Week of Nov. 16, 2009

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Timothy’s Sold to Two U.S. Companies — Expansion Planned in Canada
Toronto-based Timothy’s Coffees of the World Inc. has been bought by two U.S. companies. Its wholesale coffee business was sold to Vermont-based Green Mountain Coffee Roasters Inc. for $165 million, and the 139-location retail group was sold to Vermont-based Bruegger’s Enterprises Inc. for an undisclosed amount. Timothy’s was previously owned by Boca Raton, Fla.-based Sun Capital Partners Inc., a private-investment firm that focuses on leveraged buy-outs. Sun acquired Timothy’s in 2008. Both Green Mountain and Bruegger’s are portfolio companies of Sun. “Timothy’s is a true success story where revenues and profits were nearly doubled in 2009 over last year, despite a challenging economic environment,” said M. Steven Liff, senior managing director of Sun Capital. Both Green Mountain and Bruegger’s expressed optimism about their move into Canada and the future of the two acquisitions. Bruegger’s operates 290 neighbourhood bakery-cafes in 24 States and the District of Columbia and is the second largest bakery-café operator in the U.S. Green Mountain’s Specialty Coffee business unit produces coffee, tea and hot cocoa with brands such as Tully’s Coffee, Green Mountain Coffee, Newman’s Own Organics coffee and Timothy’s World Coffee. Green Mountain’s Keurig division recently pioneered the manufacture of gourmet single-cup brewing systems. Timothy’s sells Keurig brewers and its own K-Cup coffee capsules in all of its stores, and it had recently entered into major agreements with hotel groups such as InterContinental Hotels and Resorts to provide its single-service gourmet coffee in hotel rooms. Financed by Sun Capital, Timothy’s expanded its coffee production facility over the past year to produce 250 million K-Cups annually.

Ontario HST to Exempt Restaurant Meals Under $4
Restaurant food costing less than four dollars will be exempt from the proposed Ontario Harmonized Sales Tax (HST). The announcement was made by Ontario finance minister Dwight Duncan last week. The HST, which combines the provincial eight per cent tax (PST) and the five per cent federal goods and services tax (GST) into a new value-added tax of 13 per cent, is scheduled to take effect on July 1, 2010. Also exempted will be sales of newspapers. The government has been facing growing criticism for hitting consumers with a tax increase on previously exempt items. Economists at the Toronto-Dominion Bank have calculated that consumers will bear the burden of the proposed tax changes in Ontario and British Columbia (which is also planning an HST), while businesses will reap windfall savings of $6.9 billion.

Quebec Restaurants Must Install “Sales Recording Modules” in Registers
Concerned about the use of “zapper” cash-income-suppression devices, last week Revenu Quebec announced a pilot program that will require Quebec restaurants to install a Sales Recording Module (SRM) connected to electronic cash registers. All restaurants in Quebec will be required to have a SRM by November 2011 to collect sales and tax data for both cash and credit/debit card sales. Last year, Quebec banned the manufacturing and use of zappers. The Quebec government estimates it lost $425 million between 2007 and 2008 to evasion. L’Association des restaurateurs du Québec (ARQ) spokesperson Dominique Tremblay told the media, “We don’t really agree with the measure, but we are going along with it. There are other sectors that have tax evasion, too. We believe that just to be fair, it should apply to other industries in the future.” (Click here to read more under the heading, CRA Charges Restaurants Hid $40M in Taxable Sales)

West Coast POS Supplier Charged For Alleged Zapper Software
InfoSpec Systems Inc., a Richmond, B.C.-based point-of-sale (POS) supplier and alleged zapper software developer, has been charged (alongside two of its employees) with nine counts of criminal tax fraud for allegedly supplying area restaurants with zapper software. In December 2008, the Canada Revenue Agency charged four Vancouver restaurants for the alleged use of zappers provided by InfoSpec. The charges followed an eight-month undercover operation by the Royal Canadian Mounted Police and a subsequent search of InfoSpec’s facilities.

Steak Frites St-Paul Adds Eighth Franchised Location
The eight-location, Montreal-based Steak Frites St-Paul restaurant group has opened a new franchised location on rue Saint-Denis in Montreal. And, just like all the other units, it too offers customers the choice to bring their own wine (BYOW) and pair it with filet mignon, duck confit, salmon, lamb chops and, of course, steak frites. In 2006, the popular chain began offering BYOW to its patrons in a move that was an immediate hit. Founder George Despatie opened the first Steak Frites restaurant in 1986 on rue Saint Paul in Old Montreal, bringing diners his own authentic take on urban cuisine.

U.S. Hotel Occupancy Rates to Improve in 2010 — PwC Forecast
PricewaterhouseCoopers’ (PwC) new U.S. Lodging Forecast has predicted the beginning of a lodging demand recovery in 2010. PwC expects hotel occupancy rates will increase from 55.2 per cent in 2009 to 55.8 per cent in 2010. It also anticipates a sharply reduced rate of decline in ADR, down -1.8 per cent in 2010 versus -8.8 per cent in 2009. It is also forecasting that RevPAR will decline just -0.7 per cent in 2010, versus -16.4 per cent in 2009. PwC’s quarterly lodging forecast is based on updated forecasts from Macroeconomic Advisers LLC, which predicts that real gross domestic product will increase 3.5 per cent in 2010 over 2009. Scott D. Berman, principal and U.S. industry leader, hospitality & leisure, for PwC commented, “Barring any unforeseen circumstances from an operating perspective, the worst appears to be over. To what degree the industry experiences recovery is predicated on an improving economy, which facilitates lodging demand growth and operators’ ability to achieve higher pricing.”

McDonald’s Global Sales Up, with U.S. Sales Flat; $1 Breakfast Menu to be Offered
McDonald’s Corporation, Oak Brook, Ill., has reported that its global sales increased 3.3 per cent in October, with its U.S. sales remaining relatively flat, up 0.1 per cent. In Europe, sales increased 6.4 per cent, while the Asia/Pacific, Middle East and Africa regions experienced a 4.7 per cent gain. CEO Jim Skinner commented that U.S. sales continue to outpace the overall quick-service restaurant industry, stimulated by the Dollar Menu, premium Angus burgers and McCafé espresso-based coffees. According to the Dow Jones Newswires, McDonald’s Corp. is also planning to offer a $1 breakfast menu in the U.S. in January. The program is expected to run for six months. The report says McDonald’s national advertising fund has approved the dollar breakfast menu for a nationwide campaign, subject to approval by regional advertising groups. A McDonald’s spokesperson declined to comment on the report. It has been reported that McDonald’s is testing the new breakfast menu in several markets, offering items like sausage McMuffins, breakfast burritos and hash browns for $1. At the end of last year, McDonald’s stopped selling its double cheeseburger for $1 because of profit-margin concerns.

Burger King Franchisees Challenge $1 Pricing in Miami Court
Franchisees of Burger King restaurants have gone to a Miami court over the company’s $1 double cheeseburger pricing, which was launched in October. The members of the National Franchisee Association argue that Miami-based Burger King Corp. is using the promotion to boost sales to satisfy investors at the expense of franchisee profits. The lawsuit contends that under the franchisee agreement, Burger King Corp. cannot dictate “maximum pricing.” In an investor teleconference last month, CEO John Chidsey told analysts that during an 18-month test period, the $1 double cheeseburger had a negative impact on gross profit margin, but restaurants experienced gross profit growth because consumers added high-margin items such as soda and French fries to their purchase.

Flanagan Foodservice Honoured
Flanagan Foodservice Inc., the largest family owned foodservice distributor in Canada, has been named the Family Enterprise of the Year by the southwestern Ontario Chapter of the Canadian Association of Family Enterprise (CAFE). Flanagan will now be entered into the competition for the national award, which will be presented in Regina at the CAFE Symposium in May. The 33-year-old company, based in Kitchener, Ont., has 400 employees and is operated by a second-generation sibling team. It also has distribution points in Sudbury and Owen Sound.

H1N1 Impacting Foodservice, Hotels, Travel — Conference Board/BDBC
The restaurant, travel, lodging and pork industries have all been seriously impacted by the current H1N1 “panic-inducing phenomenon,” according to a joint-study by the Conference Board of Canada and the Business Development Bank of Canada (BDBC). The Canadian Industrial Profile for Autumn 2009, released last week, reports that the combination of the persistent sluggishness of the economy and a rising loonie, along with fears of H1N1, will have a 20 per cent negative impact on company bottom lines. The accommodation, food and beverage manufacturing, foodservices, transportation and warehousing, retail and wholesale trade sectors have been impacted. Michael Burt, associate director, Conference Board, commented, “The numbers, obviously, were already very weak at the beginning of the year, as a result of the global recession. But if you look at the numbers starting in May, when it became public knowledge that H1N1 was in Canada, we saw even more precipitous declines in the number of visitors coming to Canada, particularly from Asian countries.”

Hawthorne Suites Adopts New Wyndham Logo
Hawthorn Suites by Wyndham has introduced a new red and orange logo, featuring a design derived from the Wyndham crown, as it becomes integrated into the Wyndham Hotels and Resorts group. Cross-selling has also been introduced on its new website, as well as on the various Wyndham websites and its telephone centre, which encompasses nearly 350 hotels. Hawthorne Suites has five locations in Canada — two in Alberta, one in Saskatchewan and two in Quebec.

New Report: Profit Foodservice in Canada
The Profit Foodservice in Canada industry profile is now available, providing top-level data and analysis covering profits and operations in the foodservice industry. This new report is part of the Global Profit Foodservice Report, published by Research and Markets in Dublin, Ireland. The report includes detailed data on market size, measured by value and/or volume and      segmentation, plus textual and graphical analysis of the key trends and competitive landscape. It also includes leading company profiles with supporting key financial metrics and demographic information. The report provides a five-year forecast of the industry. For information, click here.

Ontario Culinary Tourism Focus of Conference
More than 300 like-minded foodies converged on Toronto’s Direct Energy Centre on Nov. 9 for a one-day symposium on the importance of culinary tourism to the economic, cultural and social fabric of Ontario. Organized by the Ontario Culinary Tourism Alliance (OCTA), participants included chefs, farmers, producers and educators who shared their wealth of knowledge and contacts to move the culinary tourism agenda forward. “Since first setting a strategy for culinary tourism four years ago, the province has made great strides in further developing its mandate,” said Barb Shopland, who created the strategy, “but now we need to assess how it’s doing.” Kicking off the 2009 summit, Rebecca LeHeup, executive director of OCTA and the driving force behind the conference, stressed that, “The most important ingredient in culinary tourism is agriculture.” Among the many speakers and panellists were: Bill Duron, CEO of the Royal Agricultural Fair; Jon Ogryzlo, dean of Wine and Culinary, Niagara College; and Kevin Brauch, host of the Food Network’s Thirsty Traveler, who moderated a panel discussion. For more information and a detailed report on the event, click here.

2009 Culinary Book Award Winners Announced
The winners of the 12th annual Canadian Culinary Book Awards were announced last week in Toronto. Sponsored by Cuisine Canada and the University of Guelph, the winners were:

• Canadian Culinary Landmarks Hall of Fame Award: Culinary Landmarks: A Bibliography
of Canadian Cookbooks, 1825 – 1949
, by Elizabeth Driver (University of Toronto
Press, Toronto)

English Cookbook Category:
• Gold Award: Small Plates for Sharing, by Laurie Stempfle (Company’s Coming Publishing
Limited, Edmonton)
• Silver Award: The Complete Canadian Living Baking Book: The Essentials of Home Baking, by Elizabeth Baird (Transcontinental Books, Montreal)

English Special-Interest Category (books about food and beverages, but not cookbooks)
• Gold Award: Beyond the Great Wall: Recipes and Travels in the Other China, by Jeffrey
Alford and Naomi Duguid (Random House Canada, Toronto)
• Silver Award: Bottomfeeder: How to Eat Ethically in a World of Vanishing Seafood, by Taras Grescoe (HarperCollins Publishers Ltd, Toronto)

English Canadian Food Culture Category (books that best illustrate Canada’s rich culinary heritage and food culture):
• Gold Award: Anita Stewart’s Canada, by Anita Stewart (HarperCollins Publishers Ltd.)
• Silver Award: Apples to Oysters: A Food Lover’s Tour of Canadian Farms, by Margaret Webb (Penguin Group Canada, Toronto)

French Cookbook Category:
• Gold Award: Ricardo: parce qu’on a tous de la visite: cuisiner en toutes circonstances by
Ricardo Larrivée (Les Éditions La Presse, Montréal)
• Silver Award: Gibier à poil et à plume: découper, apprêter et cuisiner by Jean-Paul Grappe (Les Éditions de l’Homme, Montréal)

French Special Interest Category
• Gold Award: Les vins du nouveau monde, tome 2 by Jacques Orhon (Les Éditions de l’Homme)
• Silver Award: Répertoire des fromages du Québec, Édition augmentée by Richard Bizier et
Roch Nadeau (Les Éditions du Trécarré-Groupe Librex Inc., Montréal)

French Canadian Food Culture Category:
• Gold Award: Québec capitale gastronomique by Anne L Desjardins (Les Éditions La Presse)

• The Edna Award was presented to Robert Arniel of Chef  To Go in St John’s, NL. The Edna is a lifetime achievement award given to an individual who has contributed to the promotion of regional cuisine and who exemplifies the region through his or her work.

• Cuisine Canada’s Founder’s Award is presented on occasion to those Canadians who have achieved a lifetime of service to the culinary community. They may be from any field of culinary endeavour. This year’s recipient is Judy Creighton.

Choice, Expedia Reach Agreement
Choice Hotels International has signed a new three-year agreement to include its international properties on the more than 80 Expedia and Hotels.com-branded websites and later on Hotwire.com. All of the systems are operated by Expedia Inc. This comes after several weeks of very public wrangling over fees and other commitments demanded by Expedia, which resulted in Choice walking away from negotiations. (Click here to read more under the heading, Choice Hotels Blackballed by Expedia and Hotels.com) Dara Khosrowshahi, CEO of Expedia Inc., commented, “We welcome Choice back into our marketplace and look forward to delivering value to their franchisees.”

Amex Cards Now Accepted at McDonald’s Canada Locations
McDonald’s Canada locations are now accepting American Express (Amex) credit cards to pay for meals, highlighted by a bonus Air Miles promotion between Nov. 15 and Dec. 31. This is the latest move by Amex Bank of Canada into the “everyday spend” sector of retail and fast-food, grocery, drug and gasoline businesses. These sectors have resisted accepting Amex cards because they tend to have higher merchant fees. No details of fee arrangements with McDonald’s have been announced. Dave Simsons, vice-president of Shared Services at McDonald’s Canada, commented, “With widespread acceptance of the Amex card, which has reached more than 80 per cent of our restaurants nationwide in less than a year, we’re pleased to provide our customers with the added convenience and increased speed of service they’ve come to expect from McDonald’s.”

CCGD Ontario Conference Features General Rick Hillier
The annual CCGD Ontario Conference of the Canadian Council of Grocery Distributors took place Nov. 18 at the Toronto Congress Centre. This year’s theme was “Winning Together — Insights to Action,” and featured a keynote presentation by General Rick Hillier as well as an industry update by Carman Allison of The Nielsen Company. For the first time, Walmart provided a distributor presentation on how major retailers are positioning their stores with Ontario shoppers. Other distributor presenters were Loblaws, Metro, and Sobeys. For information, click here.

We Care Hawaiian Bowling Challenge, Nov. 26, Toronto
The annual Friends of We Care Bowling Challenge takes place Thursday, Nov. 26, at the Planet Bowl located at 5555 Eglinton Ave.W, in Toronto. Registration starts at 11 a.m. This year’s event has a Hawaiian theme. The bowling challenge raises funds to send physically disabled children to summer camps across Canada. For more information, click here.

2009 Pinnacle Awards, Dec. 3, Toronto
The 21st annual Pinnacle Awards take place on Thursday, Dec. 3, at Toronto’s Fairmont Royal York Hotel, in the Canadian Ballroom. Sponsored by Foodservice and Hospitality and Hotelier magazines, the event begins with a champagne networking reception between 11 a.m. and 12:30 p.m. Foodservice and Hospitality award winners include: Company of the Year — McDonald’s Restaurants of Canada Ltd.; Company of the Year, Regional — Oliver & Bonacini Restaurants; Independent Restaurateurs of the Year — Yannick Bigourdan, David Lee and Franco Prevedello of Nota Bene Restaurant; Supplier of the Year — Ocean Wise; and Franchise Excellence — Keg Restaurants. The Hotelier winners are: Company of the Year — Atlific Hotels; Company of the Year, Regional — Monte Carlo Hotel Motel International; Hotelier of the Year — David Mounteer, Auberge Saint-Antoine in Quebec City; and Supplier of the Year — Harry Christakis, HCA Architects.

Tourism Vancouver to Launch Olympic Mobile App
Tourism Vancouver is launching a free mobile devices application on Jan. 1, 2010, in partnership with cellphone producer HTC and mobile technology company Satsports. The app is designed to assist visitors, athletes and event staff in Vancouver for the 2010 Olympic Winter Games. Users will be able to look up directions, receive live updates on event time changes or competition updates and check out weather reports and Games-centric newsflashes. Tourism Vancouver event staff will be given app-loaded HTC mobile devices in January. For information, click here.

Toronto à la Carte off to a Bad Start in First Year
According to The Globe and Mail, a look into the first six months of Toronto’s à la Carte street vendor program found the nine participating vendors poorer and asking for help. Launched after two years of controversy, the program was conceived and designed by city bureaucrats in the Department of Health. Each vendor paid $30,000 for city-designed vending carts and feature ethnic menus approved by the city. One vendor, Kathy Boniven, shut down after two months of selling souvlaki at Nathan Phillips Square. “We got stumped right from the beginning,” she was quoted as saying by the newspaper. A progress report was presented by the city to the Board of Health Nov. 16, and it acknowledged that five venders broke even or made very little money, while the other three operated at a loss for the summer. Seemab Ahmad, who sold biryani and karahi salsa, said he broke even, if you don’t take into account the $30,000 cost of the cart.

 

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