Week of March 8, 2010



Tim Hortons Plans 900 New Locations
Oakville Ont.-based Tim Hortons Ltd. is planning to open 900 new locations in North America between 2010 and 2013, including 600 in Canada. According to a company statement, the stores will be focused in Quebec and Western Canada, and there will be continued growth in Ontario. U.S. development will focus on existing major regional markets, such as New York, Ohio and Michigan. A new, flexible restaurant design for smaller communities will also be tested. And to differentiate the brand in the U.S., a new-concept restaurant design will be pilot-tested in 10 or more existing locations, featuring a re-imaging to increase the café and bake-shop positioning, including enhanced finishes, fixtures and seating areas as well as “experiential changes.” In all markets, menu and daypart expansion is planned with product innovations targeted at breakfast, afternoon and evening snacking. Tim’s is also extending its lunch daypart opportunities, including sandwich and soup offerings. The statement also indicated that the partnership with Cold Stone Creamery will be expanded with the addition of the ice-cream franchises in 60 more Canadian locations in 2010 (it’s currently in 13 stores). And non-standard formats and locations will also be expanded in hospitals, universities and colleges, airports and other non-traditional sites, leveraging the company’s “we fit anywhere” philosophy and capability.

On an investor conference call, Don Schroeder, president and CEO, commented, “We are a growth company with significant long-term opportunities in Canada, and we are also excited by the prospects of continued profitable growth in the U.S., and potentially internationally in the longer term.” Tim Hortons’ performance and financial outlook for 2010 calls for: operating income growth of eight per cent to 10 per cent; same-store sales growth of three per cent to five per cent in Canada and two per cent to four per cent in the U.S.; and a capital expenditure of $180 million to $200 million. Beyond 2010, management has established a goal of 12 per cent to 15 per cent earnings per share (EPS) compounded annual growth from 2011 to 2013.

Cautious Optimism Marks Opening of the CRFA Show, Toronto
Canada’s largest hospitality tradeshow, the CRFA Show, is now underway at the Direct Energy Centre in Toronto. The show runs from March 7 to 9, featuring some 1,200 exhibitor booths. Price of admission is $30. Highlights include 14 expert seminars, the participation of 12 senior Canadian chefs and seven mixologists doing demonstrations and a new Centre for Sustainability area. For an additional fee, a Foodservice Trends and Directions conference is being held this morning, presented by Chicago-based research authority Technomic Inc. Some 12,000 delegates are expected to attend the three-day tradeshow. The CRFA Show is owned and operated by the Canadian Restaurant and Foodservices Association (CRFA).

Cautious optimism about the foodservice industry’s outlook was expressed by CRFA economist Chris Elliott. In his seminar entitled Economic Forecast & Foodservice Trends, Elliott is predicting a 2010 nominal year-to-year growth of 2.9 per cent to $47 billion and total growth of 20 per ecnt in the five-year period ending in 2014, with total sales climbing to $55 billion. Among the continuing challenges facing the industry, Elliott cites: slow consumer disposable income growth; the size of the present consumer debt; rising food prices and labour costs acerbated by provincial moves to raise minimum wages; a continuing labour shortage; and the in-roads being made by grocery stores and supermarkets that are offering home-meal replacement.

U.S. Restaurants Gaining Confidence — NRA
According to the monthly Restaurant Performance Index (RPI) of the National Restaurant Association, U.S. restaurant operators are gaining increased confidence about future economic and business conditions. For the third time in four months, the RPI’s Expectations Index, which measures operators’ six-month outlook for four indicators (same-store sales, employees, capital expenditures and business conditions), rose 0.2 per cent in January to 100.1. This is also the first time in nine months that the Expectations Index rose above the 100 level. The January RPI stood at 98.3, down 0.3 per cent from its December level, which had been a 22-month high. Hudson Riehle, senior vice-president of the Research and Knowledge Group at the NRA, commented, “Restaurant operators are relatively optimistic about improving sales growth and economic conditions in the months ahead, and their capital spending plans rose to the highest level in five months.” For more information, click here.

Coffee War Underway — Roll-Up-the-Rim versus Free
The quick-service coffee promotion wars in Canada have reignited as McDonald’s Canada launched another free coffee giveaway last week (its third in the past year) at the same time Tim Hortons’ 24th annual Roll-up-the-Rim event kicked off. McDonald’s two-week-long promotion includes a no-purchase-required offer. Last Wednesday morning, March 3, also saw a free medium coffee offer, no-purchase required, put forth by the Country Style chain. McDonald’s manager of communications for Ontario, Stephanie Sorensen, told the Toronto Star, “[This promotion is timed] to continue the excitement of the Olympics.” She added, “A lot of people have seen our commercials during the Olympics…and that free coffee has proved very popular with our customers.”

Intrawest ULC Avoids Auction as Fortress Provides Equity
The auction of the Whistler Blackcomb ski resort, and other Intrawest ULC properties, has been postponed after its owner, Fortress Investment Group, reached an agreement in principle with creditors to restructure its debt. The Wall Street Journal reported that Fortress will invest an additional US$150 million of equity into the business to pay down debt and retain control of the resort company. Intrawest was scheduled for the auction block last Monday, having avoided the hammer originally set for Feb. 19. The Journal reported that a new $1.2-billion loan package will extend debt maturities by as long as four years and will charge a higher interest rate than for existing debt. The deal is expected to close within the next month.

Panache Chef Selected for Monterey Culinary Event
Canadian chef François Blais of Panache Restaurant in Quebec City is the only Canadian invited to participate in the prestigious Cooking for Solutions event from May 21 to 22, in support of California’s Monterey Bay Aquarium’s Seafood Watch program. The ninth annual, two-day celebration of fine food and environmentally friendly living has more than 70 restaurants from across the U.S. participating, including Chef of the Year Suzanne Goin from Lucques in Los Angeles; Educator of the Year, Rick Bayless, from Frontera Grill in Chicago and Guy Fieri, star of Food Network’s Diners, Drive-ins and Dives. Blais has gained a reputation for culinary excellence and innovation in his preparation of Quebecois cuisine.

All-Day Oatmeal Being Tested at U.S. McDonald’s Restaurants
McDonald Corporation, Oak Brook, Ill., is now testing oatmeal (priced at US$1.99) for all-day consumption at some McDonald’s restaurants. The trial of Fruit and Maple Oatmeal, which combines hot oatmeal with brown sugar, apples, raisins, cranberries and cream, is being sold in McDonald’s restaurants in Northern California, Baltimore and Washington, D.C.

According to Mark Brandau of Nation’s Restaurant News, the test comes as oatmeal has proven its value as a popular item for the morning daypart in several foodservice chains, including: Starbucks, which launched oatmeal in the fall of 2008; Caribou Coffee, which introduced oatmeal this past January; and Jamba Juice, which offered oatmeal on its menu every Wednesday during January. McDonald’s has been aggressive in developing new products and choices, including the most recent Breakfast Dollar Menu, which includes the Sausage Burrito, Sausage McMuffin, Hash Browns, Sausage Biscuits and a small Premium Roast Coffee from the McCafé line. The chain also introduced Real Fruit Smoothies at the Winter Olympics in Vancouver and plans a U.S. launch by summer. It is also testing frappe drinks as an extension of the McCafé menu at about a third of its U.S. restaurants.

Chocolate Works Focus of Toronto Culinary Salon, CRFA Show
Chocolate works — including showpieces, wedding cakes and truffle making — are being highlighted in the Escoffier Society of Toronto’s Culinary Salon at CRFA Show, now underway at the Direct Energy Center. On March 9, Barry Callebaut Canada Inc. will present “Passion for Chocolate” with a team of chocolatiers and pastry chefs. Lotte Andersson, regional gourmet sales manager (Ontario) for Barry Callebaut, commented, “We’re proud to be sponsoring the Escoffier Society of Toronto’s Culinary Salon, which showcases the artistic culinary talents of young and professional chefs, some of who will continue to compete on the world stage.”

Local Food, Sustainability, Organic — Top Menu Trends
The top current and emerging Canadian restaurant menu trends have been identified in a new survey of Canadian Culinary Federation member chefs for the CRFA, conducted by Toronto-based market research firm BrandSpark International. The top 10 current menu trends are identified as: locally sourced food, sustainability, organic produce, artisanal cheeses, simplicity/back-to-basics, nutritional/healthy cuisine, free-range poultry/pork, small plates/tapas/mezze/dim sum, bite-size mini desserts and superfruits such as acai, goji berry and mangosteen. The top 10 emerging trends identified are: ancient grains (e.g., kamut, spelt, amaranth), gluten-free beer, vegan entrées, organic alcohol, african cuisine, new/fabricated cuts of meat, gluten-free cuisine, Middle Eastern cuisine, quinoa and non-traditional fish such as branzino, Arctic char and barramundi.

U.S. Passport Fees to Increase This Month
The U.S. State Department plans to increase U.S. passport fees in mid-March by as much as 35 per cent. The new adult passport will increase to US$135, up from $100, and a family of four with two children under 16 (fee rising to $105, up from $85) would now face a total fee of $480. Passports have been mandatory when crossing the Canada-U.S. border since last summer.

Mac’s Convenience to be “Coffee Destination”
Mac’s Convenience Stores, a subsidiary of Montreal-based Alimentation Couche-Tard Inc., is expanding its exclusive service of Seattle’s Best Coffee, a division of Starbucks Corporation, to an additional 600 locations across Ontario. This is an expansion from a 14-year-old agreement that put Seattle’s Best into some 290 convenience stores across four provinces in Western Canada. George Kioussis, director of National Procurement, Couche-Tard Canada, stated, “Seattle’s Best Coffee will be a key anchor to our foodservice program and will establish Mac’s as a coffee destination.”

Compass Canada Celebrates National Nutrition Month
“Celebrate food from…field to table” is the 2010 theme of Compass Group Canada’s annual March campaign, Nutrition Month, in partnership with the Dietitians of Canada. The 2010 promotion focuses on educating Canadians about where food comes from, how it is grown, and the diverse variety that is seasonally available. Compass Group Canada chefs across the country at ESS, Chartwells, Eurest and Morrison locations are featuring healthy Canadian foods spiced up to be flavourful as well as ethnically diverse.

Thirteen Pacrim Hotels Collect 12,000 Pairs of Shoes
More that 12,000 pairs of shoes have been collected by Halifax-based Pacrim Hospitality Services Inc. at 13 of its hotels across Atlantic Canada in support of Shoes for Souls. The shoe drive is assisting people in Haiti and Africa. The five-week collection was held in January and February. Kris Crundwell, vice-president of Sales, Pacrim Hospitality, said the program supports a drive launched by Kyle Warkentin, a 19-year-old who is a part of the Order of Canada Mentorship program. Other supporters of the drive include Metro Self Storage, Cargolink, U-Haul and Enterprise, Guardian Transfer. For information, see the Shoes for Souls Facebook fanpage.

New Restaurant Investment Conference Announced
Toronto-based Big Picture Conferences will be launching a new restaurant investment summit to round out its portfolio of conferences and tradeshows. The new Canadian Restaurant and Investment Summit will take place May 27 at the Hilton Toronto Hotel. GE Capital will be the founding sponsor of the event, which will become an annual investment and economic conference designed to provide restaurateurs, lenders and investors with the resources to make better investment decisions.

Safe Harbor-Certified Seafood Now in Canada
Brampton, Ont.-based Export Packers Company Limited has obtained the first Canadian rights to supply Safe Harbor-certified seafood, which is tested and certified to ensure that mercury levels are below food safety standards specified by the Canadian Food Inspection Agency. Dan LeBlanc, president of Export Packers commented, “Without more widespread testing, there is little assurance that any particular fish has actually been tested and would meet current government standards.” For information, click here.

Business and Tourism Travel to Rise in 2010 — Research Report
Travel and tourism research company, D.K. Shifflet & Associates, McLean, Va, reports that in 2010, both business and leisure travellers are planning more trips and increased spending. A January study of 2,200 recent travellers found that 25 per cent more business trips and 20 per cent more leisure trips are planned in the first half of 2010. Some 60 per cent intend to travel for either business or leisure at the same or greater rates than they did in 2009 and almost two-thirds plan to spend the same amount, or more, than they did in the first half of last year. Cheryl Schutz, DKSA vice-president of Destinations, commented, “This is encouraging and may be a reflection of pent-up demand.”

Canadian Beef Marketing Campaign Underway
A three-month Canadian beef multimedia advertising campaign was launched last week by the Beef Information Centre. Trade communications manager, Susan Evans, commented, “The campaign includes radio, print advertising, outdoor billboards, online advertising, recipe booklets, in-store programs and health professional initiatives.”

Hotel Situation Analysis New Investor Service — HVS
A new service to help hotel investors, lenders and service providers quickly analyze a hotel’s current operations, the Hotel Situation Analysis, has been created by HVS Hotel Management, based in Newport, R.I. Pointing out that this new service goes beyond an appraisal to deliver specific insights and analysis, HVS co-president Kirby Payne commented, “Our Hotel Situation Analysis is the ideal cost-effective, time-efficient solution when you need to quickly understand a property’s challenges and opportunities.” He added, “Even in cases where there is limited access to a property due to operator issues, the Hotel Situation Analysis provides the actionable information to guide a decision-maker’s next steps.”

Chicago Tribune Lauds Sky Blue Sky Restaurant in Toronto
Toronto’s Sky Blue Sky Sandwich Company, which opened last October close to the University of Toronto, caught the favourable attention of the Chicago Tribune last week, which published a story on the restaurant’s practice of naming its sandwiches after songs by the Chicago-based alternative rock band Wilco. Even the name of the restaurant comes from the name of a Wilco album, and the décor features Wilco themes and music. Owner Chad Comfort and his wife, Robin, both in their mid-30s, told the Tribune reporter that they opened Sky Blue Sky, “because we wanted a place with good atmosphere and a place that played the music we like. Wilco is our current number 1 modern band and Sky Blue Sky sounded good.” Chad added, “We wanted a cosy, homey kind of place with book nerds, music nerds and nerds in general.” He said that while nothing in the signage or on the menu explicitly says “Wilco,” he has contacted the band’s management and informed them of what he is doing. Deb Bernardini, a spokeswoman for the band, told the Tribune: “The Wilco organization thought it was funny and quite nice.”


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