Below is a  shortened version “Cook Up Some Savings,” an article written by Christy Simo, managing editor of Restaurant Forum.

Simple Maintenance Leads to Big Savings - consider the tips below for reducing your carbon footprint while also reducing your costs.

Test and repair leaks. According to the EPA, a faucet leaking just a tenth of a gallon of water a minute can waste 50,000 gallons or more of water a year. That’s some serious money down the drain. And don’t forget the toilets, which can waste roughly 200 gallons a day.
An easy way to check for leaks is to add a teaspoon or two of food coloring into the toilet tank. Wait 30 minutes, then check to see what color the water in the toilet bowl is. If it looks like regular water, you’re in the clear. If the water is the same color as what you added to the bowl, you have a leak.

Tad Mitchell, owner of two Six Feet Under locations in Atlanta, does a monthly check to make sure everything is working properly.
“We have someone come through once a month and do the overall maintenance on all of our plumbing,” he says. “That in itself has saved us some money.”

Implement a startup/shutdown schedule. Leaving equipment on standby costs you money. By implementing a startup/shutdown plan, you can make sure you only use the equipment you need when you need it. The savings can be substantial.

Develop a plan and educate your staff on when to start up and shutdown items in the restaurant. The list should include things like lights, holding cabinets, dipper well faucets, the broiler, fryer and range. Turn off the lights in closets, storerooms, restrooms, offices and even dining areas when they are not in use. Be sure to power down non-essential equipment outside your kitchen, too, such as copiers, front-of-house computer systems and other office equipment.

Check your thermostats. It’s not uncommon for thermostats to lose accuracy over time. Check them periodically and recalibrate as necessary to reduce the amount of unnecessary energy you are using.

Take care of your oven. Tighten the hinges and check the seals on your oven door to make sure everything is working properly. Replace the seals if they are torn. Also, if you can’t turn your oven off during the day, reduce the temperature during slow periods, then raise it again during peak hours.

Take a look at your pilot light. Pilot lights require a constant stream of gas to stay lit, but you can adjust how much gas you are using. An over-fired pilot light has a tall, yellow flame. Adjusting the flame so that it is bullet-shaped and mostly blue will help reduce the amount of gas that you use.

Be dishwasher smart. Check your temperature pressure in your dishwasher. If it’s above 25 psi, you could be using more water than you need. Also be sure to fully load your dishwasher racks before turning it on.

Educate your staff. Let everyone know some of the things they can do to help reduce your waste and energy use, and get them involved in the bigger effort.

“Look inside your business and find the person who’s really motivated to make these changes,” says Patrick Cuccaro, general manager of Atlanta-based catering company Affairs to Remember. “If you have someone in your organization who feels strongly about these principles and who has a strong ethic regarding environmental stewardship, then let them lead the way.”

Small Changes Can Make An Impact
There are some easy things that you may be doing already to reduce energy consumption, such as replacing dirty air filters and using a programmable thermostat. A few other ideas:

Get an energy audit. This is a low-cost way to learn about your energy use and to identify efficiency options that may be right for you.
“For us, it was about the Zero Waste Zone program,” says Cuccaro, who notes Affairs to Remember is the first Zero Waste Zone caterer in Atlanta. (See page xx for more on this program). “But for somebody else, it might be about just getting rid of the Styrofoam.”

Change your light bulbs. There have been a lot of advances in Compact Fluorescent Lamp (CFL) light bulbs over the past few years—the days of harsh bright light is gone. Not only that, but an average incandescent bulb lasts approximately 2,000 hours. A CFL? On average, 10,000 hours. Over time, that money adds up. Don’t forget your walk in, too. Incandescent lights give off more heat than low-temperature CFLs, forcing your refrigerator to work harder and use more energy, upping your monthly bill. Swap them out for low-temperature CFLs.

Install low-flow spray valves. According to the Food Service Technology Center, a low-flow spray valve can save a restaurant up to $1,000 a year. It’s one of the easiest and most cost-effective energy-saving devises out there for commercial kitchens. On average, they last about five years and pay for themselves within one year—and only cost about $5 to $25 more than a standard model. Also check with your local utility or water district for rebates or repayment programs that reward installation of this product.

Add aerators. According to the National Restaurant Association, running a water faucet for five minutes uses nearly as much energy as running a 60-watt light bulb for 14 hours. You can’t control how long customers run your faucets, but you can install water-efficient aerators to help reduce the amount of water running down your drains. If you install them in both the kitchen and restroom sinks, you can save as much as a gallon of water per minute, and they cost under $5 per faucet.

Install timers and sensors. To help regulate energy usage, consider installing occupancy sensors for your wall light switches or timers on kitchen equipment. If your hot water system includes a recirculation pump, for instance, you could be throwing money away if it’s still on when your kitchen is closed. Install a timer that turns off the pump when the kitchen ramps down, however, and you stand to save hundreds of dollars on energy costs.

Apply window glaze. This clear, heat-rejecting window film can reduce your cooling costs while also making your dining room more comfortable. Consider placing them on windows facing south and west, which get the most direct sunlight. The film will help reduce your need for mechanical cooling, which in turn will help pay for the window film. These films also block ultraviolet light, which can fade your carpet, chairs and other fixtures in your dining room.

Long-Term Investments
There are things you can do that pay off immediately, but also think long-term. Life cycle costs such as purchase price, annual energy costs and estimated maintenance costs can help you assess if you should incorporate a particular “green” product or change into your restaurant.

A few long-term investments that will have you seeing green:

Add more corn to your diet. Consider switching out your to-go cartons, straws and plastic bags with corn-based products, which are better for the environment.

Install new toilets. According to the National Restaurant Association, a standard toilet uses as much as 4.5 gallons per flush. A low-flush toilet uses just 1.6 gallons per flush. That’s why nearly three in 10 quick service restaurants and four in 10 full-service restaurants have installed water-saving toilet fixtures in the last two years alone.

Use energy that already exists in your kitchen. Kitchens are energy hogs, and there are products out there that reuse the energy it typically wastes. For example, a refrigerant heat-recovery system uses heat wasted from walk-in refrigerators and freezers to reheat water used in the kitchen.

Affairs to Remember installed two products to help reduce their energy use, including a Kvar. This energy controller reduces the amount of non-productive current running through a building’s electrical system that is normally wasted, significantly reducing electrical costs and carbon emissions.

“All of our motors have Kvars now, and our refrigerators have an I-Cube, which measures the temperature of the food instead of the temperature of the air,” Cuccaro says. “When you open a walk-in, there’s a rush of inside air in, and a typical thermostat will register that outside air as being hotter on the foodstuff inside then the food really is. So this measures the temperature of the foodstuff, and it causes the compressor to go on and off less frequently. It’s actually safer for the food.”

Upgrade your appliances. Look for the Energy Star label when considering changing out your kitchen equipment. The designation means you’ll save energy and dollars in the long run.

Haul away your spent grease. That mucky used grease is actually an asset that others see value in. Several biofuel companies will now come to your restaurant and dispose of your spent grease, often for free.

Grow your own. Some restaurants, such as Ecco, a Fifth Group Restaurant, have built whole kitchen gardens on their roofs to help supplement their produce deliveries. The restaurant’s executive chef, Micah Willix, built six garden boxes on the roof and sealed them with used cooking oil. Because Ecco’s air conditioning units produce 30 gallons a day of condensate water, he also added rain barrels to harness the condensation and pump it to the roof for a drip irrigation system.

You don’t have to be as ambitious as growing all your fruits and vegetables on your roof. Many restaurants simply have an herb garden tucked away on the side of their building.

“We have a chef’s herb garden that we grow using organic principles,” Cuccaro says, adding that it’s only about 25 feet by a few feet deep. “We use those herbs year round. We dry them when they’re not in season.”

Consider composting. You can compost almost any food product in a commercial kitchen environment, and may restaurants that compost keep a separate container near the prep area so cooks can easily dump their food waste as they go. A company then will come on a regular schedule to pick up the compost, often reselling the finished dirt either back to the restaurant or to others.

“We compost a ton. I think it’s about 23,000 pounds a month,” says Mitchell, who uses Greenco to haul away their compost. “They’re super nice. They take it and compost it, then resell the compost.”

Recycle. Yes, this is the granddaddy of them all, but once you get your employees in the habit—many of them already recycle at home already anyway—it becomes second nature. Check to see if your municipality offers recycling, or contact one of the many companies in Georgia who specialize in recycling.

Donate unused food. A single restaurant disposes an average of more than 50 tons of organic waste every year, with food scraps comprising 66% of that waste. Contact local shelters, soup kitchens or food banks such as the Atlanta Food Bank to find out the need in your community. You’ll not only divert waste from landfills, but also help others in need.

Implementing just a few of these ideas, whether big initiatives or small maintenance tasks, does add up.

How to Use Online Coupon Marketing Successfully

Remember when your mom told you to never just dive into a pool of water without knowing if it’s deep enough to dive in headfirst? Well, the same is true about the online couponing marketing phenomenon. Look before you jump into the deep end.

One of the fastest growing promotion and marketing channels are social promotion sites that offer consumers daily significant discounts on local goods, services and events. Customers download the coupon or voucher to their mobile devices or print the coupon. Among the most popular of these promotion sites are DealSwarm, Scoutmob and Groupon.

And while there is a considerable upside—namely customers—a restaurant can also be potentially damaged if they aren’t fully aware of not only how the promotion works but how to handle it successfully.

“It is the best marketing opportunity for the money,” says Tom Murphy, owner of Atlanta’s Murphy’s Restaurant and Scoutmob’s first customer.

But Murphy’s experience shows the good—and the potential harm—such promotion sites offer restaurants. Murphy used Scoutmob twice. The first time brought 1,200 customers into the restaurant, but the second time saw more than 13,000 Atlantans sign up.

“We have used it twice with phenomenal results,” he says. “If you are staffed up and make it a great experience, it is a marketing tool that delivers.”

Ah, yes. The Big If—as in “if you are staffed up and make it a great experience.” These sites promise to deliver hundreds (maybe thousands) of new customers. And if the merchant is strategic about how he or she uses the promotion, it may deliver repeat, loyal guests, higher check averages, and a wait staff that reaps the benefit of several turns of the tables each night.

So exactly what must a restaurateur do to make it a great experience and turn all these new customers into regulars? And, do you make money?

Here are some suggestions on how to make it work for your restaurant:

1. Do the Math. According to Michael Tavani, 31-year-old co-founder of Atlanta-based Scoutmob, it is easy for an operator to review similar deals to compare how many customers and to compute the food and service costs and fees. There are archived deals on most of the sites.

Prior to using Groupon, Robby Kukler, partner of Fifth Group Restaurants in Atlanta, was meticulous about running the numbers to ensure it would be a good marketing tool for his restaurants.

“The second time we offered Fifth Group Restaurant Groupons we were more specific in our offer and offered purchases not only by restaurant but by meal period,” he says. “This allowed us to sell less expensive Groupons for lunch than dinner, and resulted in our net discount staying as close to 25% as possible. Negotiating as short-term expiration of the Groupon as possible also drives sales in a shorter period of time, which helps drive increased efficiencies and therefore better profitability per shift.”

Make sure you consider the online venture as a marketing expense, and don’t be surprised by hidden costs. Remember, the goal is to drive in enough new customers to offset the discount, not cannibalize existing customers. Know what you are paying for.

Jessica Kalish, marketing manager for DealSwarm, thinks of it as complimenting other marketing tools. “We promote our deals though other media outlets such as Twitter and Facebook. We encourage our retailers to do the same by using their existing advertising initiatives to promote their deal as well.”

2. Be Prepared. A restaurateur’s worst nightmare is being unprepared for success. What you don’t want to happen is that a restaurant is so overwhelmed by the influx of customers that it runs out of food (which has happened) or the service is so bad that you drive away any repeat customers.

“Restaurateurs can require reservations, which can help control the number of guests and provides operators with a more accurate number to measure food and staffing needs,” says DealSwarm’s Kalish.

For Agave, a well-known Mexican restaurant in Atlanta, DealSwarm was the perfect tool. “I have noticed fresh faces and a few customers that we haven’t seen in a while,” says Tim Pinkham, managing partner. “We redeem about 15 coupons a week, and since it runs over a seven month period, the flow is more spread out. We also have seen some large parties driven by the buyer of the DealSwarm coupon.”

3. Reserve a spot early. Melissa Libby, president of Melissa Libby & Associates, a public relations firm that specializes in the hospitality industry, advises her clients to sign up for summer 2011 now.

“There are a finite amount of deals each week on each service, so you want to think ahead to get the timeframe you want,” she says. “Think about times when you are traditionally slow—summer, maybe?—and book your promotion now for that time period.”

4. Build a Loyal Following. Work it! Turn first-time customers into regulars by going to every table using the coupon offer as an icebreaker. Thank them for coming and tell them a little about the restaurant. Ask if you could get the guests’ business cards or email address so that you can communicate with them about other deals and events.

5. Take Care of Your Staff. Staff training should be a part of your “deal.” Wait staff should show the full price of the meal along with the discounted one so that guests will be more inclined to tip on the regular price. Merchants can also ask the promotional companies to add this recommendation to its email and website.

Bottom line is that operators and marketers have a lot of variables to take into consideration before they decide whether “deal marketing” is right for them. But for many it will be just the sweet spot for growing their businesses. And you just may find that the water is fine—so dive right in.

Ellen Weaver Hartman is president and CEO of Hartman Public Relations, based in Atlanta. Hartman has more than 30 years of experience in building strategic communications campaigns for some of the world’s most well-known brands including The Coca-Cola Co., Kraft, Popeyes, Avon Products, Arby’s, Seattle’s Best Coffee, and Chili’s. In addition to consumer and business to business communications, she has expertise in corporate communications, social responsibility, media relations and crisis management. To contact Ellen Hartman, email ellen@hartmanpr.com

Times are tough.  During these difficult economic times, employers are looking to minimize risk and exposure with regard to work-related accidents. Eighty percent of workers’ compensation dollars are spent on twenty percent of claims.

The restaurant industry, with its unique safety hazards and potentially large number of undocumented workers, is no stranger to the workers’ compensation system. Below are simple steps you can take to reduce workers’ compensation costs.

The first step to cutting costs is prevention. Pre-accident documentation can set up legal defenses that result in significant savings to employers. Employers should require written applications from all prospective employees, obtain a detailed employment history, and undertake to check references.  The time and money spent contacting the applicant’s references is well worth it as it can prevent the hiring of a problem employee that could ultimately cost the company thousands of dollars. Your insurance carrier and their claims professionals cannot correct bad hiring decisions once an injury occurs.

In addition to requiring applications, all employers should follow the I-9 process to verify the applicant’s ability to work legally in the United States. This is the process by which the applicant completes Section 1 of Form I-9, Employment Eligibility Verification and provides two forms of identification. The employer must make copies of the two forms of identification, and then complete and sign Section 2 of the form. Though undocumented workers are entitled to workers’ compensation benefits, if you have followed the I-9 process and subsequently learn an injured employee is undocumented; thus, preventing you from offering him work under Federal law, you may not have to pay weekly disability benefits if you have suitable light duty work available.

Once an applicant has been offered a job, employers should consider requiring the employee to complete a Post Employment Medical Questionnaire. The Americans with Disabilities Act prohibits an employer from asking medical questions of applicants until after a job offer has been made. Nonetheless, Post-Employment Medical Questionnaires are a good tool in reducing workers’ compensation related costs as they can be used to set up what is known as a Rycroft defense.  A Rycroft defense allows an employer to deny a claim where: the injured employee made false representations regarding his medical condition at the time of hire; the employer relied on the false representations in making the decision to place the employee in a particular job position; and there is a casual connection between the false representation and the injury. In many cases, injuries that result from an aggravation of a condition that the employee concealed on their Post Employment Medical Questionnaire can be quite serious, and this defense can provide significant savings to the employer.

Employers should also consider requiring employees to submit to physical examinations at the time of hire. A physical examination can help establish a baseline of the employee’s medical condition and uncover non-disclosed medical problems. In addition, as part of the physical examination, the employee should be required to submit to a drug screen which can eliminate dangerous employees before accidents occur. Injuries from slip and falls are quite frequent in the restaurant industry, and while some slip and falls may be unavoidable accidents, others may be the result of an employee’s drug use or intoxication. Therefore, not only is it important to require a drug screen at the time of hire, it is also important to institute a policy requiring employees to submit to a drug screen following the report of an accident as a positive drug test can provide an affirmative defense to a workers’ compensation claim.

It is impossible to eliminate all work-related accidents. Therefore, one of the most important ways that employers can keep costs down is by maintaining control of the medical treatment, and the tool to doing this is the Panel of Physicians. A Panel allows employers to control an injured employee’s medical treatment as long as it is properly composed; it is posted in a prominent place; and the employee has been informed of the function of the Panel and his/her right to select a physician if injured at work. The best way to document the employee’s understanding of the function of the Panel and their rights and obligations is to have the employee sign a Panel Acknowledgment Form and place it in his/her personnel file.

These steps are just some of the ways that employers can reduce costs by both preventing avoidable claims and minimizing exposure when an accident occurs.

If you have any questions, or would like to obtain copies of the documents referenced in this article, please contact either Harry Tear or Kim Roper with Moore Ingram Johnson & Steele at (770) 429-1499.

For thousands of people, food allergies are a very real danger. One bite of something containing an allergen – or merely coming in contact with an allergen – could be fatal.

There are many tragic stories of allergy sufferers who died after consuming even a trace of allergen, and it’s not enough to say they should have been more careful. In this age of convenience and rush, allergy sufferers face a uniquely grave problem. Even when allergic individuals carefully read food labels, share allergy concerns with friends and with food service workers, carry epinephrine injections, conscientiously avoid all foods known to contain the allergen, and wear medic alert bracelets, there is still the ominous awareness that every bite of food could be their last.

The food manufacturing industry historically has made little effort to provide reliable and consistent information concerning allergens, and it has taken accounts like that of Christina Desforges, a young teenager with a peanut allergy, who died after kissing her boyfriend who had consumed peanut butter hours earlier to really make the industry take note of the issue.

Thankfully, the Food Allergen Labeling and Consumer Protection Act (FALCPA) took effect in 2006. This act requires food labels to have clear statements concerning the presence of the eight major food allergens (see sidebar).

While the food manufacturing industry is rising to meet the challenge of removing the risks for allergy sufferers, our food service industry is only slowly waking up to the need for change. Restaurateurs have an equally important responsibility and should design training programs for staff, provide accurate ingredient information to customers, and overall, support the trend toward making the world safer for those who suffer from food allergies.

Allergy Basics
A food allergy is an exaggerated response by the immune system to a specific food or groups of foods. Some reactions are mild, while others are life threatening. The body reacts to the food as if it is a foreign invader and mobilizes antibodies, which causes inflammation and other adverse reactions.

Some people have just one allergy, while others have several. Some have mild to moderate reactions such as dermatitis or inflammation around the mouth while others may experience anaphylaxis after coming into contact with a mere trace of an allergen. For individuals with mild allergies, allergic reactions can occur 4 to 6 hours after ingestion of a specific food, while other reactions may take more than 6 hours for the development of any adverse reaction or condition. However, the amount that may be eaten before symptoms appear is usually very small and varies with each individual.

In fact, in very sensitive individuals, the amount of an allergen that can trigger a reaction can be less than a milligram, which is evidenced by the fact that many individuals have experienced reactions from mere traces of an allergen. Furthermore, of the eight foods that have been identified to be the cause of the vast majority of reactions, peanuts and tree nuts cause the most severe reactions, and, according to one allergist, “most, if not all peanut allergies are considered potentially anaphylactic.” The only treatment for food allergies is avoidance of the problem food(s). Thankfully, many children outgrow allergies to milk, eggs, wheat and soy, but allergies to peanuts, tree nuts and shellfish tend to be life-long.

Numbers and Statistics
An estimated 11 million Americans suffer from food allergies, which amounts to 2% of the adult population and 6-8% of children in the United States. (To put that figure in perspective, there are 11.6 million employees in the restaurant industry.)  Eleven million means that 1 in 25 people in America are suffering from food allergies.  While that is a staggering proportion, research provided by the Food and Drug Administration reveals that approximately 90% of food allergies are caused by the big eight. Despite the fact that these eight foods account for the vast majority of food allergies, reactions are widespread and hard to prevent because nuts, milk, eggs, and wheat are so commonly used in food manufacturing and often are labeled in inappropriate or misleading ways.  For patrons of restaurants that use any kind of manufactured item in their production, the risk of facing an allergen is present.  Likewise, restaurateurs should realize that unless every item on the menu is made completely from scratch with pure ingredients, or unless precise information about store-bought ingredients is known, there is the risk that an allergic patron could have a reaction.

When one considers that approximately half of the American food budget is spent on meals away from home, and the average American eats 198 meals out a year, it is clear that the risk of having someone experience a reaction in your establishment is worth considering.

Even though not all anaphylactic reactions are fatal, they almost always result in emergency room visits. According to the National Institute of Allergies and Infectious Diseases, food allergy is the most frequent single cause of emergency room visits for anaphylaxis and accounts for 34 to 52 percent of such emergency room visits. In addition, anaphylactic shock as a result of food allergies kills, by some estimations, 150 to 200 people every year.

Food allergies appear to be on the rise, particularly in children. The most common allergy in children is the peanut allergy, and more than one million Americans are severely allergic to nuts.  What is most alarming to the restaurant industry are those statistics that directly reflect allergic reactions in restaurants.  According to a 2001 fatality survey conducted by the Food and Anaphylaxis Network (FAAN), 47 percent of food-allergy deaths occurred in restaurants, and one-third of allergic respondents to the 2004 FAAN survey experienced reactions from food provided by restaurants.

Responsibility and Risk
The fast pace of restaurants necessitates efficient communication and quick responses, but a human life is always worth an extra consideration.  Even though the threat of causing someone’s death is enough to make restaurateurs enact new strategies to aid those with food allergies, the threat of litigation certainly gives an added motivation.
It begs the question: what is the responsibility of the food service industry in meeting needs for allergy sufferers? Beyond immediate financial losses, losing in court brings the irreparable loss of reputation. And the loss of reputation will deter non-allergic customers as well as allergic customers because the idea that there was negligence in one area tends to make people think that there is negligence in another. In other words, the overall quality of food safety will be called into question should someone experience a reaction to food served in your restaurant.  For this reason, it is important to have strict procedures in place to prevent such an incidence.

Nancy Caldarola, PhD, RD, a consultant with Concept Associates, is active in the GRA and    the    Women’ s    F oodservice    F orum.    With more than 35 years in the industry she has held senior operations, training, and marketing roles in several international chains. She is a past lecturer at UGA, and was recently named Education Director for NACS CAFÉ at GSU. 678-523-3080

Allison Barfield graduated from the University of GA with a degree in Dietetics. She is currently a graduate student at the Washington University School of Medicine in St. Louis studying Occupational Therapy. A licensed pilot, Allison’s future includes mission work in underdeveloped areas where she can share her knowledge and skills.

By Christy Simo

The economy may have taken a hit over the past three years, but that doesn’t mean restaurants aren’t opening, closing and moving around as usual. Whether you are interested in opening a new concept or are a seasoned pro, the current real estate downturn may have changed the way you want to approach choosing a site for your next restaurant.

There are lots of things to consider, from what you can afford to where you want to be located, to even if you can get a loan. Still, experts note that restaurants are opening and concepts are expanding, just at a slower pace.

“There’s still lots of growth, but it’s a different kind of growth,” says Steve Josovitz, vice president and associate real estate broker for The Shumacher Group, an Atlanta-based company that specializes in site selection for regional and national restaurant and retail chains and the sale of existing restaurants and businesses. “The money is slower to come by, so that’s slowing up growth, because the borrowed money is not there.“

However, The Shumacher Group has noticed an uptick in the number of restaurants they’ve sold this year over last.

“The reason for that is that the fully equipped turnkey restaurant, for example, could be had right now for under $100,000,” he says. “It’s a great time to open a restaurant, because there’s great deals to be had. There’s a lot of empty restaurant space all throughout Georgia, and you can get it for a fraction of the price of what it would cost to build out a restaurant.”

Josovitz points to two recent purchases, both great deals in a down market.

“A Doc Greens [location] was sold to Chow Baby, and they bought a restaurant that has hoods, it has grease traps, it has the infrastructure of a restaurant, and all they have to do is come in and do cosmetic changes,” he says. “We sold a Mama Fu’s recently to Saigon Café. Saigon Café, for a fraction of the price to build out a space, can go in and technically all they have to do is different paint and cosmetics. They can be up and running in no time.”

BANKS TIGHTENING BELTS
While there are deals to be had, one of the issues slowing restaurant growth is the same as in the residential real estate market: banks are not lending as easily as in years past.

“It’s harder,” says Greg Vojnovic, vice president of development for Popeyes Louisiana Kitchen. “Restaurants are always one of the higher-risk opportunities, particularly independent restaurants.”

The economy has made it “easier for restaurants, although it’s harder for them to get the deals done,” he adds.

That’s especially true for small or independent restaurateurs who are not affiliated with a large franchisor.

“If they go into a local bank, they’re going to have to explain their business to a local banker,” Vojnovic says. “That banker may not understand the restaurant business, so it’s going to be hard for him to get his arms around the cash flow, whereas it’s much easier for a bank to finance an apartment complex.”

To make sure you have the best shot that you can of obtaining a lease, have all the paperwork and information prepared that a lender could potentially need to approve a loan before you set foot in the door.

“You need to prove to your lender that you’re a winner, and you have to show why you’re a winner—show them your cash flow statements,” Vojnovic says. “You have to show them, walk them through step by step, because you may know the restaurant industry intimately, but bankers look at hundreds of loan applications in different industries.”

A CHANGING GAME
The lending issue is affecting various aspects of the industry, from the decision of whether to buy or lease a space to selecting a site.

“The economy has hit [the restaurant real estate industry] pretty hard because it’s made lending very hard,” Josovitz says. “In terms of major growth, it’s been hampered because of lending. The lending has not stopped; it’s just getting harder. It’s taking much longer, and the requirements are much more stringent.”

Despite the banks tightening up loan availability, interest has picked up in available restaurant sites across the state.

“There is a definite increase in interest in new locations,” says Harold Shumacher, president and managing broker of The Shumacher Group. “The good news is we’re probably seeing more activity from bigger restaurants.”

The other piece of good news is that there is less uncertainty today than there was even a year ago.

“Nobody knew where this was going to go. Nobody knew where the bottom was,” Shumacher recalls. “Now everybody acts and feels like they’re more busy, and there seems to be more deals in the offering. And they’re bigger deals for the most part, but I think … we’re six to nine months away from seeing a solid recovery.”

However, even though the real estate industry is going through a rough patch, it does not mean restaurants can name their price.

“There’s a perception that because of the economy that every landlord and every seller is bending over backwards to give away the store,” Josovitz says. “That’s not happening.”

“What you’ll find is landlords are not willing to reduce their rates below market. What they’re willing to do is give you a rent abatement, or free rent,” says Vojnovic. “We’re telling our franchisees don’t concentrate so much on the dollar per square foot, but concentrate on the total value of the lease for the lease term. Find out what you’re getting. In other words, don’t try to knock the rent down, but try to get more abatements on the front end.”

While landlords may be looking for creative ways to entice restaurant operators into vacant properties, the other benefit of the current economy is that premium locations that may have never been available in the past may suddenly be up for lease or purchase.

“As an owner/operator, the really good deal that you’re getting is that you have the availability of getting that good piece of dirt. In this marketplace, there’s corners where out of nowhere, a business you thought would never go out becomes available,” Vojnovic says. “So while the real estate might not be at a discount, your true discount is that you’re able to get an extraordinarily strong site.”

“Because of the economy faltering, we just have more leasing opportunities and more leasing of closed restaurants for sale,” agrees Josovitz. “In terms of restaurants for sale that are really cheap, there’s some really great deals out there.”

Another event having an impact on the real estate market is the flood of people who either retired or were laid off who are interested in entering the restaurant industry.

“We’re getting more calls now than we’ve ever had in 25 years, and one of the factors for that is that there’s a lot of people out of work that have a chunk of money in the bank,” Josovitz says. “They may never get another job at the level they were at, and they realize if they don’t get a job real quickly or do something with their money, it’s going to be gone.“

BUY OR LEASE?
So should a restaurant buy or lease the space? That depends, although experts say if you have the means, purchasing the land or a building makes more financial sense.

“Owning the real estate gives you more flexibility in how you can take money in and out of the business, but it requires a greater amount of money in the business,” Shumacher says. “Most start-up restaurants generally only have enough capital to get open.”

Regardless of whether you purchase or rent the space, finding a high-quality spot is imperative. “You want to find the best piece of possible real estate because you’re committing all of your investment into that piece of dirt,” Vojnovic says. “You can’t take it with you.”

And if for some reason, you need to or must close or move your business, you have a piece of real estate that will be in demand. “If you have a really bad site, it’s hard to find somebody else to take it,” Vojnovic says. “But if you have a really good site, there’s going to be interest and value. People are going to want to take over that site.”

Another reason to consider purchasing the space is that what’s low rent today could become the hot area of town tomorrow.

“We always encourage people to buy the real estate if possible, because in 15 years you’re going to own a physical asset, whereas if you’re paying a lease, you don’t own anything,” Vojnovic says. “Really the only difference is you have to come up with a down payment. In 15 years, you’re negotiating a renewal on your lease, and they’re going to [raise] your rent because real estate is going to be worth a lot more in 15 years.”

Even if you do not have the capital to purchase real estate or the property is for lease and not for sale, still look for the best piece of property you can find.

“You really raise your money through the restaurant; you’re not a real estate developer,” says Vojnovic. “So it’s a preference, but don’t just pass on a deal because you can’t own real estate.”

CHOOSING YOUR SITE
So what makes a site the best place to locate your restaurant?

“That’s like saying what makes a girl pretty,” Shumacher says. Still, he notes that there are a few basics no matter where you are located within the state. “The simple ones are visibility, access and presence. You know where it is—can you get in and out, and can you see it? Those are the basics.”

“The fundamentals for all real estate are linked to two primary components,” agrees Vojnovic. “No. 1 is the quality of the trade area, and the second is the quality of the physical piece of real estate.”

Vojnovic notes that you don’t always find places that have both components, but you need to have at least one.

“You can have a weak trade area if you have a very strong piece of real estate, or you can have a weak piece of realty but a great trade area,” he says. “But what you absolutely cannot do is have a weak trade area and a weak piece of real estate. That’s the challenge in this marketplace most people are encountering.”

The other main factor in determining if a space is ideal for your concept is the rental rate and other extra charges a shopping center or landlord will charge you.

“There’s a certain percentage of what your sales have to be to cover rent. Normally around 10% of your sales should be rent and no more,” Josovitz says.

Common Area Maintenance (CAM) charges can also sneak up on you and make your monthly payment cost prohibitive.

“The problem is that you might have CAM charges anywhere from $3.50 a square foot to up to $10 a square foot,” Josovitz says. “They may give an attractive rental rate, but your CAM charges are so high that it will take your rental factor up really, really high. You also have to factor in the taxes and the real estate insurance. Some places have association fees, then you have to factor in your fixed costs—utilities, workers compensation and licenses.

“The successful person really has to budget and know what they can afford in rent,” he adds. “When you know that, that’s when it makes you much more educated when you’re looking for a space. It really takes the guesswork out of what you can afford, and that will also ensure your success a lot more.”

Lastly, consider the time and cost it will take to build out a raw space vs. converting an existing restaurant space.

“In this marketplace, there’s a lot of opportunities to take over failed locations and do conversions,” Vojnovic says. “What you have to do is look at that—why did it fail? Did it fail because the operator was poor, or did it fail because it was in a poor trade area or poor real estate?“

“There’s a great appeal right now in the marketplace for buying an existing restaurant business or leasing a fully equipped space, or one that was a restaurant—we call that second-generation restaurant space,” Josovitz agrees. “At a minimum, a second-generation restaurant space would probably have the structure of a restaurant, which would include the exhaust hoods, the kitchen, grease traps. It would have HVAC systems. It would be set up so all you have to do is do some cosmetic work, add your furniture fixtures and equipment, and you could be open in a fraction of the time it would take to build out a space from scratch.”

No matter how the market plays out over the next few years, don’t wait too long to sign that lease or purchase that space.

“It’s like having kids. There’s no good time to have kids, but people have kids,” Shumacher says. “There’s no perfect time to open a restaurant. But there is a time when you say, you know, it’s time to jump in.”

“Good real estate is still good real estate,” agrees Vojnovic. “In this economy, the smarter survive. The goal is to leave as strong as possible with the best possible real estate.”

For more information on restaurant real estate in Georgia, click to read Tip Jar: Expert Tips for Navigating the Real Estate World.

This article is excerpted from: A Changing Real Estate Landscape
Restaurant Forum, October 2010
By Christy Simo

Make a good impression. “When you approach the landlord, you only have one shot to make an impression,” says Greg Vojnovic, vice president of development for Popeyes. “So your first approach needs to be a professional approach. Gather the paperwork that the landlord is going to be looking for, things like 2 years of PNLs on your business, your personal financial statements, a business plan. So when you go in, you have your act together. Be professional and be prepared.”

Hire a professional. “We strongly encourage all of our franchisees to have a very good, professional tenant rep broker,” Vojnovic says. “Use somebody that specializes in the restaurant business, who knows what’s going on. Because in the negotiation, the landlord has all the power and all the knowledge. They have leverage, because in their trade area they know exactly how much every other shopping center is charging for rent, and you don’t. Your real estate professional will know, and he’ll know the deal terms of the marketplace. You need to have somebody on your side.”

Crunch the numbers. “Analyze your budget and your needs, and see where your rent needs to be,” says Steve Josovitz, vice president and associate real estate broker for The Shumacher Group. “So that when you negotiate for the space, your negotiating from the start what that rents going to be. That’s the most important thing that small business owners have to really understand. You have to crunch numbers, and if you don’t know how to do that, then you really need to hire a professional CPA that specializes in restaurants or work with a restaurant consultant professional to really understand the rent factor in expenses and what it takes.”

Know your market. “Do the research. Study the demographics, the car counts, really intimately know the market that you want to be in,” Josovitz says. “That’s really important.”

Find sites with visibility and access. “Always choose visibility over access, but ideally you want both of them,” Vojnovic says. “For access – how hard is it to turn into the parking lot? Can you drive straight into the shopping center, or do you have to make a u-turn or drive down a frontage road? If they can’t see you, how are they going to figure out that you are there? Visibility is critical. You want to make sure you’re not below grade, because if you’re below grade it’s hard for them to see your business. You want to be two or three feet above grade because that increases visibility to people in cars.

Ignore the deal. “Look at the real estate itself, don’t look at the deal,” Vojnovic says. “If you’re looking at a conversion, ignore the conversion first. Look at the real estate on its own.”

Be prepared to grow slowly. “You have to be prepared to pay their rental rate,” Josovitz says. “You could out of the box hit it big, have lines out the door and be very successful. But you might have a period of growth over the first year. So you have to be prepared. What happens for a lot of people is that honeymoon period in the beginning is sometimes not a honeymoon when no one’s walking through the door and you’re paying above market rent and you’re paying out of pocket every month from your personal savings account to pay rent. And that hurts.”

Factor the cost of opening your doors. “There’s a lot of factors within the restaurant that have to be determined prior to signing a lease. There’s no guarantee that your current grease trap is marginal or that your kitchen floor is acceptable to the health department,” Josovitz says. “You have to take into account a dollar amount of money that you’re going to have to spend to open the doors.”

By Debby Cannon, Ph.D., CHE

The business environment of operating a restaurant has always been challenging and is only complicated by today’s economic climate. Our industry is one of small profit margins and cutting pennies to positively impact the bottom line. With that said, how is the restaurant industry doing with efforts to “go green” in becoming more environmentally proactive and sustainable? One would perhaps guess that the movement towards sustainable foodservice has slowed. Just the contrary—it seems to be stronger than ever.

Earlier this year, the National Restaurant Association published its “What’s Hot: Top 20 Trends” for 2010. Of the 20 predictions, two-thirds were tied to sustainability, locally grown and produced products, sustainable seafood, organic produce, fresh ingredients and nutrition and health. The NRA named “gardens” as the hottest trend in restaurant concepts for 2010. Gardens—whether rooftop, backyard, community or other types—will lead the pack of new restaurant innovations according to the NRA.

According to Holly Elmore, CEO of Elemental Impact and Director of the Zero Waste Zone, sustainable involvement is thriving. The commitment to environmentally proactive business practices in the restaurant industry is growing as it is in other industry sectors.

Elmore presented a 90-minute seminar at the National Restaurant Association’s Show in May of this year. The topic was composting, and this presentation resulted in numerous engagements for Elmore nationwide with restaurant and foodservice companies seeking her expertise in the areas of food residuals and composting.  According to Elmore, the validation from the National Restaurant Association in offering this type of seminar was a first. Secondly, the interest the seminar drew in attendance and follow-up requests is a definite indicator that our industry is putting a priority on sustainability.

Elmore’s organization, Elemental Impact, does not focus solely on the foodservice industry. The foodservice industry, however, is an “engine” to the organization because of the far-reaching impact it has on the environment. One of the priority areas for   Elemental Impact is soil sustainability. According to Elmore, our soil over the years has been depleted of essential minerals and vitamins. Through university partnerships with experts in the fields of food science, agriculture and nutrition, Elemental Impact is serving as a catalyst to enhance soil quality, which will result in healthier foods.

New technologies in agriculture will increasingly impact the foodservice industry. Already there are significant advances in alternatives to soil-based production of food such as hydroponics and aquaponics.

Hydroponics, the forerunner to aquaponics, is the production of plants in a soilless medium. All of the nutrients supplied to the crop are dissolved in water. Aquaponics involves the integration of hydroponics with aquaculture—raising fish. Recent work by researchers and growers has resulted in aquaponics being a working model of sustainable food production. The waste products of one biological system (ammonia from the fish) serve as nutrients for a second biological system (the vegetables or herbs produced.) This is made possible by microbes in the system that convert the ammonia to nitrogen, in a process called nitrification.

The benefits for foodservice operators are numerous. Multiple products can be produced—both fish and vegetables/herbs—from one production area. That production area can be relatively small, such as part of a rooftop garden.

The trend is starting to gain momentum in California, with top chefs such as Adam Navidi, owner of Signature Catering in Orange County, Calif. Chef Navidi has recently started exploring aquaponics in his commitment to offer the freshest and healthiest food products.

“I’ve been growing with hydroponics for the past six years,” he says. “With our new restaurant Oceans and Earth, we expect to have an aquaponics operation in back by this coming spring.” Navidi says that for a chef to have control over at least part of his food supply is an amazing new opportunity made possible with aquaponics.

That trend is expected to move eastward among restaurant and foodservice operators. The Charleston, S.C., restaurant scene has already begun to rely on an aquaponics farmer north of the city. The owner, Travis Hughey, is known in aquaponics circles around the world as the inventor of Barrel-Ponics, a brand Hughey has trademarked. He is a partner in a new aquaponics partnership called AquaPlanet, focused on teaching and services related to aquaponics and local food. The firm’s founding partner, Bevan Suits of Decatur, Ga., is working with Hughey to produce training videos that can be accessed online by subscription.

“Travis is pretty much in demand in foreign countries because the food and water situation is more severe there than it is in the U.S.,” Suits says. “We’re glad to work with him because he gives a good presentation.”

As we look at the future of food production and sustainable foodservice and restaurant operations, definitely stay tuned for exciting options and innovations.

Debby Cannon, Ph.D., CHE, is Director of the Cecil B. Day School of Hospitality, located in the highly ranked Robinson College of Business at Georgia State University.  The school offers three different programs: A B.B.A. degree with a major in hospitality; a certificate program (a post-baccalaureate program) in hospitality operations, event planning and meeting planning; and an M.B.A. degree with a concentration on hotel real estate. Visit the School of Hospitality’s website at www.robinson.gsu.edu/hospitality or call 404.413.7615.

Start Generating New Profits and Growth
Tomorrow Morning

Pricing is one of the most powerful – yet underutilized – strategies available to businesses. A McKinsey & Company study of the Global 1200 found that if companies increased prices by just 1%, and demand remained constant, on average operating profits would increase by 11%. Just as important, price is a key attribute that consumers consider before making a purchase.

The following 10 pricing tips can reap higher profits, generate growth, and better serve customers by providing options.

Stop marking up costs. The most common mistake in pricing involves setting prices by marking up costs (“I need a 30% margin”). While easy to implement, these “cost-plus” prices bear absolutely no relation to the amount that consumers are willing to pay. As a result, profits are left on the table daily.

Set prices that capture value. Manhattan street vendors understand the principle of value-based pricing. The moment that it looks like it will rain, they raise their umbrella prices. This hike has nothing to do with costs; instead it’s all about capturing the increased value that customers place on a safe haven from rain. The right way to set prices involves capturing the value that customers place on a product by “thinking like a customer.” Customers evaluate a product and its next best alternative(s) and then ask themselves, “Are the extra bells and whistles worth the price premium (organic vs. regular) or does the discount stripped down model make sense (private label vs. brand name). They choose the product that provides the best deal (price vs. attributes).

Create a value statement. Every company should have a value statement that clearly articulates why customers should purchase their product over competitors’ offerings. Be specific in listing reasons…this is not a time to be modest. This statement will boost the confidence of your frontline so they can look customers squarely in the eye and say, “I know that you have options, but here are the reasons why you should buy our product.”

Reinforce to employees that it is okay to earn high profits. I’ve found that many employees are uncomfortable setting prices above what they consider to be “fair” and are quick to offer unnecessary discounts. It is fair to charge “what the market will bear” prices to compensate for the hard work and financial risk necessary to bring products to market. It is also important to reinforce the truism that most customers are not loyal – if a new product offers a better value (more attributes and/or cheaper price), many will defect.

Realize that a discount today doesn’t guarantee a premium tomorrow. Many people believe that offering a discount as an incentive to trial a product will lead to future full price purchases. In my experience, this rarely works out. Offering periodic discounts serves price sensitive customers (which is a great strategy) but often devalues a product in customers’ minds. This devaluation can impede future full price purchases.

Understand that customers have different pricing needs. In virtually every facet of business (product development, marketing, distribution), companies develop strategies based on the truism that customers differ from each other. However, when it comes to pricing, many companies behave as though their customers are identical by setting just one price for each product. The key to developing a comprehensive pricing strategy involves embracing (and profiting from) the fact that customers’ pricing needs differ in three primary ways: pricing plans, product preferences, and product valuations. Pick-a-plan, versioning, and differential pricing tactics serve these diverse needs.

Provide pick-a-plan options. Customers are often interested in a product but refrain from purchasing simply because the pricing plan does not work for them. While some want to purchase outright, others may prefer a selling strategy such as rent, lease, prepay, or all-you-can-eat. A pick-a-plan strategy activates these dormant customers. New pricing plans attract customers by providing ownership options, mitigating uncertain value, offering price assurance, and overcoming financial constraints.

Offer product versions. One of the easiest ways to enhance profits and better serve customers is to offer good, better, and best versions. These options allow customers to choose how much to pay for a product. Many gourmet restaurants offer early-bird, regular, and chef’s-table options. Price sensitive gourmands come for the early-bird specials while well-heeled diners willingly pay an extra $50 to sit at the chef’s table.

Implement differential pricing. For any product, some customers are willing to pay more than others. Differential pricing involves offering tactics that identify and offer discounts to price sensitive customers by using hurdles, customer characteristics, selling characteristics, and selling strategy tactics. For example, customers who look out for, cut out, organize, carry, and then redeem coupons are demonstrating (jumping a hurdle) that low prices are important to them.

Use pricing tactics to complete your customer puzzle. Companies should think of their potential customer base as a giant jigsaw puzzle. Each new pricing tactic adds another customer segment piece to the puzzle. Normal Norman’s buy at full price (value-based price), Noncommittal Nancys come for leases (pricing plans), High-end Harrys buy the top-of-the-line (versions), and Discount Davids are added by offering 10% off on Tuesday promotions (differential pricing). Starting with a value-based price, employing pick-a-plan, versioning, and differential pricing tactics adds the pricing related segments necessary to complete a company’s potential customer puzzle. Offering consumers pricing choices generates growth and increases profits.

Since pricing is an underutilized strategy, it is fertile ground for new profits. The beauty of focusing on pricing is that many concepts are straightforward to implement and can start producing profits almost immediately.

What better pricing windfall can your company start reaping tomorrow morning?

Rafi Mohammed, Ph.D is the author of The 1% Windfall: How Successful Companies Use Price to Profit and Grow (HarperBusiness).  He has been working on pricing issues for the last 20 years.  Rafi Mohammed is the founder of Culture of Profit LLC, a Cambridge, Massachusetts-based company that consults with businesses to help develop and improve their pricing strategy. He also holds the title of Batten Fellow at the University of Virginia’s Darden Graduate School of Business (in residence, Spring 2001). A frequent commentator on pricing issues to the print media, Rafi has also made prime time appearances on CNBC as an expert pricing commentator.  He is an economics graduate of Boston University, the London School of Economics & Political Science, and Cornell University (Ph.D.).

This profile article excerpted from: From Classic to Casual
Restaurant Forum, September 2010
By Jaymi Curley

GOING GASTRO WITH GUSTO
Gastropubs have lit up the scene in the past few years, offering diners upscale fare in a casual atmosphere without breaking the bank. But in 2005, the concept of fancier food in a bar setting was virtually unheard of in Georgia. P’cheen International Bistro & Pub in the Old Fourth Ward neighborhood of Atlanta was one of the first of its kind in the city, and it’s still going strong five years later.

Chef Alex Friedman, co-owner and chef at P’cheen, does not see a fine dining background and a casual restaurant as mutually exclusive. “To use the term ‘upscale’ versus ‘casual’ is to miscommunicate what we are doing here. Because the main difference between [fine dining] cuisine and mine is that their portions are smaller. Their plates may be more expensive, their wine glasses may be made of fine crystal, or they may have an army of servers circling around you at all times, but the quality of food at P’cheen is just as good and maybe even better than some fine-dining restaurants in Atlanta. Because I doubt most of them are making as much of their food from scratch as we are here.”

Friedman, a graduate of Johnson and Wales University, began his path in the industry at just 14 years old, starting as a busboy and running the gamut of the kitchen hierarchy, until at 19, he was taken aside by the chef at the Petroleum Club, a CCA-networked private club in Evanston, Illinois. “I had worked my way all the way up to sous chef,” says Friedman, “and Chef said I had natural gift for it, but basically had two choices: I could stay there and work for him as a sous chef or I could go to culinary school. So I started applying.”

Upon graduating and working three years as a sous chef at the Biltmore Estates, Friedman moved to Atlanta, where he worked under Arnaud Michel and Jean-Frederic Perfettini at Pastis. He later transferred to the pair’s Anis Bistro in Buckhead, where he became executive chef. It was there that he met his business partner Kieran Neely, who is now co-owner of P’cheen.

In the creation of P’cheen, Friedman says he was not turning his back on his fine-dining roots, but rather creating a fusion of the quality diners expect to see in fine dining with an atmosphere that’s a more relaxing experience.

“We were trying to accomplish something at P’cheen that no one else had done,” Friedman recalls. “Although we did not realize it at the time, we were creating Atlanta’s first gastropub. We wanted to try to create an environment where there is high-quality food, but you are also breaking bread with spirits and enjoying yourself, because great food and spirits always go together.”

The move to casual dining really only came about over the past decade, following a period when the high-end, 12-course chef tastings had exploded.

“But the average person—who can’t afford to spend $300 or $400 dollars on a meal that, frankly, you walk away and you are still hungry—wanted to be able to eat high-quality food in an environment they can enjoy and relate to,” Friedman says. “Kieran and I wanted to create a place where we’d be comfortable. Where anyone—white, black, Asian, Hispanic, gay, straight—could sit down, look at the menu, and find something on the menu that they can understand and enjoy.”

STAYING LOCAL AND AFFORDABLE
As a recent study reports, 70 percent of consumers say they are more likely to visit a restaurant that sources local and/or organic food for its menus. Therefore, it makes sense that the principles of local and sustainable ingredients would filter from the fine-dining arena into the casual concept restaurant. And although the trend toward local and organic food has upped the price per person for many restaurants, Friedman makes it a point to use local ingredients while also keeping the menu affordable.

“As much as we are all in this to make a living, I am also here to provide service. And where some chefs are going to say, ‘Well I can charge more for local and organic,’ I work along the lines that because we make just about everything here from scratch, I can charge the customer a little less than if I were buying things already made. I pass it on to my customers,” Friedman says, adding that keeping prices reasonable is the best way to protect the overall bottom line at P’cheen over the long term. Most items on the menu hover around the $10 mark, and nothing is over $18.

“I have had to raise my prices a little bit just like everyone else in this economy, but I want to make sure that my clientele can still afford to come in here to eat. And you are seeing a lot places shut down left and right, all over Atlanta and all over the country, because people can’t afford the prices.”

Chef Friedman uses local ingredients primarily sourced from Lazy S Ranch outside Athens, and he also has an herb garden beside the restaurant that he uses frequently as well. Everything on the menu is made from scratch, including the Potato Gnocchi Primavera, Bistro Steak a la Plancha con Chimichurri, and its Jar of Pickled Farm Fresh Veg – a mix of pickled green beans, garlic, red peppers, celery, carrots and jalapeno along with fried house pickles.

A CLASSIC EDUCATION IS STILL KEY
For whatever kind of restaurant is the ultimate goal, Chef Friedman maintains that a classic education is invaluable. “The beauty of culinary school is that it refines the skills that you learn from working in kitchens. Unless you are working under the highest caliber of fine dining chefs, you are never going to learn the real traditional way to make a stock, or what a proper brunoise or bouquet garni is,” he says. “There are the properties of a sauce, or all these great, old-school classical dishes that you may not see on menus anymore, but that are the cornerstone for the techniques you need in order to be able to cook in today’s restaurants. And you can learn the majority of it in restaurants, but you don’t learn the refined techniques like you do in culinary school.”

“Culinary school is one of those things where you get out of it what you put into it. You go through the program and really learn the techniques, get A’s across the board, graduate magna cum laude, and you’ll find yourself being chased after by the big fine dining establishments and top organizations,” Friedman says. “And I think that is the proper way to go for someone who is interested in being a chef-owner someday.”

STAFFING MAKES ALL THE DIFFERENCE
Even in a casual environment, both Friedman feels that the team members can make all the difference to both the customer and the chef-owner. Friedman’s approach to staffing is to look for people who are “committed” and willing to contribute to the success of the restaurant. “I don’t have some college kid who is thinking, I’m just here to earn a few bucks between classes and I’ll be out of here in six months when I graduate.”

Friedman helps foster a sense of unity among his employees with staff meetings where they contribute ideas to help the growth of P’Cheen. In addition, Friedman is adamant about modeling the kind of hard work and dedication he expects from his employees. “I would never presume to ask anyone who works for me to do something I am not willing to do myself. This place takes everyone to run it. If the grease trap is backed up and it needs to be emptied before a plumber can get out here, I am the first one to pull on a pair of gloves and get disgusting.”

PHOTO CREDIT: Haigwood Studios

Debby Cannon, Ph.D., CHE

July/August 2010

The National Restaurant Association designated in their “What’s Hot: Top 20 Trends in2010” that locally grown produce was the “No. 1 Trend” for foodservice opera- tions, followed by locally sourced meats and seafood (#2), locally produced wine and beer (#5), farm/estate-branded ingredi- ents (#8), sustainable seafood (#10) and organic produce (#12).

There’s no doubt that local, organic and sustainable dining is hot, but understanding what is considered “healthy cuisine” is not a simple matter. Comprehending consumer preferences for healthy food is even more puzzling. With 65% of American adults overweight, one might assume the market for healthy food is limited. However, we know from the trends charted that the de- mand is actually increasing. Evidence of this can be seen in all segments of foodservice from quick service to fine dining.

Research has shown that the primary consumers of organic food are women ages 30 to 45 who have children in the household and who are environmentally conscious. Interest in organic foods also seems to be growing among younger individuals — particularly college students.

As part of the millennial generation (those in the 16-29 age range), college students and others in the “younger than 30 set” are of great interest to most industries. With more than 70 million in this gen- eration, they already compose 50% of the workforce and, in time, will grow in pres- ence with the eventual retirement of baby boomers. These millennials, with their strong buying power, are already making an impact on the hospitality industry. This can be seen in the “lifestyle hotels” of Hotel INDIGO, aloft and N YLO, all the way to McDonald’s decision to incorporate an am- biance of Starbucks into their restaurants.

But what are the food preferences of millennials? While locally produced preferences have not received research attention yet, consumer preferences for organically grown items have been the focus of several academic studies that have centered primarily on college students.

One study (Dahm, Samonte and Shows, 2009) of 443 students in a midsized south- ern university found that positive attitudes toward environmentally friendly practices were linked to positive attitudes toward organic foods. Students who were more oriented to sustainable practices overall were more likely to purchase and consume organic products. Other research, however (such as the study by Magnusson et al., 2001), found taste to be a top factor in the purchase of organic food regardless of philosophical ties to sustainability.

Colleges have recognized students’ increasing interest in healthier foods. According to Dahm and her team of re- searchers, the University of Wisconsin at Madison was the first major American public university to consistently put foods grown on local farms on the regular menu. Over the last 10 years, the introduction of organic food options on college campuses has grown exponentially. According to the national farm-to-college program manager of the Community Food Security Coalition, based in Los Angeles, about 200 campuses around the country buy at least some food from local farmers.

What does this mean for the restaurant industry as it addresses the buying power of more than 76 million millennials? Eating habits cultivated during college, particularly supported by campus dining operations offering organic, local and other healthy food options, can and probably will transcend beyond college.

Another research finding relevant to the restaurant industry is the perception of where to find healthy food items. In one college-based study, a strong majority of students (79%) indicated organic and locally grown foods were available in grocery stores and health food stores. Slightly less than 10% (9.7%) indicated organic products were available in restaurants. These findings indicate an opportunity for restaurants, through targeted external marketing and internal selling (servers aware of items that are locally grown and produced, increased visibility on menus) to reach this sizable market segment.

Georgia State’s School of Hospitality also conducted research on students this past spring with findings relevant to the restaurant industry. A survey of 364 students targeted their eating habits and price points for the three day parts: breakfast, lunch and dinner.

The study separated students who were commuters (did not live on campus) and those who lived in campus dorms, but the overall results were consistent for both groups. Of the commuter students, 45% indicated they would be willing to spend up to 50 cents more per meal for organic food with 30% indicating they would spend up to $1.00 more per meal. Ten percent of the commuter students indicated a threshold of $2.00 in their willingness to extend their consumer dollars for organic items. Students living on campus were more supportive of spending up to $.50 more per meal (71%) with lower percentages going up by $1.00 (20%) and $1.50 (9%) per meal.

The basic conclusion of this study was that a significant proportion of students will support their preference for organic items and even spend more — up to a point.

Millennial buying patterns, particularly focused on food and beverage preferences, will be an area for rich and relevant exploration for now and the future.
Debby Cannon, Ph.D., CHE, is Director of the Cecil B. Day School of Hospitality, located in the highly ranked Robinson College of Business at Georgia State University.

The school offers three different programs: A B.B.A. degree with a major in hospitality; a cer- tificate program (a post-baccalaureate program) in hospitality operations, event planning and meeting planning; and an M.B.A. degree with a concentration on hotel real estate. Visit the School of Hospitality’s website at www.robinson.gsu.edu/ hospitality, or call (404) 413-7615