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First Financial, Now Food Engineering: This Is How A Hedge Fund Will Change The Olive Garden Menu
They came, they complained about the breadsticks and water temperature, and they won.
We are talking, of course, about value investing hedge fund Starboard Value, which a month after unveiling its 294-page proposal to boost shareholder value at Darden Restaurants owner of the Olive Garden, Capital Grille and Yard House restaurant chains, not to mention its menu and serving suggestions, scored an epic victory when earlier today Darden's entire board of directors was ousted.
As Reuters observes, the win is a feather in the cap for Starboard, one of Darden's largest investors with an 8.8 percent stake. It is uncommon for activist investors to win more than a few spots on company boards. The ouster is also a stinging defeat for Darden, which earlier this year alienated many investors after brushing off their vote requesting a special meeting on a $2.1 billion sale of Red Lobster.
Shares in Darden were up 1.6 percent to $50.06 in early trading.
So, as a reminder, here are the changes that will now be coming to one of middle-America's favorite, and less expensive, casual eating chains. From Starboard's presentation:
- The food will be fresh whenever possible, with simple choices.
- Menu items will be designed to help facilitate operational excellence and consistency by the restaurant staff.
- We will embrace authenticity, especially as it pertains to the absence of preservatives, stabilizers, gums, additives, artificial colorings, and flavorings.
- We will no longer disregard sound nutrition. Nutrition will not be the driving force, but it will now be carefully considered while greatly improving the taste and appeal of every dish.
- Some parts of the menu can be flavor-forward with fresh ingredients: extra virgin olive oil. lemons, ripe tomatoes, an array of colorful vegetables, lean meats, and fresh fish.
- Portion sizes may be gradually reduced, as guests will begin to equate Olive Garden's value proposition more with quality and excellence at fair prices, than with massive quantities of barely edible fried items, excessive cheeses, and heavy cream sauces.
- Olive Garden's breadsticks are part of the brand equity, as they come to every table. The breadsticks need to be of the highest quality, with a better taste and a frimer texture, and each table must receive hot breadsticks.
- The pasta at Olive Garden must be significantly improved. It must be prepared at the proper water temperature, boiled in salted water, precisely timed to not overcook, and tossed with sauces for each dish instead of the current practice of ladling sauce on top of heaps of coagulated pasta.
- We must rethink the amount of items from the flyer. Most fried foods are not authentically Italian and it slows service.
- We will explore a few gluten-free options, as many consumers prefer gluten-free dishes (1) Based on extensive research and discussions with culinary experts and suppliers, we believe we can accomplish these goals at Olive Garden's current price points without hurting margins.
The real question, however, is whether menu engineering is as simple as financial engineering in a time of ZIRP. Millions of Olive Garden diners are about to find out.
For those curious, here is the full Starboard slideshow again:
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i've never eaten at Olive Garden
The average customer weighs north of 275.
Here is why: http://media.olivegarden.com/en_us/pdf/olive_garden_nutrition.pdf
'All you can eat pasta and bread' just sounds disgusting to me.
House salad 150 cal
Breadstick 140 cal
Alfredo dipping sauce 440 cal
Spaghetti 400 cal
Meat Sauce 300 cal
Two Italian Sausages 470 cal
Two glasses of wine 300
_______________________
2,200 calories
2.5 hours, or 15 miles, running 10 minute miles
Amazing! Not one concept on this optimization effort that's a typical corporate optimization tactic. Finally a hedge fund I could work for.
Long organic marinara because it just fucking tastes better.
Apparently, this would be why the Romana family that owns Macaroni Grill went BIG INTO THE BARIATRIC SURGERY CENTER BUSINESS.
The customers are being fattened up for lap-band surgery.
When things go south first come the lawyers then the accountants
Anyone care for dessert?
White chocolate rasberry cheesecake...just 890 calories!
Don't worry about the consequences, surgery can fix it, and bank financing is available!
^ The effects of cocaine deficiency and/or State education.
Why would anyone listen to an IBankster about anything.
The only words I want to hear from them are "when is my walk around the prison yard?"
Didnt work for Crusty, he is still a fat bastard. Always will be a bastard, the fat part is his choice
Have they addressed the horse meat/horse DNA in meat products issue, though?
http://www.latimes.com/topic/business/consumer-goods-industries/food-ind...
And what about their Vietnamese/Thai farm raised, pig feces & melamine fed, bacteria laden shrimp?
http://abcnews.go.com/Business/consumers-eating-feces-tainted-shrimp-fis...
Thats hilarious.
Cocaine will keep you out of troughs like The Olive Garden. Cocaine is good medicine.
http://www.youtube.com/watch?v=suvJai5IC6c
"Well, there you go. Somone shoves an M80 up a bullfrog's butt, blows him to pieces, he comes back to you to fix it, you win twice brother. It's good biz!"
Luckily Ebola virus, (courtesy of the nose picking, zit faced illegal immigrant wait staff) does not add to the calorie count of most meals......
I've heard that new ebola diet is really effective too!
That'll cure our fat asses in no time...
Problem is, it means that the % of susceptable carriers is INCREASED.
Personally, I'd rather be surrounded by a GenPop of healthier people. Would give me some peace of mind, even if it's only in mind.
I'm so glad I'm not obese.
So glad.
So?
I would make AT LEAST two very nice, and satisfying meals out of that amount of food.
Hold the salad, breadsticks, dipping sauce, spaghetti, meat sauce & sausage. I'll have the 2 bottles of sangiovese, open it here. And one after dinner mint.
And the servers will now toss their sauce on your pasta.
One waitress, no dressing please
"The breadsticks need to be of the highest quality, with a better taste and a frimer texture, and each table must receive hot breadsticks."
So where is the nutritional information on this "frimer"? Is that what makes their breadsticks so tasty?
"We must rethink the amount of items from the flyer. Most fried foods are not authentically Italian and it slows service."
Is the new CEO Asian?
msg, glue, or whatever it takes to make fake food seem like real food to the sheeple. what a fantastic planet this place has become, every aspect of life managed by wallstreet, for wallstreet... to maximize profit and efficiency, limit costs... they should just go ahead and state the obvious... every one on planet usury is or will be a slave... unless we stop it.
It has one stage further to go though - no real food served, just a pasta derivative contract.
First time I ate at Olive Garden, I got laid. Never went back. Went out batting 1.000
First time I ate at Olive Garden I was coming back from a wine festival with my buddy and 2 ginger slut sisters. We were both going to get laid until we ate the chicken parmesian. Food poisoning.
Fuck the Olive Garden.
Never eat on a fuck date. That will be the end of that. Wine. Then for dessert, more wine.
I NEVER eat at those plastic cookie cutter corporate chains. My home cooking is better at 1/3 the price, and it's easy to make. If I ever go to a restaurant it's a small family place that has good atmosphere, good food and fair prices.
Only a large corporation would serve cheap crappy bread and poorly prepared pasta, and only sheeple who watch TV would get suckered into thinking that's real italian cooking. Sad.
A little clarification please. Did you get laid At Olive Garden (if you did, I'm headed there right now), or after you left Olive Garden?
I'm a lifetime winner at roulette and slot machines. Never gone back.
What about the herpes you caught. You left that part out.
That's what the dipping sauce is for.
This story reminds me of the time young Bud Fox got promoted to CEO of Blue Star. The arrogance of these pricks knows no bounds!
This story reminds me of when they hired some Apple marketing hotshot to revamp JCP. They ended up bringing back the old CEO to fix things with their group.
I LOL when a hedge fund runs a restaurant. That will work well. I think breadstix at every table and salted water is nice, but the healthier food and smaller portions are going to alienate their core demographic....
Short?
Tried it once. Bought my admin (approx 275 lbs) and her best friend ( approx 325 lbs) lunch once. They both wanted to go there.Even they didn´t like the food and all I could think of was why did I go there when we could have gone to an authentic Italian restaurant where food tastes like food.
When I started my first job in the U.S. I was informed by my admin that her friend had a "medical problem" and wasn´t allowed to work after 5 PM. The problem being that if she did she might topple over and be grounded without being able to get off from the floor and not be disvovered by security until next day and that would pose great threat to her health.
Honestly - you guys in Ameriva will have to change your dietary habits.The quality of foodstuffs are generally very poor. It´s not your fault - but you must begin to discern what you eat and weed out the Olive Gardens of this world. You are killing yourself with the crap youa re eating.
I have been to Olive Garden exactly 32 times in the past 3 weeks. Not joking. Twice a day on weekdays (once 3 times), and I've been two times on weekends.
I snagged one of those never ending pasta passes, where you paid $100 and you get all you can eat pasta for 49 days. They only sold 1000 of them nationwide.
I'm feeding my whole office, and family. I fear they may be like wild animals and will one day be unable to find shitty food on their own.
Unless you really dislike your own family - maybe you should take them off that Olive Garden diet. I have a strong suspicion it´s not really conductive for good health in the long run. As for your company - you decide. Why not grab some vacation and go to Italy and find out how real cuisine should taste and look like? It may come as such a earth shattering revelation that you may not be able to stomach Olive Garden after that - but that´s the general situation with knowledge . the garden of Eden , the snake and the apple and all that. Maybe lack of background information and comparison is a bliss. I don´t know. Leave that up to you to decide on.
I can experience Italy every day for 49 days for $100. That's what the advert said anyways.
"You a goana hava pasta comin outta alla you orifacci!"
Yeah , right. And I can experience USA every day at McDonalds.
Now , if you like burgers - why not just grind up a really nice sirloin steak and cook it to perfection at home instead of that massproduced swill that McD calls hamburger? You know that McDonalds is in competition for meats with the dogfood manufacturers? Literally. Aggressive bidding.
But hey - your funeral.
Me either, we ate at Tomato Street against my wishes and had Lasagne that consisted of noodles and sauce. Nasty ass crap, no ricotta or meat for $16.00, for $2.00 worth of food. I live out west and if you have one go to The Spaghetti Factory, if you insist on eating what made the Italians fat.
Margins to the moon!
Replacing the plates with feeding troughs might help margins too.
A vomitorium would be a nice addition as well........
That's the old spirit!
We'll have separate cloisters; one for the food and feather crowd and another for the hemorrhagic fever bunch.
Diversity, tolerance and whatever else the Progressives preach as a separate necessity from just plain good morals, ethics and civics.
Anybody but me remember civics lessons from when we were young?
Kinda went by the wayside as society went to shit and now, Common Core will fix that, we're told.
Progressives.
I've thought that the defeat of the, let's face it, imperfect performance against normative ideals was the reason that society has gone to shit. I knew a couple of people going to Columbia in the "Reveille for Radicals" era.
Even as a tiny little piglet, I wondered how Bubonic Plague could be breaking out in Haight-Ashbury, given its bad reputation and the conditions needed to breed that disease.
- Ned
shit...can't find a clip of that SNL skit where bill murray and burt reynolds are trying to pick up chicks at the vomitorium....hilarious, when SNL used to be good, you know.
Olive Garden....glad to be able to say I've never been there.
you're not missing anything SD......smaller portions, larger prices.....just like all restaurants now.....value = zero
plus, I can make my own cocktail and sit by my own firepit with people I know for about .50 cents.....any restaurant would be $9.00 for same
So being served food scraped from another patrons plate does not appeal to you?
"We will no longer disregard sound nutrition. Nutrition will not be the driving force,"
ROFLMAO
That's a keeper. Change Nutrition to Healthcare and put it up on Barry's teleprompter.
Increase diabetes, increase insulin sales. Win-win.
Hey! An insulin enema with every all you can eat deal!
I sez there Kingfish, I be regusted at yoar coagulated starch pile
LOL
Mrs K is asking me what's so funny
Fettuchini a la Baby Back Rib Sauce
I liked it the way it was, was it broken?
Does anyone seriously believe these changes will be made?
oops, i boiled the pasta a little too much ... time to throw it out ... yeah, right
bottom line they will cut costs wherever they can ... and managers will be graded on their margins (improvements)
If they wont complain then nobody would take them as experts.
Yard House is pretty good. I like the food (for a chain) and, their selection of on-tap and small brews is impressive. I hope the quality doesn't change, as a result of this move.
As an Italian American in NY, there is a reason I have not been back to the Olive (artery) Harden. I fear their promise for better food is worth about as much as a promise from (pick your favorite politician).
This means olive garden is throughzy, period, the end. Just like HTC with it's periscope camera. OG was truly shit, no doubt and I'd never eat there but I know many people who do and believe me they like it just the way it is. So I give E for effort and T for nice try.
Translation: smaller portions = higher margins. Everything else on that list is bullshit.
They should not have sold off Red Lobster; that obviously pissed off a lot of investors.
All that was needed after that was for someone to say the obvious, down came the axe.
If they put a spoon on the table and quit pushing the wine and panini's it might work.
Problem being, a lot of folks like a mound of pasta with heavy over-salted cheese sauce.
"Problem being, a lot of folks like a mound of pasta with heavy over-salted cheese sauce."
Bingo.
KYC - Know Your Customer
By trying to bring Olive Garden upscale they will alienate their core group.
Why not find out what they want (fried junk?) and give them more of it
It is the Statist and evidently the Masters of the Universe conceit. They know how to run your life better than you do.
- Ned
Price of Christopher Wool's 'Apocalypse Now' Soars With Art Market - Businessweek
Notice everything rises in value, Wine, Fine Art, ( Cough ) housing...but not Gold. That will change soon I'm sure.
The problem is, gold isn't scarce. You can print it, you see.
I like the idea of consolidating to just four chain restaurants in the US: two for the FSA, and two for the middle class. Americans deserve consistent and immediately recognizable food every time they venture out of the frozen foods section of their local supermarkets, and duopolies have proven to be highly efficient and profitable. Americans should settle for nothing less. We could have a special reality TV series to choose the four winners. Not sure that The Olive Garden would win in its category.
I've been hankerin' for a Bloomin' Onion.
You mean burnt onion. Outback is a horrible rip off. $65 for $10 worth of food that tastes like feces.
How dare they! It's every person's right to gorge themselves into an early coronary. Fuck nutrition!
Isn't this a repeat? I distinctly remember someone saying they knew a tow truck guy that had to rescue an Olive Garden truck that dumped microwave pouches of food all over the highway. Eg, all their food is nuked for you, in nice single size portions. If you're a utility sport vehicle.
We used to go to Longhorn fairly regularly but they eliminated some apps the kids liked, reduced portions, and raised some prices. I can cook a great steak at home.
I tell her...but we cook so much better at home. I know, but I want to go out you cheap bastrd.
Folks here are just whining for the hell of it.
There is absolutely nothing wrong with the recommendations by the hedge fund.
Overcooked pasta will ruin any Italian style dish. So what is wrong with directing the restaurants to not overcook pasta??!!
Breadsticks should be fresh? Well no sh.t, yes they should be fresh.
Please don't whine just for the hell of it!
They're mad the economy won't crash so their gold is worth more.
We'll see who whines loudest when the FED stops supplying crack to the crackheads.
That'll never happen since the crackheads own the crack.
Devo
There is a reality behind the old saying " don't get high on your own supply."
BTW great avatar.
Are we not men?
Among the kidz:
All negative, all the time is cool, and you know, edgy, worldly and sophisticated.
Most important of all: Smarter and better than other "dumb and fat" Americans.
So fucking predictable.
Yes, but do you really need to replace an entire board of directors to get al dente pasta and hot breadsticks?
RE: "whining for the hell of it".
LOL. It seems to me that we are just laughing at the FUCKING LIARS trying to tell us how it's going to be different this time, AGAIN.
But y'know what? Maybe you are dumb enough to either invest in that sinkin' (stinkin') ship, or worse yet, dumb enough to actually buy food from the very people aiming for a 10-fold reduction in the world's population...
It's not for nothing that the majority of Americans are obese and severely brain damaged. (But don't worry, 'cos they just promised to change the menu!!!)
The Yardhouse is a favorite stop after work just a block down from the office. About 135 craft beers on tap with a $4/pint happy hour price. Don't care for the food.
stateside
Yard House is great for happy hour. I go there quite often.
Let me translate -
1. Reduce portion sizes to make more money
2. Switch from expensive fried foods to make more money
3. Make recipes easier to cook to make more money
4. Get customers in and out quicker to make more money
Most food these days tastes like it was prepared by a hedge fund. That's why we haven't eaten out in a long time. The little shops have largely been shuttered because they can't compete and not many have money for that anyway.
a salty hedgefund at that...no flavor...just small shitty, adjusted for inflation, portion sizes and a bag of fucking salt. bath salts probably.
Gluten free breadsticks...don't let that 'science' thingy stop you.
Non-tropical sprue is rare. Gluten free is a fad.
gadammit I want my gluten free double espresso!
What people will eat and drink these days.
This article is a repeat.
when someone uses the phrase "flavor foward" I am concerned.
Did Ron Johnson advise Starboard?
This about sums it up.
https://www.youtube.com/watch?v=e8VcT-RNkdk&list=PL3E20BE9EED84DB06
Thank you for making my day.
How many of their steaks are put together with meat glue? Wouldn't be surprised to hear a lot.
Why would you go to an Italian restaurant for steak?
How's the chicken nuggets and burgers there?
I meant Darden. To boost profits use meat glue to cut costs from suppliers.
Why would you go to Olive Garden for "Italian food"?
@hedgeless, ewwww,
ewww, ewww, ewwww, ewwww!
Years ago I did payables (and some med billing) for a bariatric hospital in the Midwest. It was the first such place in my state.
Oh the stories I could tell.
That pic is gross, but it in NO way represents the vast majority getting surgery. Hell, it looks about 100 pounds and three years from the surgeon's knife.
I don't know, the changes sound like a step in the right direction. Except the gluten thing. Fuck that shit.
Otherwise, they are making good changes. IMHO as a 'foodie'. Not that I'm likely to eat there even with the changes.
Though I have to agree wholeheartedly with astoriajoe below.
Slob Garden takes EBT?
FUCK ALL THESE GUYS!
I eat at three places only, Panera Bread, Crispers, and sometimes Jasons Deil, I walk out of these places *FULL* on good food, for 20 bucks TOTAL for two people. Rarely (due to the economy) for someting special I go to a locally owned middle class place which would be consitered Dardens competition.
Yes, the wife an I eat at Jason's weekly too. Fresh food, reasonable prices, and very good soups. Panera is OK too, but a little high. Jason's is Texas based.
20 bucks i could feed myself for a week.
Shledon Cooper sums it up:
https://www.youtube.com/watch?v=6nM_dm5EvZs
I can always tell when one of our local eareries is onthe way to sudden closure: The menu shrinks and prices go up. Kiss of death.
The really odd thing is that Javier the busboy at my local Olive Garden just gave me a ginourmous PowerPoint showing how Starboard Value should rebalance their portfolio.
Now, if someone were to rename the Longhorn Steakhouse as, say, the Longhorny Steakhouse, folks would fall all over themselves to get a steak there. Hell, throw in some strippers for the Longhorny and you've got yourself a party. :)
I thought you'd be getting tube steak's in there.
that presentation is supreme idiocy.
Franchise resturants suck most of the time. Mom & Pops are always better. They give you more and they take better care of you. I haven't been to an Olive Garden since I cracked the code on their zuppa tuscana soup (the only reason we went their back in the day). Their service is pretty bad too with the typical 20 somethings who "this isn;t my real job".
In Houston, eat here: http://www.lasagnahouse.com/default.asp
So no more $100 buys you 7 weeks at the trough?
Bummer!
Eddie Lampert financially engineered Sears into the ground. Is bankruptcy next for Sears, Eddie?
Up next, Starboard to financially engineer Olive Garden into the ground.
Financiers learn a few MBA catch phrases, such as “Economies of Scale and Scope” “Just-in-Time” and “Flexibility” and assume that just by uttering these words they will make everything alright.
Financiers are not managers, i.e., financiers have no real operations or sales experience—and are acting like fools!
Except financially engineering Darden into the ground is a net benefit as people will save money by going to the grocery store and learning how to make healthy and cheap food in the house instead of pissing away money at overpriced garbage chains.
Go on starboard, destroy darden!