Tag Archives: Food industry

May 27, 2016 · 8:50 am

It’s Not Just The Burger

This Foodie Friday, the topic is Fast Food. Specifically, we’re going to see what we can learn from the rankings of fast food chains in the latest Temkin Ratings Report. What the heck are the Temkin Ratings?

English: McDonalds' sign in Harlem.

(Photo credit: Wikipedia)

The Temkin Experience Ratings are based on consumer feedback of their recent interactions with companies. We asked consumers to rate three components of the experience, Success, Effort, and Emotion, on a 7-point scale. For each component, we take the percentage of consumers that gave a rating of 6 or 7 and subtract the percentage that gave a rating of 1, 2, or 3. This results in a “net goodness” rating for each of the three components. The overall Temkin Experience Rating is an average of the three “net goodness” percentages.

In other words, they’re measuring if customers could do what they wanted to do, how easy it was to complete the interaction and their overall feelings about the interaction. In this case, it might be if the chain had the food item you wanted or prepared it the way you asked, was there a long wait or other impediment to you getting you food, and how pleasant the experience was.

Here is the business paradox and perhaps a learning. McDonald’s and Burger King didn’t do very well. In fact, as one site reported:

McDonald’s ranked dead-last among fast-food restaurants in the report, but there must be a masochistic streak among American consumers. Though the restaurant remains one of “the most commonly disliked fast-food establishments” in the U.S., last month Nation’s Restaurant News reported that McDonald’s is also the most-visited chain in the country.

So here is the question.  McDonald’s has placed a lot of emphasis on improving the menu – healthier items, more organic ingredients – and they now offer their popular breakfast items all day.  Sales are much better, and revenue and profits are two critical boxes on the scorecard in business.  I get that.  However, maybe they should have been spending more time improving the customer experience.  I can’t imagine that there is any sense of loyalty here.  The ratings seem to indicate that consumers go to McDonald’s either because it’s cheap or convenient and not out of any sense of enjoyment.  I don’t see that as a formula for long-term customer retention.

The thing for us to remember is that customers aren’t looking at your balance sheet.  They look at the product or service as well as the totality of their interaction with you.  If you’re not measuring and taking those things into account as you compile the financials, you’re probably missing a critical part as you analyze the health or your business.  Make sense?

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April 22, 2016 · 11:58 am

Box Wine

Foodie Friday, and this week our focus is on wine. Like many of you, I enjoy a glass or two of wine with dinner. Over time, that can add up in terms of keeping the cellar stocked, so I try to find inexpensive, well-made bottles. I’ve found it’s not hard to find quite a few that retail for under $12. Some of the better wine I’ve been drinking lately actually doesn’t come in a bottle at all – it comes in a box.

This image shows a red wine glass.

(Photo credit: Wikipedia)

If you’ve never tried box wine, you’re not alone. Box wine represents less than 5% of all wine sold here in the USA. Compare that to 20% in Europe and nearly half in Austrailia. What do they know that we don’t? Maybe that each box is generally the equivalent of 4 bottles and it will stay fresh for 3-4 weeks after you open it due to the vacuum sealed bags that are in each box. Unless you drink a typical bottle in a day or two, it oxidizes and the taste can become funky, no matter how well you reseal it.  But there is a broader business lesson here as well.

Box wine is a win-win for both the wineries and the consumer. The numbers I can find say that the cost to produce the box is less than the equivalent 4 bottles and the carbon footprint is less than half. It is way more convenient (try to carry 8 bottles vs. 2 boxes to your car).  Obviously, it moves more wine while providing a great value.  Why hasn’t it caught on here?  Maybe because some producers focus on making the wine as cheap as possible which often results in an inferior product.  As a great article from Food52 said on the topic:

In the U.S., boxed wine is plagued by associations with Franzia and college drinking games; when the technology first came out, cheap brands seized upon the budget vessel and filled it with contents that fully deserved the terrible reputation they gained. And the reputation has stuck.

We all need to think about the “bad actors” in our business segment.  How are they screwing it up for the rest of us?  Sure, it’s easy to say “well, they make the rest of us look good by comparison,” but the reality is that a significant percentage of consumers paint with a very wide brush.  While I think we all know great, honest lawyers, auto mechanics, advertising professionals, etc, those businesses have terrible reputations.

Consumers now assume box wine is low quality and won’t buy it, and because they won’t buy it, producers hesitate to make it.  It’s too bad that what is an obvious win-win becomes everyone’s loss due to a few bad actors.

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April 15, 2016 · 9:09 am

Mirror, Mirror

This Foodie Friday let’s take a good look in the mirror.  What follows is a sad look at some of the deceptive business practices discovered by investigative reporters in two cities.  It might be easy to write them off as some aberrant behavior on the part of a badly-run business except that the investigations found that the practices were widespread.  One can only wonder if rather than being deviant behavior these practices are the norm, and if they’re occurring in your town.  There is a broader business point as well. 

The first of these stories came out of San Diego last summer. You can read the entire article here, which describes how many chefs in the “farm to table” movement are deceiving customers:

Like any good movement, farm-to-table has now been severely co-opted. The stories of restaurants deceiving their customers—or flat-out lying to them—have increased. Multiple San Diego restaurants claim to serve Respected Local, Organic, Sustainable Farm X when in fact they’re serving nameless commodity produce that could be from Chile, for all they know.

Call it farm-to-fable.

So the chefs claim to be using locally-sourced, organic ingredients but are using the same jetted-in, pesticide-laden stuff as your local diner.  One can only wonder how their customers, who pay a premium for these ingredients and to protect their health, felt when they read this.  It is happening in Tampa too, as this piece from the Tampa Bay Times found.  They also explained the rationale behind the deception:

People want “local,” and they’re willing to pay. Local promises food that is fresher and tastes better; it means better food safety; it yields a smaller carbon footprint while preserving genetic diversity; it builds community.

Scummy? You bet.  I’d call it fraud, and one can only hope that each and every place named in these two pieces is out of business shortly.  But as I started today’s screed: we should each look in the mirror.  What are we doing that is at best a bit of hyperbole in our marketing, a little white lie that attracts customers or at worst outright fraud as committed by these restaurants?  What do we tell our customers and is it really what we’re giving them?  Do we use words like “unique” or “hand-made” when our product is neither?

It might be farm-to-fable in the food business but just maybe there is a similar tale being told in yours?

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