You’ve probably have heard about California’s drought crisis. Even if you don’t live in California, as a restaurant operator, you will feel its effects.

The USDA has recently reported its Food Price Outlook for 2015 and 2016 and there are some important findings. It’s no surprise that many foods have increased in response to the Southwest drought as well as rainfall issues affecting Texas and Oklahoma. Notable price increases have appeared in beef and veal, which are now 10.9 percent higher year-over-year and 0.9 percent from May to June. The prices of pork, poultry, fats and oils have all increased, as well. The most volatile and significant price jump happens to be from the humble egg, partially due to the Avian Influenza outbreak, jumping from a whopping 17.8 percent from May to June.

At the same time, fresh fruits and vegetable prices showed a decrease in price in June.

With such volatility, it’s important to have a good strategy in supply chain management to help control your restaurant’s costs.

1. Go Veggie-Heavy: Abundant portions of vegetables can help to increase perceived value (and add great color) in a plate, while contributing to favorable plate costs.
2. Maintain Accurate Food Costs: With fluctuating commodity pricing, it’s important to keep and eye on actual food costs. Armed with this information, you can then decide if it’s necessary to increase prices.
3. Watch Your Inventory: Pilferage is a common problem in restaurants. In addition to ensuring that team members take inventory in pairs (for accuracy and speed), meat-heavy concepts should invest in a meat cage to keep high-cost items—such as steaks—out of reach of hourly employees.

For full information on changes to food prices as well as CPI forecasts, visit the USDA website.

Cow photo credit: Tony Fischer CC by 2.0

The FDA has just posted an important alert regarding cilantro from Mexico:  Cilantro fields from the Mexican state of Puebla are said to be contaminated with human feces and toilet paper. The discovery was found through the investigations by The Centers for Disease Control and state of public health officials due to recurrent outbreaks of cyclosporiasis in the United States: an intestinal disease that can cause severe diarrhea, fatigue, and other gastrointestinal illnesses. As such, the FDA is imposing an import ban on cilantro from this state. Read more about this news here.

If you operate a restaurant and have purchased what you believe to be cilantro grown in this area, discard the herb immediately and contact your purveyor for a refund or account credit.

From a long-term standpoint, is your restaurant prepared to handle the aftermath of a crisis? Let’s not forget about the Chi-Chi’s Hepatitis A disaster of 2003, which sickened hundreds and killed three.  While proper planning should be your first line of defense, consider what would be required of your operation if a problem were to occur. It’s key to establish a contingency plan, from a press, public relations and compliance standpoint, should a guest fall ill.

Cilantro photo credit: Qfamily CC by 2.0

There has been a lot of talk across the U.S. about the seemingly ever-changing minimum wage debacle. Just Tuesday, Los Angeles City Council approved the increase of minimum wage to $15 from $9 to be effective by 2020.

Los Angeles joins the rank with other major cities: San Francisco, Chico, and Seattle, which have also increased minimum wages to similar levels. The increase in wages will gradually occur over time, and business and nonprofit organizations with 25 or fewer employees have until 2021 to meet the increase.

This is going to have a huge impact for restaurant operators who already battle with slim profit margins. It further marks the importance of managing labor if restaurants want to remain in business.

Stay tuned for more updates on our blog about minimum wage hikes and what you can do about it.

Photo credit: torbakhopper CC by 2.0

As we continue to digest the news of Chipotle freeing its menu of GMO ingredients, Panera announced its plans to remove artificial additives and ingredients from its food. This new approach is extending past foodservice: Just last month, Kraft said it would no longer use artificial coloring or preservatives beginning January 2016. Pepsi similarly revealed its plans to drop aspartame from their diet beverages.

It’s no coincidence that more and more brands are changing their approach to food and ingredients. The “clean eating” movement, or, having a diet that is as close to natural as possible, is becoming increasingly popular among consumers. Brands are simply giving with their customers want, and these days, it’s all about nixing the bad stuff, which other concepts like LYFE Kitchen have made it a point to do.

If you are a restaurant operator or food producer, it might be time to rethink your ingredients as consumer sentiment continues to shift towards clean eating. Ask yourself the following questions of your food:

• Do my ingredients use fake food coloring?
• Can I remove artificial sweeteners from my beverages? Can I offer consumers alternatives?
• Can I find a source for minimally processed ingredients?

For more information on food additives, the FDA has a handy article here.

Of course, any change in menu can take considerable planning, time and potentially cost. For expert consultation, please contact Synergy Restaurant Consultants.

Panera photo credit: Mike Mozart CC by 2.0

These days, there are a lot of buzzwords when it comes to foods: From gluten free and paleo diets to organic and sustainable. But one word is of contentious debate and has all eyes looking : “GMO.” An acronym for “genetically modified organism,” or rather “living organisms whose genetic material has been artificially manipulated in a laboratory through genetic engineering, or GE. “ as defined by Non-GMO Project.

Walking down the grocery store aisle, shoppers find more and more products labeled  “Non GMO” as consumers are becoming increasingly choosey about the origins of their foods. And it hasn’t stopped at your favorite supermarket—Restaurants are becoming aware, too. Leading the way again in the large-scale sustainable food movement, Chipotle has recently announced they’ll only be cooking with GMO-free ingredients (the first national restaurant company to do so).

Should your restaurant follow suit?  That depends on a variety of factors. What does your company stand for? What are your core values? Does non-GMO align with your beliefs? Will your restaurant be able to withstand the costs associated with non-GMO cooking? If you’re looking for expert consultation, contact Synergy.

We look forward to see how the restaurant industry continues to change to meet the needs of its guests.

Chipotle photo credit: Mike Mozart CC by 2.0

Last week while on a Discovery Tour in Los Angeles with a lovely, well-known client we are not yet able to disclose, we spotted a restaurant human resources practice that’s been popping up across the country and Los Angeles in recent years: Service surcharges, up to 4.5%, that allow the restaurant to provide its employees with healthcare coverage.

A number of restaurants in San Francisco have been tacking on a dollar per guest long before Obamacare, but guests are divided in how they feel about the charge. At Huckleberry, our cashier told us that patrons regularly acknowledge the extra charge, some more vocal or miffed than others. But while a few have asked for the additional request to be removed, people are generally in support of the initiative.

While non-fans of the added cost are put in a precarious position, not wanting to seem cheap or heartless, much of the pushback and hesitation to contribute may be in the in-your-face reminder of the additional payment. Huckleberry prominently displays its extra charge at the register, while countless other concepts leave the added fee in the menu’s small print and as a line item when the check arrives.

While it’s possible (though tough) to work this cost into menu items, making the advocacy statement is a major component of restaurants who take this approach. Love it or hate it, healthcare surcharges are likely here to stay.

Shake Shack’s IPO price more than doubled today when it opened for public trading. With many pondering and dissecting the successes of fast-casual brands like Shake Shack, and other market leaders such as Chipotle and Five Guys, NPR’s The Salt correspondent Yuki Noguchi interviewed restaurant consultants for an article that aired today. Among those interviewed was Synergy’s Founder and CEO, Dean Small.

Listen (or read) to the end to hear Dean’s thoughts on the pressure that Shake Shack will likely feel to grow its operations.

Double Shack Shack Shack photo credit: Simon Doggett CC by 2.0

Millennials, those aged at approximately 18-34 years old, are the largest generation in American history. They’re confident, tech-savvy, connected, choosy, adventurous and their impact on the economy is of utmost significance. By 2017, this age group is predicted to spend $200 billion annuallyaccording to Advertising Age!

Consumer market research group, NPD Group, reports that Millennials continue to be “heavy users of restaurants.” NPD further notes that Millennials made over 14 billion visits to restaurants in the year ending June 2014.  It’s no surprise that this segment is highly influential. If you’re a restaurant operator, it’s time to start paying attention to this all-important crowd.  But you can’t expect to grab this group’s attention by merely tapping into social media, as QSR Magazine notes in this article.

Also known as “Generation Now,” “Generation Y” and “Generation We,” this diverse consumer base takes into account many factors when making a purchasing decision, from trusting recommendations from friends, to seeking unique dining experiences. So as a restaurant, what can you do to draw them in? The National Restaurant Association explores some ways to connect to this group in order to help restaurants expand their Millennial customer base in this informative piece, “Generation Now: Marketing to your Millennial audience.” Also be sure to read FSR Magazine’s, “What Millennials Want,” for more great tips.

Many national restaurant chains are getting creative to help curb the effects of menu price increases.  Brands such as Chipotle and McAlister’s Deli are using different menu innovation tactics to soften the blow of rising prices.  In an effort to maintain value for customers, Chipotle targeted specific proteins for price increase, for example, raising the price of steak more than chicken.  McAlister’s introduced sandwiches that offered more meat for more money, instead of scaling back on protein portions to keep prices down.  To diversify their menu, BD’s Mongolian Grill added a new menu category that offers cooked-to-order entrees and sides that will complement the restaurant’s signature build-your-own stir-fry offering.  This new segment will offer a variety of price points and give consumers more choice and flexibility in their budgets.

This week, Panera Bread Company announced a new food policy that aims to bring more transparency to its menu ingredients and make a positive impact on the food system.  Panera plans to remove all artificial additives and preservatives from its menu by the end of 2016, a goal aligned with the company’s commitment to serving clean food.  This is huge news for the fast casual industry and a definite step in the right direction.  Hats off to Panera!

For more information, check out this article from Nation’s Restaurant News.