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Why Starbucks Will Never Be Great Again

Here’s why your Starbucks (SBUX) barista is all smiles these days: The popular hub of latte lovers and Frappuccino sippers is rolling. Despite the tumultuous market that has battered many consumer-facing companies, shares of Starbucks hit an all-time high last week. Over the past three years, an investment in the premium coffeehouse has come through with a return that is seven times the S&P 500′s modest gain.

The stores are buzzing again. Analysts see revenue climbing by nearly 9% to $11.6 billion for the fiscal year that ends later this week. Earnings have been growing even faster.

However, in order to appreciate the mug of pessimism that I’m about to pour out, it’s probably best to go over where Starbucks has been — and where it’s going.

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Food products described as artisan go mainstream

In the food world, “artisan” used to mean a meticulously handcrafted product, made in small batches.

No more.

This week, Domino’s Pizza introduced its Artisan Pizza line at its nearly 5,000 outlets across the country. It joined the trend of major companies in describing products as artisan.

Wendy’s has its Artisan Egg Sandwich, Ralphs markets offers Private Selection Artisan Breads and Starbucks sells Artisan Breakfast Sandwiches.

The term, from the Italian artigiano, was coined as far back as the 16th century to refer to a skilled craftsman who carved or otherwise hand-tooled an item.

More recently, foodies have used it to describe a bread, cheese, chocolate or other cozy item made in an old-fashioned, hands-on manner.

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Some restaurant chains are turning to the bottle during the rough economy, but the liquoring up has produced mostly headaches, not happiness.

Outlets that specialize in quick and cheap daytime meals — including Starbucks, Sonic and Guy & Gallard, the New York chain — have been experimenting with adding alcohol to their menus. Pret a Manger, the British sandwich maker, is considering adding wine in its new Paris stores, and Burger King last year began selling beer at its more expensive Whopper Bars in the United States.

With alcohol one of the highest-margin items on a menu, selling beer and wine can lead to increased revenue.

“Alcoholic beverages are highly, highly profitable,” said Bonnie Riggs, a restaurant industry analyst at the market research firm the NPD Group. “It’s been such a challenging time for the restaurant industry, I think they’re trying to pull out all the stops and try different ways of getting consumers to the restaurant.”

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Restaurant News Bites: Top 50 Restaurants, Free Krispy Kreme CoffeeOpenTable has pulled information from over 10 million reviews from diners to compile their newest Diner’s Choice Awards for the Top 50 foodie restaurants. 14 of the top 50 positions were claimed by restaurants in the San Francisco Bay area. New York City only had 5, showing that the country’s most exciting cuisine is found in metro areas in all regions.

Krispy Kreme is gearing up to celebrate National Coffee Day by giving away free coffee. Guests can receive a free 12 oz cup of the House Blend with no purchase necessary on September 29th. The giveaway will also introduce the chain’s new Krispy Kreme Signature Coffee Blends that were recently released.

Free food giveaways please both newcomers and loyal customers, but understanding the benefits to the restaurant takes some investigation. Most chains, like Chik-fil-A, are banking on introducing new people to their brand through the giveaway. Giving away free food also helps introduce new menu items that are drastically different from the usual fare at a chain.

In a recent interview Howard Schlutz, CEO of Starbucks, talked about his frustration with the actions of politicians who can’t work together to solve the budget deficit. He revealed that Starbucks plans to create 70,000 new jobs in the next year. He also discussed the chains’ plans for expansion which will involve a larger presence in Germany.

Zagat’s newest release is the 2011 Annual Survey results for the Los Angeles and Southern California area. The 25th edition of the yearly survey included the votes of over 11,000 diners on 2,000 different restaurants in the area. Positive feedback grew towards the restaurant scene, with 35% higher positive ratings in Los Angeles alone.

The Seasons 52 location in Indiana will now be under the management of Barbara Rafalowski. She’s worked as a managing partner at a variety of large restaurants including Stonewood Grill and Tavern in Orlando, Florida. She has the experience needed to handle the seasonal menu changes at Seasons 52 after completing 6 menu changes in 3 years with a previous employer.

GrubHub is an online service that works to link hungry diners with the right restaurants. To meet this goal, the company has acquired both Allmenus and Campusfood through the purchase of Dotmenu. Funding for further growth comes from a new $50 million credit agreement recently closed by Lightspeed Ventures and partners.

On September 29th the Ker’s WingHouse Bar and Grill will celebrate the opening of their 20th chain location. The new restaurant will also be located in Florida with the rest of the company’s existing locations. The chain is owned and was founded by Crawford Ker, a former player for the Dallas Cowboys.

In a month another Dickey’s Barbecue Pit location will open, raising the company’s total restaurants again. The new restaurant will be owned by a father and son team who are building their business in Kyle, Texas. The location opens just before the chain’s 70th birthday celebration later this year.

Chicago’s historic neighborhood of Lincoln Park is home to the newest Johnny Rocket’s restaurant. Owned by Bill Gomez, who owns five other Johnny Rocket’s in the state, it is the first restaurant for the chain to be a part of the Windy City. The grand opening was celebrated with free food and door prizes.

Tavistock Restaurants has appointed Jim Mizes to be the President of their FREEBIRDS World Burritos brand. After time spent leading brands like Jamba Juice and Noah’s Bagels Mizes comes well prepared to grow FREEBIRD beyond its limited niche. He’ll be responsible for developing a rapid expansion program for the company.

U-Swirl International is working on a partnership with natural health company Ageless Care Alternatives. The partnership will bring a U-Swirl location to Philadelphia. Ageless Care Alternatives chose to partner with U-Swirl after a careful examination of different frozen yogurt chains.

Interview with Starbucks CEO Howard Schultz

In a SPIEGEL interview, Starbucks CEO Howard Schultz discusses his anger towards American politicians, the role of speculators in the coffee business, his expansion plans for Germany and the Seattle-based company’s plan to transform itself into a player in the grocery business.

SPIEGEL: Mr. Schultz, you recently published a highly unusual open letter in the United States. In it, you vented your frustration with political leaders and voiced strong dismay at the economic and fiscal direction the US is taking, saying: “Our country is better than this.” You even asked fellow business leaders to stop contributing to political campaigns. What are you so angry about?

Schultz: This is a crisis of leadership and, in my own way, I’m trying to capture the voice of people who perhaps don’t have the platform I have or, for whatever reason, don’t have the courage to speak out. Elected officials from both parties have chosen to put partisan and ideological purity over the well-being of the people. They have undermined the full faith and credit of the United States.

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Restaurant News Bites: Chipotle, Darden, Rudy's, Hurricane Grill & WingsHoward Schultz, the founder and CEO of the Starbucks corporation, has started a boycott on campaign contributions. His lead has been followed by Whole Foods and J.C. Penny. The boycott aims to encourage politicians from both parties to work together to solve the growing deficit problem. He is also encouraging companies to spend the money on hiring instead of campaign funding.

Chipotle Mexican Grill has funded the production of a new short-film called “Back to the Start”. The stop-action animation illustrates one farmer’s path to sustainable agriculture, a pursuit the chain aims to support. Willie Nelson contributed a cover of Coldplay’s song “The Scientist” to the 2 minute film that will air in theaters around the country.

To support the charitable actions of the Habitat for Humanity foundation, Darden Restaurants donated over $1 million of furnishings from their stores. The fixtures were removed as part of on-going renovations to Olive Garden, Long Horn Steakhouse and other restaurants owned by the company. The ReStore locations sold out of the re-used furnishings quickly.

KFC restaurants in Southern California are bringing the excitement of the 2012 London Olympics to the area now. The KFC Olympics will involve five competitions pitting the best chicken cooks against each other. The winner of each regional contest will compete in the Finals at the beginning of October.

The National Aquarium has a new dining experience to offer visitors. The former main cafe was renovated to allow the new Harbor Market Kitchen room to grow. The restaurant uses local fresh ingredients in a variety of innovative dishes. The old cafe had nearly 1.5 million visitors before the renovations.

Rudy’s “Country Store” and Bar-B-Q has added another NASA store location in the Houston area. The restaurant and store opened on September 1st. The first 100 guests in line when the store opened walked away with a $20 gift card for the chain. Other giveaways were also held throughout the grand opening celebration.

BJ’s Restaurants is proud to celebrate the opening of their newest location. The Jacksonville restaurant opened on August 29th and seats nearly 300 guests. The location features the chain’s full menu of pizzas, salads, and a variety of beer options. The signature 103” plasma screen television is also in place.

Syosset, New York is home to the latest Hurricane Grill & Wings location. The chain is known for offering over 32 flavors of hot wings. The grand opening in Syosset brings the brand’s total number to 41 restaurants. The beach-style atmosphere brings a relaxed and family-friendly option to the dining scene.

Pizza fans in Arlington, Texas has another chain to choose from. Mellow Mushroom Pizza Bakers opened their new location on September 5th. The menu features all of Mellow Mushroom’s classic pizza, salad and appetizer options. Gluten-free crusts and hoagies will also be available.

Seattle's Best Coffee Opens Doors of 12 New Locations in Second Half of Fiscal YearSeattle’s Best Coffee, part of Starbucks Corporation has announced the addition of 12 new locations, which have opened since April 2011. In recent weeks, the final two locations planned for this fiscal year opened, completing a portfolio of locations in a variety of venues, such as city centers, college campuses, airports and office complexes. The two newest cafes are among nearly 100 Seattle’s Best Coffee retail locations in the United States and Canada.

The expansion reflects a Seattle’s Best Coffee strategy outlined earlier in the year to bring great coffee everywhere. The new retail locations build upon the brand’s already broad distribution network of franchised locations, company-operated stores, relationships with restaurant chains, and foodservice locations. Today, the brand has more than 50,000 places where its coffee is served.

“Our retail locations are important to our business and franchising will be the engine for our continued retail growth,” said Jim McDermet, senior vice president and general manager of Seattle’s Best Coffee. “Franchisees find us to be an attractive business opportunity, combining the growth of the premium coffee segment with the strength of an established brand like Seattle’s Best Coffee.”

In the Houston market, Amin Gheewalla, president, Hi Rise Amenities, Inc., opened his third franchised Seattle’s Best Coffee location in late August. The new location is in the El Paso Energy Building in the downtown Tunnel System, an interconnected series of walkways, restaurants and shops servicing all those who wish to navigate the city in air-conditioned comfort. The strategy behind Hi Rise Amenities’ expansion has been putting Seattle’s Best Coffee along pathways for downtown commuters.

“I’m excited to grow with Seattle’s Best Coffee,” said Gheewalla. “I am putting great coffee into the hands of hundreds of commuters in Houston each day, and I’m also creating jobs in my hometown.”

Hi Rise Amenities’ existing locations are at Williams Tower and Two Shell Plaza in Houston. Gheewalla plans to continue to expand with Seattle’s Best Coffee and open new locations.

According to The National Coffee Association 2011 National Coffee Drinking Trends Study, 40 percent of 18-24 year olds drink coffee daily, up from 31 percent in 2010. Most recently, Seattle’s Best Coffee opened the doors of a new franchise location in the student union at Carthage College in Kenosha, Wisconsin. The new cafe is the latest in a series of Seattle’s Best Coffee locations that serve college students at Duke University Medical Center, Georgia Tech, Virginia Tech, University of Southern California, the State University of New York at New Paltz and Portland State University.

Seattle’s Best Coffee LLC has been roasting premium coffee since 1970 and today roasts more than 20 million pounds of coffee every year and millions of cups of our coffee are served every day. A freshly-brewed cup of Seattle’s Best Coffee is currently available in more than 50,000 locations including cafes, college campuses, restaurants, hotels, airlines, cruise ships, grocery stores and movie theatres. Seattle’s Best Coffee is a featured brand within Starbucks Corporation (NASDAQ:SBUX) and is ranked among the 10 best franchise opportunities by QSR Magazine (January 2010).

Starbucks founder Howard Schultz has called for a boycott of campaign contributions to President Barack Obama and all members of Congress until a proper deal on the federal debt is negotiated.

CEOs of major retail companies, including Plano-based J.C. Penney Co. and Austin-based Whole Foods Market , have pledged their support in a partial list that was made public Thursday on Facebook.

In his open letter titled “Our country is better than this,” Schultz invited others to support his boycott and to hire workers without waiting for government incentives. By Monday afternoon, the Facebook page Upward Spiral 2011 said 1,750 had taken the pledge to withhold campaign funds, and 248 pledged to hire.

Schultz said the boycott would be lifted when “a fair, bipartisan deal is reached that sets our nation on stronger long-term fiscal footing.”

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Starbucks Corp. Chief Executive Howard Schultz is winning support for his call to withhold political contributions from U.S. lawmakers until they strike a “fair, bipartisan” deal on the country’s debt, revenue and spending.

Schultz recently led the world’s biggest coffee chain through a painful but successful restructuring that returned it to growth. In his letter Monday, he also challenged fellow U.S. business leaders to do their part by hiring workers to give the national economy a much-needed jolt.

NYSE Euronext Chief Executive Duncan Niederauer and Nasdaq OMX Group Chief Executive Robert Greifeld have pledged their support.

“I think that Howard’s idea is a great one, and I have told him that he can count on me,” Greifeld wrote in an email to Nasdaq company leaders.

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Starbucks Coffee Company (NASDAQ:SBUX) released the following statement in response to the product recall issued today by Georgia–based supplier, Flying Food Group:

As previously communicated, on Tuesday, July 19, 2011, we learned that Flying Food Group, LLC, in Lawrenceville, Ga., one of our suppliers, recalled ready-to-eat chicken wraps and plates delivered to Starbucks retail stores only in Alabama and Georgia due to potential health concerns. The products subject to this USDA requested recall were the Starbucks Chipotle Chicken Wraps Bistro Box and the Starbucks Chicken & Hummus Bistro Box sold in Alabama and Georgia stores only on July 14 and 15, 2011.

Today, July 26, 2011, we were informed by Flying Food Group that, at the request of the USDA, they are expanding the recall. This expanded recall includes the two previously mentioned products and extends to two additional Starbucks products; the Starbucks Salumi and Cheese Bistro Box and the Starbucks Chicken Lettuce Wraps Bistro Box. All four products were sold only in Alabama and Georgia and produced between July 13 and July 24. This recall does not affect any Starbucks stores outside of Alabama and Georgia.

There have been no reports of illnesses associated with consumption of these products.

On Monday, July 25, we asked our stores in these two states to remove these products from our stores and discard them. As a proactive measure to ensure we were protecting the best interest of our customers, this voluntary action went beyond the recalled items and included other items produced by the impacted Flying Food Group facility in Lawrenceville.

As a result, all products produced in the impacted facility are no longer available in our stores. New products will be provided soon from other locations.

The safety of our customers and partners is of the utmost importance and we take our obligation to provide safe products seriously. We responded immediately, and in cooperation with our supplier and the USDA we will continue to work to ensure that all products meet Starbucks high quality assurance standards. We will continue to respond quickly and with great care to ensure that all of our suppliers meet our high standards.

Restaurant News Bites: Starbucks, Carl's Jr., Applebee's Starbucks Coffee Company is growing exponentially around the world and to facilitate new growth the company has restructured its executive branches. The Starbucks Coffee International department that manages all international locations will be split into the Asia and Europe departments. New Presidents will be hired or promoted to manage the new divisions.

CKE Restaurants, parent company of Hardee’s and Carl’s Jr., is celebrating 70 years since founder Carl Karcher opened his first restaurant. July will be full of promotions, contests and giveaways for both chains. Karcher and his wife began with a  simple hot dog cart on July 17th 1941 and the company now earns over $1.3 billion in profits each year.

Applebee’s is expanding menu options for diners who need a new dose of excitement in their next meal. The new Stacked, Stuffed & Topped entree options combine favorites like steak, grilled chicken and fresh veggies in new ways. The Parmesan Chicken Stack, Provolone Stuffed Meatballs with Fettuccine and Florentine Topped House Sirloin are all now on the national menu.

While large restaurant chains are forecasted to improve, restaurants in New York City are continuing to struggle. Recent research shows that revenues declined 1 percent for the city’s eateries and a total of 7 percent over the last three years. Restaurants owned independently saw the worst drops in profits. Independent operators don’t receive the same advertising support as franchises.

Due to customer demand classic burger chain Whataburger is bringing back the famous Patty Melt sandwich. The two beef patties served on Texas toast with melted cheese are now available, but will be gone again August 15th. The sandwich was only introduced in 2008 but quickly became one of the most popular limited time menu items.

Fazoli’s, one of America’s favorite fast casual chains, is celebrating the return of another summer break by offering .99 cents meals for children this week. Each adult entree allows for the purchase of two child meals at the discounted price. Fazoli’s is a family friendly chain and was voted one of the top 10 menus for kids by Parents Magazine.

Modern Greek restaurant Opa is introducing a new lunch menu and is offering a free meal to guests who would like to try it out. On July 18th guests can receive a traditional pressed Greek sandwich known as a Toast filled with ham and cheese. The meal will also include freshly cut oregano fries.

The newest Red Robin Gourmet Burgers restaurant will soon be open in the Lakewood Center Mall. This will bring yet another Red Robin location to Los Angeles, California. The new location opens its doors on July 25 and will give away free child identification kits as part of a partnership with the National Center for Missing & Exploited Children.

Starbucks Launches New Iced Refreshment, Lunch and SnacksStarbucks has introduced two new coffees: Starbucks VIA Caramel Flavored Iced Coffee and Starbucks Iced Coffee Blend whole bean coffee, to its already extensive selection of summertime refreshment offerings. These coffees build on Starbucks popular cold, refreshing iced coffee and iced tea beverages as well as position the Company to expand its presence in the cold and frozen coffee beverage category, which represents 1.3 billion cups in the U.S.1

“Summer is a time when customers are seeking iced-cold refreshment— the kind of thirst-quenching beverages found in our customizable, handcrafted iced coffees and Tazo iced teas,” said Annie Young-Scrivner, global chief marketing officer, Starbucks Coffee Company. “Standing by our commitment of delivering beverages and food that meet customer needs, Starbucks is the destination for helping customers stay refreshed and refueled with new drink, snack and lunch options.”

Recharge While On-the-Go

In time for summer, Starbucks takes the guesswork out of making iced coffee and offers customers a convenient and easy option for a refreshing cup of iced coffee on-the-go. Starbucks announces the limited time availability of Starbucks VIA Caramel Flavored Iced Coffee, a special blend of medium roasted coffee, with a buttery, velvety caramel flavor and pure cane sugar for the perfect balance of refreshment and sweetness. Available in 5-packs ($5.95 U.S./ $6.95 CAN)2, Starbucks VIA Caramel Flavored Iced Coffee is designed for a standard (16 fl. oz.) water bottle. From July 14-17, 2011, receive a free Tall (12 fl. oz.) beverage with the purchase of any Starbucks VIA Ready Brew pack at participating U.S. stores.

Wholesome Food, Conveniently Delivered

Starbucks Chipotle Chicken Wrap Bistro BoxFor the perfect beverage complement, Starbucks Bistro Boxes are a full selection of eight delicious and wholesome snack and entrée size portions in a convenient grab-and-go packaging. The clear compartmentalized packaging makes it easy to see the freshly prepared ingredients, while the re?sealable cover helps to maintain freshness. The Bistro Boxes are available in snack size ($4.95 U.S./ $5.45-$5.95 CAN) and entrée size ($6.95 U.S./ $6.75 CAN). Customers can now enjoy a delicious Bistro Box each under 500 calories.

“We continue to hear from customers that they want more variety for nutritious grab-and-go food,” said Young-Scrivner. “Having products that contain lean protein, wholesome whole grains, fresh fruit and vegetables are important to our customers and focus on increasing store traffic during lunch. In fact, food sales have continued to grow over the past year and is additive to our coffee business.”

In addition to customer favorites, Chicken & Hummus, Protein and Cheese & Fruit, Starbucks is expanding the line with new Starbucks Bistro Box options:

  • Chipotle Chicken Wraps: Grilled chipotle-spiced chicken, fiery pepper jack cheese, and soft whole wheat tortillas are served with lime?cilantro slaw and avocado and tomato salsa.
  • Sesame Noodles: Sesame noodle salad tossed with broccoli florets, carrots, red pepper, snap peas and creamy peanut dressing is served with a cucumber carrot salad, crunchy sesame peanuts and baked tofu with lightly spiced lime glaze.
  • Chicken Lettuce Wraps: Build your wrap with crisp red lettuce leaves and Cantonese-inspired chicken filling. Served with chopped peanuts, a mix of fresh vegetables – cabbage, carrots, cucumbers, cilantro and peanut sauce.
  • Salumi & Cheese: Slow-cured prosciutto and traditional and peppered salami are paired with Asiago cheese, rustic crackers and marinated Greek olives.

Refresh with an Ice-Cold Handcrafted Beverage

Starbucks Iced Coffee Blend is expertly blended and roasted 100% arabica coffee beans to accentuate its full-flavor taste profile when chilled. Customers can now bring home the same handcrafted iced coffee in Starbucks stores to brew iced coffee at home. Starbucks Iced Coffee Blend whole bean coffee is available in 1 lb ($12.95 U.S. / $17.95 CAN) and 8 oz ($7.95 U.S./ $9.45 CAN) packaging.

For an iced cold thirst-quenching tea beverage, Tazo Shaken Teas are artfully blended from some of the world’s most delicious teas and botanicals, handcrafted, shaken and poured over ice. Customize any Tazo Iced Tea beverage by selecting a tea (Black, Zen or Passion), adding lemonade, determining a level of sweetness and selecting flavors to find the perfect cup of refreshment.

1Source: The NPD Group/CREST, year ending April 2011

2plus tax where applicable

 

Profit at U.S. restaurant companies is widely expected to grow in the second quarter, with companies’ individual strengths expected to overshadow continuing pressure from commodity costs. Yum Brands Inc. (YUM) and McDonald’s Corp. (MCD) recently have fueled profitability with breathless expansion in China, where market growth has outpaced the U.S. Yum leads the pack, and it hopes to keep spreading not only with its traditional chains but also with home-grown Chinese brands. McDonald’s, its biggest competitor there, has significantly fewer locations but is aiming to add more there as part of a worldwide store-count expansion.

Eager investors have pushed Starbucks Corp.’s (SBUX) stock price to its highest level ever, anticipating the benefits of the coffee chain’s filtration into the single-serving-cup sector and its push to control more of its products sold outside its cafes. Chipotle Mexican Grill Inc. (CMG) has watched its share value continue to reach new heights despite a widening investigation into workers’ immigration status, but the company lately has been a sound bet; its results consistently have outpaced average estimates in the past two years.

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Starbucks Announces New Leadership Structure to Accelerate Global GrowthBuilding on its global momentum, Starbucks Coffee Company (NASDAQ:SBUX) today announced a new corporate structure to accelerate its growth strategy, which will take effect by the end of September.

“Our company performance over the past two years has positioned Starbucks for the significant international opportunities ahead and the acceleration of our global growth strategy,” said Howard Schultz, chairman, president and chief executive officer, Starbucks Coffee Company. “Today we are successfully executing our multi-brand, multi-channel strategy and we believe the leadership and organizational moves announced today will optimize our speed and focus going forward.”

New Regional Structure

Starbucks retail business is currently structured as Starbucks U.S. and Starbucks Coffee International (SCI), which encompasses 54 markets outside the United States. Starbucks will move to a new three-region organizational structure:

  • China and Asia Pacific: All Asia Pacific markets and China
  • Americas: United States, Canada, Mexico and Latin America
  • EMEA: Europe, U.K., Middle East, Russia and Africa

A president for each region will oversee the company-operated retail business, working closely with both the licensed and joint-venture business partners in each market. They will also work closely with Starbucks Global Consumer Products and Foodservice team to continue building out Starbucks brands and channels in each region.

China and Asia Pacific Region: John Culver has been named president, Starbucks China and Asia Pacific. Culver’s focus and accountability will center on Starbucks retail business in Asia Pacific, including China, Japan and Starbucks newest market entry – India. China, Japan and India are important areas of growth for the company and Culver brings the extensive global experience navigating complex operating environments to drive even greater business results in this region. As president of SCI over the past two years, Culver and his team have delivered strong international growth and set the foundation for the company’s international business and growth opportunities ahead.

Americas Region: Cliff Burrows will expand his current role as president, Starbucks U.S. to president, Americas, with responsibility for the United States, Canada, Mexico and Latin America. Under Burrows’ leadership, the U.S. business continues to set records across almost every measure of sales and customer experience – achieving performance levels that are especially noteworthy for a business in its 40th year. The Americas Region, particularly the United States, Canada and Brazil, will continue to be a cornerstone of Starbucks growth.

EMEA Region: Michelle Gass has been named president, Starbucks EMEA. In this role, Gass will provide overall leadership to Starbucks company-operated markets in this region: the U.K., France, and Germany. She will also be responsible for growing and developing Starbucks joint venture and licensed operations in Europe, Russia and the Middle East. During her nearly 15 years with Starbucks, Gass has served in a variety of leadership roles, including global strategy, marketing and category management. Currently, she serves as president, Seattle’s Best Coffee, a Starbucks subsidiary, where she has led significant growth – from 3,000 to 50,000 points of distribution – through new and innovative business and brand strategies.

Accelerating the Multi-Brand Growth Opportunity

Starbucks is creating a multi-brand, multi-channel future by building a portfolio of branded business units beyond the Starbucks retail brand.

Seattle’s Best Coffee (SBC) will continue to be an important growth opportunity, with a goal of becoming a $1 billion business over time through expanded and innovative distribution channels, partnerships, licensing, franchising, and consumer packaged goods (CPG) initiatives. SBC will continue to operate as an independent business unit under the leadership of Jeff Hansberry, who will serve as SBC’s president in addition to his current role as president, Global Consumer Products and Foodservice. This structure will leverage the synergies between the CPG businesses within the Starbucks and SBC brands.

The tea category is another significant opportunity for Starbucks. In 1999, Starbucks acquired Tazo Tea and has built a profitable business generating approximately $1.3 billion in annual revenue. As the second most consumed beverage in the world after water, tea represents an $87 billion global market opportunity and the company intends to build Tazo into a globally-recognized multi-billion dollar brand. Annie Young-Scrivner has been appointed president, Tazo, in addition to her current responsibilities as Starbucks global chief marketing officer. Young-Scrivner’s experience includes extensive product management – with a track record of successfully bringing to market and building numerous brands – making her ideally suited to lead the efforts to grow the Tazo brand.

All three new regional presidents – Burrows, Culver and Gass – along with Hansberry and Young-Scrivner will report to Schultz.

The trip to the fast-food joint that was once all about burgers and fries is increasingly about something that could require you to flash your ID: beer and wine.

In a bid to boost business, two Sonic restaurants in South Florida soon will sell beer and wine. The move follows Burger King “Whopper Bars” recently opened in Miami, Las Vegas and Kansas City that sell beer. Starbucks recently began to serve local beer and wine in a handful of Seattle stores.

In a tough economy, the move towards alcohol is a way to compete with casual dining — and can help boost typically slow evening business, says Ron Paul, president at Technomic, a restaurant consulting firm. “For consumers, it’s basically about having it your way — even if it’s having a beer with your burger.”

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Restaurant News Bites: Starbucks, Panera Bread, ChipotleScammers are targeting Ottawa, Canada eateries with a familiar scam. They are posing as fake health inspectors and threatening the restaurant owners into calling a phone number and entering a code. This code creates a Craigslist account, which the scammers then use to sell stolen or non-existent merchandise. Restaurants should check with a local health department if this happens to them.

The world’s largest coffee chain, Starbucks, may have never appeared to be struggling. The book recently written by Howard Schultz, the CEO of the company, reveals how he came back in 2008 to save the chain as it slowly began to sink. Due to his careful actions and constant diligence the chain never dropped below 16,000 locations and is now growing again.

Roark Capital Group now owns bustling and popular chains like Corner Bakery and Arby’s after a number of buyouts last week. However, the large company is not yet satisfied and is looking again for new purchases. The company only employs 38 staffers, but the group owns over 25 companies of the 38 total that it has purchased.

The National Restaurant Association is taking on the U.S. Department of Treasury and the Internal Revenue Service again for restaurant owners everywhere. The association submitted their suggestions this week on how the new health care regulations should be defined. Requiring small franchisee and single restaurant owners to buy health insurance plans for part-time employees could ruin the industry.

Chipotle Mexican Grill isn’t taking any chances in the current on-going criminal investigation by the Immigration and Customs Enforcement agency. The chain has hired a team of top corporate lawyers from Washington, D.C. to defend the company if any charges are pressed. Early findings have shown the hiring of undocumented workers at Chipotle locations in Virginia and Minnesota.

The unique and signature colors, inviting atmosphere and exciting panini menu of Panera Bread were all developed in the Utica, New York area by resident Scott Davis. Davis is the chief concept officer for the chain and is responsible for creating the complete brand image of Panera Bread. He makes decisions about the exact colors used in counter tops and how sandwiches are named.

Boundless Enterprises, the corporation behind the popular Scooter’s Coffeehouse chain, is currently developing a new self-serve frozen yogurt concept. The chain will be called “Yoji Frozen Yogurt” and will be the company’s second brand. The new concept will be added to existing Scooter’s Coffeehouse locations for testing first.

Labor disagreements in the professional football industry have led to the stalling of the current season. Buffalo Wild Wings is the home of football fans, so the restaurant chain has sent a letter on behalf of the “Save Our Season” movement. If the season kicks off again by July 20th, anyone who has signed their petition will receive a free six piece wing deal.

Abilene will soon be home to another Dickey’s Barbecue Pit location as the country’s largest barbecue chain continues to grow its numbers. As one of many locations in development or opening this year, the Abilene store will celebrate its grand opening with door prizes and a $1 barbeque sandwich. This location is being opened by Dwain Carpenter.

Dickey’s Barbecue Pit will also be coming to airports around the country soon if the chain has its way. The Dallas-Fort Worth International Airport is home to one popular location, and the chain is discussing new agreements with other international airports. The one airport location is full sized and offers the same menu as every other location.

Earlier this year, Howard Schultz released a book about how he turned Starbucks around.

Some people never knew it was in trouble.

Although the world’s largest coffee-shop chain closed hundreds of stores over the past few years, its cafe count never dipped below 16,000.

Starbucks’ sales were hurt but stayed above $9 billion a year.

Still, Schultz was concerned enough to resume the title of CEO in early 2008 and make major changes.

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Restaurant News Bites: Heart Attack Grill, Red Robin, Pizza InnRestaurants around the country are embracing the popularity of salads to make 2011 the Summer of Salads. As customers have become more health conscious and interested in alternatives to burgers or pizza, many fast food and casual restaurants alike are adding new menu items. Wendy’s, McDonald’s and others have added new limited time salads to their summer menus.

The price of coffee is about to shoot up as the cost of growing the beans skyrockets. Large distributors like J.M. Smucker, responsible for brands like Dunkin’ Donuts and Folgers, announced it will raise prices by 11%. Starbucks is raising the cost for beans and ground coffee by 17%. The commodities price of a pound of unroasted coffee has gone up nearly 92% over the last year.

Red Robin wasn’t looking very well to investors about a year ago, but after nine months with a new CEO confidence is once again building in the company. Profits have risen and costs sunk after Steve Carley took the helm. The chain is now much fitter and leaner after three consecutive years of falling profits and falling stock value.

Lettuce Entertain You is turning 40 this week, and the 80 American locations plan to mark the celebration in style. Rich Melman, the CEO of the chain, received the James Beard Award a month ago as well. Lettuce Entertain You started as a restaurant known as RJ Grunts in Chicago, which is still open. Melman has also opened scores of popular restaurants like Maggiano’s and Shaw’s Crab House.

Some of the biggest names in the restaurant industry are integrating new technology to speed up the serving process and cut down on errors. This includes texting systems to notify customers when their table is ready. Customers can’t leave with an expensive restaurant pager and they’re no longer confined to the lobby or bar of the restaurant as they wait.

Pizza Inn already has the fresh pizza concept down, but now they are expanding into the fast casual market. The Pie Five Pizza Co. brand launched recently in Fort Worth, Texas. The restaurant combines fresh baked, custom topping pizzas that are ready in under 5 minutes. The prototype is a small 60 seat location with a shiny industrial styled interior.

Jon Basso’s Heart Attack Grill may be in need of some CPR.  The controversial burger concept is closing temporarily after clashes with the city over the exterior paint color, but he says that it will reopen shortly. He is considering moving the restaurant, which has generated plenty of buzz for its wait staff dressed as nurses and purposely unhealthy menu, to a more welcoming city. The Grill is painted white, but it is located in a nearly vacant tan shopping center.

Rocky Aoki founded the Benihana chain, but his widow is now suing the company for allegedly making false statements and defamation. This new development comes in reaction to the suit filed against her last month by the current Board of Directors of Benihana. That suit claimed that the widow Keiko Aoki was purposely trying to lower the stock value by making claims that she deserved to run the company.

Fazoli’s offers you an inexpensive way to explore Italy’s cuisine with their new Tour of Taste promotion. Five new entrees have been added to help guests explore the unique tastes of Naples, Sicily, Rome, Tuscany and Campania. Guests who order a large drink can win instant prizes, while anyone who orders a Tour of Taste entree can enter a sweepstakes to win a trip to Italy.

Frisch’s has made their 202nd consecutive quarterly dividend repayment. The latest repayment comes in the form of $.15. The company continues to report a profit, as it has since it first sold stock in 1960. It has also paid cash back to its shareholders and investors every single quarter since going public. The company operates the Big Boy brand and owns some Golden Corral restaurants.

Restaurant News Bites: Wingstop, Starbucks, Mazzio'sWingstop is one of America’s most popular hot wing chains, with over seven consecutive years of same store sales growth. They’ve been named one of the best franchise deals in the country as well by the  quick service industry magazine QSR. 95% of the chain’s nearly 500 locations in America and Mexico are franchise owned.

The CEO of the fresh salad chain Saladworks, John Scardapane, was honored recently by SmartCEO magazine. He was handed the “Chief Executive Officer of the Year Award” at the Philadelphia SmartCEO Business Awards event on May 11th. The magazine also chose the Saladworks chain as one of the companies with great growth potential over the next 10 years.

Starbucks Coffee Company, the US based corporate arm of the popular brand, has now assumed 100 percent ownership of nearly half of the Chinese based Starbucks locations. Maxim’s Caterers was the partner in charge of locations in provinces like Sichuan and Shaanxi but they relinquished those areas to the main corporation. In exchange Maxim’s Caterers received complete control over the Hong Kong locations.

Restaurants Unlimited, an operator of a variety of concept restaurants, has announced the appointment of a new CEO. Chris Harter is joining the company after his time as the President of Levy Restaurants, another large multi-concept company. He helped develop outstanding locations like the Wolfgang Puck Grand Cafe and Bistro 110.

The Mazzio’s chain offers quality pizza and other Italian foods in a fast casual environment, and the company has signed a new franchising agreement to bring the brand to Virginia. This would be the first East Coast locations for the 50 year old chain. The chain is largely based in the Midwest, with 170 currently operating restaurants.

Two new Grandy’s locations are coming to the Dallas-Fort Worth area. A new franchise contract between the Grandy’s company and Sam Poonawala will create the two convenience store locations by the end of this year. The brand combines other convenience store fixtures with home cooked Southern foods and sweet tea.

Dunkin’ Donuts will be adding four new locations to the Montgomery, Alabama area. The company signed a franchise agreement with Harrison Kwan to develop stores this Southern town that the chain hasn’t reached yet. The first location will open during 2012, and the next three will be built by 2016. Kwan now owns exclusive rights to the brand within the Montgomery area due to the agreement as well.

La Carafe Restaurant and Wine Bar celebrated its opening in the Hell’s Kitchen area recently. The restaurant is small, featuring only 30 tables, and offers a homey interior with rustic Italian décor. The menu combines French Mediterranean dishes constructed by the chef and owner Al Rineh with a full wine list.

Irving will be the home of the newest Freebirds World Burrito location. The location will celebrate its grand opening on June 8th by giving the first 25 customers free burritos for a year. The Freebirds brand combines tastes and toppings from around the world in their healthy and tasty burritos, wraps, salads and sandwiches.

North Dallas is getting a new Dickey’s Barbecue Pit location that fits the Texas barbecue obsession very well. Guy New will be developing this location, impressed by the restaurant when he first visited other Texas locations of the chain. Dickey’s is currently engaged in rapid expansion of their brand, and this new location is just one of dozens currently working towards opening.

Coffee prices are getting a jolt

The price of your morning buzz is about to get even higher.

Hit with wildly increasing costs for beans from growers, coffee roasters are charging more to supermarkets and other retailers — and those folks are passing the higher prices on to consumers.

J.M. Smucker Co., which distributes the Folgers and Dunkin’ Donuts coffee sold at stores, said last week it was hiking prices for a pound by 11% — the company’s fourth and biggest increase in a year. A few days later, Starbucks — which had already raised prices on some coffee drinks in the fall — said it would raise prices for bags of coffee beans sold at its cafes by 17%.

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