“Directors Corner”

By Tom Haas, CEO of The Haaspitality Group

Many moons ago, I attended a gathering of a major restaurant chain and listened as the CEO told the attendees that multi-unit chains will overwhelm the independent and smaller restaurant corporations. The industry’s future was with chains.

The reason for this claim was that the multi-unit corporations have the purchasing power unmatched by any smaller entity. Since that speech was made some ten years ago, I wonder what the same CEO would say today? It now appears that the present leadership of our industry is in the hands of the regional and local entrepreneurs who are setting the table for all big brothers, and are springing up all over the country.

These entrepreneurs are creating new and state of the art menus listing sources, as well as including ingredients ranging from baby kale, to quinoa, to tabbouleh, to free range everything, etc., etc.

They are presenting new and innovative entrees, sandwiches, salads, and desserts with new combinations, as well as components that are difficult to spell, as well as define, for many of us.

What did we expect with all the various culinary schools popping up in every state, and unlike other institutions these schools do not have enrollment issues, which says a lot for the Restaurant, Hospitality and Foodservice Industry. Each of these graduates has aspirations of being the great chef or CEO of a prospering restaurant organization.

Now, combine this with the American public traveling to distant parts of our globe, bringing back new experiences in eating with many of these new tastes requiring that products or menus serve only the freshest ingredients, as well as organic, gluten free, no antibiotics, cage free, free range, etc.

The question is, how is a large chain able to adapt to these challenges, and are they able to compete with the local and regional companies who have a much easier time sourcing these difficult ingredients. This is a real challenge to a large, mature multi-unit, multi-state concept that expanded due to their ability to set up an assembly line production system which allowed them to provide a consistent experience in a multitude of states, countries, etc. The McDonald’s model was seen as a proforma for more expansive concepts with full service and multi-unit options.

Today we have a living example of the tortoise and the hare or David vs. Goliath, and the Hare and David are winning. The mature and over expanded companies are having a difficult time adjusting to the new complexities of the consumer’s perception of “Real Food”. Now, couple these issues with the challenges of energy, labor, water, Obama Care, food safety, as well as the $15 minimum wage and we have an explosive situation. Today’s world requires operational flexibility along with the capabilities to make rapid adjustments in order to just maintain the status quo.

The bottom line is that if the major restaurant/hospitality corporations are unable to adjust their concept, the consumer, as well as the new generation of customers, will make the adjustment for them.