In This Section:
KFC Feels The Heat, Intros Grilled Chicken
Jack Cuts Water Use At HQ In Half
McDonald's McMuffin Creator Dies At 89
BK's Plan For Nothing But Whoppers No Fish Tale
Pressure On Food Prices Not Easing Anytime Soon
FMI Offers Sustainability Summit In June
This issue's Economic Report Sponsor: Manitowoc Foodservice Group
Regulatory ReportSponsor: Enodis
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KFC Feels The Heat, Intros Grilled Chicken
Feeling the heat not only from the usual market forces but also health-conscious consumers and regulators. KFC announced it's testing Kentucky Grilled Chicken in six markets with plans for a national rollout next year.
Under (or over) fire for high fat and sodium content in its menu, Atlanta-based KFC has been on a recent tear to evolve and reenergize its image. It switched to trans fat-free oil for its fried chicken and reduced the sodium level in many of its items. The new grilled chicken, however, is a dramatic departure from its roots, and one the company is betting the farm on. New packaging features KFC on one side and the new "KGC" on the other.
And where there's new grilled chicken, there's new kitchen equipment, too. Several years of testing and tweaking led KFC to "grill" the chicken not with a conventional grill, but with a unique new convection oven into which a grill surface is inserted. The oven heats the grill surface as well as the chicken, and conduction from the grill to the meat provides the desired grilling pattern.
"This great tasting product will help KFC continue to evolve and increase our relevance among consumers looking for non-fried menu options," said Gregg Dedrick, president of KFC. Dedrick even plays a role in the ad campaign for the new KGC, assuring consumers it has a taste worthy of the KFC name.
Grilled chicken has appeared on more menus in recent years, particularly in sandwich form among KFC competitors in the QSR segment. Call it a game of "Chicken," or "Chicken Wars" or "Where's The Beef? Crossing The Road," but every burger chain has a grilled chicken alternative on the menu, and the choices are expanding. McDonald's even plans a chicken breakfast sandwich, though it won't be grilled.
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Jack Cuts Water Use At HQ In Half
Everybody talks about water conservation. But San Diego-based Jack in the Box is doing something about it.
Jack's slashed headquarters consumption by 50%, which works out to about 1 million gals of water a year.
Rising to a challenge posed by San Diego Mayor Jerry Sanders to conserve water, the company launched a number of initiatives. The city's water department and the Center for Sustainable Energy conducted free audits of the company's irrigation system and indoor water usage.
Using available rebates, the chain purchased low-flow devices such as urinal retrofit kits, kitchen faucet aerators, and pre-rinse spray valves. Based on the water department's recommendation, the company also installed a satellite irrigation system that waters landscaped areas based on downloaded temperature and weather information.
A company spokesperson said the conservation efforts help save money and the planet at the same time.
McDonald's McMuffin Creator Dies At 89
The inventor of the Egg McMuffin, Herb Peterson, died in Santa Barbara, Calif., in March.
Peterson, whose early career at D'Arcy Advertising in Chicago included work on the McDonald's account, moved to southern California four decades ago and became a franchisee. Seeing how much business his restaurants were losing by not opening for breakfast, Peterson came up with the idea for an egg sandwich modeled after Eggs Benedict.
He introduced the Egg McMuffin sandwich in 1971, and McDonald's spent the next year experimenting with equipment and cooking methods to figure out how to consistently produce the sandwich chainwide. A development team working with supplier Prince Castle came up with a Teflon-coated aluminum ring to contain and help cook the egg. The ring was introduced in '72, and a multiple-ring device helped launch the Egg McMuffin nationwide in '75.
Peterson was still co-owner and operator of six McDonald's stores when he died at 89.
BK's Plan For Nothing But Whoppers No Fish Tale
All Whoppers, all the time: Burger King Pres. Russ Klein told The Wall Street Journal in late March the chain plans a new concept called the "Whopper Bar." Playing up on its tradition of "Have it your way," the new concept will likely sell as many as 10 different versions of its signature Whopper sandwich, many of which aren't available at all times in traditional BK stores.
The idea is still being fleshed out, Klein said, but might include a "Pimp Your Whopper" condiment station with additional topping ingredients like bacon and jalapenos. The units, smaller and "hipper" than BK stores, might even offer beer, Klein said, like many of the chain's European restaurants do.
The first of the new stores could break ground by the end of the year.
Pressure On Food Prices Not Easing Anytime Soon
After announcing about a 5% increase in wholesale food prices last year, the U.S. Department of Agriculture said it expects prices to rise another 4% to 5% percent this year.
Last year's hikes may just be the beginning of a ten-year stretch of higher food costs, according to some economists. Others suggest that while prices may ease at some point, long-range trends aren't encouraging.
Like Lemony Snicket's "A Series of Unfortunate Events," food price rises have been triggered by a confluence of trends, many of which are not easily reversible, if at all.
Global warming has been a contributor, with changing weather patterns affecting crop production. But indirect pressures from global warming also have boosted prices. Demand for alternative energy sources has boosted commodity prices as more corn and soybeans are turned into bio-fuels. Those, in turn, bump up not only prices of grain-based food products, but prices of meat, poultry, dairy and eggs. Growing demand for meat protein in developing countries like China also puts pressure on commodity prices.
The rising price of oil has had a dramatic increase on prices, too, raising the cost of gasoline and diesel fuel, making it more expensive to transport food to market. And it means increasing prices of other forms of energy, too, driving up food processors' production costs.
Passing the higher food costs on to consumers is going to get tougher. In a slowing economy, consumers eat out less often, and they'll be resistant to increases in menu prices.
FMI Offers Sustainability Summit In June
Going green in the food distribution business will be the theme when the Food Marketing Institute holds its three-day conference on green practices June 16-18 at the Grand Hyatt Hotel in Minneapolis.
Keynote speaker will be World Wildlife Fund Pres. and CEO Carter Roberts, who plans to talk about how companies can use the market to fight climate change and depletion of resources. Mitch Baranowski, co-founder of Bemporad Baranowski Marketing Group, will present new consumer research on the types of green initiatives consumers expect from companies today.
For more information, or to register, go to www.fmi.org/sustainability/.
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