Friends of Branded!
Happy Saturday!
It’s not often that the stars align and I get to triangulate a national treasure, Mr. Mike Rowe, the CEO of Branded Partner Company Simple, Mr. Daniel McMurtrie, and Branded’s love of highlighting podcasts in The Branded Weekend Update!
My shoutout and 'top of the fold' contribution goes to The Way I Heard It With Mike Rowe and his most successful podcast that I can only wish and aspire for the Hospitality Hangout to emulate and his welcoming and featuring our friend and partner Dan McMurtrie on the episode Out of the Frying Pan and into the Fryer.
I’ve been a fan of Mike Rowe for years (and my wife LOVES him). My appreciation for him only increased as I watched him celebrate the importance of blue-collar workers, blue-collar jobs and his obsession and celebration of people doing good deeds.
This week Mike released an episode of his podcast and featured our friend Dan. It’s an awesome and fun episode that I hope you choose to check out. The podcast features Dan McMurtrie and he talks about his baseball career, his life as an entrepreneur and his mission to save mom-and-pop restauranteurs.
This episode of Mike Rowe’s podcast made me think about my own love of the hospitality industry and especially the people that work in it. I’ve had the privilege of working several positions in front of the kitchen (as a much younger man) and entered the industry by walking into a neighborhood joint in NYC while on a college break looking for a part-time job. I got lucky by showing up at the very moment when the owner (thank you Perry) was hiring a new general manager. The new GM hired me on the spot as a busboy. I bused tables, got a turn as a bar-back, then a waiter and finally a bartender. I thought I maxed out and reached a pinnacle when I landed the weekend shifts at a most popular joint (thank you Joseph). Over 90% of our customers paid with cash. It was a good gig!
I think EVERYONE should do a stint working in the hospitality industry. I know absolutes are dangerous, but before you roll your eyes at my suggestion that EVERYONE should work in the hospitality industry, just remember that the State of Israel requires EVERY Israeli citizen over the age of 18 who is Jewish, Druze or Circassian to serve in the Israel Defense Forces. If you consider the seriousness of that requirement, this (never going to happen) requirement to work in the hospitality industry doesn’t seem all that daunting or difficult. 😊
While I know such a mandate will NEVER happen, let me tell you what working in the hospitality industry will do for you (or your children). You (they) will learn how to be part of a team, how to engage with customers, multitask, sell, manage, be part of a team comprised of an incredibly diverse group of people, deal with conflict, be recognized for success, confront failures and have an awesome experience and make lifelong friends.
Here’s what you will also gain from working in the industry - you will become a better customer, guest and patron of hospitality venues and your own experiences in restaurants and other hospitality venues will be vastly elevated by having an understanding of what it’s like to work in the industry.
You want one quick and easy lesson – be nice! That shouldn’t be hard, but it’s still shockingly too rare. Be nice and your experience in restaurants will be elevated for no other reason than doing what we all should be doing.
When I interview people, there are a few things on a resume that catch my attention. In no particular order, I find myself wanting to know more about candidates that played a team sport, have military experience, were first-generation college or worked in the hospitality industry. Are any of these experiences a guarantee of success? Of course not, but I’ve found all to be at least indicators of good team players, folks that roll up their sleeves, get stuff done and have a strong work ethic and ambition.
Only oxygen and gravity must be respected by everyone, but I think an experience working in hospitality should be embraced by as large an audience as possible. It’s an incredible experience and for me personally, it’s created a journey and a career that I feel extremely lucky to be on and a community I feel so fortunate to be part of.
Okay, there’s a lot to cover this weekend, so as always, let’s go!
MARKET COMMENTARY
Articles that caught my eye combined with some Branded commentary and insights.
I loved this article by Josh Rush. Not only because it was a 9-minute read (which is on or about the length of The Weekend Update), but because of his comparison of how crude oil transformed the economies of the 20th century to the importance of personal data as the lifeblood of today’s high-value tech companies. According to the article, data has created trillions in revenues and market value over the past decade alone.
Despite the article’s wishful thinking, I do not believe the consumer will be compensated for his or her data any time soon. And for avoidance of any doubt, let me now tell you why - because your personal data is NOT worth anything. My buying and purchasing activities aren’t worth anything, however, the data of thousands, hundreds of thousands or even millions of people like me is worth an awful lot!
We, as consumers, customers, guests, social creatures, etc don’t value our data. One of the greatest things to happen to the CIA, Homeland Security, FBI or other intelligence agencies was the emergence and embracement of social media. We post and give our most personal information away freely. While the vast majority of what we give away has little to no value to the intelligence agencies, it has tremendous value to the business world that wants to know what we like and care about, so they know what to sell and market to us.
Branded’s focus is exclusively on the foodservice and hospitality industry, and despite the transformation of the industry that’s underway and the importance of technology and innovation being at the forefront of margin optimization and the criticality of creating efficiencies, the data and analytics space remains underweighted and under focused on.
I don’t believe we’ve ever met an emerging tech company that didn’t have a page in their deck that talked about data or tried to make it part of their value proposition. However, having data run through your platform is not the same as being a data and analytics company.
If the article is correct and data is the new oil, then you can hope that someday the consumer will benefit or be compensated for sharing their data or you can look for the companies that are uniquely making data a most important input into the decision-making of our industry.
For Branded, we’ve embraced Brizo Foodmetrics as our source of truth for the industry and Ingest as the data platform for smarter restaurants. Please bookmark this section because you'll be hearing a great deal more about these two tremendous platforms and I'm going to remind you that I gave them shoutouts in this week's edition of The Weekend Update.
Yes, there have been plenty of articles that have tried to capture the extent of the Great Venture Capital Reset of 2022, which has been recognized as the moment, according to the article by Leslie Feinzaig, “when fundraising activity screeched to a halt after running fast and hot for the longest bull market in VC history.” The article goes on to highlight how an untold number of in-progress funding rounds sputtered in the process, and every startup that had planned to raise in the second half of 2022 found a very different market waiting for them.
However, this recap of the great correction is NOT why I grabbed this article for this week’s Update. It was the “glimmer of optimism” for founders and the uptick in deal flow and momentum in January that got my attention. There’s no question that the bar has been raised when it comes to emerging tech companies securing capital, but the article highlights how investors are more comfortable with the “new normal” and are now back in action with respect to exploring opportunities.
The Branded Team completed its own version of a Crazy Ivan this week where we scrutinized every company in our portfolio (and that information is being shared exclusively with our stakeholders and on an “as requested” basis only).
What we found was that while multiples are of course lower, our focus was on sales growth (and I was THRILLED to see the sales growth of our portfolio companies). How are our Partner Companies being embraced by the industry? With the industry's explosion in tech & innovation, which companies are seeing sales growth and low churns that confirm our expectations around product market fit?
That’s why I enjoyed this article so much. It was a love letter to founders with the goal of telling them what investors are thinking, expecting and wanting to see.
Whether it’s fair or not that investors did a 180-degree turn and went from demanding growth at all costs to speed to profitability doesn’t matter. Investors want to work with “pragmatic” founders that are paying close attention to their numbers and are being mindful of the amount of capital they’re raising and the runway they’re creating. They want to see valuations that are not about “what am I worth” to what valuation "can I grow comfortably in a short period of time.”
I would never say anything is a “must read,” but I would like to strongly suggest that all founders read this article. It’s loaded with nuggets that you need to be aware of. It’s honest, so much so, that it includes a section on this being a time for “brutal honesty.” Founders are natural optimists, but as the article points out, this is not the time for blind optimism.
As I’ve written about previously, the market will rebound. This is NOT a question of “if” but a question of “when.” As my friend Chauncy Gardner said, “we will get spring and summer again,” but first start-ups need to make it through this VC winter. The article talks about how you first need to survive before you can thrive and that’s about leading your start-up on “substance over hype.” That’s what I call brutal honesty!
TECHNOLOGY
2023 has arrived and an updated restaurant tech landscape with more brands is rising including the expansion into AI and Machine Learning. Off-premise dining and food delivery continue to grow with a projected market volume of $384 billion by 2027 in the U.S. It’s no surprise that restaurant tech companies are partnering to offer a magnitude of services seamlessly for the digital guest experience!
One of our partners, Incentivio, has big plans this year to significantly expand their partner ecosystem, release major enhancements to their platform, and continue to grow their customer relationships. With 1.8 billion loyalty points awarded, 54+ million messages sent to customers, over 3,000 live restaurant locations, and $147k yearly at-risk revenue recovered per restaurant location utilizing AI that automatically predicts which customers will stop interacting with the restaurant and uses the marketing suite to target them for re-engagement, Incentivio is achieving their mission to helping restaurants increase retention and revenue!
Exciting partnerships across marketing, delivery, and a POS system helped kick off 2023 with more integrations in the pipeline! Ovation, the 2-question guest feedback platform, Shipday, an all-in-1 delivery software, and Clover, the leading provider of POS systems for small businesses all work seamlessly with Incentivio!
Major updates are in the works that will take the look and feel of the Incentivio platform to the next level with enhancements to features and functionality. The restaurant engagement platform is always looking to elevate its customers' experience by meeting with brands to gather feedback to provide the best all-in-one platform.
Incentivio recently traveled down to West Orange, New Jersey to film a production to capture a story-driven testimonial from their client Wing It On! to help humanize and amplify the value their platform creates for restaurant owners and franchises. Stay updated on Incentivio’s exciting year by following them here.
FINANCE & DEALS
Investor sentiment hit its most bullish level since November 2021, according to a recent article from Business Insider. Investors' boost in confidence is the positive outlook we've all been anticipating. This optimism arises as the economy begins to stabilize, more positive corporate earnings hit the wire and global tensions decrease. Regardless of some challenges and uncertainties, the increased activity in the market has caused stock prices to climb giving investors more confidence in the current and future market.
Restaurant Industry Movers in the Market
—Data as of 2/10/23
BUSINESS
Embarking on a digital roadmap strategy can be challenging, especially if you lack expertise or experience in digital transformation. Whether you're a startup or a large company looking to remain competitive through the adoption of new technology, having a third party assess your digital maturity and empower you can be crucial in your transformative journey.
The World Economic Forum recently published an article that highlights 7 Chief Digital Officers and how they're navigating the uncertain environment - Click Here to see what they had to say:
- 'In an uncertain world, technology innovation is the one certainty that you can rely upon to tackle seemingly intractable challenges' - Paul Daugherty, Accenture
- ''What is good for our customers is also, in the long run, good for us', and these words continue to be a driving force' - Parag Parekh, IKEA Retail (Ingka Group)
- 'Decarbonization of the energy industry is not possible without a comprehensive digital transformation' - Jay Crotts, Shell
- 'When data and digital teams are part of project leadership, they help connect assets, ensure information can be shared on common platforms, and improve the efficiency and speed of the delivery' - Geeta Thakorlal, Worley
- 'We are shifting from products to services, using predictive sciences and technology to help consumers to make perfect choices' - Asmita Dubey, L'Oreal
- 'We must ensure that data is not controlled by a few centralized companies, without being channeled towards addressing social issues' - Albert Chu, Sompo Holdings
- 'While in the past a customer’s experience of a car was primarily defined by hardware, software is now taking on a much more important role' - Bern Schmaul, Bosch Mobility Solutions
PODCAST
Tuesday, February 7th- Hospitality Hangout: In the latest episode of The Hospitality Hangout, Michael "Schatzy" Schatzberg “The Restaurant Guy” and Jimmy Frischling “The Finance Guy” chat with Wade Allen, SVP and Chief Digital Officer of Brinker International for a special Super Bowl episode where they talk about kitchen automation and the importance of a back to the basics game plan on strategy.
Brinker International a leader in casual dining restaurant companies whose brands include Chili’s Bar & Grill, Maggiano’s Little Italy as well as virtual brands. Allen says, “Let me start with if you don't know Brinker you probably don't know casual dining because over the course of the last forty-five plus years we've owned 30 different brands. But today our core brands are Chili’s, Maggiano's Little Italy and then we launched a virtual brand called, It's Just Wings about two years ago.”
Listen to the full episode on Spotify, Google Podcast, Apple Podcasts, or Amazon Music
Thursday, February 9th- Branded Insights: The big game is right around the corner, and while football fans are eagerly looking forward to the approaching ‘Sunday! Sunday! Sunday!’, the foodservice industry is focusing its attention on Sales! Sales! Sales! And rightfully so, considering the Super Bowl spending blitz is expected to reach $16.5 billion or $85.36 per person.
A recent 2023 Super Bowl survey found that 192.9 million U.S. adults plan to tune in to the big game this year. 103.5 million people plan to throw or attend a party, and another 17.8 million plan to watch the game at a bar or restaurant. Plus, over 63 thousand fans will be watching the game live at State Farm Stadium in Glendale, Arizona.
That’s a lot of eyes on the ball, and bellies to be filled. But no matter where fans decide to watch Sunday’s quarterback showdown, their food and beverage purchases can translate into huge profits for the foodservice industry. Let’s take a look at a few venue options and the tech that is elevating consumer experience while improving restaurant operations, creating the ultimate win-win scenario.
Are you looking for a tech solution? A new partnership? Or maybe an easy way to build your tech stack??? Check out BOOM a food service marketplace!
BOOM a food service marketplace! is a digital ratings and review platform providing best in class technology, innovation, professional services and suppliers for the entire spectrum of the hospitality industry.
Want to learn more? Click HERE or contact us at boom@brandedstrategic.com
IN THE NEWS
Hospitality Tech and F&B Innovation IN THE NEWS:
We love to highlight Food Service & Hospitality news, especially when it’s Partners & Friends making it!
- Ecotrak: Ecotrak Announces Latest Funding Round
- PourMyBeer: A Restaurant's Guide to Offering Wine on Self-Pour Taps
- Yumpingo: Empower your restaurant marketing: break the apology habit
- Vromo: Choosing Restaurant Delivery Software: Tips & Red Flags
- Ovation: Why you should respond to online reviews
- GoTab: An Afternoon with an Industry-Leading Chef - GoTab and meez
- Incentivio: The Virtual and Ghost Kitchen Playbook: Essential Tools
And in other News…please see some of the stories that caught our attention and that we’re paying attention to. This week was loaded with headlines and news!!
- Gizmodo: Roku and DoorDash Have Teamed Up for Interactive Food Delivery Ads
- MarketWatch: Uber stock rises after earnings show profit progress
- The Wall Street Journal: PepsiCo, Kellogg Sales Jump as Shoppers Splurge on Snacks
- Restaurant Business: Chipotle Appears to be Testing a New Concept
MARKETING
🥔 Wed = 13 orders of Tater Tots. Fri = 16 orders of Tater Tots
At Handcraft Burgers and Brew, on average, we sell 17 orders of Tater Tots per day.
==> On February 2nd, we sold 125 ORDERS of tater tots!!! <==
So what happened? #NationalTaterTotDay
While most people were waiting to see if we were getting 6 more weeks of winter, we were busy using SMS, email and social media to promote $1 tater tots (normally $4.) We spent $0 on ads (we do advocate for digital ads, just not for this one.) Best part -- 77 of those were from brand new customers! Which means this worked both for retention and acquisition.
Their average check size: $21.48
Our average check size = $24.72
Which means our cost of acquisition was less than $4 but each of those guests ran up a check that was on par with our average guest.
A lot of people would tell you that marketing "food holidays" or "hashtag holidays" is lazy marketing, we would tell them you are either choosing the wrong food holidays or being lazy with your marketing.
Want my playbook? Click Here!
Want my help? Send me an email: rev@brandedstrategic.net
That’s it for today! I wish you a wonderful weekend!
See you next week, (about the) same bat-time, same bat-channel.
It takes a village!
Jimmy Frisch & Julia Suchocki
Branded Hospitality Ventures
jimmy@brandedstrategic.com & js@brandedstrategic.com
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_Jan 2023