Food in the News

Things haven’t been so good for Starbucks lately. Earlier this summer the coffee giant announced they would be closing over 600 underachieving stores – including 8 outlets in Arkansas; maybe having an outlet in Malvern, Arkansas (Population 9021, Brick Capital of the World, home to Brickdays) is as sure of a sign of over-expansion a company can have. This week Starbucks announced an additional 1,000 layoffs and a change in top management. Stock is down 40% from 2007, per share profits are off 4 cents and the current quarter is rife with reports of lackluster sales.

Café Schadenfreude

Industry analyst Scott Rothbort told Reuters, "The consumer knows to stop buying the $5 cup of coffee at Starbucks and to buy the $1 cup or $2 cup of coffee at Dunkin Donuts". In addition to facing vigorous competition from Dunkin Donuts, Starbucks has McDonald’s to contend with. The fast food behemoth is now operating more than 1,500 McCafes; separate spaces within a McDonald’s that offer coffee, specialty drinks, pastries and desserts. While industry insiders are probably breathlessly awaiting the introduction of ‘The Redbull Bar’ at Hardees and the Denny’s dollar short stack of Mountain Dew Pancakes, McDonald’s is capitalizing on tightening food budgets.

The money consumers spend on food is referred to as food dollars. Half of food dollars are spent on food prepared outside the home (which isn’t the same as half of all household meals are eaten in restaurants). This 50/50 split of dollars for donuts has held steady for about 20 years. People aren’t going to change generational eating habits due to financial constraints; consumers will simply make different choices about where to spend the money.

The news of Bennigan’s, who last year celebrated 30 years of mediocrity, is shuttering its doors - does not bode well for Olive Garden, Applebee’s, Friday’s, Outback and other mid-level casual service outlets. Expensive gas and economic slowdown doesn’t morph a trip to Red Lobster into tuna salad at home, rather that meal becomes a run for the border, a trip to McDonald’s or even better a free Domino’s delivery requiring no gas out of the diner’s tank.


And speaking of Fast Food –

The City of Angels has enacted a yearlong moratorium on new fast food restaurants in South LA. Citing health concerns, the city wants to use the next 12 months to attract healthier alternatives to an area where nearly a 1/3 of the population is obese.

By singling out a neighborhood with limited grocery stores, eating options and a lack of employers, city leaders have decided the best way to tackle the problem of obesity in a culture where no one walks, in an area where no one would want to walk is to make sure Fatburger and others do not expand into downwardly mobile zip codes.

Here is an area where a municipality could actually work to solve a problem - Extra patrol cars, clean parks, after-school sports and exercise programs. Or let residents correct the problem themselves with a little help by subsidizing farmers markets, offering no/low interest loans or tax abatements to stores selling fresh produce – but the very things that might make a difference are a little more difficult to manage than a reactionary feel-good resolution. At least the city chose something do-able.

Also in California

A law the Saucyman editorial board can get behind – Last week, the Gubenator signed a bill into law which will ban trans fats in California restaurants by 2010 and in baked goods a year later. Trans fats, explained here and more cautiously on the FDA website, here, are fats that have been altered to reduce the amount of dietary fat and extend the shelf life of products. The thought that manipulating food to make it healthier has been a bit of a disaster: The theory that margarine, made largely from subsidized commodity crops, is somehow better for a person than butter has not proven out over the last 40 years. There is no pressing need to serve unhealthy, federally subsidized foods to consumers. The size of California’s market will spur changes on a national level and this is good, thank you, California.

Tomorrow – Tea: Sweet, Iced and Hot