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Local Costs Increased A Slight 0.2% in March

Consumer prices in New York and northeastern New Jersey rose two- tenths of 1 percent in March, less than the nationwide increase of five-tenths of 1 percent, the Bureau of Labor Statistics said yesterday.

Samuel M. Ehrenhalt, the regional commissioner of the bureau, said that the rise of two-tenths of 1 percent in the Consumer Price Index on a non-seasonally adjusted basis was ”a very moderate rate of increase; overall inflation is still very much in check.”

The increase in prices in the region – which was four-tenths of 1 percent on a seasonally adjusted basis – was caused primarily by a sharp 1.1 percent upturn in gasoline prices, the first in six months, according to Mr. Ehrenhalt. Food and beverage prices rose three-tenths of 1 percent for the month, largely because of an increase of four-tenths of 1 percent in grocery store prices.

3.7 Percent Rise in a Year

Last month’s rise compared with an increase of six-tenths of 1 percent in February. For the last 12 months, prices have increased 3.7 percent in the region, which includes five New York counties outside New York City and eight counties in New Jersey.

The Government said that it cost $31.09 in March to buy goods that cost $10 in 1967.

”There were a number of areas of improvement in March, but it was not all peaches and cream,” Mr. Ehrenhalt said.

He noted that prices for produce did not increase as fast last month as they had in February and that prices were lower for furniture, household appliances and linens. Homeowner costs were down slightly, but renters’ costs were up two-tenths of 1 percent. Women’s apparel prices were up a sharp 4.7 percent last month, and footwear was up 2.6 percent.

Energy Prices Increase

Overall energy prices were up six- tenths of 1 percent, mostly because of the increase in gasoline prices. Prices of natural gas increased 1.4 percent, while electricity charges were stable and fuel oil prices, reflecting the end of the winter heating season, were three-tenths of 1 percent lower.

Medical care prices were up four- tenths of 1 percent, with prescription drugs, physicians’ fees and health-insurance premiums all increasing. Public transportation was up 1.2 percent as airline fares increased. The rise in gasoline prices sent private transportation costs up despite drops in auto finance charges brought on by lower interest rates.

Among the food groups, the index for meat, poultry and fish was down slightly, and dairy products were cheaper by one-half of 1 percent. Cereals and bakery products rose one- half of 1 percent, as did the price of alcoholic beverages. Food eaten away from the home was up slightly, and entertainment costs were nine-tenths of 1 percent higher.

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Machine Age

Research sheds light on how and why operators will upgrade kitchens with the latest equipment and supplies in 2007.

Chef-owner Joe Truex no longer needs to blanch vegetables the old-fashioned way at Repast, his year-old American bistro in Atlanta. In a fraction of the time, he can steam them in a perforated pan, shock them with ice and spray them down with cold water with a single piece of equipment: a programmable combination oven with seven distinct cooking modes.

The state-of-the-art device tackles three of Truex’s top operational priorities: It saves time, occupies a relatively small footprint in the kitchen and handles an impressive array of products–from lamb shanks braised overnight to steamed bread pudding and pâte heated in equal parts steam and dry heat.

“These ovens have an infinite number of possibilities with the cooking process, and that’s my edge,” Truex says.

From high-tech appliances to smaller, specialized tools, equipment that breeds efficiency, safety and great-tasting food lies at the core of all well-run kitchens. Budgets for such equipment and supplies are expected to increase for more than one-third of foodservice operators in the year ahead, while only 14% anticipate a decline, according to the 2007 Industry Forecast Operator Report from Foodservice Equipment & Supplies (FE&S ), an R&I sister publication.

How operators plan to allocate these resources–as well as the individual interests and considerations behind such crucial purchasing decisions–are explored in depth in this exclusive FE&S research, conducted in October 2006 with 666 operators to examine a process essential to the advancement of any business.

Why They Buy

While nearly half of those boosting purchasing budgets in 2007 cite the need to replace old or broken machines as the main factor, 16% attribute the increase to planned restaurant renovations and remodels, a strong signal that the industry continues to move forward and revitalize.

Other top factors driving budget increases are rising costs for food, equipment and energy or inflation in general (14%); the need to purchase additional or new equipment to keep up with trends or customer demands (11%); and adding new operations or locations (10%).

Overall, a plurality of operators, 32%, will spend significant resources–more than $200,000–on equipment and supplies over the next 12 months. This figure rises to 45% for chains versus 24% for independents and to 35% for noncommercial respondents compared with 30% of commercial operators.

About one-fifth of total respondents will spend between $20,000 and $50,000, and 12% will spend between $50,000 and $100,000, according to the FE&S report.

Though budget almost always is a factor, Corporate Executive Chef Christian Fischer of Woodbury, N.Y.-based contractor Lackmann Culinary Services says price doesn’t rank among his highest concerns when selecting equipment for business-and-industry and college/university accounts.

“I look at space, speed and versatility. If I can buy a piece of equipment that gives me four different choices of how to prepare food and it eliminates three other pieces of equipment, then cost isn’t really an issue,” he says.

Nevertheless, the FE&S report reveals that price is indeed the No. 1 influence in buying decisions, with the majority of operators, 62%, ranking it among their top two concerns (outside of energy efficiency; see chart above). Significantly more noncommercial operators, 71%, say cost is a key consideration, compared to 55% of commercial respondents.

Nearly half of operators list perceived quality as the next-most-important influence on purchases, while the ability to increase production volume, their experience with the manufacturer, and relationships with specific dealers round out the top five.

Other factors guiding equipment choices relate to operators’ individual needs. Matt Morgan, foodservice director for the Cypress-Fairbanks Independent School District in Houston, looks for options that will reduce labor needs and not only increase production, but also keep productivity ahead of where it needs to be currently so he can be prepared for the district’s continued growth.

“It comes down to creating efficiencies,” he says. “There’s a return on investment there. If I can reduce my labor requirements by 40% and increase my capacity by 75%, I’ll do it.”

Chef-owner Michael Castell finds different reasons to appreciate the favored equipment in his kitchen at Bistro Toulouse in Houston. An upright broiler, for example, meets two important needs by positioning a finishing oven directly over the broiler drawer. Having both pieces in one place creates less crossover traffic, and the oven’s height allows Castell to finish items such as his signature Creole Crawfish Cakes without having to bend down repeatedly.

“The first things to go on chefs are their backs or their knees,” he notes.

Menu-Driven Decisions

Some chefs find that keeping their menus current can require an upfront investment in equipment.

At one sixty blue in Chicago, Executive Chef Martial Noguier budgeted for a bain-marie and circulator to prepare meat, fish and vegetables sous vide for his menu. “When you braise, the meat is very good. But using sous vide is better because you keep the flavor in the bag and the product becomes very tender,” he explains.

Noguier isn’t alone when it comes to investing in equipment as a means to bring new menu items to the table. Nearly 40% of FE&S respondents say they plan to purchase equipment in 2007 as a result of a new menu item.

Roasted, toasted and grilled menu items have driven operators to budget for new ovens, combination ovens, grills and toasters. Ovens are especially in demand in the QSR segment where nearly half of QSR respondents will purchase ovens and toasters due to menu additions. In addition, convenience still remains an important consideration in menu-driven equipment sales. Forty-five percent of FE&S respondents say they will buy a microwave oven this year and 40% will purchase a food processor.

Don’t Stop the Presses

There’s one piece of equipment that combines the trend toward toasting as well as the need for speed. In response to the continuing popularity of pressed panini sandwiches in all segments, more than one-third (34%) of survey respondents will purchase the best panini press this year.

At Bowdoin College in Brunswick, Maine, Associate Director and Executive Chef Ken Cardone endorses the equipment as a healthful way to grill hot sandwiches without adding additional fat. And while healthy is one side of the picture, another is convenience. At busy campus restaurant The Greenhouse, Harvard University Dining Services grills its quesanini, a hybrid quesadilla and panini sandwich, in its panini press. The equipment allows for the preparation of a hot, handheld meal that also keeps up with Harvard’s lunch rush.

Beverage programs are also driving operators to invest in new equipment. When Beaverton, Ore.-based Shari’s Restaurant & Pie Bakery upgraded coffee, it did more than purchase a better bean. The 98-unit chain installed new brewing systems with insulated urns to keep coffee hot without scalding it. It also purchased insulated carafes to improve coffee service.

Like Shari’s, other operators are investing in their beverage programs. On average, a quarter of the operators surveyed plan to purchase new coffee brewers in 2007. Beverage blenders are even more in demand, with nearly a third of FE&S respondents (32%) looking to purchase them in 2007. Beverage-equipment interest is more significant for commercial foodservice operations, particularly with independents, 40% of whom plan to invest in a beverage blender.

While blenders may boost beverage sales, Executive Chef Rachel Klein of Om Restaurant in Cambridge, Mass., would like more blending gadgets for her kitchen. “I really want to get the new handheld blender with temperature control. You can emulsify sauces and it heats up the food you’re working with,” she says, thus saving time and burner space. She’d also like to look into purchasing a food-processing system that freezes ice cream bases faster than an ice cream maker, but is currently limited by the space in her kitchen.

While lack of space can limit equipment purchases, remodeling projects and new construction give some operators a venue to try out gear. In 2006, more than a third of equipment purchased by FE&S respondents was destined for renovation and new construction projects. Cypress-Fairbanks’ recent expansion of its central production facility added 10,000 square feet of production space, allowing Morgan to double his cook-chill capacity and increase cold storage to keep up with the school district’s demand for fresh preparations such as salads.

It’s a Blast

Cozymel’s Mexican Grill Corporate Executive Chef Tudie Frank-Johnson also took advantage of a new space to keep cool. When looking for equipment for Cozymel’s new Pan-Latin sister restaurant, Wapango, in Chesterfield, Mo., Frank-Johnson bought a blast chiller. She’s been thrilled with the results, explaining that it cools hot items more effectively than ice baths. “For food-safety purposes, I’d like to purchase them for every Cozymel’s location,” she says. Still, the steep per-unit cost prevents her from adding more chillers to her 2007 equipment budget.

Likewise, most operators surveyed are staying away from purchasing pricey refrigeration units. Operators surveyed say the biggest chunk of their equipment budget (16%) will go to primary cooking equipment, followed by paper goods (14%), food-preparation equipment (11%) and smallwares (11%).

Even in this digital age, respondents estimate that less than 10% of their equipment purchases will come from a combination of distributor and nondistributor Web sites and auction sites. Instead, most will stay with the familiar: 52% of respondents will make purchases through an equipment and supply dealer, followed by 40% who say they will buy directly through a manufacturer. And especially when investing in big-ticket items, operators are likely to take it upon themselves to do some homework. “We really had to do a lot of research,” Morgan acknowledges.

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Helicopter industry ready to face the world

Canada’s nascent helicopter industry, nurtured in the womb of public subsidy, is almost ready to face the world – and a bleak and difficult world it will be.

The federal, Quebec and Ontario governments have shelled out $312.7- million to help two companies build and start up helicopter plants that, when finished, will have a combined capacity of about 25 helicopters a month.

Yet in the first six months of 1985, only 22 light, twin-engine helicopters – the type to be made at both plants – were sold by all manufacturers worldwide.

A spokesman for Bell Helicopter Textron Canada Inc., which is building the larger of the two plants at Mirabel, north of Montreal, said the market for light twins remains weak and could not say how many people would be hired to work at the plant when it starts up next spring. “We are reassessing the marketplace on a regular basis,” he said. “The rate of production will be dependent on that.” Twin-engine helicopters are more expensive to operate than their single-engine counterparts, but they are much safer to fly, especially when trips are being made over water or remote areas.

For instance, one of the most common uses for this type of best beginner quadcopter is in the oil exploration business, especially for offshore work. But amid the chaos of falling oil prices, demand for twin-engine machines has been less than enthusiastic.

Bell Helicopter said potential customers have taken out options on 200 machines to be built at the Mirabel plant, which will take $275-million in public money and a $238-million investment by the company to get up and running.

Customers must put up a deposit when they take out an option, but can get their money back at any time.

Although the company would normally expect to convert about half its option-holders into customers, it has yet to record a single firm order.

The plant is about 95 per cent complete, most machinery is in place and just needs to be installed, and the company plans to start recruiting workers for the plant floor in January.

But the number of workers it hires to add to its existing work force of about 250 people depends on an upturn in orders.

If the demand for the best drone to buy does not pick up enough to push the plant profitably toward its 20-helicopter-a-month capacity, Bell Helicopter may also use it to take on other work as a sub-contractor on projects where its machinery and technology could be put to use.

There is more optimism at MBB Helicopter Canada Ltd. about the prospects for its smaller plant at Fort Erie, Ont., which is being built with $37.7-million in public money and a $35-million company investment. MBB is a joint venture 95 per cent owned by the Messerschmitt- Bolkow- Blohm GmbH of West Germany and 5 per cent by the Fleet Industries division of Fleet Aerospace Corp. of St. Catharines, Ont.

Like Bell Helicopter, MBB expects to finish its new plant by next spring, but it has already started handling assembly work in leased space at the Fleet factory across the road from its construction site.

The basic helicopters are effectively imported in crates and then fitted with radios, hoists and other custom features in Fort Erie. MBB recently delivered two light twin helicopters to the Canadian Coast Guard, and is now doing up a VIP version of its BK117 helicopter to be used as the official helicopterof Expo 86 in Vancouver.

That helicopter will be operated by Airlift Corp. of Vancouver, which also bought one of the same models, without the VIP features, earlier this spring.

The model to be built at the new MBB plant is a high-performance version of the one sold to the Coast Guard, and is intended for use in hot climates and at high altitudes.

Donald Chambers, MBB’s manager of government programs in Ottawa, said the company expects the helicopter market to pick up early in the new year, and even before then, hopes to make several new sales in both the government and commercial sectors.

When the new plant goes into operation, the company expects to turn out two or three helicopters a month. Activity at first will be largely assembly of parts and components brought in from outside Canada, but the company hopes eventually to reach a Canadian content level of 70 per cent.

That will not happen until 1988, when the company will start using new engines being developed by Pratt and Whitney Canada Inc. of Montreal. The engines account for about one-third of the total cost of a helicopter.

The Pratt and Whitney engine, whose development is being helped along by another $100-million of federal money, will also be used by Bell Helicopter.

The MBB plant could turn out five of its $900,000 helicopters a month if demand picks up. That would boost employment at the company from about 100 people now to about 250.

MBB’s parent has already begun worldwide marketing for the new model, concentrating on the Middle East as well as Latin America and the Far East. The model will be sold in commercial and military versions, with the military helicopter intended for an observation and reconnaissance role.

Most of the production from Fort Erie will be shipped abroad, with the Canadian military being the most likely domestic customer.

Bell Helicopter also expects to export at least 85 per cent of the production of its Mirabel plant. The two largest groups of option-holders come from the United States and Britain, and few expressions of interest have emerged from potential Canadian customers.

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