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Food Quiz
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Promotion Properly
By: Roy Bergold
Constantly offering customers promotions isn't as good for business as you might think.
I have a groupie. Yep, you heard it first. I had groupies when I was in a garage band in high school, but now?
A very nice lady e-mailed me recently. She is in the ice cream business and had a lot of questions about promotion in the quick-serve sector. She encouraged me to do a column on promotion specifically and later admitted to being a groupie of my column. Thanks to her and to all of you who read this tome on a regular basis. As always, if you have a question or an idea for a column, please e-mail me at the address on the bottom of this article.
So, my thoughts on the use of promotion in our business. Don't do it.
Now, what I really mean is use promotion sparingly and smartly. Don't make it an everyday occurrence to the point that your customer expects to get something for free whenever he walks in the door. That's what is happening a lot these days. We don't serve food, we serve promotion.
Here are some types of promotion and how to use them.
Discounts - Get two whooping crane legs with any one of four sauces for only 19 cents. Try not to do this. People begin to question the value relationship of your food if you can drop the price like this. If the legs are a dollar one day and nineteen cents the next, what is the real value of the food? If you do it enough, that is the price they expect to pay and feel cheated when you raise it back to menuboard level. In these tough times, pricing is the last place you want to go to find customers.
Buy One Get One - The problem here is that the customer needs to have a use for two of the items. And, if the item is large, he may not. He might not have any friends to share with or he might have been one of those kids in school who was lousy at sharing. Rotten little kid. But, anyway, you can get rid of your overstocked Yak (from a previous column) this way if you have to.
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Look at market fluctuations as your friend rather than your enemy; profit from folly rather than participate in it.
- Warren Buffett
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View updated pricing and information each week on the website for the following food-commodity markets:
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Beef, Veal & Lamb |
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Beef production last week declined 4.1% and was 6.6% less than the prior year. Beef output this week is on track to be modestly below last week?s levels. Despite this most of the beef markets are tracking downward. Given the recent financial market turmoil, forward beef demand is expected to be mitigated. Consequently, many beef buyers are limiting purchases for immediate needs. Additional modest beef market declines may be forthcoming and any holiday season procurement rallies could be historically late. Prices per pound FOB from USDA.
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Dairy |
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The butter market is moving downward as anticipated. Cyclical charts indicate that additional butter market decreases may be forthcoming during the next few weeks. The spot butter market is expected to fall close to below the current international price level of $1.55. The CME cheese markets have turned higher. The cheese markets are typically relatively steady during the next 2 weeks before moving modestly upward. The current international cheddar price is roughly $1.92. Prices per pound, except Class I Cream (hundred weight), from USDA.
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Poultry |
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For the most part the chicken markets are relatively steady to weak depending on the product. This is despite chicken production trending 2% plus below year ago levels in recent weeks. Going forward it will be important for chicken producers for prices to improve, however the fall is usually not a heavy feature time for chicken and the markets typically trend lower. The chicken wing markets could begin an upward course soon that carries through the end of the year. In 2006, when output was being curtailed, the jumbo cut wing market rose 24% during the final 2 months. Prices USDA, FOB per pound except eggs (dozen).
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Seafood |
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In recent years, the US dollar has depreciated compared to numerous other currencies which has led to slowed seafood import growth in the US. With the recent international financial market disorder, the forward valuation of the US dollar has become particularly ambiguous. If the dollar trends higher in the coming months it may bring a boost to seafood imports and pressure some seafood markets lower. Prices for fresh product, unless noted per pound from Fisheries Market News.
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Pork |
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Pork output last week fell 1% and was .9% less than 2007. Pork production is expected to seasonally build in the coming weeks which should influence many pork markets downward. The 3 year average decline for the USDA pork cutout during the next 30 days is 6.4%. Because of the challenged US economy, pork products could get greater retail exposure for the upcoming holiday season. Thus, any pending ham market declines may be tempered. Prices per pound FOB from USDA.
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Produce |
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The USDA is projecting fall US lettuce acreage to be 9.6% less than last year. Iceberg lettuce shipments are improving which could pressure the market modestly lower. Fall US tomato acreage is forecasted to be 3.3% larger than a year ago. The tomato markets remain relatively depressed but the late fall crop could be short due to tropical storm flooding this summer. The summer US onion harvest is estimated by the USDA to be 9.9% smaller than 2007. The onion markets are likely to remain above prior year levels through the end of the year due to the output decline. Prices shipping point unless noted (terminal) FOB from USDA
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Oil and Grains |
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The grain markets continue to decline due to financial concerns. The next few weeks could provide an excellent buying opportunity for grains and soybean oil. Prices per pound (oils) or bushel (grains) FOB from USDA.
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Canned and Frozen Food |
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Tomato Products, Canned - The California tomato for processing harvest is projected by the PTAB to reach 11.7 million tons by October 11th. The total US harvest is likely to achieve 12.3 million tons, just 2.4% less than last year. Price per case (6/10) FOB from Supply and Market Report.
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Processed Fruits and Vegetables - The processed vegetable markets remain firm. If the recent decline in grain prices is sustainable, vegetable for processing raw product costs could be lower for the 2009 crop which may be bearish for the markets. Prices FOB per case from Supply and Market Report.
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Question about cash advances against credit card sales
Community member Honeydini writes...
I have some credit card debt that I'd really like to knock out and just get a lower -interest loan. What is the best route with the least amount of headache? Someone approached me yesterday about a Cash advance against future credit cards sales. Has anyone done this? What are the drawbacks? I'd rather not go the traditional bank route and have to submit our business plan, etc... and have to wait weeks. Any feedback is appreciat...
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Sneaky Telemarketers
Community member Gridley writes...
First question: Do you train your employees how to be SUPER careful what info they give out to anyone on the phone? We do.. Some of these people are so sneaky with their tactics!!
"Hey this is so and so, I was just returning the owner's call. I'm sorry, I have such a bad memory... is it John?"
employee: Oh, no, it's xx.
"Right!! Anyways, he was asking about this security system/printer paper/urinal cleaner/pepper shaker/etc and...
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Suggestions - Oil Filtering Blooming Onions
Community member Smiley writes...
I need some suggesstions on what to do about my oil when cooking a HIGH volume of Blooming Onions in a concession trailer at fairs and festivals. I currently have standard single vat gas Imperial deep fryer (16" x 24") and cook 2 onions at a time. I am needing suggestions on filtering my oil. I currently am just cooking until it breaks down, I am not losing taste the onions taste the same until the oil breaks down I then...
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I'm such a buckethead
I am a wild herb of the mustard family. I am an heirloom perennial most often found growing along the shores of the Atlantic, Baltic, and Black Seas. Originally from England, I have been cultivated in France, Asia, and even in the United States, but to find me there would prove most difficult indeed. England is my home. They tell me I've never "seen the light" but how could they expect me to do that when they put a bucket over my head every time I break ground. My stalks (obviously white) are plucked at their prime, when we are crunchy and tender, offering a mild subtle, nutty flavor. I am best when steamed and like asparagus, work best when served with a mild sauce or enjoyed simply with melted butter. Sometimes my leaves are used but they have to be prepared separately as they will cook much more quickly. My young stalks can also be eaten fresh where they are chopped in a salad like celery. All this trouble, buckets on our heads, steaming, snipping, and still I am not beet!
What am I?
The Food Quiz has is brought to you by Culinary Specialty Produce, a specialty produce broker that scours the world for the very best in specialty produce. Contact them at 908-789-4700 or by sending an email to info@culinaryproduce.com.
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