Middleby 1Q17 Earnings Call Notes

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Selim A. Bassoul – Chairman and CEO

Labor is an issue

“The next one where I’m seeing significant change flocking to us is about this labor. So, labor has become finally an issue that I’ve been talking about labor, we did Chili’s almost four years ago and Chili’s was most forward-thinking casual dining chain when they came in and said, I need to attack my labor tissue because it’s creating a climate of instability in our stores. Consistently people are churning out. We have positions in our field and our kitchen, and it’s cost us a lot of money. And they saw that prior to the minimum wage issue and now basically broadcast on every media that minimum wage has to go up in the restaurant business.

*We have more and more chains asking us to resolve labor with automation

However, many of our other chains were very slow to follow suit. Today, it’s not the case. We have more and more chains coming to us looking at how to resolve labor issue, how do we offset the higher cost of labor through automation. So, automation, grocery store and convenience stores, Mediterranean concept, chicken concept, pizza stores, coffee chains, Asian concept, are all a big driver in second half of this year.”

Automation isn’t just about robotics

“So, looking at that, we are seeing innovation being driving our customers in the middle of the chaos, and it’s creating opportunity for us. So automation is not just about robotics, it’s about [indiscernible], it’s about labor reducing equipment solution, it’s about speeding up the cooking, it’s about reducing the space in the kitchen, the layout space, and it’s becoming a major driver where many of them are testing new equipment lot. That is growing fast as non-traditional outlets are growing.”