See related content: From the show floor: NRA expo booths.
CHICAGO — The economy, the government, food costs and sales volume are the top four challenges facing restaurant operators, according to a restaurant industry tracking survey from the National Restaurant Association.
The restaurant industry is projected to reach $660 billion in sales in 2013, moderate growth over last year and the fourth consecutive year of real sales growth, said Hudson Riehle, the association’s senior vice president of the research and knowledge group. Riehle gave the “State of the Foodservice Industry” at association’s Restaurant, Hotel-Motel Show May 20.
He noted that the industry employs 13.1 million people among the 980,000 restaurant locations in the U.S. Some 47% share of the food dollar goes to restaurants, which keeps the industry thriving, even though consumer confidence has not been as robust as in previous years.
“The government is the biggest inhibitor of growth in consumer confidence,” Riehle said.
Yet, research shows that 93% of consumers like to go out to restaurants. Hot initiatives for 2013, rated by chefs, are related to local sourcing and kid’s nutrition.
Among the expo exhibits, about two dozen produce companies competed for attention to show their goods. Michael Boggiatto, president and general manager of Boggiatto Produce Inc., Salinas, Calif., said chefs are trying to differentiate themselves with produce variety, whether that be red corn, different colored beets or baby vegetables.
“A fast-food chain is really interested in our Iceberg Babies, because they see it as something different—out of the box,” he said. “It’s not enough to change the décor in the restaurant. Now you want to change the menu so you’re not serving the same old fare all the time.”
More than 62,500 people registered for the conference, according to the restaurant association. Adding a third exhibit hall brought extra floor space for the 2,100 exhibitors, nearly 40% of which were new.
“On the exhibitor side, the most substantial sign of growth was demonstrated by the opening of a third exhibit hall, North Hall, Level 1. This additional hall housed more than 400 exhibitors and was a hotbed for innovative products from up-and-coming exhibitors and well-known brands alike. With the additional third hall, exhibit space totaled more than 579,000 square feet, a 6.8 percent increase over 2012, with more than 2,100 exhibiting companies, nearly 40 percent of which were new.”
Howard Schultz, chairman, president and chief executive officer for Starbucks, addressed several thousand attendees at the keynote session “Transforming Companies for the Future: Balancing Profit with a Social Conscience” on May 19. He said when he visited his first Starbucks in 1981, there were only four stores. He joined the company in 1982 as director of retail operations and marketing and gradually worked his way up. Now there are more than 19,000 locations in more than 60 countries, which are run with a social conscience — a view that led him early on to offer employee healthcare coverage and company stock options.
“Success is best when it’s shared,” he said.
Schultz said that with the current lack of apt leadership in Washington, it’s up to the industry to take whatever responsibility it can to do the right thing for employees and communities.
After he left his CEO position in 2002, “a disease” changed the way the coffee chain was managed.
“Success was measured and rewarded the wrong way, by comp store sales,” he said. “In the 2007 financial crisis, the bloom was off the rose. Our comps went negative.”
He returned as CEO and immediately gathered all the managers in one location to align values and expectations.
“A brand is built by experience and the people,” he said.
The experience had fallen because the coffee was widely made incorrectly. He closed all the stores for retraining.
“It was truthful. We were bad. But we would return to our heritage and exceed expectations.”
He follows the path of innovation, not line extensions.
“Have curiosity. See around the corners,” Schultz said. “You can’t embrace the status quo as an operational procedure.”
Also at the convention, celebrity chef Anthony Bourdain spoke to a crowded ballroom of attendees giving his thoughts on food and chefs colored by his travel experiences.
A lineup of other celebrated chefs conducted cooking demos, including Cat Cora, the first female Iron Chef, first female inducted into the American Academy of Chefs’ Culinary Hall of Fame, cookbook author and founder of Chefs for Humanity.