Friends of Branded!
Happy Saturday and I hope everyone had a good week!
For Team Branded, we spent the last few days in Dallas, Texas at the FSTEC conference and this was a truly awesome event!
As I shared last week, Branded has the privilege of being the lead sponsor, along with our corporate friends & partners from Cargill - Digital Studio; Nestle Professional; and Open Kitchen by Middleby in the Branded Innovation Alley.
Branded participates in a number of conferences and industry events each and every year. In a world where remote work and geographic dispersion is still very much in vogue, I find these in-person gatherings to be of even greater importance.
The efficiencies that come from bringing a diverse group of industry professionals and specifically the coming together of hospitality operators with hospitality technology companies is a most valuable investment of our time. With technology being embraced at a never-before-seen pace, this event, the Food Service Technology conference (“FSTEC”) was not only over-subscribed, but it brought out the largest number of operators in attendance than Branded has ever seen before.
This larger than ever presence of operators was one of the biggest buzzes going on in the Exhibition Hall over the past few days. The hospitality operators came out strong and were extremely engaged in the discussions with some of the newest and emerging technology companies that were part of our Innovation Alley, but throughout the Exhibition Hall at large.
So why the title and embracement of Back to the Future, an American science fiction film from 1985? B/c while FSTEC and therefore Branded returned to the Hilton Anatole for the first time since 2019 (“back”), this conference was all about what’s next (the “future”). While I don’t wish to be too confusing, despite being a technology & innovation conference focused on the continuing and even accelerating digital transformation, some of the key takeaways from the conference were about our getting back to basics and a most necessary reminder (and maybe a healthy debate) about whether the hospitality industry is a tech-enabled business vs. a technology business.
Spoiler alert, Branded believes the hospitality industry is a tech-enabled and tech-supported business, but it is NOT a technology business. In the immortal word of everyone's favorite pizza maker and sofa guest, Poppie, “on this issue, there can be no debate.”
In all seriousness, I subscribe to my very own PRB theory. Please read that acronym carefully, as I did NOT write PBR (Pabst Blue Ribbon), I wrote PRB, which stands for Professional, Respectful and in the Best interest of whatever we’re trying to do together. The idea behind PRB is that anything can be discussed, and debated as long as it’s done in a professional, respectful and in the best interest of what the parties are trying to do together.
But I digress, as expected. 😊
On a myriad of panels with some industry heavyweights down at FSTEC, technology was the talk of conference including artificial intelligence, new digital ordering solutions, and of course robotics. Branded, however, was born out of a restaurant group and is fortunate to be comprised of restaurant people. We launched our investment platform with a focus on emerging technology that will serve as allies to hospitality operators b/c we believed hospitality SMEs (subject matter experts) were being under-utilized and under-valued. We never lose sight of the fact that we’re in the foodservice and hospitality business.
I wrote recently about the importance of content and in this industry, the content is the food & beverage and the guest experience (both on-premise or off-premise).
A favorite moment of the conference for me was listening to our friend and the CEO of Craveworthy Brands, Gregg Majewski on the main stage with Peter Romeo, editor-at-large and VP of content innovation at Restaurant Business. In my opinion, Gregg got it right – “in the restaurant industry, we’re all about serving guests.” He went on to add that too many operators have not kept their focus on hospitality and “hospitality is the key. It’s how you win guests, and it’s how you make your franchisees money.” To the contrary of some other executives, Mr. Majewski made his opinion of AI clear, “you will never see AI in my front-of-house. We will always be hospitable to our guests.”
Gregg and other leading operators didn’t spend much time talking about technology as a labor saver (but please note, technology as a labor saver is critically important as labor issues remain at or near the top of the list of the challenges operators need to solve form. With respect to lists, more on that to come in the Shoutout section below), but instead used their time on various panels to talk about their desire to improve hospitality.
Mr. Jeff Caplan, CIO of Hooter's took a page out of the Branded playbook when he joked that we should all “do a shot every time someone says AI.” He went on to add that if attendees actually did that, they would likely be feeling a little askew this morning, but still no closer to determining where, exactly, artificial intelligence belongs in restaurants.
Schatzy: Mr. Caplan and members of his team have either been watching and following our own gamesmanship, or maybe we’re quite simply not the only ones that play this game! It's too close to call, so we'll move on. 😊
Sidebar and true story about a personal experience I had with Hooter's. They’ve got great wings!
I had the opportunity to present some of Branded’s earliest ideas around the need for operators to embrace emerging technology. At the time, the Branded portfolio was small, maybe 5 or so portfolio companies (and we’re now at 45 direct investments). I met the leadership team over at the Hooter's location by Penn Station / Madison Square Garden on the second floor.
It was late in the afternoon, but still ahead of rush hour. A large table was assembled for a meeting this leadership team was having and I was only part of the agenda. When it was my turn to be invited to the table, one of the leaders introduced me by saying I was here to pitch them on a self-pouring beverage (beer) solution and convince this group why sticking a piece of equipment between the Hooter's servers and guests was a good idea. There was understandable laughter (at my expense) as they were just told that I was there to attempt to separate the Hooter's servers from the guests.
Truth is, I was therefore a number of reasons, but my response to this initial challenge was a most simple one to address.
I asked the table of executives to look around their large venue and tell me where all their servers were standing. Nearly all of them were by the service bar waiting for glasses and pitchers to be poured by the bartenders. Once the libations were poured, the servers could transport them to their respective tables / guests. You know where the servers were NOT? They were NOT engaging with their guests or tables b/c of the workflow that Hooter's (and nearly all full-service restaurants) have created when it comes to taking an order for a beer (or any alcoholic beverage). The order for a beverage is taken by the server and placed into the POS solution, so that a ticket could come out at that bar, so that the bartender could pour a pint and leave it on the service bar for a server to run it over to the table.
Under this legacy and most antiquated workflow, at Hooter's (and do so many other FSRs) it required the work of three humans in order for the guest to both place an order and receive a freaking beer.
I suggested they should put a “beer wall” in their joint, and while some customers would certainly wish to be taken care of the way it’s always been done, the new self-pour system would allow the customers that wish to serve themselves to do just that and free-up some of the servers to be entirely focused on guest engagement and guest success.
But I just can’t think of a full-service restaurant brand with multi-units that would implement such a solution and disrupt the way guests and servers interact (or can I?).
So yes, technology is helping to transform and shape the future of the hospitality industry, but no one should confuse the relationship guests have with food & beverage than the one they have with any other consumer business and product. The foodservice experience is incredibly personal, and the relationship guests have with brands and venues is different than say retail products.
To succeed in this industry, you need to meet and ideally exceed the expectations around value from your guests. This is not about expensive or cheap. Those words are really not appropriate here. It’s not about the price, but about the perceived value from the experience. A strong technology stack can be a key ally to your business, but technology is NOT the business. At Branded, we have an F&B and hospitality first mentality.
If you don’t get that part right (the F&B and serving your guests), the tech stack doesn’t matter. As Mark Lohmann, CEO of the Denver-based chain Birdcall said on his panel at FSTEC, “hospitality and personal experience” are key to a successful strategy. Like our friend Mr. Majewski, the restaurant folks understand what matters most.
There’s a lot more in the Shoutout section below and this is a fully loaded edition of the Hospitality Headline. Despite, our team being in Dallas this week, we appreciate the continued subscriber growth and engagement with this weekend read. Your engagement pushes the Branded team and our growing community of contributors, to push ourselves and continue to raise the bar. We take your time very seriously, so despite the humor and high energy we (try to) bring to the many things we do, we respect and appreciate this important and growing community.
As I like to say to our portfolio companies, we will win or lose together (and I have absolutely no intention of losing).
For those we saw out at FSTEC this week, it was truly an awesome event, and I can’t wait to work with our friends at Winsight to figure out how we can continue to raise our game and ensure that these in-person events are worthy of your time and attention. We love seeing you in person and working to make our industry better for ourselves and our guests.
As always, it takes a village.
This week I want to do something a little bit different with the Shoutouts section.
Drawing inspiration from FSTEC and in the spirit of some of the time the Branded team spent with our friends on our last night together, I present to you, for the very first time in the H^2, the Top 5 takeaways from the week!
A Family Feud play in the H^2?!? IYKYK!
Number 5: The Branded team has done many editions of our Hospitality Hangout podcast on the road, but this week may have been among our very best. I’m going to save the release of the names for the actual release dates of the podcast, but to our friend and partner, Mr. Sterling Douglass, aka, “The Technology Guy,” please get ready to meet the newest member of our podcast inner circle, “The KC.” Oh, you want to know what the KC stands for and who “The KC” is, patience my friends, patience!
Number 4: I have a rule at conferences or maybe it's more of a guideline where I try NOT to leave the property where the conference is being held. I’ve always felt that I’ve traveled to be at the event and in order to maximize my time, staying on-campus has traditionally served me well.
I’ve recently broken that rule (or guideline) at some of the events and as a result, I need to re-think or re-calibrate my thoughts on this on-premise-only idea. Some of the VERY best and most meaningful moments I’ve had during these conferences have in fact taken place off-campus.
Our friend and the Founder & CEO at Wow Bao, Mr. Geoff Alexander, consistently organizes some offsite events that are truly special and wonderful. Mr. Alexander is a hospitality-guy, and if you’re lucky enough to secure an invitation to one of these events, you’re pretty darn lucky.
At FSTEC and I was invited off-campus to attend the inaugural TRA Connects, which is a group of industry executives organized and brought together by the Texas Restaurant Association.
If you’re asking why a native New Yorker, involved with restaurants ONLY in NYC, and with an office ONLY in NYC, is leaning into and engaging with the Texas Restaurant Association, my answer is simply this – the foodservice industry is global and has no borders. When it comes to technology & innovation, Branded has invested in companies all over the world (yes, we welcome deal flow from all over the world as the digital transformation in our industry is NOT a US issue, it’s a global one). I also subscribe to the theory that one should follow the talent and I’ll say here and now that what the TRA is doing represents the gold standard of associations!
This is a content rich, engaged group that is on brand for Team Branded – they’re obsessed with creating a better environment for operators to succeed in the state of Texas. They’re also very generous, not just b/c they invited a native New Yorker to come to their event, but b/c they want other state associations to succeed for their members and therefore share their ideas insights and intel. Here are a few links to get introduced yourself to the industry’s leading restaurant association.
Friends, leaders, colleagues - follow the talent!
Number 3: There’s been an explosion of B2B SaaS into hospitality, and this has all been a key part of the digital transformation, but much of the focus has been on the FOH (Front of House) leaving the BOH (Back of House), well, in the back.
Based on discussions with a number of the executives leading some of the largest and most tech-forward thinking restaurant groups, the BOH will be a key part of the transformation in this now next phase of the embracement of tech & innovation.
I believed I’ve shared with readers of the H^2 that I’m not a golfer, but I do understand the sport. There is a expression in golf that you drive for show, but you putt for dough. In our industry, putting is akin to the BOH and that’s where money is truly made and lost. With such an important part of the industry dependent on the part the guest rarely sees, the embracement of new and connected kitchen equipment is going to be substantial. To my new friend, Mr. Caplan, of Hooters, let the drinking games begin – b/c back of house and specifically the “connected kitchen” is going to dominate the discussions for the next 12 to 24 months. To our friends and Open Kitchen and Middleby, your dance card is about to get even more full!
Number 2: Branded was beyond excited this week to see our friends and partners at Copia successfully close their Seed Round. This round was led by Branded Hospitality Ventures and Third Nature Investments with additional participation from WovenEarth Ventures and Powerhouse Ventures. With this funding, Copia will be able to continue focusing on helping foodservice, retailers and other consumer-facing organizations redistribute their hard-to-donate valuable goods within their communities. I’d love to write more about this company and its tremendous value proposition, but why would I do that when I can share the thoughts put down on paper by our new friends and partners at Powerhouse Ventures: Why Powerhouse Ventures Invested in Copia
Number 1: The Spice is Right! As part of our role in creating Innovation Alley, the Branded team is afforded the opportunity to organize a breakout session, aka one of the Innovation Forums at FSTEC.
I subscribe to the theory that if you’re afforded the opportunity to speak at an event (a professional one as well as a personal one), you should take it seriously and make sure you deliver.
The Branded team embraces this philosophy in spades and thanks to our small, but mighty team, I thought the panel discussion we created at FSTEC was among our very best. We take our work and specifically our fiduciary duties as an investment management firm as seriously as anything, but we don’t take ourselves overly serious. In the spirit of hospitality, if we’re going to ask 150 or so people to come hear us speak for about 45 minutes and learn about the latest developments in foodservice technology, we want to make sure that we deliver some insights and expertise, but we’re also going to have some fun while doing it.
Not only did they deliver insights to an engaged ICP (Ideal Customer Profile) audience, but they also embraced our deep desire to be hospitable and not just put on a panel discussion, but to join Branded in putting on this limited edition and small production!
I can’t say enough about these great people at our corporate partners that we get to work with and their efforts to not only make the 2023 Innovation Alley our best ever, but I have such respect and appreciation for their fully joining and embracing how Branded likes to participate in conferences. We don’t just want to attend these events, we want to be part of the show, the story, and help create memories and foster new relationships that people will take away from these conferences.
For all of these reasons, The Spice is Right, is my number 1 answer on the board.
Answer also revealed at the end of the newsletter
By: Kimberly Smith, CEO at Copia
We’ve all had that nagging thought, haven’t we? The one about the sheer waste of food, a pang of guilt each time perfectly good food ends up in the bin. If you’re part of the hospitality industry, this notion probably hits you even harder, given your primary goal of serving people. We all want to do that “thing” we know we should, that thing we genuinely wish we could do. Read More
By: Seth Temko, Solutions Services Partner at Branded Hospitality Ventures
Regardless of what and how you sell, your customers experience your brand through software. But it’s all too common for software to have ‘code bloat’. Code bloat is a liability, and it creates baggage for everyone: the software maker, the customer, and the end user. So why are software companies still piling ‘code baggage’ at the customer’s doorstep? And what can be done? Read More
MAXIMIZE VALUE, IMPROVE PERFORMANCE
Learn how the Hospitality Industry advisors from CohnReznick can put you at the forefront of advanced financial, operational, and risk management strategies.
Restaurant Industry Movers in the Market
—Data as of 9/15/23
By: Rev Ciancio, Head of Revenue Marketing at Branded Hospitality Ventures
After attending many panels and presentations at FSTEC and asking lots of questions, here are 3 of the top guest retention tactics I took away from the show. Read More
IN THE NEWS
Hospitality Tech and F&B Innovation IN THE NEWS:
We love to highlight Food Service & Hospitality news, especially when it’s Partners & Friends making it!
- Leasecake: Introducing Cakebot: Approachable AI for Lease Management
- Ovation: Clearing Up Demand Planning With Matt Wampler
- GoTab: GoTab launches Pocket POS to streamline restaurant tableside service
- Incentivio: Top 5 Ways To Implement QR Codes Into Your Restaurant
- MarginEdge: MarginEdge Selected by TouchBistro for Restaurant Back-of-House Profit Management Solution
- Brizo Foodmetrics: How to Generate Leads for Restaurant Business?
And in other News…please see some of the stories that caught our attention and that we’re paying attention to. This week was loaded with headlines and news!!
- Nation's Restaurant News: How Slutty Vegan has financed its supercharged growth
- Nation's Restaurant News: How Hart House plans to take plant-based mainstream
- QSR: Craveworthy Brands Partners with Ovation to Better Understand Guest Experience
- Restaurant Business: These are the 10 restaurant chains that added the most locations last year
ASK THE HEADLINE
🔍 Got Questions? We've Got Answers! 🌟
Satisfy your thirst for knowledge? Look no further! It's time to dive into our brand-new segment: "Ask The Headline"! 🎉
📅 We'll be answering YOUR questions every week. And here's the best part: you can choose to stay anonymous or receive a fabulous shout-out when we feature your question!
That’s it for today!
See you next week, (about the) same bat-time, same bat-channel.