Week of May 17, 2010

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Tim Hortons Reports Big Q1 Gains; Faces Shotgun Sales of Par-Bake Plant
Oakville, Ont.-based Tim Hortons Inc. has reported an 18.7 per cent profit jump, to $78.9 million, in the first quarter, period ended April 4. It also had a 4.8 per cent revenue gain, to $582.6 million, and a solid same-store sales increase in Canada of 5.2 per cent for the same period. The gains are attributed to successful new menu items and strong marketing and operational programs. The latest results do not include profits from Tim’s non-controlled assets derived from non-owned restaurants or its joint-venture deal with Swiss bakery partner Aryzta AG. The results from its U.S.-based stores were not as strong. Same-store sales dipped by 0.2 percentage points to three per cent, largely due to the ongoing effects of the American recession. Operating income in Canada rose 14.3 per cent to $132.4 million. In the U.S., operations saw a $300,000 loss. Tim Hortons opened 20 new restaurants in Canada and four in the United States during the quarter.

“Our business achieved strong sales and earnings performance this quarter,” said Don Schroeder, president and CEO, in a press release. “Our competitive advantages continue to position our business among the leading companies in our sector, and we look forward to further building upon that position.” He predicted the Canadian market could absorb an additional 1,000 outlets, up from approximately 3,000 at the present time. A cautious international growth strategy is also planned, building on the present 290-self service kiosks in Ireland and England and locations on Canadian and U.S. military bases.

But in a surprise announcement to financial analysts late last week, Tim Hortons also reported that its joint-venture partner in its baking operations, the Swiss specialist bakery conglomerate Aryzta AG, has pulled the trigger on a shotgun provision that allows one side to buy out the other at a specified price. Publicly traded in Switzerland and Ireland, Aryzta was formed in August 2008 through the merger of Iaws Group PLC, which had created the technology for the par-bake system used by Tim Hortons and Hiestand Holdings AG. Tim Hortons must now decide between spending an unspecified amount of money to take full control of par-bake facility absolutely essential to its operations, or see Aryzta take full control of this key facility. Tim Hortons has supply rights for seven years in the event that it is required to sell its joint-venture interest. The par-bake facility and the cost of its sole-sourced product is already a contentious issue with some franchisees. This could be acerbated once the valuation is made public

OOPS! New Bocuse D’Or Winner Named
What a difference a few days can make. On April 30, young chefs met at George Brown College in Toronto for the prestigious Bocuse d’Or culinary competition, organized by the Canadian Culinary Federation (CCFCC). After two days of intense competition, Stephen Lepine, sous chef of the Calgary Golf & Country Club, was declared the winner. Lepine was chosen from a field of five finalist competitors to represent Canada at the Bocuse d’Or in Lyon, France in 2013. But only a few days later, it was discovered that there had been a mistake tabulating the judges’ scores, resulting in the announcement that Alex Chen of The Beverly Hills Hotel and Bungalows in Los Angeles was the true winner.

In a letter from Vince Parkinson, manager of the CCF Bocuse D’Or, posted on the Culinary Design Solutions food blog, he explained the situation. “I was asked by some of the competitors how they could have done better at the competition, and as I was reviewing the scoring sheets on Tuesday I noticed a mistake, which affected the result of first and second place. The first question was, “how could it happen?” The numbers were checked by a couple of people, but it still got through. “My first action was to notify the president of the chef’s association (Jud Simpson) and inform him that I would talk to Steven Lepine and revoke his win. Steven is, of course, my sous chef and has been working beside me for over eight years.”

Understandably, the conversation with Steven was “gut-wrenching,” said Parkinson. “The relationship between a chef and his sous chef can be very close, as it is in this case, and believe me, I would have done almost anything to avoid that conversation with Steve; anything but allow an incorrect result to stand. Steve was, of course, upset but handled the news with grace and gave me more comfort than I probably deserved.”

Chen will represent Canada in Lyon in 2013. “Steven Lepine has offered his ongoing support of the project, which speaks volumes about this young man’s commitment and integrity,” said Parkinson.

Higher Fines for Vancouver Restaurants Abusing Grease Traps?
According to a story in the Vancouver Sun, stricter rules for restaurants handling cooking grease and oil that might get into Metro Vancouver’s sewage and drainage system are being proposed by the district’s government, the Greater Vancouver Regional District. An “issues paper” presented to the restaurant industry recommends fines be increased higher than the $10,000 maximum that the courts can currently impose. Charging that courts seldom impose the maximum fine, Ray Robb of Vancouver Metro’s policy and planning division was quoted as saying, “We want to have a real deterrent; we want the fines to go up. Some of our main lines are getting plugged up with grease and it costs us millions of dollars each year [to clean them].”

A consultation process with the restaurant industry will start in June over proposed changes, including a requirement for proper grease traps that should be cleaned at least once a month so the oils and fats don’t clog the sewers. It also wants restaurants owners to have the grease separated and converted into energy. As noted in the Sun story, a review of the loads received at Metro Vancouver’s trucked liquid-waste facilities showed some 63.5 per cent of restaurants did not pump out their grease traps in 2008. Robb believes restaurants would likely pay about $200 per maintenance visit — which would result in an annual cost of about $2,400 — for the grease removal. Metro Vancouver spends about $2 million each year to clean up clogged and backed-up sewer pipes.

University of Guelph Leads Canadian Rankings in Top 100 Study
Five Canadian hospitality and tourism universities, led by the University of Guelph, have made the grade in the “World Ranking of the Top 100 Hospitality and Tourism Programs,” which is published in the Journal of Hospitality Tourism Research. The report, prepared by researchers at the University of Central Florida, presents a five-year snapshot (2002-2006) of research contributions to 11 leading professional hospitality and tourism journals, published in all parts of the world, including hospitality journals, tourism journals and journals with an international focus. Based on the number of authored articles and citations, the ranked Canadian universities included: University of Guelph (21st), University of Calgary (50th), University of Waterloo (82nd), Ryerson University (95th) and Brock University (96th). Details of the study were presented to a meeting of the HTM Policy Advisory Board last week, held at the Guelph’s School of Hospitality Tourism Management (HTM), College of Management and Economics. The two leading performers in the analysis were Hong Kong Polytechnic University and Cornell University.

Italian Food Emporium “Eataly” Targets Toronto Market
If plans come to fruition, Toronto could be the next major destination for the world’s largest Italian specialty food emporium, Eataly.

What started out as Oscar Farinetti’s dream to make high-quality food accessible to everyone, has become a food lover’s paradise unlike any food store in North America. The affable Farinetti, who also owns Fontanafredda Winery in Piedmont, was in Toronto recently to scout possible locations for the chain he founded and to promote his winery to local media. At a roundtable, hosted by Roberto Martella of Grano Restaurant, and held at Frank Restaurant in the Art Gallery of Ontario, Farinetti provided an overview of what he is hoping to accomplish with his specialty store concept, while answering questions about his proposed Toronto store and winery.

Eataly was launched in Italy earlier this decade as a means to promote good, clean, fair food and the precepts of the Slow Food Movement. Unlike any food store currently in North America, it features: a green market with some of the best Italian products available; mini restaurants where customers can sample foods, buy artisanal wines and beers or take away prepared foods; and educational workshops with cooking classes or culinary history lessons, including where and how the items on hand were grown as well as lessons on how to prepare the dishes. “I don’t want just rich people to have the privilege of tasting great food,” said Farinetti, in explaining his motivation behind creating the concept. Eataly boasts five units in Italy, but plans are underway to launch in Tokyo and New York. A sprawling new 70,000-square-foot New York location will open across from the Flatiron building this coming August, in partnership with restaurateurs Mario Batali and Joseph Bastianich. The partners will run a total of eight restaurants within the facility, including an 8,000-square-foot.rooftop brewery and eatery.

When he is not working on Eataly, Farinetti is actively involved in Fontanafredda winery, with a 64 per cent ownership stake. The winery was started by Italy’s King Vittorio Emmanuele in 1858. While the company’s noble past remains intact, the winery has changed with the times. Recently, a 500-millilitre bottle of its Barolo Serralunga D’Alba was introduced. It’s the only such product of its kind and hit shelves in Ontario at the LCBO May 15. Priced at $29.95, the wine is packaged in a bottle that features 85-per-cent recycled glass.

Vancouver Police/Business Initiatives Help Cut Property Crime by 40 per cent
The Vancouver Police Department (VPD) has credited hotels, clubs, restaurants and bars, office buildings and major shopping centres for a 40 per cent reduction in property crime since 2004. Celebrating National Police Week at a “state of crime seminar” last week, the VPD attributed the cutbacks in crime to having many more eyes and cameras on the street, in stores, bars and parking lots. The cameras are a result of joint VPD business initiatives such as Bar Watch/Restaurant Watch, the Safer Parking Initiative and Operation Co-operation. According to a story in the Vancouver Province, since 2004, residential break-and-enters fell from 5,257 to 2,869, down 49.1 per cent. In 2009, thefts from cars have declined from 6,713 to 2,444, a 66-per-cent reduction. “We are leaders in policing, but the Vancouver police department could not have done it on our own,” Vancouver Warren Lemcke, deputy chief constable, was quoted as saying in the story. Vancouver police Sergeant Randy Regush also noted, “[In 2004] the downtown entertainment district was out of control,” but now it’s one of the safest areas in the city. Regush referenced a 17-per-cent reduction in violent crimes in 2008 and a 25-per-cent reduction in 2009.

Renowned Chef John Bishop Turkey-Bound
Interested in taking a trip to mysterious, multicultural Turkey with one of Vancouver’s most respected chefs? John Bishop wants to hear from you. This September, the acclaimed chef and restaurateur who has been packing them in at Bishop’s for years, is setting off on a 16-day adventure through Turkey, and he’s looking for company as he explores its historical, cultural and culinary treasures. Not only will his guests get to cook regional dishes and share meals with local chefs, $500 from the sale of each tour package will benefit the Juvenile Diabetes Research Foundation (JDRF). “Since becoming involved with the JDRF in 2001, I’ve been amazed by the passion and dedication of volunteers, and the relentless focus the JDRF has towards its mission of finding a cure for diabetes,” said Bishop in a press release. “I’m proud to be part of this legacy and look forward to sharing this incredible journey that I’m sure will inspire every traveller.” There is space for up to 22 guests, who will be treated to Mediterranean boat tours, shopping, archeological visits and, of course, Turkish cuisine.

Canadian Gold Dispensed by Abu Dhabi Hotel Gold Vending Machine
The world’s first gold vending machine, named “Gold-to-Go” and nicknamed Midas, was installed in the Emirates Palace Hotel in Abu Dhabi last week, featuring Canadian gold Maple Leaf coins along with the Australian Kangaroo and the South African krugerrand and other 24-karat trinkets. The Maple Leaf coin is one-tenth of an ounce and, with gold at a record high last Wednesday at US$1,245 U.S. an ounce, the coin was worth US$124.50. The gold-plated machine contains a computer linked to stock markets in Germany and scans the markets every 10 seconds. The machine holds a price for 10 minutes then recalculates so customers always get a fair price. The German-based Ex Oriente Lux AG created and operates the machine.

TV’s Top Chef Canada Taps Mark McEwan
Food Network Canada and Insight Production Company Ltd. have named Toronto celebrity chef Mark McEwan head judge of the premier season of Top Chef Canada. “We’re thrilled to work with Insight Productions and Mark McEwan to uncover a roster of talented individuals from across the country,” said Karen Gelbart, senior vice-president, Content, Lifestyle Channels, Canwest Broadcasting. “Mark McEwan is an industry genius and the level of creativity, skill and determination he’sll expect from the Top Chef Canada competitors will make for tough competition.” McEwan — who owns North 44, Bymark One restaurants and McEwan Fine Food Store and hosts Food Network Canada’s The Heat — is looking forward to the challenge. “I’ve been in the food and service industry for over 30 years, and I look forward to sharing that expertise with the chosen competitors on Top Chef Canada.” The country’s best up-and-coming culinary stars, aged 19 and older, are encouraged to visit foodnetwork.ca to download the application form. Candidates will be selected to compete for the chance to be crowned Canada’s top chef and win a $100,000 prize.

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