Three years after initially delivering what is technically known as “orders to file special report” to 44 marketers, the FTC last week began sending subpoenas to 48 companies in order to prepare a follow-up to its 120-page report issued in 2008, “Marketing Food to Children and Adolescents: A Review of Industry Expenditures, Activities and Self-Regulation.”

“This is a follow-up to measure the effects that self-regulation has had over the last three years,” said Carol Jennings, spokeswoman for the FTC’s Division of Advertising Practices/Bureau of Consumer Protection. “We are supportive of industry voluntary efforts to limit their marketing to kids and this will see whether more is needed.”

Ms. Jennings said the findings will be made available to the public.

A handful of marketers that received subpoenas in 2007 were left off the 2010 list, (Dunkin’ Brands  was not on the 2010 list) presumably because they have limited their marketing to children. Twelve companies on this year’s list are new, but 36 companies are once again receiving subpoenas — including Yum Brands, which was called out by FTC Chairman Jon Leibowitz in a December 2009 speech in which he said, “Many companies that market heavily to children and teens have yet to join or make a commitment. Why, for instance, hasn’t Yum Brands, with its KFC, Taco Bell, and Pizza Hut chains, stepped up? Or Chuck E. Cheese and IHOP? Or the marketers of Air Heads and Baby Bottle Pops?”

Calls to Yum Brands were not returned. A spokeswoman for CEC Entertainment, parent company of Chuck E. Cheese, said she could not comment without having seen the subpoena.

Some have speculated that the new round of subpoenas was a prelude to Congressional hearings and possible legislation, but Ms. Jennings refuted that.

“We are not proposing any regulation,” she said.

Anthony DiResta, an attorney specializing in advertising, marketing and media at Washington firm Manatt Phelps & Phillip, agreed with Ms. Jennings and said he did not see legislation in the future.

Dunkin Brands is Not on the 2010 List

It might as well be the Holy Grail. Neither Joey Cups and his team of 12, nor anyone else in the industry, has been able to find it.

So now they have decided to join forces. For the first time, Dunkin’, Starbucks, and Tim Hortons are working together to conquer the sustainable container. On Earth Day this April, the competitors convened with cup manufacturers, waste haulers, and municipal officials at a cup summit held at MIT. Since then, they have been sharing prototypes of innovative designs, researching ways to make it financially worthwhile for communities to recycle used coffee cups, and designing a pilot program for a waste-free zone at Faneuil Hall Marketplace where everything would be recycled or composted.

“We are fiercely competitive but we really want to differentiate ourselves on the quality of our product and level of service in stores,’’ said Jim Hanna, director of environmental impact at Starbucks, which hosted the cup summit. “Sustainability is a problem we all have to solve together.’’

Many consumers (and even some coffee executives new to the struggle) think there is an easy answer: switch to paper. But it’s not that simple. It takes roughly 20 million trees and 12 billion gallons of water to manufacture the 58 billion paper cups that end up in the trash every year. Most communities do not have the means or equipment needed to recycle these cups, which involves separating the paper container from the wax-like inner lining that prevents your java from leaking out.

Even the compostable cups of Green Mountain Coffee, known as ecotainers, fall short of perfection because they can only be composted at a few commercial facilities, not in backyard composters.

There are also limitations on materials used to create environmentally friendly cups. The US Food and Drug Administration restricts how much post-consumer recycled fiber can be used in products that come in contact with food. Other cutting-edge containers can’t be readily manufactured in the amounts needed by coffee chains, or they fail to meet performance standards.

One time, Hellyar brought some new cups made of eco-friendly materials to Dunkin’s quality assurance lab to test them out. He poured a fresh hot brew in them and returned to his desk. A few minutes later, a research and development worker came running after him, cursing that two dozen coffee cups were leaking all over the lab.

Read more at: Boston Globe

Subway Breakfast Sandwich. Source NRN

Elissa Elan reports in Nation’s Restaurant News that after serving breakfast for four months, Subway said the daypart has increased sales systemwide and exceeded expectations, leading the sandwich chain to expand the early-morning menu with limited-time offers and explore the service of more coffee or espresso-based beverages.

In an interview with Nation’s Restaurant News, Larry Varvella, Subway’s research and development project leader, said the chain’s foray into breakfast — a daypart filled with heavyweights McDonald’s and Dunkin’ Donuts — was a success for the brand and its franchisees.

“We’re very excited that our initial results show it is outperforming even our original expectations,” Varvella said. “Those original expectations were based on our franchise owners breaking even at the least. Of course we fully realized that to be a major player [at breakfast] we needed a long-term commitment. We figured that would be a three-to-six-month period. The last thing we wanted was for our owners not to be profitable.”

The Milford, Conn.-based quick-serve sandwich chain introduced its breakfast program April 5 to more than 25,000 Subway restaurants across North America. The menu features egg and cheese sandwiches served on whole-wheat English muffins, flatbreads or Subway’s traditional 6-inch and foot-long hoagie breads at a prices ranging between $1.75 and $2.25 for the English muffin melts, $2 to $3.50 for the 6-inch hoagies or flatbread sandwiches, and $4 to $6 for the foot-long variety.

The chain entered breakfast as more research highlighted the daypart’s growth potential and popularity with consumers. According to a study conducted by market research firm Mintel Research earlier this year, the breakfast foodservice market is expected to grow 13 percent through 2014. In addition, two of the fastest-growing menu items at quick-serve restaurant chains are specialty coffees and breakfast sandwiches, according to NPD Group, a marketing research firm based in Chicago.

More sandwiches are on the way, Varvella said, although he would not disclose what was in test or when new items would debut.

“We are definitely looking at introducing new items through limited time offers,” he said. “We fully believe that new products are one of the life-bloods of a restaurant chain. We want to keep [the program] new and exciting, and have a lot of items in the pipeline.”

He added that Subway also is exploring the possibility of expanding its beverage line to include espresso-based and flavored coffee drinks.

“Coffee has been a very strong part of our program,” Varvella said. “We’re looking at expanding with Seattle’s Best above and beyond standard drip coffee.”

Though Varvella would not disclose sales for the breakfast program, he indicated there are several barometers that have determined its success, including the acceptance by Subway franchisees.

“The franchisees are happy and the customers are buying the product,” he said. “In the past the menu mix was higher in non-breakfast items, but now we’re seeing equal amounts [in sales] of about 50 percent breakfast and non-breakfast, which, again, is ahead of projections.”

Varvella noted that the two best-selling breakfast items include the egg white western melt and the double bacon and cheese omelet. Latest promotions have highlighted the steak, egg and cheese sandwiches.

Read more at: Nation’s Restaurant News

P.F. Chang's and Unilever are offering meals for two in the frozen-food section.

Bruce Horovitz reports in USA TODAY that some of the most familiar names in the restaurant world are moving into the grocer’s freezer.

P.F. Chang’s, Burger King and Jamba Juice all have recently licensed their names for new products to be sold in supermarkets. They join other high-profile restaurant chains including Marie Callender’s, Starbucks, T.G.I. Friday’s and California Pizza Kitchen, which already have substantial presence at the grocery store.

The most recent moves come at a time when many former frequent diners — scared off by the recession — are not returning to restaurants. “It’s a search for new revenue streams,” says Robin Lee Allen, executive editor at Nation’s Restaurant News. “It’s also a way to keep the brand top of mind.”

It’s also a way for a chain to familiarize consumers with the brand before entering a new market with restaurants, consultant Linda Lipsky says.

New freezing technologies that are better at keeping items tasty have made the grocery’s frozen-food aisle almost a “no lose” proposition, says Bob Garrison, editor of Refrigerated & Frozen Foods, a trade magazine.

Among the newer name brands at markets:

•P.F. Chang’s. Even with new methods, frozen food isn’t going to taste exactly like fresh — which makes Chang’s deal with Unilever to make eight frozen meals-for-two ($7.50 to $10) compelling. Chang’s, with 172 restaurants in 42 states, has built its reputation on offering great taste in its food. The question is, can Unilever’s new freezing technique do the trick?

“There were enormous discussions,” says Michael Welborn, head of global brand development. “We can never do anything to tarnish the brand.”

Based on its success with the Bertolli Italian frozen-food line, executives at Unilever convinced Chang’s that they could work the same magic on its Asian entrees. But, says Gaston Vaneri, frozen-foods marketing chief at Unilever, the company also needed Chang’s name recognition and its know-how to make a frozen Asian food line a hit.

To help convince workers that the frozen food tastes good, Chang’s CEO Rick Federico sent freebie coupons to employees to try the new items.

•Burger King. The chain recently teamed with the ConAgra Foods Lamb Weston division and rolled out King Krinkz seasoned crinkle-cut fries — cooked in the microwave — for $1.10. The focus is “to reach consumers through new channels” and give them “new ways to connect with the brand,” marketing chief John Schaufelberger says.

•Jamba Juice. The chain, with 750 units in 22 states, has a line of Frozen Fruit Sorbet & Yogurt bars made by Oregon Ice Cream. A box of four, 2.5-ounce bars costs $3.99. “The driver is to extend the Jamba brand and to let the consumer enjoy Jamba in more ways,” CEO James White says.

USA TODAY

Here are the two sides of the argument.

Against: At the hearing, franchise owners pleaded that more “government regulations” are not necessary. Additionally, some Santa Clara residents feel it is shameful to put a ban on the Happy Meals and the toys inside. Parents should be allowed to choose what their kids eat and little children should not be deprived of toys. Others say that there are healthy choices in the meals such as salads, apple slices and low fat milk. According to abcnews.go.com, overall, “87% of county residents opposed the bill. ”

For: Supporters point out “one in four children in the county are overweight or obese.” Indeed, it is no secret that many children in America are overweight. Ken Yeager, the bill’s sponsor says, “Breaking the link between unhealthy food and prizes” is important. In other words, people feel that children are lured into eating the fast food due to the prize they receive after eating it. After all, McDonalds is associated with fun and happy times for kids.

Watch the video:

The companies, which also include Au Bon Pain and Uno Chicago Grill, are the first to make the voluntary pledge through the National Salt Reduction Initiative, a public-private partnership that New York City launched earlier this year. Eighteen health organizations and 29 cities, states and municipalities are now participating in the program.

“By working together over the past two years, we have been able to accomplish something many said was impossible: setting concrete, achievable goals for salt reduction,” New York Mayor Michael Bloomberg said in a statement. “The National Salt Reduction Initiative has the potential to save tens of thousands of lives that otherwise would be lost to cardiovascular disease in coming years.”

Monday’s announcement comes as the sodium debate heats up on a national scale. Last week, the Institute of Medicine issued a report recommending federal regulation of sodium content in prepared and restaurants foods. The National Restaurant Association, however, maintains that sodium reduction should be done on a voluntary basis. (EARLIER: Talk of sodium regulation boils over)

Other companies that pledged Monday to reduce sodium in their products include Boar’s Head, FreshDirect, Goya, Hain Celestial, Heinz, Kraft, LiDestri, Mars Food, McCain Foods, Red Gold, Unilever, and White Rose.

The companies each made pledges for specific categories. Starbucks, for example, is targeting the sodium content in its sandwiches and cookies, and Uno is working to cut sodium in a variety of menu items, such as pizza, hamburgers and chicken sandwiches. Click here to see a PDF of all the companies’ goals.

Subway, which is looking to reduce sodium in its sandwiches, said it was pleased to join the initiative.

“Reducing sodium in our food is a commitment we have made for our restaurants globally,” said Lanette Kovachi, the chain’s corporate dietitian. “We are proud to partner with the National Salt Reduction Initiative. It will provide an important barometer to help us measure the progress we are making.”

The NSRI currently monitors sodium levels in 62 categories of packaged goods and 25 categories of restaurant foods. The companies participating in the program will reduce sodium in 49 of the packaged food and 15 of the restaurant categories.

“Reducing salt intake has been a public health priority for decades,” said Thomas A. Farley, New York City’s health commissioner. “We can now say we are taking the first steps to achieve it. This was made possible because of agencies and organizations that have joined to make this a truly national initiative, and we especially thank this group of companies that are leading the food industry toward a healthier food supply.

“We look forward to expanding the industry’s participation in this public health effort,” he added.

The recommended daily limit for sodium intake is 1,500 milligrams for most adults and 2,300 milligrams for others. Medical experts contend that increased sodium levels in one’s diet can lead to high blood pressure, hypertension, heart attack and stroke.

 Read more:  Nation’s Restaurant News

Subway's Jared

Quick-service operators have a tough task promoting themselves in a market where consumers are increasingly concerned with keeping to a balanced diet. This year began with new healthy eating–based marketing campaigns—a renewed interest in a trend that had taken a backseat to promoting price and value for a while.

While healthy eating is far from a new trend, the National Restaurant Association reports that 73 percent of adults say they try to eat healthier now at restaurants than they did two years ago. Furthermore, as eating out on the go becomes an ever-increasing part of consumers’ busy lifestyles, so too does quick service’s contribution to national health and, consequently, pressure on the sector increases.

Recent mandates for restaurants to post calorie content on menus could significantly change how consumers behave and consume, so it is important to figure out how to position and market a brand now before it becomes widespread. Furthermore, mothers will always remain key decision makers when eating out, and a healthier image could be the deal breaker when they decide which brand to eat at.

As such, we have seen healthy eating become a central part of marketing strategies, with key trends including improving brand transparency, not deviating too far from the core business, targeting the right consumer, and stepping up the use of endorsements to build trust.

With the publishing of calorific and nutritional information increasingly available, quick service has to factor this into company strategy. It is now actively directing consumers to healthier parts of the menu—Quiznos, for example, promotes 20 sandwiches under 500 calories—to avoid consumers giving up on fast food altogether.
Healthy eating is more top of mind for consumers now than ever before, and brands need to develop marketing strategies that display their healthy efforts. 

Read More at: QSR Magazine

Data compiled by the Chicago-based consulting firm revealed that the 500 largest restaurant chains posted aggregate annual sales of $230 billion, down almost $2 billion from a year earlier. In 2008, aggregate systemwide sales for the group had increased 3.4 percent. Many concepts halted expansion plans and closed underperforming locations, resulting in an anemic 0.3-percent increase in unit growth, compared with 1.8 percent growth in 2008.

“As the U.S. economy remained in a recession, restaurant operators continued to face a host of challenges, including cost pressures followed by declines in consumer dining demand,” Ron Paul, president of Technomic, said in a statement. “The data in this report clearly supports what we’ve been hearing in our consumer research surveys over the past year.”

Paul told attendees at the annual UCLA Extension Restaurant Industry Conference last week that growing sales in 2010 likely would remain difficult as unemployment and underemployment are expected to stay near current levels for the rest of the year. [Earlier coverage: Recovery in 2010? Maybe not]

Technomic also found that the country’s 500 largest chains performed better abroad than in the United States. International sales for the Top 500 brands grew 3.3 percent in 2009, and international unit expansion was 5.2 percent.

While the top 500 chains struggled as a whole in 2009, certain brands and industry segments bucked the trend with growth in sales and locations.

The 10 fastest growing chains with 2009 sales over $200 million

Ranked by largest percentage sales increase with concept name; 2009 U.S. systemwide sales; % sales increase
•Five Guys Burgers and Fries; $453 million; 50%
•Tim Hortons; $446 million; 23%
•Buffalo Wild Wings Grill & Bar; $1,496 million; 22%
•Jimmy John’s Gourmet Sandwich Shop; $602 million; 21%
•Wingstop; $307 million; 20%
•Noodles & Company; $230 million; 15%
•BJ’s Restaurants & Brewhouse; $430 million; 14%
•Chipotle Mexican Grill; $1,517 million; 14%
•Firehouse Subs; $206 million; 10%
•Potbelly Sandwich Works; $246 million; 10%

Source: Technomic Inc.

Read more: Nation’s Restaurant News

The commitment comes on the heels of Subway’s announcement that it will roll out a breakfast menu.

Matthew Prescott, corporate outreach director for the factory farming campaign at the HSUS, says there is no timetable yet on when Subway will reach 100 percent cage-free usage, but that the sandwich chain will start by using 4 percent.

“They’re starting with 4 percent cage-free eggs, which we can safely say will spare tens of thousands of birds from life inside a cage,” Prescott says. “When they reach 100 percent, it will put that figure in the hundreds of thousands.”

Other quick-serve chains have agreed to switch to using cage-free eggs, including Burger King, Wendy’s, and CKE Restaurants. Subway is the first to commit to using 100 percent cage-free eggs.

“It’s part of a growing trend of, not just companies starting to use cage-free eggs, which really started with Burger King in 2007 as far as major corporations go, but now we’re seeing this is a trend to do 100 percent,” Prescott says.

“Subway is the first [quick-serve] chain to commit to 100 percent, but in other sectors, just even over the last few weeks we’ve seen this.”

Read more at: QSR Magazine