Friends of Branded!
Happy Saturday and I hope you had a great week.
The holiday season is in full swing and that of course means different things for different people (and different things for different businesses).
For some, it’s a time to winddown and wrap things up before taking a break for the holidays and ringing in the New Year.
For others, it’s a sprint to the finish with the goal of getting those final projects in the books before the ball drops in Times Square, my Bostonian friend JB’s favorite place second only to Fenway Park (how long do you think I can keep this New York vs Boston joke with my boy JB going? Oh, it’s already well passed its expiration date. Sorry about that). 😊
I think for most people, the weeks between Thanksgiving and New Year involve some combination of work, holiday cheer (in whatever way you like to recognize the holidays) and hopefully some reflection on the year we’re putting to bed as well as thinking about the year ahead.
I’ll take this moment to channel my inner Barbara Streisand (who my mom believed is a national treasure) and bring back a memory from the corner of my mind and specifically December 2023. The Branded team worked around the clock to close on the sale of Targetable to Chowly, on the very last business day of the year.
I’ll give a ‘legacy’ shoutout to Targetable’s former CEO, Andrew Nash, Chowly’s CEO, Sterling Douglas and Branded’s CIO, Mark Senkpiel, (along with many others) that worked until the evening of Friday, Dec 29th to make that closing happen. I was out at Doug Quinn’s Hudson Malone as I waited for the call from Sterling to confirm that we closed (and I may have ordered an adult libation to recognize a most meaningful moment for Targetable, Chowly & of course Branded as well).
Will there be another photo finish for Branded in December 2024? Stay tuned and I’ll be sure to let Doug Quinn know if I plan to be at his bar again, this year on Friday, Dec 27th (the last business day of 2024). 😊
For Branded, 2024 was dominated by a number of special situations and I’ve covered the companies that we worked closely with and advanced. Several themes, however, have or are developing and it has created a wealth of activity at the Top of our Funnel and has us thinking a great deal about the year ahead.
It’s hard not to believe that the embracement of AI won’t be a most meaningful trend for 2025. The restaurant industry has long been among the slowest industries to adopt technology & innovation, but with the explosion of tech that has burst onto the scene since the global pandemic, from my seat, I see a bar-belled approach when it comes to what operators are focusing on for the year ahead. On one side, I see a ‘back-to-basics’ approach, which I define as operators looking to provide their guests with experiences, value (not expensive or cheap, but value for their money), and personalization. From our Hospitality Hangout podcast and specifically the segment “hot or not,” I can tell you that QR codes for ordering have completely fallen out of favor and I see this as an example of going “back to basics.”
On the other side, I expect (which isn’t hard to say b/c much of this is already happening) AI to be an important solution for how operators can leverage and be tactical with the wealth of data that’s being collected.
Guest data, which can also be defined as consumer preference data, represents value to a number of different stakeholders in and around the foodservice and hospitality industry. For most operators, the data available or delivered as comma separate values (“CSV”) file doesn’t represent value, I’d say it represents work that is unlikely to get done and therefore won’t be much of any help. Tech platforms that are taking in the data from operators and converting into actionable and tactical recommendations and / or solutions for operators are going to have a strong 2025.
Leveraging guest data will support operators need to connect, personalize, and improve guest experiences and it will also sharpen operators’ ability to make more informed, data-driven, and therefore less emotional decisions. If personalization is what’s going to be required to win a greater share of the guests’ wallet, then optimization and efficiency will be the obsession of operators when it comes to back of house (for example, optimizing labor, procurement, and inventory). AI represents an opportunity for the democratization of our industry as independent operators (over 70% of the restaurants in the US) can have access to information that will help them be a more efficient and engaged businesses with their guests. This is something that's typically been limited to only the largest hospitality operators that had the depth and scale to carry the human capital resources to perform such work.
I’m aware of many schools (at all levels) that are trying to police AI, and I wish them luck with that (seems like a polite thing to say). For hospitality operators, AI is your friend, your ally, and I can only encourage engagement and embracement of this tool that has the potential to strengthen your relationships with your guests and operate your businesses more efficiently.
Like so many other areas, the features or point solutions are where I see some operator fatigue and maybe some exhaustion when it comes to tech. This goes back to a theme I’ve written about often which is the difference between what an operator needs to have vs what might be something nice for an operator to have (and even worse, what a technologist thinks an operator might want without having any basis or operational expertise to know).
That’s not to say there aren’t features or point solutions that aren’t going to see adoption and embracement b/c Branded’s macro theme is that the operators who are exploring and embracing technology & innovation are going to come out on top. The right feature or point solution that meets the needs of one operator may not meet the needs of another. Operators set their own priorities and that’s why Branded continues to engage with operators across a broad spectrum of the industry to understand what they’re thinking about and where they’re looking to invest in tech.
Over the last few months, we’ve spoken with tech companies that believe, for example, that digital wine lists represent an opportunity for full-service (and probably higher end) restaurants to leverage. There’s of course a meaningful number of full-service restaurants in the US (about 30% to 40%), but that percentage falls dramatically if such an application is focused on fine dining (about 5%). Is that a large enough addressable market to court? Do the guests of full-service / fine dining restaurants want a digital wine list, or do they want the experience of the traditional wine list? If you include 'upscale casual' restaurants into the mix, you more than double the size of this addressable market, but again, how much of a pain point is a traditional wine list and how will using digital wine lists elevate the guest experience? Does your answer these questions change if such a digital menu is targeting a younger generation that expects to be engaged digitally?
What about more seamless and frictionless payment solutions? This is an area that’s getting a great deal of attention and again, we’re speaking with a range of operators to understand the importance and maybe risks associated with the status quo. I personally always feel horrible for the full-service restaurant that has done everything right until the very end when the guest is ready to go, but for any number of reasons, the check and end of meal experience is the only thing that didn’t meet the guests’ expectations. Could a digital solution mitigate or even eliminate that risk? Is this a big enough issue to warrant operators embracement of new solutions?
What about food allergies? According to the CDC, the prevalence of food allergies has increased by over 50% since the 1990s. Specifically, about 33 million Americans (including 1 in 13 children) have food allergies. This is of course a complex topic, with multiple contributing factors, but is this a big enough of an issue for operators to embrace digital solutions that can inform and protect those with allergies? Will guests sufficiently embrace, and to some extent, reward operators that prioritize the tools that address miscommunications with their business?
The above represents just a few of the ideas and issues that technology companies are working to address. Any one of them may resonate or strike a chord with you, but now ask yourself, would you be more likely to choose a restaurant that utilized any of the above? Would it impact your decision-making process and if it would, by how much?
Believe it or not, operators really do want to know what you (guests / customers / consumers) think about all sorts of things when it comes to your dining preferences. Digital guest feedback platforms have proliferated over the past several years b/c operators want to get it right (and fix things when they’re not). How many of you have had a less than awesome experience at a restaurant (that’s a polite way of saying a bad experience) and when the manager came over to ask how everything was going, you responded “fine” (or even “great”)? I’m not trying to shame you for not providing honest feedback, who needs the hassle or wants to create any tension?
I’m not making any bold predictions for 2025 (at least not today) or making any guarantees (see counselor, I’m listening), EXCEPT that the year ahead will not be boring b/c while the hospitality does a lot of things, we don’t do boring (and that’s reason number 736 why I love this industry).
It takes a village.
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Using this week's Shoutout section to recognize a few of Branded's portfolio companies that making things happen as we bring 2024 to a close!
The first shoutout this week goes to our friends and partners at Fishbowl.
While I shared a few technology ideas above that are gaining traction with their respective audience, one area of tech where there can be no debate is about the importance of loyalty programs. I don’t think I need to convince you of this. You know why? It’s b/c you’ve already embraced the importance of loyalty. You’re part of airline loyalty program, a hotel loyalty program, and probably car rental loyalty program as well (and most likely more than one of each of these categories).
Operators, friends, you need to embrace loyalty for your restaurants! Why? B/c according to National Restaurant Industry State of the Industry 2024 Trends Report, 81% of consumers not currently enrolled in a loyalty program say they’d join. If you’re not running a loyalty program in 2024, I fear you can’t truly understand how many guests (and how much revenue) 81% represents.
Fishbowl has created the “Ultimate Guide to Loyalty & Rewards” and it will give you everything you need to know to build a loyalty program that actually works.
The second Shoutout this week might look like it’s going to our friends & partners at Mr Bing Foods, but it’s really going to the entire pizza industry (okay, it is about Mr Bing).
Yes, the pizza industry, the one with a market value of about $50 billion, the one that sells about 3 billion pizzas each year, and food 1 out of 8 Americans eat daily!
To the good people over at the National Association of Pizzeria Operators (“NAPO”), I love that you were among the very first to embrace crushed red pepper flakes as a condiment to add a little heat and flavor to pizza. I also love tradition, but you’ve been using crushed red pepper flakes on pizza since the mid-20th century. But isn’t it time for an upgrade?
Please allow me to introduce you to my good friend, Mr Bing! They have a line of products that will make your pizza standout. On your pizza, in your pizza, insider the dough, mixed with the sauce, this is a match made in heaven!
Bold statement coming, but I’m standing by it, Mr Bing’s Chili Crisp Hot Honey drizzle is a level up from Mike’s Hot Honey. There, I said it!
Bing it on Mike!
And finally, the third Shoutout this week goes to our friends & partners at Spirits Network and the launch of their second season of Tom Colicchio's The Pantry.
Chef Tom Colicchio knows good food & drink and he shares his knowledge and passion with others in The Pantry. Tom also knows a good podcast studio when he sees it and we love having him use our studio at B Works.
Each episode, Tom, and a guest craft a fabulous dish and cocktail to pair using purchasable pantry items.
Spirits Network is a shoppable and premium lifestyle entertainment company and provides users with 24/7 access to entertainment programming featuring renowned experts and celebrities sharing tasting notes, cocktail recipes and stories from the world of spirits.
The Spirits Network is the only dedicated channel for the wine and spirits community that celebrates its lifestyle, history and culture through premium storytelling.
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Featured Episode: Let The Food Speak – Sweetgreen’s Blend of Art and Science
This week on Hospitality Hangout, we’re thrilled to feature an incredible guest: Jonathan Neman, co-founder and CEO of Sweetgreen. Jonathan shares the inspiring story of how he and his college friends turned their hunger for quick, healthy, and affordable food into a fast-casual revolution. Hear about Sweetgreen’s journey from an idea to a brand that blends art, science, and purpose to create real, wholesome food.
From the philosophy behind their innovative menu to Sweetgreen's vision for sustainable growth, this episode is packed with insights on the future of food, tech, and hospitality. Plus, get the scoop on Sweetgreen’s upcoming loyalty app relaunch and Jonathan’s take on drone delivery, fake meat, and more in our fun games segment.
Tune in now to catch this amazing conversation and find out how Sweetgreen continues to lead with purpose and passion!
Tune into the episode and subscribe to our channel here: Hospitality Hangout With Jonathan Neman
Re-Run of the Week: Best of the Crystal Ball Moment
In this week’s podcast re-run, we’re honoring the legendary Amazing Kreskin, who passed away this past week. We were lucky to have Kreskin as a guest in a special "Best Of" episode of Hospitality Hangout, where we dove into “The Crystal Ball Moments” segment—our chance to ask hospitality and tech leaders to predict the future, all while channeling their inner Kreskin.
In this episode, our guests—including Brian Anton of Citi, Andrew Smith of Savory Fund, and Kimberly Grant from Four Seasons Hotels—made bold predictions about the future of dining, technology, and hospitality. From shifts towards in-person dining, the rise of touchless technology, to the blurring of lines between fast casual and dining experiences, their insights still ring true today.
To honor Kreskin’s memory and his influence on how we see the future, we ask you: where do you see hospitality and technology in the next two years?
Tune into the episode and subscribe to our channel here: Hospitality Hangout With The Amazing Kreskin
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TECHNOLOGY
The Five Guys Burgers Spillover Effect: How Software Companies Can Serve Up Exceptional Value
By: Seth Temko, Solutions Services Partner at Branded Hospitality Ventures
Software companies can significantly enhance customer loyalty and perceived value by adopting a "spillover strategy," offering unexpected extras and benefits reminiscent of Five Guys' generous servings of fries.
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MARKETING
Increase Revenue In January With These 5 Restaurant Marketing Tactics
By: Rev Ciancio, Head of Revenue Marketing at Branded Hospitality Ventures
Here are 5, easy to execute tactics that work for all restaurants of all sizes and service models that you can start to plan for today that will help you to have a successful January with your restaurant.
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That’s it for today!
See you next week, same bat-time, same bat-channel.
It takes a village!
Jimmy Frischling
Branded Hospitality Ventures
jimmy@brandedstrategic.com
235 Park Ave South, 4th Fl | New York, NY 10003
Branded Hospitality Ventures ("Branded") is an investment and solutions platform at the intersection of foodservice, technology, innovation and capital. As experienced hospitality owners and operators, Branded brings value to its partners through investment, strategic counsel, and its deep industry expertise and connections.
Learn more about Branded here: Branded At-A-Glance