HOMETOWN: Vallejo, Calif.
EDUCATION: B.A., California State University, Sacramento; captain in the U.S. Marine Corps
AGE: 54
PERSONAL: married, three children
HOBBIES: water and snow skiing, running, biking
CAREER HIGHLIGHTS: more than 25 years with McDonald’s Corp., serving as vice president in Canada and previously as a senior VP for McDonald’s USA
Brian Unger joined the Einstein Noah Restaurant Group as executive vice president of operations in March, so one might say the honeymoon is over.
Unger is already deep in the thick of new sales-driving initiatives for the nation’s largest bagel company. Those include rolling out a national barista-based specialty coffee program, growing the brand’s catering business and trimming operating costs by about $3 million this year.
For its June-ended second quarter, Einstein Noah operated, franchised or licensed 730 units under the Einstein Bros. Bagels, Noah’s Bagels and Manhattan Bagel brands.
While same-store sales rose 0.2 percent systemwide for the quarter, commodity costs continue to challenge margins, the company said.
Unger spoke with Nation’s Restaurant News about the obstacles and opportunities ahead for Einstein Noah:
The new coffee program has lifted sales between 2 percent and 4 percent in test stores. Can you describe the enhancements?
We’re really excited about introducing our new coffee program and developing the espresso platform. We have established a Coffee Bean University with national operations and training teams developed with the help of our equipment and bean suppliers. We’re bringing our teams from across the country into the central office [in Lakewood, Colo.], so we can develop “coffee professors” and “coffee champions,” and the most critical part is training the baristas in the restaurants.
The new coffee program is in about 100 restaurants now, and it will be fully rolled out to about 90 percent of stores for all three brands across country by November.
Einstein Noah’s chief executive and president Jeff O’Neill said he sees catering as a huge opportunity. How is Einstein expanding there?
Catering now represents about 6 percent to 7 percent of total sales, but across our 700-plus units, catering is growing by double digits.
This year we have established national and regional sales teams, and that’s given us great results. We’re getting new customers from both our 1-800 system and through online ordering. We have a centralized call center to handle catering orders, with an automated system that goes directly to restaurants.
With catering we see two key opportunities: to continue to increase breakfast catering, which is where most of the business is so far, and there’s catering at lunch, which we see as low-hanging fruit.
O’Neill has pledged to trim $3 million in annualized savings. How are you doing that?
The key to margin management is to drive top-line sales. So the first thing I did when I came on board was to change opening hours to 5 a.m. Previously, our stores opened at various times.
With 65 percent of sales at breakfast, you have to be open to get in the game, and “open” means at 5 a.m. Our highest transaction hour is from 7 a.m. to 8 a.m., so this helps us better prepare for peak hours.
Secondly, from a sales perspective, I am laser-focused on driving peak hours. We have a national summer incentive challenge that recognizes teams that focus on peak-hour performance, and we have a management system that identifies outliers and sets priorities for improvement.
Einstein has talked about moderately raising prices through the year to gauge consumer response. The next round is in September, when prices are scheduled to go up 2 percent. What has the reaction been to price increases?
We have taken about a 1.4-percent increase so far this year, and we’ve looked at the product mix and price sensitivity models, and we’re not seeing any negative reaction to menu prices we’ve taken. That’s why we feel comfortable with the modest increase in September.
Contact Lisa Jennings at lisa.jennings@penton.com.
