Friends of Branded!
Happy Saturday and I want to wish you all a wonderful Labor Day weekend.
The Top of the Fold is about comics? Superheroes? What?!?
Stay with me friends, stay with me.
As readers of the H^2 know, earlier this week Team Branded, along with about 600 other hospitality & foodservice industry folks, traveled to Amelia Island, Florida for the inaugural Prosper Forum.
Hurricane Idalia forced some changes to the agenda and for many of the attendees, the visit to Amelia Island was cut short, but the event, despite the changes dictated by mother nature, was a resounding success and I dare say truly special and meaningful.
As I navigated the sessions, panels, keynotes, and the many events put together and / or hosted by the organizers at the Prosper Company, incredible sponsors, and industry leaders, I couldn’t get over the sheer number of industry heavyweights, influencers, up & comers, and of course, the 100+ Prosper Accelerators (see what I did there DJ?).
As I reflected on my time at the Prosper Forum and the many (and I mean many) people Branded was fortunate to spend quality time with, I started thinking about how crazy it all was. I would have been happy to have had just a few meetings with attendees of this caliber, but I had many! That’s where the Marvel Universe theme for this week’s edition came to mind. A Spiderman movie is great. So are Ironman, Black Widow, Hulk, and Captain Marvel movies, but that’s not what Marvel Universe is about!
Remember I once shared a photo of my daughter wearing a Spiderman costume and said I would never do it again? Never say never. 😊
Marvel Universe is about bringing all these superheroes together and the value that it creates for the franchise. For clarity, and b/c I’m far more of a capital markets person than I am a fan of comic books or movies based on the characters in them, the value derived from Marvel Universe that I’m referring to is financial, and the success that comes from the box office, the merchandise and the relationship formed with QSRs and our industry. The ability of these superheroes to defeat their enemies in a more communal manner, although a nice thing to see and enjoy of course, is for the lovers of the movies. I’m a lover of free markets and the creation of economic value that has come from the Marvel Universe.
Marvel Universe or the legal name of this cinematic platform, “The Marvel Cinematic Universe” (MCU), is an American media franchise and shared universe centered on a series of superhero films produced by Marvel Studios. MCU films are based on characters that appear in American comic books published by Marvel Comics. The shared universe, much like the original Marvel Universe in comic books, was established by crossing over common plot elements, settings, cast, and characters. You can look all this up for yourself on Wikipedia (that’s what I most certainly did). 😊
You know who owns MCU? Governor DeSantis’ least favorite Mouse, The Walt Disney Company. Please note, this is not remotely a political comment (I don’t do politics in the H^2). My daughter loves Disney and its arsenal of characters and content. The Disney+ channel is on in my home more than any other. So, in the spirit of the collaboration among Karol G, Snoop Dogg, & Rock Mafia, don’t mess with my family! You can listen to it for yourself here: My Family ("The Addams Family")
Quick (additional) sidebar, I was offered a job at Marvel Comics back in 1994 thanks to an outside-the-box cover letter (thank you SG) and a shared experience at a Jimmy Buffet concert at Jones Beach. I reached out to Marvel b/c I thought their characters and library of content were undervalued. I worked hard to get that job offer and then passed on it in favor of a Wall Street firm. I was right and wrong at the exact same time (it’s kind of like Kramer being lost at 1st & 1st). But that’s a story for another time (or maybe never, it’s too close to call).
On a very sad note, overnight, Mr. Jimmy Buffet passed away. RIP James William Buffet. As a lifelong Parrot Head, thank you for bringing decades of joy, laughter, and fun with your good-humored and laid-back music, books, and lifestyle. Legendary American singer-songwriter Jimmy Buffett Dies at age 76
Now back to the Marvel Universe, the characters are amazing individually, but are far stronger together. That was the overwhelming feeling and takeaway from my time down at Prosper – stronger together and better together. Strong and better not to be nice, but in order to win. And if you can win by being nice, by playing well with others, and by helping to grow the pie so that more people can get and enjoy a seat at the table, then that’s pretty cool. My dad gave a toast once where he echoed the words, that “it’s nice to be important, but it’s important to be nice.” I always loved that line.
My last comment on Disney and Marvel. The acquisition by Disney of Marvel was completed on August 31st, 2009 (happy anniversary) and was kept incredibly quiet before the $4 billion deal was finalized and announced. At the time of the acquisition, CEO Bob Iger said that “adding Marvel to Disney's unique portfolio of brands provides significant opportunities for long-term growth and value creation.” As of today, 4 of the top 10 grossing movies of all-time are Marvel movies! This deal permanently transformed both companies and Marvel is now estimated to be worth well over $50 billion. Who got the better end of the deal? Yes, it was a great deal for both parties!
We started out macro today, so let’s get a little micro and tactical. The hospitality industry is experiencing a digital transformation, but the same way I feel about the business of entertainment, media, sports, music, theatre and so many others - content wins!
In the hospitality industry, it’s about the food & beverage, it’s about the experience, it’s about the relationships we have with the venues, brands and people that make us feel welcomed (we’re not even called customers in this industry, we’re called guests)!
You know what technology and innovation can do? It can make the guest experience better. It can be a strong enabler, it can bring efficiencies, economies of scale to both the front and back of house and it can help so many create and find value. But it’s an enabler, it’s not the content.
The explosion of tech and innovation has, to some extent, been overwhelming to many operators. Remember, over two-thirds of the restaurant industry is comprised of SMBs and independents. They desire or might even love to have tech & innovation that can help them, but they’re working with a different playbook than, for example, the enterprise segment of the market. There are limits to the time and attention SMBs and independents can allocate to identifying, vetting, and validating tech & innovation that will add value to their business. And you know what? They’re absolutely right to limit the amount of time they spend on this b/c tech & innovation are the enablers, not the content.
In the hospitality industry, if you don’t get the content right, Branded believes nothing else matters (NOTHING!!!). Tech and innovation will work or be helpful until the moment the food & beverage is tasted. At that moment, the relationship between a seller of F&B and a buyer of F&B are all alone together. There’s nothing else there. Satisfying or not satisfying, the guest, are the table stakes and its winner takes all (and by that, I mean the guest is either going to be on your side or off it).
That’s where stronger and better together comes from. This next comment is going to be difficult for many emerging tech & innovation companies to hear and it may even be surprising (shocking?) to hear it from a person that’s core investment thesis and business is focused on emerging tech & innovation, but here it is - operators do NOT want to hear DIRECTLY from you (I’m sorry, not sorry, but they don’t).
You know how I know this to be true? B/c the single most important vertical in our entire ecosystem is our hospitality operator network. They will speak about their real needs and wants with the people they know and trust. Their peers and the folks who have walked or are walking a few miles in their shoes. They want, for the most part, best-in-suite, not best-in-class. That’s why the importance of integrations, bundled solutions and finding as close to full-service platforms as possible is so important. There’s a limit to the amount of time and attention anyone can allocate away from the content (you knew I was going back to that, right?) and time is the only true zero-sum game.
My friends and partners in the emerging technology & innovation space, please don’t fret, I didn’t say what you’re doing isn’t important. Branded’s investment business and our own capital is an absolute bet that what you’re doing is incredibly important for the hospitality industry. I’m just talking about the road ahead and how we need to continue to reduce the friction between hospitality operators and technologists.
For those less familiar with my use of the word ‘friction’ there are many examples where friction is good, for example, writing or drawing with a pen or pencil; applying brakes to stop a vehicle; generating heat by rubbing both hands together; and many others.
The friction I’m talking about is the one between operators and technologists and this is bad friction, very bad. Friction is the resistive force that slows down or prevents motion. It can hinder motion and cause the need for expending extra energy.
The friction between operators and technologists is witnessed in the difficulty of integrating software, or in the training or down time that might come from switching to a new ISV (independent software vendor), the need to reconstruct or reconfigure a venue, and so much more. If you want to successfully have your software and innovation embraced by the hospitality industry, you must address and work hard to reduce and even eliminate friction.
Please understand, I subscribe to the view that software absolutely needs to be sold, but I don’t believe that today, it needs to be sold in the same manner that it historically has been sold (and by historically, I mean about 3 to 5 years ago). There are sales channels, joint and shared salesforces, marketplaces (shameless, but still a valuable and appropriate plug here: BOOM.store) and other ways to reduce the time and friction with sales.
Hospitality operators are among the most JIT people I know (Just in Time). You can’t sell them a B2B SaaS solution to address challenge or opportunity #76 on their prioritization list, b/c they’re only going to be focused on addressing the challenge or opportunity 1 through 6 at any given time. Bundle or integrate your solution to challenge #76 with another tech platform and you might find that it gets lifted like a starter of red peppers and white anchovies on an Italian menu (that most random analogy is meant to suggest that this dish is NOT the reason you selected a specific Italian restaurant, but once you’re there, it’s a nice flavorful dish, so why not order it). 😊
If you want to see how the tech landscape in the hospitality industry is changing, watch what the big tech platforms are doing. Watch how they’re now engaging with emerging tech, but they’re no longer willing to act like Switzerland (and for good reason). They can’t afford to allocate time, resources, and capital to emerging tech companies and allow their competition to benefit from their efforts. And since I raised this point earlier, being protective of one’s time, resources and capital is not a failure or incongruent with being nice, it's the right and I dare say only move to make.
Marvel Universe = strength in numbers. Each member of the team doesn’t need to have the same skillset or superpower. It’s just that their respective skillsets or superpowers need to contribute to the good of the group. This is true of all teams and it's also true in the world of hospitality technology & innovation.
You want to go fast, go alone. You want to go far, go together!
As always, it takes a village.
While I mentioned the joy and success the Branded team felt about the Prosper Forum above in the Top of the Fold section, I want to expand on that just a little bit further here and give a few shoutouts.
It goes without saying that I want to thank and recognize our friends at the Prosper Company for the herculean effort it took to make this event happen.
This forum aimed to elevate the future of diverse talent within the foodservice and hospitality industry. A key tagline or theme was the importance of “A Better Table.” A better table contributes to better business, better lives, and a better world. The intentionality in which a community of diverse foodservice and hospitality influencers were brought together with the vision for a more inclusive, prosperous, and just world was amazing to see and be part of.
There were so many interesting, special, and moving moments (sincerely, there were many). How can I put just one forward as my favorite, but that’s what I’m about to do (I’m a risk-taker, it’s what I do).
My single favorite moment took place when our friend Mr. David Jobe took center stage and invited the staff of the Ritz-Carlton, who had assembled along the sides and back of the General Assembly, to take the stage and be recognized by the attendees of the Prosper Forum.
The staff, which included an array of front-of-house and back of house personnel took to the stage (too many to all fit, so some took their place in front of the stage). This all happened to a standing ovation from the packed room and the applause lasted until recognition was given and then the staff exited along the sides and out the back the way they entered.
Schatz and I were seated at a table on the far left and towards the back of the room (kind of how I positioned myself in class during high school). We were next to some of the staff as they were waiting to be called on stage.
They seemed to be in a decent mood, maybe a little quiet and even somewhat serious. I will put forward this belief that being asked to be in this room was NOT a normal request of the staff). When they were asked to take the stage, the room erupted, and the staff were embraced with a standing ovation that was for THEM and was delivered with unbridled appreciation. You could see a most meaningful shift in their mood, and it was one of great joy.
You want to build a better table? You want to be inclusive and create a more prosperous and just world? Recognize and value the people all around you.
Well done team Prosper – you set the tone for this event. You talked the talk, and you delivered. You walked the walk. I can’t wait to be part of this event next year.
There are just a few more shoutouts I’d like to give, and I understand that when you highlight a few, you take the risk of upsetting many. But again, I accept that risk as I do want to recognize a few of the folks that helped make this such a tremendous leadership event.
Our friends at PepsiCo hosted the Welcome Reception & Dinner and let me tell you, everything is better with Pepsi! Readers of the H^2 might be wondering how I can write anything about PepsiCo this week without first mentioning its agreement to invest $175M in Instacart and advance its digital future (see what I did there?), but I expect that’s a topic for a future shoutout.
In this edition of the H^2, it’s my appreciation for PepsiCo’s hospitality and for a night of festivities, wonderful food & drink and being together.
For the second night of the Prosper Forum, our friends at Nestle took the reins for industry dinner which was held out on the lawn under a tent with the breeze coming off the ocean (with maybe a little assistance from the build-up to Hurricane Idalia).
Thanks to my having the pleasure of attending a Nestle industry dinner before, I admit I was particularly looking forward to this event! I've learned that there’s always a lot going on at a Nestle event, almost akin to 3-ring circus that includes an array of indulgences to satisfy even the most discerning palette.
With a key theme of the Prosper Forum being the curation of a diverse and impactful community, Nestle provided a diverse menu of food, beverages and otherwise. It was the “otherwise” that I was very much looking forward to and our hosts delivered the experience I was so looking forward to when I saw this event on the Prosper schedule.
Nestle will be joining Branded in a BIG way at FSTEC 2023 as one of our strategic partners of the Innovation Alley. I can’t wait to return the hospitality to our friends at Nestle. IYKYK.
Finally, a special shoutout to our friends at Craveworthy; Wow Bao; and Dog Haus for hosting, along with Branded, such an amazing Cocktails & Connections event following the Nestle dinner. A better group of people and more amazing collection of emerging restaurant brands I can’t think of.
If you’re lucky enough to be working with people like Gregg Majewski, Geoff Alexander, and Andre Vener (and their respective teams of course), you’re very lucky!
Schatz and I also owe a debt of gratitude to our own partners, Julie Zucker and Julia Suchocki, b/c we were given far too much credit for simply showing up to the event. The work on Branded's side was done by Julie and Julia and we loved having our partners with us at Prosper. Branded is of course an investment firm, but our DNA is hospitality, so when we’re part of hosting an event, we take that responsibility seriously!
Answer also revealed at the end of the newsletter
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FINANCE & DEALS
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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!
- Picnic: ‘Robotics is the future of food’: Artisan pizza restaurant Moto makes automation a key ingredient
- Incentivio: Capturing Seasonal Trends: 20 Years of Pumpkin Spice Latte
- Yumpingo: Yumpingo-enabled restaurants see sales growth rise substantially
- Brizo Foodmetrics: How Food Manufacturers Can Benefit from Data Analytics
- Ovation: Putting Discipline and Dedication in the Ring With Diamond Dallas Page
- Leasecake: Optimizing Lease Management for MedTail
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!!
- Restaurant Business: Restaurants in disbelief after news of another swipe-fee hike
- Wall Street Journal: America’s Fight Over Tipping at Restaurants Comes to Its Biggest Battleground Yet
- Hotel Dive: KSL Capital Partners acquires Hersha Hospitality Trust for $1.4B
- Nation's Restaurant News: In Bloomin’ Brands board changes, Outback Steakhouse parent names Michael Mohan chair
The largest food manufacturer in the world is Nestle. Founded in 1866, Nestle is headquartered in Vevey, Switzerland and operates in 189 countries around the world.
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.