During this episode of The Weekly Takeaway from IFMA The Food Away from Home Association. Communications Director Heather Lalley and Managing Editor Peter Romeo discuss the ongoing cyclospora outbreak, upcoming changes to 7-Eleven leadership, and Gen Z drinking habits impacting the food-away-from-home industry. Find The Weekly Takeaway on  Spotify and Apple Podcasts. 

 

Heather: Welcome to the second episode of the Weekly Takeaway. That's the new podcast from IFMA, the Food Away from Home Association. I'm Heather Lally, the association's director of communications.

 

Peter: And I'm managing editor Peter Romeo. Each week we examine the big stories impacting the food away from home industry. We'll break down what these developments mean for all industry stakeholders.

 

Heather: We'll also give you a look ahead at the news and trends on the horizon that could impact food away from home. And sometimes we'll have special guests on the podcast too. Be sure to subscribe to the Weekly Takeaway on your favorite podcast platform. New episodes are released every Friday. Peter, you are still on this Cyclospora lettuce beat. What are we learning about overall food safety from this outbreak? And am I correct that there is now an egg recall also?

 

Peter: Indeed, you're right about the egg recall. It looks as if it's the third largest in history or over the time that such things have been tabulated. About 19 million eggs have been recalled by a Texas source. If there's any good news, it's that there hasn't been a case of salmonella yet connected to this batch of eggs, though these things tend to take a little bit of time and need time to percolate. And that seems to be the case with what's going on with Cyclospora. It is a mess. Every time you look at the count, I should say counts because there are any number of figures out there circulating, if you look at the CDC's, it changes by the day, literally, and does not match up with what the states are saying. But if you look at the overall picture and tabulate what's what, right now we're looking at over 18,000 victims in 45 states.

The feeling is that it's still somehow connected to lettuce. Both Taylor Farms and federal authorities are still saying avoid shredded iceberg lettuce from Mexico, but there's been no actual confirmation with a test. This has all been tracked through tracebacks and analyzing where the incidences have occurred. But if you look, if you dig deeper into the numbers, there's a great deal of variation.

For instance, the CDC is saying that far fewer cases have been reported yet. You look at Michigan and their number of hospitalizations is almost, well, it is literally twice the number that the CDC says on the national basis. There's still a lot of misinformation out there, but the long and the short of it is the contamination continues and the authorities expect more victims to be counted as we go forward. And in the meantime, the reports are proliferating of restaurants feeling downturn in traffic. There's also a small cheese recall in my neighborhood. And what's interesting is it's gotten the highest warning that the FDA can give about it. It's a soft ricotta and it's gotten the highest warning that the FDA can give about it. 

They say that this pathogen that they don't even know what it is can cause death. In your endeavors, you've been covering things other than foodborne illnesses and can bring that to our attention. For instance, you recently wrote about the new 7-Eleven CEO and his broader connection to food away from home. What's up with that?

 

Heather: That's an interesting one. 7-Eleven has had a roller coaster the last couple of years. For the last seven months, 7-Eleven has been without a CEO. Their CEO of two-ish decades, Joe DePinto, resigned late last year, or retired. And they have been on this hunt. But in the meantime, all sorts of things have been happening in the background.

In 2024, Alimentation Couche-Tard, that's the parent company of the Circle K convenience store chain, submitted a takeover bid for Seven and I. That's the parent company of 7-Eleven. It all gets a little complicated and I wish I could show you a flow chart here. Seven and I rejected that offer, which initially was like close to $40 billion. And then Couche-Tard upped that offer to about $47 billion a few months later. Anyway, the whole deal ended up falling apart. Seven and I decided to implement some massive restructuring plan, which included a proposal for 7-Eleven, that's what the convenience store chain we know in this country, in North America, to go public. That plan has now been delayed, at least until next April, they're now saying, if not later.

Just a couple of days ago, 7-Eleven named Mauricio Leyva as its new CEO. And folks in the food away from home industries may know that name because Leyva was formerly the group president of Keurig Dr Pepper. He has a lot of familiarity with CPG brands, with convenience retailing, and all of those things. He also spent about 15 years in senior leadership roles at Anheuser-Busch. Again, deep knowledge of these industries. It will be very interesting to see if he can help steer 7-Eleven onto some less tumultuous footing. Interestingly, it was also just announced this week that Joe DePinto, the guy who just retired from 7-Eleven, is now going to serve on the board of Target. Some interesting retail musical chairs there.

We'll be curious to see how that all shakes out. 7-Eleven, as most folks who are listening to this probably know, is more than just a convenience store. It's got thousands and thousands of US locations under 7-Eleven, Speedway, and Stripes. But it also operates like 600 taco restaurants and about 60 of this chicken and biscuit concept called Raise the Roost. No small player in the restaurant industry as well.

Also this week covered an interesting story about some new research that is sort of flipping the notion that Gen Z isn't consuming as much alcohol as older generations. That seems like that is a refrain that we have been hearing for years now. Gen Z is just like they're not going to the bar. When they are going to the bar, they want mocktails. They're zebra striping, like alternating alcoholic drinks and non-alcoholic drinks. Perhaps they're more interested in the hemp THC infused beverages.

Anyway, there's some new research out that shows that perhaps that just is not true anymore at all. They're saying that Gen Zers, and that's the group of folks born between 1997 and 2012, I have two kids in that demographic, that they are in fact drinking alcohol, and they're drinking alcohol pretty much at the same rate as every other demographic group, every other generational group.

This is research that comes from the London-based alcohol market research firm IWSR. They conduct a twice yearly consumer survey on these things, and they have found that Z's drinking rate has steadily inched up to be in line with that of the rest of the population. And they are now finding that it's actually the baby boomers who are not drinking as much. Those baby boomers apparently need to keep up with the drinking. They noted in their research that Gen Z currently makes up 17% of the population that's of legal drinking age. That is an interesting data point, I would say, for the operators out there and for the manufacturers as well who might have been shying away from that particular demographic group. Peter, you have been doing more than writing about contaminated lettuce. You have found that some of our past gold and silver plate winners have been busy recently. Can you tell us a little bit about what you've found?

 

Peter: Recently a silver plate winner, Dave Deno, who won in the chain full service category, just a couple of years ago in 2023, was just named the new CEO of Cracker Barrel. That's an interesting endeavor for David. Dave is his specialties or his area of focus has always been finance as well as operations. He spent a fair amount of time at Blooming Brands or Outback. And before that, had a long career at Yum Brands and spent some time in Burger King. He's a true veteran and knows his way around a restaurant company or a restaurant kitchen even. We wish Dave well.

In addition, Ron Shaich, who is one of the more insightful winners we've ever had, winner of the Gold Plate in 2005, he's very involved still in the industry. Ron won his award, silver and gold, as CEO of Panera, which he kind of midwifed. He didn't found the concept. He took another concept and converted it to Panera, but was there a long time and built it into kind of the poster child for fast casual sector and then ended up selling it in what was at the time one of the biggest deals the industry had ever seen, over $7 billion sale to the parent of, at the time was the parent of the Keurig Coffee Company.

And since then, Ron has been on a crusade, I think he would agree with that term, to invest in companies that have redeeming qualities that not only pay attention to shareholders, but also to the communities that they serve. His company, Act 3, has just invested another $50 million in an immersive concept out of New England called Level 99. It's kind of a new breed of concepts where food service is really prominent, but there are other sources of revenue as well. In the case of Level 99, you buy a ticket to compete with your team in different games of skills and reasoning. And it's truly an immersive experience with a pretty good menu too of burgers, pizza, and sort of pub type fare. With that additional 50 million investment, Ron's company now holds $100 million stake in Level 99. They have an asset. The funds will be used to open four more stores a year, four more units. These units are huge. That was pretty interesting.

And then the industry's renaissance man, Don Fox, formerly CEO of Firehouse Subs, has just published his latest book, The Story of Firehouse Subs, talking about how it evolved from two brothers, the Sorenson brothers, ex-firemen who decided to do something in retirement. They started a sandwich chain themed around firemen and firehouses and parlayed it into an operation that was eventually sold to Restaurant Brands International, the parent of Burger King. Don traces that. He was the CEO for 14 years prior to the sale to RBI. Those of you who don't know Don, he's also an historian. He's written a number of books about World War II, and he's a musician who plays a mean trumpet, a mean jazz trumpet. He's keeping busy in his, and I put this in air quotes, retirement. We're glad to see that as well.

Heather: Next week, when we check in together for this podcast, you'll be coming to us from Silicon Valley at our Go to Market Edge event. Can you tell me a little bit about what's going to be going on there and maybe what you're looking forward to?

 

Peter: Sure. Go2MarketEdge is IFMA the Food Away from Home Association's technology conference. And our focus in the initial conference last year and continuing into this year is on AI. Last year we looked at a lot of the theoretical underpinnings and promise of AI. This year we switched to the practical applications. We have structured a conference where we're going to hear from advocates of AI in the industry, in the food away from home industry, are actually using the technology. And then we have a submersive aspect of the event where we're going to visit Google and Amazon to see both how they're using AI and what they perceive for the technology for the future. And then we go to visit an interesting facility called Plug and Play, which is what it calls an AI accelerator. It's a service that brings in promising AI tech upstarts, helps them understand what they need to scale up or to realize their market intentions and then invest in them.

We should get a really good, well-rounded view of what's going on in the way of AI in our industry and in some other fields so that we can sort of anticipate what is going to be down the road for our industry. And I'm very excited because one of the host sites is also the computer museum, which is supposedly quite an immersive experience in and of itself. And I'll have the experience of seeing the recount of a trend of development and technology arising that I've been alive for the whole time. I'm very interested. Yeah, it should be a good time.

 

Heather: Good. I will look forward to your dispatches from Go2MarketEdge. And for all of our listeners, thank you for tuning in to the Weekly Takeaway. Be sure to check back each Friday for a new episode. And to read more about these topics and many more, head to foodaway.org and click on the News tab. I'm Heather Lally.

 

Peter: And I'm Peter Romeo. Have a really good day.