Ticker Shock: Four Reasons Why Starbucks Could Give You a Buzz

Starbucks never ceases to amaze.... first they say "we aren't buying the cheapest coffee beans in the world!" In fact, they are. Now they are saying "we aren't charging $4!" Hmmmmm........Marketing, Marketing, Marketing...... McDonald's is winning every coffee challenge... even our own. The gains recently are purely due to them dumping a bunch of locations everyone knew were losing money. Here in HK they are getting their butts kicked by McDonald's and Pacific Coffee.

from: www.minyanville.com


Starbucks (SBUX):
The one-time high-flying seemingly indestructible coffee chain that sports those insanely delicious (and addictive, I might add) “fraps,” was out with its second-quarter earnings last night after the bell.

At first blush, they looked like a train wreck. Revenues came in at a little over $2.3 billion, which was down from the more than $2.5 billion it put up in the comparable period last year. And EPS came in at $0.03 versus $0.15 in the comparable period last year.

However, at the end of the day, there were a few tidbits of good news that I think deserve a mention.

1. Excluding items, it put up $0.16, which was (hallelujah) a penny better than expectations.

2. It's cutting costs, which I think a lot of folks wanted to see. In the release, it said : “In the second quarter of fiscal 2009, the company delivered $120 million in cost savings, exceeding the targeted $100 million for the second quarter, and resulting in year-to-date cost savings of approximately $195 million.”

3. There was also some upbeat information regarding free cash flow. The following line in the release caught my eye: “...as announced in March, Starbucks fiscal year 2009 cash from operations is expected to exceed $1 billion, with resulting free cash flow in excess of $500 million.”

4. It seems the company is adamant about changing the perception people have of it. Reuters quotes its chief executive on a call as saying: “Starbucks coffee does not cost $4.” I think this is smart, and will make it better able to compete with the likes of Dunkin' Donuts and McDonald's (MCD).

But will this be enough to really draw in investors? The jury's still out. I have this sense that the tide is starting to turn at Starbucks, but I’m cautiously optimistic. Note that its comp-store sales were off a stomach-churning 8%, which isn’t something to write home about

Spice 'n Slice Daily Stock Rpt

INFO ASSEMBLED BY SLICE'N SPICE FROM YAHOO FINANCE

Wynn Macau

Sen - Ryo at Elements in Hong Kong

A Quiet Moment in the MGM: Macau

More Patisserie Pics From the MGM: Macau

Bust'n out the bresaola at the MGM Patisserie: Macau

The Patisserie: MGM Macau

Walking through the MGM Grand Macau is a lonely experience right now. The Casino floor is getting some action and the fine dining restaurants have a few takers but overall F&B is really hurting.

Hotel staff not wanting to be named told Spice 'n Slice that the weekends are keeping them busy but more people eat at cheaper options outside the hotel than prior.

Which brings us to this late afternoon snack! To encourage diners to dine-in the hotel the cafe offers a set price of 88 hkd for your choice of gourmet sandwich, pastry and beverage..... For the quality of the food it is an outstanding deal.

I chose freshly sliced bresaola (Italian air-dried beef) with sun dried tomato, arugula and shaved Parmesan and grilled marinated egg plant. All on a superbly fresh, toasted panini bun.

For a pastry I had their stuffed Danish with real raspberry compote and covered with raspberry flavored white chocolate.

For the beverage I had a glass of unsweetened iced tea.

This really is a great time to roll the dice on Macau... Lots of good deals on all fronts.

Do you know of a good Macau special? Please send it to Dinerbosschina@gmail.com

Related links:
www.MGMGRANDMACAU.com

Biz Peeps to watch: Joseph Constanty

LAW school will always be there, but there's a window of opportunity for China business, and American entrepreneur Joseph Constanty has seized the moment for business networking. Sam Riley reports.

For American entrepreneur Joseph Constanty, there was only one thing to do as he contemplated the failure of his first business venture - have a beer.

Constanty was just 27 when his first business idea, a mini-golf course in Shanghai, fizzled on Valentine's Day in 2007.

The Lucky Greens course was set in a lush fake jungle on a 100-square-meter area in the Cloud Nine Shopping Mall next to the Zhongshan Park Metro Station.

It had all the makings of a winner. The locals were going nuts for golf, the expats would love it, and it was a fun family outing in a city with not too many options.

But it never panned out.

The course was one of the mall's first tenants and it never got the foot traffic. Chinese parents preferred to watch their children than play a "kids' game" and the broad marketing campaign failed to hit the mark. Constanty dully watched the money ebb away.

Finally, when the electricity was shut off, there was an impromptu wake for Lucky Greens. "They shut our electricity off because we hadn't paid rent in two weeks and we had all this beer in the refrigerator and we didn't want it to go bad," Constanty jokes. "So, we got all the employees together and we played poker in this deserted mall until they turned all the lights off and that was my Valentine's Day in 2007."

But while sitting with colleagues and employees sipping a warm beer, Constanty was already focusing on his next big business idea.

Just two months after the demise of Lucky Greens, Constanty and his partner Ed Kim started NextStep, a business that aims to provide a forum for entrepreneurs to meet and swap ideas.

For the last two years they have run a regular social networking event on every second Tuesday of the month. They also hold monthly business forums, where like-minded entrepreneurs can exchange information on a particular topic.

Business efforts

Last year Constanty also launched NextStep Directory, a business directory that he hopes to expand to other cities around China.

"A week after we closed the Lucky Greens doors, Ed, myself and a friend Wen Ying sat down and thought what we are going to do, what does Shanghai really need that it doesn't have," he recalls.

"And in all of our business efforts we had never gone out and made an effort to talk with other business owners and expats to network and learn from them. So we thought, 'Let's find a way to get them all in one room together'," he says.

But the Philadelphia native's business career began in the States in the rather more risk-averse atmosphere of an insurance company where he says he was entertaining clients and "working on his golf game."

But Constanty had set his sights on China after spending part of his university studies in Beijing as a 20-year-old. He arrived in 2000 and, he says, was instantly "bitten by the China bug."

He also spent seven months studying finance and politics at the University of Hong Kong before graduating in 2002.

Knowing he would eventually return to the Chinese mainland, he quit his insurance job and moved to Taiwan in 2003 where he studied Chinese language while making ends meet teaching English.

Constanty had planned to go to law school in the States and decided to fill in a few months taking an internship at the Shanghai law firm Lehman, Lee and Xu in 2004.

But he never made it to law school, instead meeting his eventual business partner and fellow intern Kim.

"We used to fill in our days, talking about all these great business ideas for China, while at the same time learning a lot about business law here and how to set up a business," Constanty says. "We both decided that law school had to wait."

While all that is left of Lucky Greens is a Website that still gets the odd inquiry, their decision to chance their arm in China is looking promising.

They launched NextStep business directory and networking site (www.nextstepShanghai.com) last summer, and it has quickly grown to more than 8,000 members. As many as 12,000 people have attended at least one of their events and they get 12,000 unique visits a month from people looking for businesses and services.

Constanty and his brains trust have big plans for the directory.

"When you are looking for information, whether for your social life or business, it is not very well organized," he says. "The directory was a way of trying to do that and it still has a long way to grow in Shanghai, Beijing and all over China and Asia.

"There is a lot of competition in Shanghai for this, but Shanghai is only one location."

The keen soccer player and marathon runner says that work and making his business model a success consume much of his time and energy.

"I am constantly talking to people about their businesses, how to make their businesses work and their business ideas," he says, adding that there is a core group of entrepreneurs in Shanghai who are focused on seizing opportunities before they are gone.

"I always say law school will never go out of business but an opportunity in China may only have a window that is open for a short time and I don't want to miss that," he concludes.

Joseph Constanty

Nationality: USA

Age: 29

Profession: Business owner

Q&A

Description of self:

Opportunistic risk-taker.

Favorite place: The roof-top terrace at MiND Offices.

Strangest sight:

Everything is a bit strange.

Worse experience: Missing my flight home to the US on Christmas Eve 2007.

Motto for life: Only those who will risk going too far can possibly find out how far one can go. - T.S. Eliot

How to improve Shanghai:

More parks where walking on the grass is permitted. There is something about walking on grass that is relaxing.

Advice to newcomers:

Get out and meet people. Building your network early will pay dividends later.

Info search regarding Asian food brands in the US

Spice 'n Slice is doing research for an article about the viability of Asian food brands and franchises in the US market. The article will run on a major net franchise news site. Anyone with research suggestions, leads or information they want considered for the article please email us at dinerbosschina@gmail.com

Chef instructor Charles F. Drabkin on the state of culinary education

A Spice 'n Slice interview: Chef Instructor Charles F. Drabkin
Interviewed by Gregory David Duerfeldt
Tuesday, March 28, 2009



Charles F. Drabkin is one of two chef instructors and coordinators for the award winning culinary arts degree program at Edmonds Community Collage in Lynnwood, Wa. (just north of Seattle). Many of his former students are currently working in Seattle's finer establishments.

What's the hot trend of the restaurant world this year? "Survival"


What do you see happening in the culinary education industry right now?
It is a tough time in the restaurant industry right now. Most restaurant business is down, often by 35% or more. Restaurants are laying all but their most qualified people off.

As Educators it is our commitment to help educate the next generation of food industry workers. Additionally as with the larger industry we are seeing a real dedication to using locally sourced, sustainably raised products where ever possible. Restaurants and other food service establishments are doing their best to be greener.

Are these schools making money? Is the business model working?
Edmonds Community College is supported by the State so we are able to offer our students a great value, while at the same time giving them a well rounded culinary education.

Are culinary school overpriced?
I think the private culinary schools like the Art Institute , Le Cordon Blu and even the CIA are overpriced. I would have a hard time charging upwards of $45,000 for a job that when the students graduate they will start out making around $10.00/hour.

I think the Community College model works well our students pay around $1,000/quarter for our 6 quarter program. The education is the same but at a much lower cost.

What are the top three things you hope your students master?
We emphasize employability skills; show up on time, sense of urgency, sanitation. For some of our students this is the first time they have been told that those qualities are important.
Obviously giving students a strong foundation in basic knife skills is also high on our list.
And thirdly I would say confidence in their own skills, many of our students did not do well in academic settings so we may be the first people who tell them that they can succeed.

Is there a hot new trend this year?
I think this year the hot trend in restaurants is survival. This is going to mean cutting costs while maintaining high quality. I think restaurants at least in the Pacific Nor thwest are going to continue to focus on the bounty that comes out of our region.

What needs to change in culinary curriculum?
We try to keep our curriculum very up to date. Additionally the restaurant industry is very cyclical so it is important to continue to teach the classics while at the same time introducing students to the array of products that are available from around the world.

Over your time teaching what's changed in the industry?
The Molecular Gastronomy has really blossomed in the time I have been teaching, we see more people incorporating some of those techniques in to non-molecular gastronomy restaurants.
Also the greening of the restaurant kitchen. We can now compost 100% of our food waste, we use compostable to go containers, only buy fish from well managed fisheries and source locally whenever possible. These developments are really a plus in my book.

If there were one person you could tell to Piss Off in the food industry, who would it be?
It is probably not a single person but whoever decided that tomatoes should be available all year round and turned them from a delicious seasonal treat to the crispy red bags of water that the conventional tomato has become.

Who do you admire in the food industry?
Anyone brave enough to go out and follow their passion and open a restaurant.

What should an employer expect from a graduate of your school?
They should expect someone with a good grounding in the basics, strong knife skills etc, someone who knows not only how to but also the importance of being a good team member. Additionally they should expect someone with and understanding of the hard work it takes from every employee of that restaurant from the Executive Chef to the Dishwasher to make their restaurant successful.

Is there a gap between what the institutions put ou t and what the industry needs? If so what are schools doing to bridge this gap?
One thing we have trouble replicating is the busy Friday n ight experience where one of the other cooks has called in sick. Our fine dining restaurant is just never that busy. We try to bridge this gap by making the food for the cafeteria on campus, this does give our students the opportunity to learn in a restaurant that serves upwards of 500 people a day. Additionally all our students spend time interning at restaurants which gives them a chance to see what is really out there, and often leads to jobs for them.

Have you had a student really impress you? If so what was it about that student?
I have students who impress me all the time. It tends to be the students with a real passion for food and this industry.

Related links:
Edmonds Community Collage Culinary Arts Program
International Pinot Noir Celebration

why the heck Helsinki?

Why the heck Helsinki?

It was such a weird sign! I was walking from Kenedy town to
Central, exploring the multitude of old Chinese supply stores
and here this tiny coffee counter boasted the best coffee in
Hong kong.

Honestly, the coffee was a bit light for this adict. The
foam was perfect. Made with percision.

Why the name Helsinki? I got so caught up in the entertaining
storytelling of coffee/sandwich counter owner Adolf Cheung I
don't know if he ever answered.

That'll have to be a subject tabled for our next visit to
this lunch hole-in-the-wall, and I will be back. It's a hike
and a half out of the way, sandwiched between vendors who
sell dried shark fin and rice flour. A thimbal sized
disovery for the food lover.

The menu is simple but made with a lot of thought and care.
For example, my club sandwich today: Smoked turkey ham
sauteed to order, 3 fresh eggs scrampled with cracked pepper
and melted cheese literally right infront of me, properly
toasted bread (no mayo! Yea!), a perfectly ripe tomato,
endive, onion... all dressed with a very light viniagrette
and dusted with dried herbs and powdered parmesean.
A simple sandwich with every component handleded perfectly.
Fresh. Yummy! As a chef I can honestly say that I can't make
that sandwhich any better. Ok, Ok, I would add avocado....
but only because I love avocado on anything. Nevertheless,
the sandwhich was so well done I only thought about the
missing avocado while writing this.

Adolf has an engaging smile. “I had no idea what I was
getting into! I just wanted to do something for myself.”
What was he doing before? Investment banking. When asked
which is harder he very quickly replied, “are you crazy?
restaurant! It takes so much work everyday.”
Adolf had another customer so I was only able to ask one more
question: would you go back to being an investment banker if
you could? He smiled and answered “So long as I have this
opportunity I will be here making the best sandwiches I
can.” - Adolf, we love you! So long as you are at that
counter making every sandwich so nicely, we'll be back.