.S. economy and that likely makes it more attractive in terms of development,” Destin Tompkins of Morgan, Keegan & Co. is quoted as saying in the analysis. “On the whole, most of the mature (U.S.) casual-dining companies and quick-service companies have very limited domestic expansion plans.” Analyst Bart Glenn of D.A. Davidson & Co. remarked that Canada “does represent an easy first step” for companies looking to expand globally. “It’s a good transition as you evolve your international plans.”

Tim’s, Starbucks to Hold Coffee Prices Despite Cost Increase
No coffee price increases are being planned by Tim Hortons or Starbucks Corp., despite soaring coffee bean prices, which are up 40 per cent, to a record 13-year high, according to Canadian Press. Weak harvests in some of the world’s most robust coffee-growing regions are causing the increases, with coffee futures for December 2010 delivery hitting US$1.8865 a pound last week. A survey of other retail coffee sources shows price increases are already being put into effect for leading brands.

Salmonella Egg Recall Traced to Chicken Feed
Contaminated chicken feed has been identified as the probable source of the salmonella outbreak, which led to the massive recall of more than 550 million eggs in the U.S. and the illness of some 700 people. Between May 1 and Aug. 25, restaurants in 22 states were impacted, with some of the illnesses traced back to specific restaurants. The US Food and Drug Administration (FDA) reported the feed had been used at two Iowa farms, Wright County Egg and Hillandale Farms, and has not been distributed elsewhere in the country. “We don’t know if the feeding ingredients came to the facility contaminated or if the feed got contaminated at the facilities,” said FDA’s Jeff Farrar in a news release.

Buffalo Wild Wings to Focus Growth in Toronto
More details are emerging on the planned Canadian expansion of Buffalo Wild Wings. (See “Buffalo Wild Wings Coming to Canada,” TheWhat’sOnReport, Aug. 23.) Buffalo Wild Wings’ senior vice-president of franchising and development, Mo Sawda, told Nation’s Restaurant News (NRN) that the chain is focused on experienced Canadian operators, including possible multi-unit agreements. “We can learn from them through their experience in the Canadian market, and they understand the relationship between franchisor and franchisee, so it will be a two-way street,” Sawda said. The company is planning to build a cluster of units around Toronto before expanding into other provinces. It has already found local suppliers and marketing companies for the initial openings and says it will continue to build up a countrywide supply chain and marketing apparatus to enable growth across Canada. The company has also pre-tested its concept with Canadian focus groups. As a result, in addition to offering the existing Buffalo Wild Wings’ full menu, the Canadian restaurants will feature domestic beers and microbrews and a honey-garlic sauce not available in the U.S. According to NRN, Buffalo Wild Wings has grown from 35 restaurants to 680 locations in 43 states in the past 12 years. NRN’s most recent Top 100 report indicated the chain grew its U.S. system-wide sales by 20.4 per cent, from $1.23 billion in 2008 to $1.48 billion in 2009.

Of course, not everyone is happy about the wing company’s move north as there appears to be some legal wrangling over the expansion plans. “[Buffalo Wild Wings] knew about me when they started this, and now they think they’re going to muscle me? The law is against them,” Rick Smiciklas, founder of Canada’s own Wild Wing restaurant chain, told the Financial Post. Apparently, Wild Wing is preparing a legal challenge of Buffalo Wild Wings’ application for a Canadian trademark. The Aurora, Ont.-based chain currently includes 75 locations open or coming soon and an additional 18 under development. Smiciklas intends to double his stable of wing outlets within the next three years. “[Buffalo Wild Wings’] is the biggest wing chain in the world, they’re gunning for me and its like, ‘No problem, you want to go? Let’s go, I’m not scared of you,’” he told the Post.

Wild Wing restaurants are each about 2,000 square feet and Smiciklas said the chain has some $100-million in system-wide annual sales. “I could see [Wild Wing] having easily 1,000 stores within seven or eight years, like easily,” Smiciklas told the newspaper. Buffalo Wild Wings’ Inc. outlets are generally 6,000 square feet with 300 seats. It has a market capitalization of US$700 million.

McDonald’s Appoints Global Chief Brand Officer
McDonald’s Corporation, Oak Brook, Ill., has appointed Steve Easterbrook, currently president and CEO of McDonald’s United Kingdom and president of Europe’s Northern Division, to the new position of McDonald’s executive vice-president and global chief brand officer, effective Sept. 1. The 16-year McDonald’s veteran will be relocated to Oak Brook where he will report to Don Thompson, president and chief operating officer. “Easterbrook’s promotion reflects McDonald’s solid succession planning process and its deep bench of talented leaders aligned around the company’s Plan to Win,” reads a company release. “This new position is a natural evolution of our commitment to our customers and our pledge to be better, not just bigger,” added Jim Skinner, McDonald’s CEO.

Ban on Free Kid’s Meal Toys Being Considered in SF
Giving away free toys or other incentives with meals marketed toward children could be banned in San Francisco under a new draft ordinance drawn up by San Francisco supervisor Eric Mar and two of his colleagues earlier this month. “This legislation is aimed at promoting healthy eating habits and to address issues related to childhood obesity,” reads the proposal that also stipulates kid’s meals should include a half-cup of fruit and three-quarters of a cup of vegetables. “Fast-food restaurants target children and youth by offering toys and other incentive items. The Healthy Meal Incentive legislation would encourage restaurants to provide healthier meal options.” The proposal mirrors a recent Santa Clara, Calif., measure — believed to be the first of its kind in the nation — which takes the situation one step further, establishing thresholds for total calories, calories from fat, trans fats, sodium and sugar.

Nutrition Disclosure Guidelines Issued by U.S. FDA
Canadian chain and multi-unit operators can look south of the border with interest as the industry reacts to the Food and Drug Administration’s (FDA) guidelines on a nutrition-disclosure law that requires restaurants with 20 or more locations to post nutrition data on restaurant menus and menu boards. Vending machines and other retail food outlets must also carry nutrition information. As stipulated by the health care menu-labelling requirements law, which Congress passed March 23, the FDA released two guidance documents. The first document explains how the federal law preempts non-identical state and local menu-labelling requirements, while the second offers guidance on the menu-labelling process. While the rules won’t be put into effect until March 2011, the agency said it would hold off on enforcing them for an unspecified time so that companies can make the changes. According to Reuters, the National Restaurant Association’s public affairs specialist Dan Roehl, who often takes the lead on regulatory issues, said the industry supports a national standard for disclosing nutrition information. “Once FDA completes the regulatory process, the industry will have all it needs to comply with the federal law… It’s important for our members to know what they need to do.”

Couche-Tard Reports Record Sales/Profits in Quarter
Strong same-store sales on both sides of the U.S./Canada border have driven convenience store chain Alimentation Couche-Tard Inc., Laval, Que., to record earnings of US$129.5-million, a 42.2 per cent increase in first quarter profit, for the period ending July 18. Same-store sales were up 6.6 per cent in Canada and 4.4 per cent in the U.S. Couche-Tard’s revenues across North America, including merchandise, food, service and fuel rose to almost US$4.3-billion, up 16.3 per cent compared with US$3.7-billion in the first quarter of fiscal 2010. “During fiscal 2010 we posted a record year and we are starting fiscal 2011 with a record quarter,” says Alain Bouchard. “It’s even better when the results are supported by what makes us what we are: in-store sales.”

Commenting on Couche-Tard’s aggressive pursuit of Casey’s General Stores in the U.S., Bouchard says he was “disappointed” in Casey’s board’s refusal to negotiate. Couche-Tard’s latest offer for the Iowa-based chain, which has 1,468 stores, — all but 14 company-owned, in nine Midwest states — is valued at US$1.9-billion and expires today, Aug. 30. Casey’s sells a wide variety of prepared foods, groceries, beverages, dairy and bakery products as well as beer and fountain drinks.

Calgary’s Vin Room Revamps
Calgary’s Vin Room is preparing to introduce Claire Cameron as its new executive chef who will bring a globally inspired menu to fruition in mid-September. Cameron will use her love for quality local ingredients to create small plates inspired by countries like Spain, Korea, India and France — all made to complement the Vin Room’s award-winning wine list. “Our team is excited to bring tapas, spiced with global flavours, back to the plates of Calgarians,” said Phoebe Fung, the restaurant’s owner. “It’s a natural next step to complement Vin Room’s international wine list.” Cameron began her culinary career at 18 when she started her own catering business, which she followed up with an education at Dubrulle Culinary Institute in Vancouver.

IFMA President’s Conference to Examine Foodservice 2020
The International Foodservice Manufacturer’s Association (IFMA) will present its annual President’s Conference from Nov. 7  to 10 at the Renaissance Esmeralda Resort and Spa in Indian Wells, Calif. Themed “Foodservice 2020: Time for Strategic Decisions,” the conference will to be presented by Bill Hale, president of The Hale Group Ltd., and a senior-executive panel. The topic will be further developed by Dr. George Friedman, founder and CEO of Stratfor Global Intelligence, in his session, “The Next Decade: What the World Will Look Like,” and a keynote address by Jon Luther, executive chairman, Dunkin’ Brands, Inc. Friedman predicts food production and distribution will emerge as one of the two most important strategic systems of the next 10 years — possibly the next 100 years. For more information, click here.

DQ Canada Raises $2M for Children’s Hospitals
On Thursday Aug. 12 more than 600 Dairy Queen Canada franchisees raised more than $2 million for the Children’s Miracle Network by donating all proceeds from some 600,000 Dairy Queen Blizzard sales. The funds raised in this eighth annual Canadian Miracle Treat Day will support medical care, research and educational programs at 14 children’s hospitals across Canada. Dairy Queen has been a supporter of the Children’s Miracle Network since 1984, raising more than $79 million.

We Care Devil’s Pulpit Event Raises $54,000
The 18th annual We Care Devil’s Pulpit Golf Club Event, held in Caledon, Ont., raised $54,000, with 144 golfers raising funds for children with physical disabilities. A signature event for the foodservice and hospitality industry, it was organized by co-chairs Michael Tidmand (Chudeigh’s Ltd.) and Jennifer Marshall (Magnum Food Brokers Ltd.). The committee members were: Kathy Starr (Associated Food Distributors), Dave Coslovich (Mother Parker’s Tea & Coffee), Mandy Fenyes (Maximum Foods Sales), Angelo Mikrogiannakis (Environmental Systems), Christine Tos (Kozy Shack Foodservice) and Brian Orr (Multi-Unit Marketing). For more information, click here.

Edmonton’s 307-Room Chateau Lacombe Sold for $47.8M
The 307-room, full-service hotel Chateau Lacombe Crowne Plaza in Edmonton has been sold for $47.8 million, which is considered to be the largest Canadian hotel sale in 2010. The purchase was by the Vancouver-based Allied Hotel Properties Inc., which also owns the 353-room Crown Plaza Toronto Don Valley hotel. The deal was arranged by Paramount Lodging Advisors in Vancouver and handled by Jim Mouzourakis, senior managing director, Canada.

Dan Kornick to Lead Wyndham’s IT Program
Wyndham Hotel Group, Parsippany, N.J., has appointed Wyndham executive Dan Kornick as senior vice-president and chief information officer overseeing Wyndham Hotel Group’s worldwide IT organization. A 15-year Wyndham veteran, Kornick was most recently senior vice-president of Global Applications Development for Wyndham Exchange & Rentals.


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