This Week in Food and Restaurants
by Aristotle Munarriz (MF Edible)

Miami, FL. (March 21, 1997) -- I have a cotton candy machine. It collects dust next to my hand-powered ice cream maker in a collection of rinky treat appliances behind closet doors that never open. Cobwebs come off when the occasional social event rolls around but for the most part it's best to brand the area a time capsule. Somehow these overpriced paperweights fail to deliver the quality one expects from a yellow-lit carnival kiosk or your friendly neighborhood scoop shop.

Granted, there is nothing like chocolate chip cookies made from scratch, and everybody has a hot chocolate secret recipe which puts any retail offering to shame. Still, is it the restaurant tablecloth which makes one appreciate the dining experience over eating a similar meal at home, or simply the chance to unwind as the dirty work is done by someone else?

By now you've probably figured that the carnival has parked itself out of Edible's house and you are quite right. The annual Fair Expo has rolled into town, bringing Dade County more than two weeks of carny-inspired thrill rides and deep-fried eats. Times like these always have me reflecting on former Edible Eight stock, J&J SNACK FOODS <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: JJSF)") else Response.Write("(Nasdaq: JJSF)") end if %> which fills the world with churros, pretzels funnel cakes and Icee's. We were fortunate to time it right, picking up the New Jersey-based foodmaker at its low, and replace it in our wishlist a few months later at its high, and like any good fair ride, it has now settled in the middle.

Why J&J? Because there really isn't much there. While patrons storm right in and head to their cholesterol-induced nirvanas, the confections are not really public. Everyone has ripped off OUTBACK STEAKHOUSE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: OSSI)") else Response.Write("(Nasdaq: OSSI)") end if %> and their Blooming Onion, nobody really knows the different between an elephant ear and fried dough, and while a corporate sponsor may pay for representation the impact is often minimal. I trust you have never lost any sleep over who makes those cannisters of bavarian cream they'll rain down on your funnel cake for an extra buck.

THE EDIBLE EIGHT

The E8 continues its March dominance, this time by limiting its weekly loss to 0.7%, compared to the 2.7% drubbing of the Nasdaq market and the more respectable retreat of 0.9% by the S&P 500. Of course, while boasting is relative, it makes no sense to trumpet that we spilled less red ink than our benchmarks. As a matter of fact the Fidelity Select: Food & Agriculture Mutual Fund surrendered just 0.5% of its value over the last five trading days.

It was a week of news for a few of our stocks. Yesterday GRIST MILL <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: GRST)") else Response.Write("(Nasdaq: GRST)") end if %> announced its third quarter earnings. While sales rose 20%, earnings mirrored the $0.08 the company earned in last year's quarter. So, while margins were lower than last year, it has been a sequential improvement in the company's operating efficiency over the previous two quarters. Sales continue to take off in the company's store brand grocery sales as its private label ready-to-eat cereals and granola bars lines continue to find improving sales. New items like the recently introduced rice crisp marshmallow treats (the generic to the Rice Krispies offering) are doing well and the company expects margins to improve.

QUALITY DINING <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: QDIN)") else Response.Write("(Nasdaq: QDIN)") end if %> was strong early this week when the company announced that it is considering financial alternatives, including the possible spin-off of its Bruegger's Bagels chain. Profit-taking eroded the gains but the stock is still up 8% this month. Also, RAINFOREST CAFE <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: RAIN)") else Response.Write("(Nasdaq: RAIN)") end if %> was named one of Nation's Restaurant News Hot Concepts for 1997.

1997 Returns To Date:
The Edible Eight        +2.3%
NASDAQ                  -2.5%
S&P 500                 +5.7%
Fidelity Sel: Food      +6.0%

Until next week, Digest Foolishly,

MF Edible

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