Friends of Branded!
Happy Saturday!
There’s NEVER a dull moment at Branded! Seriously, never a dull moment. I sometimes wish there were dull moments, but if given the choice of being too busy or not busy enough, I’ll take the former every day of the week (and twice on Sundays).
A highlight of this week was the announcement made by our friends and partners at Chowly and their acquisition of our friends at Koala. The story of that acquisition is covered wonderfully below in our Partner Spotlight section of The Branded Weekend Update.
Branded is thrilled about the coming together of these two operator-centric tech platforms and expects what they deliver (pun intended) for the thousands of SMBs they serve, and support will continue to be awesome.
My mother used to tell my brothers and me “to take joy where you can find it.” As the Branded team was reviewing this coming together of Chowly and Koala (and admittedly taking the appropriate amount of joy in this acquisition), we also thought about the very positive spotlight we hope this creates for the otherwise gloomy financial headlines that have dominated the news cycle regarding emerging technology & innovation companies.
At the end of 2022, one of my strongest predictions was about the M&A activity and consolidation that I expected we’re going to see in 2023 and that will carry well into 2024. After an explosion of technology and innovation in the foodservice and hospitality industry, consolidation is an absolute necessity.
Operators have software fatigue, and their respective jobs are already too taxing and stressful to add keeping up and the diligence of every imaginable tech & innovation solution available in the market.
Only a few weeks ago I wrote that we should expect in a market like this to see interesting bedfellows coming together as the industry is BEGGING for bundled, integrated, and streamlined solutions to help create value for operators. We're thrilled to see one of our own Partner Companies be among the first movers to act on this in Q1 2023 in this coming together of Chowly and Koala.
Chowly was one of Branded’s earliest investments and it made me think about some of our other early investments. Since one never really knows where to draw a line, I decided to rely on the National Hockey League as my guide and their own “Original Six.”
The Original Six are the teams that comprised the NHL between 1942 and 1967. The six teams were the Boston Bruins, Chicago Black Hawks, Detroit Red Wings, the Montreal Canadiens, the Toronto Maple Leafs and the NEW YORK RANGERS (I have no idea how that last team got bolded and capitalized…must be a computer glitch). 😊 These six teams served as the league’s ONLY teams for 25 years, when they were joined by six new franchises in the 1967 NHL expansion.
I walked over the Branded wall of Partner Companies and looked at our own “Original Six.” PourMyBeer; Chowly; GoParrot; Bbot; Yumpingo; and TapRm were the first six investments and Partner Companies and we’ve since taken our count to 45 (eclipsing the NHL’s current roster of 32 teams) and we’re thrilled to be surrounded by such an incredible group of operator-centric companies that are working every day to create value for owners, operators and brands.
GoParrot was acquired by our friends at Square and Bbot was acquired by our friends at DoorDash, leaving only four of the original six left in the Branded portfolio. What does the future hold for the remaining four of Branded’s “Original Six”, well, that’s all part of the journey we’re on, but one thing I know for certain is that it won’t be dull or boring. Our industry continues to be transformed and while nothing is easy, I do find it all exciting and incredibly interesting.
American statesman Benjamin Franklin famously wrote: “Our Constitution is now established and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.”
Please allow me take some aggressive and potentially risky liberty and disagree with Mr. Franklin by adding a third element to his most famous list of two. I will put forward a guaranteed certainty – people will continue to eat & drink. Whether it's for pleasure or sustenance, people will continue to eat & drink, and the foodservice and hospitality industry will continue to evolve, transform, and delight in order to ensure that it remains a promise of permanency.
MARKET COMMENTARY
Articles that caught my eye combined with some Branded commentary and insights.
The news about Chowly and Koala put me in too good a mood for me not to seek out an article that is looking at being offensive and positive at a time when I know others are being defensive and negative.
You think this market is tough? You think you’re in a battle or a fight? You think the unpredictable threats are too much to overcome? Then channel your inner Marine and embrace their slogan – “improvise, adapt and overcome.” That’s the mindset that Marines utilize to deal with any physical, mental or spiritual hardship. My wife would simply say “suck it up buttercup.”
That’s why I liked and chose this article by Mr. Yuri Vanetik because he fully recognizes that we’re in “an altered business paradigm driven as much by new technology represented by electric vehicles and the metaverse as it is by anachronistic conflicts such as the one instigated by the Russian Federation. The global recession, ongoing war in Ukraine and increased credit rates have all presented new challenges for businesses looking to grow.”
Mr. Vanetik seems to channel his own Sun Tzu where in the “midst of chaos, there is also opportunity,” although Yuri wants his readers to know that adversity can also present opportunities for growth and innovation. In the attached article he delivers 10 strategies that businesses can use to navigate these challenges and come out on top. Branded is embracing the super vast majority of the strategies included in the article and we know our Partner Companies are as well!
It’s always hard to pick a favorite out of a list of 10, but for me, it was #6 on the list – Collaborate with other businesses. That sounds like a variation of my own “it takes a village” and the community Branded prides itself on building as well as our obsession with playing nice in the sandbox.
Yuri says “frenemy relationships are in.” At Branded, we believe in collaboration and subscribe to an African Proverb where “if you want to go fast, go alone, if you want to go far, go together.” For the many emerging platforms we work closely with, we’re always looking for new sources of expertise, resources and allies. The legendary Fred Rogers may have said it best with a quote from his own mother – “Look for the helpers. You will always find people who are helping.”
If I sneak a Branded Partner into this section of TBWU, am I violating any editorial integrity? I hope not because I continue to be extremely excited about Tablz and feel it has opened a gateway for the hospitality industry to embrace dynamic pricing.
This week I had the privilege of making my once-a-semester visit to Columbia Business School and speaking at Professor Stephen H. Zagor's Food Entrepreneurship class. This visit was especially significant because I followed Mr. Will Guidar, who is one of my favorite restaurateurs due to his passion to innovate as opposed to imitate, as seen through his establishments Eleven Madison Park, NoMad and now in his book "Unreasonable Hospitality."
I would NEVER call Will a warm-up act. If anything, I would say the talent in the classroom dropped considerably after Will left (with the only change being his exit and my entrance). Still, it was super fun to hear Will speak to this enthusiastic and inspiring classroom filled with new talent.
A question was asked of me by one of the students about what’s something new and cool that got Branded’s attention and I immediately thought about Tablz and talked about the company.
Take a look at the article and see for yourself why not just Tablz, but why dynamic pricing for restaurants is so important. Dynamic pricing isn’t something new or unknown to customers and guests. We’re engaged with dynamic pricing all the time when we’re dealing with airlines, theaters, sporting events, concerts and so on. We know that if we want a better seat or simply to reserve the seat of our choice, our preference, well, there’s a price for that. Why has this NOT been something the hospitality and specifically the restaurant industry is embracing?
My favorite line from the article, according to CEO and Founder Frazer Nagy, “the restaurant industry, is fighting a war and are amongst the last institutions that simply give away our real estate for free. Being last to the party we must shift our mentality and tactics to capture this opportunity.” Tablz has uniquely created a platform that is the perfect convergence of technology and customer engagement that creates a new revenue stream for national restaurant operators. This is happening at a time when the headwinds facing operators are as tough as ever and that includes increases in labor costs, supply chain issues and of course inflation. Tablz is a source of untapped revenue and a service your guests will thank you for allowing them to access.
Of course, you could always have your best tables go by the way of the handshake tip, but that money usually doesn’t find its way into the till and let’s face it, that move is so rarely done right and is probably just too "Goodfellas" for your joint!
TECHNOLOGY
I"m thrilled to share the exciting news of Chowly, Inc.'s acquisition of Koala. As a partner of Branded Hospitality Ventures, Chowly has been a leader in the foodtech industry and this acquisition is a testament to their commitment to driving innovation and growth.
The acquisition of Koala by Chowly will result in the integration of Koala's online ordering platform into Chowly's existing suite of restaurant technology solutions. With the integration, restaurants will be able to manage online orders more efficiently and provide a better experience for customers. The combination of Chowly's and Koala's technology will also help restaurants increase their online sales and streamline their operations. The acquisition represents a significant step for Chowly as the company continues to grow its presence in the restaurant technology market and provides new opportunities for its clients.
I'm looking forward to seeing the impact this acquisition will have on the foodtech industry as a whole. The combination of Chowly's expertise and Koala's technology will undoubtedly result in new and improved solutions for restaurants and food establishments.
Check out the press release HERE!
FINANCE & DEALS
“There are decades where nothing happens, and there are weeks where decades happen” – Vladimir Ilyich Lenin.
This quote by Vladimir Lenin reflects the idea that events can unfold quickly and dramatically, shaping the course of history and leaving a lasting impact on the world. The quote can also be applied to the investment world. Just when you thought you were going to spend decades watching grass grow, BAM! The market takes a sudden and unexpected turn, leaving you feeling like you just jumped out of an airplane without a safety net.
In the investment world, understanding and anticipating these moments of change is crucial for making informed decisions and achieving financial goals. The quote serves as a reminder to investors that although the market may seem calm for a while, sudden and significant changes can occur, and it's important to be prepared for them.
That being said, my fellow investment enthusiasts, what a wild ride it's been this week! The stock market had a tumultuous time on Wednesday, with most stocks plummeting, but it took a turn for the better on Thursday following the central bank's latest interest rate increase. The volatility is a testament to how quickly the market can change and how important it is to stay vigilant.
Restaurant Industry Movers in the Market
—Data as of 2/3/23
BUSINESS
Tech is no longer a nice to have, it's a need to have. For a restaurant to be successful in today’s world it must be agile and adapt quickly to changes in procedures and protocols.
Below please find a few insights from some of the largest consulting firms in the world.
PODCAST
Tuesday, January 31st- Hospitality Hangout: In the latest episode of Hospitality Hangout, Michael "Schatzy" Schatzberg “The Restaurant Guy” and Jimmy Frischling “ The Finance Guy” chat with Bo Davis, co-founder and chief executive officer of MarginEdge.
Before founding MarginEdge, Davis was the founder of Wasabi, a group of conveyor belt sushi restaurants currently operating in DC and Boston. Before Wasabi, he was in the US Peace Corps serving in Macedonia, earned an MS in Finance from London Business School, and founded an educational software company, Prometheus, which he sold to Blackboard in 2002. Davis had a restaurant in Northern Virginia and where he is based and primarily focuses on MarginEdge.
Listen to the full episode on Spotify, Google Podcast, Apple Podcasts, or Amazon Music
Thursday, February 2nd- Branded Insights: Picture this, when it comes to your restaurant’s procurement and buying process, you’re crushing it! Even considering all the supply chain issues, you are a purchasing pro, with healthy, profitable margins. Congrats! However, before you raise a glass in celebration, we have some sobering news to share – because, unfortunately, if your operation is anything like the millions of other typical American restaurants when your next batch of budget-friendly inventory arrives, you’re likely to waste 85% of it. Yep, you read that correctly. Research shows the vast majority of food that isn’t used within the food service industry – a whopping 85% is discarded.
Branded Hospitality
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!
- Ovation: Ovation Releases New Guest Feedback Mobile App
- Juicer: How Restaurants Apply Dynamic Pricing to Steer Demand
- Ottonomy: Ottonomy.IO and Goggo Network Partner for Fully Autonomous Robot Deliveries in Spain
- GoTab: Partner Webinar
- PourMyBeer: Tap The Big Idea
- Vromo: 7 Ways to Improve Your Restaurant’s Customer Delivery Experience
- MarginEdge: MarginEdge gives restaurants real-time data to succeed and thrive
- Galley: The 4 Most Common Human Errors In Commercial Kitchens (+ Easy Fixes)
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!!
- Restaurant Business: Untamed Brands looks to expand growing portfolio with a coffee player
- Fast Casual: Mongolian Concepts CEO forms restaurant brand platform
- TechCrunch: Grocery deliverer JOKR doubles down on Brazil as it secures $50M on $1.3B valuation
- Food Business News: Mondelez expecting more of the same in 2023
MARKETING
🥩🍴Want a simple marketing plan for your restaurant that brings you a constant flow of new and repeat guests that you can do in less than an hour a week?
Does this scenario sound familiar…
Had a beautiful steak dinner at a beautiful restaurant last night.
They had great cocktails, beautiful Italian dishes, only served prime grade steaks, and had outstanding service.
Despite having been in business for two years, we were the only people in the restaurant.
After the meal, the two owners joined us for a conversation, and told us about all the things they had tried to get new customers like paying influencers thousands of dollars to promote them on social, bringing in live music and comedians, and only using the freshest of high-quality ingredients to make their food.
They also spoke longingly about other restaurants, who had had these magic moments of marketing that if they could only get this one thing to happen, they would be so successful…
Sadly, this is a common story. I hear it all the time.
It’s cool… Operators aren’t marketers makes sense totally get it. Why would you be good at something that isn’t your passion or experience?
So I asked them if they would like a suggestion.
They said yes, here it is:
1. Spend $5 a day and a locally targeted google search ad.
2. Spend $5 a day on locally targeted Facebook and Instagram traffic and awareness ads.
3. Email your guests once a week, even if it’s just amazing pictures of food, a description of the menu item and a book a reservation button.
This will take you about an hour a week.
Unfortunately, they went back to wishing and wanting for magic bullet and I think we all know… there is no magic bullet in this business. It’s about doing the right things every day consistently, and building it over time.
Want marketing that works to bring you more new and repeat guests?
Do the above and if you’re still not gonna take an hour a week to do it yourself, hire us.
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