Also in this playlist...
This transcript is automatically generated
Happy Friday welcome that began -- it is noon here on the East Coast good morning to those of you out on the West Coast -- -- Dow up about 35 points -- Tracy -- He's -- you know we do on Fridays we -- specific industry segments and today it's about food.
We did pretty wide range -- -- and -- all the farmers.
We're gonna talk to restaurants -- -- is meant to talk to authors as well so we're gonna kind of cover the candidate we talk about all natural food which is really far off my radar screen.
In beer which is not very far off my wrist is -- -- did you actually get to witness I don't know.
No doubt about that last.
The last time we had done his Jeffrey bank from who is here.
CEO about cart with al-Qaeda the car and Carmine is birds will hear an accident they brought in so much food they've really brought in I think about one point four tons and -- and I AEA about 70% of -- -- -- -- at home you forget -- -- that David on the -- curator.
It kind Kelly and Chris and for your pleasure today as well because -- brought more food yet again denied and that George Cheerios here as well vice president senior VP and RBC wealth management here in the building.
So instead went down a few floors and join us and thank.
You should we appreciate it actually for this segment and vice president of global futures of capital markets that look you can I wouldn't.
Well yeah RBC wealth around from.
But but but but this -- we we do it in capital -- -- what's happening here from over the last few days because.
Gold is through the roof.
But should those gold bugs be a little fearful -- -- Are you still bullish on do you think -- -- a long way to go quite that we -- have a long way to go but I think for the short term we're gonna have some profit taking but that of course today's Friday.
The Euro dollar.
It's sinking a little bit.
The long -- -- -- a point -- half.
And so fierce some Friday always brings a little bit of get me out for the weekend crowd.
And so gold was off about six to seven dollars less time -- look at the floor is that an opportunity or not enough -- I don't think that's bunch of an opportunity to wait until that thing really all our ethic I think you might.
Have -- an opportunity.
There's going to be at some point 403 tons of gold the IMF has been lobbying congress to sell.
Underpin their bond sales.
The European ECB.
Has had an annual September sales -- -- 500 tons.
Four member banks and we haven't heard about that last year they didn't sell at all and you know.
Gold is managed by human beings -- see the price of gold don't go up but they say you know what ethical hope that the you know little little yeah saying that gold is not over -- No it isn't over owned -- look at the put call ratio before yesterday.
And I see -- out of the business was what are equal professional tragic.
I so a lot of buying in the thousand dollar ports and that's to protect long positions at the managed futures and large funds -- And I -- social buying of 11100 dollar calls from the mining industry.
There protecting forward sales.
In case there's a big officer.
But what does that mean that means that if the average guy I don't hasn't really dove in yet that we're going seeing -- don't.
Think so I think the average guy is not really in the futures market if he is he's in the ETF market and which the other day.
Achieve those things traded.
3040 million shares yah de despite one of the most popular isn't about -- lay -- -- yet -- they have -- the war they hold more gold.
-- some countries that we look at our EAU -- for call mex 100.
Derivative product which I think is.
A good one that's listed and supposed GO beaten which is the London's second fixed 400 -- derivative product.
And so and then now you have a third one.
Which is his Swiss -- bold as GO well and then you have the silver products and I think the -- products for more interest it.
-- wanna talk about why gold is on its hair.
I mean is it a dollar story is -- a flight to safety so yes yes all of -- -- -- all of it yes you've got five days of bop you've had.
Weakness in the dollar.
I don't think that weakness in the dollar is so terrible in some respects.
First the wolves -- -- -- for our exporters but I'm not an economist.
It's going to help the United States pay back debt with cheaper dollars as time goes by.
And then of course the man on the street is not directly.
Hurt with that so called weaker dollar because this purchasing power.
-- is being underpinned by a lot of other things and the weakness presently the economy -- kept.
A lot of prices from moving up -- the inflationary spiral has -- -- Very interesting thing today Sarah Palin on her FaceBook page actually.
Putting out some comments that.
The administration needs to be there it is needs to be leery of the dollar and actually needs to.
Put in place policy.
To strengthen the dollar we have Larry Summers just last week I believe it was also make a comment tonight and -- maybe the beginning of this week at any comment about how up.
It's important to have a stronger dollar.
But at what point in time because you see it increase in the near term.
Some really important to mean -- the certainly is an important -- stock market is an important the average Joseph on the street that the dollar stops the tree -- value.
If it if it decreases at a manageable rates isn't that OK at least for the time being is going to be some point halftime with a Chinese.
That's not well and -- say I'm not that slow down a little -- That a lot of these folks are going to stop buying our debt by the way of our biggest export my opinion is that.
And you're -- Clinton heading the numbers probably point that out.
And and I think that they have a lot of reason but what they do is they underpin that debt purchase.
With the other asset purchases.
And I also don't see any other major currency that's as liquid as it is important -- the dollar.
Being able to replace the dollar.
Possibly some point where we say what the heck is going not we had Dan greenhouse -- for military that in the weeks saying the same thing.
The dollar has progressively.
And fall -- over the years this is not a new thing right long that's not a tumultuous drop.
There's going to become a point where China says we're done we're -- with you guys.
I don't think so because just -- want to keep exporting to us.
We have to buy their products as it is they're gonna sell a lot more inside of China but did they still need to sell an awful lot outside the status and that's what -- come -- art and today speaking China's the end of the -- weeklong Chinese holiday you know so Monday we could see very brisk returned to the copper market.
That's a good bad and -- heads up by the way we have.
A week holiday in China one week.
And then of course are the Christmas season upon us -- and the jewelry manufacturers are looking at silver and and and palladium as I was dollar cost substitutes.
Because they're saying -- Did the buying public.
Is really hurt somewhat and the high price of gold is going to deter some -- barring.
There may be more of an opportunity and silver and and even in -- -- platinum has risen to thirteen -- it.
Forty -- because it.
-- expensive one out by platinum for your loved one George I think it's genius idea Jorge Diaz senior vice -- -- wait what's your title.
Vice president global futures and it's.
It's Friday we have different -- on let's get a call you every day and just give you a titled the -- will depending on what we wanna talk about an -- -- that -- -- go to America or that you've got a weekly commodity roundup of other commodities have thought about Brady take a break we'll be right back.
But that foxbusiness.com.
I'm Tracy -- this is Chris Scott and we're talking food that's not -- food today but we're talking food prices food stop food trends there's a lot out there.
Yeah it was a sobering year for the restaurant industry for sure restaurant traffic experience the steepest decline in 28 years this spring.
Causing the closure of just about 4000 fewer restaurants in the United States now according.
To the NPD group pool a will be hearing from a little bit later on the show.
On a relatively good note though your supermarket food prices have remain relatively flat over the last three months.
I think they have I mean everyone's complaining that prices have gone up I think milk has stayed relatively stable.
Even eggs I mean all the stuff that people are worried about I'm not saying I don't pay attention to that and I should that you -- up.
I do but I food shop in the city things are totally different -- because prices are so inflated bomb you know I used to go to the grocery store and -- Yeah a lot just like eighty dollars with this stuff you know the last -- for a couple of weeks in a few weeks now light and easy -- -- home my only villain by thirty dollars worth of stuff so it's.
It is a different experience community most you have out there.
Yes I got three kids at home that was spent about 200 dollars a week on it and a little -- their bigger -- -- but.
I haven't seen a drastic change.
Thankfully you know earth through all this.
Let's start with what goes in -- report -- -- not necessarily your stomach believe me we're gonna have time for that from Chicago our first guest.
Our -- hot -- V.
He is an analyst at morning star I hate you and our day.
Not to -- thanks for having me all right let me ask you about restaurants as an investment that's where we're gonna start.
The first when it comes to mind for me is McDonald's because it's such a great year last year although they've been lagging behind.
The S&P 500 this year is that the reason because they had such a great -- elections and stock appreciation because.
Every time they give -- monthly numbers or quarterly numbers this same story can't seem to be -- they seem to be doing a great job.
Yeah I think a lot of hats do you have the success last year and absolutely McDonald's was no firing on all cylinders and again it's one of the safest stocks you can find -- -- -- Downward cyclical trend.
And -- I think a lot of it is you know they are suffering from a success last year and not sales have declined but a lot of have to -- with tough comparisons year over year.
The DC some pressure from unemployment rates and you know that you know -- -- -- breakfast business a little bit of the same time.
No I think the bottom line it's held up very well for the company not expect to see it over the next couple quarters.
You know we're still seeing a tale land and in a number the restaurants are seeing it crude prices come down.
So it helps out that that gross margin line and you know certainly at the bottom line.
It's interesting that it's a reverse of what we've been hearing.
The comparisons to last year for some of these countries wrap up companies are actually worse -- all the -- -- numbers were so pathetic they're gonna beat them this year.
Let's talk about though what the trend is with these companies is is it more to get people.
Into Burger King to sit and stay like it's a true dining experience we talked yesterday about California Pizza Kitchen -- -- their wine list so Christie taken dates there.
-- battle without -- start seeing that fast could become our new I know dining experience.
Well I think that the name of the game in restaurant business is differentiating your product and you know.
Firms are doing anything out there as you -- California Pizza Kitchen but there one initiative.
Copper king earlier this week announced that they're gonna remodel a number of their stores you know make the you know interior look more compelling -- -- -- -- It really is the way to kind of you know drive more people to restaurants I think that this is the kind -- -- -- -- continue over the next -- months if -- years.
The -- -- franchise there is to grow.
Has to be of some concern and make sure they do it right to mean we've certainly seen so many of them grow too quick I don't know -- -- to say that about sonic.
-- about some of these others -- you know -- same way that has to be.
Control in that world growth -- to one of the biggest things when you know that they have to watch out for isn't.
Yes so imagine he's got to be very cognizant of balancing growth -- profitability.
Figure out too fast he really -- run the risk just over expanding.
Even cannibalizing down sales -- certainly that's a risk and most restaurant operators in that something that they got to keep the forefront.
How is Yum! Brands doing in China what do they do and it's -- so successful.
Well I mean the thing that makes him so successful are there as they were generally -- speaking the first company.
To really -- the Chinese market and what that the thing that they did that we like so much as.
You know they have their whole distribution -- set up they they on the distribution network they don't rely on anyone else.
And so that gives -- a huge competitive advantage in China and it's it's one -- you know other companies are gonna have to play catch up to replicate.
And China -- just not as easy to do.
Let's talk about for sad to say the lines at sonic by me are like.
Down the block into the next town it's -- I've never units I can't moment.
I'm not eaten it looks really -- But I mean I guess that's a problem is that there's the demand is there but they can't -- -- -- -- -- -- a part of a while I guess -- Talk that -- -- sat in the box this seems to winning your favorites as well -- today.
Yet check out boxes and anyway what what the company's doing it's a sign a lot of company -- locations the franchisees.
And there's a twofold impact here it actually takes away some of your top line growth.
But the same time bolsters your operating margins.
And we think that this fact has been under appreciated by the market we think that because of this movement that returns -- and that's the capitol for this company.
Are going to be -- -- over the next couple years.
And again just keeping -- thesis on just quick service restaurants in general that the company -- a pretty good job of cleaning up our cost structure.
We we we know that sales maybe we referred you know couple months -- just get your overlapping top number is.
-- -- that economic situation.
But generally speaking we think the bottom line it's been quite resilient and you know it is one of our top -- now.
-- -- -- -- Open -- my own franchise flipping McDonald's Burger King whatever the case may be how much more difficult is it now given -- credit markets -- that he could.
You basically you have to go out there and -- money and let's -- independently wealthy to get these things going how much is -- thousand birds he helping how tough has it been lately.
And it's been so many more top and a -- then you know two years prior to where we sit today.
But it isn't just saying quick service restaurants are you know out of any space and you know the restaurant category.
They are the space and -- so again capital I mean we've seen a number of specialized lending programs are franchisees.
Wells Fargo initiated -- -- program for McDonald's franchisees.
And there was another back out there not too long here that put enough place -- sonic franchise itself.
You know the capital that's out there it's going to the quick service restaurants especially the -- -- -- a strong brand name.
But I today.
Now competing with me it seems that -- sector of fast foods now you have the Starbucks the canaries of the world that are almost like -- upscale fast food.
-- is your burger king and McDonald's that or not.
Are those guys now trying to compete with this Starbucks -- -- of the world.
Yeah I think we're sorry to see that a move -- a little bit more upscale a quick service restaurants.
A number of the chains -- introduced premium burgers there's even to Angus burger McDonald's.
You know the angry whopper fat Burger King so I think you start to see that quick service restaurants are trying to move up towards the -- -- I think this consumers' perception of that the fast casual space.
You know assembly pretty pretty well received and I think that -- know Burger King again -- this remodeling initiative and to some of the other -- programs that we've seen a quick service restaurants.
-- they are trying to move us a little bit more and you know invite more prosperous and as of the restaurants.
Interest me that because about two thirds of the business of these fast food restaurants is sneak out and drive through so I got it.
I mean you would think they would both try to both about it make that experience better as opposed to me yelling into the lot lot lot lot my eating and you never nuggets that my kids subway sandwich right every time I go.
Burris is trying to bring the in house dining experience up but that seems to be the trend.
Yeah any bit at the same time still a number of these companies haven't forgotten and a lot of customers are coming to the drive -- Europe.
And a half and a lot of capital -- -- information technology initiatives you know at the register on the drive there is so I don't think that's been completely forgotten by number this restaurant operators.
As a whole he would just wrap it up with this as we come out of this recession as we continue to recover.
Do you like the fast food restaurants.
As a play on.
People not necessarily trading back up to the higher end and staying with the fast food.
Yeah I generally do I think you know what as we talked about just a minute ago with the companies introducing these higher and burgers you know what it is that the customers that were coming in over the past couple light years from now.
Trading down I think the McDonald's Burger King Yum! Brands they're going to be able to keep.
Keep a lot of these customers coming through and satisfied -- a little bit higher price point products and so I do like the the quick service restaurants based.
I generally think that they're undervalued.
You know generally across the board and that's where you know right now that's one of our favorites bases.
-- down with you as long as they keep servant like stuff for the -- is better than when we go to a drive through.
I'll certainly still be online at.
Yep product innovation is -- is that's not clear yet exactly right I'd say hot -- analyst at Morningstar thank you so much for joining us.
-- -- -- Next how eating habits impact what restaurants are doing to make you happy we'll be right back.
Welcome back to foxbusiness.com.
Today show it's -- -- flew my favorite things.
Our next guest is tune -- -- what's going on your -- in your wallet.
And restaurants look to his company decide everything for many choices the pricing.
From Chicago we welcome Harry out there you keep current industry analyst at consumer retail tracking market firm NPD group.
Well guns so what are the trends you're seeing these days.
Well the trend in the restaurants base is all about deals.
It's who's offering the best deal and it there's a deal out there consumers are using restaurants more if there's no deal consumers are going out -- that's probably the number one thing.
Affecting the restaurant industry right now -- certainly consumers.
So -- -- -- bargains but we're looking for good food at the same time.
When it was what is good food I -- were looking for bargains we can't even -- about -- chemistry and a.
Our people but we're clearly looking for good deals you know -- -- part of.
That then would be thinking that you could save money.
By eating at home not going out as often.
Eating at home you know we will have a whole foods is doing very well right now because you -- -- get good food and bring it home and -- it themselves.
Is that what you found in the most recent NPD study.
Well there's no question about there's been movement back to home there's not a -- movement back to cooking what we hear a lot of people say that Americans are cooking mourn their homes again.
They're not they're not cooking at all in their homes they're looking for the easiest way to have that meal which they have been doing -- For as long as I've been around in the answer to that easy way to get a meal had been takeout from a restaurant.
But that -- that's come to a a standstill here and so now we're looking for how to -- deal with.
Keeping my food budget under control and still feeding myself the easiest way possible and the super markets clearly have become the answer certainly in the last couple of.
Years so it's ready it's ready to eat meals that is what you're saying at the supermarkets have already been prepared you just take it home and go to the microwave the -- from what having an -- -- ready to -- Post I think what we're going through right now is a new definition of food service -- What is food service is not just a restaurant it can be at a supermarket can be inconvenienced -- it's so we're looking for ways to make our food easier for us.
You're absolutely right on a mother of three.
I provide -- and CVS cycle but I mean you think they.
I'm behind it I needed to be easy for me and I love that place is like Trader -- even our.
The meals ready for you if -- put everything together.
And you're done and wrote in the microwave I'm not sure what it's in the -- long I've never opened up a live my regular love and not once have I ever done that.
But I think you're right that's the -- I go to the supermarket they got I spoke to how rested for me I take you don't -- five minutes -- -- -- is only three appliances in this country that are growing they're being used more.
And the number one appliance -- stove top is actually being used less it's the least amount of usage that we've seen ever -- we've been doing this for over thirty years but the three appliances that we're using more I think speak about what Americans want.
The number one is the -- -- Buffett.
Even though we got this microwave oven and our house since 1990 and that was the peak -- for ownership of microwave ovens.
The usage really never increased until the last two years it's now going through the roof we had a 10% increase in Mike -- usage.
The second appliance is and as a mother of three you may appreciate this is getting -- to do more than grilling.
I have the right.
Really out there have been a -- -- the holy Grail I the American marriages.
Kids nobody can barbecue like your father.
All right what about meals obviously more because I know McDonald's is sold -- that's so big -- in the nick cafes and coffees.
Are we seeing people eating less breakfast more breakfast is -- more important how about this is the -- -- time.
Actually what's really happening is this thing that we start talking about.
Thirty years ago grazing in this country is finally coming true we are seeing people -- just more meals throughout the course of the day.
Whether -- be a smaller breakfast thing you add on breakfast when you get to to work or to school.
Or lunch that you carry things from home but then you add things to that lunch at that work -- at school we're just seeing more -- being consumed more different places.
It's interesting because you would think that this is that the way we're going we have no time unfortunately this notion of the family dinner at night.
Well it sounds really Leave It to Beaver and I wish I could be.
What's her name mom help me June good -- I -- and you know.
That's not far off I am from -- -- between her and I wish I could do that in my house -- but between homework in baseball practice and dance classes it's just not.
It's doesn't -- where we actually make breakfast our meal of the day now.
And so you see this trend and he's starting to see it in the supermarkets in places like TJ -- and even in your take out like a Boston market.
Well the future of food was determined back in 1989.
When for the first time we used a restaurant more as a takeout place than a sit down place your father your grandfather knew the restaurant industry is a place to sit down and have a meal.
Your children will not know that.
It'll be a place to get food it's already prepared for you so that the last century was all about packaged foods.
This next central be about packaged meals.
That consideration that we're moving to how to -- life easier.
I -- and Harry -- like -- my kids that they -- us on them like that before I get that somebody gets killed on the ride on I think it works out well I know.
You know -- the island that hey thanks a lot.
Through good to Syria have fun and -- balls -- the chief industrial analyst and vice president PD group move quickly to all these great studies one.
Are eating habits are telling us about the restaurant -- -- that -- -- yesterday's interest and unfortunately it's.
But just sad that.
That's -- -- at -- with people here.
You go to visit their restaurants and -- I look at -- time for the restaurant industry but our next guest has managed to keep his national restaurant group of that.
And is even opening a -- for new 700 seat venue in DC.
Here that's its different banking and CEO -- carte restaurant group they operate.
-- lines Virgil here in this city gallery.
He's also not he's my personal trainer to.
I saw last time my site lets see again boy that -- awesome last time and you've you've you've done it again you've not done yourself.
You brought it back in looks fantastic how I feel -- I guess it was probably three months ago that we last saw you -- how things gone for you in the last.
Three months and three months things have continued to be great we're very fortunate as we said on the show last time our -- -- -- -- -- some value driven we're not re branding ourselves in this economy.
Which is why -- we're excited to take a step in to DC and expand our brand and small little restaurant 700 -- have right back.
700 -- I -- you know your theory though you run a fast food restaurant behind the doors but you have.
Home self service on the outside.
Absolutely we have six restaurants and they're -- quite larger volume went to a lot of volume so the back of the house.
Runs like a machine it looks.
Like a fast food place without the fast -- from but the -- of the house still has a car -- -- the old family feeling like you're going out to lunch or dinner some and I had a family.
And after the -- kind of -- -- that the size of the portions and things of that nature the -- value driven.
And we're fortunate we ought to rebrand ourselves other restaurants however are not high end have to read.
Rebrand themselves down a little low and have to -- up their value little of the quality of their food we're fortunate we've been around twenty years you know I just you've got to maintain what we're doing.
Know it's interesting hairy balls are just -- us before was talking about grazing and if you're -- to calm winds to graze your brought a source philosophy is that look at this still grazing going on here.
You are going there for a full on -- now.
That brings -- -- my question about food costs for you because this has to be.
A tremendous cost -- the put this this -- sausages and Salinas hello not candidates a lot of product that's a lot of money some.
And in what we're considering filing -- is a nonprofit is doing good for these guys hit good.
Good for you -- -- I'll -- idea out cost of goods is a double edged sword unfortunate for small businesses and bigger business.
Because we're such -- -- because you do a lot of business.
Vendors want want to do business with us so we actually do get great prices we have great contract so we can pass -- onto the consumer.
Who come into karma I think from getting -- -- 38 ounce porterhouse.
That feeds four to six people are paying eight dollars for fabulous -- Tibetan -- a smaller restaurant without a doubt is gonna have trouble if they're not having the same volume.
Contain the cost of goods because they're not gonna have that benefit of volume.
The food is great active it's phenomenal actually I have that warehouse recently my family and I went weeks out it was wonderful and the service is split calm them in -- -- as the wind on them that.
It's just like being at home and yet but one of my service we have your picture on the front Xena.
-- very out spoken out about this government you -- Glenn Beck recently actually asked very cash you can always deal I think and we.
I mean we have we have what we call the Carmine Virgil stimulus plan -- interest but it's kind of serious and away and we are actually the merits of sin City Hall yesterday.
Discussing things making easy to work in New York City.
And we look -- a couple things the Senate Finance Committee talked about this week.
This fifty million unemployed Americans that are looking for three million jobs that are available so -- short twelve million jobs in the country.
So what do they do they extended unemployment benefits for fourteen weeks right.
Now instead -- we need to find a way to create those twelve million jobs amen small business creates 7% of all jobs in this country.
Was small business need to do that.
One the tax credit idea for new jobs -- like.
Obama talked about it turn the before the election it was in the stimulus package was pulled on February Obama -- -- chance give tax credits and create new jobs that's one thing.
The second thing if it's been over a year and a half now and the banks have -- loosen credit.
So the government can step in and back you -- -- industry help out the banks which -- supposed to be -- the small business but haven't.
What they gotta do they got to step in and help the small business association the 504 program that -- restaurants buy equipment and real -- If -- the Treasury Department to help back that program at that help ease up credit and help people out.
Hire people that's already did as oppose extending unemployment benefits and keep people harmonic announces.
Now what about your employees and -- -- motivating your employees actually know how a guy who has a label salad -- in Austin, Texas and he said one of his biggest bombs is.
The employees -- paying eight dollars out ten dollars out that's all -- taken many career path is that important for employees even if you're a college student or recent constant.
Again an interesting problem in our industry in the restaurant if -- were one of the few industries have hired unskilled.
Person camel train them in our company regular restaurant there will open a -- -- 225 jobs.
Skilled and unskilled you can come in as a dishwasher prep cook -- food runner and be -- we give free English as a second language classes to our.
Employees and we have a tremendous amount of organic growth.
One of the guys that helped bring out some food today started as a server eighteen years ago our -- he's director of operations now -- -- find out what he makes his wife will -- salt.
How many leaving it higher in DC 700 seats with a lot of people winning 225 but I got to us we can five down from New York to DC so -- -- And I -- you can't let the Atlantis as well Santana Caribbean doing fantastic in the Atlantis to great resort curtains are great people to work with.
We're in Atlantic City and you know to the -- have a tough time.
But ironically for us were up.
Really I think the only restaurant -- -- city those up this summer.
During the you know the Jersey -- season.
And again that's because we're value driven right to people coming over but the -- having a tough time management need to do some things turn around what's going to be the -- your place in DC and he determinant in Harmon's comments Carla.
The so called car went all the way in July and I do my best is if you've got you have some some just left -- you have food for the week so it -- that much more value driven.
The only tone of left over from Chris when Chris comes with -- yeah exec you're gonna have leftovers of capitalism and explode like that the money might not let Brian.
Jeff thanks see out without carte restaurant group -- the -- in again and thank you for feeding the entire staff that -- -- -- like coming and thank you today.
The ever impressive data -- yeah we'll be back.
Welcome back back -- -- -- Chris is.
Due to start eating any second now by -- like.
-- when I was in Africa when I was in college my pretend we had a dog.
I shouldn't say this -- -- -- them.
But not a dog food that this is -- -- well Obama today get -- the points we would have we -- -- domination you could -- grilled cheese sandwich on -- now.
You go to class.
And cut your -- and -- because -- didn't go to class to go to class and come back in the grilled cheese and still be on his snout and drool would be pouring down is now.
But he was such a great dog and so discipline you would snap it real keys office now neither did he -- -- and -- -- -- now I need to do it right so that's when I was back in the great.
-- rule with pouring down anonymous called out.
I love her name is synonymous with fine dining here and the Iron -- And -- -- here and box with that dot com to tell us about her wood and I look back at a time yet now use he was on.
-- questions -- money with us telling us about -- whole story you -- an attorney yes tell us.
Think I was.
My I grew up in the restaurant business was not allowed to even you know wait a table in the restaurant going up and after passing the -- practicing for four months until my dad that's it not for me I can't do it brutal.
And I'm gonna open up my own restaurant so I started looking for our space I negotiated location.
-- -- at some money and I put on everything I had into it and ten years later -- last -- later hit the.
And success how do you find success had -- you know especially in the restaurant business where restaurant opens and closes every six months had a you know this is the spot.
This is the menu -- how do you know what to do.
I think restaurants close and open every six months number -- It is one of the most difficult businesses but also a lot of people -- -- -- -- Be entering it.
Because a lot of people have fantasies about being restaurant -- and they're usually underfunded and they usually think oh I have a good personality or I know how to cook at home so I could become a restaurant tour and that doesn't mean.
-- -- -- -- For me I really.
Study everything that I do I study locations it has to be -- good -- if it is a restaurant business people forget that -- we have to make money the end of the day.
And the numbers have to -- and a lot of people don't even.
Go through the formula before they open it's amazing how -- -- people are and then they wonder I mean I have people come to me every day.
Customers lawyers doctors are famous for getting involved in restaurants actors to because.
Former athletes all you know many former athletes have the arm athletes they actually this is in no -- here later it's gonna be close because -- that's -- -- now is all about a personal.
Investment and commitment with people that really know what they're doing and even when you know in -- it's still very difficult how do I keep your at this -- there -- five places how do you get around because people like seeing people go to restaurants to see -- tell.
It's a difficult thing and it's the one thing that I always have to remember because.
You know on the one hand I wanna do all these things to keep people coming to my restaurant I have to be there nothing replaces that and I have a car and I -- -- Restaurant to restaurant to restaurant and the only restaurant outside the -- is Miami with -- -- pretty close citing go to Dubai air right now any strange country sell.
And I get to them on the -- in which -- that happens a lot with celebrity chefs they've -- their name almost and you never slowed them.
I think that there's going you gonna see with this economy to that that's -- slow down I think we're seeing that are ready we're seeing a lot of those restaurants closing.
I think there was expansion in every area with just lending your name and after while just doesn't work and people want.
To go to that place where they recognized you know we're all about comfort again but so they wanna go to the local restaurant tour again wanna be -- they -- -- be treated -- one good comforting food at a very good price.
So we've got about a minute here and I tell what about and going from restaurants to products to because that's -- difficult move to your sound products now.
The essentials collection whole foods some other places well that's going to be tough transition.
Very difficult and I didn't know I was -- this -- I think.
I'm learning now it's been very difficult the good thing is I have a great product.
I and I made certain mistakes and I I took a look back and I change.
Mistakes in terms of distributors -- learning that whole world yet so it didn't feel a lot of chefs have done products and I mean I spoke to Bobby flames like it's very difficult human -- -- -- Book coming out and we're on the next iron -- premiere which is the highest rated on the Food Network history.
They -- -- really tough not that -- And I don't like all my friends like cash and want to -- -- -- -- amazing.
It was great I mean I had meeting grasshoppers and I think that's amazing -- -- ads but it's a great experience tune in every Sunday night.
Right now until I just the end thank you so much for coming and then left but thank you -- -- -- sprang.
We'll look for the Florida -- -- all right so what's the national sentiment among restaurant owners joining us now.
Hudson that really he is senior vice president the National Restaurant Association it's good to see yet.
Good afternoon everyone.
All right let's talk about the state of the industry to -- -- talk to a lot of restaurants lawyers people involved so far do -- show.
What are your thoughts right now as we climb out of recession.
As to where we argue with the restaurant in this.
Well -- and some really.
This year 2009.
And 2008 has been the most challenging period for the restaurant industry in several decades.
Basically when you look at over the past forty year period.
There have never been to consecutive.
Back to back.
Yearly sales declines in real terms -- So when one looks at that.
Is an environment in which operators have really had some challenges.
That's -- Still on a typical day in America today.
Consumers will spend well over one point three billion dollars in the nation's restaurant so.
The total industry size is about 566.
Billion dollars but.
Within the industry that large -- a 1% decline in sales equates to an annual.
Difference of about six billion dollars.
And -- this study you showed that 34% expect improvement in the next six months that's a good sign.
Right in and that number has actually been moving up from the spring.
What we see is that today in the spring I operators expectations.
Regarding the future.
-- as well -- current situation.
Has improved somewhat but the real growth has been in expectations.
And there -- wide.
Dependent upon which region a restaurant operation is located in.
So for example if you take the west north central region which is Dakotas Minnesota.
Operators optimism areas substantially higher than say on the Pacific.
-- over the past couple years.
Both consumer and operator.
Has changed substantially compared to historical pattern.
Are you finding a -- I find -- distinct to you guys certainly look at different regions of the country.
Are you finding different trends in different parts of the country obviously we have an unemployment rate and you know.
There in real terms in the twenty -- cents in the Detroit area you're gonna find different trends in the restaurant business than you do.
In you know an area where like Austin, Texas where the unemployment is much -- I absolutely correct there's a saying in the restaurant industry that demographics and that being destiny.
Then and when you look at the demographics.
In general there's a very strong correlation between growth in real disposable personal incomes.
And restaurant -- so in areas where income growth has not been eroded as much row where the economic infrastructure is more -- -- in.
Employment has has remained better compared to the national hole.
You do see restaurant sales.
Moving above national averages.
But when we survey restaurant operators every month.
As you'd expect the top challenges either the economy.
Or building and maintaining sales.
The point important point to note though is that the -- portion.
Of operators reporting the economy as the top challenge is moving down finally.
So the trend.
Is good but when you look at the absolute levels everything is coming off historic lows.
Isn't this a cycle though it sort of vicious cycle to break because of your upbringing in.
New restaurants into an area because is depressed that you now bringing in new industry into an area upbringing you know you those dollars aren't turning over so it's hard to kind of break that cycle is that not true.
Well -- we actually look at the restaurant industry is an important catalyst of economic growth.
And each additional million dollars in restaurant sales actually adds 33 new jobs.
To the economy.
So when we're talking to legislators and regulators.
About the restaurant industry.
We really do drive home the point that.
In terms of labor developing jobs and getting people back in the workforce.
The restaurant industry if one of the most important industries.
We sat the CEO of ala -- on here -- bank he runs a bunch of big restaurants Carmine -- He said the exact same thing.
Instead of extending unemployment benefits why -- get some money out there so that small businesses -- restaurants can open their doors and hire some people.
It sounds very logical to Chris -- -- -- it doesn't sound logical to Washington.
Well I mean obviously it's a complicated environment but to understand the restaurant in history is to understand that it is one of the most labor intensive industries.
In the country today.
There are still in this environment thirteen million individuals working daily in the restaurant industry.
And -- over the past year and a half the industry have actually lost about a 120000.
That -- 1% of our total work force.
But as you know on a national basis total employment down by over 5%.
So when -- thinking about trying to reenergize.
The national economy and local economic infrastructures.
Incentives for the restaurant industry are definitely a positive way to go.
-- great stuff thanks for joining us today.
Thank you appreciate the opportunity -- probably -- Hudson really senior VP at the National Restaurant Association giving us updated on all the trends when we come back.
When I take a look at the state of farming in America -- -- Food special continues.
-- before it hits your lips like will fail so true when it -- your lips.
It comes from a fly and then now it's time to talk to the people who cultivate.
Our food from Atlanta welcome Melissa -- well she is present about applause Melissa welcome to the show him.
Thanks for haven't -- Our first thing I've got to say when I'm with a your history you that you aren't like eight ninth generation farmer you up.
You came this sort of -- life explain how you.
Decided -- farming was going to be -- true calling.
Well I think this is one of the most exciting things about our story my family has been farming for many many generations my ancestors actually sold cattle to George Washington's army during a revelation.
But I was a part of that generation in the early eighties it was told to get away from the farm -- go away and find jobs in manufacturing.
And that's what I did I became a director of sales and operations planning for a large manufacturing company that made latex products which was an agricultural products.
But traumatic experience I got a very keen inside and what it took to manage to supply chain and it's going to be very useful in this business.
So now you.
You weren't certified organic in 2006 but you're not -- -- because of the economy can you explain to people what it means to be organic first of all.
And why you didn't go back for the certification now.
Yes it is a very good question a lot of people are confused by what the term certified a happy ending -- online but it.
-- is in the US it's it it means that you have complied with a list of guidelines.
And have been audited by the USDA.
To conform to those guidelines of which we did qualify for all of that.
But it is an expensive process and one of the things that we have been focused on is where consumers are headed.
And what they plan to prioritize our focus has been on building a sustainable business.
And one that is very green in the way that we manage our resources but also in having partnerships that help -- point.
Those in the restaurant industry as well.
So when we made the decision not to -- this year and we we may evaluate that next year it was based on where we see trends headed and what it takes to have a profitable business.
Melissa had a small farm like dealers small relative terms.
How do you keep costs now without all the economies of scale especially because you're doing things and bio diesel.
Are you really trying to remain -- -- -- -- you able to have to keep margins that enable you to stay in business even in tough times like this.
Well that's a very important question in the way that we've had to manage that is by being careful with our product mix.
One of the things that we did initially was to make sure that we had a lot of direct sales to consumers.
As well as sales to restaurants and we made a decision early on not to -- grocery at that time so that we would have a little bit more buffer zone.
Now we're able to achieve some economies of scale that are getting our cost and very exciting levels and this is our number one focus through 2000 -- Here's how to have efficiencies in our production that will help us be competitive.
I could tell -- -- viewers wrote in -- Molly said that.
That is exactly what he was told to his grandfather was a dairy farmer -- told me not to get into the business -- he apparently he's not an automatic does now.
One of the things that you had said was the single biggest cost was processing.
How -- and how could we make that better for you because clearly we need people like you to keep making our chickens.
Well one thing that has happened is that what the centralized nation of our beef industry and our pork -- our chicken industries.
We have lost a lot of those small manufacturing firms in regional communities.
That are no longer there.
One of the things that we did we made a decision early on not to invest in plant property and equipment to build our own facility -- to -- in -- support existing companies.
He needed some support for jobs in those areas.
So what we need to do is to make sure that we continue to happen local product and regional product with the demand in restaurants.
And grocery stores that come from regional areas that will help us build the economies of scale in these areas.
It is very important to remember that a lot of the the cost of processing is not just in the -- -- but it's in the skill.
And when we -- people who have these generation level skills then we also lose yields and other things that are very important in producing a profitable product.
It may be interesting to note that in the United States of America today.
We have a situation where most metropolitan communities whether it's Boston Atlanta -- -- your only 55%.
Of their population from within a hundred miles of their borders.
And so it's something that we really need to look at in terms of state security.
How to make sure that we support those industries in that area it's a great point Melissa because it isn't skill that is hands down from generation some -- Edinson farming is a labor of love you can't do it.
To get rich.
Yes that is that is absolutely true one of the biggest things that we had to face meeting from.
A very comfortable suburban environment back to the farm as -- a lot of work -- a lot of hard work.
In the things that people do every single day to provide aid for our urban neighbors is -- is a very vital and import it.
The USDA tells us that 12% of our Fave is coming every bit of the -- imports into the United States are increasing by 12% every year.
And right -- the average age of the big producer in the United States of America is 59 years old well in it's very important for us to think about where it's gonna come from 1015 years from now.
Melissa we appreciate your time great -- left but that's you come back we're a little at a time but I have that depth we have some.
Some thoughts on -- getting healthy food into our cities where.
When notes that the Obama people eating fast food and unhealthy food but we'll -- will tell you later on down the road all right.
Thanks and I thank analysts about well president -- -- LOC a farmer down in Montgomery.
Alabama all right New York City we -- -- -- places in the country.
To mandate that restaurant chains post the calories of food items on their menus.
And it may stop me from -- -- a whopper actually won't but a new study found that the initiative.
Has not had the success.
It intended to joining us now is -- -- will he is an assistant professor of medicine and health policy.
And the NYU school of medicine and the author of the study now here's my thing.
The Wendy's just outside of bars studios here.
Has this board with all the calories way over on the right hand side of the room and unless you purposely go over there.
And get a magnifying glass of the Hubble telescope to look and find it it's useless.
Well that's exactly the intent of the regulation it's supposed to be up there and there in your face and ready for -- Fella you know that's something that we need needing to work and a little more.
But you know the golds regulation lets you see it and freedom -- know what the calories in that whopper watts and in that that is what we -- right we only focus on the Lankan areas.
But we did see this increase in the percentage of people who said -- they -- the labels over 54%.
And the percentage of people that that the labels matter to them about a quarter of those people sudden labels matter so.
Although all that's a very good thing so actually worked in the fact that.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Now what they didn't translate into as a percentage of people who actually.
That's -- number a number of calories purchased that we didn't see change there in the prevailing here to the both of which means we have a little more work it and.
And -- to be fair and this is new people have to get used to it and there's a lot of people especially.
-- in -- low income communities that don't count calories in aren't fanatical about it like many of us are these days as so.
We need to get that thing time at the same time though it's a little unfair because those people in those communities are looking for the most bang for their buck.
So predominant and I hit a couple clumping into -- -- I'm gonna do that I can get an -- mention it you know as a doughnut and feed two people.
So food choices are complicated -- multifaceted choice and we know that when us particularly true for low income individuals right so we focus on them first because they have the greatest health needs in many of these populations of the most of these in the city.
And across the nation so we focus first on them to see how their choices might change.
But you're absolutely right that we may see very different.
Choices once you look at a broader population which is what we're starting to do now and we may find that prices -- -- that the populations that aren't as price sensitive.
Or that have greater availability of food in the area was mentioned as was mentioned earlier might react differently to some of this information swap.
I guess and -- got a miracle worker but I think this is one of the huge parts that we still don't talk about enough with -- Health Care Reform and that is prevention and part of prevention is getting people to -- right.
I mean is is there in your studies or are you trying to find ways of solving this problem because it and it's got to be solutions out there we know.
The healthy food is more expensive we just talked about it with a farmer that is -- will not organic anymore but certainly is.
You know -- and all the all natural foods too expensive.
Yes that we are looking at lots about -- writes I think that labeling is one part of the picture.
But I think to really influence obesity we're gonna have to look at a much broader array of policies and and and regulation so I think it may mean looking at the price and availability of food and an area.
I think it may mean looking at what's happening in schools what's happening in vending machines what happened with marketing and do you need a much broader set of policies here before we might see this change in of these you know -- flat.
But you got a lot of people come -- down on this is.
Government Big Brother particularly in ally you're IMAX.
This week I'm -- -- and -- -- arteries it should be my frog.
Have to do that and you still can and you still well we just want to do two things one we want to make you have the full amount of information the therapy to make that choice.
And we want the price of that food to capture everything about it right that this is a very economic extra now any argument here right so.
The what about Tom pushed that from the restaurants.
Did that -- -- -- favorably they'll -- -- -- to do to help for the US currency was initially.
For further regulation itself was initially opposed and and they they pass and suits but -- -- come around and there's now federal legislation pending at the restaurant industry is actually getting behind which is very good news to come to terms here.
On one national federal legislation that'll push labeling Ford.
And I hope they continue to work like this for other regulations and.
Policy at that labeling isn't enough I mean I understand that restaurants we'll make changes I mean I just pulled up -- a whopper I'm sorry but I did.
670 calories 39 grams of fat now the average person might not realize that that 39 grams of fat is more fat than you basically -- in your entire day.
Yet so education needs to be part of this right and education -- artists but that the part of the but I think it means that information need to be out there even more expensive -- and we need a couple of other things as well.
When he's a great connector cousins that we don't mean yeah it's almost 1 o'clock and having that -- you bring up -- -- -- you'll get 28 grams of protein in the -- let me bring -- -- produce 101 for -- all right.
Brian good to -- -- and it's I -- noble assistant professor.
Although on -- and -- policy the NYU school that's all right up next he can't talk about -- without talking about race.
It's this time I know everybody out -- loves that.
When we return here on funds is that.
-- I -- you may be thinking I am.
You know bias when I say that the in his company -- -- -- business should be run.
But I'm not the only want our next guest is Stephen Mansfield he's author of the search for god and Guinness.
Book gives us an inside look at how the company came to be welcome to show mr.
Hey let's talk about beer -- that.
Never played there -- worse things to talk about that is for sure now Guinness.
Is world -- not only for haven't.
Great -- out -- also for treating employees exceptionally well on day.
-- that's right the founder of the Guinness company Arthur Guinness with a man of deep faith he was influenced by John Wesley the founder of the Methodist Church.
Wesley used to teach make all you can save all you can give all you can.
And those values got poured into the -- company and they've made a huge difference in the lives of people around the world.
And they've treated there could urban employees very very well exceptionally well in a way actually that rivals Google -- Microsoft today.
I mean it's certainly it.
Just about everywhere you go and the world at this point.
You said it is the most consumed beverage in the world ten million glasses a day are enjoyed by -- -- -- -- That's actually ten million -- which is -- Chris Clark are wearing glasses.
Yeah I think it's it's one of the biggest brands as one of the most recognizable brands in the world and of course with their advertising.
You know we've all heard those TV commercials with a guy shouts brilliant you know and that kind of thing.
And of course in Europe especially in the in the United Kingdom the advertising's very very well known so it's one of the most recognizable brands in the world one of those consumed beverages.
You know it's it's one of those things to it's it's very much.
On the chair industry and in many respects it's a very recognized brand all over the globe now where do you take it from here I guess that's my next question -- here.
If you look and again it's.
Well it's interesting of course I wrote the book primarily about the way the Guinness is treated his employees but it is interesting to watch what's happening with beer today.
With the economic downturn beer sales worldwide are down about 5%.
But get -- is actually improved a bit and the reason is that they've done better in America though there are a small part of the total market.
They've also done very well and in Africa -- 40% of Nigerian sales for example 40% of some other country sales and Africa.
So what's happening demographically with a beer is that a younger upwardly mobile professional crowd.
Is one thing sweeter a lighter more high alcohol content beer so they.
Tend to go more with the loggers and they're not as much leaning towards Beers like to -- the stout against produces some.
-- did this this -- just for its anniversary this year the 250 anniversary.
-- -- to fifty.
That's a little bit more in the -- direction leaning in that direction it's done very well and so they're they're still trying to capture.
The young market that tends -- like a different kind of beer.
Just to go back to your point about how well run the company is.
What can companies learned these days from the Guinness motto -- -- to an -- years and still running there's got to be something that we can take away from this.
Well that it was very fascinating to write this book while I was watching on my office television and the you know economic destruction that's happened in the last year.
At and one of the things that I I -- I realized was that you know Guinness did well because it took care of its people if you had worked for Guinness in 1928.
You would have had 24/7 medical care dental care -- even a masseuse was on site.
They would have provided -- savings bank they would have paid for your funeral expenses they would have -- your kids to school.
They even would have given you two pints of stout a day and -- -- -- your family into the country every so often so you could breathe some country air.
-- they had libraries they had concerts they had every kind of training for your spouse.
It was it was amazing and again it rivals what we see in some of the most forward thinking companies today so.
I think the legacy of Guinness is not just its -- its branding and its business success.
But the way it took care of people out of the sort of values and faith basis that came through its founder Arthur -- Steve.
What did you find out about worker productivity.
You know because of the way they ever cared -- mean obviously you wanna stay there for your entire career if you could mean -- -- -- -- -- -- What do you find out about how and improve the way they were.
How dramatically improve the way they work -- and and this was widely known in fact Irish mothers used to tell their daughters marry again this man.
-- not only bring home the bacon so to speak but he'll also become a man of character.
And that was because the company actually.
Had such loyalty from its workers the men were so devoted so loyal that it actually worked its way into the rest of their lives into -- into their character into the fact that they wouldn't show up -- -- the company for you know for workday or.
Or or that they would they would treat their other co workers well.
And so that that loyalty because of the way the company treated them.
Produced tremendous things in fact when I was visiting there to write the book.
An old man and a horse cart came up and and and I thought maybe was gonna ask for some money you know that kind of experience and instead.
He began to tell me how great it was for him to work to get us all those years and how much you loved it how much it was the best thing in Ireland.
So those values produce great workers and workers of course produce a great company.
I'm we don't have that kind of worker loyalty anymore but I just want to explain to people you -- wrote that.
Back in the day Christians -- actually brewed -- Because it was a healthier alternative to the poisonous what is out there so that's what Arthur Guinness started doing tax to help that people get better and just be a good cat Christian.
It's absolutely right there was crisis in the sixteen hundreds the began really in the sixteen hundreds.
Called the Jen -- parliament had restricted.
Certain forms of alcoholic for people begin to make their own -- And they drank -- largely because they were suspicious of the waters around cities and population centers that might.
You know be poisonous so people drink gin and it was it was horrible we we see in the famous -- Garth press.
The absolute destruction the -- wrought throughout England throughout Ireland and Scotland so many people many people of another noble motive began to brew beer came -- I was healthier providing the -- vitamins and -- -- it was an alternative -- And it's an amazing story Stephen Mansfield author of the business again it thank you so much for -- us.
Great to be with you and these -- to Imus in the morning this Monday at 6 AM have a great weekend on.
Filter by section