Tag Archives: Economy

How the Recession Became the Cupcake’s Best Friend

cupcakeHow the Cupcake Craze Began
It all started on the popular TV show, Sex and the City, when Carrie bit into a decadent cupcake made by the small New York-based shop, Magnolia Bakery. Soon the bakery was making cameos on movies and TV shows as well, such as The Devil Wears Prada, Prime, and Spin City. The small shop that started out with only three employees in 1996 baking four types of bread quickly figured out that bread-baking proved to be too time-consuming, so it quickly switched over to making desserts and focusing on cupcakes. Magnolia Bakery quickly grew to having several shops around the city and even introduced its brand in Dubai in 2010. It’s now raking in an average of $20 million dollars per year. And to think, it all started with three employees and some cupcakes.
The Cupcake: Here to Stay?
While many critics dismissed the cupcake craze as a fad that will quickly pass, it has proved to be a food trend that has staying power. As the economy weakened and many people lost their jobs, cupcake sales shot up as a surge of local cupcake-only bakeries popped up around the nation. According to market research firm, NPD, 669.4 million cupcakes were sold between October 2010 and 2011. With little money left to spend on the big-ticket items, cupcakes became an indulgence that was affordable. While these gourmet cupcakes aren’t going to cost you $1.00-2.00 like the cupcakes you’ll find at your local grocery, it seems consumers are eager to spend a little extra on such a small luxury. The Washington Post reported on the cupcake bakery trend, quoting Paul Sapienza, vice president for the Retail Bakers of America, who declared of cupcakes, “They are cute. They are an economic treat, which helps out in the recession. They are a little decadent, so you get cake, frosting and sometimes filling all at the same time.” Yet, in their report, The Washington Post declared that the trend would fade. They were wrong. According to an article in About.com, Packaged Facts Fresh Baked Goods in the U.S “…projects that the market will grow by 26% between 2009 and 2014, to reach $20.1 billion at retail.”

Gourmet cupcake shops have become so trendy that L.A.-based bakery, Sprinkles, is now establishing a 24-hour cupcake-dispensing ATM in New York City for patrons that need to grub on their goodness during the late-night hours.  Now that’s customer service!

Brides Choosing To Serve Cupcakes Instead of Tiered Cakes At Wedding Receptions
The decadent, yet economic, dessert is even affecting the wedding industry; many brides are choosing cupcakes to serve to guests over the traditional tiered wedding cake, which has, in the past, proven to be an expensive part of the wedding reception. The cupcake is not only economical, but also comes in a variety of flavors. Is the bride a coffee lover? She can choose a coffee-flavored cupcake with chocolate frosting. Is the wedding in November, close to Thanksgiving? The cupcakes can be pumpkin-pie flavored. Does anyone in the wedding party need gluten or dairy-free cupcakes? Those are also an option. The varieties of flavor and levels of creativity are endless, without the price tag of a traditional tiered wedding cake. The impact of serving cupcakes at weddings has even affected Hollywood—in 2010, country star Carrie Underwood cupcakesserved cupcakes during her reception when she married hockey pro, Mike Fisher. While most brides are choosing cupcakes over tiered cake for economic reasons, celebrities are choosing them more for the “coolness” factor.
The Recession and Cupcake Sales Go Hand-In-Hand
Although the economy has tanked in the last five years, with many Americans without jobs, struggling to pay mortgages or car payments, it seems the cupcake is a diamond in the rough. Even though each small cake sells for $4.00-6.00 a piece at a gourmet “cupcakery”, it seems a small price to pay for such gooey goodness that can help us escape for a short, but sweet while.

The Current Economy’s Effects on Alcohol Trends

Cocktails; mage from MorgueFileThe world today is on a new alcohol horizon or at least a more innovative and uniquely individual one.  What’s spurred this?  From more minimal splurging to pop culture inspired throwback cocktails many of the current alcohol trends are rooted in the down economy.

In the past few years, alcohol sales have been less than stellar overall.  However, some categories were down more than others.  More expensive choices such as wine (down 10.8 percent in 2009) and spirits with higher price points (down 5.1 percent by volume in 2009) have fallen by the way side as more economical choices have gained ground, according to an article by Martinne Geller.  While some restaurant goers are still passing up the alcohol option, it is now a bit more inexpensive to enjoy a libation with options such as wine-by-the glass.

However, many people are simply forgoing the experience of eating outside the home all together and simply grabbing a 6-pack to enjoy with a nice meal at home.  According to worldclassbeverages.com, “2009 saw an increase of 7.2% in the sales of craft beer while the overall beer industry struggled with a 2.2% decline.”   This demand for specially crafted brew has also led to a massive amount of operating breweries.  In 2009, there were 1,595 breweries operating in the U.S. which is the highest total since before Prohibition, according to Brewer’s Associaiton.   The BA also approved a new definition of what craft beer itself really means this year, allowing for craft to stand for any independent brewery that produces up to 6 million barrels of traditional beer (up from a previous 2 million).   For brewery workers, this all leads to the hope of more jobs and eventually a better economy.  For consumers, craft beer simply stands for a higher quality with more attention to detail.  Even though a shopper may pay a bit more for a craft brew than a domestic, since they aren’t splurging on items like take-out or restaurants, they feel that they can spend just a bit more and enjoy a higher quality beverage.

This stay-at-home drinking trend has also led to a push that would allow alcohol sales to boost the economy in another way.  Several states have pushed for a repeal of the, sometimes centuries old, blue laws.  Blue laws were originally put into places to provide Christians with an alcohol-free (and in some places real-estate and car sale-free) day of Sabbath, according the SUNY Potsdam Alcohol Problems and Solutions site.  Many nowadays think these laws are not only out-dated, but could be preventing a great deal of tax dollars from being raised due to an entire day void of sales.  In an article on ABCnews.com, Lisa Hawkins of the Distilled Spirits Council of the United States said, “Blue laws … simply don’t make sense in today’s economy. They inconvenience consumers and deprive states of much-needed tax revenue.”   According to the Distilled Spirits Council of the United States, 36 states now permit the sale of distilled liquor on Sunday, 14 of which have joined the list since 2002.  Now with a downturn economy and an upswing in take-home alcohol purchases, many states and communities are pushing for these laws to be gone and to allow Sundays and local (and imported) liquor to help boost the economy.

Like money, fame has always played a hand in trends as well and the new wave of alcohol trends is no exception.  With characters on popular shows (mostly of the cable variety) swilling drinks left and right, it’s not hard to believe that pop culture could have an influence of the adult beverage industry.  However, unlike the influence of shows like Sex and the City that brought in high-priced fruity drinks, this new cocktail movement is a little bit masculine and a lot more of a throwback.  Recently, the tides have turned towards the more traditional drinks served straight or pre-prohibition style.  Thanks to shows like AMC’s Mad Men and HBO’s Boardwalk Empire, bars are now catering more to the harder stuff than in the recent past.

So why is the modern, i-Pod listenening, 3-D watching, technology driven crowd looking back to drinks inspired by the 60’s and even the 20’s?  It could be due to the idea that during a downturn economy people look to more prosperous times with feelings of nostalgia.   Possibly best summed up in an article on consumer trends on euromonitor.com, “..in a world where everything is possible, where anything can happen, people are looking for certainties.”  People today are more interested in exploring drinks that were great in the past, and perhaps improving on them, than creating some new, crazy cocktail.  If ordering a simply Scotch was good enough back in the 60’s, why shouldn’t it be good enough now?

There may also be a trend towards the more straightforward ways of the past.  “I expect mid-century brands and cocktails to continue the climb back to the mainstream as American culture begins to reacquaint itself with authenticity,” said Dean Phillips of Phillips Distilling Company in an article on trends on Signature9.com.   For many it’s not even simply the alcohol involved in these wistful drinks.   As stated in an article in the Pittsburgh Post-Gazette on the Pre-Prohibition drink scene, “The fruit juices are fresh-squeezed, not pre-bottled. The bitters are home-mixed, not store-bought.  And the cocktails themselves take five to 10 minutes to prepare…”  Because so many people are going out so much less frequently, it’s drinks like these, prepared with care and the best of the best ingredients, that will get them to splurge a bit and easy their mind a little when they are spending about 19 cents more per cocktail (according to the NRN).

Eventually, the economy will swing back up and new drinks will come along. But for now, the economy has inspired drink trends that will lift your mood and hopefully save your pocket book.

Twists, Turns and Trends for the Modern Food Truck

The original incarnation of a mobile meal was usually a late night last resort or a pit stop for lunch on a busy day, not necessarily somewhere you’d think of waiting in hour-long lines.  They were home to common street fare such as your average hot dog or maybe a generic sandwich.  No longer is any of this the case.   Food carts are now the trendiest hot spot, a place with loyal followers who expect nothing less than gourmet cuisine…at a reasonable price, of course.

FoodTruckToday you can truly get just about any type of delicacy just by walking down the street (and probably waiting anywhere from 10-40 minutes).  An article on Eater.com, says that the Rib Whip truck in San Francisco boasts it’s on-board smoker, to serve up pulled-pork and beef brisket.  To add even more variety to the bunch, Coolhaus, itself peddling gourmet ice cream sandwiches, has developed a food truck…for dogs.  The Phydough Truck, launched on January 8th in Los Angeles, serves up cookies, ice cream and bake-at-home dough in such flavors as Duck Fat, PB & Bacon and Foie Gras, all of which can be eaten by man’s best friend and their human.

Why the sudden shift to mobile food (other than the fabulous fare)?  Like everything else, the economy has had its effect on the restaurant world.  In a Los Angeles Times article, former Hermosa Beach mayor and current owner of Barbie’s Q, John Bowler, said that it cost only about $40,000 to open his truck about $160,000 less than a brick-and-mortar restaurant.   That’s not to mention that while most restaurants stress about location, location, location, if your place is on wheels, you can pick and go where the customers are.

Unique advertising and good timing can also be thanked for the boost in trucks in a downturn economy.  Twitter, Facebook and other social networking sites have played a huge part in the transportation food industry.  Owners and workers can simply put up a status with today’s specials or tweet their lunch location, head there with their goods and (TA-DA!) throngs of customers.  Well, there is a bit more to it, but that is the basis of many of these roaming restaurant’s marketing plans.  John Ban, of West Coast Tacos in Indianapolis, said, “Social Networking has been a great advantage for our business because we have not spent any money on marketing.”  He went on to touch on just why this new tech tool is so invaluable.  “We have a more personal relationship with our customers through social media.  It allows us to interact with our fans around the city very easily,” said Ban.  However, like any business, especially a new one, timing is always the easiest in with an audience.  Ban’s West Coast Tacos, saw the food truck boom in other cities, like L.A., and felt the time was right to jump on the chance to be the first to start up the trend in Indy.

If low costs and cheap marketing are making you want to jump in your van and serve up some grub of your own, you may want to first know that there are some significant downsides the non-traditional restaurant scene as well.

The major bump in the road for so many vendors has been getting permits for serving in a vehicle.  Many cities have strict rules about what can and cannot be done inside a vehicle, which can put a damper on serving items that aren’t pre-packaged in a kitchen before the day begins.   In recent weeks, several articles have come up on crack downs on food trucks in Chicago.  One such article, on food.change.org, said that “Chicago officials claim that these anti-food truck ordinances (no altering food and parking up to 200 feet from a restaurant) exist in order to protect consumers’ health and safety.”  However, in Chicago and many other cities, a majority of the squabble has been that restaurant owners worry about having food trucks competition, park right outside their business and taking away customers.

Another obstacle the vehicles face is also due to that wonderful upside mentioned earlier: location.  While it’s beneficial to be able to cruise around to customers, being relatively unsheltered from the elements can pose a few problems.  Going out in the frigid, frosty mess for lunch can be a little less than inviting which cuts down on customers.  In an article in The Washington Post when asked how the cold has affected business, “Operators of four trucks say their sales have dropped by 40 to 50 percent from peak numbers.”  That isn’t even taking into account money lost on food, gas, etc. that must be spent on a daily basis to keep the business going and those inside the trucks warm enough to operate.

So far these obstacles haven’t stopped food truck operators from working on fresh and creative ways to keep on going.  In Oregon, many mobile businesses are attempting to get licensing to sell alcohol, according to OregonLive.com.   The article states that selling brews would give owners of food trucks the chance to “make a living in the increasingly crowded Portland food-cart industry while also attracting customers to neighboring mobile restaurants.”   And while not a possibility at the moment, there may even come a day when a restaurant may not only sport wheels, but also wings.  Recently an article on Curbed Los Angeles even reported that an architecture class at USC, taught by Jennifer Siegal, challenged students to create the future of the business.  Submissions included everything from wings that caught rain water for future use to a donut delivery system that will drive over a car and drop in pastries and coffee.

Until wings can be made small enough to prevent trucks from hitting passersby, before a new super social media site is created and pending any delicious new delicacies, the success of food trucks today and in the future can be summed up with this advice, courtesy of John Ban:  “Make sure your product is of very high quality, because the number one reason why our business grew was because our Tacos were made from the best ingredients and meats. This created numerous return customers for us and they spread the word about our Taco Truck. Word of mouth is the strongest form of marketing. People always listen to recommendations from another person, but people don’t always pay attention to commercials or advertisements.”

Why is Everything So Small? The Rising Popularity of the Small Plate Meal

Appetizers; Image from MorgueFileIt seems like no matter what restaurant you may stop into for a bite, you can’t miss items like tiny lamb kabobs, small shrimp skewers and a generally miniature version of just about anything. It seems choices like sliders are no longer just a novelty saved for the likes of White Castle, but have become commonplace everywhere from high end eateries to your local Houlihan’s.  According to a recent list put out by The Nation’s Restaurant News, small plates will be even bigger in 2011, placing at number 13 on their top 20 list of food trends in the coming year.

So why do we have this sudden obsession with the little things in our food life?  One of the answers could lie in our internet habits.  A study of internet use in Korean teenagers may have proved that the web isn’t the gateway to obesity as many believe.  They studied teens with light, moderate and heavy internet “addiction” and found that those falling under the heavy addiction actually tended to eat smaller meals on average.  One answer as to why this happened comes from a Salon.com article by Sara Breselor.  Breselor advises to “Considerate it (smaller portions/plates) the dining equivalent of updating your Facebook status…”   If you look at it this way, it’s only logical that with the growing popularity of social media sites like Twitter and Facebook that seeing smaller portions has also increased.

A second thought on the attractiveness of this new petite movement may be due to the economy.  After all, isn’t it common to downsize when in a financial downturn?  The average chain restaurant, like the Cheesecake Factory and California Pizza Kitchen, have recently turned to this thrifty option as a way to cut costs, but not sacrifice taste and options.  Using undersized portions allows for customers, as well as the kitchen, to test out new combinations without breaking anyone’s bank.  This alternative also tends to help add more items to the check and has increased wine-by-the-glass purchases, according to an article from Nestle Professional.

A final, and seemingly obvious, reason for the trend is it’s “health” benefits.  Like most fads in the cuisine arena, small plates have been thought to be able to lend a hand in weight loss.  In terms of portion, according to a study done by Calgary University in Canada, how much a person eats is directly related to the kind of plate they use.  This means, the smaller the plate, the smaller the portion, the smaller the portion, the less you eat, the less you eat, the less weight you gain.  However, not only does the portion size make small plates an appealing choice but the common options add to the “diet” appeal.  Most of these snack-sized alternatives are guided by the traditional Spanish tapas which focus on proteins and vegetables.  As anyone who’s followed a low-carb diet knows, these items are a diet’s best friend because they tend to provide nutrients and flavor without the starchy, fatty side effects.

If you’re looking for great places to try this new trend:
In Indianapolis, check out:  Mesh, Zing, Iozzo’s Garden of Italy and
Zest! Exciting Food Creations

Nationwide, check out:  Barcelona Tapas, Cheesecake Factory,
Houlihan’s and California Pizza Kitchen

Saving Money and the Earth

Going Green is a more efficient way to operate and you can save money on your water bills, electric bills, taxes and more while decreasing the amount of pollution. Explore these links for more information.

  • If you are interested in saving money and reducing pollution, consider Going Green. This site can help you determine the changes you can make to save money and the Earth.  Also, find information about grants, loans and incentives available for businesses going green.
  • Energy Star products can save you money while fighting global warming. Use their savings calculator to determine how much you could save.
  • If you are budgeting for remodeling, look into grants and loans offered by the government.

Questions? Contact your Product Consultant at 800-222-5107.

Spring Cleaning Continues! Today’s Topic: Going Green!

Today’s Topic: Energy Efficiency and Becoming Green While Saving Some Green!!

Are you looking to become green or save money by upgrading to energy efficient equipment? Energy Star rated equipment is your answer!

Energy Star rated equipment is a hot topic in these changing times. Americans using Energy Star saved enough energy in 2009 to avoid greenhouse gas emissions equivalent to those from 30 million cars! Even better, Americans saved $17 billion on their utility bills!

Although Energy Star equipment will cost more now the equipment will save you money on your monthly bills. Central Restaurant Products offers more than 100 Energy Star rated products.

Use this list of popular links for more information.

For more information on Energy Star products, visit Central’s Energy Star Resource Page or call a product consultant at 800-222-5107.

Trend alert: restaurants strive to remain relevant amid the recession

I’d like to share a few articles I read this week that address the changing climate of the restaurant industry and changes in the demographics and habits of diners. Each of these pieces touched on a common theme – that restaurants are going to have work harder to be relevant among a changing -and less loyal- demographic; one that is causing the market to become more competitive and more driven than ever by exceptional customer service.

First, a report released this week from the NPD Group ReCount showed the “total number of restaurant locations in the U.S. shrunk during the past year as smaller chains and independents in particular had difficulty weather the economic storm.”

And, coincidentally, a report from Technomic showed that consumers are entertaining at home more often than a year ago. That trend is expected to increase throughout the year.

The Technomic study is a good segue into a Wall Street Journal article that identifies a trend of restaurants opening fewer locations and instead trying harder to improve service. Mystery shopper programs and online surveys abound.

And the last article, from the Orlando Sentinel, shows how dining habits have changed. Older consumers, who represent a large portion of the casual-dining market, have reined in spending as their retirement savings have taken a hit during the recession. Meanwhile, the next generation of diners is less loyal to casual dining and often feel that traditional sit-down restaurants take too long. Moreover, grocery store chains are honing in on restaurants’ territory by offering more pre-packaged and ready-to-eat meals.

It’s easy to see the downside, but what opportunities do these trends present for restaurateurs?

First, as noted in the MediaPost article, it offers an opportunity for restaurants -especially the independent and smaller chains that are struggling the most- to place a greater emphasis on offering box lunches and party platters, complete with off-site preparation.

Second, these trends should tell restaurateurs that there are too many establishments that are almost exactly the same. Operators should be in a mode of constantly improving and reinventing themselves and keeping the concept fresh.

And last, restaurants should place an even greater emphasis on customer service that is second-to-none. I don’t just mean greeting the diners with a “Hi, my name is Kristy and I’ll be your server,” with a side-order of deadpan stare.

What I mean is to provide a customer experience that isn’t artificial and suffocating, but unique and special enough that people will tell their friends about it.

Now more than ever, your success depends on a unique and memorable experience, and depends on taking advantage of new trends and dining styles. Because in THIS economy, if you build it, sometimes they still won’t come.

Are happy thoughts key to ending recession?

Maybe Peter Pan had it right – maybe thinking happy thoughts is the key to rising up out of the recession.

Reports this week show that consumer mood has given stocks a boost. According to Chain Leader:

The stock market rose for the first time in a week Tuesday as unexpectedly strong data on consumer confidence sparked optimism that spending by Americans could support a hoped-for economic recovery in the second half of the year.

Citing a bunch of numerical data that means absolutely nil to me, the report went onto describe how consumer sentiment is at it’s highest since September, and investors hope resilient consumers will increase spending in time for the back-to-school season in late summer, helping manufacturers and retailers boost their depleted earnings.

Obviously, there is only so much consumer confidence can do to repair the state of the economy. But for restaurant operators, it could be a sign that banks will begin to ease up on lending as the markets rebound.

In a panel discussion at the recent NRA Show in Chicago, Bernie Siegel, founder and chairman of Siegel Financial Group and NRA Show panelist, said the key to staying afloat is to getting banks to start lending again.

He advised operators to seek financing from smaller, regional banks, as opposed to those with more than three branches.

In addition, the SBA offers a number of online courses aimed at helping small business owners obtain financing and develop a business plan. The SBA announced recently it will guarantee up to 90% of a loan submitted under several of the administration’s small business programs.

And, let’s not forget Obama’s economic stimulus package. Millions of dollars are still up for grabs in federal foodservice equipment grants for K-12 schools.

The government hopes to begin awarding the school foodservice grants beginning June 8. State deadlines to apply are approaching – in just Arkansas, Kentucky and Missouri (whose application deadlines are next week) almost $4 million in grants will be awarded. For more information and to get a state-specific application, CentralRestaurant.com