A Deeper Dive

Can dine-in pizza still work? This week’s episode of the Restaurant Business podcast A Deeper Dive features a trio of executives from Mountain Mike’s Pizza: co-CEO and brand owners Chris Britt and Ed St. Geme and COO Jim Metevier. Mountain Mike’s is a California-based chain that operates about 270 locations. Britt and St. Geme bought the chain about six years ago. The trio talk about the history of the brand and its growth since Britt and St. Geme acquired the company. They talk about the impact the pandemic has had on its takeout and delivery business, which has grown strongly over the past three years. But they also talk about the pull of the chain’s dine-in business. Dine-in pizza has struggled over the years but there is some evidence that people are coming back to it, either for nostalgia reasons or to get out of the house. Brands with an entertainment element have done well and Mountain Mike’s may help prove that. We also have some interesting discussions the owners’ time as Burger King operators.

What is the future of casual dining? This week’s episode of the Restaurant Business podcast A Deeper Dive features John Cywinski, the president of the casual-dining brand Applebee’s, to discuss that very topic. Bar and grill chains like Applebee’s had generally struggled since the Great Recession. And then the pandemic forced them to figure out takeout and delivery, and many of them did. But the pandemic culled supply of dine-in restaurants and those concepts that made it through that era have seen a strong recovery in dine-in traffic as consumers unleashed pent-up demand. Applebee’s is coming off a particularly strong quarter, featuring the best three-year same-store sales in its history. Cywinski talks about all of that. He discusses the future of takeout in the full-service space and where takeout and delivery stand with the company. He also talks about the company’s franchising strategy and how it affects the management of the chain. And Cywinski talks about the status of Applebee’s virtual brands.

Does the fast-casual sector exist? In this week’s episode of a Deeper Dive I’m joined by my colleague Lisa Jennings to talk about the blurring of the lines in the restaurant industry—particularly between fast-casual and quick-service restaurants. The fast-casual sector represented a group of higher-end limited-service concepts and until the pandemic largely dominated industry growth over the past two decades. But since the pandemic, a lot more of these chains have added drive-thrus, such as Shake Shack, Sweetgreen and Chipotle. And a lot more quick-service chains like Chick-fil-A have raised their prices to match what is often seen at traditional fast-casuals. Add it all up and the two sectors look so much alike it makes sense to wonder whether we should do away with that differentiation altogether. Meanwhile, Lisa and I also talk about recent earnings results from McDonald’s and Chipotle. McDonald’s is gaining low-income diners. Chipotle is losing them. We wonder whether the two industry giants are trading them with one another.

Amusements have been, quite literally, a game-changer for Cicis. This week’s episode of the Restaurant Business podcast A Deeper Dive features Jeff Hetsel, the president of the 300-unit pizza buffet chain. Cicis has had a strong performance coming out of the pandemic, with sales up 14.5% last year, according to Technomic. One of the big reasons is video games. The company has been convincing operators to expand their game rooms from the eight games they used to have to much larger rooms with prizes and token cards. That has been a major sales boost for the company. Hetsel talks about just how much of a sales lift video games can have for an individual operator. What’s more, that sales lift is far more profitable than the sale of pizzas. Hetsel touches on other topics, including other drivers behind the company’s sales increase.

How can restaurants avoid becoming a political football? This week’s episode of the Restaurant Business podcast A Deeper Dive features Joe Kefauver, the managing partner with public affairs firm Align Public Strategies and cohost of the RB-hosted Working Lunch podcast. Kefauver discusses a variety of topics, including a backlash against corporate ESG strategies. ESG stands for environmental, social and governance. Many corporations believe that having a strong ESG framework can create shareholder value over time because it can improve their reputation. But there’s been something of a backlash by conservative groups over these policies. He talks about this trend and how companies can avoid it, if they even can. He also talks about the Fast Act in California and efforts by restaurant chains to get that act in front of voters in the state, and why this topic is so important. And he discusses unions and why there hasn’t been many efforts to unionize companies outside of the coffee giant Starbucks.

How can operators avoid price increases as their own costs increase? This week’s episode of the Restaurant Business podcast A Deeper Dive features Rich Shank, senior principal with RB sister company Technomic. He discusses the challenging operating environment when it comes to menu pricing. Restaurants have been raising prices aggressively this year as higher prices for food and labor eat into margins. Menu prices are up 8% over the past year. But there are signs that consumers are starting to reject these price increases, enough that Shank wrote in RB that operators may need to rethink their price increases. He explains the consumer environment and how operators can offset their own higher costs without hurting consumers. We also talk about another piece of data: the decline in restaurant use by the older and bigger Baby Boom generation, and what that means to certain types of concepts.

The beverage business is rapidly changing and drive-thru coffee concepts like Scooters Coffee are right in the middle of it. This week’s episode of the Restaurant Business podcast A Deeper Dive features Joe Thornton, the president of Scooter’s. Scooter’s has quietly been one of the fastest growing restaurant chains in the U.S. System sales and unit count have nearly tripled over the past five years, according to RB sister company Technomic. Thornton talks about that growth and what has been key to the business. He talks about the brand’s franchising model and its focus on its drive-thru coffee kiosks, which sell a selection of beverages and food from 600-square-feet shops. He talks about the brand’s real estate strategy and where the company fits in a rapidly changing and shifting beverage business.

If you haven’t come across a bubble tea concept yet, you will quite soon. This week’s episode of the Restaurant Business podcast A Deeper Dive features Paul Reynish, who was named global CEO of the bubble tea concept Gong Cha earlier this year. Gong Cha was founded in Taiwan in 1996 and is now based in London. It has quietly been one of the fastest-growing chains in the country. It operates more than 1,600 locations globally. It finished 2021 with nearly 170 locations in the U.S., up 700% over the past five years. Reynish was hired after stints at Dunkin’ and Five Guys. He talks about the brand’s plans for growth, including how many units it expects at the end of this year. He talks about the bubble tea trend generally, about the rapidly changing U.S. beverage market and where Gong Cha fits in that market. He also discusses the chain’s plans for food.

How big of a deal is the unionization effort at Starbucks? This week’s episode of the Restaurant Business podcast A Deeper Dive features my colleague Peter Romeo, who talks about the ongoing unionization campaign at the coffee giant. More than 200 Starbucks locations have voted to form a union. The company has undertaken a massive effort to stop it. Peter and I discuss that unionization campaign, Starbucks’ response, whether it’s working or not, and whether other restaurant chains should worry at this point. We also talk about the California Fast Act, and the potential impact that newly passed law could have on fast-food chains and other restaurant employers in the state. We also talk about whether that law could spread to other states.

The nation’s opioid crisis grew much worse during the pandemic. And it has hit restaurants particularly hard. This week’s episode of the Restaurant Business podcast A Deeper Dive features Rick Van Warner, a former longtime industry executive and ex-CEO of the Tex-Mex chain Tijuana Flats. He is also on the board at Project Opioid, a Florida-based agency that works with employers on the opioid crisis. Van Warner is also the author of the book On Pills and Needles, where he tells the story of his son’s addiction to opioids and the family’s long struggle to help him recover. Van Warner tells his story and we talk about the risk restaurant workers face from opioids and in particular, synthetic opioids like fentanyl. He also has recommendations for employers on how they can deal with the issue.