Global Business Development

EGS Biweekly Global Business Newsletter Issue 54, Tuesday, April 19,2022

Edited and curated by: William (Bill) Edwards, CFE, CEO of Edwards Global Services, Inc. (EGS)

Trends in this issue:

As I return from a two week business trip to them Middle East and Central Europe, the 54th issue of our newsletter focuses on energy, globalization, global trade, inflation, rapidly opening global travel, social media a fully automated Pizza Hut® restaurant in Israel. A truly eclectic sample of global business trends today including the first automated Pizza Hut® restaurant in the world in Israel.

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First, A Few Words of Wisdom From Others

“In the midst of chaos, there is also opportunity” – Sun Tzu 

“The test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function,” F. Scott Fitzgerald.

“Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble.”, Warren Buffett, Yahoo Finance

Highlights in issue #54:

Brand Global News Section: California Pizza Kitchen®, Chipotle®, Dairy Queen®, Lawn Rite® (New Zealand), McDonalds®, Pizza Hut® and QC Kinetix®

Interesting Data and Studies

Visualizing the Distribution of Household Wealth, By Country – A majority of the world’s wealth is concentrated in just a few countries. In fact, almost a third of household wealth is held by Americans, while China’s population accounts for nearly a fifth. Using data from Credit Suisse, this graphic by Eleonora Nazander shows the distribution of household wealth worldwide, highlighting the wealth gap that exists across regions. To help simplify things, this graphic shows how much household wealth each country would have if the world only had $100.”, Visual Capitalist, April 13, 2022

Global Energy

US natural gas export fever tempered by costs and climate concerns – Suppliers must weigh Europe’s demand for LNG with its long-term goal to reduce fossil fuel use. European Commission president Ursula von der Leyen announced a deal with US president Joe Biden last month under which the EU would guarantee long-term demand for another 50 bcm (billion cubic meters) a year of LNG. The volumes would offset some of the 155 bcm of gas the EU imported from Russia last year.”, The Financial Times, April 17, 2022

““Biden’s Energy Marshall Plan for Europe Is No Quick Fix – Facilities to export and receive liquefied natural gas cost billions of dollars and take years to build. Six years after the first cargo of American shale gas sailed out of Cheniere Energy Inc.’s Louisiana terminal, the U.S. is vying with Qatar and Australia for the title of world’s top LNG exporter. (It’s a constantly shifting ranking, but the U.S. is currently in the lead.) Nevertheless, U.S. exports alone won’t be enough to wean Europe off Russian gas completely, at least in the short term.”, Bloomberg,  March 30, 2022

The History of Energy Transitions – Over the last 200 years, how we’ve gotten our energy has changed drastically⁠. These changes were driven by innovations like the steam engine, oil lamps, internal combustion engines, and the wide-scale use of electricity. The shift from a primarily agrarian global economy to an industrial one called for new sources to provide more efficient energy inputs. The current energy transition is powered by the realization that avoiding the catastrophic effects of climate change requires a reduction in greenhouse gas emissions. This infographic provides historical context for the ongoing shift away from fossil fuels using data from Our World in Data and scientist Vaclav Smil.”, Visual Capitalist and Our World in Data, April 8, 2022

Global Supply Chain & Trade Update

The State of Globalization in 2022 – The DHL Global Connectedness Index, which our team develops at the NYU Stern Center for the Future of Management, measures globalization based on international flows of trade, capital, information, and people. We look here at the latest trends across those four categories of flows — and consider early signals of how the war might alter their trajectories moving forward.”, Harvard Business Review, April 12, 2022

Globalization Isn’t Unraveling. It’s Changing – The flow of trade, people and ideas among countries isn’t inevitably headed toward decline following Russia’s invasion of Ukraine. But it could be reshaped. Adjusting for the differing costs of goods and services across countries, Germany’s economy in 1913 accounted for 8.7% of global GDP, according to estimates by economic historian Angus Maddison. Russia’s share of global GDP last year was just 3.1% on that basis, estimates the International Monetary Fund, and an even smaller 1.7% in dollar terms.”, The Wall Street Journal, April 15, 2022

“World food prices hit new record on impact from Ukraine war – Global food prices have struck a new high, soaring at the fastest monthly rate in 14 years after the war in Ukraine hit the supply of grains and vegetable oils, in a shift likely to do the greatest harm in poorer countries around the world. March’s food price index from the UN Food and Agriculture Organization rose to its third record high in a row, jumping 34 per cent from the same time last year, after the war shut down supply lines from Ukraine and Russia.”, The Financial Times, April 8, 2022

Global, Regional & Local Travel Updates

Delta sees ‘meaningful’ profit as travel demand hits ‘historic’ levels – The company said robust consumer demand not only translated into a ‘solid’ profit in March, but is also allowing it to offset soaring fuel costs with higher fares. ‘The demand environment that we have today is at a historic high,’ Chief Executive Officer Ed Bastian told Reuters in an interview. ‘The last five weeks have been the strongest period of bookings that Delta has ever seen in our history.’”, Reuters, April 13, 2022

The Latest Covid-19 Travel Requirements For Central America, Including Belize And Costa Rica  Countries in Central America have been easing their travel restrictions in recent months, making them even easier destinations for Americans to plan visits to during the busy spring summer travel seasons. Still, each country has its own sets of rules and restrictions, and what’s acceptable in one destination may not work for another. Here are the latest travel requirements and restrictions in Central American countries, according to the Central America Tourism Agency.”, Forbes, April 18, 2022

Country & Regional Updates

South East Asia

Why Southeast Asia Will See Stronger Growth in 2022 – Tourism is finally on the rebound. Increasing vaccination numbers are helping the private sector gain momentum. A revitalized private sector means improved supply chains. Increased energy demands mean innovation and jobs.”, Entrepreneur Magazine, April 9, 2022

Australia

Sydney Harbour turns on sunshine as first cruise liner returns since March 2020CLIA Australasia’s managing director, Joel Katz, said more than a million Australians a year took an ocean cruise before the pandemic. ‘We now have an opportunity to return to sailing and revive an industry that was worth more than $5bn annually to the Australian economy,’ he said.”, The Guardian, April 18, 2022

China

China GDP: economy grew by 4.8 per cent in first quarter despite ‘complicated, uncertain’ headwinds – Retail sales fell by 3.5 per cent in March from a year earlier, while industrial production grew by 5 per cent last month. But China’s economy slowed sharply in March due to the Covid outbreaks in many cities.  The unemployment rate for those aged 16 to 24 rose to 16 per cent in March, up from 15.3 per cent in combined figures for January and February.:, South China Morning Post, April 18, 2022

India

India’s annual wholesale inflation rate accelerated to 14.55% in March, completing a year in double-digit territory as firms grapple with rising input costs and pass on higher prices to consumers. Rising input costs for products such as fuel, metals and chemicals have pushed up wholesale prices, a proxy for producer prices. This is adding to pressure on retail prices, economists said. Headline retail inflation accelerated to 6.95% in March, its highest in 17 months and above the upper limit of the central bank’s tolerance band for a third straight month, putting pressure on the bank to raise interest rates.”, Reuters, April 18, 2022

Israel

First Automated Pizza Hut Now Open in Israel – From afar, the restaurant looks like a shipping container, but the 40-foot rectangular unit is packed with all manner of robotics arms, conveyor belts and other gizmos that add toppings and cook the pizza. It’s operated with input 120 sensors, 20 AI-powered cameras and it’s plugged into the location’s ordering and digital infrastructure. To keep it clean, the kitchen floods with ozone-infused water every 40 minutes. The output is a fully cooked, boxed pizza in a drawer, ready for delivery or pickup.”, Franchise Times, February 4, 2022

New Zealand

Why a (New Zealand) lawn mowing company is ditching petrol power for battery power – A swap to solar was a no-brainer for Troy Hillard. Over the past six months as the managing director for the Rite Group franchise, he decided it was time to take the lawn mowing business ‘off grid’. The Waikato-based group has since switched to battery-powered mowing equipment.” Stuff.co.nz, March 28, 2022. Compliments of Jason Gehrke, Founder and Director, Franchise Advisory Centre.

United Kingdom

The headline annual rate of CPI inflation rose to a higher-than-expected 7 per cent in March, according to the Office for National Statistics. City economists had forecast a rise of 6.7 per cent. Amid soaring inflation, traders are pricing as a dead-cert the Bank of England increasing the base rate next month. Money markets suggest that the probability of the base rate rising to 1 per cent, from the current 0.75 per cent, is 100 per cent.”, The Times of London, April 13, 2022

United States

The huge service side of the U.S. economy speeds up in March, ISM finds – An ISM barometer of business conditions at service-oriented companies such as restaurants and theaters rose 1.8 points in March to 58.3%, signaling a faster expansion in the U.S. economy after an omicron-induced slowdown earlier in the year. Yet prices of oil, grains, metals and other supplies rose even faster and indicated little relief from high inflation. Ongoing supply-chain bottlenecks were also complicated by the Russian invasion of Ukraine. Numbers over 50% are viewed as positive for the economy and anything over 55% is considered exceptional.”, Market Watch, April 5, 2022

New Study On How Labor Shortages Impact Franchising – The results were culled from responses from more than 200 franchise executives representing 197 brands and approximately 90,000 units. The results make it clear the availability of qualified labor is the number one challenge facing small businesses and franchisors are helping their franchisees address the shortage. ‘Four out of five franchise systems have experienced labor shortages in recent months,’ said FRANdata CEO Darrell Johnson.”, Franchising.com, April 2022

Brand News

California Pizza Kitchen (US) Signs Two International Franchise Agreements – Recently signed international deals include agreements in Costa Rica and Chile, bringing the brand’s locations to approximately 50 overseas restaurants. Additionally, new locations are set to open in India, Chile, Costa Rica, Alberta, Canada, as well as in the Santiago, Chile and Costa Rica, San Jose airports.”, CISION PR Newswire, March 30, 2022. Compliments of World Franchise Associates

Dairy Queen (US) Plans to Open 600 Locations in China – Dairy Queen on Thursday announced a deal with the investment firm FountainVest Partners to open 600 locations in the country by 2030, joining a rapidly growing number of U.S. brands making a bigger push in the fast-growing country. The agreement promises to further speed the growth of Minneapolis-based Dairy Queen, which already has 1,100 locations in China.”, Restaurant Business News, March 10, 2022. Compliments of World Franchise Associates

Metaverse is restaurants’ new frontier – American restaurant chain Chipotle recently teamed up with online platform Roblox to have users create meals that earn credits for real food. When they began inviting people to join their restaurant in the metaverse and collect credits for their next Chipotle order by receiving special codes, more than 20,000 people were waiting to get in. McDonald’s recently announced that it intends to open restaurants in the metaverse. Wendy’s and Hooters have also made announcements in recent days. In Canada, Restaurants Canada launched a metaverse marketplace for its industry, a trend-hunter partnership to revive the food service industry. It will be launched in May.”, Winnipeg Free press, April 18, 2022

What Makes McDonald’s France So Different From McDonald’s America – You may have heard the old saying: “if you’ve been to one, you’ve been to them all.” That same concept can apply to McDonald’s. No matter where you go, be the McDonald’s down the block or across the country, you’ll know exactly what to expect. In France, however, your trip to Mickey Dee’s may be a little more high-class than you were expecting. When you think of French cuisine, you’re probably thinking more along the lines of cheese and wine than anything resembling fast food. While this is a fair assumption, you’d be surprised to learn that McDonald’s in France are designed more around the food and the atmosphere than Playlands or drive-thru’s.”, Mashed, April 11, 2022

Regenerative Medicine Group Celebrates 100th Clinic Opening – QC Kinetix, a regenerative medicine franchise that offers a cutting-edge, non-surgical alternative to joint and pain relief, recently celebrated its 100th clinic opening. On March 26, they celebrated their 100th clinic opening in Mishawaka, Indiana, near South Bend. To mark the milestone opening, the company’s top brass and founders hopped on a plane and made a surprise visit to Mishawaka to congratulate the new team and show their support on the clinic’s first day of business.”, Franchising.com, April 1, 2022

How COVID Forever Changed the Future of Fast-Food DesignAcross the U.S., quick-service brands are aggressively altering store designs to accommodate shifting consumer preferences, so many powered by the COVID-19 pandemic. In TD Bank’s 2021 Restaurant Franchise Pulse survey released earlier this year, 55 percent of restaurant operators said they planned to add more space for pickup orders, while 45 percent were plotting additional drive-thru locations, and another 43 percent were looking to add outdoor dining space. Those figures underscore the fast-changing world of restaurant design.”, QSR Magazine, April 2022. Compliments of Ron Rosenblat, Managing Partner at GlobalKoncepts, LLC

Articles & Studies For Today And Tomorrow

Currently, there are over 4.5 billion people around the world who use some form of social media—about 57% of the global population. Yet, while social media’s audience is widespread and diverse, just a handful of companies control a majority of the world’s most popular social media platforms. Meta, the tech giant formerly known as Facebook, owns four of the five most widely used platforms.”. Visual Capitalist, December 6, 2021

“(U.S.) Social Media Usage by Age – Social media apps are on a lot of phones these days, but some tend towards a younger audience and others an older. Some are common across the population. Here’s the breakdown by age for American adults in 2021, based on data from Pew Research Center. Snapchat, TikTok, and Reddit tend towards a younger audience, as you might expect. Facebook most common in the oldest group seems right. Nextdoor likely rises with home ownership, so that seems to make sense. LinkedIn relies on employment, so the bump up at middle age makes sense.”, Flowing Data, April 2022

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Our Mission, Information Sources & Who We Are

Our biweekly global business update newsletter focuses on what is happening around the worldthat impacts new trends, health, consumer spending, business investment, economic development and travel. We daily monitor 30+ countries, 40+ international information sources and six business sectors to keep up with what is going on in this ever-changing environment. Our GlobalTeam™ covers 43 countries and provides us with updates about what is happening in their specific countries.  Please feel free to send us your input for the biweekly report. bedwards@edwardsglobal.com

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William (Bill) Edwards, Your Newsletter Editor, has a four-decade career successfully accelerating the international growth of more than 40 brands. Bill Edwards has a four-decade career successfully accelerating the international growth of more than 40 brands. Over the years, Bill has made and/or seen most of the mistakes companies make when going global. In Bill’s role as a Global Advisor to ‘C’ level executives, his objective is to impart the wisdom he has learned over time to help them minimize costly mistakes.  With experience in the franchise, oil and gas, information technology and management consulting sectors, he has directed projects on-site in Alaska, Asia, Europe and the Middle and Near East.  He has lived in China, the Czech Republic, Hong Kong, Indonesia, Iran and Turkey and has worked on projects in over 50 countries.

Edwards Global Services, Inc. (EGS) provides a complete International solution for companies Going Global. From initial global market research and country prioritization, to developing new international markets, providing in-country operations support and problem solving around the world. Our U.S. based executive team has experience living and working around the world. Our Team on the ground overseas covers 40+ countries.  EGS has twice received the U.S. President’s Award for Export Excellence.

www.edwardsglobal.com

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For advice on doing business successfully across 40+ countries, contact Bill Edwards at bedwards@edwardsglobal.com or +1 949 224 3896. 

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