In this Weekly Wrap, we’re looking at new portion sizes at P.F. Chang’s, PepsiCo getting in on the dirty soda trend, lay-offs at Starbucks, and more.
P.F. Chang’s Joins the Value Proposition Game
The Headline: “P.F. Chang's plays with portion sizes on new menu”
The Source: Restaurant Business Online
What You Need to Know:
The Asian casual-dining chain on Wednesday unveiled a new menu that includes two portion sizes for entrees at different price points.
For instance, in the Chicago market, a traditional serving of Chang’s Spicy Chicken costs $19.59, while the medium version costs $17.99.
Customers can now also order some appetizers, such as Chang’s signature lettuce wraps, in half sizes for a lower price.
…
Serving size is not the only change on P.F. Chang’s menu. In another nod to consumer demand for value, it is rolling out a line of cocktails for $8.99, including seasonal varieties such as the Blood Orange Margarita and Peartini.
The chain said the new Cocktail Collection offers quality drinks at an approachable price at a time when cocktail prices are rising.
Our Take:
The smaller portion and half-size items are expected. Major chains have been ramping up this tactic for the past year, and it makes sense. Customers want value and options.
The more interesting takeaway is the cocktail menu. For the most part, cocktails have either stayed flat in price or crept upward, even as the economy has been on shaky ground. Margins are generally far better with cocktails, and plenty of owners will tell you the spirits side of the business keeps them afloat.
But prices have gotten a little out of control, even at some chains. This lower-priced cocktail tactic is exactly what we need to see more of. The caveats: don’t encourage overconsumption, and make sure the drinks are actually good. If the cocktail tastes awful, it doesn’t matter how cheap it is.
Sommelier-AI Pairing Battle
The Headline: “AI vs. sommeliers: Guests at Cru Uncorked compare and rate wine pairings”
The Source: Restaurant Business Online
What You Need to Know:
“I’ve used ChatGPT for staff training and thought, ‘What would we get if we asked AI to pair wines with a menu?’” said Oppewall.
He periodically holds “Sommelier Showdowns” at Cru Uncorked, where the three lead sommeliers engage in a friendly competition over their wine picks. Executive chef Sam Lesniak creates a four-course tasting menu reflecting the restaurant’s French and New American cuisine, and the somms pair wines with each course, serving them blind. Guests then cast one vote per round, choosing their favorite pairings.
This time, Oppewall posted the menu to AI, eventually switching from ChatGPT to Microsoft Copilot as it worked better for this task, he said. AI’s wine pairings went up against those chosen by the three somms—Oppewall, Janine Poleman and Anthony Taylor—and were presented to the guests in a blind tasting.
…
“AI was about 80% accurate in picking the right wine and staying within budget,” said Oppewall. The chatbot’s wine preferences tended toward classic pairings and there was overlap with wines Cru Uncorked features and chooses regularly, he added. But the somms found that about 25% of the wines AI recommended were not in Cru’s cellar. Asking for a second choice drastically increased the error rate. Although time-consuming, entering the menu and wine list from scratch each time created the best results.
In an informal poll of the restaurant’s guests, the sommeliers found that many had used AI in situations where they didn’t know the menu and no somm was available. But they much prefer sommelier interaction to ensure they get a quality bottle.
In the end, “the somms narrowly won the showdown, but guests still prefer having a conversation with a real sommelier,” said Oppewall. And he sees no threat of AI taking jobs away from the wine pros. “Everything AI provides comes from a knowledgeable human entering the data,” he said.
Our Take:
Expect to see more “AI challenges” over time.
AI will continue to improve as agents are trained more and more on wine, but a good sommelier will always win in the end — maybe not with the pairings, but with human connection. Nothing beats a person guiding you on a wine journey, that is something AI cannot do.
But there is a takeaway from the other side. There have been numerous articles about the disappearance of the sommelier from restaurant floors. The reasons vary, but the ‘why’ isn’t as important as the effect: wine consumption across the board in the U.S. is down. A $15 cocktail is a lower barrier of entry compared to a $75 bottle of wine. There’s also less risk.
AI won’t replace sommeliers so much as step into the gap they’ve already left. If an operator can’t justify a full-time wine expert, a digital pairing assistant feels like a cheap stand-in. The danger isn’t that AI beats sommeliers — it’s that it normalizes a “good enough” solution, further shrinking the need for sommeliers outside of fine dining.
The real debate isn’t AI versus somms, it’s whether restaurants and guests still value wine enough to demand human interaction with it outside of tasting menu establishments. I personally feel that if you have wine on the list, someone should be able to talk about it. But times are changin’.
Dirty Soda
The Headline: “From PepsiCo to Taco Bell, dirty soda is taking over”
The Source: CNBC
What You Need to Know:
“Dirty soda” drinks use pop as a base, followed by flavored syrups, cream or other ingredients. While Swig claims credit — and the trademark — for dirty soda, TikTok videos and the reality TV show “The Secret Lives of Mormon Wives” have helped the trend spread far and wide, outpacing even the soda chain’s speedy expansion.
Now, consumers can find it nearly everywhere, from grocery store aisles to fast-food chains.
In a few weeks, Pepsi plans to unveil two ready-to-drink dirty soda-inspired beverages at the National Association of Convenience Stores trade show in Chicago. The new drinks, the Dirty Dew and the Mug Floats Vanilla Howler, follow on the heels of the Pepsi Wild Cherry & Cream flavor, which hit shelves earlier this year.
…
Dirty soda has also drawn new interest beyond beverage players. According to Datassential, 2.7% of U.S. eateries offer a carbonated soft drink that includes cream or milk, up from 1.5% a decade ago.
Newcomers to the trend include TGI Fridays, which launched dirty soda as a limited-time menu item this summer that could be spiked with alcohol. McDonald’s is testing flavored sodas, like a “Sprite Lunar Splash,” at more than 500 locations after winding down its drinks-focused spinoff CosMc’s in June. Yum Brands’. Taco Bell has also been offering limited-time menu items, like a dirty Mountain Dew Baja Blast.
…
For restaurants, adding dirty soda to the menu is easier than it might sound.
“It’s a custom drink offering that, one, allows the brands to leverage something that they already have right there: their soda machine,” said Erica Holland-Toll, culinary director at The Culinary Edge, which advises restaurants on food and beverage innovation. “Two, it incorporates either a one-touch ingredient, or if they’re already open for breakfast, it’s quite likely that they’ve got a creamer in house.”
Our Take:
Personally I hate dirty soda, but those who love it are fanatical.
From a trend standpoint, I’m not sure this has staying power in the mainstream. There are certain markets where dirty soda will always be a thing. The article highlights the multi-billion-dollar soda companies now pushing into the space, which means oversaturation is inevitable. Once the big players have it in their crosshairs, expect dirty soda everywhere.
For restaurants, the real question is whether to hop on the trend or steer clear. The answer isn’t black and white, it depends on the market and what the ultimate goal is. If it makes sense for both the brand and area, go for it. But if you’re just chasing a fad that doesn’t align with your identity, it won’t serve your business. Stay on brand and true to the business — this applies to every trend, not just dirty soda.
Starbucks Woes
The Headline: “Starbucks to lay off 900 workers, close stores in North America”
The Source: ABC News
What You Need to Know:
Coffee giant Starbucks will lay off workers and close stores as part of a $1 billion restructuring plan, CEO Brian Niccol said in a memo to employees on Thursday.
The company will slash 900 employees in non-retail roles across North America, Niccol said. The store closures will amount to a roughly 1% decline in the total number of Starbucks locations in North America in this fiscal year, after accounting for some store openings, Niccol added.
…
Starbucks weathered sluggish sales in recent years as customers grappled with a years-long bout of elevated inflation, analysts previously told ABC News. The company has experienced six consecutive quarters of declining same-store sales, a metric that examines performance at individual locations over time.
Starbucks has sought to improve the interior of many of its stores in an effort to draw customers and boost sales. In a review of its locations, the company identified stores where such changes would not be achievable, Niccol said.
Our Take:
A few weeks ago I was traveling in Montreal and counted three Starbucks in about four blocks. It’s not the first time I’ve noticed the sheer density of the brand. Starbucks has leaned on a saturation tactic for years, and while there are plenty of reasons behind their current struggles, oversaturation has to be one of them.
In certain high-traffic tourist areas, it makes sense — Times Square can support two Starbucks on the same block without much cannibalization. But elsewhere, that kind of density risks driving consumer fatigue.
I realize oversaturation is not mentioned, but anyone who is out of their house for even a small amount of time can see how many Starbucks there are. The takeaway for anyone on the expansion trail: be thoughtful. Research the market, understand the demand, and don’t assume that because you have a few strong performers the market wants another one. Growth for the sake of growth can just as easily backfire.