A battle for the fryer

A fast-growing cooking oil delivery company is redefining grease work. Jeff Kiesel has found a new way to manage your cooking oil, and it’s shaking up a staid sector of the foodservice business.

Restaurant Technologies Inc., Kiesel’s Eagan, Minnesota-based company, has closed the cooking-oil loop, as it were, delivering oil, installing equipment to store new and used oil without anyone having to cart it around the kitchen and trucking the used oil away. RTI has attracted 10,000 customers nationwide and has an annual growth rate of 40 percent, sales upwards of $200 million and is bringing on about six new restaurants a week, including chains like Cheeburger Cheeburger, Folks Southern Kitchen and Buffalo’s Southwest Cafe.

Inc. magazine recently named it one of the 500 fastest growing, privately held companies in the country.

With RTI’s system, “restaurants have increased productivity, because now employees aren’t doing the worst job in a restaurant,” claims Kiesel, whose seven-year-old company now employs 500. He adds that RTI’s services are safer and cut workers compensation claims.

Darling International, the industry leader in oil removal with $300 million a year in sales, represents the more traditional service, where restaurant staff empty fryers into bins which are wheeled out to 1,500-plus-gallon containers outside the store. Darling then removes the oil, for about $35 a month.

For $700 to $800 per month, RTI delivers the oil, stores it in a 1,200-plus-pound indoor oil storage tank; a second tank holds used oil. When new cooking oil is needed, a restaurant manager flips a switch and oil is pumped from the tank to a fryer. Used oil can then be sucked out with the flip of another switch. RTI trucks used oil away.

RTI also tracks oil usage and sends out alerts when oil usage fluctuates.

Darling and other competitors, like Frontline International Inc, say they aren’t concerned with RTI’s growth because they’re not convinced the company’s business model is viable.

Indeed, even RTI clients admit an increase in operating costs. “At first I was a little apprehensive, because of not being familiar with RTI and concerned as to the value of it,” says Ed Acre, vice president and COO for 21st Century, a firm in Hackensack, New Jersey, that owns 21 McDonald’s restaurants (McDonald’s makes up about 45 percent of RTI’s business). But, Acre says, increased costs are balanced by more efficient oil management.

But Darling admits RTI’s success is forcing them to reconsider their role as a renderer. “From our perspective, being in the fresh oil business is not a great idea,” says Bob Seamann, executive vice president of sales and service. “But ... if we feel threatened enough, we would consider doing anything to protect our market share.”

Still, RTI has its weaknesses. Mike De Young, an RTI general manager, admits that the company’s pricing model works with midsize chains but not tiny mom and pops that might use less than 200 pounds of oil a week. And those in remote areas, Kiesel says, might not be serviceable.

As Steve Schwan, Frontline’s director of sales, contends, “Not every restaurant has RTI’s equipment, nor does every restaurant need it.”

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