Propel Quarterly Summer 2018 by Propel Hospitality

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MAKE YOUR VENUE THE HOME OF SUMMER SPORT 08444 175 773

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ISSUE 23 â&#x20AC;¢ SUMMER 2018

MAKE YOUR VENUE THE HOME OF SUMMER SPORT There’s an irresistible line-up on Sky Sports this summer to help pull in the customers, while you pull the pints

South Africa v England

Australia v Ireland

9, 16 & 23 June, 4pm International Rugby

England v Pakistan

Friday 1 - Tuesday 5 June, 11am 2nd Test, International Test Cricket

9, 16 & 23 June, 11am International Rugby

England v Australia

Sunday 24 June 5th ODI, International Test Cricket

British Grand Prix

Friday 6 - Sunday 8 July Formula 1®

England v India

Saturday 14 July 2nd ODI, International Test Cricket

The Open

Sunday 15 – Sunday 22 July International Golf

Call 08444 175 773 or visit business.sky.com/summer-calendar to download your free summer sports calendar

Correct at time of print: 10/05/2018. Sky Sports requires Sky subscription, equipment and installation. Scheduling may be subject to change. Further terms apply. Calls to Sky cost 7p per minute plus your provider’s access charge. THE F1 LOGO, F1, FORMULA 1, FIA FORMULA ONE WORLD CHAMPIONSHIP, GRAND PRIX AND RELATED MARKS ARE TRADE MARKS OF FORMULA ONE LICENSING BV, A FORMULA ONE GROUP COMPANY.

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uarterly The essential information resource for pub, restaurant & foodservice operators

Pine and dandy How Matt Gillan blossomed from part-time washer-upper to gaining a Michelin star and building his own empire

Inside: Fattening up Fatto a Mano The new wine wave Andrew Pern – a Star reborn It's all in the (doggy) bag Soft drinks sail the sugar tax Restaurant Marketer & Innovator On the ball for the World Cup Casual dining ﬁghts back

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Propel

ISSUE 23 • SUMMER 2018

Feature

Contents 06

14 21

Fat of the land

The new wine wave

Catch a falling Star

Growing pains

Cider looking rosy

It’s in the bag

The leader of area managers

Soft sell

Finger on the pulse

Pine and dandy

Rising to the challenge

Drinking by numbers

Raising your game

Asking the right questions

Solving real problems with real data

When the going gets tough…

Published by Propel Hospitality Unit 26, Graylands Estate, Langhurstwood Road, Horsham, West Sussex RH12 4QD

Director Jo Charity T: 01444 810304 E: jo.charity@propelinfo.com

Managing Director Paul Charity T: 07899 984814 E: paul.charity@propelinfo.com

Partnerships Director Jill Harrington T: 01444 810306 E: jill.harrington@propelinfo.com

Managing Editor Paul Bishop T: 01444 817690 E: paul.bishop@propelinfo.com

Events Co-ordinator Anne Steele T: 01444 817691 E: anne.steele@propelinfo.com

Deputy Editor Martin Cooper T: 01444 817689 E: martin.cooper@propelinfo.com

Design & Production Jonathan Taylor T: 01403 256614 E: jonathan.taylor@propelinfo.com

Fatto a Mano founders Rupert Davidson and Davinder Sahota talk about expanding their empire

Vinoteca founders Brett Woonton and Charlie Young tell Glynn Davis how they helped make wine accessible for all

How Andrew Pern recovered from losing his Michelin star to build a burgeoning portfolio

James Hacon looks at five key areas to successfully scale up a hospitality business

John Porter looks at how the cider industry can emulate craft brewing’s success

Glynn Davis celebrates the growing number of customer requests to take home their leftovers

Chris Edger questions whether promotion of middle-aged males into the pivotal role of area manager is good enough

Trade headwinds and the sugar tax have failed to dampen the soft drinks sector

Insights arising from Restaurant Marketer & Innovator

Jessica Mason interviews Matt Gillan

Despite tough times in the industry, challenges can stiffen resolve and performance says Cyril Lavenant

Paul Chase looks at figures behind claims England requires minimum unit pricing to save national health

Five top tips to boost footfall during the FIFA World Cup

John Upton reveals how key performance indicators and net promoter scores can work for your company

Solutions to some of the issues hospitality companies regularly face

How casual dining operators can fight back Contributors Lizzy Barber, Geoff Campion, Paul Carrington, Paul Chase, Glynn Davis, Ian Dunstall, Chris Edger, Ann Elliott, Steve Flanagan, James Hacon, Katy Hamilton, Anthony Knight, Cyril Lavenant, Jessica Mason, John Porter, Oliver Taylor, John Upton Printing and Distribution Bishops Printers, Walton Road Farlington, Portsmouth PO6 1TR

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www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Feature

Fat land T

he charm of Fatto a Mano lies in its standards of quality and consideration for people, which operates as a barometer to gauge each decision as the brand grows. Co-founder Rupert Davidson was previously head of development at Benugo, spending 12 years growing the operations side of the business. Before that, he had been a chef at venues such as the Dormy House Hotel & Spa in the Cotswolds and Oxo Tower Restaurant, Bar & Brasserie on London’s South Bank. He moved to Brighton 12 years ago and in 2012 opened Bread & Milk cafe in Trafalgar Street, a road that runs down from the train station into the heart of the city’s North Laine area. However, he hasn’t forgotten his roots. He says: “I’m still a Midlander from Burton. I’m not sure when you become a Brightonian. My three kids were all born here so maybe I’ll get my free ticket to ride on the i360 soon.” Davidson’s business partner, Davinder Sahota, began his career in hospitality while at university in Birmingham, where he studied law. He worked in various bars but somehow ended up with a career in investment. He says: “I’m not sure how a working class lad from Bradford ended up working in investment but at the time it was a lot of fun and I learnt a lot while working with some great brands.”

of the

Fatto a Mano founders Rupert Davidson and Davinder Sahota talk to Jessica Mason about their expanding Neapolitan pizzeria concept

During that time he worked with London bar and restaurant operator Novus. He says: “It was picking itself back up from the downturn so I knew Steve Richards and the team, who took it back to growth and invested £10m capex and reinvented the business in a lot of ways.” After working with budget high-street chain 99p Stores, taking the company from 20 stores that were losing money to 250 stores in little more than a decade, Sahota entered the private equity business in 20132014, driven by “wanting to do something more entrepreneurial”. Around this time he met Davidson through a mutual friend and they hit on the idea of Fatto a Mano.

Direction and expansion Now operating three sites, Davidson says the decisions they make regarding the direction and expansion of Fatto a Mano are rooted in the belief they don’t want to create a multiple empire just to sell it to the

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highest bidder. For Davidson, the business is built on simpler foundations. He says: “I’m not, as everyone seems to be now, in this business because I want to grow Fatto a Mano to 20 sites, sell it and make millions and end up on my yacht. I’m in it because I get up every morning and look after my family and that’s the heart of it. It’s my life and my job and, along that journey, I’m doing something I love for myself too. More than anything I do it because I’ve been in this industry since I was 14 – even while at school with a part-time job washing dishes. Working in hospitality is what I know, it’s what I love and it’s what I do. “We only want to grow Fatto a Mano naturally so we can offer progression within the company for our staff and give them further opportunities. This means we’re not out there looking for investment.” Sahota adds: “We want to build ▲

‘I’m not, as everyone seems to be now, in this business because I want to grow Fatto a Mano to 20 sites, sell it and make millions and end up on my yacht’

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FOR MORE INFORMATION CONTACT YOUR ACCOUNT MANAGER OR THE LONDON PRIDE UNFILTERED TEAM ON 0203 9079424

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Feature ‘Everyone who comes into the business is empowered to do whatever it takes to help that customer leave happy’ our own culture. We want to control the business ourselves. Brighton is a great place to grow a business because you have lots of people eating out but it’s not London in terms of spending power. However, this business isn’t a formula.” Davidson believes running a business such as Fatto a Mano is all about “fluency” – gaining finance is one thing but being a self-financed business can offer a certain amount of flexibility to offer fair pricing that doesn’t include discounting. He believes many areas of the hospitality industry have been too quick to add loyalty schemes without considering the detrimental effect they can have on devaluing a restaurant. He says: “The industry is in a state because of years of self-abuse. Of course we’re a commercial business and we need to make money for no other reason than so we can fund another restaurant to grow the business, but at the same time we are so conscious about our pricing. People want great food, amazing service and good pricing. We don’t do any deals, voucher codes or discounts – and we never will.” Pret A Manger co-founder Julian Metcalfe is held up as an inspiration on how to retain a premium image alongside accessible value for all. Davidson says: “I take my hat off to him because I think Pret is the only big-brand coffee and sandwich shop that has never launched a loyalty card. You don’t build true loyalty through voucher codes but by pricing yourself fairly and offering an amazing product.” Davidson took further inspiration from online retailer Wiggle after he ordered a bike from the company. He says: “I’d paid a lot of money for it and took a chance by paying without having seen it. The next day I was called by Ben from Wiggle, who said: ‘I’m building your bike for you.’ I had about five conversations with him before my bike

Fatto facts First site: London Road, Brighton – opened summer 2015. Number of covers: 50 Second site: Hove – autumn 2016. Number of covers: 85 Third site: North Laine, Brighton – spring 2018. Number of covers: 50 Accolades: Fatto a Mano was named one of the UK’s top independent pizzerias by the Guardian in 2017. It has also been listed as one of Brighton’s top 20 restaurants. Bestseller: Margarita pizza

was delivered and it really meant something to me. I know Wiggle is bigger now and doesn’t do that any more but at the time I thought that’s how you win loyalty.”

Training Loyalty is another major factor in the Fatto a Mano blueprint. Davidson says: “Hospitality is changing, we’re all still learning as we progress. At Fatto a Mano we just want to create a great family of people. I choose to work with the people I work with because I really enjoy being with them.” Most of the pizzaioli at Fatto a Mano have been trained on-site. Davidson says: “The plan is to invest money back into a training programme. Learning how we make our dough and becoming a pizzaioli is not a two-week training programme – it’s a year.” The company, which opened its second site in Church Road, Hove, in 2016 followed by a third – a return to North Laine – in April this year, is in the process of developing a chef’s and pizzaioli academy. It will be based at one of the restaurants while

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Davidson and Sahota are also looking at working with food colleges in the UK and Italy. Davidson says: “There is one just outside Naples we are looking at working with. In the UK we are finding a lot of local chefs want to come and learn how to make real pizza so we already have a few people lined up to come in for that too.” Empowering staff is also important. Sahota says: “We have tried to teach them a culture of doing what they think is right rather than what they think are the rules. One great thing about speaking to our staff in the restaurants rather than from a big head office is it helps them to think about what they are doing at each site and why. Everyone who comes into the business is empowered to do whatever it takes to help that customer leave happy.”

Environment That straightforward viewpoint is also apparent regarding Fatto a Mano’s environmental policy. Sahota says: “Simplicity has to be at the heart of what we do. The same goes for our environmental policy where, as well as having switched to biodegradable straws after checking with Peter Borg-Neal, of Oakman Inns and Restaurants, we amended our children’s packs. We couldn’t avoid plastic packaging for children’s juices so we decided to stop them altogether.” Davidson reveals Fatto a Mano has an uncompromising approach in terms of high-quality, fresh ingredients borne from the frustration of seeing so many venues use shortcuts to boost margins. It’s something he has promised his company will never do. Fatto a Mano is Italian for “made by hand”. He adds: “Even in some of the greatest restaurants you’d walk back of house and see a lot of freezers with a lot of products in them. Hand on heart, with our traditional handmade pizza everything is made from scratch. We have a freezer in the back kitchen but only for our gelato. Outside that, every ingredient is natural, ▲

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fresh and recognisable. People may say pizza is unhealthy but not ours, because everything we use is natural. “There are only a couple of products we don’t make ourselves, which local suppliers provide. For instance, a local guy makes our tiramisu, although we will make it ourselves at some point. I go to see his kitchen and know exactly what ingredients he is using. For Fatto a Mano it’s simple – produce the best food you possibly can with the best customer experience and build the most amazing team of people.” Fatto a Mano’s authenticity begins with its dough, although that was a bit of a struggle at first when the company opened its debut site in busy London Road in 2015. Davidson says: “People needed to get used to the product we were selling. It’s not PizzaExpress – it is a bit softer and more digestible because we prove the dough for so long. Initially we got comments it was soggy but that’s the style. Funnily enough, because we’ve been around for a while there are more people doing this style of pizza now and we get far fewer comments than at the start.” Fatto a Mano also offers gluten-free dough, although Davidson wasn’t happy with the product initially, recalling a long process of trialling recipes. He says: “We looked at them all – every option out there. When our pizza is at the top of its game – the dough, the oven, the temperature – most people wouldn’t notice because it’s all so variable, but we notice because we assess our pizza all the time. Temperature has a massive impact. We also blend our own flour mix, which depends

‘We could do [delivery] overnight because we know Brighton and Hove wants our product but I don’t want a queue of drivers standing outside our restaurant’ on the weather conditions too because blending the flour in the summer when the temperature changes can get complex. “Getting the gluten-free absolutely right took a year. I wouldn’t be so cocky as to say we make the best pizza in the world but honestly, to this day, I’ve not tasted a gluten-free base as good as ours.”

Deliver-no The company is also adamant it won’t compromise its pizza by using a delivery service, even though Davidson admits such a move could boost sales by up to 20%. He says: “We could do that overnight because we know Brighton and Hove wants our product but I don’t want a queue of drivers standing outside our restaurant. Most people would want to order a Fatto a Mano on a Friday or Saturday night, when we are serving customers in the restaurant – we’d start damaging their experience. I don’t think our products would deliver well either so I don’t want to put our product on somebody’s dining room table in a bad

Brighton brewery investment Davidson and Sahota have both invested in Uckfield-based Holler Brewery, formerly Holler Boys, which is set to open a brewery and taproom in London Road, Brighton. The brewery, which was founded by Steve Keegan, formerly of Late Knights Brewery, has a “similar philosophy” to Fatto a Mano even though it’s a separate business. Sahota says: “Steve’s a mate and a good guy. He started with Late Knights and wanted beer on a different scale, better and with more purity. We’re happy to back developing people and brands – and we want to serve customers directly. We plan to present the brand in the right way and have a great product. It’s going to be a really exciting new venture.”

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state – it would be a mistake. Our pizzas need to be consumed within five minutes of being made in the wood-fired oven. The only way we would consider it was if we opened a site with two ovens that was dedicated to delivery. But that’s not a month’s work, it’s a year or more at least because we would have to develop a new dough.” So focusing on the restaurants, how will a city the size of Brighton and Hove cope with having three Fatto a Mano sites? Davidson says: “I think the North Laine site might cannibalise London Road slightly, but we’ll see. We’ll get a nice transition of people at North Laine who are in and around town. It won’t be a destination, more like a place to pop in.” Sahota believes it’s hard to establish yourself as a business, not only in your neighbourhood but also because the hospitality industry seems to have an “addiction to more and more sites” and assessing “like-for-like pricing versus cover growth”. He also recognises the impact the “wrong growth” can have on a business compared with slow organic expansion with fewer fiscal headaches. He says: “The need to pay ever higher fixed overheads in rent and rates has forced brands down the path of discounting. This benefits only the savvy customers to the detriment of others and can lead to compromising on quality or reducing investment in teams.” However, he has sympathy for the strugglers. He adds: “None of the people in the industry, including those struggling having taken on massively over-rented sites from the wrong type of landlords, started out wanting to be less than great. The ‘chains’ do a lot right, including having the scale to invest in training and development to offer their people a career path.” Being a restaurateur is a tough game but Sahota believes adversity teaches valuable lessons. He says: “It’s hard, takes a long time and certainly isn’t a way to get rich quick. But it is also a reminder to the rest of us to stay humble.” ■

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Feature

The new wine wave

Glynn Davis talks to the founders of Vinoteca, the wine bar, restaurant and wine shop business at the forefront of a movement to make the drink accessible to all

he formality, and impenetrability to some people, of wine and its high cost perception were among the drawbacks Vinoteca’s co-founders sought to address when they formulated their idea for an accessible wine bar and shop. Charlie Young and Brett Woonton met at Liberty Wines in 2000 and found they shared similar views about the wine industry. Against this backdrop they spent the following four years developing their ideas, which would crystallise into Vinoteca. Young says: “We wanted to drop the formality and the view of wine that if you can’t

Charlie Young, co-founder of Vinoteca

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‘We wanted to drop the formality and the view of wine that if you can’t afford it and you don’t know anything about it, don’t ask about it’

Feature

“We wondered why there weren’t similar places in the UK. I thought archaic licensing laws must be preventing it but there weren’t any – it was just a cultural thing.

afford it and you don’t know anything about it, don’t ask about it.” They took their inspiration from Italy’s enotecas and the vinotecas of Spain, which are egalitarian in their openness to all and interestingly operate on a hybrid model that mixes takeaway trade with on-premise consumption. Woonton says: “We wondered why there weren’t similar places in the UK. I thought archaic licensing laws must be preventing it but there weren’t any – it was just a cultural thing. It was a case of there’s the off-licence and pubs and never the twain shall meet. We thought we’d slot a shop into a bar restaurant and merge the two.” Although there were some places around with an element of both, Young says their major focus was generally on the shop element. The concept of Vinoteca was always to do full justice to consumption on-site, with the early thinking giving more than half to each element. They were able to put their plans and thoughts into practice when they secured a site in Farringdon in the City of London in 2005 after a lengthy search while committing their own money and taking out a loan. Having no business experience, it was a steep learning curve but the fact they ran the unit themselves for the first three years gave them in-depth knowledge of all the operation’s aspects. An early decision was made to change their initial thoughts of offering simple Spanish cuts of meat and a full dining menu by offering a pared-back menu that could be created from the outlet’s small kitchen in a bid to attract lunch trade. Young says: “For this we needed more space for bums on seats so we changed things – but it was carried out right at the beginning.” ▲

Brett Woonton, co-founder of Vinoteca

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Feature The menu remains concise and seasonal with eight starters and eight mains, just as it did from the outset at Farringdon. You might find ham hock terrine with piccalilli and sourdough toast and grilled Lyme Bay squid with fennel, smoked paprika and aioli as starters. Grilled Cornish mackerel fillets with rainbow chard and sauce vierge, and marinated Scottish bavette steak with hand-cut chips, watercress and horseradish could be among the main dishes. Each dish has a recommended glass of wine printed against it on the menu but isn’t the runof-the-mill wine or trophy name often found in restaurants and wine bars. These unusual choices take us to the heart of Vinoteca. Woonton says: “The challenge was in building the wine list. We had to look for our USP. We wanted to fly the wine bar flag high, alongside the food.” The big question, however, was how far could they go in terms of challenging customers and their preconceptions of wine? Woonton adds: “We said let’s go as far as we can. We knew we just needed to get the wine in front of people.”

Pushing the boundaries Getting customers to opt for offerings from regions they had never heard of and containing lesser-known grape varieties requires them to try the wine. The key part of tempting people to try something new has been a comprehensive offer of wine by the glass. If we take the recommendations with each course, there is a selection of 16 wines. Willingness to move into bag-in-box and wine on tap has enabled Vinoteca to push the boundaries with its by-the-glass offer, which is broad in its reach. Young says: “We do anything by the glass as long as it’s really good and good value. We want customers to try different wine then, when they trust us, they become comfortable with us and our offer. We sell a huge amount of wine this way and we’re pleased we did it. It’s had a very positive effect on the business.” This approach also helps the company sell across its full range of available options. When aligned with the fact the list has been gradually reduced from an original 300 to today’s 200 wines then “everything on the list moves”. Young adds: “We’re not interested in trophy wines that rarely sell.” The number of wines on the list is Vinoteca’s “sweet spot”, as it provides sufficient choice while also being manageable. The list is changed twice a year, when 40 will typically change. This presents its own challenges but things are made easier logistically by the company’s decision to purchase all its wines through distributors, twothirds of them based in the UK. Even though this involves giving away some margin, it avoids dealing with the complexity of shipping globally and having to sit on lots of stock. It also enables access to wines that are exclusive to individual distributors. Trophy wines are not completely off the agenda as proven by the Wine Ledger sublist, which was created specifically for the company’s most recently opened outlet – at Bloomberg Arcade in the City of London. The pink, folded A4 sheet lists about 40 wines consisting of odd bottles Young and Woonton have picked up on their travels.

Vinoteca, in Farringdon

Vinoteca in numbers Number of units: Six Food and drink split (excluding retail): 50:50 Average spend: £38 to £40 Fixed-price lunch: Two courses £15.95, three courses £18.95 Wine by the glass: From £4 for 125ml

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Some bottles – such as pricey Bordeaux vintages – no doubt appeal to affluent males who work in the City but the Vinoteca site still fits firmly within the accessible-to-all model originally created. Young says: “When we were introduced to Bloomberg’s right-hand person we were told they wanted something different to the typical offers in the City that cater to male bankers over the five days of the working week. They simply wanted us to be us.” The City site represents Vinoteca’s sixth and largest unit, with 150 covers inside and 50 outside. Its launch follows a 2010 opening in Marylebone, a site with 60 covers that was a step up from the modest 35 at the debut site in Farringdon. Then came Soho in 2012, at which point the company gained a non-executive director and investor in Paul Campbell, former chief executive of Clapham House Group. Young says: “We didn’t need investment but we did need experience of growing a business. Paul brings these things.” ▲ Vinoteca City bar

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Vinoteca, in King s Cross

With Campbell on board they decided to test the model outside central London. Woonton acknowledges although the rent was “insanely cheap” at its Chiswick location, it was also a difficult site to get right. A lot of hard work was undertaken to understand the psyche of the local customer base and to gradually build a regular clientele. Woonton says: “We kept plugging away to let people know what we were about and to understand our customers.” In 2015, Vinoteca moved its focus back to the centre of London with a unit in King’s Cross, which was its first new-build site and a step-up in size with 100 covers inside and 50 outside. It also features a sizeable retail area, with takeaway sales accounting for 20% of revenue. This is also the level at Farringdon, whereas at Soho it is only 10%.

“A wave is under way. You’ve got the likes of Sager + Wilde, which is plugged into the hipsters, and at Vinoteca we have our broad mix of customers. We are making things accessible – and a lot of people like it.”

wines change per year on Vinoteca’s full list of 200

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This is probably a lesser figure than the cofounders imagined at the outset but is sufficient to prove they have overcome the initial challenge of having two sets of prices – one for retail and the other for on-site. Typically at the lower end, a £9 bottle at retail will be priced at £20 to drink on the premises, while a bottle at £60 retail has a lesser differential, with a price around the £94 mark for drinking on-site.

Multi-channels The larger retail element at King’s Cross has enabled Vinoteca to use the unit for its online shop and the wine club it launched in April, for which membership involves a subscription of £80 or £120 per month for six bottles delivered to your home. This represents Vinoteca’s first shift of focus away from outlets only. Young says: “The catalyst has been the possibility to cross-pollinate with the restaurants. We can offer members discounts in the restaurants and invites to events.” Young is clearly excited by the prospect of this multi-channel proposition – but that doesn’t mean there are no more units are on the agenda. Although Young says there are “no dramatic plans for world domination”, Vinoteca has signed to take a unit at the Paradise development in the centre of Birmingham, which will see the company take its first steps outside the capital when it opens in 2020. Until then, Vinoteca can enjoy the fact it has found its place in what, if not a wine revolution, is a sector where a new generation of winelovers are opening independent and individual venues with the belief wine is for everybody. Young says: “A wave is under way. You’ve got the likes of Sager + Wilde, which is plugged into the hipsters, and at Vinoteca we have our broad mix of customers. We are making things accessible – and a lot of people like it.” ■

PREMIUM OPERATOR

SOUGHT FOR NEW-LOOK

PEAK DISRICT HOTEL The George Hotel is an iconic building set in the heart of the historic Peak District town of Glossop, just a stone’s throw away from the train station. Established in 1850, this beautiful old pub is now set to receive circa £1 million investment from Punch Taverns, to truly transform this into a luxury 10 bed-roomed boutique hotel & bar and is now available on an agreement to a premium operator. The George Hotel will have a light and spacious open plan trading area with separate drinking and dining areas and the refurbishment will give the décor a light and contemporary feel with a hint of the Orient Express. The ground floor will host the restaurant with over 100 covers and impressive focal points of a large and extravagant wood burner, glass ceilings and a floor to ceiling real olive tree, giving guests an opulent dining experience. Sitting just to the front of the restaurant lies an intimate coffee lounge allowing guests to enjoy drinks and conversation. Situated at the entrance of the hotel will be the bar, with bi-folding glass doors which open onto the pavement, allowing guests to watch the world pass by. Following the wooden staircase to the first floor it will take you to the ten individually designed bedrooms. All of this will be loving wrapped up in a new exterior and new signage turning this site into a new luxury boutique hotel and renamed The Station. Along with its sophisticated new look and name, this hotel and bar will need a new operator to offer a premium food and drink concept to attract the growing demand which is not currently being offered by the local bars and eateries.

If you are interested in ﬁnding out more please contact, Vicky Brown – 07976 948681 / 01285 501999 or email: Vicky.Brown@punchtaverns.com www.punchtaverns.com https://www.punchtaverns.com/pub/george-hotel-34-norfolk-street-glossopsk137qu/ our website advert video: https://youtu.be/vFW8ubNPN24

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Feature

Catch a falling Star Glynn Davis talks to Andrew Pern about how he recovered from the disappointment of losing Michelin recognition for his debut venue, The Star Inn at Harome, to regain the accolade and build a portfolio

he Star Inn at Harome in Yorkshire enjoyed the exalted position of being a proper pub that held a coveted Michelin star for nine years. It was credibly pushing for a second star when, in 2011, the venue was stripped of its precious star. The decision left owner Andrew Pern devastated. He says: “It was major bad news. I thought we had a strong team with an executive chef but it diluted what we were all about. It was a real kick in the nuts. We dropped £250,000 turnover that year but it was really more about me losing my street cred and not being with my mates any more – I was out of the Michelin-star gang. I didn’t go to any awards after that.” What also played its part in the star’s loss was the fact Pern was not only going through a divorce but was in the throes of organising another opening. This highlights the perennial challenge top chefs face – how to hold on to accolades at the mother ship while building a multi-venue business. The approach Pern took was to roll up his sleeves and, with a stripped-back brigade behind him, commit everything to winning back the star. It would take years of hard graft to

“I was quite cautious and protective of The Star. I saw York as a sideline project”

The Star Inn at Harome

achieve his aim, with the Michelin star regained in 2015 and retained since. Meanwhile, he moved things along in a measured manner at his new establishment – The Star Inn The City in the centre of York. He says: “I was quite cautious and protective of The Star. I saw York as a sideline project.” Pern adds his focus at the new outlet was purely on the kitchen and recruitment. He was able to do this by taking a joint-venture approach with a group of individuals who all brought complementary skills to the table. He says: “It’s a syndicate of people including a property developer, an accountant, a food supplier and a solicitor. We all offer something different.” Pern adds although he puts “very little money” into the venture, his name is on the venue and the whole enterprise hangs on his culinary skills. What it also relies on in terms of customer pulling power is The Star Inn’s credentials, including its Michelin star and a load of history after Pern built the business from a closed pub in 1996 to one of the best in the UK. He says: “I tried to buy it in 1995 when I was 24 but couldn’t get the finance – but after ▲

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Feature playing rugby with the bank manager and buying him an extra bottle of wine during a meal, I got the deal.” Having been classically trained in French cuisine – including a Roux Scholarship – Pern sought to build his own style. He says: “I wanted a Yorkshire version of what Nigel Haworth was doing at Northcote Manor in Lancashire and Terry Laybourne was doing in the north east. We did the classic Yorkshire things and polished them.” For two and a half years, Pern was in the kitchen seven days and 100 hours a week, while his wife ran front-of-house and his mother was behind the bar. This helped build a solid platform. He says: “It’s still a proper pub. We’ve dominoes and a television in the corner for the rugby. You can come in and do anything from having a pie and a pint to a tasting menu – there is something for everybody. It’s the quintessential thatched pub with a great ambience. This is the essence of The Star Inn.” Proof of its pub credentials is the fact it enjoyed a massive 51% year-on-year increase in sales in December, largely as a result of big trade over Christmas as locals suffered the closure of others pubs in the area and sought solace and beer in The Star.

“Star Inn The City is very brasserie-like with burgers and grills but we also have specials that are Michelin-level dishes to keep the chefs happy!”

Bib Gourmand In 1998, The Star received a Bib Gourmand from Michelin. The body was clearly puzzled by the place, asking Pern in 2001 whether the venue was a pub or restaurant? He told them: “Both.” This oddly seemed to clarify things with the star-givers because a year later Pern rang Michelin to ask about the retention of his Bib Gourmand and was told he had lost it – but would he like a Michelin star instead? Elation followed and so began his relationship with the Michelin star that would bring highs and lows. By 2015, Pern had managed to work out the correct balance of holding a star at his Harome base and successfully running Star Inn The City, which he says leverages the work at The Star Inn and competes effectively with what he describes as the “dismal national chains in York”. He adds: “It’s a brassiere version of The Star Inn, with lots of local game and a taste of the Yorkshire countryside. We’re working with the seasons and not overcomplicating things.” Although Harome has always been profitable, Pern says: “The money has always been ploughed back into the business. We spend far too much money on it. We make more money from the brasserie.” What Pern did find a challenge initially was the issue of customers expecting Michelin-star food and service at the new place. Whereas some chefs succumb to this and deliver a replica of their original restaurant, Pern took the opposite approach and “went even more brasserie”. He adds: “It’s very brasserie-like with burgers and grills but we also have specials that are Michelin-level dishes to keep the chefs happy!”

Happy staff Keeping the staff happy is certainly a priority for Pern and integral to him making the multiple-venue model work. He says: “They have all worked at Harome and we don’t want to lose them to the competition so we promote them to the other venues. We can move staff around because although there are different styles of cuisine, they are all under The Star Inn umbrella.” The York move proved so successful, Pern felt confident enough to expand his empire further and today his portfolio includes Mr P’s Curious Tavern and Star Inn The Harbour. The Star Inn The City broke all records and has only just reached a plateau after five years. It accommodates 150 covers and its location helps it serve up to 6,000 covers per week in the summer months, while cocktails and Pilsner Urquell tank beer can drive weekly wet sales of £20,000. Mr P’s Curious Tavern opened in York in 2016 and has even more

Wet:Dry split The Star Inn

The Star Inn The City

Mr P’s Curious Tavern

focus on drinks, which would complement its theme of Yorkshire tapas if it wasn’t for the fact Pern says he hates the term and prefers to call it “small plates with big flavours”. Whatever the description, the menu includes smoked pheasant scotch eggs with mushroom ketchup and Yorkshire blue cheese macaroni. He says: “It has echoes of The Star Inn – we piggy-back on it.” It’s the same scenario at The Star Inn The Harbour, which opened last year in the heart of Whitby. It specialises in seafood with only 25% of the menu featuring meat and, as a son of Whitby, Pern says he is proud the first boat into the harbour in the morning is his lobster supplier. Pern acknowledges he could have simply rolled-out his proven brasserie concept but chose the more complex option of having four different venues because it “gives people four different reasons to visit my restaurants”. Some people will dine in all four venues, which are within a ten-mile radius of each other. As to future outlets, Pern admits that despite having received many offers to open in places such as Manchester and Birmingham he has always declined. There is only one place that interests him – London. He says: “It would only work there as we need a diversity of clientele. It would not be popular in, say, Lancashire to have a Yorkshire focus! I’d love to do a restaurant in Covent Garden or Soho – with hopefully more than seven covers!” Such a move would surely take him away from his beloved Harome, which continues to be his main focus. He spends five days a week in the North Yorkshire village – partly because his home was attached to the pub’s accommodation some years ago but also because the other venues don’t demand his attention as much. He adds: “I’m very easy going about things.” That might be true of his character but that might fall down a bit when it comes to the thorny subject of Michelin stars. He prefers not to mention a second Michelin star because, with the benefit of hindsight, he knows it is more important to keep the one he already has. He says: “We can always wish and we are in a better place now with the team having been here longer. But having lost one, I know it is better to retain the one we already have. It was awful losing it. We can’t forecast these things. It’s got to be a profitable business at the end of the day and not tailored to winning awards.”

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Opinion

Growing pains

James Hacon looks at five key areas to successfully scale up a hospitality business

rom meeting entrepreneurs in our sector there are Richard Morris, of Tortilla; and investor Paul Campbell, of Hill two distinct schools of thought. In the first camp is the Capital Partners. passionate foodie, chef or aspiring restaurateur who has decided to head out on his or her own, perhaps FIVE KEY AREAS EMERGED: giving up the corporate world. Often the admirable passion for Know yourself product and food drives the agenda, with the output being a great concept which, if delivered well and in the right spot, will To be successful and enable scale, you have to balance the right smash it if driven by perseverance and lots of hard work. skills around the table. It’s vital you know your own strengths In the second camp you have a very different kind of and weaknesses to help you effectively fill the key roles person, who sets out to build eating around you. For someone who is operationsout brands that are designed to scale. Of course focused, you may want the support of someone people from the first camp can build their with a marketing or growth background. If “Initially think concept into a brand and open new sites, but a great creative, you’ll probably want an in clusters when this could be more organic and take longer. operations leader with strong process and planning your roll-out, A way of thinking has certainly developed people skills. Almost unanimously, everyone for those setting out to create a brand could agree you need a strong finance which means you can for scale. Usually you will invest in central leader – at the early stages that could be provide the best level infrastructure pretty quickly, financing will be as an advisor. In addition to the full-time of support to the sites higher on the agenda, and potentially you support of business leaders, having a strong will have spent more energy on the branding advisor or non-executive is priceless, both and save wasted and visual identity. You might choose suppliers for support and their guidance. Again, pick hours of travel” that work nationally and the filter for decisionsomeone who complements your skills and ideally has been there and done it, with experience making will often focus around how you deliver in scaling brands. consistency. A lot of companies we work with fall into one of the Beware of distance camps, almost always supporting growth. Sometimes this When scaling it’s easy to get excited about the far-flung involves helping to take people from the first camp into a opportunities or look quickly at a national roll-out. The advice position where they can scale but mostly it’s about helping from the panel was not to let the perceived glamour get in the people who plan to scale at an early stage or to accelerate from way of the grind. Take it from me, as much as I try to make my ten or 20 sites. life look like a ball on Twitter, driving 250 miles up the M1 at 5am When I was asked to moderate a panel recently on every week or sitting on a train to Glasgow is far from the high overcoming growing pains, I jumped at the opportunity, life. Initially think in clusters when planning your roll-out, which especially when I saw the panellists – four great leaders who means you can provide the best level of support to the sites and have developed stand-out multi-site brands. They were Jillian save wasted hours of travel. ▲ MacLean, of Drake & Morgan; Simon Potts, of The Alchemist;

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Opinion Don’t be frightened of tough conversations As businesses grow, so do the skills required to run them effectively. Risk Capital’s Luke Johnson has a theory the pinch points in growing a restaurant business are seven, 17 and 70. Our panellists, who all had experience of passing the seven and 17 mark, agreed with the principle. At seven sites it was felt you needed to let the entrepreneurship in the brand live but have a team that could implement process. At 17 sites, it was time to put a broader range of controls, processes and a more formal communications structure in place. Within these life stages it’s almost undoubted key people will need to change. It’s important to have up-front conversations about this as you recognise the challenges, then work quickly to find someone with the new skills you need. The bigger challenge many entrepreneurs don’t face is when they are no longer the right person for their business – personal reflection is key, try to remain a help and not a hindrance. That can mean becoming hands-off and passing the chief executive role to someone else. This is particularly pertinent if you are looking for substantial investment at a later stage, although for the most part investors will want to see you committed and working hard for your business. The Alchemist (above), Drake & Morgan (below) and Tortilla have all passed the seven to 17-site difficult stage

Build a solid pipeline You’ve read the title and probably think I’m referring to sites but no, you need to build a strong pipeline of managers in the business. One of the brands onstage worked on the basis it doesn’t hire general managers from the outside, it hires assistants and then promotes from within. Every site opens with an existing general manager moving to take the role. That’s impressive – but not always practical of course – but it’s certainly something to aim for. To retain and build your culture it’s a sensible way to go, hiring a new manager for a site and dropping them in to train at another for a few weeks may give them a taste for the culture but not embed them in it. If that’s not a practical option, then heavy investment in training is vital. One of the brands has three distinct training areas – one for food, one for bar and one for service – each with a regional trainer in place. Another worked on having full-time trainers at each site. Both impressive models which, in my opinion, shine through in the experiences at their respective brands.

“The key to holding on to the magic is spending time defining what it is that makes your brand and culture special” Culture changes The big question on everyone’s lips at this type of event is how to retain the brand essence and culture as you scale. No matter who I talk to in the sector, it seems there is no golden bullet. In fact, what I hear most often is it’s probably more important to understand that the brand will evolve and culture will change over time – it’s undoubted. The key to holding on to the magic is spending time defining what it is that makes your brand and culture special, then simplifying your messaging and ensuring it is regularly and consistently delivered to teams across your business. I’ve worked with many companies to help them better define and refine their brands and culture. Often to me the missing link is communication. It’s vital you get face-to-face time with your teams from senior leadership but, as you scale, it’s equally important you build an internal communications process that enables you to inform and inspire your front-line team members. It will make your growth all the more easier having an engaged and motivated team.

James Hacon is managing director of Think Hospitality, which advises multi-site brands on growth, brand and development strategy as well as investing in early-stage concepts with a bright future

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Cider Looking Rosy It’s a drinks category on everyone’s lips but how can the cider industry emulate craft brewing’s success? John Porter reports

hen drinks analysts of the future attempt to identify the point at which craft cider went from an aspiration on the part of cidermakers trying to emulate craft brewing’s success to a genuine consumer trend, the first half of 2018 should, if not settling the argument, certainly provide some key milestones. Earlier this year, Molson Coors confirmed its acquisition of Suffolk-based Aspall Cyder in a deal reputed to be worth about £40m. Family-owned since it was founded in 1728, sixth-generation owners, brothers Barry and Henry Chevallier Guild, took the view the sale was the way to continue the strong growth Aspall enjoyed on their watch. Barry Chevallier Guild said of the deal: “Molson Coors is known for respecting the provenance of local brands it has acquired in the past and has the scale and expertise to accelerate our growth in the premium cider category in the UK and beyond.” A few months later, Scottish brewer and retailer BrewDog announced its “strategic investment” in London-based cider producer Hawkes. Describing Hawkes founder Simon Wright as a “kindred spirit”, BrewDog founders James Watt and Martin Dickie said: “Cider has a massive opportunity to be so much more than a sweet, fizzy pint of something soulless or a sickly pink drink with more calories than a coke. Cider can be as much a craft beverage as beer and has a future as bright as brewing.”

rate increases sharply at 4% ABV and then Family-owned cider-maker Westons, more than doubles again above 5.5%. which owns brands that include Stowford Press and Caple Road, has begun a This works against the development of strategy to grow its overall business by 40% new, higher-strength ciders which, Mitchells during the next five years and has seen & Butlers beer and cider on-trade sales buoyed by itss launch of 4% procurement manager Ben pro ABV draught variant Stowford Lockwood says, have the rd Press Mixed Loc Berries. CGA figures show fruit potential to engage craftruit cider pote has been driving cider’s on-trade centric consumers. trade centr volume and value growth forr several Recently back from a trade Rec years, with Strongbow Dark visit to CiderCon, held by the Fruit from Heineken now United States Association Uni the UK’s second bestof o Cider Makers in ‘CGA figures show selling draught cider. Baltimore, where he B fruit cider has been tried everything from However, some t an Earl Grey cider to observers argue fruit driving cider’s ona Himalayan salt cider, cider is in fact an trade volume and Lockwood rues the fact evolution of the readyL value growth for the to-drink and alcopop th level of innovation seen market, tempting younger se in the US is “just several years’ not happening here”. He drinkers by offering a highlyy adds: “When I think about sweet flavour profile. who A genuine craft revolution h would fall into that category, I struggle. Hawkes has done a great job of requires high levels of product innovation leading the charge but there aren’t many and the cider industry argues it is joining in behind that are simulating what hampered by duty regime. Rules designed craft beer has done.” to tackle the problem of high-strength Acknowledging the challenge the UK’s white ciders impose a much higher duty duty regime creates, he says: “In the US level on sparkling ciders that are above a lot of cider producers don’t lead their 5.5% ABV, while the higher duty rate for innovation with apple, they lead with still cider only kicks in at 7.5% ABV. variants. For example, there’s been a rosé Flavoured ciders also fare badly under wine resurgence in the US so their cider HMRC rules, with anything made with fruit producers are bringing out rosé ciders on other than apples and pears falling into the the back of that trend. ▲ “made wine” category, for which the duty www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Feature

10,000

number of people The Stable hopes to sign up for cider experiences in the next 12 months

“Mitchells & Butlers is looking abroad for cider innovation at a higher ABV because we’re not seeing it domestically. Everybody here who produces a hopped cider or a fruit cider produces it at 4% because they can’t afford to do it any other way. In the US, because hopped ciders are 5.5% or 6%, they’ve got a lot more body so they are worlds apart from the hop ciders over here.”

Appealing to ‘explorers’ With cider volume growth mainly being delivered by mainstream fruit brands such as Strongbow Dark, Lockwood sees potential for a broader range of more authentic ciders across the Mitchells & Butlers estate, from town centre venues operated under brands such as Nicholson’s and Castle, to food-led country pubs. New product development (NPD) is required that would appeal to the “explorers”, people looking for something new and willing to try things. Lockwood said: “I don’t think craft is a word that has made it into cider, much as it should have. I think the customer movement would be there, but so far the products have not.” Lockwood says cider sub-brands such as Road and Stan’s by Thatchers are a step in the right direction but he feels so far brewers such as Fuller’s and St Austell have done a better job of adapting their beer ranges to appeal to craft consumers than the established cider players have been able to do. He adds: “In the younger craft beer demographic, startup brewers such as Beavertown and Anspach & Hobday are throwing caution to the wind in a way cider suppliers don’t. It’s that youthful, energetic take on the category you’re not really getting from cider producers on a national level, other than Hawkes. Although cider brand owners work hard to create a year-round market, you

still see a massive sales spike for cider in at one of our bars and don’t know what the summer. Regarding pairing cider with you fancy, I can guarantee you’ll be taken food, Lockwood says: “There is definitely on a journey.” The Stable’s cider masters an opportunity but there’s still a huge also hold regular “cider experience” education piece to be carried out with events for groups, which Gough says has consumers on cider.” proved particularly effective at converting The education gauntlet was picked up 20-something consumers, whose only cider towards the end of 2017 with the relaunch experience had been mainstream brands, of the Beer Academy as the Beer & Cider to new, usually flavoured, brands. Academy, with a focus on the on-trade as Gough adds: “By the end of it we can well as consumer education. A suite of cider find two or three authentic courses paralleling the academy’s beer ciders they enjoy. We’ve cide training has been developed converted a lot of people loped by Gabe Cook. conve The television and radio “ciderologist” uneducated from being b is also working with The he Stable, about cider with no favour the 17-strong pizza, pie e and cider profile in mind. Some brand that is 76% owned are there for fun and ed by Fuller’s people a and has an expansion programme in genuinely for education, some genui place. Cook has helped we’re targeting at least d and we to develop a “cider 10,000 10,0 people for those master” training cider experiences in the cid ‘We feel we’re a bit of programme for next 12 months.” ne a cider revolutionary, staff at The Stable The Stable, and a big part of that and also advises however, is not h the company on its immune to consumers’ im is education. We’ve got cider range, which perception that cider p 22 cider masters’ varies at each site is a seasonal drink. He The Stable operations so it features local says: “It is so dependent say producers. On an w director David Gough on weather. average David Gough, averag week about 60% of our draught sales are cider, operations director att The d and that can Stable, says: “Gabe defi nitely efinitely ca go up to 70% when the weather is hot. In context, we’ve seen keeps us on our toes – we’ve got more continual growth – it has probably grown ciders in every Stable than you’ll find at by 2% to 3% a year for the past three years, most cider festivals. We get described from about 50% of draught sales.” as the cider equivalent of BrewDog. We feel we’re a bit of a cider revolutionary, The Stable’s sales have been helped and a big part of that is education. We’ve by its launch of house cider Rapscallion, got 22 cider masters, with 14 of those produced by fellow Fuller’s-owned business on Level 2 of the internal education and cider-maker Cornish Orchards. piece we’ve created with Gabe. There’s a Gough says: “It is a 6.5% ABV, lightly really high level of understanding of the sparkling, easy-drinking quality craft cider product range.” and, because we’re selling it confidently and customers trust The Stable, we’re That cider knowledge is passed on helping to shift the focus away from ▲ to consumers. Gough says: “If you stand

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PROPERTY PROFILES

Propel showcases pub, restaurant and food service property opportunities currently available

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THE RISING SUN

THE EXETER INN

We are looking for an energetic operator to lead this exciting new launch. The Claremont (new name) sits in a vibrant area overlooking the historic city of Bath, enjoying great views of the whole city. Previously a standard community proposition called the Rising Sun, we are investing heavily in this pub to transform it into a more modern and relevant concept in the area. The new layout and interior will embrace the local demand offering craft beers, contemporary food and premium wine and spirits in an exciting environment. An overhaul of the external areas will provide a true oasis in the local area.

The Exeter Inn is a destination inn that boasts great kerb appeal on the edge of Exmoor National Park. It’s a thriving, multi-dimensional business, with 7 letting rooms included in its impressive portfolio, but it’s brand should centre on rural charm – whether welcoming walkers and dog owners, families, local residents, tourists or business travellers. This pub should be renowned for its good food, ‘country comfort’ accommodation and old-fashioned hospitality – and the incoming publican will be keen to work alongside the improvements Punch plans to make to deliver an outstanding customer experience.

7 day gross sales security deposited required

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JOLLY ROGER

FILLY INN

This well-positioned waterfront pub that benefits from great views over Portsmouth Harbour to the dockyards. It successfully blends destination-style dining with locals’ drinking trade, carefully balancing these two very different aspects of its business. It’s about to benefit from significant investment to fully refurbish key areas of the trading operation and introduce a more contemporary feel. 7 day gross sales security deposited required

The Filly sits in the middle of the picturesque New Forest along the busy A337 just outside of Brockenhurst. With a large footprint, the Filly beneﬁts from a large carpark, 5 quality letting rooms and a strong reputation for food in the area. Ideal for visitors, walkers but also with a strong local following. The Filly can be exceptionally busy in the peak summer season whilst maintaining a strong following during the quieter months. 7 day gross sales security deposited required

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Feature

flavoured ciders a little more. That trend is still there, but we don’t really want to go down the route of creating a flavoured cider. We have to stick to our game, which is all about procuring local, artisanal, traditional craft cider.”

Getting people talking About 20% of the draught cider range at each Stable site is delivered directly by producers in bag-in-box format. By working with specialist distributor Cider Box, many of those suppliers have also expanded their range. Gough says: “We’re in a lot of tourist locations where people want to enjoy local produce, and we’re supporting local producers more than ever because we’ve created a distribution channel.” The Stable is also running a cider of the year competition, with customers voting on ten shortlisted ciders. The contest will be held during the summer, culminating in five finalists being judged in September. The company also plans to attempt a world record for the number of people simultaneously taking part in a cider tasting. Gough says: “During the judging period we’re expecting to serve more than 500,000 pints of cider. We want a summer campaign people can get behind to talk about cider.” Chevallier Guild might peruse on-trade cider activity with a slightly more detached view than he once did following Aspall Cyder’s sale to Molson Coors. However, he adds: “We’re still very much involved and, happily, at the moment they’re passing everything by us.” He compares Aspall Cyder’s position in the Molson Coors portfolio to that of cask ale Doom Bar, which has seen distribution dramatically increase since the 2011 acquisition of Sharps Brewery. Chevallier Guild says: “Barry and I always said we had barely scratched the surface of Aspall in terms of reach and being within the Molson Coors portfolio is helping to strengthen that position and

The on-trade cider market • Consumer spend on cider: £1.86bn • Cider drinkers are split 53% male /47% females - this rises to a 67% split in favour of females for fruit cider • Draught is 71% of cider volumes • Apple is 63% of cider sales, fruit 35%, pear 2% • Average on-trade price of a pint of cider: £3.68 Source: CGA figures compiled for the Westons Cider Report 2018

even keep the integrity of the brand in a way we probably wouldn’t have been able to do by ourselves in the long run. “Molson will invest a huge amount in the fermentation side, which means scaling up what we do already is much easier. We’re also looking to set up some genuinely interesting NPD around the types of apple we use and types of fermentation, and that is what is interesting me at the moment.” Picking up on points raised by Lockwood, Chevallier Guild adds: “As

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Ben says there’s a lot of debate over the definition of craft, and not only in cider. We do look to the US and see all that innovation but I’ve always felt one of the things we’ve always done really badly as an industry is celebrate the core – excuse the pun – of what it is we’re good at. “We grow the best apples in the world, we have more bitter-sweet apples here than anything else. It’s slightly akin to asking why Krug doesn’t do a flavoured Champagne? Would Pomerol decide the brand needed freshening up because the Bordeaux merlot had become a tad tired? Innovation for the sake of innovation overlooks the fact we have this wonderful raw material that doesn’t get celebrated enough. “The on-trade is looking for new producers, and that’s always something to be celebrated. The risk is you’re celebrated one day and old hat the next. I was told by a Shoreditch bar owner that Aspall had ‘gone mainstream, you’re everywhere’. We were 1.8% of the market!” Chevallier Guild identifies craft consumers’ promiscuity when it comes to choice of drinks as a key challenge. He says: “Consumer choice is enormous now. There is a fantastic selection and the on-trade has done that extremely well. It sometimes feels the broader product range triumphs over the qualitative aspect, but that’s not just true of cider. From a brandowner’s perspective it can be difficult if you’re not seen as the next big thing. “When you look at how millennials drink, I think we’re going into a phase where they don’t just want to go to the pub – there’s a need to make it an event. Cider and food pairing can be part of that, but it has to be a high-quality, high-juice cider to pull that off. We see ourselves moving into that sphere.” CGA has forecast further launches of cloudy premium draught ciders such as Strongbow Cloudy Apple and Thatchers Somerset Haze, which are seen by consumers as having more authentic credentials. Beyond that, it seems fair to say on-trade operators would like a little more clarity from cider producers when it comes to making the most of the craft drinks revolution. ■

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Products

Propel’s Top Product Picks Funkin Cocktails Funkin taps into cocktail boom with draught concept

Big Al’s Big Al’s World Cup kit The World Cup, taking place in Russia this year, kicks off from 14 June. A busy time for the pub and stadia sectors, the summer sporting event provides operators with a great opportunity to increase their sales and footfall. Big Al’s is dedicated to making match days easier and spread understanding of the challenges involved in preparing for sporting events. Big Al’s has developed the World Cup kit with its customers in mind. Complete with a bespoke wall planner and themed menu cards, the kit is perfect for venues wanting to get in on the sporting action and will enable operators to profit from the busy summer of sport.

The UK’s number one fruit purée brand, Funkin, is launching Premium Batched Cocktails on Tap – a smart solution for nightclubs, arenas, outdoor events and high volume pubs and bars seeking to capitalise on the cocktail opportunity. The serves are among the UK’s best-selling cocktails, Pornstar Martini, Piña Colada, Pink Grapefruit Gin Collins and Mojito. Funkin Premium Batched Cocktails on Tap delivers balanced, quality cocktails, reduces wastage and customer waiting time. Operators can use existing equipment minimising investment. The cocktails are dispensed from 20-litre one way KeyKegs each containing 133 (150ml) serves.

t: +44 (0) 20 7328 4440

Image for illustration purposes only

e: info@funkin.co.uk

Red Bull Red Bull Sugarfree The UK’s number one low kcal functional energy brand, Red Bull is expanding its sugar-free range in its commitment to become more relevant with current health and category trends and drive market growth. The launch includes the completion of Red Bull Sugarfree, with a 355ml PMC pack offer, whilst the brand has also revisited its Editions range, and consumers can now enjoy two leading Red Bull Editions – Tropical and Orange – as a 250ml can sugar-free option (PMC and plain). The launch has also seen the brand extend its bestperforming portfolio with the addition of the first Red Bull Sugarfree 473ml can (PMC and plain).

w: www.bigalsfoodservice. co.uk/worldcup

Coca-Cola European Partners Celebrates 132-year heritage

With a history dating to 1783, Schweppes is a much-loved brand that’s instantly recognisable to consumers and a good choice for operators looking to make the most of the growing popularity of mixers. It’s more than 225 years since “creator of bubbles” Jacob Schweppe arrived in London with his Schweppes drink and last year the brand unveiled its biggest ever investment with the launch of 1783, a range of naturally flavoured premium mixers. This includes Crisp Tonic Water, Light Tonic Water, Quenching Cucumber Tonic Water and Salty Lemon Tonic Water, which are delicious pairings for premium spirits with a great-tasting natural flavour.

Coca-Cola European Partners has unveiled its latest marketing campaign, ‘We Do’, to celebrate Coca-Cola Classic and reinforce the uniqueness and specialness of the 132-year-old global phenomenon. The campaign will run for four weeks from 6 April across large-format OOH sites and social media and feature the strapline, ‘They don’t make ‘em like they used to. We do.’ This takes inspiration from the worldwide iconicity of the Coca-Cola brand and how it’s maintained the same authentic and original recipe that was created in Atlanta more than 100 years ago. The brand worked with graphic designer Noma Bar and design agency Recipe to create iconic new adverts that feature images of Elvis Presley and are reminiscent of Coca-Cola’s historical print adverts.

w: www.ccep.com

t: 01732 617070

e: rosanne@thehubagency.co.uk

Schweppes 1783 range

PROPEL QUARTERLY SUMMER 2018 www.propelhospitality.com

Opinion

It’s in the bag Glynn Davis celebrates the growing number of customer requests to take home their leftovers

t the end of a meal at a favoured local steakhouse about a decade ago, my wife’s plate still had far too much entrecote left on it to leave it all for the bin. She asked if we could take it home for our fictional dog. “What’s its name?” asked the waiter, to which my wife, unexpectedly put on the spot, responded “Sabre”. This sounded less than convincing and he asked what breed it was. Clearly there’s no way a poodle could be called Sabre so she, even less convincingly, stuttered “Alsatian”. At this stage she was one question away from being found out as clearly not owning a dog at all. However the waiter, showing some sympathy, left it at that. My wife, a tad embarrassed, left the restaurant with the doggy bag full of steak. Fast-forward to this year and little seems to have changed. A recent meal out involved an almost full plate of fish and chips being left over as my wife had massively overdone it on the lovely starters (schoolgirl error). She mulled over asking for a doggy bag but sensing it might look a little desperate in the smart restaurant she simply rolled a paper napkin around it and stuffed it in her handbag. The result was I enjoyed a very tasty battered haddock sandwich the next day but my wife ended up with a bag that still smells like a chippy. It’s also highly likely the extremely attentive waiters knew exactly where the half-eaten fish had disappeared. In complete contrast to these establishments, any dinner at one of the many Turkish restaurants in Green Lanes in the north London area near where we live ends with doggy bags freely offered for the inevitable leftover kebab and salad. This more relaxed approach to dealing with food left on the plate at the end of the meal should be applauded and increasingly adopted by restaurants. Part of the problem is it has historically been too fine a line between being seen as a cheapskate and taking a sensible approach to food waste. The odd thing is at the very top end of the restaurant food chain it is almost accepted the petite fours at the end of a meal will more than likely be taken away. They come finely packaged and look sufficiently smart to be able to give them away as a gift should you choose to do so. Regardless of the style of cuisine, I detest wasting any food

I’ve paid for and I’m also a big fan of savouring leftovers for dinner the next day. Thankfully, I’m no longer in a minority as this thinking chimes with an increasingly vocal movement that seeks to reduce general food waste across the whole supply chain. Whether restaurant or supermarket, it is surely time for putting in place practices that reduce the shocking levels of food that heads straight into the bin and landfill. There are clearly moral problems here as well as the sheer waste of money involved and myriad sustainability issues.

“Part of the problem is it has historically been too fine a line between being seen as a cheapskate and taking a sensible approach to food waste” It was certainly refreshing to hear recently about the Good To Go doggy bag scheme in Scotland run by Zero Waste Scotland. Research found 40% of Scots were too embarrassed to ask for a doggy bag, yet a hefty 75% said they would welcome the option. When this figure is combined with the estimate that one in six meals is thrown away, it makes it an absolute no-brainer to change the whole approach and perception of putting leftovers to good use. The Good To Go initiative does exactly this by distributing compostable boxes that customers can use to take away leftovers at the end of a meal. More than 40,000 boxes have been distributed during the past year and the number of foodservice businesses taking part in the scheme has doubled. Such actions should be massively applauded because the more it becomes acceptable to take leftovers home, the greater the impact on food waste. On top of this, the money diners are able to save must surely rub off positively on the restaurant, which ultimately made it easy and acceptable for its guests to ask for what has been far too maligned – the simple doggy bag. ■

Glynn Davis is a leading commentator on retail trends

www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Feature

The leader of area managers The industry needs to question whether its promotion of middle-aged male “superannuated area managers” into this pivotal role is good enough, says Chris Edger

eaders of area managers (LAMs) – commonly known as operations directors, retail directors or regional directors – carry out a pivotal role in multi-site leisure businesses. Sitting between the centre and operations, they are expected to expedite the organisation’s strategic imperatives by leading, focusing and animating their area managers and wider teams while simultaneously fulfilling a valuable feedback and policy-shaping function for the strategic leaders of the business. Outstanding LAMs can achieve stunning outperformance in relation to their peers, providing strategic decision-makers with the confidence that the operational arm of their business is agile, responsive and professional enough to deliver consistently high levels of quality, service and experiential excellence. However, little has been written to date about this pivotal cohort of senior operators. Most research and empirical enquiry has centred on their charges, namely so-called multi-unit leaders (area managers, district managers and business development managers). However, during the past decade at the Academy of MultiUnit Leadership we have “grown” countless LAMs and are in a position to make grounded empirical observations on who they are, where they come from, what the differences between the LAM and area manager roles are (including their transitioning difficulties) and what the best do. Firstly, who are LAMs and where do they originate from? The vast majority of LAMs in multisite leisure operations are men aged 40 to 55 who have transitioned from area manager roles. Many originally started in the industry at unit level, progressing through the ranks by exhibiting excellent technical and behavioural skills allied to a formidable 24/7 work ethic. There is evidence the numbers of LAMs who have progressed through the graduate recruitment route

or come from support functions is growing. However, the main source remains the “hard yard” operational line. The absence of women at this level is mystifying, given there is no evidence men outperform women at general management or area management level – indeed all but one of our academy student of the year awards have been female area managers! Likely explanations relate to inflexible work practices, appointments being made in the “image” of the (mainly) male recruiters, and inadvertent casual sexism. Again, there is evidence this is slowly changing, not least because of trailblazing women in the industry such as Karen Jones, Vanessa Hall, Karen Forrester, Jillian MacLean, Helen Charlesworth and Susan Chappell, who have proven – beyond doubt – that women are as (if not more) capable of outstanding leadership of the operational line. Secondly, if most LAMs are promoted into the position from area manager, what are the main differences between the roles and what “transitioning challenges” does this pose? This is an important question because the LAM role is not that of a “superannuated area manager” – organisations that conceive of it thus will be setting their LAMs up to fail. Overall, there are six significant differences that pose specific transitional challenges to newly promoted area managers.

“There is evidence that the numbers of LAMs who have progressed through the graduate recruitment route or come from support functions is growing”

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➤ SENSITIVE STAKEHOLDER MANAGEMENT – area managers usually have “dotted line” interfaces with support staff (HR, property, marketing, finance etc. It is the LAM’s role to collaborate sensitively and negotiate with these central resources. Newly appointed LAMs struggle with this. Rather than co-ordinating and collaborating they sometimes deploy a “them and us – shaming and blaming” strategy – an approach guaranteed to turn off these vital enabling support functions. ▲

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Feature ➤ VALUABLE STRATEGIC INPUT – up to this point newly appointed LAMs have had limited exposure to senior policy makers. Indeed, having been in field-based roles many have actively avoided any contact with the guys at head office! Now – as a LAM responsible for a large P&L – they will be expected to account regularly in meetings and executive level presentations for performance and strategic resource deployment (for instance labour, capital investment and marketing promotions). They will also be called on to make a valuable contribution to the strategic planning and direction of their brand or format. The hiding is over – LAMs are highly visible to central policy makers and have to make the step up to make valuable contributions to the strategic discussion, being the critical lynchpin between the centre and operations. ➤ DECISIVE MIDDLE MANAGEMENT LEADERSHIP – in the past as area managers, newly appointed LAMs have been used to leading line managers and motivating their wider teams. Now the LAM is further from the front line and customers, they have to provide decisive, clear inspirational leadership to their area managers, setting the dynamic tone and purpose of the region and brand. Interpreting what the business wants and recasting it into a meaningful mission, leading and coaching their area managers (some of whom might previously have been their peers) to achieve higher levels of performance requires high levels of emotional intelligence, nous and guile. ➤ LONGER EVENT PLANNING AND TIME HORIZONS – at unit manager level, weeks are segmented by day and shift. At area management level, they are sub-divided by week and period. Now, as LAMs, planning and time horizons move out to quarterly and half-year time horizons. Thus, LAMs have to adopt a less tactical and more strategic approach to planning operations; planning for events that will make a significant impact in the future rather than a modest one today. ➤ HIGHER-LEVEL COGNITIVE THINKING SKILLS – previously as general managers and area managers, they were successful because of their higher-order technical and behavioural skills; flawlessly executing the blueprint and emotionally engaging their teams. The step up to LAM requires them to display superior reflective and problem-solving capabilities to ignite their brand/region into super-performance. To this end, they need to listen, watch, observe, analyse and process rather than just DO! Energy alone will not bend the curve at LAM level. ➤ EXTREME MATURITY AND RESILIENCE – being closer to the centre and the senior policy makers brings new pressures. Extra scrutiny and accountability calls on the LAM to display exceeding grace and maturity “under fire”. Transitioning area managers often wilt under this increased exposure because they lack the perspective and resilience to weather or counter seemingly irreconcilable demands of the centre (for instance labour efficiency and operational effectiveness). Relying on their area managers as emotional crutches, they eventually buckle, either returning to their previous positions or exiting the organisation. Thirdly, what do the best LAMs actually do? Taking into account some of the empirical observations made above, we have located eight high-performance behaviours and activities (named the eight I’s) that super-performing LAMs exhibit: ➤ INSPIRE TEAM – setting a clear purpose and direction, generating trust through protection/reciprocity and public reward/recognition ➤ INTERPRET TRENDS AND MARKET – competitor and customer scanning, trend identification and insight prioritisation ➤ INSTRUCT AREA MANAGERS – acting as a technical trainer, behavioural coach and developer of advanced problemsolving skills ➤ INTEGRATE STAKEHOLDERS – fostering mutual respect, inculcating inclusivity and negotiating for valuable support and resources

➤ IMPLEMENT PLAN/BLUEPRINT – resource organisation/ deployment, clarity of communication and modelling strong values ➤ INFLUENCE POLICY MAKERS – limiting bureaucracy (cutting the crap), shaping policy and negotiating for extra resources ➤ INNOVATE LOCALLY – empowering people to try (and fail), encouraging best practice and knowledge transfer and delegating key initiatives to key people ➤ IMPACT RESULTS – simultaneously driving inputs (engagement and operational standards) and outputs (customer satisfaction and financial performance) We would contend these behaviours and activities can be monitored, measured and checked to ensure LAMs are performing to the highest levels of performance. However – finally – if we have a more advanced understanding of who LAMs are, what the differences and transitional challenges with the area manager role are and what the best should do, how should multi-site leisure organisations set up new LAMs for success? Often LAMs are appointed with no training, development or preparation. Sometimes they are given a few area managers to “manage” as a form of induction and are then given a few more if they look as if they are cutting it! In some instances they are sent on “shock and awe” leadership and strategy programmes to elevate their thinking styles. But the interventions that have the most profound effect – given sensitively managing stakeholders and making a valuable strategic input are the two greatest pitfalls – are: ➤ SUPPORT FUNCTION EXPERIENCE – “dyed in the wool” operators will usually avoid roles at the centre like the plague. Why? They will be shorn of operational power and (in some instances) have to work alongside individuals they might previously have abused! However, pulling high-potential operators into the centre not only teaches them valuable negotiating and collaboration skills, it also expands their stakeholder networks and gives them a broader appreciation of organisational and sectoral context, making them far more “rounded” individuals when they return to the line as LAMs. ➤ BIG PROJECT LEADERSHIP – if organisations are loath to lose their “big hitters” from the line, giving high-potential operators the responsibility and exposure that comes with leading an important project (with suitable “senior air cover”) is another means through which organisations can increase the bandwidth and capability of aspirant LAMs. ➤ TARGETED COACHING AND MENTORING – lastly, when in role, newly appointed LAMs must be buddied up with senior internal or professional external support that can provide targeted coaching and mentoring that will help them make sense of their new role and successfully navigate the pitfalls that lie ahead. They now occupy a more isolated and pressurised role in the organisation – having an experienced confidant (who isn’t their immediate line manager) to help them work on the areas that could potentially derail them will provide confidence and assurance during times of extreme stress. In summary, I started this article highlighting the lack of research and enquiry in LAMs. Given its vital contribution to the performance of all multi-site leisure organisations, it is my hope the analysis and insights we have made over the past decade at the Academy of Multi-Unit Leadership nudges senior policy makers’ understanding and perceptions of the role’s demands and requirements. The industry needs to question whether its promotion of middle-aged male “superannuated area managers” into this pivotal role is good enough when the role demands so much more; particularly in today’s challenging consumer and competitive climate.

Dr Chris Edger is a lecturer, coach and multiple author on multi-site franchising, branded and service leadership. His latest book, Events Management – 87 Key Models For Event, Venue and Experience Managers, will be published in June

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Feature

Trade headwinds and the sugar tax have failed to dampen the soft drinks sector. Martin Cooper looks at some industry figures, trends and forecasts

Soft sell

“For mainstream brands, therefore, more of a default he government introduced the Soft Drinks Industry purchase to low-cal options will be experienced by operators. Levy, aka the “sugar tax”, in April, sparking fears This will hopefully negate the need for operators to push up operators would be hit in the pocket or forced to hike prices of standard ‘on tap’ soft drinks.” prices during a time of economic uncertainty. Manufacturers that produce more than a million litres a year Premium perks now pay 18p a litre on drinks that contain more than 5g of sugar The time is ripe for manufacturers of non-alcoholic drinks to per 100ml, while drinks with more than 8g per litre attract a levy attract consumers who are increasingly abstaining or cutting their of 24p a litre. alcohol intake, especially the ever-sought millennials. One in When the initiative was announced in the March 2016 Budget, three consumers moderated their alcohol intake last year, while manufacturers worked hard to ensure fewer of their products 20% were teetotal, a figure that rose to 25% for under-25s. remained above the 5g per 100ml threshold. Many had already This movement is giving soft drinks companies an increasing moved to reduce sugar in their products without a prompt from opportunity to expand their range, especially as the consumer government as they bid to cater for the inexorable consumer quest for experiences shows no signs of slowing. Food quest for healthier food and drink options. and drink pairing has also become an increasingly The British Soft Drinks Association (BSDA) had important trend, and one operators can profit from. already set manufacturers a five-year target in 2015 A rise in soft drink consumption and quest to cut calorie levels in their products by 20% by for experiences also provides operators with 2020, and many companies look likely to hit that opportunities to upsell. Premium soft drinks were target. a key driver in growth in the licensed sector last of under-25s Coca-Cola has introduced about 30 reduced or year, with sales up 32%, driven in part by the zero-sugar drinks since 2005, and 95% of its products were teetotal continuing rise in the popularity of gin. The rise were exempt from the levy when it came into effect. last year in craft distilling, as seen in the recent explosion of Amy Burgess, trade communications manager at crowdfunding ventures by companies stretching from Coca-Cola European Partners (CCEP), says: “Healtheast London to the Scottish Highlands, offers opportunities conscious consumers are on the hunt for low-calorie and for operators to pair new and evolving mixers with these artisan low-sugar alternatives without having to compromise on quality spirits and provide new experiences for consumers. and taste. This is also true for cocktails as almost a third of Burgess says: “Premium and super-premium spirits are seeing people purchase a low-calorie cocktail at least once a month. a rise in popularity with tipples such as gin, dark rum and vodka Licensees can tap into this by offering a varied menu and getting front-runners of the trend. This has influenced the mixer market creative with products, especially as nearly a third of people with people looking for premium products to pair with their prefer to order a low-calorie cocktail over a standard option.” favourite spirits. Fruit juice and drinks company Frobishers was in the fortunate “We expect premiumisation to keep driving growth in the position of being unaffected by the levy, but still took time to drinks market for years to come as almost three-quarters of assess its entire range regarding consumer health. consumers buy premium spirits when in a pub or bar and nearly Sales and marketing director Steve Carter says: “Frobishers half would rather order a premium spirit when buying a long prides itself on producing only natural juices and juice drinks mixed drink. that don’t contain artificial or added sugars – it’s core to the “The spirits market has been having a ‘ginaissance’ over the brand architecture. past few years, with gin bars popping up all over the country. “Larger, mainstream manufacturers have been actioning New gins are launching regularly, from independent craft their sugar levy strategy for the past few years to help operators offerings to new flavours and variations of popular brands, navigate the new legislation more easily. This is especially seen leading to almost a quarter more gin being sold than last year. across draught soft drink suppliers, with standard ‘bag in box’ Gin is the key spirit driving the premium trend. syrups moving to low-cal or no-cal formulas and original full-sugar “Dark spirits are becoming more popular and premium dark variations increasingly being available only via more premium, rum is performing particularly well. Cola is a common choice ▲ ‘glass bottle’ options within fridges.

25%

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Feature to mix with whiskey and rum, with both drinks among the top ten most-ordered mixed drink combinations. Licensees can make the most of this by offering glass icon bottles of the CocaCola portfolio alongside their mixers range as a premium option. “Despite the rise of other spirits, vodka continues to be a popular choice in pubs and bars and consumers are choosing more premium serves. Almost two-thirds of all cocktails include vodka.” Schweppes drinks expert Tony Conigliaro adds: “We have seen a shift with people looking for more simplicity and a greater understanding of the drink choices they’re making. This is particularly true among young people, who are taking a real interest in the quality and taste of the ingredients used. “London is constantly welcoming new fashions and trends. These trends often come through in similar ways in the food and drinks industry, which makes it almost impossible to predict what will come next – but that’s the beauty of it.” Carter says the premiumisation of soft drinks has “fuelled the massive expansion of the market”, giving manufacturers the opportunity to “create drinks of higher quality that meet the more discerning tastes of today’s consumer”. He says: “The flavour combinations Frobishers has introduced to its slightly sparkling Classics range tap into the growing premium soft drinks sector. These flavours are more lifestyle-focused, conjuring memories of summer days or offer a more adult version of a drink that may have been enjoyed during childhood. The mix of nostalgia with fresh, bang on-trend flavours plus the use of premium, highquality ingredients ensures customers feel they own the sector for themselves. “They’re also willing to pay more for this, often about 20% compared with a standard mainstream soft drink. It’s a trend evident across the whole food and drink sector. Customers may be eating and drinking out less but, when they do, it’s all about the quality. Premium products and premium experiences mean the soft drinks sector has an important role to play, ensuring drinks meet the needs of today’s consumer in terms of quality, health and lifestyle.” Family-owned botanical soft drinks brewer

“Premium products and premium experiences mean the soft drinks sector has an important role to play, ensuring drinks meet the needs of today’s consumer” Frobishers sales and marketing director Steve Carter

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Fentimans was the tenth-highest manufacturer in the UK in terms of sales (£50.3m). The company puts its 24.9% year-on-year sales rise partly down to a £1.2m rebrand that saw Fentimans overhaul its image to capitalise on the growing popularity of botanically brewed drinks. The company has just launched a new flavour, Sparkling Raspberry, which has been developed to offer a “grown-up soft beverage with bitter sweet characteristics”. The drink combines an infusion of raspberry and natural botanical ingredients. Fentimans marketing director Andrew Jackson said: “It is satisfying to see an increased number of people seeking premium alternatives to ordinary carbonated drinks. It’s a trend we’ve seen growing over the past few years and shows no sign of slowing. The introduction of Sparkling Raspberry will continue to build our appeal with a younger audience, who actively seek out interesting brands that deliver on provenance and quality.”

Presentation Another way operators can use soft drinks to drive sales is by concentrating on the quality of their serves, innovating with glassware and garnishes and adding to the theatrical possibilities when serving a drink that “makes the customer seem special”. Carter says: “Presentation is key, as is service style. Glassware consistently comes up as really important among our customers, who definitely enjoy drinking from a branded glass and being presented with the bottle to selfserve the remainder of their drink. There’s a real connection here with other premium serve drinks, which helps elevate the status of a soft drink and makes the customer feel more special. Adding a garnish can help raise this status further, which in turn can help increase the price point a customer is willing to pay for that drink and the profit the bar can achieve in return.” Burgess says: “CCEP offers a free training programme for bar staff to help licensed operators grow their soft drinks sales. The first step looks at how bar staff can offer consumers choice of the three Coca-Cola variants plus a bottle or draught format. The second is the ‘Perfect Serve’ step, which looks at how bar staff can enhance the presentation of soft drinks, helping to meet the consumer demand for a ▲

Feature Children should also be offered a range of choice regarding flavour and healthy options rather than the bog-standard choices. It should also be remembered not to lump all children into the same category. What tickles the fancy of a five-year-old will turn the stomach of a teenager who would die of embarrassment if their friends spotted them drinking it. So life appears to be sparkling rather than cloudy in the soft drinks industry, despite seemingly constant attacks by anti-sugar crusaders. Manufacturers continue to have a positive outlook for the sector in the years ahead. One could say the industry is in the healthiest state it has ever been.

Industry overview

‘special’ drink that gives a perception of premium quality. This section of the training highlights the importance of glassware, volume of ice and use of a garnish. “The perfect serve adds to the experience for those choosing not to consume alcohol when eating out and helps consumers feel they are getting a special drink that stands apart from what they would have at home or on-the-go. “The final step is ‘Perfect Time’, which helps staff select the most optimum time to offer customers a second drink. This can encourage consumers to spend more during their outing and try a wider selection.” Provenance is also becoming increasingly important to consumers. Carter says: “Customers are increasingly looking for products with provenance, which syrups lack. Information about ingredients and nutrition can be displayed on a bottle. While syrups and tap dispensers can offer a high-profit margin, many operators find this outweighed by the benefits to the customer and the business of premium, bottled drinks.”

Mocktails Another rising star in the world of non-alcoholic drinks is the mocktail. Carter says just because a mocktail doesn’t contain alcohol, operators shouldn’t let that devalue its perception in the eyes of their customers. He adds: “Mocktails command a higher price point than a soft drink served alone, reflecting the care and attention that has gone into producing it as well as the extra ingredients. If you price too low, your customers won’t think they are special. Customers expect prices to be lower than alcoholic cocktails but still view mocktails as a premium product that can command a premium price point.” So what are the latest options for operators regarding healthier soft drinks? Carter says: “Our recent research indicated that, just as in the purchase of alcoholic drinks, customer choice can be dramatically affected by mood and sense of occasion. A lower-cal ‘healthier’ choice may be considered during lunchtime trade, for example, but a more treat-based, higher-sugar soft drink may be chosen on a night out or for celebrations.”

Generations Even though millennials seem a constant focus in the industry, the over-35s shouldn’t be neglected as they spend more on soft drinks per eating-out occasion than any other age group – and many of them would like to see a wider range of soft drinks in restaurants, pubs and bars. Catering to children is also an important factor for raising sales in the eating out market. Catering to what children want when looking at the menu and what their parents think is acceptable for their little ones to drink offers a huge opportunity.

As in many countries soft drinks are big business in the UK, with sales worth an estimated £15.2bn a year and showing market growth of 1.4% in 2017. However, despite a 1.0% drop in sales last year, full-sugar drinks remain the best-sellers, worth £4,772m to the industry compared with £2,997m in the low-calorie segment, despite a 7.6% rise in sales highlighting the segment’s growing importance. The Britvic Soft Drinks report for 2017 revealed overall soft drinks sales were up 1.2% last year in hotels, pubs, bars and restaurants to £64.6m, compared with the retail, travel and leisure sector (up 3.5% to £19m), and contract catering (up 1.7% to £4.3m). Soft drink sales in pubs and bars were worth £22.1bn last year from 46,740 outlets, with total value growth of 1.5%. That figure breaks down into sub-sectors – managed, branded and franchised (£10.4bn from 9,624 outlets), independent and free of tie (£7.7bn from 18,330 sites), tenanted and leased (£3.83bn from 16,121 outlets), and social clubs (£0.2bn from 2,665). The service-led restaurant sector was worth £20bn from 32,341 outlets in 2017, a decrease of 1.6%. That breaks down into independent (£13.5bn from 27,168 outlets), branded (£5.7bn from 4,823) and fine dining (£0.8bn from 350). Fast food was the fastest-growing segment last year, up 4.7% to £14bn from 40,431 outlets. The sub-sectors were independent including takeaway (£5.1bn from 25,885 outlets), branded traditional (£4.8bn from 3,151), branded delivery-focused (£1.7bn from 2,014), branded contemporary (£1.3bn from 1,269) and street food and mobile vans (£1.1bn from 7,962). The total value of soft drinks to the foodservice and licensed sector was £6.9bn in 2017, a year-on-year decline of 0.4%. Total foodservice’s gain (up 2.1% to £2.7bn), was countered by a loss in the total licensed segment (down 1.5% to £4.3bn). The biggest sub-sector gain in the total foodservice category was quick service restaurants (up 12.8% to £888m), while in the total licensed category, the restaurants sub-sector saw the largest rise (up 1.4% to £538m) followed by wet-led (up 0.4% to £1.1bn). There were falls in soft drink sales in the other three total licensed sub-sectors – food-led pubs (minus 3.1% to £937m), hotels (minus 1.0% to £836m) and late-night (minus 4.4% to £812m). The top-five brands for soft drink sales in the foodservice sector last year were Coca-Cola (£881m), Pepsi (£172m), Fanta (£162m), Sunpride (£71m) and Sprite (£70m). Sunpride, which produces fruit juices, enjoyed the biggest growth, up a massive 54.3%. In the licensed sector, the top-five brands in terms of sales were Coca-Cola (£993m), Pepsi (£754m), Schweppes (£532m), Britvic (£423m), and R Whites (£239m). The biggest riser was Fever-Tree, with a whopping 65.1% increase to £140m. Water has become the largest volume segment in the soft drinks category, growing at 6.1%, and a new segment has emerged – naturally infused sparkling water – with global sales doubling in the past four years. As consumers increasingly seek healthy options, no and lowsugar soft drinks saw a growth in value sales last year of £104m. However, taste is still the key factor when people choose a soft drink so manufacturers are looking to combine well-being with taste as the no-sugar, full-flavour cola market grew 57% last year with Pepsi Max and Coke Zero adding a combined £63m to the channel.

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Finger on the pulse Leading figures from the hospitality industry’s marketing community share insights into some of the issues affecting innovators, marketers and restaurateurs

Why did the chicken cross the road? by Geoff Campion onside and no doubt attracted new fans. For some operators, Parking the supply chain learnings to one the waters have been side, here’s my top five tips for brands that choppier since the find themselves in the unfortunate position of Restaurant Marketer negotiating similar tricky waters. & Innovator forum than for others, with a series of crises Humanise your brand throwing brands into Regardless of what industry you operate in, the cauldron and your brand has to resonate with consumers. testing damage-limitation skills across the It has to mean and stand for something. It industry. The most prominent of these, which has to make them feel. It has to be human. generated a tidal wave of media attention, This necessity is magnified in a crisis. was KFC running out of chicken – you couldn’t KFC nailed this in all its comms across all make it up, could you? channels, culminating in its cocky advert in For those who live under a rock or like the Metro, where it rearranged its initials to spend time on a remote desert island, to spell “FCK”. The brand came across as the story picked up more momentum than human and humorous, increasing positive UK storm The Beast From sentiment and winning over “Reinforcing the The East earlier this year, new advocates. Be bold with saturating news across the capabilities of your your tone of voice and seize country and spiralling into every opportunity you can to team not only guerrilla warfare tactics across humanise your brand. shows confidence social media as rival brands jostled to news-jack and bask in your brand but Drive your own in the reflected limelight. agenda drives internal KFC emerged from the It’s easy to hide behind a engagement and crisis unscathed from a “no comment” in the midst boosts morale reputational point of view – of a media frenzy but then the balance sheet will paint you’re fighting on the back when you need a bleaker picture I fear – foot – you’re not controlling it most” and arguably in a stronger the situation. Regular position than before the communication via social storm broke. The affirmation of the nation’s channels and other media allows you to love for the brand and the canny, cheeky manage the messaging and drive your own messaging of its comms and marketing agenda. The key to executing this well is departments kept its faithful customers canny copywriting and messaging, which KFC

KFC put out a series of cheeky messages during its chicken crisis

nailed with a play on the “chicken crossed the road” post. You might be in the middle of a crisis but take every opportunity to drive home key messages, even if it’s as simple as repeating that your chicken is fresh.

Avoid the blame game It’s easy to point the finger when the heat ramps up but you’re just shipping the blame – and people can spot that. Give the facts in an unbiased way and accept responsibility for the mistake. Go one step further and look at ways to be positive. KFC heaped praise on employees who were working round the clock to resolve the matter. Reinforcing the capabilities of your team not only shows confidence in your brand but drives internal engagement and boosts morale when you need it most. Do it whenever you can.

Don’t sit back, news-jack What do Peter Andre, Iceland, KFC and Burger King have in common? This isn’t the start of a bad joke, the answer is they all seized the trending opportunity of a crisis to chip in on social media and get a slice of the action. In a series of humorous exchanges across social media, the brands created original content that was so shareable it dwarfed the impact of their ad spend for the whole of 2017. Where there is woe for some, there is opportunity for others. Always seize the opportunity.

Never underestimate the power of print The piéce de résistance, and my overriding memory of the event for years to come, will be KFC’s inspired advert taken out in the Metro. This was a master stroke in crisis comms. Humour aside, issuing this apology in a newspaper contributed hugely to the volume of likes and shares it received across social media – people trust print. The apology felt more honest and heartfelt than it would have seemed if posted on social media alone. There will always be a place for print, don’t forget that. ▲

Geoff Campion is account manager at Fleet Street Communications and was named in the Restaurant Marketer & Innovator 30 under 30 list for 2018

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Never break the chain by Lizzy Barber Closures, CVAs, brands extinguished in the blink of an eye – 2018 is an uncertain place to be, at least for some formerly stalwart UK chains. But how did we get here and what can we – as innovators, marketers and restaurateurs – do to survive? To understand how we might go forward, first we should go back. Chains, for previous generations at least, have long been a staple of the UK food scene. The first Wimpy Bar opened in the UK in 1954 – the same year rationing ended and only two years after the launch of the first package holiday. While the food scene left much to be desired – the butt of many a US sitcom joke and the scorn of many a Frenchman – we were beginning to dip out toes into foreign travel and foreign food. We wanted escapism – forget the fish and chips, tonight we’re going Italian. Tomorrow it’s moules frites – what larks! Yet we were still deeply suspicious – don’t forget this was an era when olive oil was bought from a chemist (in Kingsley Amis’ Lucky Jim, “spaghetti and dishes cooked in olive oil” are proclaimed the three f’s – “filthy foreign food”). What chains provided was a chance to scratch this itch in the safety and comfort of a brand you knew and could ultimately “trust”. As Helen Rosner wrote in her James Beardnominated Olive Garden nostalgia trip: “I love that I can walk in the door of an Olive Garden in Michigan City, Indiana, and feel like I’m in the same room I enter when I step into an Olive Garden in Queens or Rhode Island or the middle of Los Angeles.”

Inspiration The chains noticed, and grew, and genuinely brought something new. PizzaExpress founder Peter Boizot was inspired by a trip to Italy rather than the boardroom, bringing a pizza oven back from Naples in 1965. Carluccio’s delivered the novelty and abundance of the continental deli counter. Wagamama meant bench-style seating, Busaba thrilled with its mysterious incense-infused entrances. Polpo’s no-reservations policy was met with a collective “you what?” but became the norm for half a decade’s worth of concepts – chain and independent alike. As the industry evolved, every few years a new brand would emerge and bring something to the table that made diners, and restaurateurs, sit up and listen. And the food? It was good. I remember queuing at the first Wahaca in Covent Garden, hunkering down for an hour’s wait with margarita in hand, desperate to experience something called “Mexican market eating” and to try guacamole pounded in a molcajete. I also recall catching Gennaro Contaldo get his hands dirty in the window of the first Jamie’s Italian in Oxford, which was founded by the famed television chef who, don’t forget, cut his teeth at The River Café. But then something started to happen. As a country we started to travel more adventurously, to eat more voraciously, and

A search for the new, unique and experiential has left some brands looking stale to do both more cheaply. We started liking a cursory glance at the trade press or being and understanding this “other people’s able to recite the new top ten food trends at food” – not just the westernised, culturally the drop of a hat. appropriated cuisine of times gone by but all Like learning a language, it demands of it, with all its complexities. We started to fluency. Subscribe to Propel’s free morning realise Thai food didn’t have to mean a Thai newsletter. Interact on social media, not green curry but Som Saa’s whole deep-fried just as a brand but as an individual – it’s sea bass and the sour, earthy curry and roti the only way to truly understand it. Heard for breakfast at Smoking Goat. We realised Walthamstow is the new Shoreditch? Go there were different types of noodles and there, see why. A little bird told you the saying you’re “going for an Indian” could vegans are coming? Join the queue at Temple mean anything from a fragrant dum biryani or of Hackney. If we want to see how the market coconut-laced keralan to Tibetan momos at has changed, we need to get our hands dirty. Madame D’s. Hey, we even started to notice our own food wasn’t so bad either. Listen But the chains didn’t notice – and the We have to understand our diners – really chains grew. And while once upon a time understand them – get into the restaurants Byron’s “built to look deliberately distressed” and talk to them; make ourselves aware of look was exciting and novel, once one every complaint and every compliment; see appeared on every corner what content of ours they’re the sheen (or rather lack of) “We need to choosing to share online; see wore off. Millennials – that what else they’re admiring, interrogate our dreaded word – searched and sharing. Don’t just brands; know with liking for the new, the unique, the sell to them, listen to them. confidence what experiential. They “hashtag Look at what Wagamama loved local” and suddenly makes them great is doing with its Noodle Lab that homogeneity, that and champion that” and vegan menu, Shake umpteenth new pizza place Shack with its Naughty Boy or burger brand that jumped burger collaboration, and on a bandwagon, just wasn’t cutting it. It Giggling Squid with its aesthetically pleasing was a bubble – one that burst and is still interiors. They’re not jumping through hoops bursting today with further closures seemingly or shoehorning every available trend into their announced weekly. menu, they’re responding to the market and There is still a place for chains despite the finding ways to be part of the conversation in restaurant apocalypse. However, finding it will a way that feels natural rather than contrived. mean facing some uncomfortable truths – and The way ahead is long and some may fall getting stuck in. by the wayside. Once we shaped the way diners ate; and those diners surpassed us. Interrogate We have grown complacent; but we mustn’t Chains once responded to consumer continue to be so. We can sit up and use this demands. Not cynically or by jumping on a so-called “restaurant apocalypse” as a rallying bandwagon but by understanding what it is cry; and we can remember where we came consumers want and how to provide it. from. Right now the chain may be broken, We need to interrogate our brands; know but that doesn’t mean we can’t rediscover the with confidence what makes them great and missing link. ▲ champion that. Why does having one branch of something automatically mean it can’t offer Lizzy Barber is head of marketing something interesting? But we also need to at Cabana, Hache and Hush have some humility, to understand why we’ve fallen out of favour – and that doesn’t mean Restaurants

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I’m more worried about Netflix and Chill than Brexit by Anthony Knight The allure of staying in has reached irresistible proportions, with an ever-growing number of us choosing to embrace our inner “sofa sloth” and enjoy a leisure-time blackout at home. A UK survey by Deliveroo found half of Brits would rather stay home while almost three-quarters (72%) of 18 to 24-year-olds often prefer a night in compared with a night out. Should we be surprised? Why risk a restaurant when you can have your favourite meal delivered to your front door in less than 30 minutes? Why go out on a Friday night when you can box-set binge on the latest Netflix release? Why go to a bar when you can swipe right? Food, entertainment, romance – the traditional weekend staples – have become available on-demand, empowering consumers to enjoy complete control of how, when and where they interact with brands. Today’s consumer has more specific requirements, less patience and higher expectations, which is supported by the on-demand economy as companies facilitate their needs through the click of a button. Immediate access to messaging, email and media through new technology and smartphones has generated a sense of entitlement to efficient, fast and convenient experiences and, as we have already witnessed with the demise of the British high street, there will be no mercy for businesses that fail to evolve and invest in reconnecting with their customers.

expectations of their customers will be the ones that reap the rewards. So how do we tempt customers off their sofas and back into our venues? The operators with the ability to pull ahead of the pack are the ones that have committed to creating fantastic guest experiences but who also understand customers want to feel engaged, delighted, recognised and listened to – changes that focus on establishing meaningful relationships.

Experience economy

A boom in the experience economy has made a considerable impact on the hospitality industry, with the likes of Swingers, Flight Club and Bounce all enjoying a surge in interest for Huge opportunities those looking for more than just a destination From super-quick food delivery or a blowto eat and drink. It is these experience-hunters dry at your office desk to laundry services delivered at 3am, the number of opportunities that see more than just the product or brand but rather what the brand stands for. They at our fingertips is vast, with consumers use the brand to help define who they are empowered to create, manage and control and what they stand for, sharing this with their own experiences including in the friends and on social media. Instagrammable comfort of their own home. Last year, data moments and innovative insights firm NPD Group “Consumers have new concepts provide a reported the delivery compelling reason for any channel in Britain’s eating- become both critics millennial to leave the house out sector grew ten times and creators, – but experiences come faster than the total market demanding a more in all forms and appeal last year. While total visits to all types of consumer. to eat out increased just 1% personalised service Some of the best restaurant year-on-year to 11.3 billion, and expecting to be experiences I have enjoyed the delivery sector jumped given the opportunity have been where I am almost 10% to 599 million to shape the products simply recognised as a visits. returning customer and The trend isn’t isolated and services they greeted by name. Great to the food and drink consume” experiences, whether industry, with Netflix and the launch of the latest Amazon set to overtake immersive concept or the smallest of service the cinema multiplex. PwC forecast in a recent gestures, help us connect with our customers report that revenues from streaming film and more personally as a brand. television shows in the UK will exceed box If we want guests to visit and, more office takings by 2020. Customers are creating importantly, to return, we need to show their own experiences and the customera customer means more than simply a centric platforms and apps that invest in transaction and that we value their business better understanding the needs, wants and

and are willing to go above and beyond to build a relationship with them. The more we know about our customers the more personalised a service we can provide, leading to a better guest experience. As marketers we cannot afford to simply be content creators. We are also trend-spotters, researchers and analysts with the responsibility to better understand the information and insight customers supply to enable us to tailor communications, services and messaging to a customer’s needs and preferences. But as well as collecting this information, marketers also need to quickly dissect the knowledge and deploy it in real time through a customer’s preferred digital channel, cutting through the thousands of marketing messages customers receive every day. Often the most memorable moments are shared between customers and our front-line employees, who should be empowered to drive change, make decisions and respond to guests directly to personalise the service they desire and improve an experience in the most important phase of the customer journey. On the customer side, we should enable guests to dictate their own journey by placing information and empowerment in their hands. Tools such as digital ordering, menu customisation and loyalty tracking can all be digitally enabled to support an empowered and personalised experience. Empowered by new technology, social networks and digital devices, consumers are increasingly dictating when, where and how they engage with brands. They have become both critics and creators, demanding a more personalised service and expecting to be given the opportunity to shape the products and services they consume.

Expectations As service-providers in an operations-led industry, we have worked hard to create and deliver a consistent user experience but we have forgotten that every one of our customers is unique, with different expectations, requirements and needs. A customer’s experience needs to be memorable, something they can connect with, something that makes them feel less of another transaction and more of a valued partner in a relationship. We need to get personal with our customers. When that happens, restaurants can serve a great experience that offers much more than good food and service, attracting customers to enjoy genuine and memorable experiences that cannot be delivered via the click of a button. ▲

Anthony Knight is group director of sales and marketing at Maxwell’s Restaurant Group. He was named Future Marketing Leader of the Year in the Restaurant Marketer & Innovator Awards 2018

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Feature

Moving customers from ‘meh’ to ‘yeah’ by Paul Carrington Returning from the Casual Dining Show, I couldn’t help but feel concern for an industry I’m relatively new to. Coming from a career spent analysing data in the consumer goods retail sector, I know only too well the challenges businesses in town centres and retail parks face and, even as I write this, more big names are in danger of joining a long list of retailers disappearing from our high streets such as Comet, Courts, Focus, Phones 4 U and Blockbuster shout about it) and “promoters” (this is where – remember going to get videos most you want your customers to be, scoring nine weekends? How times have changed! or ten and the type of people to return more Of course staff costs, business rates and quickly, work their way through your menu leases are issues restaurant operators face as and bring friends back next time). well and already this year we see tough times When looking at data from our Feed It affecting Byron, Jamie’s Italian and Prezzo Back platform, in just six months (June to among others. November 2017) we saw almost a third of Coming from a retail sector that had never the spend we track from EPOS-linked guest seen so many empty shops while leisure feedback from passives. It was a pleasant venues remained more robust (source Local surprise to see this being a much bigger Data Company), I find it interesting to see opportunity than the detractors, which was how the places we choose to spend our time at 10%, showing there is a lot of great work in are changing. Rather than browsing in a being carried out by our clients regarding stack of shops, it seems the retail parks of the guest experience. The passive spend figure, early 2000s are being replaced with leisure when extrapolated up to cover our entire parks, where there are still client base, is estimated superstores but also more “The challenge for at a huge £20m for this cinemas and places to eat. operators is to make period and obviously the Of course having all these entire industry spend sure the customer restaurants in a row means would be much higher. feels they have had the consumer has a lot When a guest fills out of choice when thinking good value for money the short Feed It Back about dining before or survey in the venue or at a time when after their visit to the shops when they get home, consumer confidence they rate the venue on or cinema. However, with is low and wallets all that choice comes food, drink, cleanliness, increased competition. atmosphere, service are being squeezed” The worrying thing and value. While, as about all this bad news expected, passives are regarding shop and restaurant closures is, of scoring a little lower than promoters across all course, it signals tough times ahead. Jobs are these areas, the interesting thing is the gap under threat and with consumer confidence between a passive score and promoter score low, the competition for a share of consumers’ is much larger when looking at value. Passive disposable income will become fiercer, not customers seem a lot harder to please when even allowing for Brexit! it comes to value and therefore the challenge for operators is to make sure the customer Insights feels they have had good value for money at For the Restaurant Marketer & Innovator (RMI) a time when consumer confidence is low and Bootcamp I was lucky enough to deliver a wallets are being squeezed. short presentation on some insights I’d found from my first couple of months working in the The value challenge industry. The good news, against a backdrop Looking at the feedback we get from guests of challenging times, is the data revealed across our client base, it seems the passives some opportunities, the largest one being a are certainly more price-sensitive, while the chance to convert a “passive” guest into a other important thing is they are very aware “promoter”. For those unfamiliar with these of the competition. A lot of the comments terms, when asking a customer “how likely referenced how, even though these people are you to recommend this venue to your were out for a treat, they didn’t feel the value friends, family or colleagues?” the customer’s of an extra option or they were aware of a score out of ten helps us categorise the better deal elsewhere. A big positive, however, “detractors” (scoring zero to six and likely to was several customers leaving positive be unhappy with their experience), “passives” feedback mentioned good service and even (scoring seven or eight and although having referred to times when they had been upsold. had a good experience are not going to The customer, and the passive customer

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more so, is well aware of when they are being upsold and they are fine with it as long as it’s done right and they feel they receive good value for money. This is surely an opportunity for operators to drive the best revenue performance in these challenging times.

Time is Money We regularly see wait times being referenced in negative comments, and speed of service is consistently the number-one topic in our Guest Recovery system. A lot of positive feedback and staff mentions we capture also include words such as “quick” and “efficient” – reviews that reference how long it took to get seated or for a dish to arrive are common. This is something we also saw in a study of TripAdvisor reviews we carried out for RMI, a sample of data looking at 37 different restaurant groups’ reviews in 2017. Our sample included more than 148,000 reviews covering upwards of 1,400 venues in the UK. In total, 7% of the reviews we analysed referenced a wait time in hours or minutes. When we looked only at the terrible reviews (one out of five rating), this 7% rose sharply to more than 25%. This TripAdvisor analysis backs up what we’ve seen in the Feed It Back system and it certainly seems clear that in our increasingly time-poor lifestyles, no-one wants to be kept waiting, even in leisure. In an increasingly competitive market place, it’s going to be so important for venues not to lose customers due to sloppy processes or delays on either side of the pass. In conclusion, there are some dark clouds hovering over the overall market place, with some more turbulent times to follow no doubt. However, our guest feedback data shows a lot of customers are currently out for having a good time and the opportunity is to push those good times into great times, resulting in more visits, more loyalty and more revenue. ▲

Paul Carrington is customer insight manager at Feed It Back, the only system that combines guest feedback with live EPOS information about their visit – what they bought, their spend, who served them and more. www.feeditback.co.uk

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Feature

The energy within by Steve Flanagan our 82nd UK venue at the end of March, Much has been one of many openings this year. We see the written about offering unique and personal Friday’s experience we customers a “great offer as key to this success – and it is our team experience” beyond members who offer this experience to our simply “great customer guests. Therefore, employee engagement service”, irrespective of offers a massive and vital – if not always the industry your brand measurable – return on investment. We sits within. This could always look to reward and recognise our team not be more pertinent members and I want to use this opportunity to for today’s casual dining market. To attract the lift the lid on some of the lesser-known ways sought-after pound of those spoilt for choice in which TGI Friday’s does this. in the out-of-home sector, the focus needs to be on delivering a great experience – one Friday’s has consistently been an innovator that edges you ahead of your competitors. in the field of employee engagement, which A recent trip to the US, in which I was creates a culture team members love to work in blown away by the service I received, brought and leads to a dedicated and motivated team. home that the experience many crave is the One of the best illustrations of this is our team personal touch teams can deliver in-store. It turnover – which is currently about 65%, almost also reminded me of the importance of the half the industry average of well over 100%. mantra that attracted me to TGI Friday’s six We believe one of the main reasons for months ago – “happy team members equal this team retention is we don’t offer jobs at happy guests”. TGI Friday’s has lived and Friday’s, we create careers. We never refer breathed this since Karen Forrester joined the to anyone as a member of staff – they are business ten years ago and it is something I team members and part of the Friday’s family. have always believed in too, during my time Ultimately, if you make team members feel at Starbucks and now at TGI Friday’s. While vital and valuable, they will make guests feel our mantra might not be ground-breaking it is the same way. something several brands have perhaps lost sight of, ultimately falling short and as a result Rising stars losing their way. We can all recall an example When it comes to developing those careers or two where we have engaged with a brand we live another mantra at Friday’s – “stars and the experience has left us feeling bad. As always rise to the top”. Those who show the a result, the brand risks losing the customer in right attitude and aptitude will always be the short term or altogether. We have reached given the support and tools they need to a point where the overall experience has help them rise through the ranks. We say we become more important than just the product grow our team members from “dish to DO”, – in this case, the dish that is meaning joiners can start served to the table. as waiting staff or in the “Giving team To avoid this, TGI Friday’s kitchen and see a career members a path undertakes a number of path through to becoming efforts, some large others one of our directors of to a fulfilling and small, to place our team operations, overseeing rewarding career members at the heart of the whole regions. We’ve got brings out the best in dozens of examples of this business. Back to our mantra “happy team members equal them. Recognising and beyond – much of our happy guests”. However, and applauding hard executive team (the board) keeping team members happy made up of people who work motivates more isstarted requires a significant monetary on the restaurant investment. There is no doubt of the same thing” floor with Friday’s. the casual dining market A lot goes on behind is currently operating in a the scenes to make this tough environment, predominantly due to a career progression possible. We invest heavily decrease in footfall. We have seen an increase in our apprenticeship programme and offer in restaurants introducing discounting industry-recognised qualifications including initiatives – with some successful while other stages one to five in English and maths, discounts may have devalued the brand. This and training up to Level 3 in hospitality – a year there has been a slew of branch closure 12-month development plan equivalent and restructuring announcements from some to two A-levels offered in partnership with of the biggest names in the sector. HIT Training. We also invest and develop technology in the area. For example, we created the Friday’s Academy app to allow Needs must team members to track their progress and In times of “needs must”, it can be tempting to make the training and qualifications as for brands to look at outgoings and attempt accessible as possible. It was downloaded to make cost-cutting efficiencies when it 3,500 times within a few weeks of launch. comes to those that don’t offer a clear and We are also passionate about recruiting tangible return on investment. For some, from within – 100% of our general managers costly employee engagement initiatives can are recruited from our existing talent pool fall into this category, as dangerous as this and we have a 95% retention rate for our might be for the overall lifeline of the brand. managers in training. However, in this testing environment TGI We take a similar approach to our Friday’s is bucking the trend. We opened operations and support teams who work in several new restaurants last year and opened

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our head office. We recently created a new operations team alongside two additions to the support centre – entirely from our population of general managers. As well as bigger initiatives we find smaller, everyday rewards are a fantastic way to keep team members engaged and motivated. For example, you may have noticed the pin badges our team members wear. These aren’t simply for aesthetics, they represent a roll call of that individual’s achievements throughout their Friday’s career.

Recognition Another example is instant reward MARC (scratch) cards, which are given to team members by their manager or peers. These are given out as instant and ad-hoc recognition for a great job carried out by a team member. Prizes include paid days off work, cinema or theatre tickets, vouchers for a family dinner and much more. We allocate about 30,000 of these each year to a workforce of roughly 6,000. This gives a good idea of the sort of investment that has gone into this reward scheme alone. We offer lots of annual events for team members too, all geared towards recognising their hard work. For example, our TGI Friday’s UK Bartender Championship allows our best bartenders to show off their skills and compete to win a slot in the World Bartender Championship. Meanwhile, our “Legends” programme invites team members to nominate their stand-out colleagues to be immortalised as Friday’s Legends. We receive thousands of nominations each year, with hundreds of winners recognised in a glitzy, all-expenses-paid ceremony. If all this sounds like a lot of work, it is, but giving team members a path to a fulfilling and rewarding career brings out the best in them. Recognising and applauding hard work motivates more of the same thing. Innovative employee engagement pays off – for team members and your bottom line alike. As you can see we like a mantra and to reinforce this commitment to our team members we have just announced our new Friday’s Family Motto, which reads: We live our family values We believe in everyone We act fair, show we care We always bring the fun! It would be easy for the chief marketing officer to write about the next big thing in the marketing space, the newest technology and digital innovation – and trust me these things are also all in play, with more to come on this. But bringing new guests to the door means nothing if the experience they have doesn’t live up to expectations. Fortunately, I find myself in a brand where I have no doubt the experience will be something memorable for those guests that join us, and that we will recruit them as loyal guests. Can you say the same? ■

Steve Flanagan is chief marketing officer of TGI Friday’s

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Why product testing is good for you Avoiding a consumer backlash by doing the right kind of product testing. With the Soft Drinks Industry Levy kicking in at the start of April the category is in the limelight. Notwithstanding the fact that the initiative is a regressive tax (less well-off people pay a higher proportion of their disposable income on soft drinks); that obesity has been rising as fast as sugar consumption has been falling in recent years; and that only 3% of calories come from soft drinks anyway, itâ&#x20AC;&#x2122;s a tax that has delighted anti sugar campaigners. Similar sugar exercises have been introduced in various countries. France took the plunge six years ago, while Norway has been at it since 1922. In terms of the global clampdown on sugar consumption, the UK is well behind the curve. Each country that has implemented the sugar tax has been working with different levies under different sugar thresholds >Â&#x2DC;` `Ă&#x20AC;Â&#x2C6;Â&#x2DC;Â&#x17D;Ă&#x192; VĂ&#x20AC;Â&#x2C6;Ă&#x152;iĂ&#x20AC;Â&#x2C6;>] Â&#x201C;>Â&#x17D;Â&#x2C6;Â&#x2DC;} Â&#x153;Ă&#x203A;iĂ&#x20AC;>Â?Â? Ă&#x192;Ă&#x2022;VViĂ&#x192;Ă&#x192; `Â&#x2C6;vwVĂ&#x2022;Â?Ă&#x152; Ă&#x152;Â&#x153; >Ă&#x192;Ă&#x192;iĂ&#x192;Ă&#x192;Â° However, to date, thereâ&#x20AC;&#x2122;s no evidence of a reduction in Â&#x153;LiĂ&#x192;Â&#x2C6;Ă&#x152;Ă&#x17E;Â° Mexico introduced a sugary drink tax in 2014 and a six per cent decline in sales has since been reported. This equates to just 16 fewer calories a day. As a result of this lack of clarity, the main soft drink companies in the UK have responded in different ways: Lucozade Energy changed the recipe to avoid the levy and, >VVÂ&#x153;Ă&#x20AC;`Â&#x2C6;Â&#x2DC;} Ă&#x152;Â&#x153; , w}Ă&#x2022;Ă&#x20AC;iĂ&#x192;] Â&#x2026;>Ă&#x192; Â?Â&#x153;Ă&#x192;Ă&#x152; Ă&#x2039;Ă&#x2C6;Ă&#x201C;Â°Ă&#x2C6;Â&#x201C; Â&#x2C6;Â&#x2DC; Ă&#x203A;>Â?Ă&#x2022;i Â&#x153;Ă&#x203A;iĂ&#x20AC; Ă&#x152;Â&#x2026;i Â?>Ă&#x192;Ă&#x152; Ă&#x17E;i>Ă&#x20AC;Â° Â&#x2DC; >Â&#x2DC;Ă&#x2022;>Ă&#x20AC;Ă&#x17E;] Ă&#x152;Â&#x2026;i Ă&#x2022;Â&#x201C;LiĂ&#x20AC;Â&#x2DC;>Ă&#x2022;Â?`Â&#x2021;L>Ă&#x192;i` wĂ&#x20AC;Â&#x201C; Ă&#x20AC;i`Ă&#x2022;Vi` Ă&#x20AC;Â&#x2DC; Bruâ&#x20AC;&#x2122;s sugar content from about 10g per 100ml to just below 5g, reducing the calorie count from just under 140 to about 66 per can. The outcome? Shoppers in Scotland stockpiled the original variant and an online petition gained over 50,000 signatures. Brands such as Coca Cola Classic, Pepsi and Red Bull remain unchanged. Coca Cola have reduced the size of their 1.75ml bottle to 1.5ml but otherwise have reported sales holding up Â&#x2C6;Â&#x2DC; Ă&#x152;Â&#x2026;i 1 Â° i>Â&#x2DC;Ă&#x153;Â&#x2026;Â&#x2C6;Â?i ,i` Ă&#x2022;Â?Â? Â&#x2026;>Ă&#x203A;i >``i` Ă&#x2039;Ă&#x201C;Ă¤Â°xÂ&#x201C; Ă&#x152;Â&#x153; Ă&#x192;>Â?iĂ&#x192; of its standard variant and have overtaken Lucozade Energy as the UKâ&#x20AC;&#x2122;s best-selling energy drink as shoppers favoured full sugar versions. The Coca Cola owned Monster brand has also reported increasing sales. This is in spite of The Grocer magazine reporting that retailers had increased the prices of these unchanged brands by more than the sugar tax would suggest. Other brands like Sprite, Dr Pepper, Fanta and Vimto have been reducing the sugar content over a long period (and are now under the sugar levy threshold) while Fever Tree has Â?>Ă&#x2022;Â&#x2DC;VÂ&#x2026;i` > Â&#x2DC;iĂ&#x153; ,ivĂ&#x20AC;iĂ&#x192;Â&#x2026;Â&#x2C6;Â&#x2DC;}Â?Ă&#x17E; Â&#x2C6;}Â&#x2026;Ă&#x152; Ă&#x20AC;>Â&#x2DC;}i Â&#x153;v Â&#x201C;Â&#x2C6;Ă?iĂ&#x20AC;Ă&#x192;Â° ->Â?iĂ&#x192; w}Ă&#x2022;Ă&#x20AC;iĂ&#x192; for brands with health and low sugar credentials like Lucozade Sport, Lucozade Zero and Sugar Free Red Bull are faring well in this new climate of heightened sugar awareness.

However, there can be consumer backlash when much-loved brands reformulate their product. In 2011 Twining’s Earl Grey Tea changed its recipe, leading to a forceful consumer social media campaign that succeeded in bringing back the original.

almost purpose-designed to win a headto-head blind sip test. They ran the Pepsi Challenge to be able to make product claims, and Coca Cola perpetuated the problem by designing a product to then beat Pepsi on the same type of test.

Most famously, this occurred with Coca Cola, a story that has been depicted widely including in Malcolm Gladwell’s “Blink”, and by Thomas Oliver in his 1986 book “Real Coke, the Real Story”. But most importantly, it highlights the importance of doing the right type of product testing of new variants before changing the recipe.

In reality (and unlike taste tests), people drink a whole can or bottle, sometimes more, and on more extended drinking Coke comes into its own and the sweeter Pepsi product can be less attractive. This is also true of beer and spirits brands looking to reduce the ABV – such changes to the taste can only become apparent after a few glasses. In real life consumers have a drink and if they like it they will buy it again – they don’t take a sip of two unknown options and then decide. Finally, they buy the brand not just the liquid, and in the case of Coca Cola they buy into 100 years of rich imagery and associations.

In the early 1970’s Coca Cola dominated the market and Pepsi was the upstart who decided to focus on product appeal by launching the Pepsi Challenge. Consisting of around 13,000 blind head-to-head tests of the two brands, the Challenge was conducted in shopping malls and stores across the US, with the result that 56% preferred the taste of Pepsi over Coca

>° *i«Ã Ì i Ài v ÀVi` Ì i w ` }Ã through TV advertising showing the Pepsi Challenge in action. This mixture of product testing and marketing worked; in 1972, 18% of soft drink users Americans exclusively drank Coca Cola, 4% Pepsi. By the early 1980’s Coca Cola was drunk exclusively by 12%, Pepsi by 11%. Needless to say, Coca Cola were concerned, and their own internal ÌiÃÌÃ V wÀ i` Ì >Ì *i«Ã Ü>Ã `ii` preferred on blind head-to-head tests. They developed New Coke to counter this and after repeated reformulations were convinced they had the winning product. Launch took place in 1985 with a huge marketing budget. And there was a huge public backlash – to say consumers did not like the new variant is putting it mildly. There were public protests, boycotts and bottles being emptied into the streets in several cities. After 79 days Coca Cola withdrew the product from the market and relaunched the original, Coca Cola Classic. It was called the “biggest marketing own goal of the century”. / i Ài>Ã Ì Ã L>V wÀi` Ü>Ã LiV>ÕÃi Coca Cola did not seem to appreciate the difference between testing designed to make product claims (head-to-head sip preference tests) and product testing for liquid development purposes. Pepsi has a product with an instant taste appeal, one

The ideal way to product test for recipe changes would include a Triangle test (to test whether consumers can taste, or ‘spot’, the difference between the current and new recipe); Monadic taste testing, where matched samples of regular drinkers taste and rate multiple cans/glasses of the new and current recipes blind; and a test of the new recipes against the brand (not blind), so that drinkers are rating the actual taste against their taste expectations and experience. We have done such testing with some of the nation’s favourite cider and beer brands, which has given some Ì i V w`i Vi Ì > i Ì i V > }i > ` others the prior warning they needed, along with guidance on how to adapt the new variant to further suit consumer taste and perception. Brands who change their recipe on the basis of a head-to-head blind sip test results can almost expect a public backlash. Let’s hope this isn’t the case with Lucozade Energy and Irn Bru.

Martin Dinkele Martin heads up Cardinal, a specialist drinks research agency that is part of the Food & Drink Division at Morar HPI. Cardinal specialises in product testing for brewers and drinks manufacturers, including both claims research and liquid development.

Michelin-starred Matt Gillan tells Jessica Mason how he blossomed from a part-time washer-upper in a pub kitchen to working for Gordon Ramsay and cofounding Brighton coffee shop and restaurant concept Red Roaster/Pike & Pine, with plans to expand into London

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The Vineyard ichelin-starred Matt Gillan’s hospitality career began as a In 2001, Gillan moved on to The Vineyard in 15-year-old when he compared Berkshire to work under John Campbell. He the money he was earning from says: “John told me he didn’t take anyone a paper round with his best friend Paul’s on for fewer than two years but I’d booked wages for working in the kitchen of the Hen a ticket to Australia with a year to use it. & Chicken in Alton, Hampshire. John took me on for a year and it was the kind of kitchen I wanted to be in. John was He says: “I packed in my round and very methodical, thoughtful and organised. started washing up on Saturday nights and There was never any shouting. I was there for Sunday daytime. Paul decided he wanted the year and didn’t hear him shout once. He to be a chef so I took his extra washing up deals with people very differently – he gets shifts and began to spend more time in inside their heads and knows which buttons the kitchen. to press to get them to do what he needs “When he left, I stepped into his them to do. It was great and the team we had position, worked with head chef Nick there was amazing. Out of 16 of us, at least Wentworth and got my brother to replace half have gone on to earn Michelin stars.” me on washing up. I moved into the kitchen and really enjoyed it. I enjoyed the While in Australia, Gillan worked in buzz of the kitchen on Saturday nights – a small restaurant with chef and author music was always blaring out. I loved it.” Shannon Bennett, who has gone on to be The celebrity chef phenomenon was head chef of Melbourne restaurant Vue de on the rise at the time – the mid-1990s Monde and a MasterChef judge. – and Gillan’s inspiration was Gordon Gillan says: “It has been amazing to Ramsay. Gillan became a chef de partie at watch his progress. He has literally done Midsummer House in Cambridge under it from nothing. His investor was a good Daniel Clifford following a 15-minute friend and when Shannon borrowed some interview. money promising to pay it back in three He says: “Midsummer House was years, he paid it back within a year. That nothing at that point. Daniel had been shows how dedicated he is.” there six months and now it’s one of the For the rest of his time in Australia, best restaurants in the country. It’s amazing Gillan earned money through humble to have been a part of that. I learnt what a fruit-picking. However, it gave him further proper kitchen is. Daniel asked me what I insight into his true trade. He says: “It was wanted to do and when I told him I wanted great to see the beginning of how I get my to work for Gordon Ramsay he said: ‘You’re fruit and vegetables. I have huge respect an idiot! You’re not ready. You’re not even for courgettes now! Physically, fruit and close.” But he promised to get me to that point – and he did “The Vineyard was great and the because my next move was to Restaurant Gordon Ramsay.” team we had there was amazing. Gillan left the now MichelinOut of 16 of us, at least half have starred Midsummer House after gone on to earn Michelin stars” about three-and-a-half years but found his dream move was more of a kitchen nightmare. He says: “It was a massive disappointment. Even veg picking was the hardest job I’ve ever though I liked the pressure and the focus, done. It was back-breaking. I think every the whole thing was a let-down – and chef should do it, though – they would Gordon wasn’t there. save budgets by ordering less stuff and “I learnt a lot but not so much about understand how to stop so much going food. Going to Gordon’s was a bit in the bin. It also gives people a better like stepping back in time. I was used understanding of ingredients.” to constantly asking questions but at Gordon’s you don’t do that – you keep your The Pass head down, you work and you do what Back in England, Gillan’s next role was you’re told. I thought ‘this isn’t for me’. I’m at South Lodge country house hotel in inquisitive and want to know why I’m doing West Sussex as a sous chef at its Camellia something. restaurant. He says: “I wanted a position at Gillan says Clifford had a similar a low level because I wanted to learn how attitude until an unexpected turn of to manage a team. I wanted to embark events at Midsummer House. He says: on every chef’s dream – running my own “The restaurant flooded – it was near a kitchen. The idea was to get back into canal – and we had to close for about six Michelin-level kitchens. weeks and went to the Fat Duck. Going “I met Lewis Hamblet the executive there opened our minds and made Daniel chef and wandered around the grounds question everything he had learnt. He said: for the day and thought it was cool. Lewis ‘Right, we’re all starting again – together.’ was brutally honest. He’s from Bolton and Daniel always asked: ‘How can we make a proper northerner. He said: ‘This is how it this better?’ It was great. With Gordon’s, I is – warts and all. You’ll have a lot of good stepped into this three-starred kitchen and days and a lot of bad days too. Do you expected it to be more advanced and for want it?’ I thought: ‘Yeah, I do.’ there to be more conversation because “A year after I started I was promoted they’d hit that pinnacle – but it wasn’t.” to head chef, then a year and a half later ▲ www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Feature I launched The Pass. We redesigned the kitchen while the hotel doubled in size from 44 bedrooms to 91 and we were working from portable cabins. We were waiting for the kitchen to come online and The Pass was a last-minute addition – it started as a chef’s table. I knew I’d have to make a choice – carry on with what I was doing with Camellia and its three rosettes or take a punt on this new concept called The Pass that hadn’t been done before and had no identity and, if it didn’t work, I’d be out of a job. Obviously I chose the latter. It doesn’t seem like the sensible option, but then that’s me. “I took that risk because I knew I’d have complete control. At Camellia there were limitations on the food and how far you could progress as well as the amount of people you had to cook for on a Saturday or Sunday lunch. With The Pass there was literally nothing – no expectations and no limitations. I was free to do what I wanted. We opened and it was dead. Some Saturday nights we cooked for two or four people but we used all that extra time to mess around with food. It was a playground. I used to say to the new guys who came in: ‘If you’ve got an idea – do it. You won’t have this opportunity in other places.’ Two and a half years later we got our first Michelin star, 4 AA rosettes and were in the top 20 in the country.” Following his stellar success at The Pass, tragedy led Gillan to come to a difficult decision to move on. He says: “The year I decided to leave was a real up and down kind of year. At the start we had a refurb in the restaurant and were closed for the first two weeks. When we got back it was really icy and one of my chefs, Grimmy, was driving home, lost control of the car and that was that. His death hit us all really hard. Three weeks later my daughter was born and three weeks after that I was cooking for the Great British Menu. I was busy but didn’t process it all because everything happened in such a short space of time. Towards the end of the year we were busy and short-staffed. One day one of my guys, Jonray Sanchez-Iglesias, came in and wasn’t feeling well so I told him to go home. Then I got a call from his brother Peter who told me Jonray had passed away. He had cancer and was only 32 years old. I couldn’t process it. Jonray had always told me I had to do

“We then began looking at places where cafes switched up their offer for dinner – in Los Angeles and Australia it’s a regular thing. We knew our place already had a late licence and all we needed to do was bring that licence forwards” something for myself. I thought: ‘That’s it, I’m going to leave.’ I didn’t know what I was going to do but I felt like I was done.”

On the beach In 2015, Gillan launched a pop-up with Mike Palmer, the man behind Lucky Beach Cafe on Brighton seafront. Gillan says: “Mike and I got on really well. I asked for some time at the start of September and he said it was the wrong time as the schools were going back and it would be really busy. But he moved it forward a week and it turned out to be the hottest weekend of the year. That was an absolute killer for Mike because, being on the beach, he’s meant to make the most of those scorching days. He told me I cost him a fortune but we stayed in touch and said we would do something in the future. One day he proposed opening

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another cafe that would operate during the day, while I could use the space during the evening as a restaurant. I thought it was a silly idea and a bit of a pain that would be like a pop-up business in a cafe or a cafe that would feel too high end. Then he asked: ‘What if the atmosphere changes and the lighting changes?’ It was then I began to think the idea sounded a bit more interesting. “Shortly after, Mike found a space with a roastery – Redroaster – where we could roast our own coffee. I didn’t have a clue about the coffee world but when I saw it, I knew it could be cool. We then began looking at places where cafes switched up their offer for dinner – in Los Angeles and Australia it’s a regular thing. We knew our place already had a late licence and all we needed to do was bring that licence forwards. “Everything was straightforward, the only issue was the old customers – Redroaster had been like a community centre for years. There were sofas at the front that were always occupied by people who would nurse a cup of coffee for three hours. We moved the sofas and there was uproar. We changed the coffee cups – more uproar. “When Redroaster opened it was trendy and the place to go. Redroaster and Monmouth were the first two speciality coffee roasters in the country back then. Monmouth went massive but Tim Hume, who owned Redroaster at the time, was bobbing along. All of a sudden coffee got trendy and Brighton was bursting with cafes, coffee shops and micro-roasters but, while other places were getting baristas, he was still running Redroaster as a cafe. “We ran it from February to November 2016 as the original Redroaster and knew it was hard work as a cafe site. I’d heard Tim was looking to sell and Mike was looking for a second site anyway – mainly for low season on the beach so he’d have somewhere else to send staff. It wasn’t long before we got the place. “We got The Stella Collective to redesign it. It‘s based in Australia and it‘s designs have an outdoors feel. Mike likes the culture in Australia and the way ▲

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people go about their business in a cafe. He wanted to recreate that a bit but it was also about sustainability, health and wellness by creating a space where people could take ten minutes out of their day to chill out – a space where ten minutes felt like half an hour because of the place.” Gillan admits the innovative concept of Redroaster Cafe by day and Pike & Pine high-end restaurant at night didn’t get off to the perfect start. He says: “Dinner always felt like we were trying to shoehorn it in. The daytime worked straight away and ticked all the boxes. We worked out the way for things to be equal was for me to oversee food in the day as well as the evening. I look after food, Mike looks after direction. That was the deal. “When we opened, dinner was supposed to be high end. It was meant to be a step above what I was doing at The Pass and I was looking at it as a two-star level. I quickly realised The Pass had been the perfect storm – the right team and the right number of covers – and trying to replicate it was too much. “There was no shame in the level and price of the food in the evening because that was what it cost, but it began to feel like a pop-up and having to change the kitchen over for Pike & Pine was a massive jump. “We launched tasting menus and on Friday and Saturday nights it was great – people were spending £110 per head and we quickly became a celebratory restaurant where you’d come on a birthday. That’s only good if you’re open three nights a week and the problem with running a restaurant at that level is you require a consistent team regardless of how many covers because that’s the only way you can make things more intricate and special. We had to adapt and agreed to take the evening offer down a few notches and bring it more in line with daytime to make our lives a lot easier and the business more streamlined. Moving the daytime menu prevented it from being too scary and we got rid of the tasting menus. We decided, instead, to make it the best dining space in Brighton, which doesn’t

“I quickly realised The Pass had been the perfect storm – the right team and the right number of covers – and trying to replicate it was too much” necessarily mean Michelin stars. We closed for two weeks and came back with a much clearer focus of what we wanted – to keep dishes much more simple.” Gillan decided to spice things up by launching a series of collaborations last year. Following a number of crossovers with renowned Brighton and Hove restaurants such as 64 Degrees and The Set, he is now looking outside the city and across the Atlantic for new hook-ups, with a collaboration with Detroit-based steakhouse Prime + Proper “in the pipeline”. Other collaborations have included Hove-based cocktail bar The Gin Club, and a themed menu with wine producer Ridgeview.

Expansion into London Gillan and Palmer are both eyeing expansion of their dual concept. Gillan says: “Mike and I want to expand and grow this concept. Mike has always wanted a group of places and for lots of people expansion is just chat, but not with Mike. It makes sense for this place because we have the roastery so we’re committed to buying certain amounts of coffee. You don’t know how much you’ll sell but you have paid for it and need to use it and store what you don’t use until you can. Out of 100 kilos of coffee, if we use 60 kilos at the main site during the week, we still have 40 kilos to shift. The most logical thing is to have another place. That way, another place of ours might use 20 kilos a week and we would only have to sell another 20 kilos elsewhere – this would make our lives much easier. “We’ve looked at Brighton sites and seen offers but another site will depend on the rent. The higher the rent, the more

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tables we need to turn. We’ve looked at something in London as well. We have some people who want us to do something in Soho. The rents are astronomical there but we would have a massive footfall to match that. In Brighton we have had to be more flexible with our offer as there are fewer people. In London you can do what you want – Flat Iron just does steak and chips and can get away with it because they do it well. In Brighton, only a certain number of people would want that – and only on a couple of days of the week. What would expansion mean for Gillan personally? He says: “I’m based in Horsham and would work between the two sites. I think I need to step back, literally, from the kitchen because I think I’ve become too integral to how it functions and I don’t want things to fall apart if I ever step away a little. Now I’m overseeing things more and developing menus with the team while working on drinks and other things. “We don’t want to have drinks on our list that everyone else can get. Before we opened, I wanted us to deliver the best cocktails you can get outside a cocktail bar. My friend Andrew Harrod runs the Dead Parrot cocktail bar in Horsham, which always wins cocktail competitions in Brighton. He developed our first cocktails. I gave him some coffee samples roasted differently and he created the recipes. I think we could make more of a thing of it but it’s about consistency and making sure our team are well trained. I’d like to have a range of espresso martinis so there’s a selection because we roast six different coffees. “We have plans for the garden that will make it a much nicer space. We’re going to lose the shed and cover the garden to give us a distinct and different space for dining. Mike had the idea that we could make it a tasting room on Friday and Saturday nights – but I think we’ve maybe got enough going on!” Meanwhile, Gillan has just launched casual dining concept Electro Pirate at The Foresters Arms, a pub near his Horsham home. ■

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Insight

Value

Quality

★★★★★

Deals

★★★★★

Rising to the challenge Despite the tough times our industry is facing, these challenges can stiffen resolve and performance, says Cyril Lavenant, director of foodservice for the UK, NPD Group

oxing legend Muhammad All this has been putting pressure Ali said: “It’s lack of faith that on consumers. The evidence is plain in makes people afraid of meeting the fluctuation in discretionary income, challenges, and I believed in negative consumer confidence and myself.” The Nobel laureate TS Eliot said: declining retail footfall. However, in the “If you aren’t in over your head, how do face of slower out-of-home (OOH) traffic you know how tall you are?” growth, it’s more difficult to persuade Anybody working in the cautious consumers to spend foodservice industry has money or make impulse probably learnt how to meet purchases. And foodservice Meeting the challenges. They’ve learnt business challenge... is competing with other the value of being thicksectors fighting for Define your core business skinned. The business discretionary income – Know your customers environment is difficult such as cosmetics, toys Understand your costs and more than ever the and sportswear. people running the many So you can be forgiven Innovate and surprise businesses that make up the if you have asked yourself Train your staff British foodservice industry how your business can are showing resilience. best navigate this stormy Politics has created plenty environment. But at times like of uncertainty, with worry over the UK’s these, challenges can stiffen resolve and Brexit destiny front of mind for many performance. consumers and businesses. There are increasing headwinds in the economy, too, What are consumers thinking? with inflation in December 2017 at 3%, So what’s motivating and attracting compared with 1.6% the year before. Since consumers in the British foodservice February 2017, inflation has been growing market? It’s clear value, deals and quality ahead of wages, although there are recent are the big themes. In 2017, visits involving signs it is easing. In November 2017, the deals or promotions grew ten times faster Bank of England raised interest rates to than the market, at 2.8%, and now account 0.5% – the first rise for more than a decade. for 28% of total OOH visits. ▲

Deals and promotions up 2.8% over previous year

72%

Non Deal/ Promotion – down

-0.4%

28%

Deal/ Promotion – up Source: The NPD Group/ CREST UK year end December 2017

+2.8%

www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Insight Also, as at YE 2017, seeking a “good price” was the second most important reason for choosing a foodservice outlet, with this motivation scoring 26% and moving up from third place in 2012, when it scored 23%. Consumers are also more inclined to seek quality of food, with this motivation scoring 19% in 2012 but showing an increase to 23% by the end of 2017. The common denominator is value – and as the market becomes more challenging consumers are more and more on the lookout for value. Our research reveals quick-service restaurants (QSR) and casual dining in particular are performing strongly in terms of value for money and quality. In QSR, “value for money” was rated “excellent” 30% of the time as of YE 2017, an increase of eight percentage points since 2012. Casual dining scored 28% for “excellent” value for money, up four percentage points since 2012. Looking at “quality” and the “taste of food and drink”, QSR was rated “excellent” 33% of the time, up seven percentage points since 2012, while casual dining did even better on excellence for “quality” and “taste of food and drink” at 35%, up one percentage point since 2012. Another trend is consumers focusing more on lower-priced dayparts such as breakfast and lunch, while limiting the “treat” occasions such as dinner and snacking. Our numbers on visits underline this, with breakfast and lunch recording increases in 2017 (5% and 1% respectively), while dinner and snacking saw visits decline about 1% each. At times like these – when dinner, the highest revenue-generating daypart, is in decline and when supply exceeds demand – it’s imperative to have a strong core business and a clear strategy. Operators need to be more than attractive to customers, they need to be “super attractive”. Manufacturers have to be innovative and offer more premiumisation while still containing costs. Above all else, operators and manufacturers must have a clear understanding of what drives consumer demand. This might sound like stating the obvious but from my personal experience of working with people in the foodservice industry, speaking with them and learning

Customer Satisfaction: Value for money % of ratings as 'excellent'

30%

28% 22%

YE Dec 2017

YE Dec 2012

YE Dec 2017

Quick-service restaurants

24%

YE Dec 2012

Casual Dining

Customer Satisfaction: Quality/Taste of Food & Drink % of ratings as 'excellent'

33%

35% 26%

YE Dec 2017

YE Dec 2012

YE Dec 2017

Quick-service restaurants

34%

YE Dec 2012

Casual Dining

Source: The NPD Group/CREST UK year end December 2017

about their challenges, I can say there are operators that don’t fully understand their consumers. Why? Because some don’t research the trends carefully enough. In my experience, there is real scope for driving foodservice business with good-quality market intelligence.

“From my personal experience of working with people in the foodservice industry, speaking with them and learning about their challenges, I can say there are operators that don’t fully understand their consumers”

Declining retail footfall At NPD Group, we have identified four big external challenges in foodservice – declining retail footfall, the fact OOH purchases are non-essential, pressure on margins, and an ageing population. Let’s look at the first of these – declining retail footfall. Each year the number of consumers operators can physically attract is declining. According to Springboard, shopping centres lost 12.2% of their footfall between 2008 and 2016 and a further 1.6% comparing 2017 with 2016. The figures for the British high street were minus 16.5% and minus 0.9%, although retail parks improved footfall. The internet is driving that decline, of course, with online as a total percentage of retail spending reaching close to 17% in 2017. What can foodservice operators do? One option to consider is participation in a delivery aggregator’s app and website so you are benefiting from the burgeoning app-based delivery channel.

Competing for consumers’ wallets Is spending money on a meal out at a pub or restaurant or on a wrap during lunch hour an essential purchase? The answer is no. It’s never the same as spending money on a child’s school needs or health or clothing for our family. Office for National Statisics (ONS) figures show 60% of households on lowest incomes have higher expenditure than income so it’s understandable there’s limited money available for OOH occasions. The foodservice industry isn’t the only one competing for the consumer’s indulgence. ▲

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Insight customers might be looking for. Don’t be scared to innovate to cater for this age group’s specific needs and tastes. Will Britain’s over-50s strengthen the delivery boom? We think yes. While the over-50s currently only account for 8% of delivery via apps, we see this increasing rapidly as older consumers become more app savvy. The industry can expand home delivery for the over-50s, especially if operators innovate with lighter food options. Menus can offer more low-GI foods, for example, including many fruits and vegetables, beans, minimally processed grains, pasta, low-fat dairy foods and nuts. Menus can do more to assist consumers who are managing diabetes or watching their cholesterol.

That competition for the contents of our wallets becomes tougher in times of uncertainty and weak consumer confidence. It’s not easy to overcome those issues but one approach is to focus on food and drinks that are difficult for consumers to replicate easily at home. These can include speciality coffee or seafood. Creating a repution for coming up with new products or creating new promotions or delivering great value for money is also key to holding the loyalty of customers. Amaze them and they’ll return.

Pressure on margins However, the biggest issue in an environment of rising costs is maintaining margins. Well-known high-street foodservice brands have had to re-engineer their operations in the face of tough trading conditions. The list of challenges is long – workplace pensions, inflation (especially the price of ingredients), business rates, property tax, sugar tax. Then there’s the National Minimum Wage, the National Living Wage and the Brexit-related staff shortage that is also bumping up wages. Again, proposing solutions is easy but making them happen is another matter. However, there are foodservice operators that are working hard on value engineering, creating a better experience, minimising expensive ingredients. All these can have a beneficial effect. There is good evidence of value engineering in QSR, pubs and full-service restaurants, where we can clearly show how some operators are moving consumer spending up into higher price tiers, which means lower spending in the less attractive price tiers. Imagine your customers always ask for the best and are prepared to pay for the privilege – that’s what migration to higher price tiers means. But how can you track that once you have made the necessary changes? It also pays to understand the top “food concerns” because that can be translated into providing the right kind of premiumisation. Take “freshness”, for example. The design of your store or outlet, as well as packaging and even smell, can help to underline the freshness of your product. So in the face of lower margins and tougher costs, it pays to adopt as many strategies as your business will allow. Obviously the key is to increase the number of visits to your business. Find ways to increase average spend while suppressing costs without compromising quality. Improve menus by rationalising them and expanding in areas where you can create a sense of value and protect profitability. Upskill staff so they can help you build sales.

the growth in the country’s population Why it pays to be ‘excellent’ between now and 2022, according to the More customers. That’s what it comes Office of National Statistics. This is an down to – more customers today and as attractive proposition for British foodservice, many of them as possible coming back especially as many over-50s are wealthier, another day. I mentioned earlier the QSR more active and more experimental when and casual dining channels are getting eating out than previous generations. Total good levels of “excellent” ratings for OOH visits among people aged value for money, quality and taste. above 50 could increase by But what about the “overall more than 4% by 2022 (130 experience” a customer has million visits), three times with your business? faster than the total OOH If you can wow them market. across the board and the average bill for Not only will the overthe 50 to 64 age group get that “excellent” rating for “overall 50s account for more at a full-service experience”, you are visits, they are already the restaurant, higher massively increasing the biggest spenders when it than any other chance of a repeat visit. comes to eating out. The age band Our findings show if they average bill for the 50 to rate you as “excellent”, about 64 age group at a full-service 70% say they will visit again. A restaurant is £13.41, higher than rating of “very good” will only see about any of the other age bands, including 25 to 49% state an intention to revisit. If the 34s. The over-65s have the second-highest verdict on you is simply “good”, expect average spend, at £13.10. Older customers will also sustain weekend business. Our data only 30% to say they will revisit. You need to aim high – the difference between “very shows over-50s will drive more than half high” and “excellent” could mean 290 of an expected 14% increase in weekend million visits for the wider industry. Some foodservice traffic by 2022 and eventually of those will be repeat visits. They say the account for 29% of weekend visits. best source of new business is from your Again, responding to these trends existing customers. That’s certainly true requires a blend of strategies. Start focusing in the foodservice industry and, when all more on older people while retaining the is said and done, it’s probably the core appeal of your customer base among the challenge. ■ younger age bands. Understand what older

£13.41

Will you definitely visit again?

69.9%

Potential to win or lose 290m visits

49.1% 30.1%

Ageing population

23.2%

The over-50s is a fast-growing demographic that will account for more than 70% of

Cyril Lavenant is director of foodservice for the UK at NPD Group

Source: The NPD Group/CREST UK year end December 2017

5.6% Excellent

Very Good

Good

Fair

Poor

www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Opinion

Drinking by numbers Paul Chase looks at the figures behind claims England requires minimum unit pricing to save the nation from alcohol-related harm

s the “public health” hysteria over alcohol and clamour for minimum pricing in England continues, it’s useful to get an overview of the issues by looking at some straight statistics. I increasingly think the Office for National Statistics (ONS) has become an oasis of calm objectivity in a sea of opinionated, emotionalised subjectivity emanating from alcophobic activists. I’ve been looking at statistics published in 2017 by NHS England that are based mainly on ONS data and some from Public Health England. What do these numbers tell us about alcohol use and abuse and its consequences in our society? First, the much-vexed question of alcohol-related hospital admissions. There

“So 2.1% of hospital admissions caused by alcohol misuse is no crisis, it isn’t growing like topsy, and it won’t bankrupt the NHS”

Broad measure

Graph 1: Estimated alcohol-related hospital admissions – narrow measure Last ten years Thousand 400

Total number of admissions

300

Partly attributable conditions

200

Wholly attributable conditions

100 0

0 20

1 20

Percent 2.5 2.0 1.5 1.0 0.5 0.0

0 20

1 20

Local Alcohol Profiles for England (LAPE), 2015/16

were 339,000 such admissions in England, representing only 2.1% of all hospital admissions, a figure that has changed little in the past ten years. This statistic is a measure of the number of hospital admissions where an alcohol-related disease, injury or condition was the main reason for the admission or alcohol was a secondary diagnosis related to an external cause, for instance an alcohol-fuelled fight. This is known as the “narrow measure” of alcoholrelated hospital admissions. It is a record of “admission episodes”, not people admitted, which is a much lower figure. Graph 1 also shows the number of admission episodes that were wholly attributable to alcohol with no secondary causes, which was 100,000 in 2015-16.

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You may have heard the term “broad measure” regarding alcohol-related hospital admissions. This records 1.1 million admissions but includes primary diagnoses plus admissions where an alcohol-related condition was a secondary diagnosis and not the reason for the admission. The important distinction between the two measures is the narrow measure is a count of actual admissions to hospital for an alcoholrelated cause, whereas the broad measure includes that count but provides further information about alcohol-related conditions a patient may have had in addition to the reason for their admission. This provides an indication of the health burden alcohol misuse has across the whole population. Newspapers and causeoriented anti-alcohol activists often confuse the two measures to create alarmist headlines. So 2.1% of hospital admissions caused by alcohol misuse is no crisis, it isn’t growing like topsy, and it won’t bankrupt the NHS. In 2015 there were 6,813 deaths related to the consumption of alcohol (Graph 2), almost two-thirds (65%) for alcoholic liver disease (4,428). Alcoholic liver disease sufferers drink at the very top end of the harmful drinkers’ spectrum. Harmful drinkers are classified as men drinking more than 50 units a week or women drinking more than 35 units a week. Most of those dying from alcoholic liver disease drink

Opinion about 200 units of alcohol a week or more – the equivalent of a bottle of scotch a day. Every one of these deaths is an avoidable tragedy, but little more than 25 million adults in England drink alcohol at least once a week so harmful drinking and deaths from it arise from the product being abused by a very small minority of drinkers.

Graph 2: Alcohol-related deaths, 2005 to 2015 Thousands 8 6

57%

4 2 0

Alcohol attributable deaths by condition Thousands 5 4 3 2 1 0 Alcoholic liver disease

Fibrosis and cirrhosis of liver

Mental and behavioural disorders due to alcohol use

Accidental poisoning by and exposure to alcohol

Other categories combined

Office for National Statistics

Graph 3: Drink prevalence – last ten years Percent 80

Drank alcohol in the last week

60 40

Drank more than 8/6 units on heaviest drinking day in the last week

20 0

number of adults in England who reported drinking alcohol in the previous week in 2016, a fall from 64% in 2006 The number of adults in England who report drinking alcohol in the previous week (Graph 3) has fallen from 64% in 2006 to 57% in 2016. This equates to little more than 25 million adults in England – and the number of men drinking more than eight units and women drinking more than six units on their heaviest drinking day fell from 19% to 15%. And what about the old myth that we have a particularly bad drink problem in the UK and “we’re drinking more and more”? The UK ranks 19th out of 31 countries (Graph 4) in terms of annual alcohol consumption per head at little more than nine litres, while consumption per head has fallen by almost a fifth since it peaked in 2004. The overall picture of drinking in England is we are a nation of moderate drinkers, that harmful drinkers are a tiny minority, and the current clamour for ever-increasing regulation and restriction of alcohol sales is fuelled by the irrational fears and exaggerated claims of a noisy minority of alcophobic public health fussbuckets. ■

Paul Chase is a director of CPL Training and a leading commentator on alcohol and health policy

Graph 4: Drinking prevalence for adults – international comparisons Litres per capita (15 years +)

Most Recent (2011-15)

2,000

16 14 12 10 8 6 4 2 0

1. 2.

Uses most recently available annual figure during the period 2011 to 2015. UK data is for 2014 Organisation for Economic Co-Operation and Development Health Statistics

www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Opinion

Raising your game Access Hospitality head of marketing Katy Hamilton reveals five top tips for pub and bar operators to boost footfall during this summer’s FIFA World Cup

he FIFA World Cup 2018 will kick off on 14 June, bringing four weeks of football fever as pub and bar operators prepare for an increase in footfall. DesignMyNight, now part of Access Hospitality, has used its years of experience helping operators maximise bookings, promote events and streamline reservations to provide five top tips for driving that all important footfall. Nick Telson, founder of DesignMyNight and the Collins booking system, says: “The World Cup presents a great opportunity for pub and bar operators to increase footfall and, of course, profits. However, it is a competitive market so it’s important to raise your game and attract that all important football customer and, more importantly, get them spending.” Here are five top tips to boost customer spend during the football feast.

Avoid an early injury

that suits their requirements. We believe in simplicity and will be offering price-per-person packages, flexibility to customise drink and food packages, and premium packages.”

Match the match

Telson says: “Pub and bar operators should think creatively around their food offering. Consider tailoring dishes to reflect key ingredients from competing nations. For example, kimchi added to burgers for South Korea, sushi and tempura for Japan, tacos with guacamole for Mexico and anything involving barbecued meat for Brazil. These simple tweaks go a long way to helping create more of an immersive and quirky viewing experience for your customers. “Operators should consider driving loyalty and promoting their wider drinks offer across the month with a ‘tenth drink free’ loyalty card. Perhaps consider a World Cup drinks list of nations – not forgetting alcohol-free versions for designated drivers. Customers can tick-off each nation’s tipple during the course of the month while voting on their favourite Operators to win a prize.” should consider Managing loyalty through technology removes the headache of tireless administration driving loyalty and while also incentivising customers to keep promoting their wider coming back – a win-win for all!

No-shows are an issue for the industry as a whole. However, during major sporting events you should be even more cautious of leaving yourself with empty seats on match day. This also goes for accepting large group bookings without implementing pre-payment or card authorisation. drinks offer across Telson says: “Smart operators are bundling Keep your eye on the ball the month with a packages together and using their booking It has been reported 65% of customers don’t system’s technology to take a booking and tenth drink free know what to order when they first sit down so payment up front. For example, instead of just a the opportunity for front-of-house teams to make loyalty card booking why not offer a guaranteed seat, view of recommendations and upsell is huge during the a screen, a beer and a burger for £20? You could also World Cup, especially if operators plan themed menus consider using ticketing to sell your space and create more based on competing countries. of an event feel. Smart EPOS technology can prompt staff on what to upsell “At DesignMyNight we see customers who are delighted to and record individual staff performance, giving praise and rewards pay for guaranteed seating and a comfortable way to enjoy the where due. This kind of data can be used to make shifts more football. Gone are the days of young professionals wanting to be enjoyable for teams, potentially feeding into a staff league table packed in and watching the game over 50 pairs of shoulders.” with rewards for scoring against set goals. Consideration should be given to an in-house cup winner or prize bespoke to the individual.

Just the ticket

Why not take it a step further and create themed viewings to coincide with the matches you are showing? Using event and ticketing technology to create an event box office is super simple. These events can help customers feel “exclusive” to your venue, meaning they’re more likely to spend not only on drinks but also on food. It also creates a round-the-clock box office to sell your space without your staff having to get involved. Maxwell’s Group marketing director Anthony Knight says: “Raising our game is really important to Maxwell’s during big sporting events. We not only offer fantastic and compelling products to entice our customers to enjoy watching live sport in our venues but we also ensure the booking journey and pre-visit experience is as straightforward as possible. “Customers are provided with the information and given great flexibility at the point of booking to create a bespoke package

Bridging cultures, and technologies The World Cup has a unique opportunity to unite a nation, but what about uniting and integrating your technology? Telson stresses the importance of integration. He says: “If you are preselling packages or taking deposits it’s fundamental to be able to integrate the booking system with your EPOS provider. This enables your team to easily see on the till who has a booking and what they have paid for and/or pre-ordered, eradicating manual, inefficient work for your staff and providing immaculate customer service during a busy shift.”

To find out how Access Hospitality’s suite of technologies can help make your World Cup month a success, visit www.theaccessgroup.com/hospitality/

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Insight

Asking the right questions John Upton reveals how key performance indicators and net promoter scores can work for your company

et’s be clear from the start, we like metrics and key performance indicators (KPIs) and how they drive business performance. Many KPIs are very good and play a positive role in helping companies do a better job for their customers and shareholders. One of the most popular metrics with the most impact is Net Promoter Score (NPS), which is popular because it’s so easy to understand and measure. That also led to it being used across multiple businesses as the key customer success metric in daily operations and business planning alike.

Use with care Many companies tend to rely on the NPS score alone because they don’t have enough time (or resources) to digest all the accompanying customer comments they receive. As a result few, if any, of the words shared by customers (the verbatims) see the light of day. I know from my own experience in fast-growing restaurant businesses how hard it is to find the time to look behind the headline metrics. However, not taking the time to read what customers say can significantly increase the risk to your future success. For example, one of my colleagues recently told me about a well-known company he had carried out some work with. Headline KPIs were all trending positively, NPS all good, sales growing. However, when he reviewed the actual customer verbatims, 12.5% of customers said they wouldn’t return or were thinking of not coming back. Just take a moment to digest that. What if 12.5% of your customers told you they weren’t coming back? When did you last look at your customer verbatims to check what they were saying? Statistics like this certainly sharpen the mind about making time to look behind the headline score.

Customers’ words and need There is a further challenge from the

“We must force ourselves to reduce our reliance on the NPS score alone and read more of our customers’ words – as NPS creator Fred Reichheld told us to”

increasing over-reliance on NPS scores. The score alone won’t tell you if you are meeting your customers’ needs and, more importantly, which ones you’re failing to meet. A need can be defined as “something that must be there as without it the whole experience, service and proposition fails”. You therefore meet a need or you don’t. It’s a binary equation to address – not a percentage or score to incrementally improve. As a result, meeting customers’ needs has to be the fundamental deliverable and focus for your business. If you don’t consistently meet needs, because of their binary nature, you place your business (and its growth) at risk. Relying on improving your NPS score alone is not enough. Don’t just take our word for the importance of meeting needs, take a look at Harvard Business Review’s renowned article about the service-profit chain (SPC), which has been brought to life in many successful companies around the world. The SPC tells us revenue and profit growth is built on customer satisfaction. That customer satisfaction is based, in turn,

on delivering a service or product that is designed and delivered to “meet targeted customers’ needs”. One of my colleague’s former employers, John Lewis, is a great example of a business that has been getting this right for decades.

NPS and needs It’s not as if we don’t like NPS – we do! NPS has made, and continues to make, a real and positive difference to customer service all over the world. However, it should be used as a snapshot of how you’re doing in relation to your customers rather than anything deeper. We must also force ourselves to reduce our reliance on the NPS score alone and read more of our customers’ words – as NPS creator Fred Reichheld told us to. To get the best results for your business, NPS has to be complemented by a “needs-centric” approach that provides a comprehensive answer to the question how well are we meeting our customers’ needs on a day-by-day, week-by-week and month-by-month basis? If you’re not 100% clear on whether you are meeting your customers’ needs – or even what they are – how can you make the best strategic decisions for your business? By getting more of these decisions right and satisfying more customers’ needs, you will grow your revenue faster and outperform the competition. After all, think about what NPS actually asks – how can a customer give you a good recommendation or keep buying from you if their basic needs are not being met? ■

John Upton chairs a number of restaurant brands and works with iCustomer using artificial intelligence to help businesses identify and meet their customers’ needs (www.icustomer.co.uk). He is former managing director of Leon and a McDonald’s UK leadership team ex-member. Email john.upton@icustomer.co.uk

PROPEL QUARTERLY SUMMER 2018 www.propelhospitality.com

Advertising Feature

The cost of bullying and harassment

Bullying and harassment at work can cause stress, which in turn may lead to mental health conditions such as depression and anxiety. Poor mental health can affect productivity and related absence is estimated to cost employers over £11 million per year.

arassment is unwelcome behaviour that affects a person’s dignity - ranging from unpleasant comments to physical violence, and is related to a personal characteristic such as age, gender, race, religion, sexual orientation or disability. Bullying at work involves attempts to undermine, criticise or humiliate an individual. Whilst there is no law prohibiting bullying, harassment is against the law if it is related to a protected characteristic, such as age, sexual orientation, race and disability. Note that some cases of mental illness will amount to a disability (a protected characteristic under the Equality Act).

Employers’ responsibilities Employers are responsible for preventing bullying and harassment; if an employee suffers harassment they can bring a claim under discrimination law against the employer as well as against the employee who committed the act.

Constructive dismissal If an employer does not take action when an employee suffers harassment or bullying this may enable the employee to claim constructive dismissal. You must ensure you have taken all reasonable steps to prevent such behaviour, as this will form the basis of your defence to such a claim.

Case study A waitress employed at a Britannia Hotel on a zero hours contact was awarded £19,500 in damages for injury to feelings after being harassed at work by her line manager. This serves as a timely reminder to employers of the ongoing obligation to monitor harassment in the workplace. The waitress was frequently asked questions by her manager about her sex life and there were allegations of inappropriate touching and attempts to kiss her over eight months. Initially she did not make a complaint as she was worried that it would affect the number of shifts she was offered. When she lodged a formal complaint this was only investigated in a cursory fashion, with one witness only being interviewed for ten minutes. The hotel manager concluded that certain “mannerisms and behaviours” towards her had been inappropriate but the manager involved was not disciplined and simply asked to desist from such behaviour.

A second investigation was only carried out when the waitress issued a complaint in the Employment Tribunal but the HR manager decided there was “no conclusive evidence” of harassment and simply required the manager to attend a bullying and harassment course. However, the Employment Tribunal decided harassment had taken place and Britannia Hotels were vicariously liable.

Practical tips In order to be able to show that you took all reasonable steps to prevent harassment in your workplace you should consider the following practical steps: • Ensure that you have a robust policy on harassment and bullying in the workplace • Offer equality training to employees • Ensure that the culture of your workplace promotes equality and diversity and that employees Understand that jokes and banter can cause offence • Investigate promptly and objectively if you receive a complaint of bullying or harassment whether raised informally or under your grievance procedure • Make it clear to staff that complaints of bullying or harassment will be dealt with conﬁdentially and sensitively • Counselling and mediation are often useful tools in resolving a situation. In some cases bullying or harassment may involve management style or unintentional misunderstandings • In cases of deliberate or malicious acts, disciplining an employee in accordance with your disciplinary procedure may be the only alternative.

Specialist legal support for the Drinks, hospitality & leisure industry Call: 01908 668555 For more useful legal insights visit: www.hospitalitylaw.co.uk

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Insight

Solving real problems with real data Ann Elliott and Oliver Taylor look at some classic scenarios – and solutions – to some of the issues hospitality companies regularly face

saw a great article from Marketing Week’s Mark Ritson take over a much greater percentage of the feedback, giving a recently on how to recognise the warning signs of a bad false impression of success. consultant – and was rather glad to see I didn’t tick any of the A true, data-driven approach is the simplest way to identify boxes I might add! what is wrong. A long, generic questionnaire to the brand’s database is simple enough but a wasted effort if the wrong One quote in particular stood out: “Look out for consultants questions are asked. It’s all about the detail so the brand should that are happy to advise without any data or with just qualitative run the questionnaire but focus on lapsed users. Ask every or quantitative data and not both. Any decent consultant should respondent when they most recently visited? If it’s longer than six be asking for or generating significant amounts of qualitative months ago – or even three months ago for loyalty-driven venues and quantitative data to understand your brand from the target – ask the reason behind their lapse in custom. consumer’s point of view and avoiding the Asking what would bring them back certainly naïve ‘expert’ approach of giving you their “Building a profile wouldn’t hurt either. personal experience of your packaging, pricing, for the typical lapsed Digging into those lapsed users can go so store layout and new ad campaign. One of the user and interviewing much further too. Do they share a particular signals of a bad consultant is a comfort with them or including demographic? For instance, at the most making big decisions with no data and one of rudimentary level are women more likely to the most reassuring things you can experience them in a focus lapse in custom than men? Building a profile for from a good consulting firm is a resolute refusal group is key to the typical lapsed user and interviewing them to avoid knee-jerk recommendations without understanding why or including them in a focus group is key to data first being collected.” they don’t visit your understanding why they don’t visit your venue There is surely a lesson here for every brand any more. in the sector, be it the operator of a pub or venue any more” Just as Ritson says, there is a need for both restaurant or, indeed, a supplier. Research and quantitative and qualitative data here. The insight have long been known as invaluable quantitative stuff, getting percentages for potential reasons for tools in any marketer’s toolbox, but using insight is just as useful rejection, gives the baseline understanding of the problem. The for those involved in operations, food development, concept qualitative then expands on it and explains it. Both are imperative. development and the like. However, seeing the wood from the trees is easier said than done. Here are some classic scenarios – and solutions – all of The stagnant supplier which Elliotts has been involved in. A food supplier isn’t losing customers (they’ve clearly got great service and are trusted) but isn’t winning any new ones either. The beloved, but in decline small chain Finding the real issues behind this scenario can be complex and time-consuming but quantitative and qualitative insight can shine a Let’s look at it from the perspective of a small restaurant chain. light on them. Are potential customers aware of the food supplier Their TripAdvisor scores are good, in fact better than ever in the business? Do they know how it could help them? Do they know past six months, but covers are down. It’s immediately a tough where or how it is better than their current supplier? In other words, problem to tackle because the customer channel is suggesting is the food supplier complacent about understanding the needs of the brand is doing well but the bottom line isn’t feeling a positive its potential customers and marketing to them accordingly? impact. This scenario is common. As infrequent customers stop In terms of quantitative intel, a price comparison with visiting and reviewing, the positive comments from loyal customers competitors is a must – the issue might be price after all. Reviewing competitive annual reports to find out which suppliers are in growth will help point out best practice and might explain why competitors are winning the customers you should be winning. From a qualitative perspective, again it’s important for you to talk to your customers to find out. Ask “what are we good at as a supplier?” and “why do you continue to work with us?”. It’s vital too to understand the exact scenario in which suppliers are chosen in the first place. Are they typically selected in tender processes? Are they typically chosen on impulse when another supplier lets their new customer down? Are they employed by ▲ www.propelhospitality.com SUMMER 2018 PROPEL QUARTERLY

Insight people who have prior experience of working with them at an old company? As a food supplier, building the personas of your customers and, crucially, understanding their typical trigger points in hiring new suppliers means you can revise who you are targeting accordingly. A targeted approach is always more efficient – and more likely to deliver results.

The drinks supplier

With the craft beer revolution and so many alternative drinks on the market, there must be a real battle out there for space on the drinks menu across the sector. So how does a drinks supplier go about getting listings? Following the “stagnant supplier” situation stated earlier in this article, speaking to customers and prospects alike stands out immediately as a solution. However, it’s important to remember The contract caterer worried about share restaurants and bars are also listening to their customers. On that basis, building consumer evidence is equally important. A segment-specific contract caterer is starting to lose some of its Having robust consumer data where 70% of 1,000 people, for high-profile contracts to a major player that is flexing its muscles in instance, say they would be willing to drink your product in the segment. a restaurant environment would be a major plus. As a drinks This is not a dissimilar scenario to the supplier but what about supplier, you probably wouldn’t trust a consultant that doesn’t use an open research programme here? Some of the best research data and, in the same way, a restaurant brand conversations happen when a researcher shares wouldn’t trust a drinks supplier that doesn’t their findings with each participant. Contract “The focus here is have flawless, convincing intel. caterers in particular are often surprised on pinpointing those at the number of stakeholders at potential who are aware of contracts who are willing to speak to them in The mega-brand the local pub but the interest of mutual learning. In this scenario, it’s invaluable to also speak to sector-specific Global presence, bags of heritage, like-for-like not visiting it – and consultants, internal stakeholders, end-users – decline. finding out why” potentially – and other suppliers to appreciate You would hope such a brand had a wealth of the benefits of a 360-degree approach. internal, data-driven resource and analysts so If you are the caterer in question, you would benefit from this scenario isn’t so much about discovery. speaking to current and potential contracts and cross-referencing Instead, your challenge is probably making your raft of data the “gap”. Finding out what your current customers like about you sources speak to each other. Millions of pieces of customer and what are the potential contract’s aspersions would allow you feedback are great but need to be contextualised with EPOS. to amend your messaging and how you describe yourself to better What do customers who spent only £10 say about the brand in align your catering company to the market. comparison with those who spent £15? Learning about both, crossreferencing and assessing how to move the £10 customer towards the £15 bracket is very achievable. The managed pub business Follow this by layering in internal feedback. Do sites where staff are happier outperform those where staff aren’t so happy? If yes, Inconsistent sales across the estate is a typical challenge, it’s time to turn those unhappy sites to happy by looking at the particularly for businesses of scale. feedback and identifying the pain-points and hassle factors. Again, a questionnaire is probably the answer (questioning Sales data learnings come next. Find those sites that underthe database is an easy win) and it could even be worth talking index on certain dayparts and cross-reference with feedback again. to a major research house such as Morar, which can also speak to Which sites have a lower spend per head? Cross-reference with consumers in the catchment area of each site, ideally in the target the feedback and see if this is simply a reality of the customer type market. The focus here is on pinpointing those who are aware of or a deeper-rooted problem. the local pub but not visiting it – and finding out why. The truest value comes from segmentation of the data and analysing internally. What are the points of commonality among The one challenge each of these scenarios has in common is knowing the underperforming sites? What characteristics are customers when to stop! However, here are the key lessons across each: ● Speaking to customers should be an ongoing process and not saying they share? What are customers typically saying differently about underperforming sites that they aren’t saying about the sites revisited ad-hoc: Running a piece of customer research every six known to be performing well? Once that’s in the bag, follow it with months isn’t enough any more – seeing where variances occur an internal discussion to brainstorm solutions. on an ongoing basis can unlock critical pieces of insight ● Quantitative and qualitative are equally key: One unlocks the root of the problem, the other explains it and helps identify the solution. You can’t have one without the other if you want to understand the problem and fix it ● Data needs to communicate: One stream of information is incredibly limiting. Instead, balancing customer feedback with commercial reality is simple enough to carry out and empowering when it comes to problem-solving. Even better if a research programme can mesh in internal feedback and operational efficiency ● Read between the lines: Seeing what customers say and what they mean are very different. Percentages may help to convince a room what a problem is but the words behind them are more powerful when looking to fix an ongoing brand issue. ■

Ann Elliott is chief executive of Elliotts, the leading integrated marketing agency in the hospitality and leisure sector – www.elliottsagency.com. Follow her on Twitter: @elliottsagency ▲

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Opinion

When the going gets tough… Ian Dunstall looks at how casual dining operators can counter the cocktail of key challenges that lie ahead

he short-term cocktail of challenges the casual dining market faces are well documented. Huge inflationary cost pressures and shaky consumer confidence mixed with excess market capacity and the added spice of legislative intervention – all are having an impact on sales and profit targets and it is inevitable short-term trading reaction is foremost on business agendas. Many of us have lived through these cycles before. Our industry has many strong leaders who have the positivity and composure to successfully embrace these challenges. What I personally learnt from previous economic downturns is to focus on the need to protect the loyalty and offer appeal to your core target guests. While tight control of costs and “wastage” is key, don’t risk alienating your core customers by compromising the elements of the product or service experience they rely on most. As a secondary point, I would avoid being over-reactionary with the scale of action plans and change programmes to mitigate the short-term challenges. It is better to focus on a limited number of more transformational initiatives that can be implemented more effectively. However, I want to focus beyond the short term. Eventually these economic headwinds will abate. Beyond it, though, lie some key challenges within the casual dining sector that brands need to successfully navigate to ensure long-term brand strength and relevance. I will focus on three:

How can casual dining brands remain relevant amid the changing needs of younger generations? The “younger generations” are demonstrating many characteristics that drive the evolution that brands need if they want to retain relevance. As consumers, they are more inclined towards the limited-service models of quick-service and fast-casual restaurants for their high-frequency occasions – and they are more likely to use delivery services. Therefore, casual dining brands need to work harder to capture their audience. As teenagers they may “fit in” with the family behaviour of casual dining visits but as students they are more focused on extreme value for money. However, as they

emerge into the working population and find they have disposable income, their needs become rapidly more sophisticated and demanding. This generation is seeking experiential and inspiring venues, and concepts that fuel their appetite for social sharing. Their behaviour is much more driven by technological interaction. While researching and choosing their dining venue – their digital engagement – their preference is for a more tech-enabled service experience that removes bottlenecks such as ordering and payment and heightens their interactive experience. Consumption needs of this market focus much more on the health agenda. Witness the recent vegan trend or the “gym diet” relevance of Nando’s chicken menu alongside a generally upweighted demand for ethical conscience. Drinks consumption is also less alcohol-fuelled than in past generations. When this group uses the casual dining sector it is often the independent or small-scale concepts, which can be more responsive to new trends and needs as they emerge, which attract their attention. The challenge for casual dining brands is how to engage with the young adult market. The danger is if they don’t develop the casual dining habit, they may take their new behaviours with them as they mature into the family market.

“What I personally learnt from previous economic downturns is to focus on the need to protect the loyalty and offer appeal to your core target guests”

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Where’s the tipping point when brand scale advantage becomes a disadvantage? Brands in the higher-value/limitedservice sectors continue to benefit from massive scale distribution – brands such as McDonald’s, Domino’s Pizza, Greggs, Whitbread-owned Costa Coffee and Subway are expanding successfully between 1,000 and 2,000 UK outlets. But only by exception – JD Wetherspoon and Nando’s, for example – can more experiential brands successfully achieve significant scale without compromising their brand appeal. There is strong evidence from the US that the casual dining sector of the market is challenged, and possibly represents an exaggerated model of the UK market’s characteristics – but there are transferable learnings. In the US there are many old, tired brands in the market that consumers increasingly find dated. Some of the brands have lost their differentiation and become “all things to all people”, with broad, generalist offers. In time, the brands may lose the distinction and differentiation that made them popular and relevant in the first place. Operating a large-scale brand has its challenges. The size of many brand estates makes reinvestment in modernisation ▲

hgem.com

Opinion or implementing new enhancements a costly hurdle. The challenges of culture, recruitment and training become more complex with brand scale. Large brands can become inflexible in their supply chain structure and may rely on a mainstream supply base. Ongoing offer evolution becomes a major change programme to manage and successfully implement. Consequently, it becomes harder for these brands to respond in a timely manner to new market opportunities or changing guest needs. These brands may become over-reliant on managing price and promotion discounting to influence short-term demand. We know casual dining guests are becoming more demanding. They have chosen to invest their time and money in a more enriching, engaging, personalised and experiential offer than a quick-service transaction. Brands cannot therefore become so large this core need is compromised by the above constraints of scale. The recent

“The good news is overall demand remains relatively buoyant in the short term and retains the potential for strong growth in the medium term”

examples of brand CVAs is evidence of a strong correction to the overexpansion of some brands in recent years. Once the current economic challenges have abated, we can expect a more realistic approach to brand expansion and scale potential.

The delivery market challenge We all understand consumer demand for meals delivered to our home or office is long-term and growing. To some extent (probably greater) this demand is currently incremental to restaurant visits. But how does a brand successfully fulfil this demand and ensure it develops as a profitable revenue stream for the long term. In the short term, brands are trialling how to most effectively manage this new demand opportunity, balancing the economics of dealing with the delivery company’s commission and the operational set-up to manage the orders without disrupting dining guests’ experience. Some doomsday observers are pessimistically comparing the growing power of delivery firms with the experience suffered by the hotel industry from online travel agents. Online travel agents initially developed as an opportunity for hotels

to offload excess room stock at value prices and gain incremental revenue. Over time these providers have grown strong online awareness and now represent a significant share of overall hotel bookings. This is positive for consumers seeking a one-stop shop for price comparison and easy booking but hoteliers have lost significant brand loyalty, are more reliant on price discounting and must pay high commission rates to booking agents. Long term, how will the relationship between the restaurant brand and delivery companies develop? Through the software, delivery companies own the guest relationship and all the data on their menu needs and preferences. They are already developing kitchen capability that could enable direct food production, and potential investment in automation (of food production and delivery services) could enable a lower cost model that might drive down delivery prices. So how do restaurant brands manage this market opportunity and the relationship with the delivery companies that are a source of incremental demand but also a potential challenge to their direct relationship with their guests.

Overall markets are evolving fast Look at the evidence of the retail market, which is undergoing massive transformation. Long-established retail brands have rapidly found their offer is no longer relevant or economic in a changing world where circa 20% of non-food retail transactions are made online. Familiar brands have disappeared from our streets in recent years – Toys R Us, Maplin, Comet, Austin Reed, BHS, HMV, Blockbuster and Woolworths to name a few. And more retail brands are rumoured to be under shortterm pressure to follow. The casual dining market is currently experiencing its own transformation. In the short term there are some immediate challenges to react to in response to recent economic and political disruptors. But beyond that there are some key underlying market shifts to successfully navigate. The good news is overall demand remains relatively buoyant in the short term and retains the potential for strong growth in the medium term. New opportunities will emerge from the current market conditions and many leadership teams in our industry will successfully react to the current market challenges to strengthen their long-term brand advantage. When the going gets tough, the tough get going! ■

Ian Dunstall is a consultant in brand strategy, insight and development. Previous roles at Mitchells & Butlers included director of marketing and director of concept development. In his career he has supported more than 40 brands with their positioning and development

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