Week of Jan. 4, 2010

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Canada’s Recession Fading as Economy Shows Strength
There is growing evidence the Canadian economy is rebounding from its first recession since 1992. October saw Canada’s economy grow for the second month in row, according to Statistics Canada, prompting economists to again declare an end to the ‘Great Recession.’ A final tally of several sectors saw Canada’s gross domestic product grow by 0.2 per cent, retail trade rise 0.3 per cent, wholesale trade grow 0.2 per cent and tourism-related industries such as air travel, accommodation, foodservices and arts and entertainment rise 0.1 per cent.
Krishen Rangasamy, an economist with CIBC World Markets, commented, “While the final quarter of the year did not start off as spectacularly as the preceding quarter ended, output still expanded in October for the fourth time in five months, suggesting the recession is now well in the rearview mirror.” The Bank of Montreal’s 2010 economic projections call for annual GDP growth of 2.5 per cent and an end to the Bank of Canada’s low interest rates by mid-year. TD Bank Economist Dina Cover, wrote, “Overall, we expect the broad-based growth seen in recent months to continue in the fourth quarter and into 2010.”
In mid-December, Canadians were the most optimistic about the country’s economic outlook since the fourth quarter of 2007, according to a quarterly tracking poll by Toronto, Ont.-based Nanos Research. Looking ahead to the next six months, 49 per cent of respondents saw the economy growing while only 12 per cent said the economy will weaken; the 49 per cent figure is the highest since the fourth quarter of 2007. Nik Nanos, president and CEO, commented, “It’s pretty clear Canadians think the economy is going to get stronger in the next six months.” Confidence is strongest in Ontario and western Canada, and weakest in Quebec.
The Canadian Chamber of Commerce, in its annual outlook for 2010, says the global economy has turned the corner to recovery and expects the Canadian economy will continue to strengthen, growing 2.6 per cent, in the new year. It warns, however, that premature withdrawal of stimulus measures in Canada and internationally, could stall recovery, endanger confidence and put jobs at risk. The chamber expects that economic momentum will pick up in 2011, with real GDP growth forecasted at 3.3 per cent.
A Harris/Decima-Investors Group consumer confidence index released Dec. 30 shows that, nationally, Canadian consumer confidence reached a high of 86.5 in August and leveled off to 85.5 in November. Alberta led in confidence levels finishing 2009, more than five points ahead of the average at 90.7. Those under the age of 35 started the year with a measure of 70.2 in the first quarter and reached a level of 93.2 by year’s end. Harris/ Decima senior vice-president, Doug Anderson said in a release, “The year began during one of the least-confident phases since Harris-Decima and Investors Group has been recording Canadian consumer confidence. However, the closing quarters [of 2009] have shown that Canadians have some optimism for their financial future, certainly considerably more than found in the U.S.”
An Ipsos Reid Public Affairs survey commissioned by Canwest News Service and Global National reports that 73 per cent of respondents said they are “optimistic that 2010 will be a good year for creating jobs and getting people back to work,” and 67 per cent said that their “personal economic outlook for 2010 is bright.” John Wright, senior vice-president at Ipsos Reid commented, “This [earlier polling] had all of the potential to be really serious, but what we’sve witnessed is a burgeoning optimism since May that has just continued.”

Extreme Pita Opens 235th Location in Charlotte, N.C.
Mississauga, Ont.-based Extreme Pita has entered the Charlotte, N.C. market, and it plans on expanding to 15 to 20 franchised locations in that market within five years. A traditional Extreme Pita unit — the new 1,200-square-foot restaurant has 14 employees — seats 35 people and offers dine-in or take-away for lunch, dinner and late-evening offerings.
The chain promotes its pita sandwiches, soups and salads as healthier alternatives to fast food. “After years of tremendous success in our native Canada, we’re proud to have successfully crossed over into the United States and extremely excited about bringing our fresh and healthy pitas to Charlotte” said Alex Rechichi, president of Extreme Pita. “We look forward to building upon our success in other markets across the country, feeding the local appetite and answering the call for healthful quick-serve alternatives.” Extreme Pita has approximately 235 locations in Canada and the U.S., all but two of which are franchised.

U.S. Bakery Cafés Sales Rise 12 per cent — Technomic
“Bakery cafes have emerged as [the] high-fliers in the U.S. restaurant industry,” according to Chicago-based foodservice research firm Technomic. Led by Panera Bread (sales US$2.6 billion), Einstein Bros. Bagels (US$393 million) and Au Bon Pain (US$307 million), the sector grew more than 12 per cent and exceeded US$4.5 billion in sales. Units expanded by 6.6 per cent to 3,107 locations. The fastest-growing chains are Paradise Bakery & Cafe with sales growth of 30.7 per cent, and Le Pain Quotidien which lead in store-count growth, up 29 per cent. “The consumer trade-down from full-service to limited-service formats, that solidified through 2008 and into 2009, allowed fast-casual bakery cafés to truly shine,” said Technomic’s executive vice-president, Darren Tristano. A detailed analysis of the chains, their products and market trends are included in a new study, the 2009 Technomic Top 25 Bakery Café Chains Restaurant Report.

Intrawest ULC May be “Pushed Nearer to Default” — Bloomberg
2010 Winter Olympics venues operator Intrawest ULC, Vancouver, B.C. may be “pushed nearer to default” on a $1.4-billion loan due before Christmas, according to financial services news source Bloomberg. However, the report assured fans and athletes alike, that the February Olympic games will not be affected by a missed loan payment. Intrawest is privately owned by New York-based Fortress Investment Group LLC whose stock trades on the New York Stock Exchange. A US$524-million payment was due on Wednesday, Dec. 23, 2009, and Intrawest had issued a statement saying it was current on all its obligations as of Dec. 22, 2009, “and we are in active dialogue with our lenders regarding refinancing a term loan.” CEO Bill Jensen said, “It is business as usual for Intrawest. We are providing our customers and homeowners the memorable experiences that they have come to expect … and will continue to do so regardless of the outcome of these discussions.” No further information has been released.
Fortress acquired Intrawest in a leveraged buy-out for US$2.8 billion in cash and debt of US$1.7 billion, which came due in the fall of 2009, but a 60-day extension was negotiated. In November, Intrawest sold its resort at Copper Mountain, Colo. to U.S. mountain resort company Powdr Corp., for an undisclosed amount.

New Brunswick Strengthens Food Safety Training Requirements
Improved food safety is the principal goal of New Brunswick’s new Public Health Act, proclaimed Nov. 20, 2009, which includes a new Food Premises Regulation calling for at least one food-safety certified employee to be present at all times, effective April 1, 2012. It also specifies that the manager of the food premise must hold an approved food-safety certification after that date. The Food Premises Regulation applies to locations where food is, processed, prepared, stored, handled, displayed, transported, sold or offered for sale. Licensed abattoirs and dairy plants will also fall under the new food premises regulation as well as having separate requirements under their own regulations, which are very similar to their existing requirements.

Menu Calorie Ratings Reduce Consumer’s Calorie Consumption — Study
Restaurant customers consume fewer calories at dinner and afterwards when the calorie content of entrées is listed on the menu along with information on how many calories they should consume in a day, according to a new study by the Rudd Center for Food Policy and Obesity at Yale University. Researchers there enlisted 303 adults and invited them to have a dinner in a restaurant with three different menu options. Published online in the American Journal of Public Health, the study included: menus with the calories listed for the dinner entrées; menus that cited the calories plus the recommended daily caloric intake for the average adult (about 2,000); and menus with no calories listed. Diners who saw the calorie label and the 2,000 calorie reference consumed the least, both at dinner and afterward, eating about 1,380 calories at dinner and during the evening. That compares with about 1,630 calories for both the no-calorie label group and the calorie label group. “The reason menu labelling is so important is decisions in restaurants are not intuitive,” said lead author Christina Roberto. “At a lot of chain restaurants, some of the salads have more calories than the burgers.” Kelly Brownell, director of the Center, commented. “It’s crystal clear that menus should include both the calories and the 2,000-reference number to make it easier for consumers to make healthful choices.”

To Put Asparaginase Into Processed Food: That is the Question
Health Canada has invited public comments on a draft report to be released Feb. 21, proposing to have manufacturers add small amounts of the enzyme asparaginase into plant-based foods such as potato chips and french fries that are cooked at high temperatures. Asparaginase is expected to reduce the natural formation of the chemical acrylamide, which is a cooking byproduct that has been linked to cancer in animals. Health Canada says that research suggests asparaginase reduces acrylamide production by as much as 90 per cent. A “notice of intent” document was published on Dec. 9, 2009. The enzyme is already being used in the U.S., Australia, New Zealand and Denmark.

CAFP Gala Dinner & Fundraiser, Feb. 8, Toronto
The 36th Annual Top Management Night Gala Dinner & Fundraiser for the Toronto branch of the Canadian Association of Foodservice Professionals (CAFP) will be held Monday Feb. 8 at the Old Mill Inn & Spa, Toronto, Ont. Last year this event contributed more than $11,000 in awards and bursaries to young professionals seeking foodservice and hospitality careers. This year’s keynote speaker is Richard Worzel, one of Canada’s most prominent futurists. For information, click here or call (416) 422-3431.

IFMA’s COEX 2010, Orlando, Fla., Feb. 28 – March 3
COEX 2010 (Chain Operators Exchange) will take place from Feb. 28 to March 3 at the JW Marriott Orlando, Grande Lakes. Orlando, Fla. Sponsored by the International Foodservice Manufacturers Association (IFMA), Chicago, Ill., the event is themed “Menu, Value & Innovation: Consumers Rule!” The organizing committee is chaired by Kevin Bechtel, senior vice-president, Purchasing & Menu Development, Shari’s Management Corporation. COEX 2010 is produced in partnership with other industry organizations including: International Corporate Chefs Association; National Restaurant Association; GS1 US, Technomic Inc.; ArrowStream; Noble/The Food Channel; The Kruse Company; Faegre & Benson and The Hartman Group. For information, click here.

HoJo and the Harlem Globetrotters Support Children’s Wish Foundation
Oakville, Ont.-based Howard Johnson Canada (HoJo) and the world famous Harlem Globetrotters have partnered to support The Children’s Wish Foundation of Canada. HoJo president Glen Blake commented, saying, “Both Howard Johnson and the Harlem Globetrotters are brands, which are dedicated to spreading fun and happiness and we wanted to take this opportunity to give something back to the community”. As the Globetrotters travel across Canada on their 2010 tour, ‘Wish Kids’ and their families will attend each game in an effort to help ‘spread happiness’, Blake said. During Canadian Globetrotter games, The Children’s Wish Foundation will also be asking for fans to help them continue making children’s wishes come true with their Mobile Giving promotion.  Mobile Giving allows people to donate $5 to The Children’s Wish Foundation simply by texting “WISH” to 30333 from their mobile device. The Harlem Globetrotters are embarking on their 84th consecutive season of world touring.

Volrath Acquires Lincoln Smallwares Product Lines
The Vollrath Company, Sheboygan, Wis., has acquired Lincoln Smallwares, a division of the Manitowoc Company. However, Manitowoc will retain the “Lincoln” name and continue to manufacture other products that carry this brand name, including countertop foodservice equipment. The Volrath sale includes the Wear-Ever line of more than 300 foodservice products, including pots, pans, bakeware, trays and other kitchen utensils. Other Lincoln products acquired by Volrath include Centurion stainless-steel cookware, and REDCO, a line of manual food-processing equipment. Vollrath president and CEO Paul Bartelt commented, saying, “Acquiring Lincoln Smallwares enables Vollrath to provide a broad array of strong cookware, bakeware and food prep brands, ensuring our customers have the best possible product selection. The acquisition also further solidifies our position as the premier supplier of cookware for the foodservice industry.”

Wendy’s Closed for Business in Japan, But Plans Comeback
Even though long lines of customers had queued outside its locations over the past three weeks, Wendy’s closed its 71 restaurants in Japan on Dec. 31, after almost 30 years. It was announced three weeks ago that the company was unable to renew a franchise agreement with the Tokyo-based Zensho Co. Zensho said it didn’t renew Wendy’s contract to concentrate on its other chains, which include the Sukiya beef-bowl brand. Wendy’s was Japan’s seventh-largest burger chain. Atlanta, Ga.-based Wendy’s/Arby’s Group Inc., hasn’t ruled out re-entering the world’s second-largest economy if it finds a suitable new partner, according to Bloomberg. “There is significant long-term potential for Wendy’s/Arby’s Group restaurants in Japan,” said Andy Skehan, senior vice-president of the Wendy’s international division.

 

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