In the News

Last year, Qdoba ranked fourth in sales for Mexican fast-food restaurants, behind Taco Bell at No. 1, Chipotle at No. 2 and California-based Del Taco at No. 3, reported Technomic, an industry research firm. Qdoba, with 510 locations in 2009, had sales of $436 million, the firm said.

"There have been so many Hollywood stars shot eating Pinkberry in Us and other celebrity magazines," said Darren Tristano, executive vice president at Technomic Inc., a Chicago-based restaurant research company. "It's a fast-growing, successful company, and everybody's talking about it."

Ruth's fishes for success with new restaurant chain, Orlando Sentinel, May 25, 2010

"I think short term, it's going to be challenging," said Darren Tristano, executive vice president of Chicago-based food-industry research and consulting firm Technomic.

"Long term, it's a strong brand, loyal customer base. ... They just have to be more contemporary. They have to build in the types of features that younger generations are looking for."

Technomic President Ron Paul said that KFC can rebound, but to do so, "they've got to find the right focus." "Obviously, going to grilled didn't seem to work very well, so they're going to have to try some other new products."

According to research group Technomic, retailers and food manufacturers have increased the quality, variety, convenience and availability of "meal solution products".

**

Retailers are focusing on a variety of key trends to help drive growth in these categories. Common marketing messages include 'restaurant quality at home', 'convenience without sacrifice' and 'better-for-you without effort', Technomic said.

Darren Tristano, executive vice president of Technomic, a Chicago-based food consultant group, said he also has not heard of other restaurant chains opening a nonprofit store. But he noted that there are a handful of small, independent cafes around the country that have a pay-what-you-can model. He pointed to some examples in Denver, Salt Lake City and Kettering, Ohio.

"This trend appears to be very European," he wrote in an e-mail.

"What we're seeing with Tropical Smoothie Cafe is a health-, wellness-, lifestyle-type of positioning, with fresh and natural ingredients, and food figures into that very strongly," said Darren Tristano, executive vice president of industry watcher Technomic Inc. "Now that you can get smoothies in so many places, smoothie players have to really think about what complements their offerings, what will keep people coming and what will help raise their check average."

Ron Paul, president of Technomic, a foodservice consulting and research firm, said fast casual with upgraded decor and a controllable experience can be an attractive part of the market.

"It has to be better than traditional fast food," he said. "The way you do that is through quality of the product, service enhancements and the kind of money you put in the store."

It makes sense, because "their model relies heavily on nostalgia" said Darren Tristano, executive vice president of Technomic, a Chicago food research firm. "It's going to drive people who really want that experience."

Still, Sonic should watch that consumers in its newer markets do not misconstrue the chain's skating push as gimmicky, Tristano said.

Bob Goldin, executive vice president of food industry consultant Technomic Inc. of Chicago, said the food service industry has been coping with reduced volumes over the past year. That is boosting consolidation among brokers to cut costs, similar to the trend that occurred in the retail food broker market in the 1990s, he said. "Brokerages traditionally have been pretty much independent local market companies," Goldin said, aside from a few regional firms. "It's changing, although there are still a lot of independent local market brokers."

Darren Tristano, exec VP of Technomic, the Chicago-based restaurant consultancy, put it this way: "Heavy, heavy marketing is going to drive results," he said. The real test will be how the chain is able to sustain the gains long-term."

Fine dining restaurants have been hardest hit during the downturn, followed by casual dining restaurants that specialize in pricier items such as seafood and steak, said Darren Tristano, executive vice president for Chicago firm Technomic, which tracks the restaurant industry.

**

Tristano said despite all the indications that consumers are dining out more, it may be a while before restaurant owners feel secure enough to start charging more. "They certainly don't want to scare them away at this point," he said.

Even more impressive, the turnaround is taking place at a time when the $22 billion pizza-delivery business -- quashed by the recession and vastly improved frozen-pizza technologies -- fell 3%, researcher Technomic estimates.

Melissa Wilson, principal at Chicago-based food industry consulting firm Technomic Inc., said day-to-day demands often leave little time for management to think long term.

"It's very valuable for catering companies to work on scenario planning," she said. "We don't know how long the market will be down, but what if it powers back dramatically?"

**

Wilson also recommends that growing caterers look to hire the sales and marketing talent laid off from fine-dining restaurants during the recession. "There are real opportunities for strategic hiring," she said. "Concentrate on growing the business while you're restructuring."

Darren Tristano, executive vice president of Chicago-based restaurant consultant firm Technomic Inc., said the bill will generate innovation as restaurants look to increase sales.

"We will see healthier items, portion control and downsizing of fats and calories," Tristano said. "And we will start to see these companies becoming more like the auto industry by offering a base item and then up-charging for add-ons."

Tristano said the change ultimately will create higher prices for consumers.

"Health care is definitely going to hit the bottom line of franchisees," says Darren Tristano, an executive vice-president of Chicago-based Technomic Inc. "Some of McDonald's initiatives might get stalled or pushed back as franchisees re-evaluate where they are going to invest their money."

Although KFC is still the chicken-category leader, the chain has lost nearly six points of market share since 2005 and two points last year alone, according to Technomic, to competitors who've gained by finding their core brand stories-whether it be chicken or regional roots-and pushing those hard in marketing efforts.

Sales at full-service restaurants were down about 8 percent in 2009, according to Technomic, a Chicago-based research firm. For Morton's, where $95 meals and business expense accounts are the norm, the decline was far more precipitous, with revenues off by nearly 20 percent last year. "They were definitely hit the hardest," said Darren Tristano, Technomic's executive vice president. "There was less money being spent entertaining clients and as a result, they really took the brunt of it."

**

"We are going to see more checks in the $20-$35 range -- what we would call upscale casual," Tristano said.

According to Chicago foodservice research firm Technomic, sales at the United States' 500 largest restaurant chains declined by nearly 1 percent in 2009, compared to a 3.4 percent increase in 2008. Full-service seafood chains' sales fell 4.2 percent.

"Eventually we were going to run out of places where we could put traditional Chili's units," said Higar, now director of research and consulting services for restaurant industry consultant Technomic Inc. of Chicago. "We wanted to be able to go into places where the consumer is."

The new format made it financially feasible for Chili's to go into communities with populations as small as 20,000, as opposed to 50,000 for a traditional restaurant. "We found out if you're the first (national chain) to get to a place, it's much harder when the second one comes in," Higar said. "If a Chili's got in before an Applebee’s, they had a real strong advantage."

"You've got culinary (minded) individual [sic] throwing out wicked flavor profiles and interesting items," says Kevin Higar, a director at Technomic. "You have to think: 'How is my item going to be different?'"

**

Kogi's success reflected the growing power of Facebook, Twitter and other social media to communicate with an audience. Higar says a moving target ups the cool quotient of a mobile restaurant, that many patrons like the challenge of finding it before the food runs out.

"You've got all these different dynamics, and for millennials, this sets up really well," he adds.

A recent Technomics [sic] study cited rising labor costs as a primary concern for 77% of operators polled. Labor costs can be reduced if a liquid coffee system is used, since no brewing/grinding/ emptying funnels is required. There is less waste involved, and the small footprint saves valuable counter space for other profit centers.

Red Lobster wants to differentiate itself from other casual dining chains while remaining relevant to its customers, said Darren Tristano, executive vice president of Technomic, a food industry consulting and research firm.

"It's important to contemporize," he said, and restaurants generally show a "nice uptick" in sales after such overhauls.

"It's like remodeling your home - you can expect to get money back through increased value in the home," he said.

"They are trying to emulate the look and feel of places like Starbucks and Potbelly," says Darren Tristano, an executive vice president at Chicago food consultancy Technomic Inc. "They have a lot of stores that need refreshing, and they are trying to appeal to those people looking to snack or graze."

Although KFC remains the largest player in the growing segment of fast-food chicken, its share continues to drop, according to Technomic. KFC's market share tumbled six full points since 2005 to 30% in 2009, while the category grew from $14.5 billion to $16.1 billion.

**

During the recession, KFC has stressed that its consumers rely on them for dinner, a meal they've increasingly been cooking themselves. But Darren Tristano, executive VP at Technomic, said that KFC's grilled chicken products, intended to recapture lost consumers, appear to have had a cannibalizing affect.

**

Mr. Tristano expects KFC's share declines to moderate, but noted that the competitive landscape is getting tougher. Chick-fil-A is entering new markets like Chicago, and Popeyes, too, is pursuing a growth strategy.

In a survey earlier this year by industry research firm Technomic Inc., 69 percent of consumers said they were dining out less often. When they do dine out, 86 percent of respondents said they were spending less in restaurants. Another 80 percent said they were stretching their dollars further by using coupons, skipping extras like a dessert or wine, or following discounts.

But despite those findings, Technomic president Ron Paul said focus groups conducted in January revealed a pent-up demand. Consumers are "tired of not being able to go out; they're tired of trading down or of not ordering dessert," he said.

Industry observers point out, in fact, that barbecue can be a difficult concept to chain. "Barbecue is really a niche opportunity," said Ron Paul, president of Technomic Inc. "Is it a menu item or a concept? Does the American public need a place for just ribs when you can get baby-back ribs at Chili's? It's a self-limiting category, and we've seen that it's tough to create a national chain."

Street names also can project a status as a neighborhood establishment rather than a big chain -- think of when Starbucks named its Seattle coffeehouse/bar spinoff 15th Avenue Coffee and Tea last fall, says David Henkes, VP of Technomic, a Chicago-based bar-restaurant consulting firm.

More than half of Americans have a snack at least once a day, but 76% have made changes to their snacking habits in the prior two years, according to Technomic. More than a third (35%) are selecting healthier snack options than they did two years prior, 21% are snacking more frequently than they used to, and 19% have broadened their definition of snacks to include more types of food.

In its fifth deal in the last six months, Roark Capital Group, an Atlanta-based private equity firm specializing in franchising, announced today that its affiliate has acquired Wingstop Restaurants, Inc., the chicken wing chain that was recently recognized by Technomic as one of the 10 fastest growing concepts in the United States. Having sold over 2 billion wings since being founded in 1994, Wingstop generated more than $300 million in system-wide revenues in 2009.

"They are trying to emulate the look and feel of places like Starbucks and Potbelly," says Darren Tristano, an executive vice-president at Chicago food consultancy Technomic Inc. "They have a lot of stores that need refreshing, and they are trying to appeal to those people looking to snack or graze."

Some of these remodels, however, have slowed because of the poor economic climate, said Wade Hanson, director of research and consulting with Technomic, a Chicago food industry firm.

**

In 2009, some supermarkets saw 6 percent to 8 percent increases in prepared food sales, said Hanson of Technomic. He characterizes prepared foods as ready-to-heat (in a microwave) or ready-to-eat meals.

"Any day that a chain or restaurant feels they can differentiate, they're going to try to take advantage of that," said Darren Tristano, executive vice president of food industry consulting firm Technomic. "It's like how Hallmark created holidays to sell cards. Restaurants want to take advantage of holidays to offer specials and discounting."

Tristano said there is still a very high degree of discounting and coupons in the restaurant world, despite increased optimism about the economic outlook.

He said tax day is a good day to offer discounts, since it's something a lot of people can identify with. "Unlike some people, I'm not getting a refund. I have to pay taxes this year," Tristano said. "In my opinion, bars should be offering free drinking on tax day!" he joked.

Nationally, more people are dining at moderately priced restaurants, instead of high-end eateries, said Darren Tristano, executive vice president of Technomic, a Chicago food industry research firm.

But the fast-casual segment into which Panera falls was the one bright spot. That category was up 4 percent last year and up 6 percent the year before.

"This is a category that has grown, expanded, and increased sales in the last 10 years at a very fast pace," said Darren Tristano, executive vice president of Technomic, a Chicago-based food consultant group. "And it's being led by Panera."

With the right mix of price, experience and quality, many families are "trading down" from more traditional sit-down restaurants and opting to eat at places like Panera, Tristano said.

Sales have been hammered for some of the nation's most well-known chains. For instance, Applebee's same-store sales in 2009 were 98.6 percent of what they were in 2000, while Ruby Tuesday's were only 89.5 percent, said Ron Paul, president of Technomic Inc., a Chicago-based restaurant consulting firm. Famous Dave's clocked in at 97 percent by the same measure, he said.

**

The U.S. unemployment rate is still stuck at nearly 10 percent, and many economists don't see that changing any time soon. Technomic's Paul said he doesn't expect a real restaurant recovery until unemployment significantly declines.

"Consumer confidence and unemployment correlate with the uptick and downturn of restaurant industry sales. The current degree of optimism on the state of the economy and the number of jobs created or lost have a significant impact on consumer spending in away-from-home dining. When the Consumer Confidence Index appears to be moving back towards 80 and unemployment continues to steadily decrease, we can expect a return to more normal restaurant spending patterns."

--Darren Tristano, executive vice president, Technomic Inc., Chicago

A new food industry study by Technomic, Inc., found that 36% of consumers are celebrating at home more often than a year ago, while 40% expect to do so over the next 12 months, even with the economy on the rebound.

According to research firm Technomic, fast-casual better-burger chains were a $1.4 billion category in 2009, up 21 percent in unit counts compared to 2008. Strong unit growth also helped to push sales up 18 percent in 2009, a year we all know was none too kind to restaurant expansion.

"There's a lot more opportunity for better burgers to grab market share," said Darren Tristano, executive vice president of Chicago-based research firm Technomic. "We'll continue to see a high level of growth over the next two or three years."

**

For example, Five Guys jumped from 360 to 547 units, a 52-percent increase, during 2009, Tristano said.

"Five Guys could hit the 1,000 count faster than any chain in history," he said.

Despite competition from such heavy hitters as Chipotle and Qdoba, the fast-casual Mexican segment is a good place to be, said Ron Paul, president and chief executive of Technomic, a Chicago-based market research firm.

"Americans, not just Latins, like the food and are looking for more options," he said. "Fresh is definitely seen as healthy. It certainly is looked upon as a trade-up from quick serve, and people are willing to spend considerably more for it."

"As the U.S. economy remained in a recession, restaurant operators continued to face a host of challenges, including cost pressures followed by declines in consumer dining demand," Ron Paul, president of Technomic, said in a statement.

Friday (36%) and Saturday (24%) are the days when households most commonly order restaurant food for delivery, with Wednesday a distant third, accounting for 13%, according to Technomic. While 42% order delivery consistently throughout the year, 33% order more often in the winter.

Food-industry research firm Technomic last week said Jimmy John's was the fourth-fastest-growing food chain in the country in 2009, with $602 million in sales.

"Technically, we're not in a recession anymore, but that's certainly not translating back into consumer spending either on an overall level or specific to going out to bars and restaurants," says David Henkes, vice president, on-premise practice leader, Technomic Inc.

**

"People go to bars for different things than they go to restaurants," he says. "They're more likely to cutback on that dining occasion because that's something they can replicate at home or get meal solutions from supermarkets. There's still that socialization aspect of going out to a bar or hanging out with your friends. It's a little more resistant to the downturn; it's not immune."

The USDA reports cheese production hit a record 10 billion pounds in 2009. And select artisan cheeses and other upscale comfort foods are one of the Top 5 menu trends for 2010, says a study conducted by food industry research firm Technomic.

Such interest, especially in rough economic times, is not new, said Ron Paul, a restaurant analyst and CEO of Technomic, a firm that tracks the food industry. Some are fed up with the corporate life, he said. And in such times, franchisee sales tend to increase. Plus, buying into a franchise with a known brand can be a safer bet for many entrepreneurs looking for a safer bet.

According to recent data from research firm Technomic Inc., 35 percent of consumers say the economy has had a "major impact" on their lives, 55 percent said it had "some impact," and only 10 percent said it had "no impact."

"Job insecurity is a major overhang on the industry," said Ron Paul, Technomic's president and chief executive. "Employment definitely is troubling consumers."

Shultz Hartgrove, Quiznos' senior vice president of convenience development and 20-year convenience industry veteran, sought input from customers and convenience store partners in strengthening Quiznos' product and partner offering.

"According to a Technomic Breakfast Report, breakfast is projected to be a $93 billion business and is absolutely crucial in the 24-hour convenience store environment, as more than 35% of convenience store food business is in breakfast," said Hartgrove.

Switching to a new product or source poses a risk for these chains, because customers could perceive it as lower quality, said Darren Tristano, executive vice president of food industry research firm Technomic Inc.

"It's a question of if you are going to be those that opt for a lower price and sometimes lower quality products or if you are going to maintain the level of quality your customers expect," he said.

Continued consumer frugality, amid worries over job losses and underemployment, recently prompted Technomic Inc., a prominent restaurant industry consulting firm, to revise downward its projections for 2010 industry sales. Instead of its prior estimate of a 0.8 percent decline from 2009, it now forecasts a 1.6 percent drop.

Jazzman's Cafe and Bakery, the largest and most popular restaurant concept from Sodexo's retail restaurant development team, Retail Brand Group, has been named a Top 25 Bakery Cafe Chain by Technomic Information Services.

Jazzman's ranking is ninth in the overall listing of top chains and third in the total number of cafe units in the United States.

When it comes to its french fries, Jack in the Box seems to have taken an adage to heart: If at first you don't succeed, then fry and fry again. And fries, more than burgers, are cash cows.

They are low-cost, high-volume and have better price points, explained Bob Goldin, executive vice president at Technomic Inc., a restaurant consulting firm. While dollar-menus are littered with burgers, a large order of fries can cost $2.

"It's a pretty perfect profit story," Goldin said.

"Caribou is more of a Midwestern brand, but retail sales is a great way to expand their national presence," said Darren Tristano, SVP at food service consultancy Technomic.

Consumer perception of what constitutes fast-food has changed, researcher Technomic said in a recent study. It said traditional fast-food joints that serve burgers and french fries face increased competition from a new breed of operators like Panera Bread

Although away-from-home beer sales will be down about 1.8 percent this year, predicts Technomic, the category will still suffer less than other alcoholic beverages: wine sales will be down 6.7 percent; spirits down 2.1 percent, according to the Chicago-based research firm. And while wine drinkers are trading down in price, that's not happening as much in the beer category, believes David Henkes, Technomic's vice president and director of on-premise practice. "Craft beers have a dedicated drinker that isn't necessarily willing to trade down," says Henkes. That's one reason why craft brews are selling better than the category overall.

Darren Tristano, executive vice president of Technomic, believes breakfast is still the most underpenetrated daypart. "There's an opportunity to draw in more customers with more ethnic selections, healthy offerings, like oatmeal, yogurt and fruit, and higher quality, more innovative grab-and-go items," he says.

"The price wars are very real and will intensify in 2010," said Ron Paul, president of Chicago-based restaurant consulting firm Technomic.

**

"Expect to see a fresh, premium or high-quality spin on familiar, humble foods, such as artisan cheeses used in macaroni and cheese," the firm said in its forecast of 2010 food trends.

Interest in premium burgers and artisan sandwiches, for example, ramped up in early 2009. Technomic said restaurants will continue to place an "even greater emphasis" on providing diners with hearty, custom burgers and sandwiches at value prices.

Sales at full-service restaurants (counting only food and nonalcoholic beverages) are down an estimated 8 percent this year over last, according to Technomic, a Chicago-based food industry research and consulting firm. Though there are signs of improvement -- sales were down 6.3 percent in September versus 12 percent in August -- Technomic says restaurants are experiencing "perhaps the worst market conditions the restaurant industry has seen in nearly 20 years."

Rocky Top is among the few restaurant groups opening new restaurants now, said Bob Goldin, executive vice president for Chicago firm Technomic, which tracks the restaurant industry. Technomic estimates that more than 15,000 restaurants will have closed in 2009, accounting for more than 2 percent of the overall industry.

The foodservice consulting firm Technomic has projected that U.S. restaurants and bars will finish 2009 at just over $328 billion in sales, which would be a 3.5 percent drop from last year. The firm estimates that sales will decline by another 0.8 percent in 2010.

"You're definitely going to see a lot more discounting," said Ron Paul, president of Chicago-based Technomic. "That's about the only weapon that restaurants have right now to bring in traffic."

**

Paul said restaurant chains in the coming year will continue to counter dropping sales by cutting their operating costs so they can maintain profits with lower foot traffic. Some chains not closing restaurants could sell some off to franchisees to reduce management costs, as Brinker International recently did with some of its Chili's restaurants.

Credit will remain tight, Paul said, limiting expansion opportunities for locally owned restaurants and corporate franchisees. Banks will continue to renegotiate loan terms with some struggling chains, and shopping center landlords will be working out leasing deals to prevent some locations from closing.

"It's been an abysmal year for the restaurant industry," says Melissa Wilson, principal at the research firm Technomic.

**

"The sheer number of restaurants now with a presence in the catering space is amazing," Wilson says. Catering is a $33 billion opportunity for the industry, she says. People may be eating out less often, Wilson says, "but there's certainly no embarrassment about bringing a restaurant platter to a potluck dinner."

The latest downturn hit high-earners and big-spending companies unusually hard, noted David Henkes of restaurant consultancy Technomic. Before the current "top-down" crisis unfolded, he observed, "Fine dining was not viewed as vulnerable to recession."

Ron Paul, president of Technomic Inc., a restaurant consulting firm, said sky-high unemployment finally caught up with McDonald's, which was the leader in fast-food breakfasts. If people don't have a job, they won't stop at the Golden Arches for a pre-work meal, Paul said.

A new survey by market research firm Technomic shows that 88 percent of consumers plan to eat their holiday meal at home, or at a relative's house.

Ron Paul, president and chief executive of Chicago-based research firm Technomic Inc., said selling discounted breakfast items should drive traffic in a day-part that has slowed down considerably and should build sales by driving purchases of other higher-margin items.

**

"McDonald's has always kind of owned breakfast, and this is an attempt to hang on to it and get their competitors where they're vulnerable," Paul said. "It shows that they still want to be successful in coffee. They've got to make their franchisees happy--it cost a lot to get McCafe into the stores, and they want the return on their coffee investment."

A recent study from Technomic Inc. found that consumers are more interested in buying premium coffee now than they were two years ago. According to the survey, 34 percent of respondents said they preferred buying premium coffees, compared with 29 percent who preferred premium coffee drinks in 2007.

In a report earlier this year Technomic Inc., the Chicago based research company, said, "Fast casual was once thought to have limited potential for continued growth, however, today this subsegment seems ideally positioned for the new economic and social climate. These restaurants give casual-dining consumers an opportunity to 'trade down' to lower-priced, yet high-quality, fresh food, and allow quick-service customers a way to 'trade up' to a 'third-place' environment that offers affordable food quickly at a cost that is usually only about $2 to $4 more than that of typical quickservice venues."

Breakfast has become a "hotbed of activity" as restaurants realize that consumers pulling back on spending still are willing to eat a meal out, research firm Technomic Inc. said in a recent study.

**

Chicago-based Technomic found that consumers increasingly want breakfast foods for lunch and dinner, like Eat'n Park and other restaurants offer. "In this type of economy, people are seeking out more comfort foods like breakfast all day," the firm's Sara Monnette said.

"It's an impulse purchase that's not all it's cut out to be," said Ron Paul, president of Technomic Inc., a Chicago consumer research group.

"Supermarkets are trying to get part of the business," pointed out Darren Tristano, executive vice president for Chicago-based food service consulting firm Technomics [sic]. Grocery stores offered more roast chickens and stuffed peppers, while restaurants began promoting takeout options and even building special entrances and counters for takeout customers.

**

Pickup windows have been tested by other chains, Mr. Tristano said. While it's not an entirely new idea, he said it seemed to be a good option for family-style restaurants.

Also helpful have been improvements in packaging in recent years, making it easier to send home different types of dishes, he said. "At least it doesn't leak out over the seat of your car when you're driving home."

"It's a tough economic situation out there, and the fast-food pie has shrunk," says Ron Paul, president of Technomic, a consulting firm. Because of high unemployment, he says, consumers are increasingly hitting grocery stores and "turning on their ovens again."

Chipotle, based in Colorado, is second only to Taco Bell among the largest fast-casual Mexican chains. It had sales of $1.3 billion last year, growing by 20.7 percent, according to research firm Technomic. It has more than 900 locations in 33 states, with more than 100 new stores planned next year.

"Their moderately priced, high-quality Italian food in a romantic upscale setting has provided them with a strong niche in which to expand and succeed," says Darren Tristano, executive vice-president at Chicago-based food-industry consultant Technomic Inc.

Darren Tristano, executive vice president at Technomic Inc., noted that being up even 1 percent in 2009 "is an indicator of doing something right," but wondered about the options for the chain to grow outside New Hampshire.

"Most growth today is in sports bars, and the boomers and even Generation X aren't spending their dollars," Tristano said. "If they were to grow one unit at a time that would make sense, but casual dining is finding it somewhat difficult to grow in this economy."

The limited-service hamburger segment grew by 4.1 percent to $64 billion in 2008, the latest available numbers from Chicago food industry research firm Technomic Inc. That's faster than the 3.2 percent growth of the limited-service restaurant segment in total.

**

"If you are trading down, you are wading to something you are accustomed to," said Darren Tristano, an executive vice president at Technomic. "There has definitely been a demand by consumers and a resulting growth in what we are calling the better-burger category."

"There are big opportunities for trendy, well-known chefs or brands to open," said Darren Tristano, an executive vice president at food industry research firm Technomic Inc. in Chicago. "But a lot of success will depend on whether they can continue to be relevant to the customer."

"I think companies, even the ones that are doing well, think it's inappropriate to splurge in this environment where unemployment is growing. It sends the wrong message," said restaurant consultant Bob Goldin, executive vice president of Technomic, a Chicago-based restaurant consulting firm. "Even our own company went from Gibson's, a high-end steakhouse, to Maggiano's (a moderately priced Italian restaurant chain).

"The six weeks leading up to and including New Year's is the difference between profit and loss for food establishments, so they're discounting and dealing. It's make-or-break time."

Chicago market research firm Technomic recently asked mothers of children aged six to 12 how their families' eating behavior had changed at different restaurant types during the 12 months through July 2009. More than half of respondents (51 percent) reported that their families cut back on visits to or spending at fast casual restaurants. And the numbers are even worse at family style (52 percent cutback), casual dining (55 percent cutback) and fast food (59 percent cutback) restaurants.

All-day breakfast service is a growing market in North America, said Darren Tristano, executive vice president of Technomic Inc., a Chicago-based industry consultancy. A recent survey by the company shows that 36 percent of consumers will order breakfast items throughout the day if a restaurant makes them available.

**

"The convenience factor of quick-service and delivery is definitely going to give them (Eggfast) a leg up," Tristano said.

Technomic notes greater reluctance on the part of consumers to shell out for pricey fresh produce and organics.

This year, North American consumers are expected to spend 48% of their food budget on meals eaten away from home, down from 50% in 2008, according to Technomic, a food-industry consultancy in Chicago.

"All the research we've done shows that business is really soft in bars and restaurants," said David Henkes, vice president with Technomic, a Chicago-based restaurant-industry consulting group.

It's hard to quantify the busiest nights at bars, Henkes said. But he suspects the night before Thanksgiving is a big one nationwide. After all, he said, not everyone is a sports fan. "I would certainly put it as one of the top five bar nights of the year," he said.

Technomic, a leading research and consulting firm for the restaurant industry, says takeout food has been growing about twice as fast as the overall restaurant industry.

"His experience with the franchise model is probably the main reason why Potbelly brought him in," says Darren Tristano, an executive vice-president at Chicago-based food industry consultancy Technomic Inc. "This definitely will be a shift in their culture."

**

In addition to franchises, Potbelly plans more company stores, says Rick Trebilcock, senior vice-president of marketing. He declines to provide specific targets, but Mr. Tristano notes that Potbelly has opened about 40 restaurants annually in recent years. He estimates that each Potbelly store does about $1.1 million in sales annually, and says the chain could add 30 or 40 franchise stores a year. Potbelly won't disclose total revenue, but Mr. Tristano's per-store estimate points to roughly $245 million in annual sales.

Darren Tristano, executive vice president of Technomic Inc., a Chicago-based food industry consulting group, said McDonald's franchise owners have wide discretion in how they decorate their restaurants as long as brand elements like the golden arches are present.

"There is a lot of flexibility," he said.

When Del Monte Foods appointed Bill Pearce as its first CMO in May 2008, the goal was to deliver category-changing marketing that would drive the organization forward, the company said at the time.

**

Bill Pearce: “When you look at the Technomic [restaurant and food industry research firm] data, which tracks the number of meals at home [and out-of-home], the at-home meal occasion is just as relevant as it was 12 months ago. One of the biggest impacts of the recession is families spending more time together and wanting more quality time [often via a meal] together.”

Total industry alcohol sales are projected to fall 2.5 percent in 2010, with fine dining taking the hardest hit as sales in the segment tumble 10.4 percent, according to Chicago-based Technomic Inc. Alcohol sales are forecast to drop 6.8 percent in the casual-dining segment, 6.1 percent in lodging, 5.0 percent in casinos and 2.0 percent in concessions circles. Technomic research shows that only the bars and nightclubs category, including sports bars and neighborhood taverns, is expected to enjoy a slight uptick in 2010, with growth of 0.6 percent in nominal terms, or before adjustments for inflation.

They've always been really customer-centric," said Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant consulting firm. "They try to provide high-quality service to match the quality of the food, and I have to say, the reviews they get are fantastic."

The result, Tristano said, is Chick-fil-A's growth. He predicts sales across the industry to be flat or down for this year.

While the cafeteria and buffet segment has faced slumping sales for years, Furr's sales are trending up, according to Technomic, a Chicago restaurant research firm.

Even among the relatively healthy fast-casual restaurant segment, Mexican concepts grew better than most, with 11.9 percent expansion last year, according to food service consultant Technomic.

Donatos, with $177 million in sales last year, is the country's 13th-largest pizza chain, said Darren Tristano, a spokesman for Technomic Inc. Pizza Hut, the leader, had $5.3 billion in sales last year.

"I think the whole bakery cafe been a successful niche," said restaurant consultant Bob Goldin of Technomic. "Corner Bakery is an established company that's performing well and has a winning formula for success in other markets. There's room for more than Panera."

Data released in the recent 2009 Technomic Future of Fried Foods study has estimated that approximately seventy-five percent of leading chain operators have switched or are in the process of switching to trans fat-free cooking oils.

New software would update the complicated abbreviations of the touch-screen register with simply labeled, icon-like pictures of food. The system is easy to learn and may cut as many as 10 seconds off workflow, said Laurie Gilbert, the center's director.

That saved time may squeeze another five cars in the drive-through lane per hour, said Darren Tristano, executive vice president at Technomic.

McDonald’ currently aims to serve most customers within 90 seconds of taking their order.

A recent study by Technomic Inc. found that 50 percent of consumers said receiving products in green packaging made from biodegradable or recycled material is important to them when choosing a restaurant.

''You ask people in surveys why they chose one casual dining chain over the other and they'll say, 'because the line was shorter,' '' says Ron Paul, the president of Technomic.

Americans are cutting back most on dinner at restaurants, down 6.8% compared to the prior year, and least on lunch out, down 5.3%, according to Technomic.

In a recent poll, 85 percent of respondents said that they eat desserts once a month or more, which is the same amount of times they consume hamburgers, and 0 percent said they never eat desserts, said Melissa Wilson, a principal of the Chicago-based market research firm during the recent Menu Trends & Directions conference held here.

"It sounds to me like they're looking for some fresh perspective and insights from the marketplace and not the just from the coffee and doughnut space," said Technomic's Darren Tristano. "After awhile, getting a fresh perspective on a pretty old brand can't hurt."

"This environment has created a very high level of competition, and real winners are the ones who can partner with the restaurants and add value for them," says Darren Tristano, an executive vice-president at Chicago-based food industry consultancy Technomic Inc. "Selling restaurants on new opportunities is critical, and success depends on people like (Ms. Bird)."

After four years at the helm of McDonald's venerable marketing machine, Ms. Dillon has driven share gains and international expansion, and continued to grow the business as the rest of the fast-food industry has slowed and declined.

**

According to Technomic, McDonald's share of the burger category has grown from 43.6% to 46.8% since 2003.

According to Technomic, McDonald's share of the burger category has grown from 43.6% to 46.8% since 2003. In measured-media terms, McDonald's spent $814 million in 2009.

Technomic recently reported that in the past three years 21,425 units have dosed in the United States, and 84 percent of those were full-service operations. That reflects the worst three-year contraction in foodservice history.

"Conspicuous consumption is out," said Technomic's Kevin Higar. "It's chic to be cheap."

**

Today's consumers take pride in being frugal, he added, so restaurant operators need to respond with promotions that ensure they feel they're getting their money's worth.

Some 70% of respondents to a recent Technomic Inc. survey said healthier foods are increasingly difficult to afford.

"People are attempting to economize, especially away from home," says Bob Goldin, executive vice president at Technomic. "Value is what counts to consumers right now and unfortunately, in the minds of many consumers, a lot of these lower-priced options are just not as healthy but they're still buying them."

Besides battling the economy, Max & Erma's also has faced strong competition from other casual-dining chains, such as Applebee's and Chili's Bar and Grill, said Ron Paul, president of Technomic, a Chicago restaurant and food research firm.

"They've been struggling for quite a bit," he said. "That whole category of bar-and-grill casual restaurants have all become kind of look-alike, and not offering consumers anything to differentiate themselves. With Max & Erma's being the smaller player, they didn't have the marketing muscle the others have.

Dunkin' Donuts has a 72 percent share of the donut market compared to 8 percent for Krispy Kreme and 5 percent for Tim Hortons, according to food industry consultants Technomic, Chicago.

"Tim Hortons faces a big challenge from the established players in a more competitive market, particularly from brands like Dunkin' Donuts in the East," said Technomic president Ron Paul. "Tim Hortons' brand image is somewhat limited here and it's not like everyone's been to Canada and knows them as a well-established brand."

According to Technomic Inc., the Chicago-based foodservice research and consulting firm, ready-to-eat or ready-to-heat prepared foods in supermarkets generated about $14.7 billion in sales in 2008. Between 2006 and 2008 supermarket sales of those items rose 7 percent to 8 percent annually, Technomic said.

"It's just a modest development, not really that significant," said Ron Paul, president of Technomic Inc. "As a restaurateur I wouldn't give it a second thought."

Though bar-cafes such as the Map Room and Katarina's have championed the idea for years, Chicago seems to be further catching on to a trend seen in Europe and even the East Coast, said Darren Tristano, executive vice president of Technomic Information Services, a food service consultant based in Chicago.

While people drink coffee throughout the day, they mainly buy it in the morning and afternoon, Tristano said.

"When you think of a cafe in the U.S., you think breakfast. In Europe, when you think cafe, it's a place to have coffee and have a drink," he said. Offering alcohol on menus and shifting more to a wine bar at night can help generate sales revenue, he said.

Restaurant analysts at Technomic Inc. say sales at premium burger concepts such as Smashburger -- which touts fresh ground beef, gourmet bread and other trendy attractions -- was the prime driver behind the 4.4 percent sales growth in all U.S. burger restaurants last year.

Smashburger led the Top 50 U.S. burger chains in growth, with revenues up more than 150 percent over 2007.

That downturn has been brutal on restaurants as the industry is expected to see its second consecutive year of sales declines in 2010 -- the first time that's happened since Technomic Inc., a leading market research company, has tracked the food industry. If Technomic's projections for 2010 hold true, the 2008-2010 period will mark the weakest period in food-service history.

"It began about 10 years ago with sliders," said Darren Tristano, author of a new burger study for restaurant industry think tank Technomic Inc.

He decided this was no fad when he saw the Ritz-Carlton serving White Castle/Krystal-style miniburgers hand-pressed from filet mignon in 2002.

Jaw-dropping food specials drive traffic into restaurants and bars, especially during off-peak periods like happy hours, said Darren Tristano, executive vice president of Technomic Information Services, a food service consultant based in Chicago. Even though customers can be lured to establishments by the word "free," they might end up still spending money, he said. "Because you're spending less getting food for free, you're willing to spend more on beverages."

"They've narrowed their message and gone after value; appealing food at appealing prices," said Ron Paul, president of Technomic, a food-service consulting firm in Chicago. "They're using television very effectively to communicate to customers that there's a real reason to go."

Tilted Kilt puts a new twist on the basic idea behind Hooters, but it's not a "copy-cat" concept, said Darren Tristano, executive vice president of Technomic, a Chicago-based restaurant research and consulting firm. The outfits, Celtic theme and menu are different, he said.

Tilted Kilt faces competition from Hooters and other sports bars, Tristano said. The chain will have to produce quality food to draw people back, he said.

Ron Paul, president of the food consultant company Technomic Inc., said he thinks the redesign shows just how determined Burger King is to compete with "fast casual" restaurant chains such as Chipotle, Starbucks and Panera, which customers think of as a cut above typical fast food.

"People in the fast-food category are recognizing they've been losing customers to the fast-casual player," he said. "What this sounds like is an attempt to get that dining-in business back by making it an attractive environment."

The new buzzword when it comes to attracting restaurant diners is flat-out, ungarnished "save." It's a subtle shift from getting your money's worth to actually saving money, said Tom Miner of Technomic Inc., a restaurant research firm in Chicago, who spoke to food service professionals at a recent Foodservice News forum.

Version 6.0 enables customers to approve pricing, rebates and promotions via mobile devices including Blackberry[R] and iPhone(TM). This enables sales, marketing and finance to approve deals from their mobile device while on the road, without logging into the application, reducing the time required to approve deals and facilitating greater customer responsiveness.

**

Gary Karp, Executive Vice President at Technomic, commented, "This latest version of FORGE(SM) promises more efficient workloads for sales, deduction processing and others involved in trade processes. Greater efficiency is necessary at a time like this in order to handle the increased volume of discounts manufacturers are evaluating and processing given the economic environment. Customer responsiveness is always important but becomes even more vital when customers are pitting manufacturers against one another, and the features in version 6.0 help manufacturers' front-line representatives quickly evaluate opportunities and respond to customers."

It will take more than just a buyout for Food Lion to increase its sales, said Bob Goldin, executive vice president of Technomic, a food industry consultant. It will have to invest in its stores and make a better connection with the customer, he said.

"You have to make it a more pleasurable shopping experience," Goldin said.

"They came out with pasta last year and had a nice bump in sales, but over time you wouldn't expect the trend to continue; you have to go on to the next best thing," said Darren Tristano, exec VP at restaurant consultant Technomic. "As they get into winding down on a growth standpoint from pasta, it's kind of put them in that position. And if you're looking for someone to blame, why not blame the advertising agency that you pay? It's an easy way to point the finger."

According to the latest data from Technomic Inc. and sponsored by the International Foodservice Manufacturers Association, sales at full-service restaurants, which include casual-dining and upscale-dining concepts, will continue to post the largest sales losses in years ahead. In 2009, full-service segment sales are expected to fall 8 percent on a nominal basis, which includes menu price inflation, and 10.2 percent on a real basis, which adjusts for inflation, to $165.7 billion. In 2010, full-service segment sales are expected to drop 4.1 percent on a nominal basis and 5.5 percent when backing out menu-price inflation.

"Most successful pizza chains have staked out highly defined market positions that allow them to stand out from the pack," said Darren Tristano, Technomic executive vice president.

**

Tristano said that big pizza players Pizza Hut, Domino's and Papa John's aren't standing put, either. Pizza Hut has moved toward more catering with its Tuscani Pastas line, Domino's is differentiating itself with Oven Toasted Subs and Pasta Bread Bowls, and Papa John's continues to market its "Better ingredients, better pizza" positioning.

Still, Tristano noted, the big three's biggest opportunity for unit growth will be outside the United States. "When you hit the level of maturity that those brands have, you have to look to other ways of growing," he said. "As a result, they've been growing much more internationally, playing in a global market instead of just the U.S. market."

"Convenience is a No. 1 driver in many eating occasions," says Ron Paul, president of Chicago-based Technomic, a foodservice research and consulting firm. And when the economy improves, consumers will only expect their experiences to improve along with it, he says.

**

Today "less-tolerant" consumers expect "to be greeted properly," says Paul, noting that it's not OK, for example, when guests are told to wait for a receptionist who chats on the phone or clears a table. Diners don't what [sic] their time wasted.

"So service has got to be better or you will lose them," Paul says. "We want to be seated promptly and get someone to the table soon. We don't want the salad dressing on the side after we finish the salad. We want everything now."

"You can even get Jay Leno an hour earlier now," he says, noting that television viewers no longer have to wait until 11 p.m. to see the comedian. That's the "impatient" culture we live in, Paul adds.