Transcript of Food & Restaurant Podcast – What is ‘Better For You?’ with Leah McGrath of Ingles Markets

Transcript of Food & Restaurant Podcast – What is ‘Better For You?’ with Leah McGrath of Ingles Markets. Listen to the episode here.

[00:00:11] Adam Pierno: All right, welcome back to another episode of Food and Restaurant Marketing, the podcast. We are really excited. This will be our conclusion to season 2 and it’s been a very fun season so far but I have a feeling we may have saved the best for last. We have a fantastic guest who is a little different than the other folks that you’ve heard from. Today we have, joining us from Ingles Markets is Leah McGrath who is a registered dietitian. Knows a lot about nutrition, knows a lot about food, ingredients and some of the science behind what we eat and what we add to our meals, and what we’re consuming and also what we’re selling. So, welcome Leah.

[00:00:55] Leah McGrath: Thank you, Adam. Nice to be here.

[00:01:00] Adam: I’m really glad that we did this. We’ve been trying to set this one up for a while and I appreciate you hanging in there while we scheduled and re-scheduled that a few times.

[00:01:07] Leah: Yes, you know I wasn’t trying to play hard to get Adam, I promise. [laughs] I think we were both trying to play hard to get, with busy schedules and timings and everything, but it’s great to be here and be able to talk to you and your guests.

[00:01:24] Adam: Yes I know. Thank you, I’m really glad. Do you want to give the people a little bit of a background on where you’ve been and what you’ve been doing?

[00:01:31] Leah: Sure. I have been a registered dietitian for over 20 years. I’ve been a retail or supermarket dietitian for the majority of that for 17 years, but my background as a registered dietitian has also included work in public health, and I was a dietitian in the army believe it or not. I was an officer and dietitian in the army. That has been the past 20 some years but my life before that, I was involved in marketing as a head hunter and even before that, I worked in the restaurant space, Adam. I was a general manager, banquet manager, catering manager, so I really credit the restaurant world for first sparking my love for finding out more about food and learning more about food and even nutrition.

[00:02:32] Adam: Wow, that’s a really interesting background. So, you’ve seen it all. You’ve seen food from all sides and you’ve done the regiment, the discipline of the army and the craziness of the marketing side as well.

[00:02:43] Leah: Exactly, and being a dietitian is– a lot of people don’t know what the difference is between a registered dietitian and a nutritionist. Registered dietitians have to complete at least a four-year college education. We have to go through about 1200 hours of an internship. We have to pass a nationally administered board exam and we have to keep up continuing education credit every year. It is a pretty rigorous type of study. It’s very competitive to get into an internship and there’s a lot of science and chemistry behind becoming a registered dietitian.

[00:03:23] Adam: Yes. Well, that’s very interesting. Tell me a little bit before we get into our conversation today. As a dietitian working with a brand, what does that entail on a day to day basis?

[00:03:36] Leah: Well, my days are pretty atypical. Today, for example, I was down recording a TV segment and talking about ways that you can use all of the watermelon. My days vary between doing presentations, doing TV, hosting a radio program for our retailer, doing supermarket tours. I do a lot of writing for regional publications, but probably the biggest chunk of my day right now which has also been the case for about the past five to six years, is running social media for the retailer and for my own pages as well. Social media takes up a big chunk of my time right now.

[00:04:22] Adam: Right, I think it takes up a lot of everybody’s time but I do appreciate you being here and let’s get into the conversation today. We’ll be talking today about what does the phrase “Better for you” really mean? What is better for you? We hear it as a claim from CPG manufacturers, restaurants and people thinking about it as they shop, but I thought who better to help me answer that question than a registered dietitian that’s been doing this for a long time. Give me your overview on “better for you” as a claim and what it’s intended to mean.

[00:05:01] Leah: Well, I’m glad you said claim versus what it’s intended to mean. I think that it gets a little murky sometimes because what better for you might be for you, might be very different for somebody who might have diabetes or who might have celiac disease. It’s sort of a very general term. I think there are probably things that most health professionals and dietitians could agree upon that could fall under that “Better for you” might be more fruits and vegetables, or a product having more servings of fruits and vegetables. Less sodium.
Perhaps low in saturated fat, lower sugar amounts, minimally processed or could be higher in fiber. I think that there might be a few ideas that most people would agree on as being better for you, but then we start to get into the gray areas that might depend on a person’s dietary needs, their lifestyle, their food allergies, their food preferences so it gets a little complicated, it gets a little sticky.

[00:06:29] Adam: It happens very quickly, I think. When we start to think about– you mentioned celiacs or food allergies, so I know that if I want to have some good clean protein I can use peanuts or nuts, but if I have a nut allergy that’s obviously not better for me. That’s going to cause all kinds of problems. That’s where the gray area comes in. Even beyond the improved nutrition, I like the idea that people are trying to create products that offer improved nutrition and I think they have the right ideas at heart. But, when they say, “Better for you” is it always better for you? Or is it better than the competitor on the shelf that has 11 grams of sugar and they’re only adding 10 grams?

[00:07:21] Leah: Right, I think we start to get into the whole labeling conundrum and also sort of following a fad. You mentioned lean protein, so right now protein is exceptionally hot thanks to things like the Paleo diet and CrossFit. I see that becoming the “Better for you” perception, is all around protein right now. That’s one of the biggest areas where I think, they think brands are trying to shine the spotlight on products that have higher amounts of protein as being better for you and may not always be the case. But, I think right now protein is very hot.
I think even more so. I mean, we’ve seen other trends through the years. We’ve seen things like fiber, we’ve seen things like anti-oxidants but I think right now, higher protein amounts and lower sugar amounts; those are the two things that brands are trying to seek that competitive edge over their next door neighbor on the shelf and say, “Hey, we look better because we have more protein” or “We look better. We’re better for you because we have less sugar.”

[00:08:41] Adam: Right. Yes, it’s interesting. Last month we went to The Fancy Food Show in New York and in the past, I think it was driven new innovation in that space and the CPG space was driven a lot by flavor in the past. But now it seems nutrition and quality of nutrients is really forward in all the innovation. Everybody has, besides popcorn, everybody has something that’s really adding protein or a new way to sweeten without sugar and that seems to be really driving innovation.

[00:09:17] Leah: Yes. I think I’ve seen the same at Expo East, Expo West. I’m seeing reports on those and I would say you’re right on target with that.

[00:09:30] Adam: Earlier this season we interviewed Lucas Clark from MAD Greens, which if you’re not familiar with MAD Greens, it’s a chain of salad restaurants and they have these crazy customizable salads and I happen to be a super fan of the brand. He posited that all trends right now are driven by nutrition and trying to find this edge of “Better for you” so when he was saying they look for ingredients, that’s what they’re trying to do. It’s not just flavor, but it has to obviously taste good. He said they were looking in their culinary team for ways to get more protein in or get more fiber and really amp up the quality of the nutrition.

[00:10:14] Leah: Yes, I think that’s really exciting. As a dietitian, any time you can promote eating vegetables in a salad, I mean, we’re all for that. The top of our list is trying to get people to eat more vegetables and fruits and make those a bigger part of your plate or your bowl. That’s definitely a big selling point for me, but yes. It’s interesting Adam, you haven’t said the word superfood. Honestly, I’m glad you haven’t because I think that, it seemed like for a while every year we would have one superfood that everybody catered to. Whether it was pomegranate or kale, or something like that, but now I think you’re right, I think-

[00:11:08] Adam: Acai.

[00:11:09] Leah: Acai, right. Chia seeds. Now I think we’re seeing maybe a broader look, a broader scope at just making offerings in general. Better for you with more fruits, more vegetables, more protein, less sugar. Maybe not focusing so much on just one food.

[00:11:34] Adam: Leah, you triggered a great question. Do you believe that that is because we’re getting smarter about nutrition as a culture and we understand there’s no magic bullet or do you think the marketing has just worn off of the term superfood, and people are starting to spam it in their email?

[00:11:51] Leah: Yes. I don’t know. I hope the latter, that people are getting tired of that term. Are we getting smarter? I think we certainly have access to a lot more information. I don’t know if that always correlates with getting smarter or just getting bombarded with more information. I think the trends and the fads are flipping much more quickly now than they used to. It feels like when the Atkins diet was the big fad, that stuck around for quite some time, but I feel like now the food fads and food trends just change up. Their cycle is much shorter.

[00:12:38] Adam: That’s really interesting too. I’m glad you brought that up. In the restaurant space we see menus can shift quickly with LTOs and probably not as quickly as internal brand people would like them to, but pretty quickly they can add some things. If chia seeds become a trend, they can add a chia seed salad or an additive to a milkshake or something. But in the CPG world, when you’re talking about shelf space and grocery distribution, how fast do you see that shifting when an ingredient or an additive becomes popular? How long does it take to get to the market and how long does it stay on the shelf before it starts to disappear?

[00:13:20] Leah: Yes. I think going to events like the Fancy Food Show, Expo East, Expo West will give you an inkling of the coming fads and trends in food. Usually what we start seeing presented to buyers might be a little ahead of those shows. It’s kind of like a little trickle, right? At first it’s a little trickle and then the shows come and you see, for example, popcorn, you mentioned popcorn earlier. I remember one year it was like, all of a sudden we’re getting more people trying to introduce popcorn to us and there were like all different flavors and things like that. Then when you go to Expo East or Expo West, there are tons of popcorns there. Then you’re starting-

[00:14:11] Adam: Yes, it’s amazing.

[00:14:12] Leah: Yes. Then you’re just getting this flood of presentations for people to try and sell you popcorn. I don’t know in terms of time what the cycle is, but it’s still probably a lot faster. Then I think in the US, anyway, we’re such spoiled consumers. Our boredom threshold is so low that we get really bored so quickly and we want to move on to the next food, the next taste, sensation. Now we’re tired of sea salt caramel, we want sriracha. You have to be pretty nimble.

[00:14:56] Adam: Oh, that’s funny. Yes. You’re hitting on all the trends. Sriracha was in everything for a year. It’s still very popular. I just read that Auntie Anne’s has a sriracha pretzel [inaudible 00:15:06]

[00:15:06] Leah: Oh, that sounds good.

[00:15:09] Adam: I’ll be heading over to the mall for that for sure. Not better for you, but tasty as well.

[00:15:14] Leah: Yes. Exactly.

[00:15:15]Adam: I’ll do it. What do you think about Panera last year kind of went all in on the idea of the clean menu and I have my own take on that from a marketing standpoint, the use of the word clean. I would love to hear the perspective of a registered dietitian on the clean menu and what does that mean for “Better for you” claims and what does that mean for consumers?

[00:15:44] Leah: Yes. You’ve touched on one of my least favorite terms. One of my friends works for another retailer in the mid west and we had this discussion about that whole term, clean is like, what’s the opposite of clean? Is it something unclean or dirty?

[00:16:06] Adam: Totally, totally agree.

[00:16:07] Leah: Yes. She was saying, and I agree with this is that, “Why can’t we focus on clear?” Why can’t we focus on– if the brand’s idea is to simplify labeling or make things more understandable, or clearer to the consumer, or clear to the guest at the restaurant? I mean, I think everybody could get behind that, but when you start focusing on clean, I think it sets up this sort of caste system of food that implies that you’re better if you eat these foods because they’re clean.
If you’re eating at a competitor or buying these other options, which are unclean or dirty, you, therefore, are unclean or dirty in some way. Let’s not forget Chipotle because I think that when I see Panera making these sort of clean claims, I think, “Wow, this sort of reminds me of Chipotle in the pre-food safety nightmare days”. A lot of people frankly said on Twitter, “Hey, you got what was coming to you. Karma bit you in the butt on that one.”

[00:17:19] Adam: I totally agree. In fact, if you go back, I believe it might have been the first episode we posted of this podcast. We did a story on Chipotle going all in on food safety. It was in the aftermath of the first outbreak. Our position at that time was, “Hey, that’s the wrong move” because now you’re saying, “We promise this won’t happen again” and when you break that promise we’re seeing what’s happening, right?

[00:17:44] Leah: You’re right. I think it’s a dangerous space to try and put up your marketing flag. I think it’s kind of risky.

[00:17:56] Adam: I agree. It’s like service. I never can promise flawless service because it’s a promise that is guaranteed to be not kept. Clean food, it just takes one social media image of some somebody who finds a toothpick in their food or something that all of a sudden it turns into a snarky meme.

[00:18:16] Leah: Yes. What reminds me, if you’ve ever been traveling across the United States and you see a big sign on a roadside that says, “Clean restrooms here” it’s like, well, that’s what we expect. Right? We expect-

[00:18:33] Adam: I sure hope they’re not filthy, yes.

[00:18:34] Leah: [laughs] We expect our food to be clean. We expect a certain level of food safety and safe food handling. We don’t want you to have to brag about that because that’s an understanding that we have that it’s supposed to be clean anyway.

[00:18:51] Adam: I feel the same way about restaurants. I just read an article about Papa John’s and they have a new CMO, and that’s a brand I like. They want to talk more about food quality. To me, I say, “Food quality?” I take that as table stakes. I assume that the food is quality or you wouldn’t be in business. Reminding me of that, I’m not sure that I’m motivated, but with clean food to me, maybe I’m just hypercritical and hyper-skeptical. It raises more questions for me as a consumer than it answers or makes me want to go there.

[00:19:26] Leah: Yes. I don’t know if I mind quality as much because maybe that implies more of people taking care of where the food’s coming from and where they’re sourcing it from, and how they’re storing it. I don’t know if I mind quality quite as much, but I see where you’re going with that.

[00:19:48] Adam: But you do not care for clean?
[00:19:59] Leah: I don’t care for clean, no.

[00:19:54] Adam: Let’s talk a little bit about your neck of the woods in the grocery isle. I know that there’s a lot of new stuff happening on shelf and we’ve already touched on fancy food and the health innovation. Any other trends that you’re seeing in the grocery that are more “Better for you” claims, but that also as a dietitian that you can get behind and think they’re really making advances?

[00:20:17] Leah: Well, I think there are so many different things happening. Sometimes I just like to go to the store without any shopping list or agenda just to try and pay attention to what I see there. I feel very excited that I’m seeing a lot more innovative packaging when it comes to vegetables and fruits to make them more accessible, grab and go prepped so that people don’t have to spend a lot of time cutting. That’s one really cool trend that I’m really happy to see. The other thing, of course, I see that I’m not as crazy about is non-GMO project labeling on products that have no genetic material whether it’s-

[00:20:59] Adam: Wait, can you repeat that? Your voice just cut out there.

[00:21:01] Leah: Yes, sorry. I’m not as happy about seeing non-GMO project labels on products that don’t have genetic material. When you see a non-GMO project label on a bottle of water, or sea salt, or cat litter. I recognize why companies are putting that pay-for-play label on products but I think it’s going to confuse consumers and then they’re going to just start ignoring it because they know that it has little or no value.

[00:21:42] Adam: Right, I couldn’t agree more. I think that’s when we think about green washing and trying to disguise everything as better for you then the tide is going down and everybody starts ignoring those labels. As a consumer, I think I’m never really sure what’s good for me and when I see GMO, non-GMO I honestly have no idea. Is that bad? Is that good? I don’t know.

[00:22:09] Leah: Yes, Adam. I finally decided I think it’s because of the G that I’ve had people who actually confuse non-GMO with gluten free. Because they don’t know-

[00:22:24] Adam: That’s interesting it’s more just from saturation of media coverage that they just kind of confuse those two ideas.

[00:22:31] Leah: Yes, a lot of people, whether we’re talking about non-GMO project or gluten free, or even organic that they don’t know. They think that those labels automatically also imply health or nutrition when they don’t.

[00:22:51] Adam: That’s dead on. We did some research here for a CPG brand of snack that has the “Better for you” shine on it and we found out that consumers liked that it was organic. They attributed it to some health benefit, but they actually had no idea how to draw a line between the word organic and a health benefit. I don’t think there actually is one. It’s just a cleaner way to grow the food.

[00:23:17] Leah: Right, organic was designed as a way to provide agricultural certification for products. Certain standards when it comes to how crops are grown and with what input. What pesticides, because organic does use pesticides but many people don’t understand that. Then it also has to do with how what animals are fed and access to outdoors. It’s just specific standards. Nowhere, if you read the organic standards does it have anything to do with nutrition or even food safety because, of course, we have recalls of organic products several times a year so it obviously is not a guarantee of food safety either.

[00:24:10] Adam: No, I totally hear you. Then, when we think about the trends- you mentioned super food then we talked a little bit about clean, gluten free, non-GMO, organic, all these trends. It’s interesting to see how the trends make it to market and then how they get diluted. You see popcorn came back and then now there’s 60 brands and each one of them has 10 skews with different flavors. It’s so saturated that it almost doesn’t mean anything anymore. Not that that is a nutrition play but I see that also with flavor. At Fancy Food again I saw a lot of seaweed products and I wonder how far will that go before that’s just a totally watered down trend where it just becomes a flavor that’s added to other things.

[00:24:59] Leah: Right. The tide comes in and then it starts to go out again as people just sort of go, “You know, I’m tired of that flavor,” like the example I gave earlier the sea salt caramel or the sriracha and they’re ready for something new. They’re ready for the dill pickle popcorn, or some other kind of flavor that will intrigue their taste buds.

[00:25:34] Adam: Yes, they’re looking for the next one. I do like the dill pickle actually, that’s a good flavor. I know we talked super food, we talked clean, what about the phrase “Free from”? I’ve been seeing it almost as a substitute for “Better for you” and it’s used a lot as “Free from lifestyle” kind of like you referenced CrossFit at the top of this talk. “Free from” has become a banner people can get on.

[00:25:59] Leah: Yes, my goodness I have a whole slide and a presentation I’m working on now about “Free from” claims because, remember fat-free, Adam? Fat-free has gone by the way side but with sugar-free, or no sugar added. We’ve got GMO-free, we’ve got non-GMO, or antibiotic-free, hormone-free, free range, cage-free. I think that whole “Free from” has taken on a big personality. There is just so much in that space and I think again, we have a situation where consumers are confused about what the alternative is. Cage-free eggs for example. I will admit I only learned this more recently, cage-free eggs being a really big thing or the word cage-free. I did not realize that our broiler chickens, the ones we eat, are never raised in cages anyway. Did you know that they’re-

[00:27:25] Adam: No, and I have also seen hormone-free chicken or anti-steroid chicken and then foster farms have said legally, you’re not allowed to have that anyway so I don’t know what produce was talking about. It’s interesting how they try to make those claims.

[00:27:39] Leah: Yes, they do it and they will admit that they do it for marketing reasons to have a competitive advantage. It’s kind of like watching a domino when one brand label does that, that everybody has to get in line to do the same thing because nobody wants to be the odd man out. If the chicken brand puts on their label, “Antibiotic-free,” then that’s not technically correct. They can say, “No antibiotics administered” then every other brand’s going to go, “Well, we’re gonna do it too now because everybody’s going to be thinking that we’re the ones who have antibiotics even if we don’t.”

[00:28:20] Adam: Yes, they’re all updating their packaging the next day as soon as they hear that claim from their competitor, that’s for sure. It’s a crazy world but I think it’s making it hard for consumers to keep pace because I look at “Free from” and to me it seems like it will stay fringe. It hasn’t really caught on mainstream yet. I haven’t seen it as something that restaurant brands definitely not, but I haven’t seen it in grocery either really take hold as there’s no “Free from” section or there’s no “Free from” promotion but the food brands that like it or that use it are really, really into it.

[00:29:01] Leah: I think the only place that we’ve really seen sections in the store and labeling has really been gluten free universally. That really kind of got adopted and then it has FDA backing now so that serve a separate category though.

[00:29:21] Adam: Yes and there’s actually traceable reasons why it’s important. I have noticed though in the groceries we’re in Scottsdale, Arizona, and I’ve noticed that our stores out here have added a snack area to the produce section. In the produce section there will be one or two isles set up that have the “Better for you” snacks and some of the products I would consider “Free from” or cleaner. Are you guys also doing that?

[00:29:52] Leah: We have a lot of our newer stores have a bulk food section so that’s real popular. In the produce section, we’ve always had things like apple chips and different kinds of nut and fruit bars. Those have always been very popular in that area. But as to a separate section within produce, no, I don’t think we have anything that I would describe that way.

[00:30:24] Adam: Those things have always been part of the produce like apple chips and fruit leather. Some of those products that are just little bit better for you. Okay, well I think we have run the gamut here of topics. I really appreciate you making time to chat with us today.

[00:30:42] Leah: It’s been a pleasure, Adam. Thank you.

[00:30:47] Adam: Leah, is there anything that you have going on that you want to talk about?

[00:30:50] Leah: Well, if people want to find me, they can find me on Twitter. I’m @InglesDietitian on Twitter and I am on Facebook as Leah McGrath Dietitian, on Facebook as well. I am happy to interact with people on social media. I think one of the things that I’m probably most proud of right now that we’re doing is we work a lot with local farmers and vendors and we have monthly events in our stores to highlight locally grown and produced products. That is probably my most fun right now.

[00:31:31] Adam: I love that. Actually, Twitter is how you and I met, so I can vouch for the fact that if you reach out to Leah she will respond pretty quickly. Also, don’t forget Leah also has a radio show that she’s been doing for over 10 years. 12 years is it?

[00:31:48] Leah: About that, I think, yes.

[00:31:50] Adam: You can download that. I’ll include a link to the podcast. Every episode is released as a podcast just like this one. It’s called the Ingles Information Aisle. I will add a link to the show notes here so that people who enjoyed this talk can hear some more.

[00:32:06] Leah: Great.

[00:32:09] Adam: Alright. Well, thank you very much, Leah. I really appreciate your time and as always to our listeners, we appreciate all the feedback that we get. You can email us Adam@foodandrestaurantmarketing or on Twitter FandRM. We love to hear feedback especially when it’s positive. You can keep the negative stuff.

[00:32:26] Leah: [laughs]
[00:32:28] Adam: I’m just kidding, I’ll take that too. [laughs]
[00:32:29] Leah: Thanks, Adam.
[00:32:30] Adam: Alright, well, thanks again, Leah. I appreciate it.

Listen to the episode here.

Transcript of Food & Restaurant Marketing Podcast – Episode: Amazing Culture with Kaffee Hopkins of Sterling Hospitality

Transcript of Food & Restaurant Podcast – Amazing Culture with Kaffee Hopkins of Sterling Hospitality

Transcript of Food & Restaurant Marketing Podcast – Episode: Amazing Culture with Kaffee Hopkins of Sterling Hospitality

[00:03:35] Adam Pierno: All right, well welcome back to another episode of food and restaurant marketing. We have another special guest as part of our season two here. We are joined today by Kaffy Hopkins. Kaffy, that’s right, with the two F’s not TH, who’s joining us from Sterling Hospitality and it’s a brand– part of that is a brand called Marlow’s Tavern that I’m very familiar with and love. And so welcome Kaffy to the show.

[00:04:14] Kaffy Hopkins: Thank you very much for having me, Adam.

[00:04:16] Adam: No worries. I’m really glad we could make this happen. I know we tried a few times get it on the calendar. Can you give the audience a little bit of a background of your career and where you’ve been what you’ve done?

[00:04:29] Kaffy: Sure. So I got my start in restaurants, I hate to say, nearly 30 years ago this fall. I went to work for the Applebee’s franchise in Kansas City. They had six Applebee’s. They bought the company from WR Grace who owned Applebee’s corporate at that time and they became the franchisor. We had 50 Applebee’s then, great fun. It was at the very beginning. Nobody really knew who Applebee’s was. We kind of flew under the radar. I stayed there for four years, helped him grow the marketing and then the advertising agency was here in Atlanta.
It was a company called Babbitt and Reiman and our AE went on a maternity leave and didn’t come back and they were bellyaching about how they couldn’t find anybody to help so I said I can do that job and the chairman of the company, Joel Babbitt, called me the next day and said, “I’ll send somebody to pack you up and move you to Atlanta.” One of my three sisters actually lived here then, still lives here, and I said okay so I moved from Kansas City to Atlanta, 26 years ago, right about this time. And that’s how I got into restaurants.

[00:05:39] Adam: You know what made me sad? You sounded like you were sad to say you’ve been doing this for 30 years and I hate that. I love that you have this experience and when I talk to people that have great experience, I think there’s just so much more to learn and you’ve seen it all, you’ve been there, you’ve done that. Be proud of your 30 years, not a lot of people survive that long in this business.

[00:06:00] Kaffy: Thank you. It’s just fun business. Nothing is as much fun as this. I love the business and you either love it or you don’t and it’s okay if you don’t but you should go do something else because you’re never going to.

[00:06:13] Adam: Right, that’s right. I agree. In the conversations that you and I have had leading up to this, I can tell that you really have a passion for the business and for the topic of today which is restaurant culture and how to live restaurant culture, which I really love. In another recent episode, we talked about authenticity with Zac Painter of Fatz Cafe.
He talked about how they turned around and got back to the roots and the authentic meaning of the brand but because of your great experience and all the brands you’ve been in, Applebee’s and some of these really, really established brands, your perspective is going to be great here today on this topic. Do you want to talk a little bit about what culture means to you because you had a lot of passion about this when we when we talked a couple weeks ago?

[00:07:00] Kaffy: Culture to me is something that you have to live and breathe and not just talk about. It’s how you say things. It’s your tone of voice. It’s how you treat people. It’s what you look at and what you do when you walk into one of our taverns or a cafe, it’s the respect I give the dishwasher if you’re the CEO who’s in the office next door to me and our co-founder. But it’s not just the way you live your life at work, it’s the way you live your life. If the culture of where you work doesn’t align with your own personal culture and your own values and how you already live, then you’re never going to be a hit. That’s why I find Marlow’s so refreshing because I feel like I’ve worked —
For me, it was the last 27 years to have this one job. I feel like this is– And I don’t hope to have another job ever again. I align so well with the culture and we talk about our culture a lot. We have what’s called a Marlow’s Magic Book. It’s right here in my hand. It’s got my first day that I started, which was February 26, 2014. It’s gotten notes in it. It’s got our mission. It’s got an introduction to Marlow’s, employee attributes or seven values, our guiding principles, our promises. I carry it with me all the time.

[00:08:26] Adam: You get that on your first day but then you don’t just put it in a drawer?

[00:08:30] Kaffy: No.

[00:08:31] Adam: That’s amazing. Go ahead.

[00:08:34] Kaffy: For example, we have monthly leadership face-to-face meetings on the cafe side and on the Marlow side. The cafes are 20 plus cafes and office buildings, B&I, Business and Industries is what it’s called. Anywhere from a building of 400 population to 4,000 population. It’s how we range. We will get in a meeting and John Metz, who’s our co-founder and CEO will say, going to go around the room, “Which value are you feeling this period? This month? And why?” or another meeting he’ll say, “Have you seen somebody, a co-worker or somebody in the Tavern, a manager, somebody who is really living one of these values and had it? How did you see that come to life?”

[00:09:21] Adam: That’s fantastic.

[00:09:23] Kaffy: They’re always top of mind.

[00:09:24] Adam: Full disclosure for the audience, Kaffy and I met because I’m an alumnus, I consulted on the Marlow’s brand a few years back and maybe Kaffy, it’d be helpful to give the audience who maybe are in the West and don’t know the Marlow’s brand yet just a quick elevator speech on what the Marlow’s brand is.

[00:09:45] Kaffy: Absolutely. We are Marlow’s Tavern. We call ourselves taverns, never restaurants. We want you to eat in our bar and drink in the dining room. They’re together, we serve– Everything is made from scratch. Our CEO went to the Culinary Institute of America so we’re all about the food. We don’t have a microwave. We have a very small freezer. We have cloth napkins. Every marinade, every stuff, everything is made from scratch. In our taverns, we have an open kitchen so you can see what’s going on. We have a chef de cuisine. Our lowest priced item is 4.50 for our parmesan fries and our highest priced item is $20 for filet medallions, great steak-frites that we just put on the menu and green beans. We’ve got terrific, we sell a lot of burgers. We have some great shrimp and grits and some specialty items, Mongolian bowl.

[00:10:40] Adam: The shrimp and grits. When I lived in Atlanta, I lived on the shrimp and grits and Parmesan fries, for sure.

[00:10:45] Kaffy: Yes, shrimp and grits is definitely one of our most popular items. We don’t talk about how many we have. We don’t want anybody to know. We want you to think your Marlow’s is your neighborhood Marlow’s. We don’t think people drive a long way to get to a Marlow’s and that’s not really who we are. We want to be the corner bar, the one’s you’re going to come–

[00:11:03] Adam: That’s another interesting thing that I think relates back to culture. The neighborhood feel. If there’s no footprint, there’s no, “If I go to the town.” or, “If I go up to Alpharetta,” there are two different footprints. The feel is the same but distinctive to the neighborhood and it’s unique to the location that I am.

[00:11:27] Kaffy: In Midtown you might not ever see a child. In East Cobb, you go in and there are families and everybody knows everybody. It takes on the bars, the taverns take on the flavor of whatever neighborhood they’re in. We never call ourselves a chain. We don’t have customers, we have guests.

[00:11:45] Adam: I love that.

[00:11:46] Kaffy: And we’re about the hospitality for those guests, it’s what we are. That’s a little bit about Marlow’s Tavern. Does that help?

[00:11:53] Adam: Yes, that’s awesome. You talk a little bit about the internal culture with the Marlow’s Magic Book. How does that– I guess the mission is, we’re going to build this really strong internal culture and so John is going to give these inspirational talks and refer back to the values and really demonstrate to people that those values are important. How do you translate? What I think is interesting about the brands that do this right is that they’re able to get the guests to not just recognize that there’s a culture but the guest actually becomes a participant in it. And that’s definitely true for Marlow’s.

[00:12:32] Kaffy: I would say the first of our seven values is hospitality, and I think that our guests feel the hospitality. They don’t know exactly what it is we do that makes us different. They may not recognize it. For example, if you have an appetizer or a salad before your meal comes, you don’t get to keep your dirty fork. No, no, no. We take the fork and bring you a clean one. We serve our food with open-handed service, a server comes and never turns her back on you. They serve the food even if they have to switch hands. It feels different, the hospitality feels different. But our guests may not be able to put the finger on why they were treated differently at Marlow’s but they know that the experience was better.
I think that people feed off that hospitality, being recognized, knowing– We know that they’re a regular. It’s, “Welcome back,” and, “What did you have last time?” and, “Can I tempt you for something new this time?” One of our values is fun. I mean, which companies you know one of their values is fun? We are a fun place. It’s fun come to Marlow’s. Our servers have a good time–

[00:13:36] Adam: I thought it was fun working with people at headquarters too.

[00:13:40] Kaffy: Well, thank you. It’s a fun place to be. We don’t take ourselves too seriously. We want you to come sit at the bar, try new drinks. Say hello to the bartender. We have little bar cards that’s got the bartender’s name on the front so that you know who you’re talking to.

[00:13:55] Adam: How do you train for that? How do you train for open-handed service? Is it part of hiring? Or is it part of training? I’m sure it’s a combination of both but give me a little background.

[00:14:06] Kaffy: It’s both. We use the company called [unintelligible 00:14:10] and it is an online assessment that everybody who works at our company, from the server to me– I had to do the online assessment test. It was a different online assessment test and it took me an hour and a half to do it but, it tests the hospitality gene. If you don’t have that service minded attitude, then you’re not going to survive in our taverns. You can go work somewhere else where hospitality and service might not be this high up priority as they are with us and that’s okay go work there.
But you have to take this online assessment test and you have to get within our range that we’re looking for or we’re going to pass on you and go on to the next person. The first most important key is that you have a propensity to be hospitable and to serve. And then it comes down to the training. We are inspired by fine dining, the fine dining is kind of dead but it’s those things that they do in fine dining. Those points of service from the hello when they get there to goodbye when they leave. We serve our drinks on a little tray. We just don’t carry them out and plug them on the table. First, it’s making sure that you have that mentality and second, it’s the training.

[00:15:35] Adam: I think that’s fantastic. You mentioned in the Magic Book there’s a mission. You don’t have to tell me the mission but do you think about the mission every day? Is the staff in house, at each location, at each tavern, are they reminded of the mission? How do you bring that to life for them to make it work?

[00:15:58] Kaffy: Well you have to be because if we’re not giving great hospitality, then we’re not Marlow’s. If a server or bartender is not saying hello and we’re pointing to the bathroom, that’s not great hospitality. It’s not a good fit. But our mission, part of it is the hospitality, so they live it and breathe it every day. It is always alive and well and breathing in our taverns and cafes.

[00:16:29] Adam: Does that happen with the– operationally, is that trained into the management of each tavern to remind people every day? Or to call out great behavior? How does it work operationally?

[00:16:47] Kaffy: The managers do managers’ meetings weekly and they talk about the top three and the bottom three. The top three and how great they’re doing, and the bottom three and how we could help those. But just step back for a second, so everybody who works at a Marlow’s or a Sterling Spoon Cafe, everybody gets the orientation with the Magic Book. It’s not just for leadership or managers, everybody gets the Magic Book.

[00:17:12] Adam: Everybody’s responsible, everybody is exposed to it and then they know it, and they can either take it hard as they can. If they can’t, I suspect they don’t stay long.

[00:17:20] Kaffy: Correct, yes. [inaudible 00:17:24]

[00:17:25] Adam: Let’s talk about how most brands– I complimented you for your experience and I want to bring that to bear. You’ve worked at some big places. I know that through conferences and other things, you’ve been exposed to how other brands practice these techniques. How do the biggest, best brands do this? I think of branding where they wear a brand will try to communicate their culture outwardly and they’ll try to build the strong brand, do you think the branding plays a role in it? Or do you think the branding is based on what’s already really happening and it doesn’t work if it’s not real?

[00:18:03] Kaffy: I think it’s based on what’s already happening and it doesn’t work if it’s not real.

[00:18:08] Adam: If it’s a bluff because the consumers don’t buy it.

[00:18:11] Kaffy: Yes. And you know, we don’t talk about our mission statement or our branding. We didn’t do it. It’s like, you know Ritz-Carlton is ladies and gentlemen serving ladies and gentlemen. They don’t say that, they just do it. They always say, I split my career on the ad agency side and the client side. I can recall having clients that they would, “Let’s say this.” Well, if you’re saying that in the advertising, your strategy is showing. We should just do it. You don’t have to tell people we’re doing it. I think there’s companies–

[00:18:42] Host: Do you think the culture– Sorry to cut you up. Do you think the culture is more important than the branding?

[00:18:49] Kaffy: I think you can’t live up your brand if you don’t have a strong culture. It is not believable.

[00:18:55] Adam: If they’re not aligned for sure.

[00:18:57] Kaffy: No. You can’t– I mean, you can for a little bit of time but people are going to come to you once and they’re never going to come back. That’s really where the difference is. You can get them to come the first time but you can’t get them to get back if you don’t live up to the brand. You just can’t.

[00:19:19] Adam: That’s it. There’s an old adage that I was taught early on in my career that your strategy cannot be and your brand cannot be service because service is going to fail at some point, but your culture can sure as hell be built on service. It sounds like you’ve translated service for hospitality. I don’t want to promise it but I learn as a guest that, “Oh wow, they really take care of me. These people have the light of life in their eyes. It’s not like some places where you’re going and the person could care less if I’m at the table or not.”

[00:19:54] Kaffy: And, hospitality is felt. Here’s good service, everybody gets the service. But it’s that next step and that removing the dirty utensils. I was at a really upscale restaurant here in Atlanta and I won’t name names, you’ll know it if I said it, and they said, “Hey, do you want to keep that fork?” [laughs]

[00:20:16] Adam: Don’t make it my choice, bring me a clean fork.

[00:20:19] Kaffy: I don’t want to keep my fork. And I was thinking, “Really?”

[00:20:23] Adam: Yes.

[00:20:24] Kaffy: It’s just those subtle things that make you want to come back to Marlow’s because it’s so comfortable and nice but it’s upscale enough that you feel you’re getting that fresh ground burger, the burger has never been frozen, you get it cooked to order and french fries that have been peeled in-house and parboiled so that when we fry them they stay really crisp but they’re great and hot on the inside.

[00:20:48] Host: Right.

[00:20:48] Kaffy: You know it’s all of that that works together.

[00:20:51] Adam: Yes I know, I think it’s really important. I always think of the small salt shakers that tell me there’s a real person back here, there’s a real chef who cares how this tastes and there’s a cue to me that salt is not my friend and I should try it before I just start pouring it on there.

[00:21:07] Kaffy: Yes, correct.

[00:21:09] Adam: So when brands do miss on culture, is it because it’s not aligned with who they really are, the branding isn’t, or is it they create a mission statement that it’s just a bunch of Powerpoint jargon?

[00:21:22] Kaffy: I don’t think they have the right people as they say on the bus and not everybody believes. You got to have believers, you got to have people who embrace it and want to be a part of that culture.

[00:21:35] Adam: So it’s the assessment that helps you bring people that are the right people to fit into the organization and get the culture and like it.

[00:21:42] Kaffy: I add and help us to make for telling [unintelligible 00:21:45] quit telling people that I had eight interviews and an hour and a half online assessment test, and I kept thinking, “Holy cow, just hire me, could you?”

[00:21:55] Adam: [laughs]

[00:21:57] Kaffy: Because I really wanted the job. I did not understand then why that. I understand now because you got to have the right [unintelligible 00:22:06] assessment. You know we’ve had that on occasion in a tavern that it’s not the right manager and didn’t fit our culture and it’s devastating to the team and to the operation.

[00:22:18] Adam: Yes, it slows everything down. And you know what Kaffy, it also helps as an applicant for you. It helps you say, “Oh no,” probably at this point of the interview, you get to decide, “Well, I don’t know, that sounds different than what I believe in and I don’t want to go back for interview number seven,” or hopefully this keeps getting better every time.
What I love when I’m talking to an organization is up and down the chain, everybody’s telling me the same story or some version of the same story. That’s a lot of love. I think in the bus, when you go to corporate and they have one vision and then maybe you go to a restaurant or somewhere else in corporate and they have, “Well, that’s what they say, but the real thing is we’re just trying to cut costs, we’re just trying to get by,” or “We just want to turn tables,” and then you say, “Oh no, okay,” so it all fell apart.

[00:23:07] Kaffy: Yes. Everybody really has to buy into it or it just doesn’t work, it’s just not believable and you really cannot fake it. You can’t fake hospitality.

[00:23:21] Adam: No, you can’t.

[00:23:21] Kaffy: It doesn’t come across as genuine and we are genuine, and that’s what the company was built on. It’s that and a really good suit and a really great drink.

[00:23:35] Adam: That’s at the restaurant level as a guest, and I do get to experience that, thinking, going back to the management level, what do they do differently than some of the management teams that you’ve worked with at other places or witnessed as an agency person or through the contacts that you have, what do you think it is that you’re doing different?

[00:23:57] Kaffy: I think that what we’re doing different is that our culture comes from the top and that our leadership and our senior management walk the walk and talk the talk, we’re not asking them to do anything we don’t already do and we don’t already believe in.

[00:24:17] Adam: They created the mission and the culture and they really believe that-

[00:24:19] Kaffy: Correct.

[00:24:19] Adam: -and so it cascades down.

[00:24:21] Kaffy: Correct, it does and I think we’re more about what somebody’s doing right than what somebody’s doing wrong.

[00:24:27] Adam: I like that. It’s a culture of praise versus culture of form.

[00:24:33] Kaffy: Correct. I was with a big franchise of a group and we would start every month with leadership meeting with how many days we had gone without a worker’s comp claim, by restaurant, and I’ve never heard–

[00:24:48] Adam: That told me everything I need to know.

[00:24:51] Kaffy: I mean I started thinking we never had any and somebody said, “Yes, we do but– We just do.” If I were going to start our meeting we didn’t talk about them in our leadership meeting so that makes sense to just a different focus. Anyone who go around the room we thought about the values, it’s not just about what you’re doing at work.
Last time it was what’s one word thereby stealing today, one word to describe how you’re feeling, and mine at the moment was balance and I said mine is balance between the cafe side and the Marlow’s side of what needs to be done today versus what needs to be done six months and a year from now so we put a strategy in our future and my husband just said soul-searching so I’m trying to balance. That’s where I am right now, just on that teeter-totter trying to balance. They’re not just all about work. We have lives and we all know that and we all respect that personal life because it mixes so much in with our professional life, because we work so much. But that’s [inaudible 00:25:56] I choose that.

[00:25:58] Adam: That’s very simple but very powerful. One word to tell me how you’re feeling in a leadership meeting-

[00:26:02] Kaffy: One word.

[00:26:03] Adam: -and that group, yes.

[00:26:04] Kaffy: One word.

[00:26:04] Adam: That’s very strong. One last question.

[00:26:06] Kaffy: You can hyphenate occasionally, if you have two words you can hyphenate, even though [inaudible 00:26:10]

[00:26:10] Adam: Is that permitted?

[00:26:11] Kaffy: [laughs] Yes.

[00:26:13] Adam: Very good. Okay one last question, I know we have to stop here but I want to get one more question.

[00:26:18] Kaffy: Sure.

[00:26:19] Adam: Knowing that this is working at Sterling Hospitality because it comes from the top and cascades down. What would you say to franchise X, and we won’t name any names, let’s just make up one that’s struggling and is on CEO number 10 from the founder who inherited the mission or hired a consulting firm to create a mission. What’s your advice to them if they have any hope of turning it around it, at least getting the culture right? I can’t guarantee that’s going to lead to sales but I don’t think it hurts. What’s your advice on them for how to get that culture right?

[00:27:00] Kaffy: I would say go back and look at day one, month one, year one. What were you all doing right then that got you off the ground because it’s hard to start a restaurant, it’s hard to start a restaurant and group, it’s hard to grow, but what did you do then that you’re not doing now. Because there was a culture then that got you started, and it got you to grow and got you really far, you wouldn’t have franchisees and be where you are today, but somewhere you lost your way to go all the way back to the beginning then see what it was then that you were doing, that you’re not doing well, not doing now and go back to doing that, it worked. It’ll probably work again, but you got to get back to it.

[00:27:40] Adam: Yes, I think that’s right. So go back and look at the founding fathers or mothers notes and what the whole company has actually built on and how they were practicing it and then figure out how you can do that.

[00:27:51] Kaffy: Yes. Who those people were, and what was different about those people and who they were versus who you have in there now. Because you might have just gotten the wrong people, and the wrong people will get you down the wrong path.

[00:28:04] Adam: Well I almost guarantee it. As organization scales, there’s just going to be more people that don’t fit as you just try to fill roles. We’re doing an upcoming episode on recruiting and hiring because as we’re talking a growing organization, it’s just so hard to get the right people in it. Sounds like you get to have a great system for it but I know it must take a long time to refill an empty role or if you’re opening a new tavern to staff it.

[00:28:45] Adam: You were saying go back to the beginning, look at who you have, and I agree with you because the people are so different especially as organization scales, it’s so hard to find the people that fit into the role if you’re opening a new location or if you’re opening into a new market and you’re opening four or five or something upscale, whew, it’s hard to get those people and it sounds like you guys have a fit or you have a fix for figuring out how to get the right people but I can only imagine how long it takes to fill roles when you’re staffing an entire tavern.

[00:29:16] Kaffy: Yes, and we talked a lot about– we’ve got to keep the culture, we have to be very very careful as we grow, very careful as we grow. Not to lose that, because if we lose that then we’re like everybody else and we’re not. We don’t want to be ordinary, we don’t think that we’re ordinary. Hiring the right people makes us not ordinary but you got to be careful and nowadays, because it’s so hard to find good people, becomes even more important.
[00:29:45] Host: Yes, I think that’s really an interesting thing and I’m interested to have the conversation we’ll be having on the next episode about that recruiting and hiring topic. It’s going to be illuminating and I have a feeling.

[00:29:58] Kaffy: Yes.

[00:29:58] Adam: Kaffy, this was a great conversation. Thank you so much for making time. I know we have to juggle from schedules to make this happen. I really appreciate you playing with me and figuring it out how to get on this phone together today.

[00:30:09] Kaffy: Adam, I was so happy too and I hope that you’ll be in Atlanta City and we can go to Marlow’s and have a cocktail and a bite to eat.

[00:30:16] Adam: Absolutely, I should be there in the next month or so actually so-

[00:30:19] Kaffy: Oh nice.

[00:30:20] Adam: -I will let you know when I’m coming in.

[00:30:23] Kaffy: Please do. Thank you.

[00:30:24] Adam: All right thanks so much Kaffy, I appreciate it.

[00:30:27] Kaffy: Bye.

[00:30:28] Adam: Everybody listening, I hope you enjoyed that conversation as much as I did. Please share this podcast if you liked it, you can always email us with questions or follow-up information at adam@foodandrestaurantmarketing.com or find us on Twitter @FandRM but you can find this podcast on our site and it’s also on iTunes or Apple podcast and it’s also on Google Play Store. Please subscribe and tell your friends. Thanks very much.

Listen to the episode here.

Transcript of Food & Restaurant Marketing Podcast – Episode: Amazing Culture with Kaffee Hopkins of Sterling Hospitality

Transcript of Food & Restaurant Podcast – A Funeral For Retail

Transcript of episode A Funeral For Retail or read the companion article by Adam Pierno.

[00:00:03] Adam Pierno: All right. Welcome back to another episode of Food and Restaurant Marketing. I am Adam Pierno. With me again is the effervescent and extremely happy, Daniel Thaddeus Santy.
[00:00:19] Daniel Santy: Hello, everybody. Good to be here again today.
[00:00:22] Adam: Dan is in a great mood because we have been attending a funeral for the past year, that just seems to never end. Last time, we talked about the funeral that has been going on for 10 years for television.
Today, we’re talking about the funeral. We’re both wearing black for retail and specifically shopping centers, malls if you remember those. It’s just that it’s sad there’s a dirge playing, there’s a black limousine out front, a hearse. What do you think sir?
[00:00:53] Daniel: We just put a outlet mall in the hearse, there’s a processional that will happen. [laughs]
[00:01:00] Adam: You know what? I wonder– I’ll bet you outlet malls are okay.
[00:01:04] Daniel: Yes, you’re probably right. Well, I have a theory if you want to kick this off really-
[00:01:08] Adam: Let’s go, yes.
[00:01:11] Daniel: -with speed, is I have a theory about malls in terms of their revolution because I think you’re right about they’re not dying, they’re evolving. We talked about that. There are going to be two successful mall types going forward and I think outlets will be one.
[00:01:29] Adam: Extreme discount, extreme value.
[00:01:30] Daniel: Exactly, because everybody likes cheap blank.
[00:01:36] Adam: Right, you could say the word. [Editor’s note: we swear a lot]
[00:01:38] Daniel: Almost as much as they like free shit.
[00:01:41] Adam: I think they like cheap better than free.
[00:01:43] Daniel: Sometimes, I think you might be right. Then on the other end of the spectrum is luxury goods. I think the worlds of Louis Vuitton and I’m talking really pretty much the high-end stuff, because I think people really want– if I’m going to go in and buy a $1,600 bag, either as a gift for my wife or my girlfriend, which I don’t have currently or if a woman is going to splurge, she’s a professional and she just got a bonus and she wants to go gift herself a beautiful new purse or some luxury item, I think they want to see, feel, and touch it. Ordering it online is not the same.
[00:02:30] Adam: No, and you don’t know what the real heft of it is or what the real shape of it is until you’re holding it in your hands. If it’s a bag, leather. I think for tech goods, even for assembling this. Last time, we talked about the all-new Food and Restaurant Marketing studios, I bought almost everything on Amazon and read reviews and clicked links and then when it all got here, this very microphone that I’m speaking into now didn’t come with a cord.
[00:02:57] Daniel: Fascinating.
[00:02:58] Adam: So, then I started thinking, I went online, and I thought, “Oh, I could just order this cord.” and I was like, “You know what? I just want it today and I don’t want to mess around.” I had already had to return some things, I just wanted to go get it. So, I went and found there’s a– I was like, “I don’t even know where to go to buy this.”
[00:03:13] Daniel: Right.
[00:03:14] Adam: There’s a guitar center over there and I went in and I found a person and talked to them and asked them questions.
[00:03:19] Daniel: There you go.
[00:03:20] Adam: And got all the answers and bought the thing and it was like 13 bucks.
[00:03:23] Daniel: Yes, amazing.
[00:03:25] Adam: So, I think that part is not going away. That was a major, major, major digression.
[00:03:30] Daniel: Yes, interesting. Interesting. Again, I think all these stories are validating your theory about evolution.
[00:03:39] Adam: Yes, I don’t think what looks like today is right and I don’t think that the CNN slideshow of 12 photos of dead malls is where it’s going. The real estate’s too valuable. Somebody, either an entrepreneur or somebody that’s already existing in the retail space, will figure out how to reuse those spaces, either knocking them down or just filling those big box spaces.
[00:04:03] Daniel: More than likely [sic]– more than likely. [sic] More than likely, a few of them, and I mean this seriously, will become evangelical churches. You see that a lot where they reuse of a old movie theater.
[00:04:20] Adam: Right, and it’s a good, big, empty box.
[00:04:23] Daniel: Good, empty box that’s inexpensive to–
[00:04:25] Adam: I’ve actually thought of maybe putting a school in.
[00:04:28] Daniel: Yes, there’s another fundamental use. There’s so much going on in the charter school space.
[00:04:33] Adam: Right, they’re expanding and they’re looking for real estate in markets like ours, too. It’s hard to find.
[00:04:39] Daniel: If you think about it, retail malls typically are placed based on the residential density. That makes it viable. So, that’s actually interesting.
[00:04:50] Adam: Yes, that applies to both malls and churches.
[00:04:52] Daniel: Yes, Simon and company, if you’re listening, there’s a couple ideas for you.
[00:04:57] Adam: Yes, send the royalty checks our way. This is important because for you guys that are listening, because shopping, malls, and retail is really the major source of a lot of spontaneous restaurant traffic that pops up every day. So, as we’re watching, I don’t think it’s a coincidence that we’ve been seeing these headwinds in the restaurant space while we’re watching these big box major brands close and go bankrupt. They’re facing challenges and people are shopping less and then therefore, there’s pressure on any other cottage industry around that activity.
[00:05:33] Daniel: Okay, imagine if you did the math, just take the last 90 days. Every week, sometimes two or three times a week, you read the article about restaurant chain X is closing 30 stores.
[00:05:51] Adam: Wow.
[00:05:52] Daniel: Think of the implication if those 30 stores tend to be pads at these malls that we’re talking about.
[00:05:59] Adam: Right, it’s a death spiral; one feeds the other.
[00:06:01] Daniel: Exactly.
[00:06:02] Adam: Because you know what it is with retail in general is always clustered. So, when we say mall, that might be a strip mall, it might be a huge shopping center, a traditional indoor shopping mall. But the restaurant that I might stop at next to the store I might go to buy shoes and next to the bookstore that I used to go to get books or whatever else, those are all related activities and so when Fridays closes or Ruby Tuesdays closes at the mall, like at PV Mall.
[00:06:31] Daniel: Right.
[00:06:32] Adam: Well, there’s one less corner of the place I’m going to walk into and each time that mall gets less useful, and until now, if you walk into that mall, it’s deserted.
[00:06:42] Daniel: Yes, it’s kind of like what the West Valley Mall was like but now it’s complete reuse.
[00:06:51] Adam: Scary stuff. So, why is this happening? What is happening and what are the experts saying? Why is retail dying?
[00:07:00] Daniel: I will tell you right now.
[00:07:01] Adam: You have some answers for me?
[00:07:02] Daniel: Well, and you know what? Anecdotal as this may be and literally happened this morning, my lovely bride reminded me that I’ve been wanting to get a new pair of running shoes. So, I said, “All right.” I’m going online right now and we’re having a cup of coffee, I go to the place where I have a loyalty program.
[00:07:25] Adam: Right.
[00:07:26] Daniel: It’s a retail store so I could literally go in, I hate going in and here’s why because they’re vultures. I want a pair of shoes I do not want insoles. I do not want socks. I do not want a cap.
[00:07:40] Adam: Where do you go?
[00:07:42] Daniel: What’s it called, Runners? Not runners.
[00:07:44] Adam: Road Runner?
[00:07:45] Daniel: Road Runner, yes. They’re ridiculous.
[00:07:48] Adam: Sorry, Road Runner,
[00:07:49] Daniel: Yes, sorry Road Runner
[00:07:49] Adam: Maybe we’ll bleep this.
[00:07:50] Daniel: So, I’m all the way– I’ve got the cart. I’m going to checkout. Liza goes, “Why don’t I check my Amazon Prime account and see if I can get that same pair of shoes?” Because I buy the same pair of Asics every time. I love them.
[00:08:07] Adam: I’m the same way, same pair of Adidas.
[00:08:09] Daniel: She goes and they were $35 less.
[00:08:14] Adam: Holy moly.
[00:08:15] Daniel: Thirty-five dollars, same exact shoe. Now, I would venture to guess that the guy or the gal at– what’s it called, Road Runner?
[00:08:23] Adam: Yes.
[00:08:23] Daniel: Road Runner would tell me that the ones on Amazon are the 2016 model or something like that.
[00:08:27] Adam: Who gives a rats?
[00:08:28] Daniel: Right, because what did-
[00:08:29] Adam: I don’t care.
[00:08:29] Daniel: -they do between 16 and 17 to make that thing different?
[00:08:32] Adam: No, the body of the shoe, it’s with the fashion. The colors change. Who cares?
[00:08:36] Daniel: Right. Right, and so boom, abandon cart and head straight boom, and used–
[00:08:42] Adam: Wow, that’s it. Free shipping.
[00:08:45] Daniel: Free shipping and they were offering me shipping because I’m a VIP member
[00:08:48] Adam: Okay.
[00:08:49] Daniel: But still, I mean that wasn’t even enough.
[00:08:52] Adam: So, you’re saying you weren’t going to go into Road Runner, anyway?
[00:08:57] Daniel: No.
[00:08:58] Daniel: But you’re saying there was a reason now that something that made it very convenient for you and very affordable for you to buy those shoes. What was that thing? What was the name of that store?
[00:09:07] Daniel: Interweb? Amazon.
[00:09:10] Adam: Yes, exactly.
[00:09:11] Daniel: Amazon, absolutely.
[00:09:12] Adam: So, Amazon is eating everything and if it’s not Amazon, it’s a store that’s exactly like Amazon that’s in a very tight vertical that is stealing your reason to go to the store. That’s number one and we saw this going back to when we think of it, it was Christmas of ’15. I wrote an article about this. Showrooming had been a big thing, but at that time, what we found was, people would go to a store like Best Buy or they would go to a place like Road Runner, they pull out their mobile phone, they would take a picture of the thing that they wanted, they would Google the thing that they wanted, they would not buy it on their mobile device, they would go home and they would convert on their laptop.
[00:09:54] Daniel: Interesting.
[00:09:55] Adam: So, what they saw was a spike in mobile traffic going to these retail stores, but not a spike in sales and a spike from desktop-
[00:10:04] Daniel: Interesting.
[00:10:05] Adam: -in that same seasonal period. Retail was down that year. Now, we’re seeing that people have finally figured out, “Oh, I can just buy it.” I’ve been trained to either buy it on my phone, which is getting easier and easier and easier, and Amazon has [crosstalk]
[00:10:19] Daniel: Amazon has made it very easy.
[00:10:21] Adam: Yes, and Zappos and a bunch of people have figured out how to make it one click, basically. They don’t– going to the store, just like you said with Road Runner, I don’t really want to deal with– I don’t want to get sold. The experience is very rarely fun or helpful, but there’s some key times when you need to and most of the time you just say, “I just need this thing in my mail box. I think I’ll be fine. If it’s free returns, I could send it back. I don’t need to lose a half a day to go to the mall.”
[00:10:51] Daniel: Yes. I really think that these– many of these retailers like Road Runner need to do a true audit on the customer experience in store. I get that sales is the holy grail, but there’s this fine line between what feels like fake and forced and I think they’re being incented to sell socks this week to–
[00:11:20] Adam: [laughs] That’s the worst.
[00:11:22] Daniel: Right. To genuinely helping me make a good purchase decision based on my needs. It doesn’t feel like that way. It feels like the corporation’s shaping how to sell versus how to understand my needs and then find the right product for me.
[00:11:40] Adam: Right, and you don’t leave there feeling a value.
[00:11:43] Daniel: No.
[00:11:43] Adam: You leave there feeling either A; “I just got sold socks and I don’t need socks,” or B; “Why did that guy keep bringing up insoles? I told them no. All I wanted to do was try on shoes.”
[00:11:54] Daniel: Especially when I have orthotics [laughs].
[00:11:56] Adam: Right, exactly. That’s a totally different thing. They don’t know who they’re messing with. I do think that applies to the restaurant industry, doesn’t it? When I go to a restaurant, I have a lot of choice, a lot of options.
[00:12:10] Daniel: Absolutely.
[00:12:11] Adam: Tolerating service that’s– look, bad service happens. People have bad days. That’s one thing and I think people are willing to deal with that or forgive that.
[00:12:22] Daniel: Right.
[00:12:22] Adam: But mean service, or service with someone who just does not want to be there, or someone who really doesn’t care or a restaurant where you just get the idea like, “They don’t care if I’m here or not.” That’s what is putting the headwinds on the restaurant industry.
[00:12:37] Daniel: Absolutely. Maria told a great story. One of our co-workers told a great story to me this morning about– she was at this local burger brand that had opened a new location up here by our office. Their original location, which is extremely popular, is pretty far away, it’s not some place you’re going to drive to on a workday for lunch.
[00:13:03] Adam: Right, too far.
[00:13:05] Daniel: So, she gets there. You could shoot a cannon through the place; number one. Number two; the server, she said she felt that maybe he was high. She said that it was just– the service was ridiculous. Listen to this story, the ending of the story, she writes– she goes online to their customer service function on their website, she tells them what happens, and she actually says, “Listen, you can use–” I think it was Facebook. I forgot what she recommended, “To recruit more qualified staff.”
[00:13:37] Adam: Yes, hire better people.
[00:13:38] Daniel: Yes, and she goes–
[00:13:39] Adam: I’m not complaining. I’m trying to help you.
[00:13:41] Daniel: Yes, yes exactly. The manager wrote back [laughs] and said, “Thank you for your information. I saw what you experienced. I was in the restaurant when that happened.” Now, can you imagine?
[00:13:53] Adam: Now, is that better or worse?
[00:13:55] Daniel: That made it like a debacle, in my opinion because like– so you– it’s like you just watched me get choked out on the street and you didn’t do anything.
[00:14:03] Adam: Isn’t that– yes, that’s how I hear it.
[00:14:04] Daniel: Yes.
[00:14:05] Adam: It’s like, “Thank you for your sympathy now.” Where was your sympathy then?
[00:14:09] Daniel: Yes. Can you imagine it getting me back in the store while I’m still in the store is much easier than saying, “Here’s a $25 gift card. I hope you come back.” Well, I don’t know, maybe. I’ll probably give it– She said, “I probably won’t go back. I’ll probably give it to one of the young’uns who 25 bucks to them is meaningful. Not that it isn’t to her but–
[00:14:30] Adam: Right. No, no, I get it. I get it.
[00:14:32] Daniel: Again, customer experience, I think it really comes down to that. I was talking about the high-end environment. I want that experience. The outlet mall is the experiences is I’m getting the deal. You feel lie ‘I’m an insider getting the deal.’
[00:14:49] Adam: You know when you walk into that outlet mall that the experience what you’re giving up in exchange for that 35% off, and that’s a trade-off you’re willing to make. I know when I go to QSR that there’s no white tablecloth. I’m good with that because I only want to spend $18 for me and my son to have a meal. He will always choose Burger King because he just loves Burger King.
But I think it’s funny you brought up the high-end brands because, in retail, we saw Radio Shack, we talked about this on our last episode, too, about cord cutting and cable. But the Radio Shack brand, for example, has gone bankrupt probably 10 times since the downturn started and they’re done for good now.
That was a dead brand for a long time, but high-end brands like Michael Kors, is a pretty high-end brand, a consumer brand. They are having problems.
[00:15:39] Daniel: They’re closing a hundred plus stores, I just read.
[00:15:41] Adam: Yes. Yes, Ralph Lauren is a brand we talked about before. Same deal. So, something is changing out there in the world that people are actually starting to think differently about shopping and what used to be the event of going to that store. Even just walking around and then, “Well, now we’re here, let’s buy something.” Nobody’s going around– going there to hang out, so then there’s less of those casual purchases that are off the cuff.
[00:16:10] Daniel: Right, yes. So much of retail for so long was that impromptu purchase. You just happened to go to the mall as a way to hang out and socialize and the buying. Now, shopping really is destination-driven. You went to the store to get that cord.
[00:16:32] Adam: It’s task-oriented much more. Yes, I think you’re right.
[00:16:37] Daniel: Yes. Got to get a birthday present for my wife. That’s very task-oriented.
[00:16:41] Adam: Yes, and you can’t leave without getting something because you probably waited until the last minute.
[00:16:47] Daniel: Pretty close.
[laughter]
[00:16:49] Adam: Exactly, but I’m sure it was a lovely gift.
[00:16:53] Daniel: I like going back to this what you– again, I credit you with this because genuinely, your strategic thought and that retail is not dying. Again, there’s so many funerals being– or so many deaths being predicted out in the media today including retail, but it is truly in its evolution and you talked about delivery. Now, tell me a little bit more about your theory, about how delivery is changing the retail environment as well.
[00:17:24] Adam: Yes. No, I’m glad and there’s an article that is going live. By the time this is up, it should be live, that talks about there’s a little bit more, but we think a lot about delivery here. We just see the size of the trend and we see all the players, the entrepreneurs that are trying to get into the delivery business.
What we’ve noticed anecdotally and also through some research is that if you’re let’s say– I can’t say Pizza Hut, but let’s say you’re like a Wingstop or something, that’s standalone, you don’t have delivery or Buffalo Wild Wings is a better example and you use UberEATS or you use any delivery service. Well, when that thing gets to you, yes, it might be in your box but the experience at the door is UberEATS branded, it is not Buffalo Wild Wings branded.
[00:18:15] Daniel: Yes, that’s a great point.
[00:18:17] Adam: That person is dressed in that brand, that person, that experience is their brand. So, if it’s a good experience, you really don’t get any credit. You know when you get the blame is when I open it and the order’s wrong which– that could happen anyway.
[00:18:29] Daniel: Absolutely.
[00:18:30] Adam: So, what we talk about is, “Hey, if delivery’s a trend and you want to make money in delivery and you want to continue thriving as a brand and growing, what can you put in that box or that order? How can you treat that thing differently to make it feel like I’m having a special experience, even if I’m just ordering because I’m working late and I’m ordering wings for my office and there’s six of us that are pissed off, we’re here late? Make something special happen for us that we say, “Oh, this is interesting.” Sometimes small things like Taco Bell and their sauce labels, the little stupid quips they put on their sauce packets. Dumb but–
[00:19:13] Daniel: On brand.
[00:19:14] Adam: On brand and every now and then I get a little snicker when I see one and I haven’t seen that one before and it says, “Oh, I’m going to make you sweat,” or something. All right, that’s pretty– that’s just the right-
[00:19:24] Daniel: To smile.
[00:19:24] Adam: -amount of chuckle that I expect from Taco Bell. It didn’t have to be this big surprise in the light like they gave me a free chalupa, just a little joke. I think about kid’s meals, you think about Happy Meals that come in that special designed box that’s designed to delight those kids, to make those kids have a good memory.
[00:19:42] Daniel: The food is just the function.
[00:19:45] Adam: Right, at that point, yes, it’s a side item. I think they should– for delivery, if I was a brand like that, that had that business, I would probably be thinking about how could I make this the real star of the show? How could I make the delivery package interesting, engaging, and fun? I mean pizza boxes are a pretty big opportunity.
[00:20:04] Daniel: Well, it’s interesting you brought that up. I think you know this. One of the clients we’re consulting with right now which is entertainment. I challenged the teams to think about how to bring the entertainment component into the carryout.
[00:20:21] Adam: Yes, how do we get it home?
[00:20:22] Daniel: How do you do that? It doesn’t have to– to your point, don’t overthink that, don’t make it, “Oh, we’ve got to deliver some crazy expensive game that they will play.” Make it very, very simple but it’s a reminder, that thank you for getting our product via carryout, but remember the next time you want to dine in, we’re the place that has great food with fun entertainment.
[00:20:49] Adam: Yes. So much of the retail brands that we’re talking about; Michael Kors, Ralph Lauren, believe that– I’m theorizing right now, so this is all happening in real time, tell me if you disagree. They think that the brand– in a conference room, somewhere they know it’s not true, but when it gets down to the tactical level, the brand is the product on the shelves and hanging on the clothes, on the racks, and everything else is like, “Eh, it’s okay.”
I think a lot of restaurant brands think the brand can be dumbed down to just “Well, it’s the menu. It’s the food and the server better not be a jerk.” But that’s not true.
[00:21:29] Daniel: I agree with you 100%. My wife’s a big fan of Louis Vuitton and staying on the Kors example. When I’ve gone into a Louis Vuitton store with her and I see the way they deliver the sales process in that environment. I mean they put gloves on and open these drawers to get the item that she’s “Oh, I’d like to see that purse” and they go, they pull it out of this felt bag and–
[00:22:03] Adam: Right, it feels special.
[00:22:05] Daniel: It feels very special and it sure is heck better because the price tag reflects that, but you’re right. You go to a Michael Kors and it’s not anywhere near that level of experience and I do think, to a certain degree, resting on their laurels that the Michael Kors logo will carry the day.
[00:22:27] Adam: Walk out through that office. I mean everybody out there has some Michael Kors product. My son has Michael Kors sunglasses or something. I mean– [Editors note: My son just broke his glasses and replaced with Ray Bans]
[00:22:35] Daniel: Oh my gosh.
[00:22:35] Adam: Yes, it’s ridiculous. It’s everywhere. So, it’s funny if [crosstalk]
[00:22:38] Daniel: Styling.
[00:22:39] Adam: He’s a very stylish boy, but I think about the restaurant brands, it’s almost the bigger you get in scale, the further you get away from the center of your guest experience, and Jesus, we hate jargon and we’re not talking about making it just– what’s it? A customer journey map, I mean those things–
[00:22:57] Daniel: You don’t want to talk omnichannel right now?
[00:23:00] Adam: Omnichannel marketing, for sure all day. We don’t like the jargon. I think there’s value to the journey map, but honestly, we don’t have to overthink the customer journey when it comes to a restaurant.
In 70% of cases, they’re driving by, they’re hungry, and they pull in. I mean there’s not much more than that. They see an ad. They don’t even remember it and subconsciously, they see the sign and they go, “Oh, right. I’m hungry.” For whatever reason, that neuron fires and they go in. That’s the journey. If you let them down after that, they’re not coming back.
[00:23:28] Daniel: Well, and I think that– I’m very cynical about the whole customer journey because first of all, there’s millions of customers. How can you ever– if you’re going to dumb down the customer journey to, “Oh, it should be this,” that means you are missing so many opportunities because if I come in and I’m not following the journey the way you’ve been trained to deliver it.
[00:23:56] Adam: Then what?
[00:23:57] Daniel: What do you do? Especially in a environment where the sales individual or the server isn’t paid that much. They’re not going to know how to evolve and move with what I’m doing. So, I think the customer journey, quite frankly, is fraught with risk to commoditizing it all mostly like, “Okay. Well, 60% of our customers do this so therefore this will be the journey,” leaving 40% which is a boat load of people
[00:24:30] Adam: I wish– I want it to be that easy. I mean I wish it was. I would love to go sell journeys all day. I agree with you. I think they’re more– for most brands, there are some brands that can parkour their way around a journey and figure out how to shuck and jive and build on it versus being constrained. But I think for most brands, they barely have the bandwidth to build the operation they’re trying to build and it becomes a trap, it becomes a tunnel they’re stuck in.
[00:24:59] Daniel: Yes, exactly.
[00:25:02] Adam: Talking about brands, we talked about– we touched on the digital experience. We talked about Amazon who’s eating everything. Ultimately, I don’t think Amazon will be the only company in the world. I’m pretty confident. There’ll be other companies that also exist.
But another side of the digital experience is that people are spending much more time doing things that they think they’ll be able to share online, that’ll be share-worthy, that can be Instagrammed. Most stores at a mall are not that.
[00:25:35] Daniel: There’s no Instagram options in Dillard’s. Sorry, Dillard’s.
[00:25:40] Adam: No, it’s rather hideous, right?
[00:25:42] Daniel: Yes
[00:25:43] Adam: So, when we think about restaurants– who was it? There’s a few brands that do table tents that are shaped like picture frames. So, you can put your face in there and then do a selfie or take a picture of the person you’re with. It’s a dumb thing, but again, going back to that Taco Bell example, it’s something little, like just the right amount of interesting for I’m at this casual Mexican chain. That’s okay. That’s good. It doesn’t have to be much more intelligent or dynamic than that. If it is, that’s cool, but man, if you have a standee of the most interesting man of the world from Dos Equis and people can take a picture of it, they will. They will do it.
[00:26:26] Daniel: Yes, classic don’t overthink it, make it simple. Furthermore, as you know, all our stats our showing this, that user generated content is shared and consumed and liked so much more than the brand generated content because it’s not curated. It’s more organic. It’s natural. It’s more interesting because like-minded people are sharing these things and I think this example that you give, gives the user the opportunity to generate content-
[00:27:02] Adam: And control it.
[00:27:03] Daniel: -and control it and can potentially be shared because they’re friends are going to see it and then they’re going to want to say “Oh, you should see what’s going on here.:
[00:27:10] Adam: Right. Yes, that’s right. It’s more authentic in a way that the word is really intended to be used not in a way that a ’70s slide deck on authenticity for your brand-
[laughter]
-it brings to life the authentic side of it.
[00:27:26] Daniel: Be sure to be authentic.
[00:27:28] Adam: Oh, jeez. These millennials they love the authenticity.
[00:27:31] Daniel: That’s right.
[00:27:33] Adam: Any last parting shots you want to take on retail? Do you think that we’re in the midst of a funeral and almost will be close in the next 30 days?
[00:27:42] Daniel: I do not. I think it’s more like 45 to 60. No. [laughs]
[00:27:46] Adam: You think that’s good?
[00:27:47] Daniel: I subscribe to your theory. This is a major evolution going on, 25% of the malls are predicted to be closed in the next five years. I don’t doubt that. I think there’s probably a great deal of reality that I think like anything in these downturns, if you will, these evolutions, the strong will survive. The ones that are smart and in the right place and with the right mix of stores and offering new experiences within their malls instead of just resting on their laurels as to what’s been driving mall traffic for the last 20 years is not what’s going to drive mall traffic going forward.
[00:28:31] Adam: Yes, I agree. It will be new things. We won’t miss 25% of the mall’s closing. I don’t miss– I haven’t been to a mall. I can’t remember how long. You can close a quarter and nobody will miss them. I think they probably just had overbuilt.
[00:28:47] Daniel: Yes, major overbuilt. Absolutely.
[00:28:49] Adam: Yes, and so I think we’ll see what– as those really do close and are closed or knocked down and rebuilt into something else, the part of the evolution will be, “Okay. Well, which one of these restaurant brands is left standing when a major source of traffic closes?”
[00:29:05] Daniel: Yes, and it becomes the next big question for our restaurant brands as these malls close for those brands that have the luxury of expanding right now and there are many, where are they going to go? I think the real estate model and this is probably something we could do in our future-
[00:29:26] Adam: I think we should, yes.
[00:29:27] Daniel: -podcast is I think the real estate departments of all these chains are going to have to start really thinking about the model they’ve been using to select locations, I think in itself, probably it needs to evolve in the light of this evolution going on in retail.
[00:29:45] Adam: Yes, that’s a great point. I think we’re going to close on that and that’s a great place for us to pick up with our next episode. So, I think we can make a promise to do that.
[00:29:53] Daniel: Perfect.
[00:29:54] Adam: So, thank you very much for listening. If you have any questions, you can email us dan@foodandrestaurantmarketing.com or adam@foodandrestuarantmarketing.com or bug us on Twitter @FandRm. You can read the article I mentioned at foodandrestaurantmarketing.com and please comment, tell us what you like, tell us what you hate. We love to hear it all. We really appreciate it.
[00:30:18] Daniel: Take care, eat well.

Listen to the episode here.

retail, sales, traffic, restaurants
Things aren’t too busy in retail locations.