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DELIVER THE GOODS

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Raising the Dough

Raising the Dough

WITH CONSUMER DEMAND FOR FOOD DELIVERY SERVICES SHOWING NO SIGNS OF SLOWING, MADELINE WOOLWAY FINDS OUT WHAT PUBS CAN DO TO TAKE ADVANTAGE OF THE BOOM.

The Australian hospitality industry is continuing to feel the effects of premiumisation across all segments. Pubs have carved out a niche by offering more than just a good feed – while menus have moved beyond a stodgy counter meal, pubs remain an important community space, giving their patrons a warm and comfortable place to come together. However, as the dining market becomes increasingly competitive, many businesses are looking to diversify their revenue streams and offering delivery is one of the most popular ways to do so.

Uber Eats at St Kilda Burger Bar.

Given dining experience and atmosphere are such a central part of pubs’ identities, can the delivery movement offer publicans the same opportunity to generate additional revenue that it provides to neighbourhood diners, cafés and pizza parlours? According to some operators who’ve already taken the leap, the answer is yes.

COMPETING WITH THE COUCH

In the past decade pubs have had to reposition themselves in response to changing diner expectations. With more restaurants offering relaxed and affordable, yet high-quality meals, pubs have had to do the same. Once able to rely on patrons loyal to their local watering hole and happy with a $10 steak, pubs are now expected to provide restaurant-quality meals without the restaurant-level price tag. Just as they’ve found their footing in the shifting landscape, a new competitor has arrived on the block – the humble couch. For shrewd operators, the best way to adapt to change is to embrace it.

“We’re competing with the couch, so embrace the technology, grow your business and move forward,” says Rabih Yanni, owner/operator of The Grosvenor in Melbourne. “The couch customer is still a customer, just with a different dining requirement for that afternoon or evening.”

In Yanni’s view, delivery platforms are just another shopfront and they come with extensive exposure, designed to help businesses get in front of stay-at-home diners. But does facilitating the couch diner’s penchant for ordering in mean that delivery will eat in to dine-in business?

For The Australian Heritage Hotel, which implemented delivery late in 2017, this has not turned out to be the case. “It’s certainly more a way to generate additional revenue,” says general manager Lincoln Baker.

The same is true for another Sydney stalwart, the Rose of Australia. According to owner Scott Leach, dine-in revenue has continued to grow in tandem with the addition of home delivery. Keeping the balance between dine-in and delivery revenue is simple: it comes down to the invenue experience, as Leach explains.

Alcohol can also be delivered through Deliveroo.

“Our belief is that in-venue experience needs to be far superior to what people can get in their homes, otherwise bottleshops and fast food deliveries will kill us in the end. This is not just about the location of the meal and the price, the best operators we watch all reach and achieve ‘experience of venue’ as the benchmark to keep people coming back to venue.”

Ultimately, couch diners have surfaced as a new category of spenders. “We determined within our local market, [which has] a concentration of medium-to-high density living, that households were choosing to have home delivery 1-2 times per week,” states Leach. “Regardless of how many times they ate in venues, this home market has emerged as a new consumer trend in our area.”

For the Rose of Australia, which rolled out both Uber Eats and Deliveroo, food revenue was up 15 per cent in the first month, afterwards falling back to an average of 10–12 per cent increase over previous years. The Grosvenor experienced a similar pattern, with an initial honeymoon period leading into consistently good revenue.

Delivery can go beyond reaching couch customers too. According to Uber Eats, many Aussie pubs have used Uber Eats to gain new customers in their neighbourhood and build a new following of regulars. The delivery service app has seen its partner venues experience positive growth by reaching new customers – a trend Leach has experienced first-hand.

“As an inner-city Sydney pub, certain nights can be a gold mine for this new market,” he says. “Mardi Gras weekend saw a 40 per cent increase in food revenue over three days – the venue was at capacity, all new business.”

Don’t be afraid to embrace a digital partner. Do your homework. Understand their value and how to leverage it; it’s not just about the per cent they charge.” Scott Leach, The Rose of Australia

BALANCING ACT

With the in-venue dining experience a crucial safeguard against losing customers to the lure of home delivery, making sure the new business stream doesn’t impact dine-in patrons has been a key consideration for The Australian Heritage Hotel.

The Rose of Australia chose dishes that travel well for its delivery menu.

In-venue meal times at The Rose of Australia at peak capacity have been affected by no more than 3–4 minutes while wait times when the in-venue capacity is below 85 per cent remain unaffected.

With three years’ experience offering delivery under their belt, the team at The Grosvenor now has enough data to assist with rostering in order to combat the extra workload. “The average wait is 20 minutes, which the kitchen manages as they would any situation… should there by an upcoming promotion that we need to be mindful of, [we can] manage, prepare and roster accordingly.

“We find that popular delivery times generally sit outside peak times and when it does coincide with busy service periods, you just need to manage the trade as you would if it were walk-ins, or any other peak or trough for that matter – it’s called managing your business.”

A FRESH APPROACH

Making the most of delivery also requires careful planning – what menu items to offer for delivery and coordinating with the courier efficiently are of utmost importance – to ensure that diners who order-in get the same quality meal as those dining at the venue.

“When we first started we’d wait until everything was packaged and looking perfect, before we’d order the driver. But obviously sometimes it can take the driver or cyclist 15 minutes to get there, so it’s more of a come now and we’ll make sure it’s ready in 10 minutes or as you’re arriving set-up,” explains Baker.

The Rose of Australia also manages production of meals to make sure they come together as the driver arrives or within a minute or two of their arrival. It took just three weeks for the venue to iron out any kinks.

“Some peak nights see shortages of drivers, which can create issues [but] capacity constraint management is a part of every business,” states Leach.

Pubs might have made a name for themselves serving up steak, parmas and fish’n’chips, but when it comes to delivery these classics don’t necessarily travel as well as more modern pub fare like pizzas and burgers.

Between 500-1000 pizzas are delivered per week from Australian Heritage Hotel.

“Our choice of menu is directly related to items that travel well and are easily kept hot,” says Leach.

“We don't offer all our menu via delivery partners. Prior to commencing we trialled all our menu via delivery and found certain items could not translate to the service.”

Customers who come across The Australian Heritage Hotel the Uber Eats app will notice a tightly-curated menu, selected based on different dishes' ability to keep well during transportation.

“The menu is limited to what would travel well – pizzas, chips and wedges, stuff like that,” says Baker.

With all of The Grosvenor’s burgers, pizzas and groceries available for delivery, Yanni has also drawn the line at parmas and steaks. “Some ingredients are still best enjoyed within the walls of your local pub,” he says.

MUTUAL BENEFITS

When it comes to choosing a delivery partner there are a few things to think about.

“Don’t be afraid to embrace a digital partner. Do your homework. Understand their value and how to leverage it; it’s not just about the per cent they charge,” says Leach.

While The Australian Heritage Hotel prefers not to actively market the service, Leach argues in favour of promoting the service to patrons via social media, leveraging both the delivery service’s and the venue’s brands to bring in the most customers possible.

Like implementing any new business development, choosing the right partner requires research. As Leach says, it’s not just a matter of picking the platform that charges the lowest percentage. The Rose of Australia took a number of things into account, using social media, in-venue intelligence and conversation enquiry to identify their preferred delivery partner. The team settled on Uber Eats, which is popular because it has no minimum spend and offers quick service; and Deliveroo, which was the first to market in Sydney’s inner west, where The Rose of Australia is located, and provides strong local marketing.

In other words, it could be worth the cost to jump onboard with a well-established partner.

“We’re doing 500-1000 take-away pizzas a week. It’s not worth employing our own driver to cover that,” says Baker.

“I’m not sure about the others, but UberEATS is really good in that the set-up costs are structured to be paid over a period, it’s not up front, so it’s not a large outlay upfront so I’d jump on it, it’s certainly worthwhile.

“The support and walkthrough processes are really good, they make sure you understand the system.”

Yanni took advantage of the support processes by trialling three delivery partners – UberEats, Deliveroo and Foodora, all of which he says are leaders in the space, thanks to their ability to innovate and curate an audience. After three months, The Grosvenor onboarded with all three.

Three years later and Yanni is unequivocal in his advice to publicans when it comes to adopting delivery: “Do it, [but] take charge of the process.

“This is another aspect of your business which if managed well can pay good dividends and make a difference by increasing productivity of both personnel and real estate. It is your product and your responsibility, just manage it as an extension of the business.” AH

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