Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
February 23, 2010

Economic Report:
Sponsored by:
Henny Penny
MAFSI Barometer Falls 12.8% In Q4, Matching Record Drop
NRA Performance Index Improves To Best Level Since Early 2008
NPD Reports U.S. Restaurant Units Declined In Second Half 2009
Mid-Atlantic, Colorado To Lead Sales Growth In 2010
Revised FER 2010 E&S Forecast Available

Regulatory Report:
Sponsored by:
Manitowoc Foodservice
Doggie Bags Still Okay In D.C.
Smoking Bans Debated In Kansas, Missouri
States Step Up Allergy Awareness
Obama Budget Boosts Food-Safety Efforts

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In This Section:
New Prototype Scales Down Chipotle
Burger King Plans 250 To 300 Net New Units, Opens In Russia
NRA Announces Kitchen Innovations Honorees
DQ Blizzards To Hit Egypt, Macau
Carl's Jr. Eyes Texas
Hatco Marks 60th Year With Corporate History

This issue's Economic ReportSponsor: Henny Penny
Regulatory ReportSponsor: Manitowoc Foodservice

Industry Report A.J. Antunes & Co.

New Prototype Scales Down Chipotle
Chipotle Mexican Grill is making no small plans with its new prototype store and the new, custom-designed equipment that fits into it. The prototype's smaller footprint has lower development costs but the same return-on-investment, creating a lower-risk strategy to help the Denver-based company fill in smaller markets. According to Steve Ells, Chipotle's founder, chairman and CEO, up to a quarter of 2010's new-store openings will be this new prototype, dubbed the "A Model." With up to130 new locations planned, that'll be close to 32 stores.

Chipotle enlisted a designer, best known for working with European chefs, who reduced both the size of the kitchen and its equipment costs by 25%. "We've gained labor efficiency, reduced energy consumption, and we now have the potential to do more volume out of this footprint," Ells told an investor conference in January.

One of the key elements, he said, was the switch from a grill to a flat, high-temp griddle known as a plancha, which Ells said has halved energy needs in cooking while producing better-tasting chicken and steak. Chipotle's Culinary Manager Joel Holland told FER Fortnightly the plancha has many advantages.

"We feel the food cooks better and more consistently," Holland said. "The planchas are easier to clean and give off less ambient heat in the kitchen, thus making them much easier/better to work around." Chipotle has also incorporated a new custom-designed tortilla warmer that improves product quality as well as throughput efficiencies. Other restaurant design elements include more efficient lighting, less clutter, and distinct, varied seating zones.

The chain will soon cross the 1,000-store threshold. Last year's 121 new-store openings grew Chipotle to nearly 960 stores, and Chipotle is on track for 130 new units in 2010. International expansion is part of the plan as well; the chain will build on what Ells called "the great success" of its new Toronto store and add two more locations there. Its first unit opens in London in April, and more sites are being scouted in that city, as well as in France and Germany. Rex Jones, Chipotle's chief development officer, is transitioning to work full time on international development.


Section sponsored by A.J. Antunes & Co.

Burger King Plans 250 To 300 Net New Units, Opens In Russia
The chain that broils its burgers says it's on track to open 250 to 300 net new units during fiscal 2010. Burger King, which grew its net store count by 95 in the second quarter, attributed up to 90% of its net restaurant increase to international segments. In the past 12 months, the chain opened a total of 321 net new restaurants, including its first two in Russia.

"We believe that our brand's entry into Russia exemplifies our company's commitment to diversifying our global restaurant portfolio and represents a milestone in our expansion strategy in the region," said John W. Chidsey, Burger King's chairman and CEO.

Both new stores are in Moscow. Under the agreement signed between Burger King Europe GmbH and Burger Rus LLC, additional restaurants are expected to open in Russia in the next few years. The BK brand has expanded its presence throughout Central and Eastern Europe in the last five years, entering Bulgaria, Czech Republic, Hungary, Poland and Romania. The entry into the Russian market comes only weeks after the opening in Beijing of the brand's 12,000th restaurant. Earlier in February, Burger King signed an agreement to acquire 35 restaurants in Singapore, which Chidsey said will become the center of BK development and product innovation for the region.

February sees the national launch of the chain's steakhouse burger, which required the full implementation of new batch broilers across the U.S. system. And by September, Burger King's new partnership with Seattle's Best Coffee will see the coffee brewed in approximately 7,250 units across the United States. The program will replace BK Joe.

Section sponsored by A.J. Antunes & Co.

NRA Announces Kitchen Innovations Honorees
The National Restaurant Association has named 16 equipment and supplies products as recipients of its annual Kitchen Innovations Awards. A panel of industry judges convened recently and scored products on a variety of criteria including significant technological innovation, cost-efficiency, environmental sustainability, value in answering an industry need, etc. We'll be taking a more in-depth look at these products in an upcoming FER Fortnightly as well as in our print sister publication, Foodservice Equipment Reports, but for now here's the list of honorees. Congratulations to all:

  • Activeion Cleaning Solutions, The ionator EXP
  • Alto-Shaam, The Alto-Shaam CombiTouch
  • Champion Industries, E2series Flight with Quad Rinse
  • Champion Industries, Heat Recovery Unit with Temp-Sure
  • Ecolab, Scrub N Go, Cordless Floor Scrubber
  • Henny Penny Corp., iControl for Evolution Elite
  • Hobart Corp., Ventless AM Warewasher
  • Irinox USA, Multi Fresh Blast Chillers
  • Manitowoc Beverage Systems/Manitowoc Foodservice, TRUfill Beverage Dispensing System
  • Merrychef/Manitowoc Foodservice, eikon Accelerated Cooking Oven
  • Middleby Corp., Middleby Marshall Mini WOW Oven
  • Middleby Corp., Southbend Ultimate Range
  • Multiplex/Manitowoc Foodservice, Blend-In-Cup Smoothie Machine
  • Oliver Packaging & Equipment Co., Mini Chip Slicer
  • Perfect Fry Co., Spin Fresh Centrifugal Fryer
  • Vegawatt, Vegawatt Cogeneration System

Section sponsored by A.J. Antunes & Co.

DQ Blizzards To Hit Egypt, Macau
With the exceptionally snowy winter in the United States, it's no surprise that a blizzard is on its way to Asia and the Middle East. Dairy Queen is opening its first locations in Macau and Egypt. Macau, like Hong Kong a special administrative region of China, has a tourist-driven economy in perhaps the world's most densely populated region. The Hon Hoi Group (International) Co. Ltd. will open two Dairy Queen units this year, including one expected to open this spring. The Hon Hoi Group has multiple restaurants in Macau, China and Canada, including Chinese, Japanese and Thai food concepts.

While Dairy Queen is a well-known presence in Asia—home to 530 of DQ's 652 locations outside the United States and Canada—it is newer to the Middle East. The chain will debut in Egypt this summer. Boraie Development, an Egyptian firm with businesses in New Jersey, will open the first DQ Grill & Chill restaurant in Cairo this summer; the standard menu will be supplemented with local favorites. Another 40 to 50 restaurants are likely to break ground in four or five other Egyptian cities. International Dairy Queen, headquartered in Minneapolis, has more than 5,700 stores.

Section sponsored by A.J. Antunes & Co.

Carl's Jr. Eyes Texas
In a state as big as Texas, there's plenty of room for expansion—at least that's what Carl's Jr. is figuring. After a November store opening in Leon Valley, Texas, set a record for the chain's highest-grossing first week on a new store, the chain's parent company, CKE Restaurants, has signed two franchise agreements that will add 31 Carl's Jr. units in Texas over the next nine years.

The two franchisees are both new to Carl's Jr. Frontera Star Foods will open 20 units in southeast Texas, including the Laredo-Brownsville area; Burger Barons—already franchisees of 10 Panera Bread stores in Houston—will open 11 units around Waco and College Station.

There are currently 34 stores open in the Lone Star State; 27 are franchised, seven company-owned. The company's master plan is to open another 352 units systemwide in the next decade; 100 stores would be company-owned, the rest franchised stores.

Section sponsored by A.J. Antunes & Co.

Hatco Marks 60th Year With Corporate History
The fast-food industry wasn't even in its infancy when Hatco Corp. started rolling out its first few pieces of foodservice equipment. Its 60 years of producing everything from food warmers to toasters to carving stations for customers in every market segment encompasses the history of the modern foodservice industry.

The Milwaukee-based company has put its story on paper, marking its 60th anniversary with "An Appetite for Life—The People and Products That Made Hatco Corp." The story details the company's growth, its product development, and the evolution of its corporate culture. The volume includes interviews with Hatco staff and customers, as well as legends and stories from Chairman David Hatch. Complimentary copies of the book are available by calling Claire Lievrouw at 414/615-2240.

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