Foodservice Equipment Reports Fortnightly

Welcome to FER Fortnightly Online Newsletter
July 15, 2008

Economic Report:
Sponsored by:
Foodservice Group

Almost-Last-Chance To Register For FER's President's Preview Forecast Seminar
In A Soft Economy, Shouldn't Materials Prices Soften?
NRA Performance Index Creeps Back, But Expectations Hit New Low
Macro Forecasts Push Pain Well Out Into 2009

Industry Report:
Sponsored by:
FER E&S Market Forecast Meeting
Doobies To Play NAFEM All-Industry Gala
Starbucks Nips 'N Tucks--Sign Of Times?
Arby's Development Deals Mean 35 New Stores
El Pollo Loco Honored For Energy Efficiency

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In This Section:
EPA Might Reduce Bio-Fuels Mandate
City To Rethink Drive-Through Noise Limits
DOJ Seeks Comment On ADA Changes
Seattle Mayor Wants More Sidewalk Seating
Boston Ops Might Get Cheaper Energy

This issue's Economic ReportSponsor: Manitowoc Foodservice Group 
Industry Report Sponsor: FER E&S Market Forecast Meeting
Regulatory Report Lincoln Foodservice Products/Enodis

EPA Might Reduce Bio-Fuels Mandate
With bio-fuels production widely blamed as part of the cause for suddenly rising food prices here in the United States, and for catastrophically steeper rises in other parts of the world, the Environmental Protection Agency is considering a petition from Texas Gov. Rick Perry to grant a waiver that would at least temporarily reduce bio-fuel production requirements.

The EPA's decision is due by July 24.

If approved, the request would cut target production to 4.5 billion gallons of ethanol per year from the 9 billion required by the EPA's Renewable Fuel Standard.

Perry's petition grants the standard is "a well-intentioned policy," but goes on to assert it "has had the unintentional consequence of ... contributing to higher food prices." Perry said the artificial pressure on the corn crop from the EPA mandate could cause irreparable damage to other agricultural and livestock producers as well.

Agricultural and economic experts in general agree food-for-fuel (corn ethanol and soybean bio-diesel) is impacting food prices, but they are at odds about the extent of the impact. A former U.S. Department of Agriculture chief economist, in a study done for Kraft Foods, warns food costs could rise a quarter to a third above a normal annual inflation rate of about 2.5%, bringing the effective rate to 3% to 3.5%.

Another study puts the estimate higher. In a study commissioned by the Balance Food and Fuel Coalition, a University of Indiana agricultural economist says food prices might rise in the range of 7%.

Other studies, particularly those from the corn-ethanol industry, note corn ethanol so far appears to add only a very small percentage to food prices that have doubled and even tripled over the past few years in other parts of the world.

U.S. crop size this year obviously will have an effect. Floods in Iowa this summer have devastated some of the corn crop, but not as much as first predicted, according to the USDA.


City To Rethink Drive-Through Noise Limits
Here's one that'll get your ears ringing. The city of Clawson, Mich., recently considered putting noise limits on drive-through speaker systems, almost did it, and might yet.

A proposed ordinance would have banned the use of drive-through speakers from 10 p.m. to 8 a.m., which would force late-night and breakfast customers to order at the window.

The ordinance passed at the first reading in early June, but at the second reading in early July, city planning director James Albus said the hours of the speaker ban had been changed to 11 p.m. to 6 a.m., accommodating more restaurants with drive-throughs open late at night.

Even so, Mayor Penny Luebs criticized the ordinance, saying the city had never received complaints about noise from drive-through speakers anyway.

Some restaurants in town are open 24 hours and others are considering staying open later than they have been. At the July 1 city council meeting, council members suggested setting a late-night decibel level for drive-through speakers rather than restricting hours of use. The drive-through provisions of the ordinance are being kicked back to the planning commission for revision.

DOJ Seeks Comment On ADA Changes
The U.S. Department of Justice is proposing revisions to the Americans with Disabilities Act that could cost businesses billions. The good news is that you have until Aug. 18 to log public comment at

Eight particularly expensive categories are part of the proposed changes. Those that affect foodservice include side reach (which affects height of things like light switches and door handles), clearance in toilet stalls with doors that swing inward, elevators, assistive listening systems and accessible paths through employee work areas.

Other changes address issues ranging from use of service animals to Segway scooters and captioning and emergency information announcements in stadiums.

The department says it based suggested changes on small businesses spending about 1% of gross revenues in a year to make accommodations and remove barriers.

Texts of the proposed changes were printed in the June 17 issue of the Federal Register.

Seattle Mayor Wants More Sidewalk Seating
Seattle Mayor Greg Nickels is trying to make it easier for restaurants to get permits for sidewalk seating areas.

The current system, which requires approval from both the city's planning and transportation departments, is time-consuming and costly, according to hizzoner. Nickels has proposed a simplified process that would take just 10 days and require approval only by the transportation department. The proposal also would lower the cost, with the price of a 100-sq.-ft. sidewalk seating area, for example, coming in at $600—as opposed to the current $2,300.

Only about 225 Seattle restaurants presently have outdoor seating permits. Making the process faster and less expensive may encourage more restaurants to take advantage of Seattle's sunny summers. Nickels also wants to strengthen the public-notice process to focus on neighborhood concerns such as noise and encroachment on neighboring businesses or residents. Under the proposal, amplified sound would not be allowed in sidewalk seating areas.

Boston Ops Might Get Cheaper Energy
Restaurants and other small Boston businesses could save 20% to 40% on energy under a plan to pool gas and electricity purchases announced by the mayor's office in late June.

Tested in May in a focus group with small businesses that included several restaurants, the buying pool idea was developed by Evelyn Friedman, director of the city's Department of Neighborhood Development. She organized a similar program for rental properties when she was with a community development agency in nearby Roxbury, Mass.

Under the plan, businesses that sign up would still pay the same rates for delivery of gas and electricity to their utilities, but a broker would negotiate gas and electricity prices for the buying pool directly with energy producers. The broker would collect its fees from participants in the buying pool. Friedman said that if 200 businesses sign up, the program could be up and running as early as September.

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