2001 The Year in Review

Nation's Restaurant News, Dec 17, 2001 by Ron Ruggless

For the restaurant industry 2001 was more the epic envisioned by Homer than that by Stanley Kubrick.

Far from the space odyssey that was depicted in Kubrick's seminal 1968 film, the year in foodservice was littered with challenges of the terrestrial sort.

The world entered into war. After the Sept. 11 terrorist attacks when hijacked commercial jetliners crashed into the two World Trade Center towers in New York, sliced into the Pentagon in Washington, D.C., and plowed into a field in Pennsylvania, nothing was the same.

The economy, which had grown robustly for an unprecedented 10 years but was beginning to show signs of decline, slid even more precipitously into the dumper. Despite the economic pinch, operators dramatically responded to the needs of the victims and survivors of the Sept. 11 attacks by raising millions of dollars and providing meals for rescue and recovery workers.

But war was not alone in buffeting the industry. Mad-cow and hoof-and-mouth diseases, once seemingly isolated problems in Europe, began to spread and became a global concern. Energy deregulation, which was embraced by a number of states, proved to be an albatross for California operators, who faced increases of nearly 50 percent in electric bills and suffered a series of "rolling blackouts."

And amid those woes restaurant companies went about the business of mergers, expansions, acquisitions, new creations in menus and buildings, and, sadly, bankruptcy filings and the firings and hirings of several executives.

Still, Kubrick fans no doubt were amused when Pizza Hut arranged the first-ever extraterrestrial delivery to space, to Russian cosmonauts circling the earth in the International Space Station.

On the following pages Nation's Restaurant News looks at the events and images that shaped the year. It was an odyssey indeed.

JANUARY

The year 2001 dawned bright, with the specter of mad-cow disease and terrorist attacks not even registering on the radar screen. The nation's foodservice industry anticipated that sales in the United States would increase 5.2 percent, an inflation-adjusted 2.7 percent gain over 2000, to $399 billion. However, those projections would butt up against world events, and an odyssey the likes of which we've never seen before began to unfold.

The National Restaurant Association's prediction was a $19.8 billion increase over 2000's sales of $379.2 billion.

But like most predictions, that NRA figure would have to endure changing realities, in this case a recession in the economy and the yet-to-come Sept. 11 terrorist attacks that brought the world's problems directly to U.S. soil and shook the foundations of the nation's consumer economy.

The biggest gains in foodservice sales were expected in the Southwest and Mountain States as well as in the Southeast.

Undaunted, the Walt Disney Co. opened its new Disney's California Adventure theme park in Anaheim, Calif. with suchnames as Ralph Brennan, the Patina Group, Restaurant Associates, ESPN Zone, Wolfgang Puck and McDonald's participating.

In other developments in the year's first month, franchisee La-Van Hawkins left the Burger King system after his Urban City Foods of Detroit, which had been embroiled in countersuits with the burger company, saw his claims dismissed.

Burger King, meanwhile, said it would divide advertising agency work to separate accounts, one for adults and another for children.

Officials at debt-strapped Prandium Inc. in Irvine, Calif., said the majority shareholder in the company, which operates Chi-Chi's, Koo Koo Roo and Hamburger Hamlet, sold its 53.1-percent stake to Prandium chairman and chief executive Kevin Relyea for $15,000. The deep-discount purchase price reflected seller Apollo Advisers LP's move to take a year-end write-down of its unfruitful investment in Prandium, which by the end of 2001 would be poised to file a proposed prepackaged Chapter 11 bankruptcy reorganization plan.

John Farquharson, president of the International Food Safety Council and former chairman of Aramark Global Food and Support Services, donated $1 million to the Culinary Institute of America in Hyde Park, N.Y. The donation was earmarked to be used for the institute's Great Hall, which was renamed Farquharson Hall, and to augment the CIA's endowment fund.

Wendy's International Inc. said it would ban smoking at all 1,000 company-owned units under a pact reached with the Interfaith Center on Corporate Responsibility.

Brew Moon Enterprises of Boston filed for Chapter 11 bankruptcy protection and agreed to sell four of its five brewpubs to 73-unit Rockbottom Restaurants Inc. of Louisville, Colo.

S. Prestley Blake, 86, the co-founder of Friendly Ice Cream Corp. of Wilbraham, Mass., spent about $1.78 million at the end of 2000 to become the largest individual shareholder in the company. Blake said he was hoping to prod Friendly's management to move ahead with a turn-around strategy.

Krispy Kreme Doughnuts Inc. of Winston-Salem, N.C., entered into a joint venture to open stores in eastern Canada. The company also named Donald Henshall president of international development.