Category Archives: Reality checks

August 9, 2019 · 1:43 pm

A New Food Hall?

This Foodie Friday I’m doing something way out of the ordinary for this space: I’m going to quote heavily from a press release. Yes, that’s right – I finally got one that interests me because I think it makes a point that will be of interest to you. That said, I’m going to edit this to make a point in a second.

The Local Culinary, an all-new innovative (EDIT) restaurant concept led by seasoned European restaurant industry veteran and entrepreneurial visionary Alp Franko, today celebrated its official launch, with the opening of its first location in downtown Miami. With a (EDIT) kitchen located on South Miami Avenue, The Local Culinary operates eight individual concepts where chefs produce a range of creative, inspired menus.  Catering to both evergreen fare and timely dining trends, The Local Culinary is dedicated to serving modern, chef-driven food (EDIT) options inspired by global cuisine. From Mexican, Italian and Asian cuisines to burgers, fried chicken, healthy bowls, gourmet salads and more, the company’s (EDIT) restaurant fare is available to Miami residents (EDIT).

OK, so why would an announcement of what sounds very much like a food hall (8 restaurants under one roof) be particularly interesting? I mean you can’t go more than a few miles in many major cities without finding one, so what’s the big deal? I’ll give you a hint. According to a recent survey on Upserve.com, 60 percent of U.S. consumers order delivery or takeout once a week, and 31 percent say they use these third-party delivery services at least twice a week. Orders placed via smartphone and mobile apps are expected to become a $38 billion industry by 2020, with millennials as a driving force.

Did you guess? This is a virtual restaurant or restaurants. Everything I edited out mentioned that fact and that the food is only available via delivery. There is no physical dining room and all 8 operate out of a common kitchen. It’s a food hall without a hall and it caters specifically to the demand for meals delivered. Why I find this interesting, no matter which business you’re in, is that it is a reminder that consumer preferences change constantly and those changes can be devastating if you’re not anticipating them. Think about the landlords who own prime street locations for a restaurant. What happens when “restaurants” can be located in a warehouse with no real parking or storefront? What about the paper companies who haven’t geared up to fulfill orders for a huge takeout market? It doesn’t take a lot of thinking to figure out how many other sectors, from servers to bartenders to furniture to glassware this trend could impact.

Legacy thinking does nothing but gets you left behind. Look at the issues (since it’s Foodie Friday) that Kraft-Heinz is having. Big brands like Oscar Mayer and Maxwell House are out of step with modern consumers’ tastes and even though they were smart enough to buy an early plant-based “burger” company (Boca), they have been left behind by the newer companies such as Beyond Meat.

How far down the road are you looking? What are you doing about what you see?

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August 5, 2019 · 8:24 am

When I’m…

Most of the time, this blog is about you, or at least about something that I think could be helpful to you. Today, if you’ll indulge me since it’s my birthday, it’s mostly about me, although maybe there’s something you could take away as well.

When I was 12, The Beatles put out the Sgt. Pepper album. It had a little ditty called “When I’m 64” on it. While to most of us the song was brand-new, it turns out it was one of the first songs Paul ever wrote and was in The Beatles performance repertoire quite early on (they played it when their amps went out). It seemed kind of hokey to 12-year-old me and the lyrics about being old and losing my hair seemed very far off.

Well, that was in 1967, and if you can do the math, it’s 52 years later. So let’s see – I was 12 and if add 52 that’s OMFG – I’m 64! Well, happy frickin’ birthday, old man. Yep, the future is now. My hair is mostly gone too. I don’t, however, ask myself if I’m still needed (nor do I have Vera, Chuck or Dave as grandchildren). I also realize the song is about getting old together and is sung by a young person. 64, by the way, is still pretty young. That said, may I impart a little wisdom from this almost-aged one?

I try to live in the moment. I’ve made an effort to stop looking back and wanting things to have been different and I try not to look too far forward because things happen each day that affect what the future might hold. That’s not as easy as it sounds, at least not for me. When I do look back, I try not to think of things I would do differently as mistakes but as lessons. I’ve always been a pretty good student and have never had to repeat a class so learning those lessons thoroughly prevents the outcomes I might change from happening again.

Like most of us, I’ve experienced unbelievable joy and unbearable sadness. The trick isn’t, as some folks say, not to get too caught up in either. I think experiencing them fully is the best (and worst) part of being human. It’s when we stop feeling and are emotionally dead to the world that we have problems. I just try to remember that the highs and lows will pass and while each of those extremes affects us in some way, the changes they bring make each day more interesting than the last.

Mostly, what I’ve learned is exactly that: it’s about constant curiosity and learning. Growth and wisdom come from that learning and we’re all in this together, like it or not. Helping others to grow and to learn, as I set out to do as a teacher 40 years ago and still do now in a different way, assures that the world answers the “will you still need me” question in the affirmative. Does that make sense?

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July 29, 2019 · 11:44 am

Symptoms, Diseases, And The Long Term

We’re into that time of the year when corporations are reporting their results for the last quarter. I tend to look at any single quarter’s results as a data point and since I’m a believer in watching things through the lens of the long-term, I mostly ignore anything strongly negative or positive unless it’s part of a long-term trend.

I’m sure it’s not a shock to any of you that the cable TV provider business is in a downward trend. I’ve written about this before and you might be one of the millions of folks who have cut their cable cord and gone pure streaming or supplement your streaming with an HD antenna to get your local TV over the air (everything old is new again!). Charter Communications is one of those cable TV providers who is watching their user base deteriorate. This last quarter, the company’s video customers sank by 150,000 subscribers, now totaling 15.8 million. At the same time, their Internet customers grew 221,000 to a total of 24.2 million, which also mirrors what’s going on elsewhere and the aforementioned trends. At the same time, these distributors are getting hit with increased costs for programming – what the cable networks charge the delivery guys to carry their programming (and in theory, the availability of which is why people pay for cable in the first place).

What the CEO said in making the results announcement, however, doesn’t mirror other CEO’s thinking and that’s what I want to highlight today:

Asked why the company doesn’t raise prices to cover increased programming costs, CEO Tom Rutledge said, “If you do a 10% programming price increase and lose 10% of your customers, you don’t really get anywhere and yet you’ve alienated a lot of people. In fact, that’s actually happening and has been happening. I expect continuous fighting for the foreseeable future.”

Mr. Rutledge gets it.  He is not confusing a symptom (customer loss amid increasing costs) with the disease (a rapidly changing business model reflecting consumer resentment at the high monthly out of pocket costs). Rasing prices would, in my opinion, accelerate the negative trend. It would stabilize earnings and make investors happy in the short term, but it’s not sustainable and would ultimately result in disaster.

More of us in business need to think that way. What’s a symptom and what’s the disease it reflects? What’s the right play for the long term even if it hurts in the short term? Does that make sense?

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