Feast or Famine
Michael “Schatzy” Schatzberg
??Hospitality|Investor?? Food Service|Technology|Innovation|Emerging Brands|Restaurant Owner|Venture Capitalist|TechStars Mentor|Advisor|Co Founder| Podcaster???Influencer?? Managing Partner|Talk Show Host
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Friends of Branded!
Happy Saturday and I hope you had a great week!
I was reminded often this week that we’re in the ‘dog days of summer’ and when that phrase was used, it was usually uttered in reference to the weather (high heat & humidity), the lack of traffic in my hometown of New York City or the increase in out of office messages coming from various e-mail campaigns or communications.
For whatever its worth (and b/c people have commented that they appreciate my somewhat random inclusion of factoids), the expression ‘dog days of summer’ comes from the ancient Greeks who first coined the phrase, using it track the months. The Greeks found that Sirius, the brightest star, rose in the Northern Hemisphere, marketing the year’s hottest days. Sirius is the dog of Orion, the Hunter, and a part of the constellation Canis Major, which translates to the “greater dog” in English. The Greeks nicknamed this star the “dog star.” So, there you go.
Despite these being the ‘dog days of summer,’ there was nothing quiet about this week. We witnessed some meaningful equity market volatility (although I believe the 3% fall and recovery the next day was over-hyped), the continued ramping up of this election cycle and for those that are interested (and I’m one of those people), some amazing action and performances at the Olympics taking place over in Paris.
As someone who enjoys reading about our industry, there was also some great stuff published this week and at the risk of naming a few (and therefore by definition leaving out many), I’ll give shoutouts to (i) a New York Times piece by Pete Wells (I Reviewed Restaurants for 12 Years. They’ve Changed, and Not for the Better ); (ii) friend of Branded and my favorite industry newsletter, Expedite by Kristen Hawley ; and last but certainly not least, a LinkedIn post about the feast & famine in the restaurant industry by Sterling Douglass, Branded’s friend and the CEO of one of our very first investments, Chowly , the off-premise platform that helps restaurants create, capture and convert demand to help drive more profits into the bottom line (I never want to miss an opportunity to give one of our portfolio companies some well-deserved love). ??
While the links to the above thought leaders and their writings this week that got my attention have been provided above, to be efficient with your time (I felt that eye roll people!!!), Mr. Wells doesn’t like the direction or the digital transformation that’s underway in our industry, Ms. Hawley defends and captures some great reactions to Mr. Wells’ New York Times article and Mr. Douglass’ post shares his observation that the failure rate of restaurants is increasing while at the same time other operators are expanding and then does his best impersonation of Marvin Gaye and asks his readers (as well as our friend & partner Nabeel Alamgir and myself by name), “What’s Going On?”
I’m taking some liberties here and pulling directly from Sterling’s LinkedIn post in an effort to share his take on some of the reasons operators are struggling…
·???? Lack of off premise and digital strategy
·???? Lower brand awareness with changing demographics
·???? No catering or events
·???? Never had to do marketing so never did
·???? Didn't raise prices enough
·???? Blamed staff / hiring
·???? New market realities for costs didn't match their business model
·???? Landlords pushing them out
As well as some of the reasons why others are thriving…
·???? Succinct and cost-effective off premise
·???? Great brand awareness
·???? Lots of automation on digital marketing
·???? Always be Catering (ABC)
·???? Raised prices to what seemed uncomfortable levels, but worked
·???? Big investment in staff training (paying above min wage)
·???? Or very little staff investment with heavier automation
·???? Some in-house supply chain (micro greens, direct farm connections)
·???? Landlords who are partners
·???? Detailed understanding of their customers and demographics
My overarching response to the above thought leadership is that the restaurant industry is experiencing a BOOM in traffic and according to the National Restaurant Association, sales are projected to reach a record breaking $1 trillion in sales in 2024!
To be clear, this monstrous sales number doesn’t invalidate Pete Wells’ comments about the industry and his dislike of the industry’s embracement of technology and the digitalization that he feels is negatively impacting the hospitality and human connection that he feels is most important to our industry.
Kristen Hawley’s article included some great contributions from leaders in our industry in response to her question: “Is technology making restaurants inhospitable?” Sterling Douglass shared his thoughts and asked for others to contribute their own on what is making this current environment one of feast or famine for operators.
All this leads and only adds to my conviction that our industry is over-supplied and saturated (and it’s important for you to understand that I’m not simply talking about the number of restaurants we have in our country). It’s the number of dining options available to us that has taken this saturation to a whole new level that is causing the feast or famine for operators.
According to Merrian-Webster Dictionary, a restaurant is a business establishment where meals or refreshments may be purchased. Words matter (thank you Mr. Hirth) and that specific definition is one Branded believes is accurate.
The Merriam-Webster definition is different from the Oxford Dictionary that defines a restaurant as a place where people pay to sit and eat meals that are cooked and served on the premises.
As an investment platform that embraces the breadth and depth of the hospitality industry and are focused on the diversity of the venues that sell and serve food & beverage (Merriam-Webster’s definition), over the past 20 years, the US has seen an increase in brick and mortar (aka: 4-wall) restaurants, and the expansion of dining options available to guests grow exponentially.
The first shoutout this week goes to our friends and partners at PourMyBev , the world leader in self-pour beverage solutions! The beverage solution platform that increases sales by 50%, decreases labor by 20%, and produces a positive ROI within a year (just in case you were wondering how operator-centric company was). ??
PourMyBev (aka: PourMyBeer ) announced this week that our friend Mr. Robert Thompson has joined its Board of Directors. Mr. Thompson is an award-winning hospitality entrepreneur and brings a wealth of experience and innovative spirit to PourMyBeer as the company continues to revolutionize the beverage service industry.
Robert Thompson, CEO of the Joy Trade EATertainment platform, home to the recently opened Jaguar Bolera concept in Raleigh, N.C. and the highly anticipated Camp Pickle concept slated to open next year, is renowned for his transformative impact on the EATertainment sector. Robert was the founder of category-defining Punch Bowl Social and successfully grew the concept to 20 locations across the country with $120 million in annual revenue. His dedication to creating unique, immersive experiences for patrons has made him a leader in the quickly growing industry.
With both the cost and availability of labor ranking among the biggest challenges facing operators (especially in the casual dining, quick-serve and EATertainment space), the need for simple solutions is imperative and PourMyBev / PourMyBeer is such a solution. That includes you my stadium and arena owner friends! Give your fans what they want! ??
And since this week’s edition of the H^2 is leaning heavily on the pulling of thought leadership including LinkedIn posts from others, then I’d be crazy not to share a most recent one from our friend and PMB’s Founder & CEO, Josh Goodman.
领英推荐
Here’s the LinkedIn post: YOU ARE EXACTLY WHERE YOU ARE SUPPOSED TO BE
And here’s the image I want to share:
This week’s second shoutout undoubtedly falls into the category of a most personal one.
Last week I was fortunate to be up in the Adirondack Mountains at Brant Lake Camp , a summer camp that my family and I have been fortunate to be involved with since 1978.
My brothers and I had the privilege of being campers, counselors, and forever active alumni at BLC.
Each summer I make a visit to camp and have the opportunity to re-engage as an official on the courts, fields and otherwise. Over the past 8 summers, my wife and I have brought our daughter to be part of this trip, and she’s developed her own relationships and love of the camp.
For those that haven’t experienced sleepaway camp, there’s event known as Color War or the splitting of the camp into two teams (usually defined by the colors of the camp) that is the highlight of the summer. Brant Lake is a little unique in that once you’re selected by a team / color (which takes place in your first year), that is your team / color for the rest of your life.
Branded invites readers of the?H^2?that are interested in learning more about our?portfolio companies, and?investment strategies?to become part of our?Access Hospitality Network.
In this weeks episode of the Hospitality Hangout, Michael Schatzberg “The Restaurant Guy” and Jimmy Frischling “The Finance Guy”, are joined by Scott Finlow , the Global CMO for PepsiCo Food Service.
Scott’s journey into marketing began at PepsiCo, where he led many successful initiatives, and now brings twenty-one plus years of a strong, innovative, and consumer-focused approach to marketing and he plays a leading role in establishing key partnerships and developing effective marketing strategies, connecting the company's brands with the food service industry. With a degree in English from Tufts University, Scott’s early career included experiences as a dishwasher, an experience that gave him valuable insights into the foodservice industry. Scott’s time in Thailand, as part of his extensive international career, involved marketing and brand management, significantly broadened his perspective on global markets and consumer preferences.
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Who made the B List?
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MARKETING
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By: Rev Ciancio, Head of Revenue Marketing at Branded Hospitality Ventures
Restaurant marking is hard. There are a lot of moving parts, multiple channels that need to be maintained daily and best practices ... well what worked on Monday might be a totally a dead way to do something by Thursday!
That’s it for today!
See you next week, (about the) same bat-time, same bat-channel.
It takes a village!
Jimmy Frischling Branded Hospitality Ventures [email protected] 235 Park Ave South, 4th Fl | New York, NY 10003
Branded Hospitality Ventures ("Branded") is an investment and advisory platform at the intersection of food service, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its portfolio companies through investment, strategic counsel, and its deep industry expertise and connections.
Learn more about Branded here: Branded At-A-Glance